Construction Industry Pondering Diversification of Revenue Structures... Common Denominator is 'Renewable Energy'

Deepening Uncertainty, Urgent Need to Create Growth Conditions
Expansion of Eco-friendly Businesses such as CCUS and SMR

As high interest rates and high inflation worsen the business environment, the construction industry is also struggling to diversify its profit structure and strengthen financial stability. Major construction companies are actively exploring new growth engines such as renewable energy and environmental sectors or promoting related businesses.

On the 7th, the Construction Industry Research Institute explained in a trend briefing, "The construction industry, which is greatly influenced by domestic and international economic fluctuations and growth trends, is making efforts to overcome growth limitations and create new growth engines," adding, "The new industry sectors of major listed companies include renewable energy, environment, and circular economy."

Large construction companies anticipate continued difficulties in the domestic construction market and are expected to accelerate the promotion of new industries as well as expand into overseas markets. This is based on the judgment that company-wide efforts are necessary to establish stable profit-generating conditions.

With the global energy market paradigm shifting rapidly around renewable energy, the domestic construction industry is also capturing business opportunities in related markets. In particular, most construction companies are actively pursuing management activities such as research and development (R&D), equity investments, and acquisitions of technology-holding companies to secure technologies in related fields such as △secondary batteries △carbon capture, utilization, and storage (CCUS) △small modular reactors (SMR).

Samsung C&T identified solar power, SMR, and hydrogen as feasible fields within eco-friendly business sectors. They are advancing business sophistication through differentiated technology acquisition and core market localization in airports, metros, and power generation. They plan to promote energy solutions and platforms, develop carbon reduction technologies, and strengthen their eco-friendly business portfolio.

Hyundai Engineering & Construction presented SMR and hydrogen as future new industry sectors. While expanding large nuclear power plant projects mainly in the European market, they plan to target overseas markets by securing a leading position in the global SMR market in the US and Europe. They are commercializing core technologies through national demonstration projects in hydrogen production via water electrolysis and CCUS, and are also pursuing market leadership in hydrogen energy by utilizing nuclear power plant waste heat and biogas. Additionally, they are promoting the commercialization of the AI gene analysis-based 'All Life Care House' product to develop future residential models.

Daewoo E&C selected resource circulation and senior sectors as new industries to overcome the growth limits of existing industries and create new growth engines. In civil engineering, they plan to enter the renewable energy market in earnest based on their offshore wind power project development capabilities and prepare for market expansion through modernization projects of aging sewage treatment plants. Their plant business will promote renewable energy projects such as onshore and offshore wind power generation and fuel cell power generation, develop business models for blue hydrogen and ammonia, and discover projects.

GS Engineering & Construction is discovering and nurturing new growth engines in non-construction business sectors such as manufacturing. In eco-friendly businesses, they are conducting renewable distributed energy projects like solar power and expanding investments in secondary battery recycling businesses. Moving beyond simple construction, they plan to promote developer businesses that comprehensively handle business planning, design, procurement, construction, and financing, including overseas development projects and investment proposal projects. They will also advance infrastructure and environmental business operation models. In the plant sector, they aim to secure profitability by winning high-quality projects and seek mid- to long-term changes in their business portfolio in preparation for energy transition.

DL E&C is promoting the CCUS business as a strategic new business in line with eco-friendly management trends. They hold the domestic first commercialized carbon capture plant record. In the domestic civil engineering sector, they plan to actively explore overseas new markets with high growth potential, domestic transportation infrastructure projects with stable profit potential, sewage modernization, and biogas and other eco-friendly businesses. In the plant business, they will selectively win projects with verified profitability and promote business development in future growth sectors such as CCUS, hydrogen, ammonia, and secondary batteries.

The Construction Industry Research Institute stated, "Leading construction companies are overcoming management difficulties based on their financing capabilities while continuing investments to establish sustainable growth conditions and diversifying their business portfolios," adding, "They are enhancing competitiveness and profitability through internal strengthening of existing businesses and are actively investing based on various corporate-level strategies and plans to foster future new businesses."