Lotte E&C, 'Absolute
Value Creator'

Strives to become a leading contractor with 2 trillion won worth target sales in civil engineering division in 2010

Lotte Engineering & Construction (Lotte E&C) has acquired experience and expertise in all ranges of the civil engineering sector since its inception nearly half a century ago. Lotte E&C has emerged as a contractor which is in the vanguard of national land development and national infrastructure buildup as it has pushed ahead with creative projects making the most use of experience and expertise.
Lotte E&C has solidified its stature as a large-size contractor as it ranked eighth in construction capability in Korea in 2005. In particular, Lotte E&C's civil engineering division is putting more energy into seamless construction with the goal of raising its sales from 350 billion won in 2005 to 450 billion won this year.
The civil engineering division still has enormous growth potential as it is devoting itself to continuously exploring new business areas. The division is trying to strengthen its presence through active marketing activities for landing orders since its entry in the turn-key-based project market.
Under its vision "An Integrated Construction Service Company as the Absolute Value Creator,"Lotte E&C is striving to chalk up 2 trillion won in the value of orders landed and 2 trillion won in sales from the civil engineering division in 2010.
The 50-year history of the civil engineering division is synonymous with the one of challenges it has offered with a dream of upgrading the construction culture to first-class levels. Take a look into the track record of seamless construction the civil engineering division has worked with technological prowess by introducing major achievements during each decade.

I. Foundation & Buildup Period (1959-1977)
Lotte E&C was established under the name of Pyonghwa Construction Shop Inc. in 1959. Lotte E&C made feats in the early stage of Korea's construction industry as it participated in such infrastructure projects as the construction of the Gyeongbu (Seoul-Busan) Expressway riding on the modernization of the nation.

Among the representative roads, bridges and tunnels Lotte E&C built during Lotte E&C's Foundation & Buildup Period between 1959 and 1977 was its participation in the construction of the Gyeongbu Expressway that opened to traffic on July 7, 1970. The contractor successfully completed two out of the total eight sections of the expressway - a 58.2 km-long Eonyang section and a 54.9 km-long Waegwan section - contributing to the dedication of the expressway within the construction schedule. Lotte E&C played a leading role in the construction of the nation's trunk roads as it was also involved in projects, including the Daejeon-Jeonju Expressway, Yeongdong (Seoul-Gangneung) Expressway, and Jinju-Busan Expressway.
During this period, the contractor was responsible for the construction of the first and third sections of the Gwangju Railroad Line. Lotte E&C began the construction of the first section in September 1966 and dedicated it in July of 1969. The third section project broke ground in July 1965 and finished in December 1966. Lotte E&C also participated in the construction of approach railroad lines to the Gwangju and Jeonju industrial complexes.
The government launched the Sapgyo-cheon Stream area agricultural development project, aimed at preventing tidal damages. This project was one of the nation's representative land construction projects in the 1970s. Lotte E&C landed an order on the construction of the Sapgyo-cheon Stream Embankment, beating out such major contractors as Daelim Industrial and Hyundai E&C. Lotte E&C launched the project in December 1976 and completed it in October 1979 to secure a stable supply of water for agricultural use to the South Chungcheong area. The contractor was awarded with a presidential prize and the Industrial Order of Merit, Steel Tower in recognition of the successful dedication of the project complete with the advanced technology to contain 8,400 cubic meters of stored water, a watershed of gaining technological prowess. The company participated in irrigation and agricultural water development projects in the Iksan and Yonggi area that broke ground in December 1971 and were completed in March 1976, realizing a goal of providing a smooth irrigation water supply and drainage in the Geumgang area, thus improving agricultural productivity.

II. Growth Period (1978-1987)
The Lotte Group acquired Pyonghwa Construction Shop Inc. to enter the construction industry. Thanks to the overwhelming support of the group and its advanced technological power, Lotte E&C carried out numerous mega-projects in a successful and seamless manner to reposition itself as a large-sized contractor.
During the period, the contractor completed a project designed to expand a national road between Pohang and Samcheok in July 1979. Under the expansion project that cost 27.5 billion won, including $34 million in IBRD loans, Lotte E&C participated in the work of a 38 km-long section between Hosan and Samcheok and a 41 km-long section between Yeongdeok and Pyeonghae for a combined 79 km, accounting for 41 percent of the total length.

The contractor was recognized for completing the seamless pavement of a road between Hangaeryeong Pass and Yangyang, considered to be the most difficult section of the road, in 1981. It is significant that the expansion project was the first one the contractor had landed after it was renamed to the current name. Lotte E&C also adopted a new construction technology, dubbed the "Incremental Launching Method"to build the Mangyeong Grand Bridge and achieved a feat of completing the pavement of a road between Onyang and Pyeongtaek within 39 months as it adopted the Sand Drain Method to pave the extremely weak Dunpo area.
A project for constructing the Gangnam section of Seoul Subway Green Line was launched in 1979. Lotte E&C participated in the 1.24 km-long Section 3-2 between Pongcheon-dong and the entrance of Nakseongdae. Subway officials and technological experts picked the portion, a mega-project requiring 225,000 man-days, as an exemplary site of excellent construction for observation tours.
Lotte E&C, which was working on the fourth waterworks project for the Busan Metropolitan government, subsequently succeeded in landing an order on the Section 1-14 of Busan Subway Line No. 1. Thanks to its endless efforts for seamless construction, the contractor's section was selected as an exemplary construction site in 1982 and 1983 and was prized by the mayor of Busan. The company also won an order on a section of Busan Subway Line No.1 Phase III between Jungang-dong and Seodaeshin-dong. The project on a subway section and an underground shopping center proceeded from February 1985 to July 1988. The contractor adopted the Slurry Wall Method in subway construction for the first time in Korea, demonstrating technological prowess. The shopping center, covering 14,684 sq. meters, has now become one of Busan's major tourist attractions following the opening of the subway line.
Lotte E&C launched the Second Iri Industrial Complex Project in October 1985 and completed the project designed to build up an area of 380,000 sq. meters with an input of about 40,00 man-days. The company participated in not only the design and construction of the Sihwa Industrial Complex, but also the Janganpyeong Land Rezoning Project and Gimhae Reclamation Development Project. The company was awarded with the Industrial Order of Merit, Stone Tower, for successfully dedicating a project designed to build the Dongbok Dam, an unprecedented rockfill dam. It also completed the Daeasin Dam after the project broke ground in 1983, contributing to improved irrigation and flood control facilities in the Wanju area in North Jeolla Province.

III. Development Period (1988-1997)
Entering the 1990s, Lotte E&C turned to external growth and profitability simultaneously as it ranked in the top 100 corporations in Korea and top 10 in construction performance rankings. It inaugurated the Social Overhead Team designed to undertake mega-land development projects as part of its efforts to expand business areas. Lotte E&C made efforts to adopt systems corresponding to its external stature by obtaining such certifications as ISO 9001 and 14001 to lay a foundation for developing itself into a leading contractor.
One of the major road, bridge and tunnel projects undertaken during the period was the contractor's participation in the Incheon International Airport Expressway, a private-sector SOC project, - the Banghwa Grand Bridge, the 27th one built over the Han River. The 2,559 meter-long, balanced arch truss bridge was rated to have upgraded domestic civil engineering technology a step closer to international levels. Lotte E&C adopted the Soil-Cement Injected Precast Pile Method for the first time in Korea to construct the First Tancheon Bridge connecting Daechi-dong, Gangnam-gu, and Samjeon-dong, Songpa-gu. The company was awarded with the Yangyang Bridge Project by capitalizing on the PC Box Girder (ILM) Method employed in the course of construction of Mangyeong Grand Bridge.
Lotte E&C undertook the third and fourth section of a project designed to extend the Seoul Subway Orange Line from December 1989. The contractor was decorated with an award by the Seoul mayor for the seamless completion of the 8 km-long section of Phase I, including the construction of Hakyeoul Station, which turned out to be a thorny one in terms of civil engineering and structure construction. The construction sector was picked up as one of exemplary quality and safety sites. Lotte E&C completed Section 222 of Busan Subway No. 2, by adopting the Top-Down Engineering Method for the first time in Korea in June 1998. One year later after the completion of the subway section, the Busan Transportation Corp., the owner of the project, designated the contractor as an excellent contractor. The company also participated in a project for laying a railway roadbed for Guro III Double-Track Subway Line Project.
Lotte E&C undertook the third section of the Siheung Industrial Complex, part of the Sihwa District Development Zone, between December 1986 and May 1997. After completion, the section was fraught with subsidence of weak land foundation, but it conducted an overall repair to gain credit as a large-sized contractor. As a result, the company was awarded with additional projects for the Sihwa District Development Zone. In 1996, Lotte E&C won an order on the land development and piped waterworks in the Munhyeon area, south of Busan, which was placed by Busan Metropolitan Corp. in 1996. The company undertook the first section of the Noksan National Industrial Estate Development Project in July 1990. Lotte E&C became the sole company among the six participants to be awarded with the Industrial Order of Merit, Stone Tower.

IV. Maturing Period (1998~)
The 1997 Asian financial crisis rocked the domestic construction industry, causing large-sized contractors to go belly up and the market contracted by 40 percent. Overcoming the worst recession, Lotte E&C's aggressive management resulted to translating the crisis into an opportunity for accelerating its continuous growth. At the same time, the company focused on cost saving and quality improvement Thanks to these efforts, Lotte E&C has established foundation as a leading contractor. The company is now striving to realize a goal of becoming the top contractor in Korea.
Lotte E&C completed the 14th section between Gunsan and Muan of the West Coast Expressway Project, ordered by Korea Highway Corp. in April 1998. It is now undertaking an expansion on a road section linking Seongdeok and Daeya after launching it in August 1998. The contractor is adopting such engineering methods as the Mat Method, Drain Method, Shear Key Method and Loading Control Method to deal with the weak ground foundation of the West Coast. The company successfully completed its portion of the Seoul Ring Expressway this past June. It is participating in multiple projects like the Seoul-Chuncheon Expressway, Yongin-Seoul Expressway, Myeongji Grand Bridge and Misiryeong Tunnel projects. It is set to begin the construction of the Second Gyeongin (Anyang-Seongnam) Expressway, a project landed in 2005. In April 2004, Lotte E&C launched the construction of the First Suyeong Bridge in Busan on a turn-key basis with the completion scheduled for January 2008.
As a major railway project, Lotte E&C broke ground for a railway bed improvement project for the fifth section between Sinni and Suncheon of the Jeolla Line in June 1998 to facilitate the flow of freight to and from Gwangyang Steelworks, Yeocheon Industrial Complex and Gwangyang Port. It is still undertaking a double-track railway project for the first section between Cheongnyangni and Deokso of the Jungang Line, which is to be completed by December 2006. Section 326 of Busan Subway No. 3 Phase II LG E&C landed in 2004 is also under construction. Capitalizing on experiences and expertise, it is undertaking such railway projects as the double-track project for Janghang (Cheonan-Onyang) Line, High-speed railway track Section 12-3 of Gyeongbu Line, the second portion of the double-track railway between Dongsuncheon and Gwangyang, and double-track project for Gyeongjeon Line.
Starting with an irrigation waterworks for the Yeongi area, ordered by Gochang County authorities in North Jeolla Province, Lotte E&C has already launched such projects in Myogok, Gwangsan, Buseok and Oedong districts. Starting with the Gimhae Logistics & Tourist Project that broke ground in April 1998, the contractor landed such complex buildup projects as the residential development project for the Jeonggwan area in Busan, the Second Dalseong Provincial Industrial complex, the Woongcheon residential Development Project, Haengsin housing development project in Goyang city, the Soha housing development project in Gwangmyeong, Dochon housing development project in Seongnam, and the Shinbang-Tongjeong district urban development project in Cheonan.
Lotte E&C is participating in New Port development projects on Gadeok Island, Busan, as a member company of the private-sector New Port investment corps. The company has also acquired experiences in the construction of ports by landing orders on Uido Port whose construction began in 2004, Incheon North Port general merchandise pier and Incheon North Port Sampyo pier. nw

(left photo) the Eonyang and Waegwan sections of the Gyeongbu (Seoul-Busan) Expressway and the landmark Sapgyo-cheon Stream Embankment, both constructed by Lotte E&C.

(Left photo) A section of Seoul Ring Expressway, and the Banghwa Grand Bridge, both, built by Lotte E&C.