Overseas construction orders poured in this year

Korea’s overseas construction orders jumped 31 percent to $17.6 billion in the first quarter of the year compared to a year earlier, hitting the second-largest amount for the first half of a year on record, said the Ministry of Land, Infrastructure and Transport yesterday.

The ministry said in a report that the government’s goal of reaching $70 billion in overseas construction orders by the end of the year may be easily achieved after such a buoyant performance in the first quarter.

There were two major projects involving a number of Korean construction companies in the first three months of the year. Hyundai E&C, GS E&C, SK E&C and Hyundai Engineering together clinched a $6 billion order to build a refinery in Iraq.

Hyundai E&C, Hyundai Engineering, GS E&C, Daelim Industrial and Samsung C&T also worked together to land a $3.3 billion thermal power plant complex deal from Algeria.

The Middle East was the largest market for Korean builders, with about 79 percent of their orders coming from there.

Demand from Asian countries is on the decline as large plant construction and civil engineering projects are drying up in the region.

Even though the dollar figure for orders rose, analysts say the profits that will come to individual Korean companies are declining as companies participate in consortiums rather than in land orders on their own. And they are still focused on relatively low-value construction projects rather than high value-added engineering works, the ministry said.

One of the goals of the Park Geun-hye government is to boost the overseas construction market by 2017.

The Korean government is currently eyeing countries that are scheduled to embark on massive construction plans like Dubai, which is going to host an expo in 2020, and Qatar, which will host the World Cup in 2022. It plans to dispatch delegations to those countries.

BY SONG SU-HYUN [ssh@joongang.co.kr]