EPC Business Model

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This presentation describes the global EPC(Engineering, procurement and Construction) model

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EPC Business Model

  1. 1.     Global EPC Business model
  2. 2. Agenda <ul><ul><li>Definition of International EPC Projects </li></ul></ul><ul><ul><li>Definition of EPC Projects </li></ul></ul><ul><ul><li>Typical International EPC Projects </li></ul></ul><ul><ul><li>Current Trend of International EPC Projects </li></ul></ul><ul><ul><li>EPC Projects Development </li></ul></ul><ul><ul><li>EPC Projects Bidding Procedure </li></ul></ul><ul><ul><li>Business Model of International EPC Contractors </li></ul></ul><ul><ul><li>SWOT of Contractors in the International EPC Projects </li></ul></ul><ul><ul><li>Winning strategy of a Contractor – sharing experiences </li></ul></ul><ul><ul><li>Open discussion </li></ul></ul>
  3. 3. DEFINITION OF INTERNATIONAL EPC PROJECTS <ul><ul><li>Investors </li></ul></ul><ul><ul><ul><li>Foreign Government / State-Owned Enterprises </li></ul></ul></ul><ul><ul><ul><li>Foreign Private Sectors </li></ul></ul></ul><ul><ul><li>Project Location </li></ul></ul><ul><ul><ul><li>A foreign location </li></ul></ul></ul><ul><ul><li>Project Fund / Budget Source </li></ul></ul><ul><ul><ul><li>Foreign Government </li></ul></ul></ul><ul><ul><ul><li>Shareholders </li></ul></ul></ul><ul><ul><ul><li>Project Finance by the Owner (International Financial Institutes and Commercial Banks) </li></ul></ul></ul><ul><ul><ul><li>Project Finance by the Contractors (EXIM Bank and Commercial Banks ) </li></ul></ul></ul><ul><ul><li>Players </li></ul></ul><ul><ul><ul><li>International E&C Firms from the Developed Countries </li></ul></ul></ul>
  4. 4. DEFINITION OF EPC PROJECTS <ul><ul><li>E: Engineering & Design </li></ul></ul><ul><ul><ul><li>Process Design (PFD) </li></ul></ul></ul><ul><ul><ul><li>Basic Design (FEED) </li></ul></ul></ul><ul><ul><ul><li>Detailed Design </li></ul></ul></ul><ul><ul><li>P: Supply of Equipment & Materials </li></ul></ul><ul><ul><ul><li>Ps: Procurement Service </li></ul></ul></ul><ul><ul><li>C: Construction </li></ul></ul><ul><ul><ul><li>Cm: Construction Management Service </li></ul></ul></ul><ul><ul><ul><li>Ca: Construction Advisory Service </li></ul></ul></ul><ul><ul><li>K: Commissioning & Start-UP </li></ul></ul>
  5. 5. TYPICAL INTERNATIONAL EPC PROJECTS <ul><ul><li>Gas Processing </li></ul></ul><ul><ul><li>Chemical Process Industries (Refinery, Petrochemical, Chemical, etc.) </li></ul></ul><ul><ul><li>Power Plants (Coal-Fired, Gas-Fired, Hydro, Nuclear, Wind, etc.) </li></ul></ul><ul><ul><li>Steel Mills </li></ul></ul><ul><ul><li>Infrastructure (MRT, High Speed Rail, Highway, Harbor, Airport, Dam, Desalination, etc. ) </li></ul></ul><ul><ul><li>Environmental (Wastewater, Municipal Waste Incineration, De-Nox, De-Sox, etc. ) </li></ul></ul>
  6. 6. CURRENT TREND OF INTERNATIONAL EPC PROJECTS <ul><ul><li>Booming in the Countries either with Low Cost Raw Material or Huge Market </li></ul></ul><ul><ul><ul><li>Mid East </li></ul></ul></ul><ul><ul><ul><li>PR China </li></ul></ul></ul><ul><ul><li>Mega-Sized and Complicated Project </li></ul></ul><ul><ul><ul><li>Integrated Complex </li></ul></ul></ul><ul><ul><ul><li>World-Scale Capacity </li></ul></ul></ul><ul><ul><li>Global Keen Competition </li></ul></ul><ul><ul><li>Project Finance </li></ul></ul><ul><ul><li>Partnering Arrangement </li></ul></ul>
  7. 7. EPC PROJECTS DEVELOPMENT (1/2) <ul><ul><li>Project Planning & Preparation Phase </li></ul></ul><ul><ul><ul><li>Project feasibility study and Define Scopes </li></ul></ul></ul><ul><ul><ul><li>Government / Regulatory Approval </li></ul></ul></ul><ul><ul><ul><li>Funding / Budgeting </li></ul></ul></ul><ul><ul><li>Project Definition Phase </li></ul></ul><ul><ul><ul><li>Technology / License Selection </li></ul></ul></ul><ul><ul><ul><li>PMC / Engineer Selection </li></ul></ul></ul><ul><ul><ul><li>Process Design / Basic Design </li></ul></ul></ul>
  8. 8. EPC PROJECTS DEVELOPMENT ( 2/2 ) <ul><ul><li>Project Implementation Phase </li></ul></ul><ul><ul><ul><li>Pre-Qualification of the Potential Bidders </li></ul></ul></ul><ul><ul><ul><li>EPC Bid (ITB, Site Visit, Clarifications, Bid Submittal) </li></ul></ul></ul><ul><ul><ul><li>Contract Award (Clarification & Negotiation) </li></ul></ul></ul><ul><ul><ul><li>Project Execution </li></ul></ul></ul><ul><ul><ul><li>Pre-Commissioning & Commissioning </li></ul></ul></ul><ul><ul><li>O&M Phase </li></ul></ul><ul><ul><ul><li>Start-Up & Operation </li></ul></ul></ul><ul><ul><ul><li>Maintenance </li></ul></ul></ul>
  9. 9. EPC PROJECTS BIDDING PROCEDURE Define Scope Funding Budgeting Feasibility Study Project Planning & Preparation Phase PMC/Engineer Selection Process/ Basic Design ITB Preparation PQ Evaluation & Clarification ITB Bid Evaluation & Clarification Bid Negotiation Letter of Intend Contract Negotiation & Signing Owner Marketing/Sales Approach Bidding Strategy Partnering PQ Proposal Site Survey & Clarification Cost Estimate & Bid Submission Contractor Project Definition & Implementation Phase Project Execution Engineering Design Procurement /Supply Construction Implementation Phase
  10. 10. BUSINESS MODEL OF INTERNATIONAL EPC CONTRACTORS ( 1/2 ) <ul><ul><li>Partner Structuring (contract scheme) </li></ul></ul><ul><ul><ul><li>Consortium, Vertical Split, Joint and Several </li></ul></ul></ul><ul><ul><ul><li>Joint Venture, Share Profit & Loss </li></ul></ul></ul><ul><ul><ul><li>Prime and Sub, Horizontal Split </li></ul></ul></ul><ul><ul><li>Global Resources Integration </li></ul></ul><ul><ul><ul><li>Low Cost Engineering Offices </li></ul></ul></ul><ul><ul><ul><li>1st Layer Management by Expat </li></ul></ul></ul><ul><ul><ul><li>2nd Layer Management by 3rd Countries </li></ul></ul></ul><ul><ul><ul><li>3rd Layer by Local Sub </li></ul></ul></ul>
  11. 11. BUSINESS MODEL OF INTERNATIONAL EPC CONTRACTORS ( 2/2 ) <ul><ul><li>Risk Management </li></ul></ul><ul><ul><ul><li>Technical, Commercial, Financial </li></ul></ul></ul><ul><ul><ul><li>Risk Analysis, Risk Transfer, Risk Mitigation, and Risk Control </li></ul></ul></ul><ul><ul><li>Support by Financial Institutes </li></ul></ul><ul><ul><ul><li>Project Finance by EXIM Bank and Commercial Banks </li></ul></ul></ul><ul><ul><ul><li>Bonding via Global Network </li></ul></ul></ul>
  12. 12. SWOT OF CONTRACTORS IN THE INTERNATIONAL PROJECTS <ul><ul><li>S trength – Well-Educated Engineers with Diversified Construction Experiences and Devoted Mentality </li></ul></ul><ul><ul><li>W eakness – Lack of Projects Records, English Language Barrier, Poor Support by EXIM Bank and Related Industries </li></ul></ul><ul><ul><li>O pportunity – Numerous </li></ul></ul><ul><ul><li>T hreat – Contractors from other Asian countries </li></ul></ul>
  13. 13. WINNING STRATEGY OF CONTRACTOR –SHARING EXPERIENCES <ul><ul><li>How could you be invited to bid alone or with a partner? </li></ul></ul><ul><ul><li>What benefits you can bring it to a partner? </li></ul></ul><ul><ul><li>Establishment of projects records </li></ul></ul><ul><ul><li>Project management capabilities </li></ul></ul><ul><ul><li>Global EPC capabilities and experiences </li></ul></ul><ul><ul><li>Finance capabilities </li></ul></ul><ul><ul><li>Joint forces of contractors </li></ul></ul>
  14. 14. OPEN DISCUSSION
  15. 15. Thank You

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