Park Jin-hai primarily focuses on K-dramas, entertainment shows and actor interviews. Beyond that, she also pens articles covering the broader arts scene, with a particular emphasis on classical music, dance and various aspects of lifestyle. Since joining The Korea Times in 2013, she has made significant contributions in the realms of hallyu (Korean wave), industry news and international affairs.
HanmiGlobal to focus on profitability
Kim Chang-rae, president of HanmiGlobal, speaks during an interview at the company’s headquarters in Samseong-dong, southern Seoul, Aug. 5. / Korea Times photo by Park Jin-hai
By Park Jin-hai
By Park Jin-hai
Kim Chang-rae, president of top local construction management (CM) company HanmiGlobal, says his company is selective when bidding for contracts and is not interested in winning as many jobs as possible with the lowest price.
“Instead of other companies that win bids by writing down the lowest price, we have set our target on the high-end market,” said Kim, at his office in southern Seoul, during an interview with The Korea Times last week. “We aim to be a CM company that can give high value for money.”
In the domestic construction sector, where many small and large companies are struggling to stay afloat, HanmiGlobal has been making great strides since its establishment in 1996.
“In the short term, we could be in a disadvantageous position in competition, because there are clients looking for the cheapest price,” he said. “But what is certain is that they come back to us in the end after considering the value for money.”
CM is about “active engagement” in all processes of construction, he said. The company acts as a partner with the client and consults in all stages, from development and design to construction and maintenance, taking responsibility for the project to guarantee the owner minimum costs and best quality.
HanmiGlobal, better known for its numerous local high-rises, including the Tower Palace buildings and the 123-story Lotte World Tower under construction, has now grown into a giant with five affiliates. These include the recently acquired OTAK, a U.S.-based engineering firm, Ecosian, a Korea-based consulting firm specializing in energy saving and environment protection, and iARC, a design firm in Korea. It also has established Turner & Townsend Korea in a joint venture with Turner & Townsend U.K.
Kim said a lack of understanding of CM hindered the company’s business in the beginning. “It was hard to start the business in the beginning because clients were reluctant to pay for the invisible values we create,” he said.
The biggest challenge came in the public construction sector, where officials did not understand the need for a CM company and tended to hold on to traditional construction delivery methods.
“The breakthrough came when we were building the Seoul World Cup Stadium,” Kim said. “At the time, when it broke ground belatedly, everybody involved worried whether the project could be finished on schedule.
“We adopted the project management information system as well as fast track, which simultaneously carries out design and construction, successfully managing the construction four months ahead of schedule and cutting construction costs by tens of billions of won.
“Instead of supervising whether construction has been done according to the specification and design, CM starts from scratch, whether the design suggested is the optimal one and checks whether there is ‘over-engineering.’
“For instance, if the design says a 60-centimeter column is required, under the design review, we give other options to say 50-centimeter and 40-centimeter columns are also acceptable. That cut construction costs substantially without degrading the safety of the building. That is the value engineering we are looking for.”
From 2003, HanmiGlobal has been seeking more opportunities overseas, having carried out more than 230 projects in some 50 countries.
Since the acquisition of OTAK in 2011, the company has tried to create more synergy with the American engineering firm. And Kim said it is now starting to work. In 2013, the company successfully turned OTAK’s bottom line black, with 33.1 billion won in sales and 970 million won in net profit. In the following year, those numbers grew to 33.5 billion won in sales and 1.4 billion won in net profit.
“Now we should be better called a project management (PM) company, an advanced one from CM,” Kim said. “Instead of working as a CM, we have worked as a team with the client and have hired a CM company under us in repeated projects. What we are carrying out with Universal Entertainment to build a resort in Manila Bay in the Philippines is one example.”
According to the Engineering News Record, HanmiGlobal was the No. 19 CM company in 2014. It aims to be a “global top 10 CM firm” by 2020.
“What we are doing makes a constant virtuous cycle: we create value for our clients and get returns, which strengthens our system and upgrades our technology,” Kim said. “That differentiates us from others.”