Overseas construction

Overseas construction (해외건설/海外建設) is referred to the overseas operations of Korean contractors.

Overseas construction has been an important export industry since the early 1960s in Korea. Though construction industry played a major role in rebuilding Korean economy from the ashes of the Korean War, the overseas operations were pursued not for the diversification of markets but as a recycling channel of oil money from the Middle East in the 1970s.

Since then overseas construction remains a critical source of foreign currency and invisible export earnings. By 1981 overseas construction projects, most of them in the Middle East, accounted for 60 percent of the work undertaken by South Korean construction companies.

Key words
overseas construction, depression in local markiet, diversification of markets, recycling of oil money

History
Since the mid-1960's, Korean contractors have successfully participated in more than 9,022 contracts in 138 countries with total worth of over U$545 billion as of December 2012.

Saudi Arabia's Jubail Industrial Harbor project was a turning point. Hyundai E&C completed the project successfully for the period of 1976-1980 by transporting steel jackets and structures made at its Ulsan factory up to 19 times by sea. It was a 6,750 mile journey over stormy seas through South Chinese Sea and the Indian Ocean. The 931 million dollar project bailed out a number of employees' households as well as the nation's economy plagued by oil shocks.

Penang Bridge in Malaysia was the remarkable achievement by Hyundai E&C in the first half of 1980s. Dong Ah Construction's U$10.4 billion contract with Libya for the first and second phase of Great Man-Made River Project followed in the second half of 1980s and 1990s. In the year of 1989 alone, Korean construction companies signed over US$7 billion of overseas contracts.

Samsung C&T, one of Korea's largest construction companies, built noteworthy constructs such as Petronas Towers, Malaysia for the period of 1994-1997. Ssangyong E&C was proud of its unique landmark edifice, Marina Bay Sands Resort in Singapore constructed during 2008-2010.

Statutory grounds
To support overseas construction by Korean contractors, the government enacted the Overseas Construction Promotion Act (해외건설촉진법/海外建設促進法) for the first time in 1976. The Act was wholly amended in August 2011.

It is to provide for administrative licensing and support of overseas construction business necessary to promote overseas construction thus contributing to the improved balance of payments.

Monumental projects staged overseas
See ICAK Website.

Prospects
Korean contractors are exploring overseas markets not only in the Middle East but also in the Asia-Pacific region and the North America to overcome the continued depression in the local market. ICAK disclosed that for the seven months in 2013, Korean contractors were awarded U$31,577 million contracts in Asia (U$13,066 million), the Middle East (U$11,069 million) and the Pacific region and North America (U$6,185 million).

A Korean consortium is expected to perform the huge water restoration program in Thailand. Korea Water Resources Corp and major Korean builders were named as a preferred bidder in two of the nine water management projects - U$5.47 billion combined - accounting for 56 percent of the U$10.8 billion projects. Samsung C&T was successful in obtaining the subway construction deals in Singapore and Saudi Arabia in July 2013.