'4.5 Trillion Jackpot Order' Samsung ENG Signals Bright Outlook for Achieving New Order Target of '10.5 Trillion'

Samsung Engineering Mexico Dos Bocas Refinery Project Site

[Asia Economy Reporter Ki-min Lee] Samsung Engineering recently secured its largest-ever order worth 4.5 trillion KRW in Mexico, signaling a positive outlook for achieving this year's new order target of 10.5 trillion KRW. This is because countries around the world can no longer postpone new infrastructure orders that had been delayed due to the COVID-19 pandemic.

According to Samsung Engineering on the 7th, the company won an EPC (Engineering, Procurement, and Construction) contract worth 4.1 trillion KRW for Packages 2 and 3 of the 'Dos Bocas Refinery Project' from PEMEX, a subsidiary of Mexico's state-owned oil company, on the 30th of last month. Including the basic design (FEED) and preliminary work costs carried out since last year, the total amount reaches approximately 4.5 trillion KRW, the largest in the company's history.

The actual order amount Samsung Engineering can secure from the Dos Bocas contract is expected to exceed 3.3 trillion KRW, even after excluding the share allocated to local companies in the Mexican joint venture. Consequently, Samsung Engineering's order backlog has increased to about 16 trillion KRW, equivalent to approximately two years and six months of sales based on last year's revenue.

With significant orders remaining in the fourth quarter, industry and market observers anticipate that Samsung Engineering can achieve its new order target for this year. Early this year, due to the impact of COVID-19, overseas new orders slowed down, and Samsung Engineering's cumulative new orders for the first three quarters remained in the 3 trillion KRW range. However, besides the Dos Bocas order, the company also secured a 779.9 billion KRW contract for Samsung Biologics' 'Edison 4 Project,' pushing this year's cumulative orders beyond 7 trillion KRW.

The methanol project in Sarawak, Malaysia, is considered a likely next order. Samsung Engineering has already secured FEED and first and second-phase preliminary work contracts similar to the Dos Bocas project. Therefore, there is high anticipation for an additional EPC contract worth about 1.1 trillion KRW within this year. Researcher Sera Park from Shin Young Securities recently stated in a report, "Since it is an FEED-linked EPC project, it is similar to the Dos Bocas case. Having already performed preliminary EPC work worth 200 billion KRW, there is a high possibility of EPC conversion in November."

Additionally, Samsung Engineering is targeting orders such as the 1.458 trillion KRW Saudi Jafurah gas field and the 5 trillion KRW UAE Hail and Ghasha gas development projects. Researcher Dong-heon Lee from Daishin Securities commented, "The order trends for Saudi Jafurah, Malaysian Sarawak, and UAE projects scheduled within the year will be important. Despite COVID-19, orders are resuming mainly for projects that can no longer be delayed, and Samsung Engineering's mega projects are national core projects, so expectations for orders within the year are not unreasonable."

This content was produced with the assistance of AI translation services.