South Korean companies look set to continue their dominance of the GCC contracting market in 2011
As Saudi Aramco gets ready to sign about $10bn-worth of engineering, procurement and construction (EPC) contracts, it is looking likely that once again South Korean companies are going to be the big winners.
The onshore packages at the $6bn-plus Wasit gas development programme are about to be awarded and South Korea’s SK Engineering & Construction (SK E&C) and Daelim Corporation are the frontrunners.
SK E&C is in line for three of the four Wasit onshore packages and, if successful, this would add several billion dollars to their 2011 balance sheet in January. Daelim is in line for one package, but already has several billion dollar contracts ongoing with Aramco.
South Korean companies are seemingly unstoppable in the Middle East contracting industry at the moment. Competitive pricing coupled with efficient project management strategies has made them the go-to companies for most of the region.
Where this leaves the rest of the foreign contractors in the Middle East EPC market is an interesting question. It is clear most cannot compete with the South Koreans on price. Maintaining a presence in Saudi Arabia or the UAE is also not cheap. Some of the larger contractors like, France’s Technip, have myriad skills that are always going to be in demand. Others looking to win new work will continue to struggle as the more experience the South Koreans gain, the better they will become.