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Korean Builders Showing Substantial Business Recovery in the Middle East
Booming Signal?
Korean Builders Showing Substantial Business Recovery in the Middle East
  • By Jung Min-hee
  • June 27, 2017, 03:45
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Korean builders recorded a value of US$8,944.33 million in the Middle East in the first quarter of this year with a year-on-year growth of 89.3%.
Korean builders recorded a value of US$8,944.33 million in the Middle East in the first quarter of this year with a year-on-year growth of 89.3%.

 

The International Contractors Association of Korea announced on June 26 that South Korean construction companies signed international contracts worth a total of US$16.2 billion in the first half of this year, up 7% from a year ago.

In recent years, their international business showed a significant shrinkage for global economic recessions and a decline in oil price, which resulted in less and less projects in the Middle East. Specifically, the value, which had reached a record high of US$71.6 billion in 2010, dropped to US$28.2 billion last year. In the first half of this year, however, they made a breakthrough based on solid growth in the Middle East and Asia.

They recorded a value of US$8,944.33 million in the Middle East during the period with a year-on-year growth of 89.3%. These days, Iran, Oman and Bahrain are launching a number of construction projects.

Major projects to be launched in the second half of this year include the Duqm Refinery Project (US$7 billion) in Oman and the Bapco Sitra Refinery Project (US$5 billion) in Bahrain. Bidding for the former is scheduled for this coming fall. At present, consortiums led by Daewoo Engineering & Construction, Samsung Engineering, GS Engineering & Construction and Hyundai Engineering are competing with one another. The bidding for the project is scheduled to be divided into three packages for its large size. Each of the first and second packages, which cover processes and power and auxiliary facilities, is worth US$3 billion.

The Bapco Sitra Refinery Project consists of technical and commercial parts. The GS E&C-JGC consortium and the Hyundai E&C-Daewoo E&C-Fluor consortium are the two most promising candidates in the technical part. Samsung Engineering is competing in the commercial part.

For the first five months of this year, Hyundai Engineering signed international contracts worth US$3.7 billion, up 217% from a year earlier. In March this year, Hyundai Engineering and Hyundai E&C signed the final contract for expansion of South Pars 12 in Iran, worth US$3,287 million.

Daelim Industrial, in the meantime, boosted its value from US$300 million to US$2.7 billion during the same period. It inked a 2.23 trillion won contract with Isfahan in Iran in March for refinery renovation. It is planning to participate in projects in the Philippines, Singapore, Malaysia, and so on as well.

GS E&C’s targets include a refinery construction project in Gabon (US$1.5 billion), a similar project in Thailand (US$1 billion) and a reclamation project in Singapore (US$0.7 billion). Those of Daewoo E&C include new town development in Saudi Arabia, gas plant construction in Russia, power plant construction in Vietnam and petrochemical plant construction in Nigeria.