Daewoo E&C names insider as new CEO

Daewoo Engineering & Construction on Wednesday named Baek Jung-wan, the current head of the constructor’s housing division, as its new CEO whose appointment will be finalized in an upcoming board meeting once the planned acquisition by the Jungheung Group completes next month. 

Baek, 59, a career insider, joined Daewoo E&C in 1985. He has worked as an onsite leader for Daewoo’s major apartment constructions before becoming an executive director at the company’s housing division in 2015. He was promoted to division chief in 2018.

The constructor said that Baek has been recognized for his capabilities to stabilize the organization and set the right strategy for bolstering business competitiveness. 

“Baek, with his 35 years working at Daewoo E&C, is a perfect fit who can lead the company’s sustainable future, as well as seek harmony as part of the Jungheung Group,” a Daewoo E&C official said. 

On Dec. 9, Jungheung Group signed a binding sales and purchase agreement contract with KDB Investment to acquire a controlling 50.75 percent stake in Daewoo E&C. The takeover of Korea’s sixth-largest construction company is expected to complete by Feb. 15.

While the two firms will run management individually under terms, Jungheung Group said it will retain Daewoo E&C staff and executives and guarantee the builder‘s independence in management. The two builders’ flagship apartment franchises, Prugio and Jungheung S-Class, will also run separately. 

Following the acquisition of a controlling stake in Daewoo E&C, Jungheung will step up to the 21st largest conglomerate with around 19 trillion won ($15.9 billion) in total assets, according to the industry. 

Daewoo E&C was once a major affiliate of the now-defunct Daewoo Group, one the country’s largest conglomerates in the 1990s. The builder was later owned by Kumho Asiana Group, but has been on sale for years.

Its key businesses include building its premium apartment brand Prugio as well as overseas plants for liquefied natural gas regasification and storage tanks. 

Some of the major overseas projects include a 2.6 trillion-won project in Vietnam to build residential, commercial and government agency buildings on 2.1 million square meters of land in Starlake City in Hanoi by 2024. The start of the project goes back to 1996, when Daewoo E&C proposed the new town project to the Vietnamese government. 

Other ongoing projects include building facilities for a large-scale port in Iraq, which is worth 2.9 trillion won. Named Al Faw Grand Port project, Daewoo E&C will build a sea wall, connecting roads, a main canal, a tunnel, in addition to previous deals clinched for the same project in 2013.

By Kim Da-sol (ddd@heraldcorp.com)