POSCO E&C bets big on Latin America
The construction of a power plant by POSCO E&C is underway in Peru / Courtesy of POSCO E&C
By Park Si-soo
POSCO Engineering and Construction (E&C) continues to expand its operations in Latin America, betting big on the region’s growth potential.
“We have diversified our overseas market from early on. When all our rivals focused solely on the Middle East, we ventured to the then-untapped Latin American market,” a POSCO E&C official said.
The company established a control tower for its overseas projects in December 2006 and has since launched various energy development projects in Latin America. In particular, the firm has paid keen attention to Chile, Peru and varying Central American countries.
Starting from winning the construction contract for Chile’s Ventanas coal-fired power plants, it has successively bagged the Campiche and Angamous projects in the country.
In 2009, the company tapped into the Peruvian energy market for the first time after it secured coal-fired power plant projects for two consecutive years. It also struck several large-scale construction deals in Chile, Peru, Mexico and Brazil.
The company said the collective value of deals it had secured in the region reached $10 billion last year.
“This was a landmark achievement made just seven years after we entered the Latin American market,” the official said. “The region, once neglected, has now emerged as the third-largest overseas market for Korean construction firms following the Middle East and Asia, with an average annual growth rate of 5 percent over the past five years.”
As of December 2013, POSCO E&C’s Latin American projects came top in value for Korean companies operating there, recording $10.1 billion, making SK E&C’s $4 billion a distant second, according to the International Contractors Association of Korea.
The company attributes that success to its more than 40 years of construction expertise, localization and “POSCO DNA,” making the impossible possible.
POSCO E&C offers turnkey projects, encompassing the whole process of engineering, procurement and construction (EPC).
In 2011, it acquired Ecuadorian EPC firm Santos CMI, expanding its presence in the region even further.
“Latin America is not an easy terrain to build plants. It is earthquake prone and construction regulations are rather complicated,” the official said. “However, we are building our reputation by meeting the completion dates and exceeding the output targets.”