Reaching Sustainable Growth through Innovation

John T. Yu, Group Chairman of CTCI

In the face of severe challenges brought by the global COVID-19 outbreak in 2020, CTCI has upheld the "most reliable" brand spirit by joining hands with owners, partners, and suppliers. Not only have we mitigated the impact, but we have allowed business operations worldwide to go on uninterrupted. However, we still fell short of expectations in terms of revenues in 2020 even with all the hard work. The good news is that the prospect for 2021 is brilliant given that in the latter half of 2020, we successively securing multiple significant orders, including a multi-billion dollar power plants contract, tapped into the clean energy sector— offshore wind and solar power— and successfully branched out into the advanced technology facility engineering business. These fruitful results have helped us break historical records in both backlogs and annual contract amount, reaching our multi-billion dollar contract goal far ahead of schedule.

Our excellence not only lies in sales performance, which allowed us to be consistently ranked among Engineering News-Record’s top 100 international EPC contractors and number one contractor among CommonWealth Magazine's top 650 service sector enterprises. We have also achieved remarkable brand management and ESG (environmental, social, and corporate governance) performance. We have been incorporated into the Dow Jones Sustainability Emerging Markets Index (DJSI) for six consecutive years, and are ranked number two in the global construction and engineering sector. Moreover, we have won 18 awards in Taiwan’s Global Corporate Sustainability Awards (GCSA) and Taiwan Corporate Sustainability Awards (TCSA), including GCSA’s Global Outstanding Professional Award for the Group Chairman, and TCSA’s Top 10 Domestic Companies Sustainability Model Awards (Service Industry). We were also given the "Excellence in Corporate Social Responsibility Award" by CommonWealth Magazine, and was recognized by Taiwan Stock Exchange in its Corporate Governance Evaluation system as a top 5% company. As for brand management, we have been selected as one of the "2020 Best Taiwan Global Brands" by Interbrand, an authoritative international brand appraisal institution. These achievements both demonstrate our outstanding business performance as well as bring significant recognition to all employees.

Looking ahead to 2021, we will continue to innovate and grow in response to the ever-changing and competitive global market so as to stay further ahead of our competitors and lay a solid foundation for CTCI to be invincible.

Some Insights on Industry Trends and Corresponding Strategies

Looking at the changes in the global industry, we have observed that hydrocarbon and petrochemical market have become ever mature in recent years, with demand falling. Coupled with the impact from COVID-19 pandemic, crude oil prices even once dropped negative. Moreover, the use of fossil fuels has led to climate change and pollution, posing a threat to human survival and safety, which will also significantly reduce the willingness to invest in hydrocarbon plant projects. On the other hand, as strong growth momentum for high-tech industry sustains and the demand for plant construction continues to rise, we see huge business opportunities in the upstream and downstream industry chains. In addition, changes in international politics and economics have led to the rise of de-globalization and a different supply chain landscape, exacerbated by the China-US trade war. Long chains now become short chains, creating regional development opportunities.

In view of these trends and business opportunities, we have formulated our future development strategies. In addition to our core business competencies, we will actively seek business opportunities in "energy transition" and "advanced technology facilities engineering," and will continue to notch up success by combining our solid capabilities of more than 40 hubs worldwide.

1.Energy Transition
We are actively engaging in the renewable energy sector. Last year (2020), we successfully manufactured the first batch of domestic offshore wind turbine equipment, and have subsequently secured pin piles manufacturing orders for Zhong Neng and Changfang & Xidao offshore wind farms. With regard to solar power, we have hit national record in terms of largest installed PV panel capacity at seaports, restored landfills, and rail transit stations across Taiwan. Moreover, we support the government's gas-fired power approach in seeking nuclear-free energy transition. With rich experience and track records in energy and power plant constructions at home and abroad, we won CPC Corporation’s and Taiwan Power Company’s projects. We vow to help the government achieve the goal of energy diversification and stable power supply with low to zero carbon emissions. We expect more green power business opportunities to come, which will become one of the directions where we will be heading for in the future.

2.Advanced Technology Facilities Engineering
Last year, we were awarded a plant construction contract for a Taiwanese high-tech company in the US. Given the rapid development of the high-tech industry chain, we will systematically invest in high-tech engineering and further cross over to waste treatment and reuse businesses. We have rapidly integrated our group resources and experiences and set up a new unit called Advanced Technology Facilities Business Operations, or ATFBO, in an aggressive bid for businesses in five major areas: integrated circuits (IC), precision testing, optoelectronics, computers and peripherals, and communications. In addition, by drawing on our experience in waste treatment, water reclamation and waste IPA reuse, we will seek relevant business opportunities in the IC manufacturing process. This can help us stay ahead of the game and keep abreast with the business opportunities in high-tech industry.

Three Types of Innovations Lead to Sustainable Growth

"Innovation" is the key to surpass our competitors and ensure sustainable growth. Our three major innovations are "innovation in technologies," "innovation in business model" and "innovation in management."

In terms of "innovation in technologies," last year we have seen nearly 30 innovative applications related to intelligent EPC1.0 (iEPC 1.0), which includes our in-house "pipe cleaning robot" and "automatic welding robot"; digitalization of engineering data, such as automatic delivery of upstream and downstream data; and new applications of RPA (Robotic Process Automation) for hydraulic analysis. We will continue to innovate and move towards iEPC2.0. As another example of our innovation, the GCGV 1.1 MTA MEG EPC project currently under way in the United States, is the largest onshore modularization project that has seen significant reduction in construction cost, module size, and overall plant size.

As for "innovation in business model," in addition to our systematic expansion into the high-tech sector, we have introduced a new profit-sharing contracting model that allows us to share certain amount of the owners’ profits while helping them reach their process optimization targets, a win-win for both parties. Another win-win innovation is to invite our clients to join our procurement and subcontracting processes, a measure that can provide transparency to contract information and reduce risks.

In terms of "innovation in management," one example is the transparent communication channels with incentive schemes aimed to collect innovative proposals from our colleagues. So far, more than 100 proposals have been accepted, which is a remarkable achievement. Regarding the COVID-19 pandemic outbreak, we had immediately launched a pandemic prevention center, which saw a comprehensive pandemic prevention and response mechanism as well as a global project risk management plan in place to ensure business continuity. We have provided all of our outposts the necessary goods to combat the pandemic. The clear standard operating procedures allow us to take swift response in case of any incident, so that every colleague can have a peace of mind at work.

Innovations are the key for us to reach sustainable development with better ease and more possibilities! 

Discover Reliable, Create Reliability, and Be Reliable

"Professionalism, Integrity, Teamwork, Innovation" defines our corporate culture, while "Most Reliable" is our brand spirit. Internally, we ask all employees to integrate corporate culture into their daily routine; externally, we must provide a consistent brand image so that our customers can trust us.

People and talents are indispensable if we are to create reliability. They are our most important asset, which is why we value talent cultivations and trainings, regardless of job ranks. Last year, we went through leadership transition, facilitated by a program called "Transition in Leadership for Everlasting Growth." The transition is to bring new perspectives and mark another milestone. Moreover, to maximize team potential and reach organizational synergy, every employee is required to make an individual development plan, or IDP, and enroll in "CTCI University"— a corporate online learning platform that is borderless, has no time difference, and aims to strengthen employees’ capabilities, allowing them to be more professional, outstanding, and reliable.

Solid financial performance. Diversified business outreach. Global talent cultivation. Sustainable and innovative brand management. These are what have made us become "the most reliable global engineering services provider." We will stay true to our spirit and keep providing quality engineering in a sustainable manner, so that CTCI becomes synonymous with "reliability" in the hearts of our global clients.