Description Page - Doosan Power Systems

DOOSAN BABCOCK ENERGY
Annual Report and Financial Statements 2007
Chief Executive Officer’s Statement
A bright
future
It has been just over a year since
Babcock was acquired by Doosan
Heavy Industries & Construction.
Since then, the business has developed considerably
with many initiatives aimed at improving performance,
increasing capacity and achieving ‘preferred employer’
status with all our employees through best-in-class
conditions and standards.
In our first year as Doosan Babcock, we have achieved
significant growth, booking record order intake and
improved operating profits. This has been achieved on
the back of improved operating performance across the
business. Our organisational structure has been altered
in order to ensure that there is clear accountability for all
functions across the business - the main growth area will
be in ‘big ticket’ items, that is, major projects often
involving Engineering, Procurement and Construction,
and our organisation has been structured to address
such new business.
We have had a number of notable successes during the
last 12 months - a major order was received for two 800
MW state of the art ultra-supercritical coal fired units in
Germany, our first major new build order in Europe for
decades and an excellent reference plant for the
company incorporating our best available technology
and very high efficiency. We signed the Mechanical,
Engineering & Technology Support long-term support
contract with British Energy, which will see Doosan
Babcock providing Engineering support to the UK’s
Advanced Gas-Cooled Reactor fleet for the next seven
years. We signed emissions reduction and upgrade
contracts in Hong Kong as well as significant plant
upgrade contracts in mainland China. Our business in
the USA continues to attract good upgrade business and
we are in the process of delivering our first large utility
02
Iain Miller Chief Executive Officer
plant, a 750 MW supercritical coal fired unit in Kentucky.
Overall, it has been an excellent start for Babcock as
part of the Doosan family.
Significant synergies have been achieved by becoming
part of the Doosan Heavy Industries & Construction
(Doosan Heavy) business during the course of 2007.
Doosan Heavy have now adopted the ‘Babcock’ Original
Equipment Manufacturer (OEM) product as their new
standard for all future utility applications. Doosan Babcock
have adopted Doosan Heavy’s Changwon manufacturing
facility for future major new build work. The Doosan
Babcock operation in Chennai will host a variety of support
functions for both Doosan Babcock and Doosan Heavy in
the future and we have opened a new office with increased
resources to address this need. We have incorporated
some of the ‘best practice’ processes developed by
Doosan Heavy and have achieved notable successes in
improving our utility boiler design, our procurement
processes and we are implementing new integrated
delivery systems for our major projects business. We
have adopted Doosan Heavy’s risk management processes
and these are proving highly effective. Our aim is to
achieve our order intake targets whilst controlling risk, an
essential element of our future success.
Looking ahead, the future looks very encouraging for the
company in all of our main markets. Rising demand for
new and replacement power plant will drive growth in
our business for the foreseeable future.
In our home market, the UK, there is already activity
developing new ‘clean coal’ stations by major utilities.
In parallel, some UK clients see the advantage of major