European orders from January to October increased by 263% compared to the previous year.
Hungary stands out… Expectations for reconstruction of Czech nuclear power plant and Ukraine
The North American market was cut in half… Trump’s concerns about cold wave
This year, Korean construction companies increased their order book by more than 260% in the European construction market. It is predicted that if the company wins orders for the construction of the Dukovany nuclear power plant in the Czech Republic or the reconstruction project in Ukraine in the future, it will be able to lay the foundation for diversifying its order regions.
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European construction orders ‘grow’
According to the Overseas Construction Association on the 19th, overseas construction orders received in Europe as of October this year amounted to $3.1148 billion, a whopping 263.1% increase compared to the same period last year ($1.18386 billion).
Within Europe, Hungary stands out as domestic manufacturers continue to build overseas production plants. Hungary, which had accumulated orders of only $88.73 million from January to October last year, ranked 4th among countries with $2.6586 billion in the same period this year. Samsung E&A’s new construction of Samsung SDI’s Hungarian battery factory worth $1.4 billion and the WCP separator plant construction worth over $500 million contributed to improved performance.
Europe’s influence in the overseas construction market is expected to grow further. In particular, there are speculations that the reconstruction project will begin in earnest as U.S. President-elect Donald Trump pledges to end the Russia-Ukraine war. Accordingly, the government is also making advance preparations, such as discussing practical cooperation measures, and increasing contact points.
Jin Hyun-hwan, First Vice Minister of Land, Infrastructure and Transport, recently attended the ‘Korea-Poland Infrastructure and Ukraine Reconstruction Cooperation Forum’ held in Warsaw, Poland and discussed the agenda of ‘Establishing a triangular cooperation system between Korea, Poland and Ukraine for the reconstruction of Ukraine.’ Vice Minister Jin said, “By stimulating the entry of our companies into the large-scale Ukrainian reconstruction market expected after the war, we will not only support essential infrastructure for the Ukrainian people, but also help our companies accumulate a track record in the European market.” “We will build a strong cooperation system,” he said.
A decision will soon be made on whether to win the order for the Dukovany nuclear power plant construction project in the Czech Republic. For this project worth $17.3 billion, ‘Team Korea’, led by Korea Hydro & Nuclear Power, has been selected as the preferred negotiating party. The final contract will be announced in March next year. Winning this project is meaningful in that it will establish a bridgehead for Korea to enter the European market, the home of nuclear power plants.
There are also predictions that regional diversification in overseas construction orders may occur as the company performs well in the European market. The Middle East currently ranks first in orders by region. The cumulative order amount from January to October this year was $15,192.46 million, accounting for 53.3% of the total.
‘North America’ to become more difficult
On the other hand, US orders are less than half of last year’s level. As of the end of last month, the cumulative order volume in North America and the Pacific region was $3.99055 billion, the second largest after the Middle East and Asia. However, compared to the same period last year (USD 9,238.91 million), it is only 43.2%.
Last year, the sharp decline in orders in the U.S. market, which ranked first in orders by country, had an impact. From January to October this year, cumulative orders received from the U.S. amounted to $3,410.79 million, which is only 38% of the same period last year ($9,041.6 million). Last year, domestic companies such as Samsung Electronics and Hyundai Motor Company actively expanded their local factories to receive support under the U.S. Inflation Reduction Act (IRA), leading to a significant increase in orders.
There is a possibility that orders from the US will decrease further in the future. An official from a construction company said, “If the Trump administration continues to advocate ‘America First,’ there may be restrictions on domestic construction companies’ activities in the U.S. market.” He added, “Looking for a way out in Europe, where energy-related projects, including the reconstruction of Ukraine, are progressing one after another. “I’m looking forward to this,” he said.
Meanwhile, the total order receipt for all regions was calculated to be $28.52586 billion. It increased from the same period last year (USD 25.646 billion). However, it falls far short of the government’s annual target of $40 billion.
Reporter Noh Gyeong-jo felizkj@asiae.co.kr
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S competitive bidding processes and increased material costs. Many Korean companies are finding it challenging to navigate the regulatory environment and establish a presence in the North American market. Additionally, labor shortages and supply chain disruptions are further compounding these issues, making it difficult for us to maintain our previous level of success in that region.
Welcome to World Today News! We are pleased to present an exclusive interview with Mr. Kim Jong-un, Managing Director of Overseas Construction Associations, and Mr. Park Jin-sung, Vice President of Hansol Engineering and Construction Company, about the recent surge in European construction orders and the challenges faced by Korean construction companies in North America.
Section 1: Surge in European Construction Orders
Reporter: Mr. Kim, can you please share the details about the significant increase in European construction orders for Korean construction companies?
Mr. Kim: Yes, according to the Overseas Construction Association, Korean construction companies have received a whopping 263% increase in construction orders for Europe from January to October this year compared to the same period last year. The primary reason for this growth is the increase in domestic manufacturers building overseas production plants in Hungary. Samsung E&A’s new construction of Samsung SDI’s battery factory and WCP’s separator plant worth over $500 million have contributed to this impressive performance. We also expect that the ongoing Russia-Ukraine war may lead to an increased demand for reconstruction projects, which could further boost orders in the region.
Reporter: Mr. Park, as a representative of Hansol Engineering and Construction Company, how do you feel about this new trend in the European market? And how is your company adapting to this change?
Mr. Park: The European market’s growth is exciting news for us. At Hansol Engineering and Construction Company, we are actively exploring opportunities in Eastern Europe, particularly in the energy and infrastructure sectors. We have dispatched personnel to the region to identify potential projects and expand our network. We believe that winning orders for the construction of the Dukovany nuclear power plant in the Czech Republic could establish a strong foothold for us in the European market. We are also focusing on regional diversification to avoid relying solely on one region for our orders.
Section 2: Challenges in North America
Reporter: While Europe appears to be thriving for Korean construction companies, North America seems to be experiencing a setback. Can you elaborate on this, Mr. Kim?
Mr. Kim: Yes, unfortunately, orders from North America have declined significantly compared to last year due to last year
