GS Engineering & Construction Corp. aims to more than triple its sales and operating profit and secure 35 trillion won ($30.4 billion) in overseas orders by 2020 as part of its long-term roadmap to become a global player.
Korea’s third-largest builder on Monday unveiled ambitious goals of making 27 trillion won in sales and 2 trillion won in operating profit by 2020, both up more than 330 percent from 2010. Its orders totaled 14 trillion won in 2010.
The company said it will also boost international operations to 70 percent of total revenue over the next 10 years from the current 28 percent.
As part of the comprehensive package, GS E&C pledged 5 trillion won in investment in up-and-coming areas such as desalination, natural gas liquefaction and offshore power generation. It plans to spend 700 billion won this year.
The company is gearing up to enter the water treatment market after it took over Inima of Spain for 231 million euros ($300 million) in November.
It set aside another 500 billion won for mergers or acquisitions for the next decade.
GS E&C shares edged up 4.82 percent, or 4,500 won, on Tuesday to end at 97,800 won. The company’s announcements were disseminated after the market closed on Monday.
“The increasingly unpredictable business environment prompted me to overhaul the company’s existing blueprint and draw up new tactics to join the top tier of the global engineering and construction market,” president and chief executive Huh Myung-soo said at a New Year’s event with employees.
With globalization being the keyword for the new growth framework, the firm will bring in a multitude of foreign nationals for executive and managerial positions, Huh said, without providing specific figures. But the overall workforce will be expanded to 18,000 from the present 6,500.
The latest plan embodies a healthy transition to knowledge-based technologies from housing construction and petrochemicals production but lacks details on the vision for this year and how to execute the strategies, said Kim Seon-mi, an analyst at KTB Investment & Securities Co.
“The company is taking the right direction given growing doubts over the sustainability of the high levels of growth in its core business fields,” she said.
Cho Yoon-ho, an analyst at Daishin Securities Co., forecast that GS E&C would fetch $4.45 billion in overseas orders this year though the builder’s target is likely to hover around $8 billion.
“The company could gain momentum in the first half of the year given the high possibility of a new project in Saudi Arabia,” he said, referring to its bid for a 5 billion petrochemical complex in the Middle Eastern country.
By Shin Hyon-hee (
heeshin@heraldcorp.com)
