Feeling Downturn
Even though the cumulative overseas construction orders of South Korean builders have exceeded US$700 billion (781.41 trillion won) 50 years since they first ventured abroad, recent data shows that the they were actually struggling to win orders in the first half of this year.
The Ministry of Land, Infrastructure and Transport announced on June 30 that the total value of orders that Korean firms received for overseas construction in the first half of this year recorded US$25.47 billion (28.43 trillion won), a 32.1 percent decrease from a year earlier with US$37.5 billion (41.86 trillion won).
This was largely due to the fact that there was an increasing number of companies in the Middle East delaying or canceling orders owing to low oil prices. In fact, the bidding for a new oil refining plant project package in Kuwait worth US$1.3 billion (1.45 trillion won) was rescheduled from Dec. last year to this month. The bidding for Qatar’s Al Sejeel Petrochemical Complex contract worth US$7.4 billion (8.28 trillion won) was actually canceled. Accordingly, the amount of construction orders won in the Middle East in the first half of this year was US$6.96 billion (7.79 trillion won), accounting for as low as 27.3 percent of the total amount. The figure was only 28.1 percent from a year ago with US$24.74 billion (27.69 trillion won).
On the other hand, the amount of orders received in the Asian region reached a record high as of the first half of the year. Korea firms won orders worth US$13.03 billion (14.59 trillion won) due to large plant construction projects, including a gas liquefaction plant in Turkmenistan worth US$3.89 billion (4.35 trillion won). The figure is more than double from the same time last year with US$6.22 billion (6.96 trillion won).