Published : Sept. 21, 2011 - 18:50
Builder aims to become one of the world’s top 100 construction firms with sales of W5trHanwha Engineering and Construction is turning its attention to overseas markets to fuel its drive to become one of the world’s top 100 construction companies by 2015.
Under the plans announced earlier this year, the company aims to become one of the world’s top 100 builders with an annual sales figure of 5 trillion won ($4.4 billion), and win contracts worth 7 trillion won in that year.
As part of the plans, the company aims to raise 40 percent of the target from overseas markets.
Since breaking away from its parent firm in 2002, Hanwha E&C has grown rapidly to establish itself as a major player in the construction market.
Expanding at an average rate of 20 percent each year, the value of contracts won on an annual basis has gone from 400 billion won to 4 trillion won. Such changes have also pushed up the company’s ranking among Korean builders in terms of construction capacity. In 2000, the company was ranked at 35th place, but it now stands at 11th place.
With Hanwha E&C’s operations growing rapidly across the board, the company’s performance in overseas markets has also shown significant growth in recent years.
The company’s overseas operations began to expand rapidly from 2008, with the value of contracts won in 2009 shooting up to 1.2 trillion won from the 300 billion won recorded in 2007.
According to the company, at the core of its overseas expansion strategy is the concept of selecting and concentrating on areas the company has sufficient experience and technological capacity as directed by Hanwha E&C chief executive Kim Hyun-chung.
Kim Hyun-chung
“The company used the experience gained from local industrial plant projects to enter overseas markets for power plants and chemical plants,” a Hanwha E&C official said.
As such, the company has taken on projects for building a variety of industrial facilities ranging from power plants and desalination plants to refineries.
For its overseas expansion, the company has been focusing on Saudi Arabia, United Arab Emirates and Kuwait in the short term to consolidate its presence in the Middle Eastern region.
However, the company’s plans are not limited to the cash-rich Middle Eastern markets.
Hanwha E&C employees brief CEO Kim Hyun-chung (second from right) about the progress on the works on the power plant being built in Saudi Arabia’s Yanbu industrial complex. (Hanwha E&C)
As part of its long term plans the company aims to spread its overseas portfolio across other regions, and to win more than 20 percent of its overseas contracts from other regions including Asia and South America.
In addition, the company plans to diversify its business portfolio by taking on investment projects and moving into the market for facilities for upstream industrial processes.
The company has also been expanding into entirely new areas such as solar power equipment to ensure growth in the future. According to the company it has been working closely with Hanwha Chemical, which entered the solar power market last year by acquiring the China-based solar cell and module maker Solarfun Power Holdings and reestablishing it as Hanwha SolarOne, to secure competitiveness in related markets.
Along with industrial projects, the company has also been expanding into the field of real estate development.
“Using the experiences gained from large scale development projects in Korea, the company has been expanding into Chicago, Hawaii and other areas with proven business opportunities,” a Hanwha E&C official said.
“The company has successfully completed a number of related projects and we are currently building a 133-unit housing project in Hawaii.”
By Choi He-suk (cheesuk@heraldcorp.com)