Hyundai E&C leads construction boom in Iraq

The Hyundai E&C’s construction site in Habshan, southwesternAbu Dhabi, the United Arab Emirates. Hyundai won the $1.7 billion project from Iraq’s state gas company GASCO in 2009 to build a gas processing facility. / Courtesy of Hyundai E&C

By Park Jin-hai

Hyundai Engineering and Construction (E&C) is leading a second construction boom in Iraq.

Last February, the company, signed a contract with the Iraq government to build an oil refinery in Kerbala, Iraq, 120 kilometers south of the country’s capital Bagdad.

“The oil refinery construction contract signed last February will go down in Korean construction history,” said a company official.

The $6.04 billion contract Hyundai E&C won in a consortium with three other Korean firms has been the largest single plant construction overseas project the company has ever had.

“It’s not only the size of the contract but also the way we bagged the project that has been praised highly. The joint venture is a successful model for overseas construction projects, where our rivals GS E&C, SK E&C and Hyundai Engineering work in close coordination with us,” he added.

Since it entered the Middle East construction market in 1965 for the first time as a Korean builder, it established its Iran office ten years later to build the foundations for further projects in the region.

Following a shipyard construction project for the Iranian Navy in Bandar Abbas in Iran, the company successively completed an industrial port contraction project in Jubail, Saudi Arabia, spurring other Middle Eastern projects.

Presently, the company has participated in 48 projects in 15 countries, with contracts totaling $66 billion in the Middle East alone.

The key to Hyundai’s regional success has been its constant efforts to move into new fields of construction, where other rivals were often reluctant to go, thus expanding its project portfolio.

The company has been focusing on overseas projects, creating revenue from outside the country. Hyundai E&C has built nuclear power plants, ports and other major infrastructure such as malls and hospitals all around the world, while many of its rivals remained simply building power plants.

In 2010, the company’s revenue from overseas contracts surpassed $11 billion for the first time for a Korean builder.

However, its overseas construction drive has not remained solely in the Middle East. It has continued to expand into new markets, ranging from countries in South America such as Chile, Colombia and Venezuela, to countries in Africa such as Uganda.

Thanks to market diversification and finding new opportunities, its revenue incurred from overseas topped $10 billion two years in a row, $10.5 billion in 2012 and $10.9 billion in 2013.

In July 2013, the company clinched its first construction project in Europe as well.

“The project to build the world’s first large-scale cable suspension bridge in Turkey is an opportunity to demonstrate our technological prowess in the field. It also serves as a springboard for other ventures into European market,” said the official.