Engineering, Procurement, and Construction Procurement Insights 2030

Engineering, Procurement, and Construction (EPC) Category Overview

EPC, short for Engineering, Procurement, and Construction, represents a specialized contracting approach tailored for large-scale infrastructure endeavours, industrial complexes, power generation facilities, and intricate construction ventures. Anticipated to surge at a robust Compound Annual Growth Rate (CAGR) of 5.5% from 2023 to 2030, the EPC domain boasts North America as the dominant player, commanding a share exceeding 35%, while the Asia Pacific (APAC) region emerges as the frontrunner in rapid expansion.

Driving this growth are several pivotal factors including the escalating demand for infrastructure development, notably in burgeoning economies like India, China, and Brazil, alongside the increasing shift towards renewable energy sources such as solar and wind. Moreover, the populace’s inclination towards seeking professional expertise for construction undertakings fuels the momentum. The advent of cutting-edge technologies like 3D printing and Building Information Modelling (BIM) promises to usher in a new era of opportunities, further propelling market growth and innovation in the EPC landscape.

Order your copy of the Engineering, Procurement, and Construction (EPC) Procurement Intelligence Report, 2023 – 2030 , published by Grand View Research, to get more details regarding day one, quick wins, portfolio analysis, key negotiation strategies of key suppliers, and low-cost/best-cost sourcing analysis

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

Engineering, Procurement, and Construction (EPC) Procurement Intelligence Report Scope

The Engineering, Procurement, and Construction (EPC) category is expected to have pricing growth outlook of 5% – 7% (Annually) from 2023 to 2030, with below pricing models.

• Maximum price model,
• cost plus pricing model,
• fixed price model

Supplier Selection Scope of Report

• Cost and pricing
• Past engagements
• Productivity
• Geographical presence

Supplier Selection Criteria of Report

• End industry application,
• quality compliance,
• financial stability,
• service provision,
• technical specifications,
• operational capabilities,
• regulatory standards and mandates,
• category innovations,
• others

Engineering, Procurement, and Construction (EPC) Procurement Intelligence Report Coverage

Grand View Research will cover the following aspects in the report:

• Market Intelligence along with emerging technology and regulatory landscape
• Market estimates and forecasts from 2023 to 2030
• Growth opportunities, trends, and driver analysis
• Supply chain analysis, supplier analysis with supplier ranking and positioning matrix, supplier’s recent developments
• Porter’s 5 forces
• Pricing and cost analysis, price trends, commodity price forecasting, cost structures, pricing model analysis, supply and demand analysis
• Engagement and operating models, KPI, and SLA elements
• LCC/BCC analysis and negotiation strategies
• Peer benchmarking and product analysis
• Market report in PDF, Excel, and PPT and online dashboard versions 

Engineering, Procurement, and Construction (EPC) Procurement Cost and Supplier Intelligence

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.

List of Key Suppliers

• Fluor,
• Flexitallic,
• Saipem,
• ERGIL,
• Tekfen Holding,
• Maire Tecnimont,
• BCC Group,
• Azco,
• Samsung Engineering,
• Bechtel

Browse through Grand View Research’s collection of procurement intelligence studies:

Graphite Procurement Intelligence Report, 2023 – 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Cyber Security Procurement Intelligence Report, 2023 – 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape) 

Brief about Pipeline by Grand View Research:

A smart and effective supply chain is essential for growth in any organization. Pipeline division at Grand View Research provides detailed insights on every aspect of supply chain, which helps in efficient procurement decisions. 

Our services include (not limited to):

• Market Intelligence involving – market size and forecast, growth factors, and driving trends
• Price and Cost Intelligence – pricing models adopted for the category, total cost of ownerships
• Supplier Intelligence – rich insight on supplier landscape, and identifies suppliers who are dominating, emerging, lounging, and specializing
• Sourcing / Procurement Intelligence – best practices followed in the industry, identifying standard KPIs and SLAs, peer analysis, negotiation strategies to be utilized with the suppliers, and best suited countries for sourcing to minimize supply chain disruptions