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Hanshin E&C cements foothold in Southeast Asia

Feb. 6, 2024 - 20:36 By Park Han-na
Hanshin E&C Chairman Choi Yong-sun speaks during an interview with The Korea Herald at the firm's headquarters in Seocho-gu, Seoul, Jan. 29. (Im Se-jun/The Korea Herald)

With decades of know-how in the infrastructure building business, Hanshin Engineering & Construction is taking a big leap by tapping deeper into the Southeast Asian market and diversifying its business portfolio.

Hanshin E&C Chairman Choi Yong-sun singled out Indonesia and Ukraine as the builder’s “future markets.”

“Indonesia is Southeast Asia's largest economy and has a high demand for infrastructure construction and urban development. Hanshin E&C pursues various projects there, including high-rise apartments, roads, and ports,” he said during a recent interview with The Korea Herald at the firm’s headquarters in Seoul.

To solidify its position as a global construction company, the chairman has been eyeing reconstruction projects to be conducted to rebuild Ukraine from Russia's full-scale invasion.

“There will be multiple grant and lending programs set up by international multilateral banks such as the European Bank for Reconstruction and Development and World Bank and countries like Korea, Japan, and the United States for post-war reconstruction works,” he said.

The headquarters of Hanshin E&C in Banpo, southern Seoul (Hanshin E&C)

Hanshin E&C has a dual-track business model – one that focuses on private sector construction projects including apartment complexes and other residential buildings and urban redevelopment. The other is working on public projects such as roads, bridges and sewage treatment facilities.

With most Korean builders struggling with the sluggish housing market here, Hanshin E&C has managed to generate stable revenue by diversifying its business portfolio.

“As of 2022, public construction accounted for 47.9 percent of the company’s revenue, minimizing the negative impact of the contraction in the private-sector apartment market,” he said.

Expansion of overseas business is the firm’s core strategy for a balanced portfolio.

Its overseas business started in Vietnam in 2004 where it completed about 20 projects in major cities like Hanoi and Ho Chi Minh.

“In the Southeast Asian market, projects are changing depending on the development stage of each country. In Vietnam, basic infrastructure construction projects have been actively carried out since the early 2000s, focusing on the ODA contract market. However, now, about 20 years later, it is transitioning into an investment development market along with economic growth,” he said.

Based on this successful experience, the firm entered Cambodia in 2015 and Laos in 2017.

“These infrastructure markets are shifting from Vietnam to Cambodia and Laos. Cambodia and Laos are experiencing slower economic development than Vietnam, and there is a high demand for building basic infrastructure,” he said.

In December, Hanshin E&C won an 41.2 billion won ($31 million) order from Laos to build water and sewer utilities in Champasak province.

The chairman said the company is also considering entering the Central Asian country of Uzbekistan.

“We are reviewing several projects, including apartment development projects and data center development projects, and plan to establish a liaison office to conduct market research and other new business discoveries,” he said.