John F Mika Senior Vice President of Procurement CH2M HILL

Transcription

1 ...The Climate Path of Forward Concern John F Mika Senior Vice President of Procurement CH2M HILL

2 Discussion Topics Procurement Executives Group (PEG) Global Economic Environment Supply Market Landscape EPC Industry Landscape Concerns and Threats Questions and answers 2

3 Procurement Executives Group AMEC, Peter Jessup Bechtel, David Hammerle Black & Veatch, Mike Gammill Burns & McDonnell, Matt Nordhus Burns & Roe, Michael Clark CB&I, Dan Kinsey CH2MHill, John Mika Fluor, Jim Scotti, Ed Ruane Foster Wheeler USA, John Crockett McDermott, Ryan Siebenkittel Jacobs, Harry Breijaert KBR, John Townsend Kiewitt, Christopher Gonzalez Kvaerner Americas Inc., Jeanean Slamen Mustang, Ted Kelly S & B, Kent Malone Shaw, Gary Dellesky, Jim Malone Technip USA, Art Wardlaw The Industrial Co., Michael Chambers URS, Joe Christopher, Larry Dinger Worley Parsons, Tom Brock Zachry, Glenn Kloos 3

4 211 Membership Profile ENR Rankings Top Contractors 6 of top 1 are PEG 1 of top 25 are PEG 12 of top 5 are PEG Top Design Firms 7 of top 1 are PEG 13 of top 25 are PEG 15 of top 5 are PEG Top International Contractors 15 of top 225 are PEG 4

5 Charter Core Values The Procurement Executives Group (PEG) serves as a forum for the executive leadership of procurement and supply management in the engineering and construction industry. We seek to represent, promote, and improve the contributions of our profession to the industry we serve. In fulfilling this mission, PEG and our member company representatives are committed to a set of Core Values. Ethics and Integrity Safety Quality Diversity Sustainability Collaboration Leadership in Procurement Excellence For more information, visit 5

6 Headlines Concern around a double dip recession US and European expansion anemic Consumer and business confidence Sovereign worries Fiscal tightening Gridlocked US government Emerging markets fairing better Best growth Best pricing potential, selling or buying Projects Giga Projects is the new landscape 6

7 Global Recovery: Diminished Expectations Real GDP Growth United States Eurozone United Kingdom Japan China India Brazil World Source: IHS Global Insight 7

8 U.S. Economic Growth by Sector (Percent change unless otherwise noted) Real GDP Unemployment Rate Consumption Light Vehicle Sales (Millions) Industrial Production (growth) Housing Starts (Millions) Business Fixed Investment Fed Government CPI yr Treasury Yield Oil Prices (WTI, $/bbl) Procu Source: Global Insight 8

9 Purchasing Managers Indexes: Manufacturing Slowing Down PMI Manufacturing Indexes values over 5 indicate expansion United States Eurozone China Source: Global Insight 9

10 Pressures in Supply Chains are Beginning to Abate 7 United States 15 4 China Month Lag, PMI Component Index - Supplier Deliveries (Left Scale) 6 Month Lag, PMI Component Index - Delivery Times (Left Scale) Year over year change, PPI, Core Intermediate Materials (Right Scale) Year over year change, PPI, Total Industrial Products (Right Scale) 3 Eurozone 8 4 Brazil Month Lag, PMI Component Index - Delivery Times (Left Scale) Month Lag, PMI Component Index - Supplier Deliveries (Left Scale) -1 Year over year change, PPI, Intermediate and Capital Goods (Right Scale) Year over year change, PPI, Industrial Products (Right Scale) Source: Global Insight 1

11 Supply Base Risks and Influences Supplier performance Shop capacity restraints Global dispersion of supply chain, continues Regulation changes and compliance Financial condition and access Commodity volatility Energy cost and availability Counterfeit, fraud, and suspect items 11

12 Market Capital Expenditures (Capex) Power Oil, Gas, and Chemical (OG&C) Civil Mining 12

13 MMBOED Global Energy Demand Forecast 5% Growth Coal Natural Gas Procu 5 Liquids Fossil fuels projected to meet 8% of energy demand in 235 Source: U.S. Department of Energy, International Energy Outlook & BP Statistical Review. 13

14 Nominal $US Bn Nominal $US Bn Nominal $US Bn Nominal $US Bn Procu Power Global Capex Civil Global Capex Source: IHS Global Insight Oil, Gas & Chemicals Global Capex Mining Global Capex

15 Nominal $US Bn Procu Total Global Capex (Power, Oil, Gas & Chemical, Civil, Mining September 21 Forecast October 211 Forecast Source: IHS Global Insight 15

16 Nominal $US Bn Procu Regional Global Capex 3, 2, 1, Africa North America Western Europe Asia-Pacific Middle East Latin America Eastern Europe Source: Global Insight 16

17 EPC Industry Landscape Strong capital expenditures Significant growth in EPC Spend ahead, some bow wave happening Global project challenges Attracting and retaining staff Local labor shortages Lack of infrastructure Remote and challenging locations Complex scope and size Global sourcing Opportunities and challenges 17

18 Nominal $US Bn Procu EPC Spend Crystal Forecast Ball - Spend - Revisited Forecast Civil OG&C Mining Power

19 Freight Spend in $US Billions Freight Tons in Billions Procu Crystal Ball Part II - Revisited Total Freight Spend Total Freight Tons

20 .Climate of Concern 4% chance for double dip Can Washington work again in collaboration Can the European debt crisis stabilize From Arab Spring to Arab Fall Can we continue to be ready for impending expansion Logistics is even more critical to EPC success! 2

21 Questions & Answers 21