Hyundai Engineering and
Construction Regains Past Luster

CEO Lee takes lead in putting it back on track

Hyundai Engineering and Construction Company President and CEO Lee Jong-soo, his executives and staff members served lunch to about 2,000 senior citizens on Oct. 2 as part of the company's volunteering activities and in celebration of the first anniversary of its apartment brand, Hillstate.
Lee joined some 100 executives and members of the company's volunteering groups, including the Junior Board, in serving meals and deserts to elderly residents of the Seoul Elderly Welfare Center.
Hyundai Engineering and Construction (HDEC) hosted a similar event at the Seoul Elderly Welfare Center this past May on the 60th anniversary of the company's founding. In addition to a meal, the seniors were given a bag of rice produced from a farm in Seosan, owned by HDEC.
Departing from the usually luxurious anniversary events, HDEC took the occasion to "look after and share a warm heart with neighborhood residents"on the anniversary of the launch of the apartment brand.
Lee has been setting his sights on regaining the old luster as Korea's largest and representative E&C firm since March 2006 when he first took the helm. His push toward recovering HDEC's decades-old reputation as a construction powerhouse has paid off: HDEC has completed the workout program it has undergone since the Asian financial crisis and has made a strong showing in Korea and abroad with a stream of new contracts.
In his office at the HDEC headquarters Lee has a work of calligraphy that reads "Sang Seo Yang Soo"in Chinese characters, which literally means "Be clean and modest like water and lead a life like a stream of water."Lee's motto highlights his management style: ensuring an organizational balance by making up deficits and reducing excesses. The domestic construction and business communities have been paying close attention to the leadership of Lee, who has been pushing to make changes and reforms while remaining true to his principles.
CEO Lee favors an approach of moderation. He respects and attentively listens to the opinions of others as much as possible. Lee is said to have the resolve to stick to his decisions. Despite concerns from his acquaintances, he decided to unveil the new apartment brand, Hillstate, just six months after he took charge of the construction company.
The "Hyndai Apartment"had become the hottest household brand and would-be apartment buyers scrambled for the rights to purchase units built by HDEC in spite of the huge premium. However, HDEC suffered a liquidity crisis and fell into the hands of creditors in 2002. At that time, the company lost the race with its rivals, including Samsung E&C, to publicize their apartment brand in order to gain recognition among would-be buyers. Talk within the construction company of the need to launch an apartment brand had surfaced, but HDEC gave up its bid after studying the feasibility for two or three years.
Lee suffered a humiliating defeat in his first bid to build apartment units due to a lower brand image. The failure prompted HDEC to form a task force designed to launch a new apartment brand. Lee later confessed that he didn't know how customers would respond to his company's election of the apartment brand name "Hillstate."A recent survey showed that Hillstate has topped the list of apartment brands, gaining high recognition in a short period.
Unlike his predecessors who favored vertical leadership, Lee tends to choose a horizontal leadership approach, delegating more responsibility and authority to staff members and offering them more incentives.
A look into orders HDEC has landed indicates that Lee's efforts have begun to bear fruits. The company has seen the value of its orders surge from 8.07 trillion won in 2005 to 9.24 trillion won in 2006. It has won orders worth 6.12 trillion won during the first six months of 2007, the highest among Korean contractors. Its credit rating has also been rising by one notch every year: from BBB+ in 2005 to A- in 2006 and A this year.
Lately, Lee is putting his heart and soul into the construction of the planned Taean Corporate City, which he considers as a growth engine. The project, set to be launched in mid-October, calls for reclaiming a 14.62 million sq. meters of coastal land to build an ecological park, a theme park, six golf courses with 108 holes, a hotel and wharfs. It will require HDEC to invest a total of 8.3 trillion won by 2020. A survey by Taean County authorities indicates that the project is forecast to bring about production induction effects worth 12.1 trillion won, create approximately 134,000 jobs and attract 7-8 million tourists annually.
Lee is striving to grab high value-added projects for building gas plants. HDEC plans to focus its capabilities on exploring for gas reserves, which has been on the rise in such areas as Sakhalin, Russia.
HDEC, which is back on track as a construction powerhouse, has new ambitions to reposition itself as one of the global top 10 contractors. With this in mind, Lee declared that the 2007 management objective is to pursue opportunities and growth for the future. Lee said, "Executives and staff members are committed to making HDEC a beloved company and a world-class contractor. We will do our best in contributing to the development of the national economy and be a company for the people." nw

President Lee Jong-soo of Hyundai Engineering and Construction Co.