[China Aluminum Network] The building curtain wall is an imported product. It entered the Chinese construction market in the early 1980s with the pace of reform and opening up. The early domestic curtain wall market was mainly contracted by foreign companies. However, with China’s reform and opening up, rapid economic development, and the explosive expansion of the construction market, domestic curtain wall companies have also started from scratch, in the curtain wall design, construction technology, product quality New developments, new products, and new technologies have achieved unprecedented development. Since the 1990s, domestic curtain wall companies have had the power to go abroad and participate in international competition. The author's company has been undertaking curtain wall and aluminum alloy door and window projects in Singapore, North Korea, the United States, New Zealand, and some countries in the Middle East and Africa since 1992. With the gradual recovery of the world economy and the country’s “all the way†policy, more and more companies are now going out. However, due to the considerable differences in political, economic, cultural, religious folk customs, and legal policies between countries, as well as unpredictable factors such as political situation, exchange rate changes, labor policies, overseas construction costs, and overseas visas, construction contractors Will face and bear great risks. If it is predicted in advance, inadequate prevention and control, not only may not get the expected economic benefits, and serious may be huge losses. Therefore, based on the practice and thinking of overseas engineering management, the author analyzes the main risks of overseas curtain wall project management, and puts forward some suggestions for countermeasures for overseas companies undertaking construction curtain wall projects.
First, the overseas curtain wall project management risk categories.
1, political risks.
Political risks mainly refer to political turmoil, social security, terrorist activities, religious conflicts in the country where the project is located, as well as diplomatic troubles between China and the country where the project is located, which affects project construction. This risk is a relatively large risk for overseas engineering project management. It is often sudden and unpredictable, and once it is harmed, it is also relatively large. Generally, it is categorized as force majeure and the claim has no door, so it needs to be highly valued. . In areas where the general economy is less developed, the risk is correspondingly greater. Although it is simple and easy to undertake projects in these areas, the contract profits are also good, and the project requirements are relatively low, but the political risk is a key issue to consider.
2, legal risks.
Legal risk refers to the risk of project construction management caused by not knowing the laws and regulations of the country where the project is located and product standards or changes due to changes in laws and regulations, mainly manifested in import tariffs, tax policies, labor policies, visa policies, and safe construction of materials. The impact of regulations and regulations, such as the United States and Canada, imposes an anti-dumping policy on the curtain walls and aluminum alloy doors and windows produced in China, and is subject to a 33%-104% heavy tax. In order to undertake curtain wall projects overseas, the general mode of operation is to design, purchase materials, and process finished products in the country, then transport them to the countries where the projects are located and install them abroad. The level of import tariffs in the country where the project is located will directly affect the cost of the project and also affect the local competitiveness of the company. Curtain wall installation is a labor-intensive industry. Many countries now do not allow the installation of labor input, or they must be approved by the government. When overseas projects are submitted for bids, whether labor can be imported or not, there is still no clear response. Some countries have encountered such problems in New Zealand after labor importation due to pressure from trade unions and national labor demonstrations. The use of domestic workers and local workers is not the same as the cost, the difficulty of management is different, and the degree of work co-ordination and operation proficiency is not the same. The risks involved must be taken into account. Domestic companies have suffered losses in this respect. On the other hand, the management fees for imported labor in the country where the project is located are also rising. For example, in Singapore, the management fee of the foreign labor administration that passed the skill test 10 years ago is SGD 75 per month, but it has now risen 10 times. Month to 750 Singapore dollars. In addition, many countries have lower wage standards for workers, which must be considered when quoting.
3. Economic risks.
Due to the economic crisis and debt risks of developed countries in Europe and America, the world economy is still very fragile. The curtain wall project is a subcontracted project. If a developer or a general contractor has an economic problem, the risks involved are also enormous. Overseas, the general contractor company goes bankrupt every year, and it affects or even goes bankrupt with subcontractors and material suppliers. We have encountered bankruptcy in New Zealand and Singapore. However, due to our early detection and early prevention and control, although we suffered some losses, they were not fatal.
4, the contract risk.
The content of overseas construction contracts is comprehensive, and there are generally hundreds of pages. The relevant technical requirements, material quality, brand requirements, construction duration, quality requirements, procedure requirements, and liability for breach of contract are all clearly stated. Due to different languages, differences in understanding, and time, it is still relatively large to understand the contents of the contract. Contract risks can be divided into quote risk and contract management risk. The accurate quotation is the basis for profit and risk reduction of the project. However, due to the incomplete understanding of the cost of the operation project, the requirements of the local regulations are not thoroughly understood. Especially for the first time out of the overseas companies, the cost of the target project is often not accurately grasped, but only Listen to the general contractor's introduction, and then use the same domestic project cost as a reference, so the quotation made is often risky. Overseas, the contract price is not allowed to be modified, unless the architect has changed the design, domestic low prices, through the thinking of changing, high-cost settlement overseas will not work. Foreign projects have the following characteristics in terms of contract management: predecessors and foreign projects perform strictly according to the terms. Unlike domestic projects, overseas projects have stricter performance and are mainly characterized by strict procedures. In the curtain wall project, deepening the design, material samples, observing the model, and testing the sample, before any approval has been obtained, it is not possible to purchase any material and enter the site. Therefore, the preparation work in the early stage will take a lot of time. If it is not seized, the construction time will be squeezed and the construction period will be delayed. Many countries do not allow overtime in the evenings, weekends, and holidays due to labor policies or disturbances. Therefore, the delays are difficult to retrieve. Secondly, foreign projects employ very professional management teams and consultants to manage. All issues are written and even when the interviews are clear, they will make up a written document afterwards. The basis, but domestic construction companies lack of awareness in this regard, often suffer more losses. Third, foreign project management pursues the principle of “who is at fault and who is responsibleâ€. If the subcontracting of the curtain wall has faults that affect the general contract or other subcontractors, their losses shall be the responsibility of the faulty party, and the compensation for such damages is enormous, sometimes exceeding the amount of subcontracts, and may even directly result in subcontracting. Business bankruptcy. A famous glass supplier in Singapore was forced to go bankrupt in the glass supply of the curtain wall project at the third terminal of the Singapore Airport because it failed to deliver large sums of money according to the contract. Overseas, if there is a problem with the supplier's product quality or delay in delivery, rather than the responsibility of the construction company, resulting in engineering quality problems or delays in the construction period, all losses can be passed on to the supplier. This can't be done in the domestic procurement. The domestic suppliers are more for you to exchange a qualified material, other costs will not be for you to bear, so companies that participate in overseas competition must find their own responsible. Partner.
5. Exchange rate risk.
Most of the curtain wall subcontracts are settled in the currency of the country in which the project is located or in U.S. dollars. However, no matter which currency is used for settlement, the risk of exchange rate fluctuations will be high. In particular, some small currencies will fluctuate more. The cost of curtain wall subcontracting companies generally occurs in two places, mainly including the domestic cost of goods and the project local labor costs and project site management costs. Due to the long construction period and slow payment, the exchange rate risk always exists.
6, product quality risk.
The slightest negligence in the design, material procurement, product processing, and construction installation of the curtain wall subcontracting project can create quality problems. If these problems can be found in the country and resolved in a timely manner, the losses may be relatively small; once the goods are delivered to the site or installed, the problems will be discovered and the losses will far exceed expectations. Re-procurement, processing of concurrent air shipments, together with local loss of labor and labor costs, these direct costs alone may exceed the contract price several times.
The six types of risks mentioned above are often encountered when contracting curtain wall projects overseas. However, the risks involved in the management of overseas engineering projects are not only those six categories but are various and varied. These risks have both external and The construction company's own problems.
Second, overseas curtain wall project risk management and control measures.
1, in-depth investigation, comprehensive assessment.
When we want to enter a new market, we should do a good job in all aspects of investigation. Surveys are an important part of what we must do and avoid risks. When we plan to undertake overseas engineering projects, we should comprehensively understand the political situation, natural conditions, cargo transportation conditions and costs, laws and regulations, religious conditions, labor policies, living costs, taxes, currency conditions, and engineering resources of the country where the project is located. We must be aware of the fact that only in this way can we be active in negotiations and future construction management. The method of investigation can be conducted through the network, embassies and local Chinese Chamber of Commerce. It is better to send professionals to conduct field surveys, feel personally, and grasp the information of the top players. After the information collection is completed, a comprehensive assessment is conducted to analyze the project conditions and self-completing capabilities, and formulate bid plans and coping strategies.
2. Organize and equip professional management team.
Doing projects well, managing the team is very important. The curtain wall construction has many construction links and long fronts (two battlefields at home and abroad). It is necessary to manage the on-site construction as well as coordinate domestic design, material procurement, and finished product processing and transportation. At the same time, language is also one of the necessary skills to communicate with the general contractor and local authorities. Everything is always handy and easy to translate through the conditions. It is better to employ local people who have experience and understand local laws and regulations to join the team. This is beneficial to strengthen communication and prevent risks.
3. Strengthen contract management, use contracts and laws to protect their own rights and interests.
The contract is the contract of the transaction. Both sides of the contract have the promise of rights and obligations. After signing a contract, special personnel should interpret the contract to make a comprehensive understanding so that those involved in the performance of the contract will have an in-depth understanding of the contract. In particular, there should be a plan in advance for the part of the contract that has a risk. Contract executives should be familiar with the mode and characteristics of international engineering contracts and the laws and regulations of the country where the project is located. They should collect all the information and documents in the project operation process so as to be able to handle the project in a timely manner, respond well and perform the contract in strict accordance with the terms of the contract.
4. Strengthen the assessment of partners and try to avoid economic risks.
When undertaking the project, it is necessary to have a comprehensive understanding of the economic strength and market reputation of the developer and the contractor, and to prevent the risk of project failure or total bankruptcy. In particular, the initial cooperation must be done in the bottom of the heart. Some general packages are not lack of strength, but like to set up traps and find excuses for the subcontractors' interests. For example, if you work with domestic outsourcing contractors, the risks will be smaller, but the benefits will be smaller. If possible, it is better to sign the supply and installation contract separately, and the goods are required to be paid by letter of credit, which can greatly reduce capital pressure and capital risk.
5. Lock in exchange rates and reduce exchange rate risks.
At least 50%-60% of the construction costs for the sub-projects of the curtain wall will be returned to China, and the major costs will also occur in the country. The trend of appreciation of the renminbi is quite obvious. Now, many banks in China have opened foreign exchange-locked exchange rates. In particular, foreign banks are advancing this work. After signing the contract, we can estimate the amount of money to be returned to the country, and once sell the foreign exchange to the bank, you can lock in the exchange rate to prevent the risk of devaluation.
6. Arrange the construction plans rationally to reduce the risk of delays.
Generally speaking, overseas projects will have a reasonable period of time. Arrangements are reasonable and there will generally be no shortage of workers. Arranging the construction plan rationally is the guarantee for fulfilling the construction task on schedule. In the layout of the construction plan, it is necessary to comprehensively consider the construction period and the resources that the company can use for the project, including management personnel, designers, funds, equipment, and installation labor, as well as emergency plans with various risks, and actively respond to possible changes. This kind of complicated problem turns passive into initiative in order to reduce the losses caused by various risks.
Third, the conclusion
Although there are many risks in the project management of the overseas curtain wall project, practice makes perfect. As long as we are good at summing up, being good at learning and thinking, not being intimidated by momentary difficulties and failures, we have analysis of risks, forecasts, plans, and countermeasures. Must be able to go out, and will go more and more stable, more and more smoothly.
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