Overseas Construction Expected to Double in the 2nd Half
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According to the survey on overseas construction companies by the Ministry of Land, Transport and Maritime Affairs (MLTM) and the International Contractors Association of Korea (ICAK), a total volume of overseas contracts will amount to more than 30 billion dollars for the 2nd half of this year. The survey anticipates that the volume would even reach a goal for this year to receive 40 billion dollar worth contracts.
The volume of orders received during July and August alone is expected to reach over 16 billion dollars, exceeding the total contract volume for the 1st half. Concluded contracts during that period include the Jubail refinery at Saudi Arabia, Merapoh refinery at Malaysia and gas plant at UAE.
Meanwhile, domestic construction companies have made bids for 327 projects totaling 125 billion dollars for this year, which displays little decline from 133 billon dollars in the last year. Therefore, volume of orders received can exceed the current estimation.
Overseas contracts for the 1st half of this year stood at 13.13 billion dollars, which is half the volume compared with the same period of the previous year, mainly because the Middle East and Asian region placed less orders due to the global economic crisis.
During the latter half of this year, overseas contract volume is estimated to sharply grow by more than two folds, driven by increased orders from the Asian region and the recovery in the Middle East construction market.
As for the Middle East and Northern Africa, the construction markets show the signs of recovery as the oil price hits 70 dollars or more per barrel. Therefore, it is expected to receive orders totaling 17 billion dollars from Saudi Arabia, UAE and Algeria.
Furthermore, oil producing countries in North Africa are expanding their investments in the upstream sector, while Algeria has increasingly placed orders for infrastructure such as new towns and highways. As such, prospects for the future contracts are bright.
In this regard, MLTM plans to develop proper measures with related Ministries such as the Ministry of Knowledge Economy, which include expanding vendor registration of domestic equipments to overseas construction market. By doing so, the increase in plant construction contracts will lead to expansion of plant equipment exports.
