February 26, 1999 in Social Responsibility News

SHI Designated As a GE's Superior Power Generation System Vendor

Samsung Heavy Industries (President& CEO : Lee Hae Kyu) has been selected by GE, U.S.A. as an official global vendor for the supply of power generation facilities for the first time in Asian market, succeeding in forming a partner system with GE in the power generation facility market.
Samsung has been selected as the first GE business partner in Asia after undergoing rigid inspections of production, technology, business, engineering, and cost competitiveness by GE featuring world's highest technological ability and M/S.

As GE's selection of Samsung came at a time when the Korea Heavy Industries & Construction Co., Ltd. privatization is at hand, public attention is centered on Samsung's possible coalition with GE with respect to participating in the privatization project.

Thanks to such achievements, Samsung Heavy Industries has recently acquired orders for 3 units of HRSG (Heat Recovery Steam Generator) for US$16,000,000 from GE (General Electric), well-known for its rigid quality standards, and Parsons Power Group, of the U.S.A.

One unit of 250MW class HRSG ordered by GE, the world's largest gas turbine maker, at a price of US$9,000,000, is scheduled to be installed in Great Yarmouth, England some during Feb 2000, and the 2 units of 70MW class HRSG ordered by Parsons Power Group at a price US$7,000,000 will be installed in Sep 2000 at the regional heating combined cycle power plant in Zagreb, Croatia.

The HRSG is a combined cycle power generation system which turns gas turbines through the use fuel combustion to generate electricity, and the hot and high-pressure exhaust heat produced therefrom is used again to produce steam. This steam is then used to turn steam turbine to produce electricity again. Samsung Heavy Industries holds the largest performance record in this field, with its independent designing, manufacturing, installing and engineering capabilities are well recognized worldwide.

[Samsung's success in being selected as GE's Asian partner among its 5 major vendors under the current adverse environment, such as the stagnated domestic power generation facility market, is attributable to the fact that Samsung's technical level and facilities capable of manufacturing more than 20 generators/year have been recognized, particularly in the field of design engineering that Samsung can independently carry out without the help of any advanced technical partner.], said an official from Samsung Heavy Industries. Following GE's selection of Samsung Heavy Industries as its official global vender, Samsung now holds more advantageous position in relation to future domestic power generation project restructuring.

Related industries believe relations between Samsung and GE will become closer following Samsung's success in receiving orders and GE's selection of Samsung as its official vendor. Currently, negotiation is under process between these two companies regarding other projects worth more than US$100,000,000.

As of 1998, participation in HRSG by Samsung Heavy Industries is ranked 6th in the world market or 7.1% of the total world demand.

GE has the largest market share (37.8% based on 1998 performance) in the world gas turbine market.
Jack Welch, CEO and Chairman of GE, has expressed intention to take 20% equity in relation to the privatization of Korea Heavy Industries & Construction Co., Ltd.

In July last year, Samsung Heavy Industries made inroads into the European market, for the time for a domestic power generation plant maker, succeeding in receiving large orders worth approximately US$107,000,000 from various companies including Siemens, Germany. By successfully advancing to the U.S.A. market following the above-said feat, Samsung's technical capability is now recognized in the advanced world market.

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