Hoping to latch on to an unprecedented uptrend in construction overseas and offset the slump of the domestic market, the heads of major Korean builders have recently been ramping up overseas business trips.

The frequency and the length of the visits were especially conspicuous for large-sized builders which have been experiencing a fall in local stock prices this year.

Overseas construction orders won by Korean builders this year amounted to $597 billion as of last week, according to the International Contractors Association of Korea.

Also, the nation’s largest builder Hyundai Engineering & Construction recently surpassed $100 billion in overseas sales.

“The construction industry has long been seeking its escape abroad, especially in the developing countries which are striving to expand their basic infrastructure,” said an official of the ICAK.

“With a prolonged slump of the domestic market, this dependence on overseas sales increased even more.”

Daewoo Engineering & Construction and GS Engineering & Construction, the nation’s third and sixth-largest builders respectively, have been spearheading such an overseas sales strategy.

Park Young-sik, who took office as CEO of Daewoo E&C in July, has already inspected most of the company’s major overseas construction sites over the past few months, according to officials.

His extensive tour included visits to the contract ceremony of the 680 billion won ($641 million) Central Area Field Complex Oil Project in Algeria and to the 970 billion won residential construction project in Vietnam.

“Having long served as the company’s strategic chief, Park is fully aware of the importance of the overseas market, as well as the CEO’s role in it,” said an official.

“The visit of the top managerial person not only speeds up the progress of the ongoing projects but also boosts the possibility of additional orders in the corresponding partner country.”

Daewoo E&C, despite its relatively stable position in the domestic residential market, has been experiencing a continuous fall in its stock price.

Also, GS E&C, which recorded a worst-ever financial deficit in the first three quarters of this year, is striving to make up for its losses in the overseas market.

CEO Lim Byeong-yong, since taking office in June, has spent almost a whole month in total visiting the company’s overseas construction sites, officials said.

He is also slated to pay a visit next month to the United Arab Emirates where the company won a 4 trillion won petrochemical plant construction deal, in a consortium with the U.K. energy provider Petrofac and German gas producer Linde.

“For several years, GS E&C has suffered from the extended aftermaths of its past low-cost deals, triggered by the excessive competition in the overseas construction market,” said an official.

“We will in the future adopt a select-and-concentrate strategy, placing focus on high-value-added projects.”

The ICAK, while positively assessing the Korean builders’ outbound sales efforts, also expressed concerns over the financial value of their business.

“Considering the large amount of deals won in the overseas market, it is advisable for construction companies to turn their eyes abroad,” said an official of the association.

On Tuesday alone, local companies such as Daelim E&C and POSCO E&C, together with Daewoo E&C, simultaneously announced the clinching of new overseas deals that total 2.4 billion won.

“However, the Korean builders should at all times remember that the long-time slump of the construction industry was largely due to the low productivity in overseas sales,” the official said.

“It is the financial margin and future growth potential that really matter, not the immediate sales amount.”

By Bae Hyun-jung (tellme@heraldcorp.com)