Overseas Construction Orders Excel in 'Europe'... "Expecting Diversification and New Opportunities"

Europe Orders from January to October Up 263% YoY
Hungary Stands Out... Czech Nuclear Power and Ukraine Reconstruction Expected
North American Market Halved... Concerns over Trump-Induced Cold Wave

This year, South Korean construction companies have expanded their order volume in the European construction market by more than 260%. It is expected that securing projects such as the Czech Dukovany Nuclear Power Plant construction and Ukraine reconstruction projects will lay the foundation for diversifying order regions.

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Growth in European Construction Orders

According to the Overseas Construction Association on the 19th, the overseas construction orders secured in Europe from the beginning of this year to October amounted to $3.1148 billion, a remarkable 263.1% increase compared to the same period last year ($1.18386 billion).

Within Europe, Hungary, where domestic manufacturers continue to build overseas production plants, is standing out. Hungary, which recorded a cumulative order amount of only $88.73 million from January to October last year, rose to 4th place by country with $2.60586 billion during the same period this year. The $1.4 billion new construction of Samsung SDI Hungary battery plant Phase 2 and the over $500 million WCP separator factory construction, both secured by Samsung E&A, contributed to the improved performance.

The influence of Europe in the overseas construction market is expected to grow further. In particular, with U.S. President-elect Donald Trump pledging to end the Russia-Ukraine war, reconstruction projects are expected to accelerate. Accordingly, the government is increasing points of contact by preparing in advance, including discussing practical cooperation measures.

Jin Hyun-hwan, 1st Vice Minister of the Ministry of Land, Infrastructure and Transport, recently attended the 'Korea-Poland Infrastructure and Ukraine Reconstruction Cooperation Forum' held in Warsaw, Poland, where he discussed the agenda of establishing a Korea-Poland-Ukraine triangular cooperation system for Ukraine reconstruction. Vice Minister Jin said, "Activating the entry of our companies into the large-scale post-war Ukraine reconstruction market to support essential infrastructure for the Ukrainian people, as well as firmly establishing the Korea-Poland-Ukraine triangular cooperation system so that our companies can accumulate track records in the European market, will be our goal."

The decision on the order for the Czech Dukovany nuclear power plant construction project will also be made soon. This $17.3 billion project has 'Team Korea,' led by Korea Hydro & Nuclear Power, selected as the preferred negotiator. The final contract decision will be known by March next year. Securing this project is significant as it will establish a foothold for South Korea to enter the European market, the home of nuclear power plants.

There is also a prospect that success in the European market will lead to diversification of overseas construction order regions. Currently, the Middle East ranks first in orders by region. From January to October this year, the cumulative order amount was $15.19246 billion, accounting for 53.3% of the total.

North America to Become More Challenging

On the other hand, orders from the U.S. are less than half of last year's level. As of the end of last month, the cumulative order amount in the North America-Pacific region was $3.99055 billion, ranking third after the Middle East and Asia. However, compared to the same period last year ($9.23891 billion), it is only 43.2%.

The sharp decline in orders in the U.S. market, which was the top country in orders last year, had an impact. From January to October this year, the cumulative U.S. order amount was $3.41079 billion, only 38% of the same period last year ($9.0416 billion). Last year, domestic companies such as Samsung Electronics and Hyundai Motor actively expanded local factories to receive support under the U.S. Inflation Reduction Act (IRA), significantly increasing order volume.

There is a possibility that order volume in the U.S. will decrease further. A construction company official said, "If the Trump administration inevitably emphasizes 'America First,' domestic construction companies may face restrictions in operating in the U.S. market," adding, "We expect to seek opportunities in Europe, where energy-related projects including Ukraine reconstruction are progressing one after another."

Meanwhile, the total cumulative order amount combining all regions was recorded at $28.52586 billion, an increase from $25.64603 billion in the same period last year. However, it still falls far short of the government's annual target of $40 billion.