Large Construction Companies' Plant Workforce Increased by 5.8% Last Year

POSCO, Lotte, SK Eco, and Others Expand Workforce by Hundreds
25% Plant Staff Turnover from 2017 to 2021

A significant number of major domestic construction companies expanded their plant business workforce last year. After large-scale losses from low-cost orders in the Middle East in the mid-2010s, the plant business organizations, which had been downsized by each construction company, seem to be gaining strength once again.

This year, the plant organizations of each construction company are expected to grow even larger. This is due to ongoing overseas plant orders in North America, Europe, and the Middle East, as well as the full-scale launch of major plant projects domestically, such as the Shine Project with a total investment cost of 14 trillion won.

Korean employees looking at blueprints at an overseas plant construction site.
[Photo by DL E&C]

According to the Financial Supervisory Service's electronic disclosure system on the 12th, excluding Samsung C&T and HDC Hyundai Development Company, which do not disclose workforce status by business division, the plant workforce of eight out of the top 10 construction companies (based on construction capability evaluation)?Hyundai Engineering & Construction, DL E&C, POSCO E&C, GS Engineering & Construction, Daewoo Engineering & Construction, Hyundai Engineering, Lotte Engineering & Construction, and SK Eco Plant?was confirmed to be a total of 12,028 as of the end of last year. This represents a 5.8% (706 people) increase compared to the previous year.

By company, Hyundai Engineering & Construction (1,307 → 1,280) and DL E&C (1,252 → 1,223) slightly decreased compared to 2021, but POSCO E&C (1,351 → 1,626), Daewoo Engineering & Construction (910 → 973), Hyundai Engineering (2,445 → 2,475), Lotte Engineering & Construction (784 → 1,065), and SK Eco Plant (2,160 → 2,884) significantly expanded their workforce.

However, GS Engineering & Construction's plant business workforce decreased by 54.9%, from 1,113 in 2021 to 502. This is because the company actively pursued new businesses such as water treatment and modular housing instead of the plant business.

Until now, these construction companies had downsized their plant businesses due to the aftermath of large-scale losses in overseas plant projects in the mid-2010s. Instead, they adjusted their business portfolios to focus on housing. As a result, the overseas competitiveness of the domestic construction industry, which once ranked 7th globally (according to the U.S. construction and engineering magazine ENR), has fallen behind countries like Portugal and India (based on design standards).

The annual plant workforce of the eight companies was ▲15,122 in 2017 ▲14,329 in 2018 ▲13,818 in 2019 ▲12,408 in 2020 ▲11,322 in 2021, showing a continuous decline. During this period, 25.1% (3,800 people) of the workforce left.

However, the atmosphere began to change last year. With the domestic housing market stagnating, companies started seeking opportunities overseas, and the long-standing low oil price trend reversed, opening markets in the Middle East. Additionally, global emphasis on energy-related issues such as eco-friendliness increased opportunities in areas like nuclear power.

The government also actively supports the construction industry's overseas market entry, and since early this year, news of overseas orders by domestic construction companies has been steadily reported. According to the Korea Plant Industry Association, the overseas plant order amount by domestic companies in the first quarter of this year reached $5.52797 billion (approximately 7.3 trillion won). This is a 564% increase compared to $832.3 million in the same period last year.

Overseas plant orders are expected to expand further. Large-scale orders worth trillions of won are expected to pour in, including Indonesia CAP2 petrochemical, Texas LNG, Indonesia TPPI petrochemical, UAE ADNOC Hail and Ghasha, Saudi Arabia Amiral Project Package 1-4, NEOM City tunnel, and Qatar North Field Package, raising expectations for domestic construction companies' entry.

Some point out that as plant orders continue and the construction of ordered projects intensifies from the second half of this year, the shortage of specialized plant personnel may worsen. Accordingly, the market expects new hiring for the plant business sector in the second half of this year and the first half of next year, given the workforce decline over recent years.