Domestic construction companies have begun to diversify their overseas expansion countries from a focus on the Middle East and Southeast Asia. Their business areas are also shifting from traditional engineering, procurement, and construction (EPC) to renewable energy, nuclear power, and investment development projects. With a goal of accumulating $2 trillion in overseas construction, they are seeking differentiation from other countries.
According to the overseas construction industry on the 31st, DL E&C recently entered North America through its carbon-neutral core technology, carbon dioxide capture, utilization, and storage (CCUS). DL Group signed a contract last November for design and technology licensing work for a fertilizer plant with Genesis Fertilizers, a Canadian fertilizer company. This fertilizer plant is an eco-friendly facility that produces fertilizer by extracting blue ammonia after removing carbon dioxide from natural gas. DL E&C will handle the front-end engineering design (FEED), while its subsidiary, Carbonco, will supply the CCUS technology license. Carbonco is a subsidiary established by DL E&C in 2022 to enter the CCUS business.
A DL E&C official noted, "This contract has laid the first stepping stone toward entering the North American blue ammonia market," adding, "As the United States and Canada have announced plans to support eco-friendly projects, there is a growing atmosphere of new orders related to this, so we expect additional orders in the North American region."
GS Engineering and Construction is solidifying its position in the Australian infrastructure market. The GS Engineering and Construction consortium was selected as the final bidder for the North East Link (NEL) road construction in October 2021. The NEL road construction involves building a tunnel approximately 6.5 km long that connects the northeastern outer ring road of Melbourne with the eastern road, a large-scale project with a total project cost of 10.1 trillion won. This is the largest single project among orders in Australia, with GS Engineering and Construction's construction cost at about 2.8 trillion won. GS Engineering and Construction will use the tunnel boring machine (TBM) method to excavate the 6.5 km tunnel. The TBM method is known for its low vibration and noise, and it enhances safety by conducting tunnel excavation work with machinery.
The Australian construction market has a significantly high share of local construction companies. Most of the overseas construction companies that have entered the local market are also European firms. GS Engineering and Construction formed a consortium with an Italian construction company to secure this project.
Daewoo E&C entered Africa early and is currently pursuing business diversification. In particular, it entered Nigeria in 1983 and has carried out 71 projects worth approximately $10 billion. Notable projects include participation as the prime contractor for NLNG Train 7, the emergency repair of the Kaduna refinery, and the emergency repair of the Warri oil facility. Daewoo E&C also entered Libya, Africa's largest oil-producing country, in 1978 and has undertaken 163 projects worth about $11.4 billion. Libya has seen most of its infrastructure deteriorate or damaged due to its first and second civil wars.
Daewoo E&C has also made strides in Iraq's reconstruction efforts. Iraq is promoting reconstruction projects in various areas such as development and housing due to various civil wars and the IS situation. Daewoo E&C has undertaken a total of nine projects worth $3.8 billion since starting the Al Faw port project, which can be considered the beginning of the project, in February 2014. The company is currently working on the first immersed tunnel project in the Middle East. This year, it expects to win contracts for Iraqi naval and air force base construction.
A Daewoo E&C official said, "We are securing various projects through private contracts based on the trust we have built over many years with clients in Africa and Iraq," adding, "In the future, we will explore new markets such as Mozambique in Africa and expand our business in Turkmenistan in the Middle East."
An official from the Overseas Construction Association noted, "Latecomers from Southeast Asia and China are actively securing orders related to EPC projects, prompting domestic construction companies to strive to break away from traditional businesses such as EPC," adding, "Domestic construction companies are facing a phase of transitioning to new businesses such as renewable energy, nuclear power, small modular reactors (SMR), and investment development projects."