Four Construction Companies on the Rise

Four small and middle-sized construction companies that entered the housing business in the 1980s have become construction enterprises of middle standing, achieving one trillion won in sales.

The quartet is Hyunjin Construction, World Construction, Woolim Construction, and Dongil Highvill. They started their businesses building row houses, rental houses, and small apartments in the middle and late 1980s.

Now they are targeting foreign markets, constructing big apartments and condominiums in China, Vietnam and Kazakhstan.

They achieved rapid growth by getting into niche markets.

The four companies started and expanded their housing businesses in earnest after the economic crisis.

At that time, construction companies of middle standing such as Cheonggu, Woobang, and Kunyoung grew rapidly by diversifying their businesses, but were severely hit by the economic crisis. Unlike them, the quartet managed to survive the financial crisis since they were relatively small.

In addition, their common ground is that they took on niche markets that big construction companies didn’t, and took the lead in developing new products. Woolim Construction has kept on building small and middle-sized reconstruction apartments in the Metropolitan Area, and apartment-shaped factories that big companies have neglected.

Dongil Highvill has focused its efforts on developing new products such as an apartment complex with no cars on the ground, for the first time in the country.

World construction recorded a competition rate of above 200 to one in the first round of distribution in Dongtan Newtown in Hwaseong, Gyeonggi Province, winning over big construction companies

They concentrated on the housing business in the Metropolitan Area in their early years of business, but they have expanded their businesses in local areas beginning this year.

Hyunjin successfully finished a reconstruction apartment project by building more than 3,000 buildings in Pohang and Kumi, North Gyeongsang Province, which is rare for an enterprise of middle standing. It also succeeded in receiving orders for about 12,000 apartment complex units this year in Suwan, Gwangju and Jeongkwan, Busan. World Construction has also started businesses in Gyeongsang Province, including Daegu and Ulsan, this year.

More aggressive management strategies-

As the domestic housing market has become stagnant, these construction companies are expanding their businesses overseas.

Dongil Highvill sold more than 3,000 apartment units in Astana, the capital of Kazakhstan, in September, and is preparing for a second round of construction next year.

Woolim Construction plans to concentrate its energies on an apartment project in Kunsan, China and a downtown development project in Hanoi, Vietnam. World Construction is considering the establishment of a joint corporation with a local big company to build an apartment complex in new towns near Manila in the Philippines. Hyunjin Construction has set up foreign branches in Japan, China, and Vietnam this year, and plans to push its business forward in earnest beginning next year.

They will place more weight on non-housing businesses, such as engineering works and social overhead capital, next year, and will implement aggressive management strategies through business diversification to expand their businesses.

Woolim Construction plans to increase the proportion of non-housing sector orders to 20 percent of its total. World Construction will construct a large-scale water park in Saipan next year and jump into the leisure business in earnest.

imsoo@donga.com