Waiting in the wings

Everyone in plant construction seems to be doing well these days. Whether it is AkerKvaerner or Foster Wheeler landing huge orders from Saudi Arabia, or BASF commissioning its first plant in Nanjing, there has been no let-up in the steady stream of orders for new production facilities coming from both Asia and numerous oil producing countries.

What makes this all the more surprising is not just that some markets are still languishing, but also the sheer size of what is being ordered. Current projects include ethylene plants for 600,000 tons p.a., methanol plants with an output of 100,000 tons p.a., and polyethylene production lines that can supply the market with up to 400,000 tons of plastics every year.
Figures like these are enough to worry even experienced managers, such as Dr. Aldo Belloni, who sits on the Linde Board of Management. Yet it is precisely the scale of these contracts that Belloni believes to be his company’s greatest advantage. After all, a newcomer to the market would scarcely be in a position to handle such world-scale projects, if only because of the scale of the finance required: credit insurance is impossible to come by without good references. One consequence of this, says  Belloni, is that there are some areas in which Linde Engineering has not had to contend with any new entrants at all in the past 15 years.

Europe’s leading plant builder, the French group Technip, began the new year in a similarly upbeat mood. Its January revelation that it had orders in hand worth more than E 1 billion turned up the heat on its competitors, forcing them to reposition themselves and diversify in order not to lose any more ground. In an exclusive interview with PROCESS (see page 30), Dr. Wolfgang Essig of German plant builder Uhde explains why he, unlike Belloni, believes that engineering companies these days need a more varied offering. The diversification that this is bound to entail is something he is prepared to tackle by acquisitions, if necessary.
What is certain is that players in international plant construction can expect to meet with much more Asian competition in future years, especially from China, where a new generation of highly-motivated and efficient engineers is already waiting in the wings. We can only hope that in five years’ time, Europe’s established plant builders will still be brandishing their licences and references with the same élan as they are doing now.

-Frank Jablonski-