GS E&C begins turnaround
A petrochemical plant in Oman, built by GS Engineering & Construction (E&C). / Courtesy of GS E&C
By Lee Hyo-sik
GS Engineering & Construction (E&C) has turned around from its worst performance in 2013 by successfully restructuring its business portfolio, strengthening its core competence, and capitalizing on the rebounding property markets at home and abroad.
In 2014, GS posted 9.5 trillion won in revenue and a 51 billion won operating income, reversing an operating loss of 950 billion won in 2013. The builder plans to boost its revenue and operating income to 10.1 trillion won and 200 billion won in 2015, respectively. It also seeks to secure new orders totaling 12 trillion won.
“We have been able to perform better in the petrochemical plant construction sector on the back of our extensive knowhow and experience,” a GS E&C spokesman said. “We also did well in the domestic housing sector last year as more people bought homes.”
The builder said it will make every effort to improve its bottom line and regain market trust by enhancing its competiveness, slashing operating expenses and boosting inter-department cooperation.
To help achieve its goals, the company recently established the “infrastructure implementation office,” which coordinates its human resources management, and supports its engineering and construction capabilities, the spokesman said.
“We will downsize operating costs and work in emergency mode, as well as increase our core competence and promote the can-do spirit among employees,” he said. “We will invest more to improve employees’ work capacity, abolish an outdated way of doing business and introduce a performance-based merit system.”
In 2015, GS expects to sell more than 25,000 apartments, up 75 percent from 14,350 in 2014, as the local housing industry continues to boom amid low interest rates and other favorable market conditions.
“The company plans to earn 5.7 trillion won from its domestic operations this year. In addition, it expects to win orders worth 6.15 trillion won in foreign countries,” the spokesman said. “We are having a smooth start overseas by securing an order in January to build a $2.6 billion gas plant in Venezuela. This was thanks to our advanced technical knowhow and vast experience in the construction of large-scale plants across the globe. We will earn more such deals in the coming months.”
In 2014, the builder signed a dozen contracts for building oil refineries, natural gas process plants and power generation facilities, mainly in the Middle East and South America.
In a bid to avoid excessive competition and guarantee profits, GS has teamed up with other local construction companies to jointly win construction orders abroad.