The construction, maintenance and shutdown segments have realised that the market demands one-stop-shop services.


Saudi Arabia’s evolving EPC market

June 7, 2023

Heon Jae Yim, CEO of Sendan International Company, talks to The Energy Year about the stability of demand in the facility maintenance and shutdown segment and the company’s ambitions in skid manufacturing and modular construction. Sendan International Company is a Saudi general construction contractor for industrial construction and maintenance services.

How did market trends encourage service diversification among construction and maintenance players in Saudi Arabia?
After the construction boom in 2008 to 2015, the industrial construction market shrunk drastically, which continued to be the trend until the pandemic, with a lot of competition and not having many opportunities in the marketplace. Subcontractors to the major EPC players suffered a lot. This trend shrunk the size of the construction market, but it didn’t affect the demand for maintenance services, which remained stable during that difficult time.
The service providers for the construction, maintenance and shutdown segments realised that the market demands one-stop-shop services. There was a need to develop support services. In the last couple of years, as construction demand increased, these types of players grew their construction capabilities.
However, the industrial construction segment has too many fluctuations. For Sendan, it’s important to grab more of a market share in the maintenance and shutdown segments while growing skid manufacturing, modular plant construction and support service capabilities.

How is Sendan diversifying its offerings to provide services within the value chain?
Following our diversification plan, we will manufacture skids, develop plant modular construction and aim to participate on the dryer packages, skid packages and gas modular skids for the upstream, midstream, downstream, petrochemical and water and power sectors.
All of these will be provided in-house. To support our construction and maintenance services, we have other support services such as scaffolding, rotary equipment and valve repair and testing services.
Basically, we are following the industry’s trends to supply turnkey solutions as a one-stop-shop. Something that started as just construction or just maintenance now evolves into a five-to-seven-year plan, where we provide the client with engineering, construction and installation support services and maintenance within the same contract. These long-term agreements allow you to have a continuity of workload in the same area, which gives you excellence and customer satisfaction.

What are the main steps to achieve Sendan’s target of becoming an established EPC player?
Our first step is focusing on our biggest strength: construction and maintenance services. Once we have a larger footprint in this sector, we will aim to reach the capabilities of a tier-1 level company, so we can take on large-scale EPC contracts on our own. There will be a lot of opportunities for EPC contractors in this environment. However, our most active segment right now is greenfield industrial construction, where we want to become a key market player.
This is why we are now hiring more engineers and developing our team with the latest software tools to meet industry requirements and efficiencies. We have established an engineering centre in Pakistan with backup engineering offices in India. Our vision and target is to become a major EPC player in Saudi Arabia as a local company.
Saudi Aramco is now contacting us to do EPC contracts. We can see the market’s exponential growth in our numbers. We have secured the same value of contracts in the first two months of 2023 as we did during 2022 as a whole. Our revenue has almost doubled to reach about SAR 1 billion [USD 266 million] during 2023.


What are the company’s most important ongoing projects?
During Covid-19, many major players disappeared. In 2021, the market opened, and EPC contractors started searching for new reliable players in the market. During this time, we secured a lot of new contracts. The market has now started recognising Sendan’s true capabilities as a reliable partner for complex projects. For instance, in 2022, we completed the expansion of a gas compression facility expansion at the Safaniyah gas plant as an EPC contractor.
I think we have a good opportunity with these dynamics, as proven by our recent award of sizable contracts in Packages 1 and 2 of the Berri field expansion projects to provide civil construction for a gas-oil separation plant, where we have a massive resource involved. Also, we were awarded an EPC contract to build the first stainless steel seamless pipe and tube production plant in the MENA region, at the King Salman Energy Park (SPARK).
Currently, Sendan is performing multiple industrial drainage upgrade projects, being hired directly by Saudi Aramco and also participating in several EPC projects as a subcontractor. Our main challenge now is to deliver on these commitments and show our true reliability and strengths.
Sendan is working with the leading EPC company JGC at the DPCU [dew point control unit] project as a general construction contractor (CMEI [civil, mechanical electrical and instrumentation] scope) including the buildings package inside the Abqaiq plant of Saudi Aramco.
This project entails brownfield and greenfield construction. At peak, we expect to have over 2,000 people engaged on it. This project is of strategic importance for our company due to both the scope of work criticality and the execution schedule.

What are the main challenges perceived when developing new manufacturing units?
The localisation of technology through in-country manufacturing is at the heart of our In-Kingdom Total Value Add (IKTVA) initiative. We are continuously looking to attract new partners from South Korea, China, the US and other places around the globe.
The first hurdle is getting the right technology partners with the interest to invest in the local market. It’s a long-haul activity, in which many variables come into play: investment capabilities, technology know-how on the local market and track record.
Local companies cannot develop too many new technologies with their own R&D at the rate the market demands, and it’s also very capital intensive. We are more interested in the use of new technologies through strategic partnerships than in its development.

How did the company change its mindset after the Covid-19 pandemic?
We have almost doubled our workforce in two years, and it now amounts to over 6,000 people. Two years ago, we started changing our mindset towards transparency, fair treatment and teamwork as the key elements for growth. We are now ready to take on major projects.
The most important thing is that our people understand that we are capable. The vision of the owners is also to grow and develop the industrial services portfolio for the oil and gas, petrochemicals, mining and other general industries.

What were the previous stages for Sendan to reach its current position?
We have more than 10 years of experience at our plant services division, in the maintenance and shutdown market. Our company is 100% local and private, but its ownership is divided between Saudi and South Korean partners. It started as a skilled workforce supply company, then began to do electrical and instrumentation construction, to grow later into mechanical and civil engineering.
It’s a continuous graduation, where the endgame is to become a premier EPC player in our markets, with expertise in module manufacturing and a one-stop service provider for industrial construction and maintenance in Saudi Arabia and the GCC region.

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