Engineering, Procurement, and Construction (EPC) Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Engineering, Procurement, and Construction (EPC) Category Overview

The engineering, procurement, and construction (EPC) category is anticipated to grow at a CAGR of 5.5% from 2023 to 2030. North America holds the largest share of over 35% and APAC is expected to be the fastest-growing region during the forecast period. The EPC category is driven by factors such as the growing need for infrastructure development, particularly in developing economies such as India, China, & Brazil, increasing adoption of renewable energy sources such as solar and wind, and people's desire to seek expert assistance for construction projects. Furthermore, the introduction of new technologies such as 3D printing and Building Information Modelling (BIM) is likely to open up new avenues for market expansion.

There are several key trends emerging in the category and some of them include rising demand for infrastructure, the emergence of new technologies, and growing investments in the oil & gas industry, for example:

• The U.S. Infrastructure Investment and Jobs Act, signed in November 2021, aims to provide USD 1.2 trillion in funding for EPC projects over the next five years

• In April 2022, CWP Global partnered with Bechtel to develop large-scale green hydrogen and ammonia facilities, providing conceptual and early planning solutions for optimal integrated configurations.

• The UK plans to accelerate HS2 rail network construction using on-site 3D reinforced concrete printing using robots, developed by SCS JV (Skanska Costain STRABAG Joint Venture)

Building planning and design is a collaborative process that necessitates participation from a variety of stakeholders, including engineers, architects, builders, and clients. The conventional method makes it impossible to visualize changes in real time because everyone works on their own files. It leads to the creation of many copies of the same plan, which in turn leads to confusion. Advanced Building Information Modelling (BIM) systems address this issue by centralizing data and allowing everyone to collaborate on a single shared model.

This category is fragmented and very competitive with the presence of multiple established enterprises. To increase their market share, these companies are implementing methods such as mergers and acquisitions, partnerships, and collaborations. Many big players are focusing on expanding their global operations by gaining contracts and providing EPC services to develop plants and production facilities in many industry verticals, for instance:

• In May 2022, Mitsubishi Heavy Industries Ltd and the SEPCOIII consortium inked a contract with Aluminum Bahrain BSC (Alba) to expand Power Station 5 at Alba by installing a new 680.9-megawatt Combined Cycle Gas Turbine Power Block

• In December 2021, Saudi Aramco awarded McDermott three new EPC and installation projects. EPCI of four drilling jackets, seven oil production deck modules, and three contract release purchase orders for the construction of 45 kilometers of pipeline, more than 100 kilometers of subsea cables, and tie-in works to existing facilities are all part of the project

Major cost components for this category vary depending on the industry which implements engineering, procurement, and construction, for example:

• For the oil & gas sector, direct field costs (machinery & equipment) account for roughly 50-55% of the total cost. Labor (15-20%), administrative overheads (10-15%), and miscellaneous costs (10-15%) are the other major costs

• In the power generation sector, major cost components include mechanical systems (70-75%), electrical systems (9-11%), and civil works (10-12%)

• For the infrastructure sector, major costs include equipment (30-45%), material (25-35%), and labor (20-35%) of the total cost.

There are three main sourcing factors to consider in this category: contracting bundled suppliers, multiple suppliers, and preferred suppliers. Contracting bundled suppliers is a common practice in Asia-Pacific, where local and regional players engage with clients. Multiple suppliers allow projects of all categories to be addressed, and it is helpful to have a set of pre-qualified suppliers in place for any required region over 3-5 years. Preferred suppliers involve selecting a set of 5-8 service providers, and then initiating a bidding process only among these preferred partners every time a project is planned.

Engineering, Procurement, and Construction Procurement Intelligence Report Scope