Korean Constructors Armed with Competitiveness

It was in the construction field where GS Engineering & Construction is building a linear alkyl benzene (LAB) plant in the Amreya industrial complex in Alexandria, Egypt on Feb. 16. Even though it was Sunday, Egyptian workers strived to put finishing touches on the plant while placing a big crane close to the 56-meter-long column (a kind of plant facilities resembling a tower).

The construction cost amounts to $350 million (approximately 331.5 billion won) and 93 percent of the work has been completed. Yeon In-ok, manager of the construction field, said, “The construction work has been fast in progress. Therefore, we’re planning to reduce our construction period by around three weeks, instead of finishing the work in May as scheduled. We could achieve such a good result since we have tried to be considerate of Egyptian workers and that they have also responded positively to our request for extra working hours.”

Korean construction firms are enjoying their heyday in overseas construction markets again. They are expanding their prowess in the global market since they are armed with the latest technology, price competitiveness and time-based competitiveness.

○ Diligence and Consideration for Local Culture

Recently, overseas construction fields run by Korean firms have hired local workers, unlike in the 1970s. Nevertheless, Korea’s construction firms have successfully secured time-based competitiveness thanks to diligence of engineers and managers dispatched from Korea. When employers want to request local employees to work overtime, middle-level managers should also participate in extra working hours. In contrast, managers who came from developed nations mostly avoid working overtime.

GS E&C could successfully finish its construction work (worth $240 million) of LAB plant in Qatar one month earlier than expected in March 2006. It could make such a great achievement since its field managers and engineers had closely worked with local employees until late at night on weekdays and even weekends.

Kim Tae-yeop, heading the planning team of the International Construction Information Service, said, “The quality and period of construction depends on the leadership of field managers. Korea’s middle-level field managers are very skillful at managing construction work as they themselves set an example.”

Another factor critical to competitiveness is the adaptability to local culture and the capability to handle workers.

In GS E&C’s plant construction field in Alexandria, Korean workers dispatched from Korea raised money to provide medical costs for an Egyptian worker suffering from peritonitis. They even bought local workers carpets on which they could pray comfortably.

SK Engineering and Construction finished its construction project to change oil refining facilities (worth $46 million) in Romania two months earlier than expected in March 2006. The Korean construction firm made an impression on its customer by putting a green house in place on the construction field during cold winter days.

Kim Ik-hyeon, a senior engineer heading GS E&C’s plant construction field in Oman, said, “A customer can dominate the market through the early manufacturing of products and retrieve its investment earlier than scheduled, if the constructor finishes the work earlier than expected.”

○ Heydays Will Last for More Than 5 Years

Korea’s large construction firms armed with competitiveness have eyed the Middle East bountiful with construction projects.

Heo Seon-haeng, executive director of GS E&C, said, “The prospects for the Middle East’s plant construction market will be rosy at least for five years. We are bidding for a plant construction project worth $1.6 billion in Kuwait and another plant construction project worth $10 billion in Saudi Arabia.

Hyundai Engineering and Construction also received an order for a natural gas plant project worth $770 million in Qatar in 2006 and another one for a fertilizer plant project worth $920 million last month.

GS E&C’s senior engineer Kim emphasized, “Korean construction firms are competitive since they would finish their projects earlier than scheduled, unlike those from developed nations which manage to meet the deadlines.”

jefflee@donga.com