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Daewoo E&C lands $82m Indonesian deal

An artist’s rendering of District8 Mixed Complex Project in Jakarta, Indonesia
An artist’s rendering of District8 Mixed Complex Project in Jakarta, Indonesia
Daewoo Engineering and Construction, the nation’s third-largest builder, won its first construction contract in Indonesia in 12 years. The company will share a $82 million project to develop a business district in its capital city of Jakarta last week. 

Daewoo E&C said it won the mixed-use complex development deal named as “District8 Mixed Complex Project” from Agung Sedayu Group, a leading Indonesian developer, last Friday.

Under the deal, the Korean company will build two office buildings of 41 and 56 stories, three 36-story apartment buildings and other commercial buildings within the Sudirman Central Business District in Jakarta over the next 33 months, the company said.

The company said it formed a consortium with local builder Acset to win the bid and will take 40 percent of the construction, which amounts to $32 million.

“Winning the property development project is meaningful in that the company entered the growing Indonesian market in 12 years,” a company official said. The builder’s last Indonesian project was to build the Kufpec refinery facilities in 2001.

Daewoo E&C has sought reentry to the Indonesian market under the growth strategy of market diversification since 2010. In the past three years, it penetrated into five overseas markets, including Morocco, Papua New Guinea, Saudi Arabia, Singapore and Indonesia, the company said.

Among those five new markets, most of all, Daewoo expects to win additional deals in Indonesia in the coming years, where the construction market has recently grown more than 6 percent annually, boosted by the continued growth in the overall economy.

“Besides property development projects, we are eyeing civil engineering and plant deals,” the company said.

Daewoo E&C saw a rise in sales and operating profit in the second quarter compared to a year ago, thanks to increasing sales in the housing market and overseas orders.

The company’s sales rose 5.4 percent to 2.3 trillion won in the second quarter from the same period last year, while the builder’s year-on-year operating profit soared 26.8 percent to 108 billion won.

The company said its balance sheet was starting to see the results of the revenue from building 23,082 housing units and winning 6.3 trillion worth of overseas orders last year.

By Seo Jee-yeon (jyseo@heraldcorp.com)
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