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South Korean builders’ order book from overseas is expected to fall below $20 billion this year, their poorest record in 13 years as once Asia’s favorite has become replaced by Chinese rivals offering cheaper rates and generous state funding.

According to International Contractors Association of Korea on Wednesday, Korean builders bagged a combined $18.5 billion worth deals in the overseas market from January to December 11, down 31 percent from the same period last year. The figure is also the lowest since 2006 when they collectively came home with $16.5 billion worth overseas contracts, and just around a quarter of $71.6 billion, the highest record set in 2010.

Korean constructors are facing stiff competition from Chinese rivals who are rapidly expanding their presence in the global market through low price and reliable quality. A Korean builder who partnered with Korea Electric Power Corp. (KEPCO) lost to a Chinese company who joined forces with a U.S. developer in a large-scale bid in Dubai in August this year. An official from a construction firm said Korean builders increasingly find it hard to beat Chinese rivals armed with Beijing’s generous state supports and their own much-improved technical skills.


Korean builders are losing grounds in their support base of the Middle East. They secured $4.4 billion worth contracts from the market from January to Dec.11, less than half of last year’s $9.2 billion. The order value is likely to drop to a 15-year-low since 2004 with $3.5 billion.

Korean firms who recorded $11.2 billion in combined sales in 2017 in the Middle East lost their No.1 position for the first time to Chinese rivals with $16.4 billion sales in the market, according to construction industry news publisher Engineering News-Record. It was a remarkable turn of event given that Korean companies had raised three times more sales in the market than Chinese firms in 2012.

Korean firms have been losing their competitiveness in the global market as they fail to improve their capabilities after recording worst-ever losses of almost 1 trillion won ($842.7 million) in 2013 in the overseas operations. Critics also point out that Korean builders have been neglecting the global market while too much focusing on the domestic market on the back of a real estate boom since 2010.

According to a report released by Korea Institute of Civil Engineering and Building Technology last year, Korean constructors’ global competitiveness slipped from ninth in 2017 to 12th in 2018, falling below 10th for the first time since record-keeping began in 2011.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]