[Run Again, Construction Korea] Daewoo E&C Builds World's Longest 15km 'Al Faw Breakwater'... A Launchpad for Iraq's Rebound

The Iraqi government has established a master plan to invest 53 trillion won to develop the Al Faw New Port into one of the world's top 12 ports by 2041. The Al Faw breakwater (photo) is the first project in the first phase of this master plan.

The Iraqi government, aspiring to reemerge as a dominant power in the Middle East, has embarked on constructing a large-scale new port in Al-Faw, Basra Province in the south. Basra is the only region in Iraq with access to the sea. The plan is to develop a massive port capable of handling 99 million tons of containers by 2041, serving as a foundation for economic revival.

Daewoo Engineering & Construction (Daewoo E&C) was entrusted with the first phase of the Al-Faw new port project, which involves building the world's longest breakwater, measuring 15.5 km. Leveraging its extensive large-scale technical expertise and trust earned both domestically and internationally, Daewoo E&C is instilling the spirit of Korean civil engineering on site.

◇World-class technical expertise... Selected as Civil Engineering Structure of the Year= The Al-Faw breakwater, with a total length of 15.5 km, is the longest breakwater in existence worldwide. The project involves constructing a rubble mound breakwater and internal revetments, with a total construction cost of approximately 870 billion KRW. Daewoo E&C broke ground in February 2014 and completed the construction in September last year after a six-and-a-half-year journey.

The breakwater incorporates world-class technology. In July, it won the grand prize at the 'Civil Engineering Structure of the Year Contest' hosted by the Korean Society of Civil Engineers. This prestigious contest selects outstanding civil engineering structures that have significantly contributed to the development and promotion of civil engineering technology.

Successfully completing this project, Daewoo E&C subsequently secured additional contracts for follow-up new port development projects worth a total of 3 trillion KRW through negotiated contracts. This has laid the groundwork for participation in future phases 2 and 3 development projects, estimated at about 48 trillion KRW.

The follow-up projects awarded to Daewoo E&C for the Al-Faw new port include five contracts: container terminal quay wall construction (510 million USD), container terminal dredging and reclamation (720 million USD), Al-Faw to Umm Qasr connecting road (440 million USD), new port main navigation channel (310 million USD), and Khor Al Jubair immersed tunnel main construction (630 million USD), totaling 2.625 billion USD.

Through these follow-up contracts, Daewoo E&C has accumulated a total of 10 contracts worth approximately 4.1 trillion KRW at the Al-Faw new port alone. The consecutive awards in the same project allow Daewoo E&C to utilize skilled personnel and existing site equipment, minimizing construction risks and enabling cost reduction.

A Daewoo E&C official stated, "The large-scale additional orders were possible because the client highly evaluated the technical skills and site management capabilities demonstrated in the Al-Faw new port project. Since these were negotiated contracts, high profitability is expected." He added, "We also plan to actively participate in the upcoming new port hinterland development projects."

In June, the groundbreaking ceremony for the 'NLNG Train 7' project held on Bonny Island, Nigeria, was attended by numerous Nigerian government officials. Considering the COVID-19 situation, the ceremony was conducted on a minimized scale.

◇Daewoo's technology embraced by Nigeria= Daewoo E&C has also made a new mark for Korean construction companies amid competition with global firms in Nigeria, Africa.

In June, the groundbreaking ceremony for the 'NLNG Train 7 Project,' in which Daewoo E&C is the main contractor, was held on Bonny Island, Rivers State, Nigeria. This project involves constructing an LNG liquefaction plant and auxiliary facilities on Bonny Island, with a contract value of approximately 5.181 trillion KRW. Daewoo E&C participates as the main contractor in a joint venture, holding about a 40% stake worth 2.0669 trillion KRW.

This project attracted attention because Daewoo E&C secured the main contractor status in the LNG liquefaction plant EPC (Engineering, Procurement, and Construction) market, which had been dominated by some global construction companies. Industry experts say that Daewoo E&C's high local recognition, based on its track record of constructing five out of six NLNG Train units from 1 to 6, was a decisive factor in winning the contract.

Notably, Nigerian President Muhammadu Buhari and government officials have officially endorsed the advancement of the LNG Train 8 project. Given Daewoo E&C's global competitiveness in Nigerian construction, expectations for additional project participation have increased as the Train 8 project gains momentum.

A Daewoo E&C official said, "Since we have global competitiveness in the LNG liquefaction plant sector, which is regarded as an eco-friendly energy source, we plan to pursue continuous growth and orders in related fields. The Nigeria NLNG Train 7 project is expected to be a cornerstone for Daewoo E&C to become a global construction company."

Daewoo E&C achieved a remarkable success in May last year by securing a prime contract in the LNG liquefaction plant construction EPC (Engineering, Procurement, and Construction) market, which is virtually monopolized by some global construction companies. The photo shows the construction site of Nigeria's 'NLGN Train 7' project. Photo by Daewoo E&C.

◇Strong overseas performance leads to good results despite COVID-19= Despite challenging external conditions such as COVID-19 and rising raw material prices, Daewoo E&C achieved the highest order intake, order backlog, and operating profit margin in the past five years last year. This was due to domestic urban redevelopment project orders and overseas project successes in Iraq and Nigeria.

This year, as of the third quarter, Daewoo E&C has recorded cumulative sales of 6.2465 trillion KRW, operating profit of 534 billion KRW, and net profit of 376.3 billion KRW. The operating profit for the first three quarters increased by 75.1% compared to the same period last year (305 billion KRW).

Net profit during the same period also rose 121% to 376.3 billion KRW, and gross profit reached 888.8 billion KRW (gross profit margin 14.2%), nearly a 44.2% increase compared to the previous year's 616.2 billion KRW (10.5%). The net profit for just the first three quarters of this year has already surpassed the total net profit of 282.6 billion KRW in 2020.

New orders are also progressing smoothly. So far, Daewoo E&C has recorded 7.6316 trillion KRW in orders, achieving 68.1% of the annual plan of 11.2 trillion KRW. Currently, Daewoo E&C holds an order backlog of 40.534 trillion KRW, a 6.4% increase from the end of last year, securing about 4.9 years' worth of work relative to annual sales.