Foreign construction orders off 5%

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Foreign construction orders off 5%

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Overseas construction orders won by Korean builders fell in the first half of the year, the Ministry of Land, Infrastructure, and Transport reported yesterday.

The ministry said 191 Korean companies collected $30.5 billion from 348 overseas construction projects from January through June, down 5 percent from a year ago. However, the ministry said the value of orders has been growing steadily each month and Korea has been named a preferred bidder in two of nine water restoration projects in Thailand worth $5.5 billion.

By region, orders from Asia accounted for 41 percent of the total in the first half at $12.54 billion. This is nearly double the $6.6 billion collected from Asian projects last year.

Orders from the Pacific Northwest area also saw a big boost, thanks to Samsung C&T which secured the $5.85 billion Roy Hill iron ore project in Australia.

In contrast, orders from the Middle East, traditionally the No.1 foreign revenue source for Korean builders, dropped to $10.68 billion from $20.1 billion last year. The ministry said a series of orders are in the works and expects business in the region to be back on track soon.

By type of order, plant construction projects represent 47 percent of total orders won at $14.37 billion, followed by civil engineering at $11.51 billion. The ministry credited Korean builders’ competitiveness in engineering, procurement and construction systems.

By company, Samsung C&T is at $9.62 billion, followed by Hyundai E&C ($4.66 billion) and GS E&C ($3.14 billion).

The ministry said it expects to reach its annual goal of $70 billion in foreign contracts and will support builders to reach a goal of $40 billion in orders the rest of the year. According to the ministry, about $26 billion in orders are in the pipeline and Korean firms are bidding for work worth $150 billion.

However, it warned it is possible orders could go down and contracts could be delayed due to the sluggish global economy and likely tapering of quantitative easing in the United States.

The ministry said it will dispatch ministerial-level delegates in the third quarter to various countries to check on market conditions and promote Korean companies. It will host the Infrastructure Cooperation Conference in mid-November to help local companies connect with important international players.

BY JOO KYUNG-DON [kjoo@joongang.co.kr]
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