RIYADH, 1 June 2007 — Saudi Arabia has awarded an SR3.5 billion contract to Samsung Engineering Co., South Korea’s biggest engineering company, to build an ammonia plant.
“The project is for Saudi Arabian Mining Co. and will be completed by Dec. 2010,” Shin-Youl Kang, vice president & resident director of Samsung Saudi Arabia Ltd., the Saudi counterpart of the Seoul-based Samsung Engineering, said here yesterday.
“Samsung Engineering has signed a preliminary agreement to build the ammonia plant, which is the company’s largest single contract in Saudi Arabia,” said Kang, while giving an overview of the world-class technical capability of the company.
On hearing the news of the new contract, Samsung’s shares rose to a record high.
The company now expects to exceed a previous target for SR13.2 billion in orders this year.
Spelling out the salient features of the project, Kang said “the Saudi public and private sector companies have reposed trust in Samsung and hence the company is getting major orders. This project is a prestigious one for us. The ammonia plant will have the capacity to produce 3,300 metric tons of chemical a day, making it the largest in the country.” Samsung Engineering expects to sign a formal contract within one month, he added.
He said: “As a major player in the high-tech engineering market, Samsung Saudi Arabia Ltd. ranks as a major regional power that creates high future value for customers.”
In the years ahead, Samsung has resolved to lay added emphasis on strengthening customer-oriented business, upgrading business portfolio and enhancing project execution capabilities, while it is emerging as a true No.1 company across the world.”
The company currently enjoys a solid footing in the Gulf states including the Kingdom, where a number of huge projects namely — refineries, buildings and power stations — are coming because of the soaring oil prices.
“Samsung will only get better as a number of major projects are expected to be awarded this year in the Middle East,” Byun Sung Jin, an analyst at Mirae Asset Securities Co. in Seoul, said in a statement.
“This contract will put Samsung Engineering in a better position to win more orders,” said the analyst, while referring to the new ammonia plant project.
Saudi Arabia is the biggest single source of overseas revenue for South Korean contractors, having pumped out nearly SR220 billion in orders during the last 34 years they have been doing business in the Kingdom, according to a report issued by the International Contractors Association of Korea.
Saudi Arabia is expected to invest about SR285 billion until 2010 for refineries and other chemical plants.
Korean contractors have received a combined SR28 billion in new orders from the Middle East including Saudi Arabia this year, according to the contractors’ association. Samsung expects to exceed this year’s target for new orders.
“It will be another year of record orders for Samsung Engineering and that will be reflected into its earnings next year,” Byun said.
Samsung Engineering is involved in projects in Saudi Arabia, China, Thailand, India and other countries. Samsung Engineering recently signed SR975 million contract with state-owned oil company Indian Oil Corporation Limited (IOCL), according to a report published recently.
Samsung Engineering has worked on over 1,700 projects in the past 30 years, and the technology and experience the company gained through this has ensured its reputation as the first and best engineering company in Korea.