[Let's Run Again Construction Korea] Posco Construction Magic at Vietnam's Offshore Port

[Asia Economy Reporter Yoo In-ho] On Long Son Island in Ba Ria-Vung Tau Province, about 150 km southeast of Ho Chi Minh City, the largest city in Vietnam, Vietnam's first petrochemical complex (LSP) is being established.

This project involves constructing facilities to produce 1 million tons of ethylene and 1.2 million tons of petrochemical products, representing a large-scale plant project with a business scale of $5.4 billion (approximately 5.7 trillion KRW). A Korean construction company is proudly participating in this project: POSCO Engineering & Construction (POSCO E&C). POSCO E&C is responsible for the port construction project, including two petrochemical product docks and one construction dock.

◆ Perfect execution using BIM and precast construction methods = During the bidding for the Vietnam LSP port construction project, POSCO E&C faced difficulties participating as it bid with a construction cost higher than the client’s expected budget.

However, based on accumulated engineering capabilities, POSCO E&C was finally selected as the preferred negotiator in 2016 through an optimized design process. Subsequently, in February 2018, the contract for the construction of the product export-import docks was signed.

To meet the construction schedule requiring the completion of the construction dock within 22 months after the start of the port construction, POSCO E&C utilized Building Information Modeling (BIM) to simulate the construction process in advance before commencement. Through BIM, equipment operation plans necessary for the construction were established beforehand to minimize risks that could arise during the construction process.

Accordingly, the construction dock was completed in July of this year, 22 months after the start of construction. The final completion target is September next year.

Since the construction is carried out at sea, POSCO E&C applied construction technologies to ensure quality and safety. POSCO E&C fabricates pipe supports totaling 2 km in length on land and then transports and installs them at sea for product shipment. As steel frames, piping, and electrical equipment are semi-assembled and moved to the sea for installation, construction quality and safety are secured.

This approach also significantly shortened the construction period. The marine concrete structures were also changed from originally planned on-site marine construction to precast concrete methods, improving construction convenience.

POSCO E&C proposed changes in pile material and equipment to the client to shorten the construction period. These proposals were approved by the client, resulting in design change approval for approximately 16 billion KRW. Through this, despite being an EPC (Engineering, Procurement, and Construction) contract, the contract amount was increased.

Currently, POSCO E&C is progressing with the petrochemical product dock construction at about 90% completion rate and 1.5 million hours without accidents.

In addition to port construction, POSCO E&C is also carrying out the installation of 28 product storage tanks worth 450 billion KRW and site development work worth 80 billion KRW within the petrochemical complex.

◆ Wings for overseas orders = POSCO E&C’s overseas orders this year have shown a dramatic increase. According to the Overseas Construction Association, POSCO E&C’s overseas contract amount reached $1.2758 billion up to last month this year, a 327% surge compared to the same period last year.

Despite difficulties such as the COVID-19 pandemic and low oil prices, orders in the railway sector, which were relatively less affected, led the performance increase.

In the Philippines, POSCO E&C won a sole contract for the construction of a $290 million (approximately 350 billion KRW) railway vehicle depot ordered by the Department of Transportation.

This project is part of the 53 km North-South Railway construction connecting Malolos in northern Manila and Clark, a special economic zone in the Philippines, where a railway vehicle depot is being built.

Additionally, POSCO E&C participated in a consortium with Hyundai Engineering & Construction to win a large-scale monorail construction project in Panama, successfully entering the Panama construction market. This project is the largest infrastructure construction project ever undertaken in Panama, building a 25 km monorail connecting the capital Panama City to the west.

POSCO E&C is performing well overseas by leveraging its experience in railway vehicle depot projects such as the Donghae Nambu Line Deokha Vehicle Depot, Seongnam Yeoju Vehicle Depot, and Daegu Urban Railway Vehicle Depot.

Recently, POSCO E&C also secured a 490 billion KRW contract for Poland’s largest waste incineration plant project. POSCO E&C will design and construct a new incinerator using the stoker method, which mechanically supplies fuel to facilitate smooth combustion of waste, processing 264,000 tons annually, and will renovate and upgrade existing facilities processing 40,000 tons annually.

◆ Strategic moves in domestic maintenance projects = POSCO E&C is steadily increasing its order backlog focusing on remodeling projects, where it has strengths, not only overseas but also domestically. POSCO E&C’s urban maintenance project orders this year amount to 2.5617 trillion KRW, maintaining its position among the top three in the industry.

In particular, POSCO E&C succeeded in winning the Daeyeon 8 District redevelopment project, one of the largest redevelopment projects in the Busan area. The Daeyeon 8 District redevelopment project is expected to have a construction cost of 900 billion KRW, making it one of the most competitive maintenance projects in the second half of this year.

Based on this increase in orders, POSCO E&C obtained a credit rating of 'A+' from all domestic credit rating agencies for the first time this year. NICE Credit Rating assessed that POSCO E&C’s excellent sales performance in the construction sector and smooth collection of occupancy payments leading to debt reduction will alleviate financial burdens and maintain financial stability.

A POSCO E&C official said, "We are recognized for our high technical capabilities both domestically and internationally. We will continue to increase high-quality orders to establish a stable financial structure and steady growth, and operate our business portfolio solidly."

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