Hyundai Engineering & Construction, South Korea’s largest builder, will expand further into emerging markets and diversify its business risk in the second half of this year, the company said in a statement outlining its annual goals.
The builder aims to record $11 billion in overseas sales this year by moving beyond the overheated Middle East market and focusing on the booming construction markets in emerging countries.
“Hyundai E&C will continuously place more emphasis on overseas projects. We plan to increase the portion of overseas sales to 70 percent this year from 64 percent last year,” said a company official.
The company’s sales from overseas orders in 2013 exceeded $10 billion for the second consecutive year. It brought in $10.9 billion in accumulated overseas orders in that period.
|Hyundai Engineering & Construction employees work at the construction site of a gas plant in Habshan, southwestern Abu Dhabi, United Arab Emirates. (Hyundai E&C)|
Buoyed by large-scale deals to build oil refinery plants in Iraq and Venezuela, the company’s total value of orders for domestic and overseas construction surged 37.3 percent to 10.8 trillion won in the first half of this year compared to a year earlier.
“The stellar first-half performance was largely due to our diversification strategy and stable business portfolio,” the official said.
To stake out more territory, Hyundai E&C, which in the past concentrated on the Middle East market, has expanded to Africa, the Commonwealth of Independent States and Latin America after 2011, when the builder was incorporated into Hyundai Motor Group. This was also when the company stated to focus on improving its profitability and optimizing the new global network it had gained, according to the official.
As a result, the company reduced its dependence on the Middle East to 19 percent last year from over 50 percent in 2011 while orders from other regions noticeably increased. CIS was the biggest client, which accounted for 43 percent of the total overseas sales, followed by Latin America, Asia and Africa.
In Asia, Hyundai E&C plans to focus on civil engineering and construction projects in the public sector commissioned by Singapore.
It is also eyeing countries such as Myanmar and Vietnam, where it sees a growing demand for infrastructure and plant construction in line with their dramatic economic growth.
In the long term, the builder hopes to launch new growth engine projects in nuclear power generation, renewable energy and oil sands development.
“Hyundai E&C will strengthen its research and development workforce and make the necessary investments to become a leader in the high-value-added market,” the construction firm said.
Hyundai E&C currently touts a stable business portfolio in four mainstay businesses ― civil engineering, construction, plants and power facility. All four evenly contribute to the builder’s total sales.
By Park Han-na (firstname.lastname@example.org)