Hanwha gets additional Iraq contract of $2 billion
The Iraqi government will pay 10 percent of the order within the first 60 days after the contract is signed and the balance as the work is done.
Since 2012, Hanwha has been signing contracts to design and build Bismayah New City, an 18.3 million square meter (4,448 acre) area 10 kilometers (6 miles) southeast of Baghdad. The new city will be similar in size to the Bundang District of Seongnam, Gyeonggi.
The Bismayah project was worth $8 billion in 2012, and was the largest overseas construction project for a Korean company. With the additional order, Hanwha E&C will have a $10 billion deal.
Over the weekend, Lee Geun-po, president and CEO of Hanwha E&C; Kim Hyun-chung, vice chairman of Hanwha Group; Kim Dong-sun, manager of Hanwha E&C and son of Chairman Kim Seung-youn; and other executives visited Baghdad to sign the order contract. Key Iraqi government figures including National Investment Commission head Sami R. Al Araji and the country’s Deputy Prime Minister Bahaa Al Araji joined them.
The new contracts were finalized thanks to Hanwha Group Chairman Kim Seung-youn’s visit to Iraq last December. Kim has been consistently visiting the country. As soon as he was released from a jail term for breach of trust, Kim flew to Iraq to have meeting with Iraqi government officials and Hanwha E&C employees working there.
The Korean conglomerate chairman’s interest in the Middle East’s construction market goes all the way back to the 1970s. He was a managing director and president of the overseas construction division of the construction company before he succeeded his father in 1981. His experience at the time has helped him realize the importance of restoration and reconstruction projects in the Middle East.
In fact, he has shown extreme interest in the region. In 2010, when the Korean government formed a delegation of Korean businessmen to visit Iraq, Vice Chairman Kim, who at the time was in charge of overseas business at Hanwha’s construction arm, was told by the chairman to find any opportunities that were available. When Kim told him on his return that housing construction looked promising, the chairman gave full support, telling his top executive that he would take full responsibility for any investments in that area of business.
The construction arm put together a task force consisting of 100 employees, when at the time the total number of employees of Hanwha E&C was 1,500.
Hanwha hopes it will be selected to build new cities in other parts of the country. President Park Geun-hye’s recent tour of the Middle East promoted Korean businesses while Korea’s government recently introduced support measures to encourage builders to tap the Middle East’s construction markets.
Besides the Bismayah New City project, Iraqi plans to build an additional 1 million houses nationwide.
BY PARK MI-SO, KIM JI-YOON [email@example.com]
More in Industry
LG may hang up on smartphone business
Look out below
FKI calls on government to improve trade with Taiwan
Shopping patterns evolve as the pandemic drags on