Abu Dhabi: Arabtec Holding and Samsung Engineering Co., Korea’s largest engineering company, announced the signing of a Memorandum of Understanding (MoU) for a new joint venture company.
The new Joint venture will exclusively undertake large-scale projects in oil & gas, power and infrastructure in the Middle East and North Africa (Mena).
The joint venture will be called Arabtec-Samsung Engineering, and will be incorporated and headquartered in Abu Dhabi. Arabtec will be a 60 per cent shareholder in the new company, with Samsung Engineering holding the remaining 40 per cent interest.
The management team of the new joint venture will consist of experienced executives from Samsung Engineering and Arabtec and will be appointed shortly.
The Joint venture will benefit from Arabtec’s extensive regional network, top-tier project managers and skilled workforce, along with a proven track-record of delivering technically-complex construction projects in the region as well as Samsung Engineering’s leading market position in oil & gas, power and infrastructure.
Samsung Engineering currently has a backlog of $10 billion in oil and gas, power and infrastructure in Mena, and has established businesses operating in the power and infrastructure sectors across the region. The two companies will also benefit from their buying power in procurement, which will enhance project profitability.
Under the terms of the MoU, the new joint venture will bid exclusively together for mutually agreed and selected work in Mena in the oil & gas, infrastructure and power sectors and will focus on winning large-scale contracts, which can range from $3–$10 billion in total value. The joint venture plans to be an active bidder in the tender process for large-scale contracts expected in 2013 and beyond in each of the three sectors.
Arabtec-Samsung Engineering will engage in the full range of sectors from Hydrocarbon projects (hydrocarbon processing, refining, petrochemicals and fertilisers) to industrial and infrastructure business (power plants, water treatment & environmental, metallurgy and industrial projects).
To support long-term innovation and growth in the UAE, Arabtec-Samsung Engineering will establish a new Centre of Excellence in Abu Dhabi in the near future to develop young Emirati engineers of the future. Aspiring Emirati engineers will have access to both companies’ expertise, technology, know-how, support and resources.
Mena’s oil & gas, power and infrastructure sectors are key drivers of long-term economic growth in the region. The major projects market in the Middle East in oil & gas, power and infrastructure is gaining momentum with the region’s 100 biggest schemes currently under construction, accounting for more than $304 billion of capital spending.
Activity in these sectors in 2013 and beyond is set to increase dramatically in the coming years. The top 50 projects currently planned or already under way across the region are valued at $1.56 trillion, representing a 42 per cent increase compared to 2012.
“We have a successful history partnering with Samsung Engineering’s sister company, Samsung C&T. We have already worked together on some of the region’s high-profile projects, including Burj Khalifa. This JV is the logical next step in the relationship between the two companies. Arabtec-Samsung Engineering will be well-positioned to capitalise on the exciting growth opportunities in oil & gas, power and infrastructure. Samsung Engineering is already the leading EPC contractor in Mena, with their experience and track record of successfully executing large-scale projects, Arabtec has the right partner to achieve its strategic goals in EPC,” said Hassan Abdullah Ismaik, Managing Director and CEO of Arabtec
Park Ki-Seok, Samsung Engineering’s President and CEO, commented, “Samsung Engineering is currently executing major projects in the UAE, worth $9 billion. Through this partnership with Arabtec to form a JV, we hope to expand our presence in Mena as well as contributing to the development of the local UAE community.”
