CTCI 40 Years, Rising to the Challenge–Building the Most Reliable, Sustainable Engineering Brand

CTCI Group Chairman John T. Yu

Welcoming the brand-new 2020, CTCI has also entered its 41st year, expecting to reach a new milestone with further glory.

Last year (2019), CTCI continued to gain recognition from multiple parties for its most reliable engineering strengths. It ranked 28th among the 650 major service industries released by Taiwan’s CommonWealth Magazine, and has retained Top 1 in the Contractor Sector. As for rankings released by the Engineering News Record (ENR), an important indicator of the international engineering industry, it ranked 73rd and 80th in International Contractors and International Design Firms, respectively, among the top 100 in the world, which highlight CTCI's global strengths and performance. In addition, CTCI promotes global sustainability with its core engineering expertise, and the outstanding CSR and sustainable management results saw us selected as a component of the Dow Jones Sustainability Indices (DJSI) in the Emerging Markets index for the fifth consecutive year, while ranking third in the global engineering & construction industry. This has also demonstrated that CTCI's performance in corporate governance, environmental protection, and social participation is satisfactory, and the achievements of the collective efforts of all employees in the group are fully recognized.

In the highly competitive global market, we are facing the threat of powerful international EPC companies. Let us maintain a sense of urgency and continue to stride forward to not only surpass Korean competitors but also catch up with the top-level international EPC companies in Europe, the US, and Japan. In order to achieve such goals and surpass the achievements of the past 40 years, in addition to utilizing its advantages in global resources, CTCI will continue to make improvements and make bold progress in four major fields: expansion of international business, project execution and management, continuous innovation, and internal branding, so as to strengthen its global competitiveness and build "the most reliable engineering services brand" sustainably.

Redouble Efforts in Business Development in the US Market and Internationally

CTCI has developed its core business in the field of hydrocarbon for 40 years and has completed countless arduous EPC turnkey projects in the fields of oil refining, petrochemicals, natural gas, and chemistry at home and abroad from Asia, the Middle East, to the Americas. Important major projects include Liwa Plastics Industries Complex (LPIC) Package 1–Steam Cracker with Off-Site Works & Utilities in Oman, Petronas RAPID Package 1 RFCC Project in Malaysia, Thailand PTTLNG Nong Fab LNG Receiving Terminal Project, and GCGV 1.1 MTA MEG EPC Project in the US. Particularly, with breakthroughs in shale gas drilling technology in the US in recent years, it has become the most popular place for investment in global petrochemical plants outside the Middle East. This booming market is the focus of CTCI's future development and an important key to the continued growth of our business.

To expand the business in the US market and respond to the needs of local clients in a timely manner, we have quickly adjusted our organization and set up a US Regional P&L with CTCI Americas as the main pillar to expand its organization, functionality, and authorization; all works in the US, from business development, project execution, revenue to financial performance, is solely managed and controlled by the Regional P&L. In addition, to strengthen CTCI's competitive advantages in the US, we have tapped into CTCI's global resources with the highly competitive engineering and procurement resources offered by CTCI HQ in Taipei. CTCI Americas is a streamlined and flexible engineering, procurement, and construction organization, responsible for project and construction management, with a strong and fantastic team of "Taipei x US" talents, differentiating itself from competitors and continuing our way to victory. The region-centered market development strategy adopted by CTCI Americas is also different from CTCI's previously adopted business unit-oriented profit centers, and fully utilize functions and advantages of the organization, generating more momentum for CTCI to expand its global territory, and accelerate the expansion of international business.

Optimization of Project Management and Improvement of Quality and Safety

International EPC turnkey projects are both risky and difficult to execute, and their interfaces are numerous and complicated. To provide clients with better quality of services, CTCI continues to optimize project management, strengthen the transparency of global project information management, and keep track of all stages of project execution accurately while speeding up the establishment of various SOPs. Take the GCGV 1.1 MTA MEG EPC project (a joint venture by ExxonMobil and SABIC) currently implemented in the US as an example. This project is the world's largest modularization onshore project, with the project being executed simultaneously in Taiwan, the US, China, Mexico, India, and Malaysia. To keep track of the progress and execution of the project, the JV team formed by CTCI and McDermott identified tasks that are important, special, and urgent on a dashboard report that reflects project status dynamically. It is updated on a weekly, daily, or even hourly basis, making all issues easy to understand at a glance. Should there be any problem or delay, all project stakeholders would learn about it immediately, and everyone involved would then search for the cause and solve the problem together in order to ensure the success of the project with transparency. The dedication, creativity, and spirit of active cooperation demonstrated by the JV team in the execution of this project also led to excellent results which earn owners' trust and further strengthen our reputation. Last year, the Group Engineering Business (GEB)'s Hydrocarbon Business Operations (HBO) and Infrastructure, Environment, and Power Business Operations (IEPBO) have each selected two ongoing projects to implement this transparent management model on a trial basis, which will be gradually implemented to all CTCI projects around the world.

In addition, in order to improve the effectiveness of HSE management, so that CTCI's more than 40 affiliated companies at home and abroad have consistent standards, we have implemented the Alliance Lead comprehensively to coordinate our management and implementation of HSE policies, enabling each CTCI's affiliated company to meet the international standards in terms of performance and effectiveness of safety and health management. Meanwhile, we work with collaborating vendors and partners to put into practice the goal of "safety first." The specific results of our safety first corporate culture have been reflected in our project execution. The number of safe man-hours of the Liwa EPC 1 project implemented by GEB have reached 68 million hours at the end of 2019, setting a new safety record in our history. Meanwhile, the other two major business groups: Group Resource Cycling Business (GRCB) and Group Intelligent Solutions Business (GISB) have also received multiple national HSE awards.

Making the Pie Bigger through Continuous Innovation

"Innovation" is part of CTCI’s corporate culture and is also the key to CTCI's ability to develop new businesses and grow steadily for years. CTCI's three major business groups have been actively demonstrating outstanding results in business model innovation. For example, the intelligent EPC (iEPC) project model developed by GEB will become an advantage to differentiate us from competitors. By introducing various high-tech applications, such as AI and big data, into EPC project interfaces, projects will be executed even faster, better, more precisely, and thereby become more competitive; iEPC version 1.0 will be launched first this year (2020), followed by version 2.0. In the waste incinerator market, GRCB's (ECOVE) business model is also an important innovation; from consulting work, to EPC turnkey projects, and to operations and maintenance to build-operate-transfer (BOT) investments and developments. While our competitors have only reaped one benefit doing BOT projects, ECOVE has achieved other benefits of investment and development, EPC turnkey project, and operations and maintenance at the same time. GISB, on the other hand, is dedicated to implementing Industry 4.0 services and smart industrial solutions, developing factory energy saving solutions, promoting smart factories and smart transportation innovation services. There is tremendous potential in using innovative technologies to drive industrial intelligent upgrades, in the future, new technologies and techniques will be continuously introduced to strengthen our innovation capabilities.

In addition, owning process technologies is also one of the innovative changes we can make in our business model. CTCI already has the ability to undertake a single EPC contract valued US$2.5 billion in the international market. In order to grow our annual revenue to US$10 billion mark as planned, we must make the pie bigger. To this end, CTCI is actively planning to invest and acquire process technology companies with the aim of keeping pace with European and US EPC companies owning process technologies, so as to increase our market share.

Internal Branding –Where There is CTCI, There is Trust

Over the years, CTCI has accomplished numerous daunting tasks worldwide and earned clients' recognition with the corporate culture of "professionalism, integrity, teamwork, and innovation." With the development of business and international presence, challenges encountered during daily project execution are also increasing. What remains unchanged is the commitment of all CTCI employees to the brand spirit of being the "Most Reliable." We see our team members take a proactive attitude to prevent problems from occurring wherever in the world we are operating. We constantly improve our quality control, seek ways to exceed clients' expectations, overcoming difficulties encountered, and always being five percent more perseverant than others with the determination to accomplish the mission without easily giving up. This brand spirit of "I am CTCI. I am Reliable" is exactly the work attitude adopted by all CTCI employees.

Employees have always been the most important asset of CTCI and the momentum that drives CTCI to advance in the international market. To bring employees together and further cultivate the corporate culture, we have made a great deal of efforts to lay the foundation. First, we nurture and retain talents on a comprehensive basis, launch training programs for all employees and build the platform of "CTCI University" that integrates domestic and international learning resources from industry, academia, and government circles to accelerate the development of young potential talents and succession of key job positions. CTCI University's courses include the training and competences required for all employees' career development within all CTCI companies, and the training program is implemented in a systematic manner, so that employees can continue to grow with CTCI's international expansion and leverage their own strengths. Secondly, we Implement two-way communication to discover problems proactively and assist employees to find solutions. Thirdly, we establish an annual KPI for each employee, implement a fair, just, and clear performance appraisal system with proper rewards and penalties. All managers are also expected to lead by example to establish a sound corporate culture.

Looking forward, we envision to achieve "where there is CTCI, there is trust." CTCI will continue to innovate and provide the most advanced EPC turnkey services to clients around the world and bring reliable and high quality engineering to places where is needed. CTCI, as the most reliable global engineering services provider, will continue to exert our maximum influence in engineering and make the world a more advanced and better place.