DL E&C to Increase Developer Proportion for Enhanced Profitability

DL E&C Acro Seoul Forest

[Asia Economy Reporter Onyu Lim] DL E&C (formerly Daelim Industrial) announced on the 25th that it will focus its developer capabilities to advance its business portfolio centered on high profitability. The company plans to concentrate on business models that can secure stable and high returns, and based on this, expand investments in future new businesses to establish a sustainable growth model. Instead of increasing the proportion of simple construction contract projects, it aims to grow as a total solution business operator responsible for the entire business process from project discovery, planning, equity investment, financing, construction, to operation.

To promote high value-added developer projects, DL E&C plans to improve the organizational structure and innovate productivity through digital transformation. It intends to break away from the limitations of traditional construction industries, expand the scope of customers and projects, and continuously create new values that meet the increasingly high market expectations. Based on this, the company aims to consistently secure profitability that surpasses the industry's best housing project cost ratio recorded last year.

First, regarding the housing business driving DL E&C’s sales, the company announced that it will raise the proportion of developer project orders from about 15% last year to approximately 30% by 2023. It plans to focus on housing public projects based on differentiated competitiveness and discover theme-based projects that align with industrial trends such as the 4th Industrial Revolution and untact (contactless) services, as well as government policies like the Green New Deal. Through synergy with the civil engineering division, it is also exploring developer projects that can elevate the value of not only high-growth potential sites but also those previously overlooked by the market. Additionally, projects linked to the 2nd and 4th real estate measures and the 3rd new town development are under review.

To this end, DL E&C is utilizing big data in various ways and collaborating with proptech (property technology) companies to discover project sites and conduct feasibility studies. The organization has also been restructured into an agile system composed of experts in design, estimation, sales, and finance by recruiting specialists in each field.

In the civil engineering business, alongside thorough management of ongoing developer projects, the company is focusing on discovering new projects domestically and internationally. Currently, DL E&C is engaged in projects such as the Jemulpo Tunnel and Sinlim Light Rail Transit in Korea, and is acting as a developer for the ?anakkale Bridge project in Turkey, which is the longest suspension bridge in the world. For projects that have entered the operation phase, the company plans to generate continuous profits by enhancing management capabilities through a dedicated organization established last year. Furthermore, DL E&C intends to prioritize profitability in bidding for domestic and overseas projects, focusing on marine bridges, ports, and railway projects where it holds global competitiveness.

The plant business plans to actively explore new business opportunities in the ESG (environmental, social, and governance) sector, which is expected to experience high growth. With the global strengthening of the carbon neutrality trend, the company is reviewing entry into hydrogen energy and carbon capture and storage businesses. DL E&C has accumulated EPC experience and know-how in various hydrogen production plants and is especially recognized for its differentiated competitiveness in green hydrogen and ammonia projects. Since 2010, it has participated in national research projects and possesses basic design technology for plants capable of capturing 3,000 tons of carbon dioxide per day. Additionally, results from pioneering new overseas markets are expected to become visible. In Russia, where it entered in 2014, the company is anticipated to begin full-scale EPC orders based on its recognized technology through basic and detailed design and procurement services.

Changmin Ma, CEO of DL E&C, stated, “With DL E&C’s unique specialized developer growth strategy, we will realize a different level of profitability, enhancing shareholder value and maximizing shareholder returns.”