South Korea's Doosan Heavy Industries to Invest $1.1 Billion for Growth and Expansion in 2009

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Researched by Industrial Info Resources (Sugar Land, Texas)--Doosan Heavy Industries & Construction Company (SEO:034020) (Gyeongsahngnam-Do, South Korea), a leading global player in the power generation and water desalination sectors, intends to invest $1.1 billion in 2009 in an effort to enter new markets, procure core technologies in the infrastructure support market, and establish a more efficient sales and global promotion network. The company also intends become "greener," investing in environmentally friendlier water treatment and power projects in energy sectors such as wind power and fuel cells, as well as becoming involved in the management of carbon emissions.

The Doosan Desalination Business Group, renamed as the Water Business Group (WBG), intends to broaden the firm's scope of business by including wastewater treatment, water reuse, and other businesses related to water to its existing services portfolio. With its new interests, WBG, an established leader in the seawater desalination business, intends to seek opportunities in the impending global water supply crisis. The water treatment business is expected to grow at an annual rate of 15% from the current value of $3.3 billion to $9.9 billion by 2015.

Doosan is actively involved in the carbon capture and storage sector. Doosan Babcock Energy (West Sussex, United Kingdom), a subsidiary of Doosan Heavy Industries, is the lead developer of the OxyCoal UK Project that is being funded by the British government. The project aims to develop a viable oxyfuel technology that can be utilized by full-scale plant applications for the capture of carbon dioxide. The oxyfuel process involves the combustion of coal in a mixture of recycled gas and high-purity oxygen. The resulting carbon-dioxide-rich gas can be purified and compressed for storage and transportation.

In September 2008, Doosan purchased a 15% stake in Canada's HTC Purenergy Incorporated (CVE:HTC) (Regina, Saskatchewan). HTC is one of the four companies owning leading-edge technology for carbon capture and storage. This would be crucial for Doosan, which intends to enter the power markets of Europe and the U.S., where very strict carbon-emission regulations will come into force in 2013.

Doosan has also been focusing on turning conventional power plants into more environmentally friendly projects. It is at the forefront of the development of integrated gasification combined cycle (IGCC) plants, a next-generation power-plant technology that generates gas from coal. In comparison with conventional power plants, IGCC power plants consume less coal and produce lower carbon-dioxide emissions. Doosan and Korea Electric Power Corporation (NYSE:KEP) (Seoul, South Korea) are currently developing a 300-megawatt (MW) power plant based on this technology. The Korean government has embraced IGCC technology as part of its future energy plans.

Doosan is also involved in the development of wind energy systems and is currently developing WinDS 3000, a wind power generation system for 3-MW systems. Commercial production of WinDS 3000 is scheduled to commence in 2010. Doosan expects the demand for systems with capacities of 2.5 MW and higher to increase significantly from 2010.

Doosan is currently developing the molten carbonate fuel cell, which is capable of producing enough electricity to feed about 200 households and is expected to begin commercial production by 2012. The company intends to build upon the technology and produce a 1.2-MW fuel cell by 2014. Doosan intends to utilize its already existing technology, which is now being used in its desalination and thermal power plants, in the fuel cell arena in future.

Among other activities, Doosan also upgrades existing power plants and makes them more energy-efficient and eco-friendly. Doosan's $100-billion contract with Korea South East Power Company (Seoul) involves the design and installation of a fuel-saving boiler system at the power plant at Yeosu by December 2011.

Park Yong-Sung, Chairman of Doosan Heavy Industries, considers the prevailing economic crisis to be an opportunity for the company to focus on innovations and explore new allied business opportunities.

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