Overseas Construction
This year has been witnessing tectonic shifts in Korean builders’ new overseas orders. Hyundai Engineering, Daelim Industrial, and SK E&C distinguished themselves while Samsung C&T and GS E&C which performed well last year faltered this year..
According to the International Contractors Association of Korea on October 10, Hyundai Engineering came in first in the reception of new orders, posting a total of US$4.511 billion during the January-September period of this year among Korean construction companies. Last year, Hyundai Engineering ranked fourth in overall new orders.
A contract signed in Iran considerably contributed to launching Hyundai Engineering to the top of the standings. Hyundai Engineering won an order amounting to 3,098 million euros for the 2nd-stage expansion of South Pars 12 in Iran in March this year. This figure eclipses last year's total order volume (US$2.357 billion) and the largest order that a Korean construction company landed from Iran. "We expect additional orders from Southeast Asia within this year," said an official of Hyundai Engineering.
Doosan Heavy Industries & Construction (US$3.127 billion) and Daelim Industrial (US$2.665 billion) took second and third place, respectively. Daelim Industrial did not make the top 10 last year but it claimed third place because the builder won a contract to build Canakkale Bridge in Turkey with SK E&C earlier this year. SK E&C also jumped to fifth place (US$1.953 billion) from 18th place (US$212 million) of last year.
Samsung C&T which had ranked high in overseas orders for many years, has not performed well. As of September, Samsung C&T's overseas orders totaled US$993 million, ranking eighth overall. Its volume is lower than Samsung Engineering (6th place and US$1.360 billion), which is also a subsidiary of the Samsung Group.
Samsung C&T led overseas orders with Hyundai E&C. Last year, it topped the list with US$5.111 billion. Samsung C&T is planning to retrieve its honor by landing orders from the Middle East and Southeast Asia including Kuwait and Singapore.
This year, GS E&C has not been as successful as last year. GS E&C was relegated out of the top ten by chalking up US$176 million (11th) in new orders. The builder ranked fifth with US$2.095 billion last year and third with US$5.542 billion two years ago. GS E&C seems to have difficulty in reaching its overseas order target, missing the highly anticipated US$1.3 billion Bapbco Refinery Project in Bahrain in the second half of the year.
Hyundai E&C posted overseas orders similar to those of last year. The contractor placed 4th overall with US$2.143 billion. Hyundai E&C stood third with US$2.974 billion last year and fifth US$3.401 billion in 2015. In 2014, the builder topped the standings with new orders worth more than US$11 billion.
Meanwhile, overseas construction orders stood at US$21.094 billion as of September of this year, up 14% from a year ago (US$18.455 billion). However, according to analysts, it is too early to say that major markets such as the Middle East have normalized.
"An increase in order volume compared to last year can be seen as the resumption of orders due to Korean companies' revamping rather than the normalization of markets which place orders," said Park Se-ra, a researcher at Shinyoung Securities. "We can find that Korean builders won more orders from regions where Korean contractors traditionally excel as orders from the Middle East (45%) and Asia (49%) accounted for 94% of the total.