Mid-sized construction companies shift their business focus to public and non-residential projects as they lose ground in private redevelopment
Mid-sized construction companies are shifting their business focus to public and non-residential projects as they lose out to major companies in bids for urban redevelopment projects in Seoul and the capital region. Doosan E&C has set a target of raising its operating profit margin to the 8% range and presented an annual redevelopment project order target of 6trillion won.
Major companies are taking the lead in urban redevelopment projects in Seoul and the capital region, leveraging their brands and financial strength, while mid-sized companies are seeing their position narrow. An official at a mid-sized construction company said that, after losing ground in private redevelopment projects, there is a trend toward turning to public works, where entry barriers are relatively low and experience has accumulated. Mid-sized companies are increasing the share of public projects to secure stable volumes and manage risks.
Major companies continue to monopolize orders for core urban redevelopment projects. The difficulty of defending profitability in private housing projects, compounded by high interest rates and rising costs, is also having an impact. Against this backdrop, mid-sized and small construction companies are shifting their business focus from private housing to public and non-residential projects.
Mid-sized companies are accelerating portfolio diversification into data centers, infrastructure, and overseas businesses. Doosan E&C is improving profitability through a data-based selective bidding strategy while expanding its foundation in public redevelopment projects. It raised its operating profit margin to the 8% range and presented an annual redevelopment project order target of 6trillion won.
Doosan Engineering & Construction 1in the quarter 4secured projects. The secured projects include the reconstruction of Sinan Villa in Magok-dong and the block housing maintenance project in Sillim-dong, Hong-eun1district and Chungjeong-ro1district public redevelopment. The company presented its achievement of the annual target based on strong orders for urban maintenance projects.
Mid-sized construction companies are focusing on improving operating profit margins and securing a stable order backlog rather than pursuing excessive expansion in scale. Industry officials say that a strategy prioritizing profitability is clearly evident. They are seeking new opportunities in the public and non-housing sectors.
Sources: 뉴시스 경제
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