POSCO E&C turns to Latin America

A Kallpa 830MW combined cycle power plant that POSCO E&C constructed in Peru / Courtesy of POSCO E&C

By Park Jin-hai

POSCO Engineering and Construction (E&C) says it will continue to expand its operations in Latin America, which it said is the next gold mine for the construction industry.

“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,” said a company spokesman.

Since it has established a control tower to oversee its overseas construction projects in December 2006, the company has actively sought business opportunities in 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 that country.

In 2009, it also entered the Peruvian energy market for the first time after it secured coal-fired power plant projects for two consecutive years.

The Pohang-based builder has won $4.74 billion worth of deals in Chile and Peru. Added to steel plant projects in Mexico and Brazil, the company’s Latin American projects were worth $10 billion last November.

“We passed the $10billion mark in just seven years after we entered the market. 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,” added the official.

As of December 2013, POSCO E&C’s Latin American projects came top in value for Korean companies, 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. However, we are building our reputation by meeting the completion dates and exceeding the output targets,” the official said.