Construction Industry Faces a Tough Year Ahead... "Focus on Solid Management and Safety Through Innovation"

CEO New Year's Address Highlights This Year's Construction Industry Keywords
Continued Complex Adversities... Cutting Unnecessary Costs
Focusing on Safety and Quality as Top Priorities for 'Sustainable Growth Innovation'

Newly appointed CEOs of construction companies, who took the helm last year, emphasized "solid management through innovation" and "safety" in their New Year's addresses for the Year of the Eulsa. They urged tightening belts to cope with the prolonged downturn in the construction market and ensuring thorough safety measures.

According to the construction industry on the 3rd, Kim Bohyun, CEO of Daewoo E&C, said in his New Year's message to employees the day before, "This year will be the toughest among the next three years," and urged, "Let's focus on solid management to secure financial stability." He called for concentrating company-wide capabilities and minimizing unnecessary or non-urgent expenses as much as possible.

He also did not forget to emphasize prioritizing safety. CEO Kim said, "Performance and results only have meaning when safety is secured," and asked employees to manage sites with sincerity as if "protecting their own family." Having been in office for just half a month, CEO Kim repeatedly stresses the importance of safety.

Park Sangshin, CEO of DL E&C, also took the construction industry's recession more seriously than ever and urged employees to become agents of change and innovation. Park said, "This is an unprecedented situation where all adverse factors appear simultaneously," and expressed concern that "the crisis in the construction industry starts with worsening cash liquidity, and if losses cannot be prevented, it will no longer be sustainable."

He proposed a management strategy centered on cash flow. CEO Park emphasized, "Cash flow should be an important decision-making indicator to determine the progress of projects," and "unnecessary investments should be boldly stopped, and fixed costs minimized." He also said, "Profitability must be sufficiently secured in a risk-free manner," and "Based on crisis management capabilities, we must be able to distinguish and focus on 'profitable businesses.'"

CEO Park took office in August last year. Known as a 'housing expert,' he served as head of the Housing Business Division and later as head of the Construction Business Division at Daelim Industrial. During that time, he increased operating profit in the housing sector from 668.5 billion KRW in 2017 to 940.5 billion KRW in 2020. He is also regarded as a master of crisis management, having led the early workout exit and management normalization of Samho Construction, the predecessor of DL Construction.

Posco E&C, which celebrated its 30th anniversary last year, judged that this year is a critical moment to build a sustainable company for the next 30 years and beyond 100 years. Despite challenges such as the inauguration of the second Trump administration and unstable domestic political and economic conditions, the company believes that it is precisely at times like these that positivity and seeds of opportunity must be nurtured.

Jeong Heemin, CEO of Posco E&C, who marked his first week in office, revealed five management strategies in his New Year's address, stating, "We must establish a culture that prioritizes safety and quality." He added, "We must innovate the plant business structure, foster future new businesses, and lead the transportation infrastructure and environmental markets." Specifically, he ordered the full-scale promotion of the offshore wind power business. Along with this, he suggested strengthening brand power through focused attacks on the Seoul and metropolitan housing markets. Before his appointment as CEO, Jeong served as head of the Architecture Business Division. The momentum of achieving second place in domestic redevelopment project orders last year is expected to continue this year.

Heo Yunhong, CEO of GS Engineering & Construction, held a field-based New Year's ceremony again this year, following last year. CEO Heo stated, "We will focus on strengthening the basics of construction based on safety and quality, and laying the foundation for mid- to long-term projects through selection and concentration." He emphasized, "Let's create new changes through relentless innovation to prepare a foothold for sustainable growth."

Samsung C&T and Hyundai Engineering & Construction, ranked first and second respectively in construction capability evaluation, did not issue New Year's messages. Samsung C&T replaced it with messages by business division. Hyundai E&C plans to hold a New Year's meeting next week after the official inauguration of new CEO Lee Hanwoo following an extraordinary shareholders' meeting and board meeting this afternoon. Presentation of tasks and vision, including the New Year's message, is expected to come from the new CEO.