Financial Times FT.com

Amec enters S Korean energy sector

By Christian Oliver in Seoul

Published: October 15 2009 22:30 | Last updated: October 15 2009 22:30

Incheon Bridge
Catalyst: Incheon Bridge links the international airport to Songdo, a new city that developers believe will become a business hub for north-east Asia

Amec, the UK engineering consultancy, is moving into South Korea’s energy sector after forging its reputation there by leading the construction of one of the world’s largest bridges.

In a big step for a non-Korean company in a country that has a mixed reputation over its attitude to foreign investment, Amec has formed a joint venture with Korea Electric Power Corp and Korea Gas Corp.

The venture will steer the expansion of the two state-run companies abroad in the nuclear and hydro-carbon sectors.

Samir Brikho, the chief executive of Amec, who will on Friday attend the opening of the 12.5km bridge in Korea, told the Financial Times he was also seeking to develop green cities and cut carbon emissions in partnership with the Korean government.

“The bridge has been a great opportunity to showcase our skills and to leverage them to expand into the energy sector,” he said.

The $1bn bridge, which took four years to build, connects Yeongjong island, the site of Incheon International Airport, to the mainland. It will improve connections to Seoul and to the new city of Songdo.

Amec’s operations in South Korea also illustrate its broader strategy of ditching heavy construction work to focus on the energy industry. They also chime with Seoul’s ambitions to deal with its wasteful usage of energy and clean up dirty industries through a “green new deal”.

Mr Brikho said working with Samsung Engineering & Construction had shown him that South Korea’s giant companies possessed the technical skills needed for big projects. But he said the UK group had expertise in programme management and a holistic approach “that still needed to be learned” in South Korea.

British companies are largely priced out of basic engineering work in Asia, but diplomats say they are positioning themselves to work in design, research and logistics.

While Kepco plans to build 18 more nuclear power stations in South Korea, Mr Brikho hopes to use Amec’s global network to take Kepco into international markets, including the Middle East. Kogas is the world’s largest importer of liquefied natural gas but seeks Amec’s guidance in developing resources abroad, Mr Brikho said.

“We are looking to take Korea abroad and develop relationships abroad.”

Both South Korean companies are facing scrutiny at home for losing money in earlier foreign ventures. Amec owns a 24 per cent stake in the Incheon Bridge Company, which will operate the toll bridge for 30 years. Mr Brikho said there was no specific timeframe to recoup its investment or target profits. “It’s like a power plant. You see it works and, if there is no risk, the value goes up.”

The bridge is hoped to become a big earner as it links the airport directly to Songdo, a new city developers believe will become an international business hub for north-east Asia.

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