Hanwha Engineering and Construction, one of Korea’s leading builders, is seeking to cement business cooperation with Iraq, hoping to lead the “second Middle East boom” as the Mideast country rebuilds after war.

For Korean builders, the Middle East has been a major construction market since 1965, when Korea started doing construction overseas. Since then, Korean builders have secured a combined $500 billion in overseas construction orders as of June.

Behind Korea’s surprise performance, there may be Hanwha E&C’s successful advance into Iraq as it is in the process of rebuilding.

In May, the Korean builder signed an $8 billion contract with the Iraqi government to build a mammoth housing complex in a new town.

The building project, which will include 100,000 houses in Bismayah a satellite city of Baghdad, is the nation’s second-largest overseas deal next to its $20 billion nuclear plant contract with the United Arab Emirates in 2009.

Company officials said its scale will mark the largest ever in Korea’s history of overseas construction projects,

Market analysts said that the scale of the new town in Iraq amounting to 1,830 hectares would be equivalent to that of Bundang, south of Seoul. The project includes the establishment of water supply and sewage systems.

They evaluated that Hanwha Group has secured new growth potential in the overseas market as its construction unit has won the high-priced order for new town supply in Iraq.

In consideration of the importance of the building project, Hanwha Group chairman Kim Seung-youn participated in the signing ceremony in May in Iraq.

Hanwha officials expect that it will take about seven years to complete the construction of homes in Bismayah.

As if reflecting Hanwha’s interest in the Middle Eastern country, group chairman Kim revisited the country two months after the contract signing.

Kim and Iraqi Prime Minister Nouri al-Maliki in Baghdad discussed the construction project and other issues of mutual concern such as the Korean company’s business opportunities amid Iraq’s ongoing postwar reconstruction.

During the meeting with the prime minister, chairman Kim explained the preparations for the housing project and proposed to organize a separate task force team to discuss new business.

“I want to contribute to developing the future relationship between Korea and Iraq and to have more opportunities to participate in the growth of Iraq,” Kim was quoted as saying by company officials.

“We need more specific discussions on the modernization of military facilities. And about the installation of solar panels at schools, we will carry out pilot programs promptly if you pick some model schools,” he told the prime minister.

According to Hanwha, the prime minister responded positively to Kim’s proposal, saying, “(I would) consider Hanwha not as a Korean company but as an Iraqi company and hope to continue our partnership.”

Since winning the Bismayah project, Hanwha has sought to join Iraq’s rebuilding efforts, including installing individual solar power facilities at every school in Iraq as well as in the new satellite city.

By Chung Joo-won (joowonc@heraldcorp.com)