쌍용건설

The company is back on black after the end of corporate rehabilitation proceedings previous year ... Sales target is high at 53%

S. Joon Kim, Chairman&CEO of Ssangyong Engineering&Construction Co., Ltd., is set to embark on a full-scale expansion of the construction heavyweight in the year that marks its 40th anniversary. With the housing market slump and prolonged low oil prices and with most construction companies putting up conservative management strategies, it is only natural to wonder whether Mr. Kim&rsquos bold move will in fact succeed.

According to industry sources, Ssangyong E&C has recently set a target for orders received at 3.2 billion USD, a 77% increase from the previous year. The target for sales was 1.3 billion USD, which is 53% more than that of previous year. Even considering the base effect from the rehabilitation process over the past two to three years, meeting these targets will be no small feat considering the state of domestic and overseas construction market. A company insider said, "domestic and overseas orders have been reduced during the rehabilitation process, and that decrease has been reflected in sales figures in the previous year. But we have been receiving orders from the majority shareholder (Investment Corporation of Dubai), and our domestic and international credit has and will continue to get better, leading to more orders and kick-starting our sales growth.&rdquo

Ssangyong E&C has also made clear that the firm will increase the number of competitive overseas bids, as well as expand its reach to various government-led, public and private projects. In Singapore, Dubai, and Malaysia, where the firm has built a considerable portfolio, Ssangyong E&C has decided to pursue orders for high-end architecture and social overhead capital (SOC), including 18 projects that are bidding right now (4 billion USD). In Korea, the firm plans to concentrate its capabilities on large-scale civil engineering projects such as roads, subways, and railways, and focus the sales effort on technical bidding and stable private investment projects. It is also planned that the Ssangyong E&C will expand in the realm of domestic investment projects from overseas clients as well as housing projects such as metropolitan area maintenance projects, remodeling, and public housing.

Ssangyong E&C's sales last year were estimated at about 850 million USD. This represents a significant contraction, since the company has generated more than 1 billion USD in sales each year even during the workout and corporate rehabilitation process from the 1990s, with the number exceeding 2 million USD in 2010. The announcement by Mr. Kim to adopt an aggressive management posture, in the 40th anniversary of the firm&rsquos founding, is based on the fact that the firm has returned to black last year and continued to win orders from home and abroad since last year.

Ssangyong E&C is expected to secure significant orders from the Dubai Investment Authority (ICD), which became the firm&rsquos largest shareholder in 2015, as it has publicly announced its intention to develop Ssangyong E&C. ICD is a sovereign wealth fund with affiliates in fields such as real estate development, aviation and energy, and is known to have assets of over 230 billion USD. In Singapore, where Ssangyong E&C is mainly involved, as well as Dubai, a location where the firm&rsquos parent company is located, large and small public works projects and private projects are scheduled, and conditions are set for expanding orders.

Since last year, the firm been winning orders at home and abroad. Last November, Ssangyong E&C won three projects totaling 330 million USD in Dubai, Singapore and Equatorial Guinea. According to the International Contractors Association of Korea, Ssangyong E&C received overseas construction orders worth 958.18 million USD last year, making it the eighth largest domestic construction company. In Korea, the company entered the turnkey market in four years after receiving an order for construction of Pohang New Port facility last year. The turnkey construction market is mainly comprised of a small number of large builders due to the fact that contractors must perform design and implementation, making the market a high-cost, technology-intensive environment.

Since he plans to increase the number of domestic and overseas orders and expand the firm, Mr. Kim has made it clear that he will work on employee education and training. "The core assets of the construction company are excellent people, and the improvement of human competitiveness leads to the enhancement of competitiveness in many fields," said Kim. "We will develop and operate effective programs for employee education and training, and no expense or effort will be spared."