Saudi Expo win puts Korean firms in line for contracts

Saudi Crown Prince Mohammed bin Salman Al Saud, right, talks with Korean conglomerate leaders at his room in Lotte Hotel Seoul in this November 2022 photo. From left are Hanwha Group Vice Chairman Kim Dong-kwan, Hyundai Motor Group Executive Chair Chung Euisun, SK Group Chairman Chey Tae-won and Samsung Electronics Executive Chairman Lee Jae-yong. Screenshot from Saudi Press Agency's website

All-out efforts for Busan to host the World Expo 2030 could not bear fruit, but the result made it much easier for Korean companies to join NEOM and other mega-size projects led by Saudi Arabia, according to industry officials, Wednesday.

In the wake of Saudi Arabia’s success in hosting the World Expo 2030 and the 2034 FIFA World Cup, its infrastructure projects have been expected to gain momentum, creating more opportunities for builders and high-tech firms worldwide to enjoy the benefits from a potential construction boom. Even before Riyadh was chosen as the host city for the Expo, the kingdom pushed ahead with large construction projects for Saudi Vision 2030, a roadmap led by Crown Prince Mohammed bin Salman for economic, social and cultural diversity.

When the Korean port city was competing with the Saudi capital, domestic companies apparently tried to balance their efforts to support Busan’s bid and their attempts to boost economic ties with the Middle Eastern country.

The crown prince’s meeting with business tycoons here last year sparked a rumor that Korea was giving up its Expo bid in exchange for lucrative opportunities in Saudi Arabia. The Korean government and companies denied the speculation and explained that the two countries’ bilateral cooperation is irrelevant to their friendly rivalry to host the World Expo.

In addition, some Korean firms informed the Bureau International des Expositions (BIE) members behind the scenes of alleged human rights violations in Saudi Arabia, while making efforts at the same time to discover business opportunities in the Middle Eastern country.

“The selection of Saudi Arabia can increase orders placed with Korea for the NEOM project,” Shinyoung Securities analyst Park Se-ra said.

Korean construction companies said they expect more opportunities in Saudi Arabia after the selection of the World Expo's host city, but they have remained cautious about speaking openly about their potentially lucrative outlook, considering the public disappointment over the city’s failure to win the right to host the international event.

“We will participate in Saudi Arabia-led projects with strategies tailored for our clients,” an industry official said.

SK Group Chairman Chey Tae-won, left, talks with Hyundai Motor Group Executive Chair Chung Euisun during the General Assembly of the Bureau International des Expositions near Paris, Tuesday (local time). Yonhap

It is also considered that Korean business magnates will enjoy broadened business networks on the basis of their extensive overseas lobbying in support of Busan’s bid.

“Domestic firms have also enjoyed collateral benefits, such as raising global awareness about their businesses, discovering new markets, diversifying supply chains and securing new business opportunities,” the Korea Chamber of Commerce and Industry said in a statement.