A Big Piece of Project

GS Construction wins the largest single order exceeding $1.2 billon in Oman

GS Engineering and Construction Co. announced recently that it has won the aromatic plant construction project worth $1.2 billion from the Aromatic Oman LLC in Oman, jointly with LG International Co.
The project, the largest single order won by GS Construction overseas, is located in the Sohar Industrial Complex, 230 km northwest of Muscat, the capital city of the Middle East country. The project involving the construction of paraxylene and benzene production plants is targeted for completion in 2009, with the work to begin in July.
When the project is completed, the plant will have the capacity to produce 800,000 tons of paraxylene and 200,000 tons of benzene a year. GS Construction officials said they were able to sign the contract on an exclusive basis with the Oman side accepting their proposal.
They said the Export-Import Bank of Korea will put up $500 million in loans and the Korea Development Bank $43 million to financially back the project.
GS Construction did well last year in its overseas operations with total sales amounting to 909 billion won, up 119 percent from the previous year. Overseas projects totaled 1.09 trillion won last year, breaking the 1 trillion won mark for the first time since the company began operations.
The company has been focused on both real estate development and plant construction projects overseas. Its technology for plant construction including oil refining and petrochemical installations won international recognition. The company clinched a petroleum plant construction project worth $660 million from ATC Co. in Thailand in consortium with SK Construction to win plant construction work in Nanjin, China, in addition to a resort construction project in Korea.
The company will continue to go after oil refinery and petrochemical plant projects around the world, while continuing to work on winning gas and liquefaction plant projects, company officials said. The company's projects make 59 percent of its revenue overseas. New orders and sales revenue in 2005 recorded 524 billion won and 533 billion won from the Middle East with most of them related to oil and gas plant facility projects. The company also has projects in Southeast Asia, China, Poland and Russia. About 36 percent of the company's overseas projects are located in China based on 2005 records. These projects include office buildings, plant construction, and aromatic plants. Orders and sales in China recorded 262 billion won and 327 billion won respectively in 2005.
A steady flow of projects in China strengthened its construction technology and competitiveness. Currently it seeks to diversify its construction portfolio based on the technology expertise gained in building the Beijing Tower.
The company also undertook various projects in Taiwan and Thailand. It currently is engaged in building a $660 million aromatics plant project in Thailand, jointly with SK Construction for its $240 million share in the project.
At home, GS Construction plans to build 13,000 housing units this year, up 60 percent from last year with most of the projects located in the Yongin area in Gyeonggi Province, south of Seoul. The project benefited from the Pangyo apartment construction project undertaken by the Korea National Housing Corp. The company plans to build one/third of its projected housing units in Seongbuk-dong in Yongin and 10,539 units in other areas in Yongin, which is expected to make the area known by the company's "Xi"brand apartments, becoming, in fact, a "Xi"town.
In the meantime, the International Contractors Association of Korea projected that overseas construction projects won by Korean builders this year would increase to $15 billion. The project orders won in the first half have exceeded already $8.5 billion, up 37 percent from the same period a year earlier.
The orders showed that the Middle East was the largest market with $4.46 billion including $2.2 billion in Saudi Arabia and $1.3 billion in Kuwait, $2.28 billion in Asia and $1.14 billion in Africa and $610 million from other regions. Orders from Asia are up 124 percent from the same period last year, and from Africa up 117 percent. Hyundai Heavy led all others with $1.4 billion in orders booked, followed by Daewoo Construction in second place with $1.32 billion, Samsung ENG with $920 million, Doosan Heavy with $650 million and Hyundai Construction with $680 million. nw

LG Polycarbonate Plant built by GS E & C in Yeosu, South Jeolla Province.

Chairman Hur Chang-soo of GS Engineering and Construction Co.