Korean builders looking toward Saudi market for more
opportunities in modular construction
Competition among major Korean construction companies is
intensifying as they vie for dominance in the modular construction market.
Modular construction involves manufacturing standardized building components
off-site in a factory and assembling them on-site.
This off-site construction method offers several advantages,
including reduced construction time, decreased industrial accidents, and lower
carbon emissions. It has gained recent attention due to its potential
application in Korean builders' involvement in projects like the construction
of the NEOM smart city in Saudi Arabia and the reconstruction efforts in
war-torn Ukraine.
Korean
minister sees a bigger role of his country’s firms in Neom project
According to the Ministry of Land, Infrastructure, and
Transport, the domestic modular construction market grew from 26.8 billion won
($130 million) in 2020 to 175.7 billion won in 2022. It is projected to reach
250 billion won this year and exceed 2 trillion won by 2030.
However, the adoption of modular buildings remains limited
in the Korean construction industry due to high costs, which have been a major
impediment since POSCO Group completed the nation's first modular building in
2003. To make modular construction more profitable, companies need substantial
investments in production facilities and a consistent demand, necessitating
economies of scale through mass production.
Kim Hwa-rang, a researcher at the Construction & Economy
Research Institute of Korea, emphasized the importance of creating stable
demand and expanding overseas. In line with this advice, Samsung C&T signed
a memorandum of understanding with the Public Investment Fund of Saudi Arabia
to establish a facility for modular parts production. These components could
eventually be used in the NEOM project and other construction in Saudi Arabia.
Korean
President, Saudi Crown Prince discuss cooperation in the Neom project
In August, Samsung C&T also showcased its modular
construction technologies suitable for future apartment projects. The Saudi
Arabian facility is expected to serve not only the NEOM project but also
housing construction in Saudi Arabia.
GS E&C is another company actively participating in the
competition. In 2020, they acquired a Polish prefabricated timber-frame house
builder, Danwood, and established XiGeist, a subsidiary specializing in
prefabricated houses. During the NEOM Roadshow in Seoul in July, GS E&C
expressed interest in contributing to the NEOM and Ukraine reconstruction
projects by leveraging modular construction technologies. In September at IFA
2023 in Berlin, the company exhibited a prefabricated home called the Smart
Cottage in collaboration with LG Electronics.
High
profile Korean business delegation to visit Saudi Arabia to secure Neom
contracts
Kolon Global joined the competition by signing a memorandum
of understanding in September with SY, a domestic external building panel
manufacturer, to use modular construction and other off-site construction
methods in Ukraine's reconstruction project. This cooperation is seen as
significant for adapting off-site construction to Ukraine's climate.
Land Minister Won Hee-ryong pledged his support for domestic
builders in securing overseas orders for modular houses, especially in light of
Ukraine's reconstruction efforts. He emphasized the innovative nature of
modular construction as a solution to challenges in the construction industry,
expressing optimism that builders would secure more international orders as
large construction projects, including Ukraine's reconstruction, are expected
to materialize.
Source: https://www.koreatimes.co.kr/
0 Comments