Deal becomes the largest overseas construction project won by a Korean firmHanwha Engineering and Construction Corp. announced Thursday that it signed a $7.25 billion contract with Iraq’s National Investment Commission.
Signed on Wednesday in Iraq, the project is the largest overseas construction project to be won by a Korean construction firm.
Under the contract, Hanwha Engineering and Construction will build a planned town at a location 25 kilometers east of central Baghdad, the company said.
The town will be built over an area of 1,830 hectares and contain 100,000 new homes, the company said.
Hanwha Engineering and Construction said that the project, which will be conducted as an engineering, procurement and construction or EPC contract, will be conducted over a period of seven years.
“This project is the first case of exporting Korea’s know-how in building planned cities, and it will provide an opportunity for gaining recognition from Africa and the Middle East in the field,” Hanwha Engineering and Construction said in a statement.
CEO Kim Hyun-chung (Hanwha Engineering and Construction Corp.)
The Iraq project is the latest in a series of contracts Hanwha Engineering and Construction has been awarded in the Middle East as it drives to become one of the world’s 100 largest construction companies.
Earlier this year Hanwha Engineering and Construction announced plans to become one of the world’s top 100 builders by 2015 with annual sales figure of 5 trillion won, and win contracts worth 7 trillion won in that year.
Iraqi Prime Minister Nouri al-Maliki (right, back row) looks on as Hanwha Engineering and Construction Corp. CEO Kim Hyun-chung (second from left) and Head of National Investment Commission Sami Al-Araji (second from right) sign the contract at the Prime Minister’s office in Baghdad on Wednesday. (Hanwha Engineering and Construction Corp.)
The plans also revealed that the company will diversify its overseas portfolio to include civil engineering projects, and to expand into solar power and other renewable energy businesses.
Also as part of the plans, the company hopes to expand its overseas generated income by more than 20 percent each year with the aim of raising 40 percent of its annual revenues from overseas sources by 2015.
Aided by the company’s expertise in industrial plant construction, Hanwha Engineering and Construction won several large contracts from Middle Eastern nations.
In April, Hanwha Engineering and Construction signed a $1.05 billion deal to build a power station and desalination plant in Saudi Arabia.
Under the contract the company will build the desalination plant at Yanbu industrial complex, the biggest of its kind in Saudi Arabia located on the western side of the country, by 2014 for the Saudi Arabian power and water utility company Marafiq.
Facilities to be built at the site include three 230 megawatt-steam turbine power generators and three 830-ton boilers.
Hanwha E&C attributed the deal to the builder having earned credibility for its expertise in EPC contracts from the Saudi Arabian utility company.
In 2009, the firm won a $750 million power plant contract from Marafiq. Around 60 percent of the construction for the facility has been done and is to be completed by 2012, the builder said.
In March, the company won a $220 million refinery facility contract in Kuwait.
Under the deal, the company will update fire detection and alarm systems at three refinery facilities near Kuwait City, and two office buildings.
The project, issued by the state-run Kuwait National Petroleum Co., is to be completed in 30 months.
“The latest contract, on top of last year’s LPG plant contract, will be an opportunity for the company’s capabilities in carrying out projects in Kuwait,” Hanwha Engineering and Construction said in a statement.
The contract boosts Hanwha Engineering and Construction’s already significant presence in the Middle Eastern nation.
In September 2010, the company won a 230 billion won order to build a liquefied petroleum gas complex in Kuwait.
The contract, issued by the state-owned Kuwait Oil Tanker Co., calls for six LPG storage tanks, pumps, compressor stations and truck-loading facilities, as well as three production lines each capable of filing 1,600 cylinders of 12 kilograms per hour to be built.
The plant, located in a 150,000-square-meter area in Umm Al Aaish, 30 kilometers north of Kuwait City, is scheduled for completion in 2013.
In 2009 the company won a $75 billion contract with a Saudi electricity firm to establish a steam turbine generator and a $2 billion project with SEPGO, a Jordanian state-run electricity firm, to build a gas turbine generator.
By Choi He-suk (
cheesuk@heraldcorp.com)