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2011 Seminar 5

Sustainable Engineering and Exporting Services

Andreas Wiese

Wednesday, 05 October 2011, 10.45 – 12.15

Perspectives from Lahmeyer International GmbH

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Sustainable Engineering through Export Services

Perspectives from Lahmeyer International GmbH

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Sustainable Engineering through Export Services – Perspectives from Lahmeyer International GmbH

Content

1. Lahmeyer International GmbH

2. The situation now and how to respond

3. Example: Exporting German Know-How to Southern Europe (Greece, Italy)

4. Example: Expanding in Emerging Markets (Turkey)

5. Example: Maintaining long standing cooperation in difficult markets: Nigeria

6. Project specific Cooperation with Transfer of Know How: Renewable Energy Master Plan (Egypt)

7. Summary and Conclusions

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2011 Company Data

4

2011

‐02‐18

  Com

pany

 Data

Company Lahmeyer International GmbHIngenieurgesellschaft

Foundation 1966

Headquarters Bad Vilbel

Activities Technical and Economic Planningand Advisory Services

LI‐Group 11 Subsidiaries

Representatives In 50 Countries

Projects In 165 Countries

Employees 2010LI: 610LI‐Group: 1350

Turnover 2010LI: 77 Mio. €LI‐Group: 109 Mio. €

Sustainable Engineering through Export Services – Perspectives from Lahmeyer International GmbH

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2011 Project Experience in 165 Countries

5

Notes■ Areas with high project 

concentrationLahmeyer projects

Lahmeyer International GroupHead Office

■ Lahmeyer International GmbH, Bad Vilbel, GermanyLI Group Germany

■ Lahmeyer  Berlin GmbH, Berlin■ Lahmeyer Rhein‐Main GmbH, Bad Vilbel■ Lahmeyer München Ingenieur‐

gesellschaft mbH, Munich■ Hydroprojekt Ingenieur‐

gesellschaft mbH (HPI), Weimar■ LIREFIS GmbH, Bad Vilbel

LI Group Abroad■ Lahmeyer International (India) Pvt. Ltd.,

New Delhi, India■ Lahmeyer Agua y Energia S.A., Lima, Peru■ OOO Lahmeyer International Russland,

Moscow, Russian Federation■ Consulting Engineers Lahmeyer Nigeria Ltd.,

Abuja, Nigeria■ Lahmeyer International USA Corp.,

Washington DC, USA■ Hidro Dizayn, Ankara,Turkey

Local Offices▲Abu Dhabi, UAE▲Athens, Greece▲Cairo, Egypt▲Doha, Qatar▲Istanbul, Turkey▲Jakarta, Indonesia▲Lahore, Pakistan▲Quito, Ecuador▲Salerno, Italy▲Santiago, Chile▲Saudi Arabia

Notes■ Areas with high project 

concentrationLahmeyer projects

Sustainable Engineering through Export Services – Perspectives from Lahmeyer International GmbH

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2011 Incoming Orders of LI 2006 - 2010

Sustainable Engineering through Export Services – Perspectives from Lahmeyer International GmbH

0,010,020,030,040,050,060,070,080,090,0

100,0Orders in M

io Euro

Order Volume 2006 ‐ 2010 ‐ Lahmeyer Group

0,010,020,030,040,050,060,070,080,090,0

100,0

Orders in M

io Euro

Order Volume 2006 ‐2010 Lahmeyer International GmbH

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Sustainable Engineering through Export Services – Perspectives from Lahmeyer International GmbH

Lahmeyer International’s export portion of business remains high above 90 % since the late

90ties, no substantial change expected in the coming years

Lahmeyer`s exporting business was all the time focussing on developing and emerging countries

(Middle East, Africa in the first place, Asia and Latin America in second place)

Recruitment of personnel in Germany for high quality consulting services for export is more than

challenging ⇒ bottleneck for growth

Need of Know- how transfer to client and local private sector in the countries to be exported is

increasing

LI’s policy is responding to this in various ways:

1. Acquisition of locally established engineering companies and integrating these into the

Lahmeyer group

2. Establishing local branches as part of LI Germany and building up qualified human

resources therein

3. Partnering with local engineering companies (subcontracting or JV)

The situation now and how to respond

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Acquisition of an engineering office in turkey with 150 qualified engineers, January 2011

Adding about 11 Mio€/y turnover to the group

Joint projects in neighbouring countries

Administrative integration actually ongoing

Transfer of technical and project management know-how selectively carried out

⇒Growth opportunity in the Turkish market

Synergies in neighbouring countries: stronger competitiveness, larger market share in these regions

Turnover and profit increase for the entire group

Sustainable Engineering through Export Services – Perspectives from Lahmeyer International GmbH

Example Turkey

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Sustainable Engineering through Export Services – Perspectives from Lahmeyer International GmbH

Example Turkey

LinerjiTansel TugalAgent / Local Partner

LI Branch Office TurkeyBungo Ezawa

Hidro DizaynNN

LI Energy Division LI Water Division

Lahmeyer International GmbH

Eko DHaldun DanismanAgent / Local Partner

HPI Turkey

LI Group

Close cooperation LI‐ Hydrodizan for a hydro project portfolio

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Sustainable Engineering through Export Services – Perspectives from Lahmeyer International GmbH

Renewable Energy Markets South Europe – Example Greece

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Establishing of local branches in Italy and Greece

Focus on wind and solar projects

Dedicated training on-the-job of Greek and Italian engineers

Integrating local engineers temporarily into head office team

Training courses of experience Lahmeyer engineers in foreign branches

Joint projects with increasing local participation

Business development localised

⇒Contribution of about 20 % to the total renewable energy business through these two markets

Local market share > 50 % (Greece)

Extending the existing expert pool

Stronger human resource flexibility for international short term projects with high manpower resources

Sustainable Engineering through Export Services – Perspectives from Lahmeyer International GmbH

Example Renewable Energy Markets South Europe

0,00

0,25

0,50

0,75

1,00

1,25

1,50

2005 2006 2007 2008 2009 2010 2011

Turnover [M

EUR]

Turnover Greece 2005‐2011

Branch Greece, Energy Division  

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Sustainable Engineering through Export Services – Perspectives from Lahmeyer International GmbH

Long term cooperation with local engineering companies: Example Nigeria

Current Scope of Project

OEM direct supply of 18 Gas turbines

10 Power Stations

1 Convertible debenture in Ibom Power Station

11 Gas Pipeline and Flow Station Projects

102 Transmission Lines and Substation Projects including a Telecoms/Teleprotection project linking 93 sites

291 Distribution projects

Project Cost

OEM Supply (Gas Turbines):  $     526,545,918.09

Power Stations: $  3,406,777,291.54

Gas Supply and Metering:  $     371,794,569.16

Transmission: $  1,503,935,870.91

Telecoms: $       20,318,681.23

OEM (Distribution): $     122,653,156.42

Distribution: $     668,801,829.68

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Sapele Power Station  GT Unit 1 and 2

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• Sapele Power Station Switchyard Extension

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Ihovbor Power Station  GT Unit 1 to 4

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Sustainable Engineering through Export Services – Perspectives from Lahmeyer International GmbH

Long term cooperation with local engineering companies: Example Nigeria

Ihovbor Power Station  GT Unit 4 

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Sustainable Engineering through Export Services – Perspectives from Lahmeyer International GmbH

Engineer‘sAuthority

Other Consultants EMPLOYER

EPC CONTRACTOR

ENGINEER OEM Contractor

Site Survey Consult.

Soil Investigation

EIA Consultants

Steering Council On NIPPNiger DeltaPower Holding Company

Managementand DesignConsultantLI / OTIS

Project Consultant (Power) e.g. Gas Turbine Sets

BoP EPC Contractor

Infrastructure for each Site:• Bush Clearing• Soil Analysis• Land Reclamation• Access Road• Block Wall Fence• Gate House + Security

Part 1Power Station–Substation• 330/132/33 kV incl.ECR

• 330 kV Transmission Lines

• Connection to Grid incl.Extention of Substations

Part 3Power Station BoP

Transmission linesGas connectionDistribution

Part 2

Gas Turbine Sets(OEM)

Contract

CoordinationOEM / EPC

Project Consultant (Transmission)Project Consultant (Gas)

PROGRAMME IMPLEMENTATION TEMPLATE

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Nigerian market contributed about 8 % to the overall Lahmeyer International GmbH business during last five

years

Largest project in the Energy Division: National integrated power project (NIPP)

Cooperation with a qualified local engineering company in a joint venture

LI team focuses on project management and high end services

Local partner focuses on site supervision and civil and architectural items

⇒Maintaining a very strong position on the local market

Able to maintain profit goals over a long period

Important: maintaining the business alive also in difficult times

Sustainable Engineering through Export Services – Perspectives from Lahmeyer International GmbH

Long term cooperation with local engineering companies: Example Nigeria

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Project specific cooperationWith local companies: 

Example Egypt

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Project specific cooperation with local companies: Example Egypt

Sub‐Consultant Energy Research Center

Fraunhofer ISI

Consortium

Lead Consultant

Consultant Partner / Sub‐Consultant

Lahmeyer International GmbHFraunhofer ISE

• Project Management• Economic Potential of Renewable Energy

Sources Economic Integration of RES• Regulatory and Institutional Framework• Financing Framework• Sector Framework and Road Map• Terms of Reference for Other Renewable

Energies• Feasibility Study CSP

• Economic Potential of RES,• Solar Technology Promotion,• Feasibility CSP• Sector Framework and Road Map

• Technology Promotion and Manufacturing• Roles of Government Agencies• Tariff and Subsidies• Sector Framework and Road Map

• Technology Promotion and Manufacturing• Regulatory, Legal and Institutional

Framework• Sector Framework and Road Map

Local input required for:

• Regulatory situation, status and how to proceed

• Local Research and science status and development

• Local manufacturing capabilities – now and in the future

• Social and socioeconomic impacts

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LI maintains an exceptional large export share over a long period of time already

However, we see increasing competition on the market:

Selected increasing competition from newcomers on the market out of emerging countries (India, Brazil, e.g.)

with a global approach

Substantial more competition on selected regional markets (e.g. in Angola from Brazil, Middle East from India

High competition in selected national markets from fast growing local companies (e.g Turkey, Brazil, India)

In large emerging markets, growth goes along with larger needs, but also larger amounts of available local

engineering capacities

In parallel to the above, the education and experience level of local engineering capacities in such countries is rising

constantly

⇒Adapted strategies need to be developed for each type of market in order to turn threats into real opportunities

Our examples demonstrate that it is possible to achieve success

Due to the above, expansion into the regions and national markets are seen as an opportunity rather than a

threat within the Lahmeyer group

Sustainable Engineering through Export Services – Perspectives from Lahmeyer International GmbH

Summary