Slumping builders seek promised lands overseas

Korea’s major construction companies said yesterday they are moving to expand their overseas operations this year in an attempt to find new profit sources in the face of a prolonged slump in the domestic market.

Hyundai Engineering & Construction said its overseas business will account for 65 percent of its total orders this year, up from 60 percent last year, by diversifying its business in Africa, Asia and the former Soviet republics beyond the Middle East.

Meanwhile, Hyundai E&C slashed the number of apartments it will sell this year in Korea to 900 from 4,000 last year in the latest sign of a housing market slump. Koreans are unwilling to buy new homes as they are concerned that housing prices could further fall, a widespread development that has led to piles of unsold apartments and further hit profit margins of local construction companies.

“We will make efforts to diversify overseas markets,” said Jung Soo-hyun, the head of Hyundai E&C, adding that his company will strengthen its global business capability to meet the challenges of an uncertain environment.

Daewoo Engineering & Construction said it will also make inroads into the Latin American and southern African markets in addition to the Middle East and Southeast Asia.

Daewoo E&C also said it will seek to expand its business in construction and development projects in cities in addition to industrial plants.

The construction arm of Samsung C&T said it will seek to find business opportunities in hospital projects as well as industrial plants in the Middle East and Southeast Asia.

For decades, oil-rich Middle Eastern countries have been the largest market for Korean builders.

Meanwhile, GS Engineering & Construction plans to hire a senior executive and other marketing employees to break into markets in the Americas, Africa and former Soviet republics.

It also plans to dispatch regional experts in Algeria and Myanmar, two emerging countries now being targeted by construction companies.

Local builders won overseas orders worth $64.9 billion in 2012, up 9.8 percent from a year earlier, according to the Ministry of Land, Transport and Maritime Affairs. But the volume was lower than the government-set target of $70 billion, it added.

Yonhap