Middle East Orders Boost Overseas Plant Orders to Korea by 40% in 1H

Overseas plant orders to Korean companies increased by more than 40 percent year on year in the first half of 2023. This is due to increased orders, including those for petrochemical facilities from the Middle East.

According to the Ministry of Trade, Industry and Energy (MOTIE) on July 6, overseas plant orders in the first half of this year hit US$13.05 billion (about 17 trillion won). This was a 40.2 percent increase from US$9.31 billion in the first half of 2022.

By region, orders from the Middle East and Africa led the way with a sharp year-on-year increase. Middle East orders totaled US$7.02 billion, up 52.3 percent from US$1.08 billion in the first half of 2022. Those from Africa were also up 331.1 percent year over year as they climbed to US$1.7 billion from US$400 million a year before. On the other hand, orders from Asia, Europe, and the Americas descended.

Orders from Middle East, in particular, sharply increased in the first half of 2023 after two consecutive years of declines, from US$4.38 billion in the first half of 2020. This can be attributed to the COVID-19 pandemic, a recovery in oil prices, and the Korean government’s high-level diplomacy with Saudi Arabia and the UAE.

According to the Korea Plant Industry Association (KOPIA), nine large-scale projects worth more than US$100 million each were signed in the first half of 2023. The largest deal was the Amiral Petrochemical Plant in Saudi Arabia (US$5.08 billion). The order for the project was awarded to Hyundai Engineering & Construction in June, followed by the US$1.26 billion Ras Laffan Petrochemical Project in Qatar which went to Samsung Engineering & Construction in January. Projects in Kazakhstan, Libya, and Nigeria also ranked high on the list of the nine projects. This showed that large projects were mainly concentrated in the Middle East and Africa.

By project type, petrochemical plant projects were up 119.6 percent over the year to reach US$7.4 billion. Power generation and desalination projects grew by 88.5 percent and equipment projects 368.3 percent. Korean companies failed to take orders for offshore plants in the first half of the year, but on July 3 Hyundai Heavy Industries landed an order to build a floating oil and gas production facility worth US$1.19 billion in Mexico.