Samsung Engineering eyes $1b Saudi orders 

(MENAFN - Bahrain Tribune) South Korea's Samsung Engineering Co. expects more than $1 billion in plant orders from Saudi Arabia in the last quarter of this year, a company executive said.

"We expect to receive two separate orders valued at more than $1 billion in Saudi Arabia in the fourth quarter to build a petrochemical plant and a refinery," Hong Sung-Il, head of Samsung Engineering's investor relations team, said on Thursday.

He didn't give further details because the deals are not finalised yet.
Samsung Engineering - which attributes about 60% of its total sales to the global petrochemical plant business, including main market Saudi Arabia - aims to achieve KRW6 trillion ($6.4 billion) in orders and KRW3.3 trillion in sales by 2008, said Hong.

In the long-term, he added, the company is targeting KRW5 trillion in annual sales by 2010 on growing demand for plants in the Middle East and for petrochemical products in emerging markets such as India, China and Brazil.

The company - whose businesses range from petrochemical and gas plants to oil refineries - is also seeking sales growth of 30% every year till 2010.

Samsung Engineering's major customers are state-run companies in Saudi Arabia, India, Thailand and Mexico.

They include Saudi Basic Industries Corp., top Indian refiner IOCL, Thailand's PTT Public Co. and Mexican oil monopoly Petroleos Mexicanos, or Pemex.

"We are stepping up efforts to expand our customer base in these countries, while trying to gain a foothold in new markets such as the Commonwealth of Independent States and North Africa," Hong said.

In the long-term, Samsung Engineering will strengthen its refinery business to bring it on par with the mainstay petrochemical division.

This because the company forecasts that increasing investments in refinery facilities in the Middle East and rising oil demand in Asia and Latin America will create a $500 billion refinery market by 2030.

Samsung Engineering is also attempting to diversify, and is in talks to participate in steel plant projects with Posco and Hyundai Steel Co., Hong said without elaborating.

Hyundai Steel is building a KRW5.24 trillion steel plant in South Korea - with an annual capacity of eight million tons - which is expected to be completed by 2011.

Posco will put up a $12 billion plant - which will produce 12 million tons a year - in India by 2016.

Samsung Engineering estimates its 2007 operating profit of KRW172 billion, up from KRW137.4 billion a year ago, and sales of KRW2.4 trillion, up from KRW2.03 trillion.

The company, which revised up its 2007 order target in July to KRW5 trillion from KRW3.5 trillion, has already received KRW3.8 trillion worth of orders as of September 14.