CTCI Corp (中鼎工程), which builds refinery and power plant facilities, said that it is seeking new business opportunities in “green” energy and pollution reduction projects as demand from refinery clients weakens.
“Since last year, the battle between OPEC and US oil shale producers has led to a glut, forcing prices down amid waning demand from emerging markets, and we have been preparing for this tremendous shakeup,” CTCI spokesperson Hsiao Ming-cheng (蕭明證) told an investors conference on Wednesday.
The company is to bid for air pollution reduction contracts at power plants in Taiwan, Vietnam and Malaysia before the end of the year, Hsiao said.
The company also plans to continue improving its frontend engineering design services to attract more construction contracts and pursue additional maintenance revenues from existing clients, Hsiao added.
The company reported that sales in the first eight months of this year grew 13.93 percent to NT$40.8 billion (US$1.23 billion), while net income in the first half rose 14 percent year-on-year to NT$988.65 million, or NT$1.31 per share.
As of August, the company reported NT$18 billion in new contracts, compared with NT$77.9 billion last year, while backlog contracts reached NT$166.8 billion, compared with NT$187.1 billion a year earlier.
Refinery and petrochemical projects accounted for 37 percent and 8 percent respectively of new contracts this year, the company said.
To weather the downturn in global oil and petrochemical industries, the company is seeking higher value-added segments, such as contracts for natural gas field facilities, light natural gas export terminals, hydrogenated styrenic block copolymers, and C4 and C5 derivative product plants, Hsiao said.
The company also plans to bolster its service offerings by obtaining upstream technologies such as ethylene crackers, cryogenic tanks, and signal systems for mass rapid transit systems by with strategic partners and through acquisitions.
Next year the company is hoping to tap into the NT$570.6 billion in contract revenues across the globe, of which NT$181.2 billion are non-oil and petrochemical projects.
“As OPEC has established a marked price advantage over US oil shale producers, we anticipate oversupply to begin diminishing gradually, but the situation is more favorable for the US shale gas segment,” Hsiao said.
In the US market, the company is upbeat on continued investments in the country’s shale gas industries, as the cost of US shale gas as feedstock to produce ethylene is lower than naphtha sourced from Asia, seeing growth potential driven by ethylene glycol, ethylene oxide and low-density polyethylene.
CTCI shares rose 4.25 percent to close at NT$40.5 on Friday in Taipei trading outperforming the market’s 0.11 percent gain that day.
The Executive Yuan’s Public Construction Commission said that it has selected CTCI to spearhead its program to export the nation’s expertise in building power plants to the Middle East and Southeast Asian markets.
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