Strategies for Overseas
Construction Market

Symposium estimates project orders from Middle East to reach $750 billon in 5 yrs

The Construction Association of Korea, the Korea Investment and Trade Promotion Agency along with the Construction and Economy Research Institute of Korea jointly held the "Korea, CIS and the Middle East Construction Plant Cooperation Symposium in Seoul on September 15.
One of the purposes of the gathering focused on the introduction of overseas construction markets and strategies to secure projects for the Korean construction firms in growing construction markets. The event heard from four construction experts from those countries including the UAE and six CEOs of Korean construction firms with operations in the regions.
Eight countries in the Middle East are projected to order $750 billion worth of construction projects in the next five years with the UAE alone taking up about 30.5 percent of the estimated figures at $230 billion, which will put the region in the center of the world construction market.
Kazakhstan would see its construction market grow 21.5 percent per year due to stable domestic political situation, economic growth helped by rising foreign investment and raising the per capita income level.
Chairman Kwon Hong-sa of the CAK, in his opening speech of the symposium, said he hoped that many Korean construction firms would make advances into the Middle East and the Confederation of Independent States whose construction markets have been growing with oil dollars flowing in and President Roh Moo-hyun toured the region increasing Korean companies chances to enter these regions and win projects. He said the construction industry is faced with slow down due to the government's measures to cool down the market by cutting budgets for social overhead capital projects, which is why domestic construction firms should look to overseas markets for growth. As of the end of August, overseas projects won by Korean builders reached $11.8 billion and is likely to amount to over $20 billion as targeted for this year.
Lately, construction markets in the Middle East and the CIS countries have been booming due to the inflow of large chunks oil dollars resulting from high oil prices, making the countries in these regions order large infrastructure construction projects including power plants and harbors. In case of Dubai, the government has eased its laws and regulations to allow foreign investors to own real estate there, which is attracting domestic investors in Korea. Many construction firms have been in this region winning projects to recover the loss of business at home determining that these regions are a blue ocean in their strategies. But things have been very tough for small and medium-sized firms due to their lack of information, experience and funds. CAK signed an MOU with Kotra to help SMEs to have success in their search for business in the regions and the symposium is the first project under the MOU.
About 200 from the construction industry, including plant construction export firms participated in the symposium. President Hong Ki-wha of Kotra and President Choe Jae-dick of the CERIK also attended the gathering.
Speakers at the event included Hyun Ki-choon, vice president of Bando Construction Co. on his experience advancing into Dubai and the UAE with construction projects, Manager Kim Myun-woo of Hyundai Construction on winning project orders in Iran,
Dr. Kim Min-hyung of the Cerik, spoke about strategies to invigorate Korean builders to advance into overseas construction markets. Among foreign speakers were CEO Norman Johnston of Zones Corp. on the industrial development policies of Abu Dabi and conditions for foreign builders to enter its construction market; Ali Buruhaima, chief officer of Dubai Properties, on Dubai construction and development projects and conditions for advancement; Marchenko Victor Ivanovich, External Business Manager, City Construction Bureau; Moscow; and CEO Concern Siberia Valery Cherov who spoke on the development projects in Siberia and prospects and conditions to enter the region; Chairman of the Construction Committee of the Industrial Trade Department of Kazakhstan, Kaisar Omarov on major construction policy and the present status of construction project orders; Mike Upton, Group 5 CEO designated, on South Africa's World Cup related projects and conditions for advancement. nw

(above) Participants for the symposium including government officials and construction company executives from the Middle East, CIS and Korea.
(right) Chairman Kwon Hong-sa of the Construction Association of Korea delivers an opening speech at the symposium