Builders Busy With Wave of Overseas Orders
The Korean Times
By Kim Yon-se - Staff Reporter
Dubai Dancing Towers
South Korean builders’
overseas real estate development projects surged during the first half
of the year on a construction boom in the Middle East.
From January to June,
domestic companies clinched overseas construction orders worth $950
million, more than double last year’s total orders of $440 million,
according to the Construction Association of Korea.
An association official said
builders are stepping up efforts to seek opportunities abroad due to a
contraction in the domestic market. ``A shortage in construction sites
and excessive land prices are also discouraging the companies from
launching domestic projects.’’
Overseas development orders
received by local companies peaked in 1997, amounting to $1.87 billion.
In the aftermath of the financial crisis that swept Asian nations, such
orders plummeted to $170 million in 1998 and $260 million in 1999.
After two years of no
development orders from abroad, companies showed signs of recovery,
clinching $81 million and $84 million worth of orders in 2003 and 2004,
In 2005, Korean builders won
281 overseas orders soaring dramatically to $10.85 billion, the Ministry
of Construction and Transportation said.
Construction orders from the
Middle East totaled $6.44 billion _ mostly from the oil-rich countries
of Kuwait, Qatar and Saudi Arabia. Orders from Asia and Africa topped
$2.61 billion and $1.81 billion, respectively.
The ministry plans to try to
strengthen cooperation with Chile and Brazil to help Korean contractors
move into the South American region.
``To help construction firms
reduce risks in expanding their overseas business, we will provide funds
at low interest,’’ a ministry official said.
awarded South Korean firms contracts to build plants for the processing
of natural gas and petroleum, or to treat fresh water, worth a total of
Other construction and
engineering works accounted for $1.22 billion and $840 million each.
The top five builders won
about 70 percent of the total orders, the ministry said. Hyundai
Engineering & Construction won garnered $2.52 billion of the total,
followed by SK Engineering & Construction with $1.68 billion and Daewoo
Engineering & Construction with $1.26 billion. Samsung Engineering and
GS Engineering & Construction trailed.
For the first time in eight
years, annual orders exceeded the $10-billion mark in 2005, the ministry
Since recording $14 billion
worth of orders in 1997, South Korean builders have struggled to recover
from the crippling Asian financial crisis that occurred in that year.
The ministry forecast the builders to win $13 billion worth of orders
this year, up 19 percent from 2005.
Hyundai Engineering and
Construction, one of the top 30 global builders, has won a $690 million
contract to build a power plant in the United Arab Emirates.
The plant, owned by Dubai
Electricity and Water Authority, will be built inside a power complex in
Jebel Ali, about 35 kilometers southwest of Dubai, the country’s
Hyundai Construction is
leading a consortium that won the order. Italy’s FISIA, one of its
partners, will take charge of construction of a $250-million
desalination plant beside the power plant to be built by the HEC.
The plants are part of a UAE
project to improve electricity and desalination facilities near Dubai.
When the construction projects are completed in 2008, the power complex
will produce 1,200 megawatts of electricity and 55 million gallons of
water for Dubai citizens.
The company is enjoying
growing orders in the Middle East, which have spent a large part of
profits from rising international oil price into enhancing industrial
``Recent data shows the size
of construction projects in the Middle East is getting larger,’’ a
company executive said.
He said Korean firms face
tough competition to win orders, but the outlook is very bright, because
the countries know well that Korean firms have an edge over foreign
bidders in technical know-how.