Major S. Korean construction companies focus on overseas projects due to slowed domestic market

By Park Sae-jin Posted : March 3, 2023, 14:09 Updated : March 3, 2023, 14:09

[Courtesy of Daewoo Engineering & Construction]

SEOUL -- Major Korean construction companies are seeking opportunities to expand into overseas markets. With concerns rising about the sluggishness of the domestic housing market due to market deterioration, the impact of high-interest rates, and rising raw material prices, the companies are turning their attention to overseas markets as the domestic market is expected to slow down.
According to the International Contractors Association of Korea on March 2, the cumulative amount of overseas construction orders from the beginning of 2023 until February totaled about $4.16 billion. Although this is a 2.9% decrease compared to last year, overseas orders are gradually accelerating, with $661 million in January and $3.5 billion in February.
This year's target for overseas construction orders is $35 billion, 12.9% higher than the cumulative amount of orders of $31 billion set last year.
Major Korean construction companies are turning their heads toward overseas markets by winning construction orders and signing memorandums of understanding (MOU). Daewoo Engineering & Construction, which won orders worth about KRW 940 billion ($719.4 million) in countries such as Vietnam, Iraq, and Nigeria in 2022, won construction projects worth KRW 2 trillion in overseas markets such as emergency repairs of the Kaduna refinery in Nigeria during the first two months of 2023.
Hyundai Engineering & Construction, which won overseas construction projects worth about 3.2 trillion won last year, signed an MOU with China State Construction Engineering Corporation (CSCEC), the world's largest construction company, on February 7 to expand business in Southeast Asia.
Samsung C&T is also focusing on overseas construction orders based on its overseas project performance in 2022. The company won large contracts such as the Qatar solar power plant project, the Vietnam combined cycle power project, and the Malaysian semiconductor factory project. GS Engineering & Construction is also winning large-scale seawater desalination projects in Brazil, Vietnam, Spain, and the Middle East, using its water treatment company, GS Inima.
The importance of the overseas construction market is expected to grow even further. According to IHS Markit, a global market research firm, the global construction market size is expected to grow by 4 percent this year to $13.9 trillion. An official from the Korea Institute of Civil Engineering and Building Technology said: "Unlike the domestic real estate market, the overseas construction market is showing rapid growth," and "it is now necessary for the government to actively support the expansion of overseas construction orders and for companies to strengthen their capabilities."
The government is also providing support to expand into overseas construction markets. In 2022, the Ministry of Land, Infrastructure and Transport launched the "Overseas Construction Order Support Team" and sent a delegation to Poland and Kuwait to promote the participation of Korean companies in infrastructure construction projects.
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