[Let's Run Again, Construction Korea] Hyundai Engineering Breaks Through European Barriers

Polymeri Poliche Plant Order... First Achievement in Civil Engineering and Building-Related Fields in Europe
Korea Infrastructure & Urban Development Corp's First Project... Demonstrating 'Overseas Construction Team Korea' Capabilities
Another Good News in June with 2.7 Trillion EPC Project... Fruitful Results in Developing New Markets in Asia, Middle East, and Europe

Panoramic view of the PDHPP plant site in Police, Poland.

The Police region, located about 460 km northwest of Warsaw, the capital of Poland. Currently, Hyundai Engineering is actively engaged in the construction of the Polymer Police PDH/PP plant project here. With a total project cost of 992.8 million euros (approximately 1.4 trillion KRW), this is the largest petrochemical plant project in Poland's history, building facilities to produce 400,000 tons of polypropylene annually along with supporting infrastructure. Selected as the first investment project by the Korea Overseas Infrastructure & Urban Development Corporation (KIND), established in 2018, Hyundai Engineering secured the final contract in 2019 based on its plant design and construction capabilities, demonstrating the strength of the 'Overseas Construction Team Korea.'

◆ Winning Poland's largest petrochemical plant project worth 1.4 trillion KRW... First entry into Europe = The Polymer Police PDH/PP plant project is regarded as a milestone in the history of Korean overseas construction contracts. Until now, domestic construction companies have mainly handled civil engineering projects such as bridges and tunnels in Europe, as well as construction projects for factories and office buildings of automobile, tire, and electronics companies. However, this is the first time a Korean company has entered the European market by winning a large-scale chemical plant project in the European Union (EU), where advanced plant companies abound. This project, commissioned by Azoty Group, Poland's largest private petrochemical company, will produce 400,000 tons of polypropylene annually after completion, significantly contributing to Poland's economic development through domestic sales and exports.

Since joining the EU in 2004, Poland has maintained steady economic growth. In 2018, it recorded the highest economic growth rate among EU countries and is recognized as the fastest-growing country in Europe. Industry experts expect that Hyundai Engineering's plant contract will prove the technological capabilities and execution skills of Korean construction and engineering firms, leading to expanded entry into the European market, which has traditionally had high entry barriers.

◆ Another good news from Poland in two years... Winning a 2.7 trillion KRW contract "Recognition of capabilities in Europe" = In June this year, Hyundai Engineering delivered another piece of good news from Poland. It secured an EPC contract worth approximately 2 billion euros (about 2.7 trillion KRW) for the 'PKN Olefin Expansion Project' from PKN Orlen, Poland's largest state-owned oil refining company.

This project is a large-scale petrochemical project located in the petrochemical complex in Plock, Mazovia Province, about 120 km northwest of Warsaw. It involves cracking naphtha produced there to produce ethylene, known as the "rice of the petrochemical industry," at an annual scale of 740,000 tons. Hyundai Engineering's project management and risk management capabilities, accumulated through the 'PKN Olefin Expansion Project' contract won in 2019 and currently underway, were recognized by the client PKN Orlen, positively influencing the contract award.

Notably, this contract is seen as the fruit of Hyundai Engineering's continuous pursuit of the 'FEED-linked EPC contract strategy.' By actively strengthening Front-End Engineering Design (FEED) capabilities, which have been a strong point of advanced engineering firms in Europe and the U.S., Hyundai Engineering has gained recognition in Europe, attracting market attention.

Aerial view of the PDHPP plant in Police, Poland.

◆ Expanding into new markets in Europe, Southeast Asia, and the U.S. beyond Asia and the Middle East "Success of FEED-based sales strategy" = Recently, overseas plant projects have undergone a paradigm shift, starting from business feasibility analysis and basic planning through FEED (Front-End Engineering Design), leading to EPC (Engineering, Procurement, and Construction) contract awards. However, many domestic plant EPC companies still face limitations, unable to move beyond the bid-contract-simple construction structure.

In response to this paradigm shift, Hyundai Engineering has focused on expanding its strategy beyond Central Asia and the Middle East to various countries including Europe, Southeast Asia, and the U.S. Hyundai Engineering's strategy is to secure FEED execution capabilities that exceed those of leading global EPC companies and to grow into an organization that leads plant contract sales based on FEED capabilities. Already in 2011, Hyundai Engineering won a FEED contract for the Kandym Gas Processing Facility in Uzbekistan and in 2015 secured and completed an EPC main construction project worth about 3 trillion KRW. Building on this experience, Hyundai Engineering has diversified its overseas markets, achieving new market breakthroughs by winning contracts such as the 'Russia Methanol Plant FEED,' 'Indonesia Balikpapan Refinery,' and 'Malaysia Rosemary Gas Processing Facility FEED.'

A Hyundai Engineering official stated, "Based on abundant FEED execution experience and successful completion of FEED-linked EPC projects, our sales paradigm strategy?from plant business feasibility analysis to FEED to EPC main contract award?is successfully taking root."