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Hyundai Engineering Twin Giant Projects in the Middle East


AFP reported that South Korean builder Hyundai Engineering and Construction has finalized USD 1.36 billion deal with Libya after the Islamic country ended a diplomatic row with Seoul.

Seoul's foreign ministry said that Hyundai won the order in July to build power plants in Libya but it had not received a letter of credit necessary to start construction. However, the letter was issued last week.

Hyundai will receive 15% of the order in advance. Construction would begin early next month. Ties between the two nations soured after Libya expelled a South Korean intelligence agent in June for allegedly trying to collect information on the sly.

Libya suspended operations at its de facto embassy in Seoul, forcing South Korean businessmen to go overseas to get visas for the country.

(Sourced from AFP)

On the other hand,

Hyundai Engineering and Construction Company has been awarded a US$329m (AED1.2bn) contract to carry out building works at the Khalifa Port and Industrial Zone (KPIZ) project.

The works, which involve the project management, design, procurement, construction, testing and commissioning of civil works for the Offshore Terminal Area, will commence immediately - scheduled to complete by Q4 2012 in time for the port to become operational that year.

Specifically, this will include the construction of a 1,000m semi-automated container terminal and a 1,400m break bulk / general cargo terminal intended to handle two million TEUs (Twenty Foot Equivalent Units) of containers and nine million tonnes of general cargo as an initial capacity.



IPO For Korea Development Bank eyes in 2011

KDB Financial Group said it planned to float its shares in an initial public offering (IPO) next year on the domestic stock market as part of its ongoing privatization drive.

Chairman and Chief Executive Min Euoo-sung told a press briefing that the financial group that operates state-run Korea Development Bank and Daewoo Securities was aiming for both a domestic and international IPO.

The IPO plan in the local bourse, which still needs to be cleared by the government, will target not only local portfolio investors but foreign players.

“I think, considering other IPO cases, 10 to 15 percent size is more realistic and ideal,” said Kim Jin-ho, KDB’s chief financial officer.

KDB, with a total equity of 16 trillion won ($14.16 billion), is considering listing shares in the New York and Hong Kong bourse.

In a bid to energize its privatization process, Chairman Min who headed Lehman Brothers’ Korean operations between 2005 and early 2008, said he would continue outbound M&A activities, especially in Asia. He did not specify any bid targets.

“The Korean market is a saturated market ... We are more focused on the international market for our M&A strategy.”

KDB participated in the sale of Thailand’s Siam City Bank but pulled out citing regulatory uncertainties in the global banking industry.

Min also said KDB was ready to restart the stalled sale of Daewoo Shipbuilding & Marine Engineering but was waiting for two big deals in the pipeline Woori Finance Holdings and Hyundai Engineering & Construction to be cleared.

KDB has picked Citigroup to advise on the sale, jointly with Korea Development Bank and Daewoo Securities.

The Korean government will start the sale this week of its 57 percent stake, worth around $6 billion, in Woori, the country’s No. 3 financial services group, which would be the biggest takeover deal this year.

Also, shareholders of Hyundai E&C are expected to pick a preferred bidder before the end of this year for their stake worth $2.5 billion.



LGI and Hyundai Engineering win a contract for the largest plant in resource-rich Turkmenistan

South Korean companies win a contract  for the largest plant in Turkmenistan  

- The contract amount for this gas treatment plant is worth USD1.48bn   (1.7 trillion won) on a turnkey basis 

- The plant construction is expected to begin in January 2010 and be completed   in Q3, 2012

- The plant will be constructed in Yoloten, in the southeastern region of Turkmenistan, the site of a super-large gas field 

- The plant will produce 10bn cubic meters of natural gas through gas treatment and desulfurization processes

Unprecedented Exploitation of   Emerging Markets 

- The business deal in Turkmenistan is significant since Turkmenistan is unknown country to South Korean companies  

- The project lays the foundation stone for economic cooperation between   Turkmenistan and South Korea

- This will promote to participate in other related businesses in the future The consortium of Hyundai Engineering and LGI has successfully won a contract for Turkmenistan's largest-ever plant.

South Korean companies win the largest contract in Turkmenistan

LGI (CEO: Koo Bon-joon) and Hyundai Engineering (CEO: Kim Dong-wook) together won a contract for a gas treatment plant worth USD1.48bn (1.7 trillion won) from Turkmenistan's state-owned company, Turkmengas.

The project, Turkmenistan's largest ever, is a turnkey-based deal that comprehensively includes engineering, procurement, and construction activities. The project will begin in January of 2010 and end in Q3, 2012. Once completed, the plant will produce annually 10bn cubic meters of natural gas through the desulfurization process, which is designed to remove sulfur from natural gas.

The plant will be located in the Yoloten region, southeastern Turkmenistan, containing the Yoloten-Osman natural gas field, which was discovered in November 2006 and is one of the world's five largest gas fields. A 2008 survey showed that the gas field holds 14 trillion cubic meters of natural gas, enough to supply to the world for five years. This discovery suddenly elevated Turkmenistan to a fourth country in the world in terms of natural gas reserves.

All costs for the project will be borne by the client, Turkmengas. Turkmenistan is set to continue to expand its gas treatment plants.

Unprecedented Exploitation of Emerging

  Markets: likely to promote the two countries' economic cooperation

Resource-rich Turkmenistan had a long history of limited diplomatic policies, but it began to positively seek foreign investment in 2007 when President Gurbanguly Berdymukhammedov was inaugurated. Various countries, including China and Russia, are actively competing for business deals securing natural resources due to the world's fourth largest natural gas reserves of Turkmenistan.

Russian President Medvedev recently visited Turkmenistan to meet President Berdymukhammedov and concluded a strategic agreement regarding natural gas and various energy sources. Prior to this, Chinese President Hu Jintao visited Turkmenistan and attended a ceremony opening the world's longest gas pipe between Turkmenistan and China.

The ceremony attendees were Turkmenistan President Berdymukhammedov, Kazakhstan President Nazarbayev, Uzbekistan President Karimov and the leaders of other related nations.

LGI forecasted the potential growth of the emerging Turkmenistan market and established a branch office in the country's capital, Ashgabat, in 2007.

Since then, LGI has explored business opportunities with the country's government.  Hyundai Engineering President Kim Dong-wook said, "This deal was successfully achieved because LGI has new market exploitation capabilities, and Hyundai Engineering has diverse overseas business experience in the Middle East, Africa, Asia, and Central and South Africa, its excellent engineering technologies and service quality, and its superior engineers."

He added, "We will endeavor to improve South Korea's national prestige in resource-rich Turkmenistan with our superior service quality."

LGI President Ha Young-bong said, "LGI's country marketing efforts targeting emerging resource-rich countries have come to fruition. By winning the contract, we have prepared a stepping stone to enter into additional gas plant projects and resource development fields. In this sense, the deal is significant."

He added, "Last year the two countries' governments signed an MOU to develop the infrastructure fields including construction, transportation and harbors. As such, this project is expected to pave the way for the promotion of the two countries' full economic cooperation."

This consortium, through this contract for the plant, will contribute to the economic development of Turkmenistan, and at the same time expand into related business fields such as the development of resources and the construction of SOC infrastructures with the possibility of stably securing profits.



Hyundai Engineering wins $329 Million USD Abu Dhabi port project

Abu Dhabi Ports Company (ADPC) has awarded a $329 million contract to Hyundai Engineering and Construction Co. Ltd to construct its flagship Khalifa Port and Industrial Zone (KPIZ) project.

South Korea's Hyundai Engineering and Construction will handle project management, design, procurement, construction, testing and commissioning of all civil works associated with the construction of the Offshore Terminal Area, according to ADPC.

The project will consist of a 1,000 metre semi-automated container terminal and 1,400 metre break bulk and general cargo terminal.

Work is scheduled to begin immediately and Phase 1 of Khalifa Port will open in the fourth quarter of 2012, replacing Abu Dhabi's main port of Mina Zayed.

The new port will have an initial capacity of 2 million twenty foot equivalent units (TEUs) of containers and 9 million tonnes of general cargo.

When all phases of Khalifa Port are completed, it will have a capacity of 15 million TEU’s of containers and 35 million tonnes of general cargo.

ADPC Chief Executive Officer, Tony Douglas, expressed his pleasure in working with Hyundai as "another key partner who is committed to delivering a high quality solution, safely, on time and to budget."

Located midway between Abu Dhabi and Dubai in the Taweelah industrial district, KPIZ will consist of a "new, world-class multi-purpose offshore port and one of the largest integrated industrial zones in the world".

KPIZ is a feature of the 'Abu Dhabi Vision 2030' and will play a major role in the emirate's industrial and economic diversification by serving as a key hub for large scale industrial investments, according to ADPC.


Hyundai Motor bets big on Hyundai Engineering & Construction

Faced with a need to diversify its business portfolio and to strengthen its competitiveness in the field of eco-friendly growth, Hyundai Motor Group is turning its eyes to the construction sector.

While the country’s second largest conglomerate has more than doubled its assets from the 36 trillion won ($31.9 billion) at the time of its establishment as a separate conglomerate in 2000 to 100.7 trillion won this year, its business portfolio is heavily concentrated on the automotive industry.

At present three of the four top earners Hyundai Motor Co., Kia Motors Corp., Hyundai Mobis Co. and Hyundai Steel are directly involved in the automotive industry.

Due to the nature of its profit structure, the group’s performance is dependent on the conditions in the automotive industry, and as the competition intensifies and regulations become stricter, the rate at which the group’s revenues have been growing has been significantly reduced in recent years.

As such the group is hoping that expanding into the construction sector will be able to offset the effects of slowing growth of its automotive and steel businesses.

“The construction industry has a higher growth rate than the group’s existing businesses, and the demand for eco-friendly overseas projects is increasing,” a Hyundai Motor Group official said.

“In addition, the construction industry can complement the auto industry’s business cycle.”

Although the group already counts a construction company, Hyundai Amco, among its subsidiaries, Hyundai Motor Group is hoping to jumpstart its ambitions for the construction industry by acquiring Hyundai Engineering and Construction.

Hyundai E&C is the country’s top, and the world’s 23rd largest construction company, and laid the foundations for late Chung Ju-young’s Hyundai Group from which the current Hyundai Group and Hyundai Motor Group were spun off.

Hyundai Motor Group submitted last month its bid for a $2.5 billion stake in Hyundai Engineering & Construction.

On Tuesday, the conglomerate announced a plan to invest 10 trillion won in Hyundai Engineering & Construction by 2020, raising the stakes in its competition with Hyundai Group, the other bidder for the builder.

The auto giant set a goal for Hyundai E&C to achieve 120 trillion won in orders and 55 trillion won in sales for 2020.

The plan also envisions that the builder will diversify its business portfolio through stepping up its presence in fields such as harbor works, chemical engineering, water plants, road construction, residential building and real estate, a group official said.

Shifting its business focus to higher value-added projects from heavily construction-centered operation, the company expects to expand its some 90,000 labor force to 410,000 by 2020.

“Hyundai Engineering & Construction will be our new growth engine to become a global general engineering company,” the official said. “We’ll gather our energies to strengthen the country’s capacity in high value-added construction.”

The successful bidder will acquire 34.88 percent, or a little less than 39 million shares, with prices estimated to settle at between 3.5 trillion won to 4 trillion won.

Korea Finance Corp. is currently the builder’s largest shareholder with 11.12 percent of shares.

“Since 2005, Hyundai E&C has grown by more than 20 percent annually, and in addition to being the country’s top builder, its international rankings have climbed from 59th place in 2007 to 23rd in 2009,” a Hyundai Motor Group official said.

In addition to representing the means to give its ambitions for the construction sector a massive boost, the conglomerate says that Hyundai E&C’s incorporation into the group will complete what it calls the “Eco Value Chain.”

“According to the International Energy Agency’s scenario, three areas transport, industry and construction are at the core of plans for reducing greenhouse gases,” a Hyundai Motor Group official said. He added that the group’s efforts in the transport sector would include electric cars and trains while those for the field of industry will take the form of making the steel industry more environmentally friendly.

“By securing those from the construction sector such as eco-friendly buildings and nuclear power plants, the group will be able to significantly expand green businesses and complete the Eco Value Chain.”

In addition to playing a significant role in its plans for the future, Hyundai Motor Group projects that significant synergy effect will be created for both itself and Hyundai E&C if it succeeds in acquiring the builder.

“One of the main problems Hyundai E&C faces is that its overseas portfolio is focused too much on the Middle East. So expansion in South America and other emerging markets is important for the company’s growth,” a Hyundai Motor Group official said.

“In this, Hyundai Motor Group’s global network can be used to accelerate Hyundai E&C’s expansion into new markets, while Hyundai E&C’s presence in the Middle East can work in favor of Hyundai Motor in such markets.”

The conglomerate is also hoping that Hyundai Steel and Hyundai Rotem, the group’s rolling stock maker, will be able to work in concert with Hyundai E&C in overseas projects.

Suggestions for such collaborative projects put forward by Hyundai Motor Group include a package deal between Hyundai E&C and Hyundai Rotem in undertaking overseas railroad projects, and Hyundai Steel providing a stable source of materials for any overseas civil engineering contracts the builder may undertake.

While Hyundai E&C represents an unprecedented opportunity for growth, Hyundai Motor Group says that it is not charging in blind, and that its designs for the construction company are based on sound business planning and experience gained from a series of successful takeovers.

“Starting in 1999 with Kia Motors Corp., the group has carried out more than 10 M&A actions and turned around struggling firms into thriving businesses. Such bold actions have allowed the group to grow at an average rate of 10.9 percent over the past 10 years,” a Hyundai Motor Group official said, citing examples of Kia, Hyundai Card and Hyundai Steel.

According to the company, Hyundai Card has gone from the smallest credit card operator to the second largest while Hyundai Steel has seen more than 6.2 trillion won investment since being taken over by the group.

In contrast, Hyundai Group, the only other bidder for Hyundai E&C, is said to have succeeded in one M&A, and grown at an average rate of 1.8 percent annually over the same period.


By Choi He-suk  (


Hyundai Motor to hike Hyundai Engineering & Construction sales 6 fold

Chairman Moong Koo CHUNG

Should Hyundai-Kia Automotive Group successfully take over Hyundai Engineering & Construction (HE&C), the former vows to jack up the latter’s annual sales almost six fold during the second decade of the new millennium.

Hyundai Automotive Group issued a press release Tuesday, saying that the Seoul-based outfit will crank up HE&C’s yearly sales to 55 trillion won by 2020 from 9.3 trillion won in 2009.

In addition, the country’s largest carmaker said that it would inject fresh investments amounting to 10 trillion won over the next decade into HE&C, the country’s foremost builder, to create more than 300,000 jobs.

``We are jockeying to boost Hyundai Engineering & Construction to become an internationally high value-added, comprehensive constructor that will chalk up 55 trillion won in sales and garner 120 trillion won in orders per annum by 2020,’’ the group said.

``Together with the automobile and steel businesses, construction will be one of the three major pillars to underpin the group’s growth in the future if we acquire the company.’’

Thus far, two candidates have thrown their hats into the ring for the builder ― Hyundai Group and Hyundai-Kia Automotive Group. A 34.88 percent stake in the top constructor is up for sale by creditors.

The creditors, including the Korea Exchange Bank and Korea Finance Corp., plan to pick a preferred bidder by the end of the year in a deal that is estimated to be worth around 4 trillion won.

At first glance, the ambitious scheme sounds overly optimistic because it is typically very difficult to increase the turnover of a company the size of HE&C by six fold in 10 years. Hyundai Automotive, however, says that it can be done by massive investment and better prospects of gaining big deals.

Under the stewardship of CEO Joong Kyum Kim Hyundai Engineering & Construction came up with its own five-year goal of increasing its annual sales to 23 trillion won by 2015. But Hyundai Motor’s guidance is more encompassing and ambitious.

``We have management knowhow and global competitiveness on top of experience in advancing into world markets. With our help, HE&C will expand its presence across the world,’’ a Hyundai Automotive representative said.

``In addition to the Middle East and Southeast Asian countries where HE&C has a strong footing, we will assist the firm to expand in South American and African countries. Out network in 150-plus countries will be of great help.’’

HE&C was founded in the 1940s by the late Hyundai founder Chung Ju-yung and became the core asset of the Hyundai business empire.

However, the company saw its fortunes decline in the aftermath of the Asian currency crisis in the late 1990s and was eventually handed over to creditors in 2001 through a debt-to-equity swap.

Hyundai Automotive Chairman Chung Mong-koo is the second son of the founder while Hyundai Group is currently operated by Hyun Jung-eun, the widow of Mong-koo’s younger brother Mong-hun.

Hyundai Motor and Kia Motors are the flagship subsidiaries of the group. It also has Hyundai Steel under its wing, which has established a blast furnace to create high-quality steel.

By Kim Tae-gyu

Hyundai Motor pledges investments for builder & increase workforce from 90,000 now to 410,000 by 2020.

October 20, 2010

Hyundai Motor Group, Korea’s top automaker, said yesterday that it plans to invest 10 trillion won ($8.9 billion) in Hyundai Engineering & Construction Co. over the next 10 years if it succeeds in its bid to take over the country’s largest builder.

Hyundai Motor made the offer as it competes against the Hyundai Group for a controlling stake of 35 percent in Hyundai Engineering & Construction from creditors.

It was the first concrete plan laid out by Hyundai Motor, which until now has allowed Hyundai Group to take the lead in a publicity campaign criticizing the automaker’s ambitions.

The creditors, led by Korea Exchange Bank, will receive final bids by Nov. 12 and hope to complete the sale by the end of this year, with the stake valued at between 3 trillion won and 4 trillion won.

Hyundai Motor, which has much larger cash reserves than Hyundai Group, said its planned investment will help boost sales five-fold over the next decade. It has set several targets for Hyundai Engineering & Construction, including sales of 55 trillion won and an order book worth 120 trillion won by 2020. The builder’s sales are expected to amount to 10 trillion won this year, with the amount of new orders totaling 20 trillion won.

“We will be developing Hyundai Engineering & Construction as a global engineering company through active market development, enhanced business models and expansion of value-added products,” Hyundai Motor said. It also plans to increase the building firm’s workforce from 90,000 now to 410,000 by 2020.


By Lee Eun-joo []


Hyundai Motor to invest 10 trillion Korean Won in Hyundai Engineering

Hyundai Motor Group has raised the stakes in its competition with Hyundai Group to acquire Korea’s top construction company.
Hyundai Motor said on Tuesday it will invest 10 trillion won ($8.9 billion US Dollar) in Hyundai Engineering & Construction by 2020 if it succeeds in taking a controlling stake in the company.

Under a blueprint to grow Hyundai Engineering & Construction into a leading global integrated engineering corporation, the investment will be directed to boosting its capacity for infrastructure development, plant construction, renewable energy and R&D, the world’s fifth-largest carmaker said.

It set a goal for Hyundai Engineering & Construction to achieve 120 trillion won in orders and 55 trillion won in sales for 2020.
The plan also envisions that the builder will diversify its business portfolio through stepping up its presence in fields such as harbor works, chemical engineering, water plant, road construction, residential buildings and real estate, Hyundai Motor said.

Shifting its business focus to higher value-added projects from heavily construction-centered operations, the company expects to expand its 90,000 labor force to around 410,000 by 2020.

“Hyundai Engineering & Construction will be our new growth engine to become a global general engineering company,” a Hyundai Motor official said. “We’ll gather our energies to strengthen the country’s capacity in high value-added construction.”

Hyundai Motor Group, parent of the country’s two largest auto companies, submitted last month its bid for a $2.5 billion stake in Hyundai Engineering & Construction. Hyundai Group is the other competitor.
The auto giant is run by Chung Mong-koo, the son of Hyundai Group founder Chung Ju-young. His elder brother’s widow, Hyun Jeong-eun, runs the current Hyundai Group.

In April, Hyundai Motor Group’s assets were valued at about 100.7 trillion won by the Fair Trade Commission, marking the country’s second largest conglomerate. The assets of Hyun’s Hyundai Group stood at about 12.4 trillion won.

Hyundai Engineering & Construction recorded revenues of nearly 9.3 trillion won and operating profits of 418.9 billion won last year.
The builder is considered to be the foundation of Chung Ju-young’s Hyundai Group, from which the current Hyundai Group and the carmaker were spun off.

The successful bidder will acquire 34.88 percent, or a little less than 39 million shares, with the price expected to settle at between 3.5 trillion won to 4 trillion won.

Korea Finance Corporation is currently the builder’s largest shareholder with 11.12 percent of shares.

By Shin Hyon-hee (

Hyundai Engineering's President & CEO's Dong Wook Kim Autumn Speech of Morning Assembly (October)

Now autumn is already in the air. Sending a capricious season, it seems there will be more good things to happen this fall. We’ve just had the awards ceremony for contributors of contracts and excellent sites.

I express my gratitude;  From Honam Petrochemical P2 Project, and HCP Project obtained from the narrow domestic market, to Revamping Plant in Malaysia, Phosphatic Plant in Tunisia, and Gautami Power Plant in India, and to site manager and employees who have successfully completed overseas EPC projects.

I truly congratulate you and appreciated it.

It is needless to say, but it reminds me of saying, “Talented people are assets” especially in engineering field. The invaluable outcome has resulted from not only the directly related staff and employees, but the entire staff and employees who passionately worked together night and day to attain our goal.

I’d like to state the estimated business results for the 3rd quarter of 2010.

The sum of obtained orders is $ 1,990,000,000 (Billon) US Dollar which is 92% achievement compared to the plan, and the sales is $760 million US Dollar which is 88%, and therefore order reception and sales is somewhat behind the plan. Still, the operating profit is $110 million US Dollar, which is 105% achievement of the plan.

Our beloved employees, now it’s the 4th quarter of 2010. What is your resolution? We have to put effort on business goal achievement for this year, as well as prepare ourselves for the oncoming 2011.

Once the Korean Won keeps rising while we are aggressively competing in Middle East with European corporations such as those of Italy and Spain, the probability of order taking will get lower. Hyundai Engineering is confident globally because it is in its instinct of being technology advance, and global competitive but we anticipate the stiff competition in the Design, Engineering and Construction industry.

The intense competition is expected, since the narrower domestic market leads a number of Korean companies to enter the overseas market more rapidly.

Even the profitability doesn’t seem to get better next year. Still, the risks in market always exist, and we have been developed while seeking chances and challenging ourselves within risks. By enhancing competitiveness to overcome the challenge before blaming the adverse economic situation, there’s nothing we have to be afraid of.

There are distinctive characters among the Top ranked global corporations in ENR survey; pursuing EP&CM and high overseas sales proportion. In order to compete with them in the same market and take the dominant position, it is necessary to build a firm foundation as a global level.  In the following order, there will be a presentation regarding Indian state and culture by Mr. Ramesh from Process Plant division.

The homeland introduction of a foreign employee working for Hyundai Engineering (HEC) would be effective with its practical information and as a method of communication.  Employees shall globalize their business process and attitudes and upgrade mind in order to make a competitive organization with global competency.

Our beloved employees, now we should progress toward the vision we’ve built and challenge ourselves with constant passion.  The business goal for 2011 is to advance the Vision 2015 by 1 year, building aggressive goals. Achieving not only quantitative but qualitative goals, our company monitors the vision practice state by each department/team every six month, and gives feedback for practicing willpower.

Let’s attain the Vision 2015 in advance by steady and consistent practice.

Our beloved employees, our Company, The Hyundai Engineering has signed up for the UN Global Compact, an international agreement for the first time as a domestic engineering company, and expects to publish Sustainability Management Report soon. Through stabilizing the transparency and ethical foundation in general, and through win-win management with subcontractors and sharing management, we shall grow as a beloved and respected corporation.

I suggest to all the employees to adapt  the new international paradigm. Now it’s time to wrap up the last 3 months and plan for the next year. Next year will be busy, with the order backlog for 3 years, worth of $4,220 million.

The manpower shortage is forecasted to deepen.

To resolve the shortage problem, we should outsource the low value-added sector and improve the inefficient sector into productivity-oriented process through change and innovation.

I appreciate all the employees working overtime and during weekends to take all the job responsibilities, and I’d like to stress that we should make an enjoyable working atmosphere as much again.

Under the cold weather and busy works, please put your health care above all.

May happiness fill you and your family every day.

Thank you.


Hyundai Engineering Reach-out to Equatorial Guinea

The sharing management of Hyundai Engineering is spreading far to Equatorial Guinea, Africa, adding warmth.

10 employees from the integrated office including Senior Vice President Choi, Sung-pil, visited an elementary school in Bata, on September 20th 2010 for the Hyundai Engineering International reach out program. They handed over necessary school supplies such as 320 sets of desks & chairs, 320 art supplies, notebooks, and whiteboards.

The children were excited in that they can learn from better atmosphere with new desks and whiteboards. In addition, the site manager Kwon, Joong-kee and employees from Hyundai Engineering Project in “Mongomo Sewage Treatment Facility” Construction site visited an elementary school in Mongomo and offered art supplies, soccer balls, food, etc.

The residents who have attended the delivery ceremony was so impressed and so happy for the high quality supplies as said, “High quality and new designed stationeries.” And added, “Thanks to the Hyundai Engineering’s gifts, the whole town is delightful.”

Following last year, this is the second time to present school facilities and stationeries.

Hyundai Engineering in Equatorial Guinea is not only performing sincere projects but enhancing its evaluation as a sharing company.

Hyundai Engineering upgraded IT infrastructure security system

Hyundai Engineering IT security improvements have its dry run since October 14 2010 for their final implementation scheduled November 1 2010. Account management system is based on Microsoft AD (Active Directory) Infrastructure that will tighten the data security of the company.

This is a much secured system that wont allow anybody to use flash drive or any portable drive when saving files and data sharing also is blocked to avoid sending or exporting data to any means which is not monitored by the company.  The only means to transmit file is the Email system which also features the high control from the IT department. We expect that the efficiency and security of data management will be increased by establishing the system, which integrates server accounts which were operated separately or shared into one directory, creating unified certification system for each user, insider said.. 

And, we can prevent breach of security including leaking of information through integrating and centralizing ID data and management system that will remove dormant account, shared account, and creating unnecessary access account fundamentally. External files from portable drives could be read and could be stored to the computer system but changes from those files could not be save anymore in the portable drives as it has a 1 way access (IN no OUT system)

Active Directory: An inclusive solution of account integration and access management, required for identifying user and administrating the access of system resource by assigned level of authority. Though there are few disadvantages for this system, the company may prefer to have it this way than to allow leaked of data from different sources.

An external IT analyst found out a security weakness of this system as South Korea is very dependent on the sole An Lab security system which is not so effective in blocking harmful viruses which are agent of phishing, spying and etc. According to the external IT analyst who is so familiar with the system; He tried using the An Lab antivirus and An lab internet security but it could not detect and could not remove dangerous Trojan virus, spyware, malwares, and worms that slowly attacking all internet users in South Korea.  A certain phishing worms and virus been detected by other antivirus which become dormant to the online programs of the KB or Kookmin Bank which also possible to the other banks but no action or feedback from the bank so far.

World class IT technology of Hyundai Engineering (Intergraph)

INTERGRAPH: Hyundai Engineering received “Platinum Pipe Awards” in “Intergraph 2010 User Conference”, hosted by Intergraph a world leading plant IT Solution Company.

“Platinum Pipe Awards” is given to a company with superior application of SP3D (SmartPlan 3D) programming, and Senior Engineer Lee, Seung-soo(Plant IT Department, Technology Innovation & Development Office) of Hyundai Engineering accepted this award in behalf of the company.

With more than 2,000 participants from 42 states including members of leading companies in the field as Flour, Technip, KBR, this event; Hyundai Engineering standouts and flying with colors.






Vietnam Government recognized and awarded Hyundai Engineering's completion of oil facility

Hyundai Engineering takes the role of non-governmental diplomat, completing the first oil facility [ Dung Quat Polypropylene Facility] of Vietnam and received achievement award from Vietnam government and ordering organization at the completion ceremony on 25th August.

Hyundai Engineering President & CEO Kim, Dong-wook and site chief received achievement medal, Chief Engineer Song, Suk-bang, Deputy Chief Engineer Sim, Jae-ho and Baek, Bok-hyun received Commerce & Industry ministerial medal, and Chief Engineer Choi, Dae-sung, Assistant Chief Engineer Han, Kyung-ho, Engineer Moon, Sung-jin received award from the ordering organization.

This project for constructing polypropylene production facility was accepted at order of 180 million US Dollar in 2008. It has been focused by Vietnam government as a state undertaking, as general-secretary and prime minister have visited the site during construction period.

Besides, Hyundai Engineering has gained trust of Vietnam government and the ordering organization by helping victims of typhoon in September of 2009, evacuating them to safety house, supplying meal and other relief goods, supporting recovery with construction vehicles in the site.

Dinh La Thang, chairman of the ordering organization Petrovietnam, stated “I am very grateful that Hyundai Engineering completed this project successfully without any accident or delay, in spite of hard conditions. We want to maintain good partnership with Hyundai Engineering ever after.”

Due to this trust and confidence, Hyundai Engineering obtained the order of PVTEX PET Project as 250 million US Dollar in May of 2009, a short time after the beginning of first construction in February of 2008, from the same ordering organization.

Hyundai Engineering President & CEO Kim, Dong-wook stated “HEC takes the role of non-governmental diplomat, by performing various projects in various states.” He added “We will do our best to promote friendly relation and economic cooperation between Korea and Vietnam.”






Hyundai Engineering ranks No.1 for acquiring the most overseas orders in the first half of the year

[Press Release] Hyundai Engineering has reached the top of the rank for acquiring the most overseas orders out of the engineering companies in the first half of the year 2010 with total of 1.6 billion dollars worth of orders, according to the International Construction Association’s Information Service on August

The leading Isan Corporation($8.3M) and Mooyoung A&E($488M) have also placed the top in the fields of civil engineering and architectural design respectively.

Hyundai Engineering overtaking Samsung Eng.’s top position was striking news to the industry since Samsung Eng. was placed the 1st in this field last year for acquiring the most overseas orders exceeding $900M.

Hyundai Engineering’s admirable accomplishment is largely due to the acquirement of bid in Turkmenistan at the end of last year which was worth $1.3 billion. This was Turkmenistan’s biggest investment project and Hyundai Eng. has acquired it as a Turnkey system which includes from designing to constructing the whole project. The contract was completed at the beginning of this year which raised its overseas orders by a significant amount.

 The bid that was acquired last month in GAUTAMI Combined Power Plants (stage 2) in India ($295M) is also considered as a big project. For Samsung Eng. on the other hand, could not avoid handing over the top position due to the incompletion of 2 major contracts, UAE oil painting plants worth $1.7B.

Hyundai Eng. has set a ambitious goal of acquiring 3 Billion dollars worth overseas contracts. This is number that is exceeding 90% of its overall contract acquirement goal. “In the second half of this year, we plan to win the contracts from various sources including Philippines (power plant), Oman (gas plant), and Saudi-Tunisia (infrastructure),” company’s spokesman said.


The Ministry of Land, Transport and Maritime Affairs announced "the appraisal on Construction Capacity of 2010"

The Ministry of Land, Transport and Maritime Affairs in South Korea announced the result of the appraisal on construction capacity of 11,293 construction companies and 42,838 specialized construction companies across the country.

* Comprehensive ranking of Appraisal on Construction Capacity

             1st : Hyundai Engineering & Construction

             51st : Hyundai Engineering (placed the 61st in the previous year)

  * The Ranking of the major Construction companies

             2nd : Samsung C&T Corporation,

             3rd : GS Engineering & Construction

             4th : Daewoo Engineering & Construction

Out of the appraisal based on the Construction Records by Major Fields, Hyundai Engineering & Construction has placed the 1st in the field of “Water and Sewage.”


HYUNDAI Engineering adhere to United Nations Global Compact

The UN Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labor, environment and anti-corruption. By doing so, business, as a primary agent driving globalization, can help ensure that markets, commerce, technology and finance advance in ways that benefit economies and societies everywhere.

Never before have had the objectives of the international community and the business world been so aligned. Common goals, such as building markets, combating corruption, safeguarding the environment and ensuring social inclusion, have resulted in unprecedented partnerships and openness among business, government, civil society, labor and the United Nations. Many businesses recognize the need to collaborate with international actors in the current global context where social, political and economic challenges (and opportunities) — whether occurring at home or in other regions — affect companies as never before.

This ever-increasing understanding is reflected in the growth of the Global Compact, which today stands as the largest corporate citizenship and sustainability initiative in the world — with over 7700 corporate participants and stakeholders from over 130 countries including South Korea’s biggest construction firm; the Hyundai Engineering.

The Global Compact is a leadership platform, endorsed by Chief Executive Officers, and offering a unique strategic platform for participants to advance their commitments to sustainability and corporate citizenship. Structured as a public-private initiative, the Global Compact is policy framework for the development, implementation, and disclosure of sustainability principles and practices and offering participants a wide spectrum of specialized work streams, management tools and resources, and topical programs and projects — all designed to help advance sustainable business models and markets in order to contribute to the initiative's overarching mission of helping to build a more sustainable and inclusive global economy.

The UN Global Compact has two objectives:

   1. Mainstream the ten principles in business activities around the world

   2. Catalyze actions in support of broader UN goals, including the Millennium Development Goals (MDGs)

With these twin and complementary objectives in mind, the Global Compact has shaped an initiative that provides collaborative solutions to the most fundamental challenges facing both business and society. The Global Compact seeks to combine the best properties of the UN, such as moral authority and convening power, with the private sector’s solution-finding strengths, and the expertise and capacities of a range of key stakeholders. The initiative is global and local; private and public; voluntary yet accountable. The Global Compact’s has a unique constellation of participants and stakeholders — bringing companies together with governments, civil society, labor, the United Nations, and other key interests.

The benefits of engagement include the following: 

    * Adopting an established and globally recognized policy framework for the development, implementation, and disclosure of environmental, social, and governance policies and practices.

    * Sharing best and emerging practices to advance practical solutions and strategies to common challenges.

    * Advancing sustainability solutions in partnership with a range of stakeholders, including UN agencies, governments, civil society, labor, and other non-business interests.

    * Linking business units and subsidiaries across the value chain with the Global Compact's Local Networks around the world — many of these in developing and emerging markets.

    * Accessing the United Nations' extensive knowledge of and experience with sustainability and development issues.

    * Utilizing UN Global Compact management tools and resources, and the opportunity to engage in specialized work streams in the environmental, social and governance realms.

A more detailed analysis of the benefits of participation in the Global Compact can be found in The Importance of Voluntarism — which also focuses on the importance of the Global Compact as a complement rather than substitute for regulatory regimes

Finally, the Global Compact incorporates a transparency and accountability policy known as the Communication on Progress (COP). The annual posting of a COP is an important demonstration of a participant's commitment to the UN Global Compact and its principles. Participating companies are required to follow this policy, as a commitment to transparency and disclosure is critical to the success of the initiative. Failure to communicate will result in a change in participant status and possible delisting.

In summary, the Global Compact exists to assist the private sector in the management of increasingly complex risks and opportunities in the environmental, social and governance realms. By partnering with companies in this way, and leveraging the expertise and capacities of a range of other stakeholders, the Global Compact seeks to embed markets and societies with universal principles and values for the benefit of all.

As of 3rd June, Hyundai Engineering has joined the internationally renowned organization,  the United Nations Global Compact, for the first time as a Korean engineering company.

To be a part of UNGC, a company has to abide by regulations with regards to human rights, environments, corruptions that add up to 10 principles. The company also has to be actively involved in the worldwide campaigns to fulfill the social responsibility and report to the UNGC annually.

With this admission, Hyundai Engineering has secured trust globally while continuing the business operations and has established a great foundation for systematic CSR activities. President & CEO, Kim, Dong-wook, has mentioned, “accomplishing the revenue of 1 trillion KRW was possible because of our customers,” and added “we are not going to stop here but keep contributing to the economy as well as society, environment, and human rights, and pay extra attention on the ethics and the transparency of the operation of the business.”

 UNGC has emerged as the most global and influential initiative for the realization of corporate citizenship.


Saudi Conglomerate to submit bid for Hyundai Engineering

 (Reuters) - An unidentified Saudi conglomerate who said to be part of the Saudi Royal Family company plans to submit its bid to buy a controlling stake in Hyundai Engineering & Construction (000720.KS), a local newspaper reported on Friday.

"After reviewing several circumstances, it has decided to independently submit a letter of intent," JoongAng Ilbo quoted an agent for the Saudi firm as saying.

The paper added the Saudi royal family holds the biggest stake in the conglomerate that runs construction, real estate and financial services.

An official at one of the creditors of Hyundai Engineering said they had not received a bid from the Saudi company.

The creditors, which include the Korea Exchange Bank (004940.KS), had put up their 35 percent stake in the builder on sale. The shares are worth $2.56 billion.

Preliminary bids are due on Friday at 0600 GMT.

Hyundai Motor Group, the world's fifth-largest automaker, has announced its bid for the country's biggest builder, stirring up a contentious battle by rival members of the Hyundai family.

"We have so far received an LOI (letter of intent) from Hyundai Motor Group. We hope more contenders will participate," the official at one of the creditors told Reuters on condition of anonymity.

Hyundai Group, the department store, shipping and tourism group is seeking to regain control of Hyundai Engineering & Construction, which fell into the hands of creditors in 2001 because of financial woes.

The JoongAng Ilbo said Hyundai Group has asked Saudi Arabia's companies to be its financial investor.

By Ju-min Park and Hyunjoo Jin - editing by Valerie Lee)


Hyundai Group Makes Initial Hyundai Engineering Bid Rivaling Hyundai Motor

Hyundai Group bid for a stake in Hyundai Engineering & Construction Co. worth $2.5 billion, setting up a competition with Hyundai Motor Group for control of South Korea’s largest builder.

Hyundai Group wants the stake to help expand globally, it said today in a preliminary bid statement. Hyundai Motor Group, owner of South Korea’s largest automaker, submitted its proposal on Sept. 27. Neither group said how much they would offer for the holding.

Hyundai Group’s letter of intent is the latest round in a decade-long feud splitting one of South Korea’s most powerful families. Hyundai Group Chairwoman Hyun Jeong Eun is trying to rebuild after family infighting, bad debts and an ill-fated effort to expand into North Korea splintered the industrial empire. Her billionaire brother-in-law, Chung Mong Koo, the Hyundai founder’s eldest surviving son and chairman of Hyundai Motor Co., is competing against her to expand his group.

Buying Hyundai Engineering would also help Hyun maintain control of Hyundai Group’s biggest unit, Hyundai Merchant Marine Co., which is 8.3 percent owned by the construction company. Hyundai Merchant, which contributed 58 percent of Hyundai Group’s sales, last year, is the biggest shareholder in 7 of the 12 Hyundai Group units.

Bids Confirmed

Korea Exchange Bank, the main creditor bank for Hyundai Engineering, confirmed in a statement today that only the two companies had submitted their proposals.

The builder dropped 1 percent to close at 71,800 won in Seoul trading. Hyundai Merchant fell 7.6 percent to 46,850 won.

Hyundai Engineering, based in Seoul, was taken over by creditors in 2001 as debt mounted after it couldn’t collect payment for overseas projects. The company said in February it aims to win $12 billion worth of foreign orders this year, compared with $4.5 billion in 2009.

Bank of America Corp.’s Merrill Lynch & Co., Woori Investment & Securities Co. and Korea Development Bank are arranging the sale.0


 Kyunghee Park in Singapore at

Seonjin Cha in Seoul at

Editor - Neil Denslow at

Hyundai Engineering-Led Group Bids $2.6 Billion for Kuwaiti Bridge Project

A group led by Hyundai Engineering & Construction Co. made the lowest bid to design, build, operate and maintain a bridge in Kuwait, one of the country’s biggest infrastructure projects, the Central Tenders Committee said.

The group offered to carry out the project to build the Jaber Al-Ahmad bridge for 738.8 million dinars ($2.6 billion), the committee announced on its website today.

Competing bidders for the project included Saudi Binladin Group with 805 million dinars, and Australia’s Leighton Holdings Ltd. with 807.3 million dinars, the state news agency KUNA reported today. The government will study the offers and make recommendations, according to KUNA.

The bridge will span 37 kilometers (23 miles), mostly across water, and take five years to build, Hussein Mansour, assistant undersecretary for road affairs at the Public Works Ministry, told a conference today in Kuwait. The causeway will link the mainland to Subbiya in the north, where a Silk City is planned as part of a 30.8 billion-dinar development project.


Fiona MacDonald in Kuwait at

Hyundai Automotive Aimed to grow with Hyundai Engineering

Many believe that the Hyundai-Kia Automotive Group, the world’s fifth-largest carmaker, is trying to snap up Hyundai Engineering & Construction (E&C), the country’s No. 1 builder, without urgent reason.

Such a belief appears to have arisen because the group continues to chalk up fast growth in global markets in competition with conventional powerhouses in the United States, Germany and Japan.

Yet, the conglomerate whose flagship unit is Hyundai Motor contends that it has to acquire Hyundai E&C in order to sustain growth momentum, which has shown signs of slowing of late.

``The group’s growth rate has halved during the first decade of the new millennium. To garner upside momentum once more, we desperately need a new business to spearhead our future,’’ a Hyundai Motor spokesman said.

The head office of Hyundai Engineering & Construction in central Seoul.

``We regard the construction business as a new cash cow for the group, which will generate sufficient revenue streams as the automobile business has done during the past decades.’’

Scores of Hyundai-Kia Automotive Group affiliates combined to record a 10.5 percent average annual expansion rate in sales from 2000 through 2003. The figure plunged to 5.2 percent between 2007 and 2009.

In comparison, Hyundai E&C has racked up an impressive performance in the mid- to late-2000s ― the outfit’s annual growth rate averaged as high as 20 percent over the past five years.

Such feats put the firm at the top of the overstuffed construction industry, and its success story has continued this year ― its global orders topped the $10 billion mark for the first time.

A couple of new players have thrown their hats into the auction for Hyundai E&C ― Hyundai Group and the Hyundai-Kia Automotive Group. A 34.88 percent stake in the builder is up for sale by creditors including the Korea Exchange Bank and Korea Finance Corp.

The preferred bidder is expected to be chosen by the end of the year and the deal is estimated to be worth up to 4 trillion won because Hyundai E&C has strong business fundamentals.

Hyundai E&C was founded in the 1940s by the late Hyundai founder Chung Ju-yung and became the cornerstone asset of the Hyundai empire. Yet, it was handed over to creditors in the wake of the Asian currency crisis in 2001 via a debt-to-equity swap.

Hyundai Automotive Chairman Chung Mong-koo is the second son of the founder while Hyundai Group is presently run by Hyun Jung-eun, the widow of Mong-koo’s brother Mong-hun.

Flagship builder

Hyundai Motor said that its takeover of Hyundai E&C would also benefit the latter.

``Korea has fostered global leaders in such businesses as information technology, automobiles, steel making and shipbuilding. However, the country failed to do so in the construction segment for some reason,’’ the spokesman said.

``No builder has ever joined the ranks of the global best 20 companies ever. Currently, we are required to nurture a flagship outfit in the lucrative industry and we will be able to boost Hyundai E&C to become a top-tier player based on our financial leeway and experiences in offshore markets.’’

Hyundai E&C has climbed fast in the global rankings of international contractors, from 59th in 2007 to 23rd last year, according to The Top 225 Global Contractors as compiled by the U.S.-based authoritative journal Engineering News Record.

Hyundai E&C has come up with its own plan of becoming one of the foremost 20 competitors by 2015 but Hyundai Motor is claiming that its stewardship would accelerate this.

Hyundai Motor argues that its acquisition of Hyundai E&C will benefit not only the latter but also the former by creating huge synergy effects.

``Hyundai E&C has set up solid sales networks in South America, the Middle East and northern Africa. By contrast, we have strengths in North America and Europe,’’ the spokesman said.

``In other words, we are a perfect fit for each other. The amalgamation of the two will be a model case of a win-win merger and acquisition (M&A).’’

Market observers concur.

``Hyundai Engineering & Construction is financially healthy and has secure stable sources of cash flow. Yet, it has failed to establish its own unique image and strategy under the control of banks,’’ KB Investment & Securities analyst Heu Moon-wook said.

``It is high time for the builder to do that by channeling lots of energy and funds. Cash-rich Hyundai Motor will be the right outfit to help Hyundai E&C do this so that it can fly high in global markets.’’

Avoiding winner’s curse

In hard-fought auctions for highly coveted treasures, participants take turns jacking up their bidding prices. The treasures end up in the hands of the one who offers the highest price.

The victor may smile at first, but only until they realize that they made a mistake. As they valued the treasures so highly, they’ll have difficulty reselling the item at the price they paid.

This is called the ``winner’s curse,’’ as they are worse off despite beating out the competition and it is one of the most frequently used terms in the M&A market _ experts guess that a majority of M&A suffer the winner’s curse.

But Hyundai Motor contends that its track record in the M&A markets as well as its sufficient cash reserves will remove any concerns on this happening.

``Over the past decade, we showed expertise in acquiring struggling companies and turning them around as amply demonstrated by such cases as Hyundai Card and Hyundai Steel,’’ a Hyundai Motor insider said.

``Furthermore, we have rich liquidity as the group netted about 1.5 trillion won in profits last year alone. We saw many firms languish after locking up a large-sized builder due to a lack of funds. We don’t have to worry about that.’’

The insider seems to mean Kumho Group and Daewoo Engineering & Construction. The former channeled 6.4 trillion won to snap up the latter in 2006 with the support of 18 financial investors.

As it had to pay back funds to the investors late last year, the group eventually gave up Daewoo, which industry watchers say hurt the competitive edge of the country’s No. 3 builder.


By Kim Tae-gyu


Hyundai family Groups lock horns over Hyundai Engineering

 (Reuters) - Two groups split from what was South Korea's top conglomerate are squaring off in a bid for $2.5 billion-plus controlling stake in the country's biggest builder, Hyundai Engineering and Construction.

Korea Exchange Bank, the biggest shareholder of Hyundai Engineering & Construction, said on Friday it had received letters of intent from Hyundai Motor Group and a consortium led by Hyundai Group, the parent of Hyundai Merchant Marines.

The groups are headed by feuding members of the founding family of the original Hyundai group which was torn apart by family infighting.

In the bid for Hyundai Engineering & Construction Hyun Jeong-eun, a former housewife and the head of the present Hyundai Group will go head to head with Chung Mong-koo, the Hyundai founder's oldest surviving son, chairman of Hyundai Motor and the brother of Hyun's deceased husband.

Analysts said Hyundai Motor with its deep pockets was in a better position to win the race for Hyundai Engineering & Construction and that its acquisition would provide the builder with a strong support.

"If Hyundai Motor wins, Hyundai Engineering will have a new cash-rich owner that can provide synergies, such as assertive investments and stable supply of materials for construction," said Kang Seung-min, an analyst at NH Investment & Securities.

Hyundai Motor, the world's fifth-largest auto maker along with its affiliate, had a debt-to-equity ratio of just 55.1 percent as of June, less than one-fifth of the 300 percent ratio for Hyundai Merchant Marine, company data shows.

Hyundai Group has teamed up with Germany's M+W Group, a German engineering and project management firm, for its bid.

BofA Merrill Lynch and a domestic consortium of Korea Development Bank and Woori Investment & Securities are advising on the sale of the 35 percent stake.

Shares in Hyundai Engineering rose almost 3 percent on hopes for more bidders joining the auction, but finished the day down 1 percent, slightly underperforming the broad market's 0.2 percent gain.

A South Korean newspaper had reported early in the day that an unidentified Saudi conglomerate, owned by the Saudi royal family, would join the bidding.

The original Hyundai Group spearheaded South Korea's rise to Asia's fourth-largest economy from the rubble of a war in just over a generation, but has since been split into several groups after the death of its founder.

(Additional reporting by Hyunjoo Jin; Editing by Yoo Choonsik and Valerie Lee)



Hyundai Motor looks to construction for growth (Hyundai Engineering)

Hyundai Motor Group, the parent of the country’s two largest carmakers, is turning its eyes outside the boundaries of the automotive business to maintain the growth momentum.

Since breaking away from Hyundai Group founded by Chung Ju-young, Hyundai Motor Group has rapidly expanded its operations to become the world’s fifth-largest automotive group in the world.

Aided by its growing presence in the market and improving quality of their vehicles, the group’s two carmakers Hyundai Motor Co. and Kia Motors Corp. recorded record earnings during the first half of the year, and the companies are also expected to have performed well during the third quarter of the year.

For the first half of the year, Hyundai Motor posted revenues of nearly 18 trillion won ($16 billion), while the operating and net profits came in respectively at 1.56 trillion won and 2.52 trillion won.

Although the carmaker raked in record profits, the company attributes much of the improvements seen this year to passive factors such as the economic recovery, and difficulties experienced by its larger competitors such as GM and Toyota Motor Corp.

In addition, the local currency’s continuing weakness is also thought to have aided overseas sales, figures for which have seen much more significant improvements this year. During the first nine months of the year, Hyundai Motor’s overseas sales increased by 27.4 percent compared to the same period last year, while domestic sales shrank by 3 percent.
Over the same period, Kia Motors’ overseas and domestic sales increased by 51.5 percent and 20.8 percent, respectively.

However, despite increasing sales, Hyundai Motor Group says that the growth rate of its automotive business is slowing.
The profit margins of carmakers have shrunk in response to intensifying competition in the global market, and as the industry is sensitive to changes in exchange rates and raw materials costs and other external factors, carmakers are vulnerable to sudden changes.

In 2005 and 2006, when the won was at its strongest against the dollar in the past decade, Hyundai Motor’s operating profits fell to the lowest levels seen during the period, despite having maintained revenues at similar levels to 2004.

According to the company, the group’s decision to enter the biddings for Hyundai Engineering and Construction is part of its strategy to seek out new revenue sources and to maintain its growth momentum.
“Our automotive business in the global market is stable, but the group needs businesses that can compensate for uncertainties of the industry,” a Hyundai Motor Group official said.
“And now is the right time, when the group is financially stable.”

According to Hyundai Motor Group, the company views the construction sector as an essential part of its future growth.
“The construction business has a higher growth rate than other businesses the group is operating in. In particular, the demand for eco-friendly overseas projects is rising,” a Hyundai Motor Group official said.
“In addition, construction business can compliment the automotive industry’s business cycle and reduce the impact of negative developments.”
With the auto giant apparently having been interested in the construction sector for some time, Hyundai Engineering & Construction appears to be an opportunity the conglomerate can’t afford to miss.

Hyundai Engineering & Construction is the country’s largest construction company, and has been growing at an annual average of 15 percent since the workout process began.

In addition, the company’s 2009 revenues of nearly 9.3 trillion won is equivalent to almost 10 percent of the figure for the entire Hyundai Motor Group recorded in that year, which came in at 94.65 trillion won.
Hyundai Engineering & Construction’s portfolio structure is another factor that has made Hyundai Motor Group show interest in the company.

According to the group, residential properties that are vulnerable to changes in the economy make up relatively small proportion of the builder’s portfolio compared to the competition. In addition, Hyundai E&C’s overseas presence has been expanding with the value of overseas contracts awarded to the company during the first half of the year rising by more than 70 percent from the same period last year.

“The company’s brand value is also receiving increasing recognition, and the proportion of its sales accounted for by overseas projects is expected to increase,” Hyundai Motor Group official said.
“In this, there will be synergy effect with Hyundai Motor Group’s global network. For the group, Hyundai E&C is attractive in terms of both the synergy effect it will create within the group and our future growth strategy.”

By Choi He-suk (

Hyundai Group aims high with bid for its old construction arm

Hyundai Group is gearing up to acquire former affiliate Hyundai Engineering & Construction in a deal which it expects to have significant synergy for its diverse businesses.

The group has for years expressed its intent to get back Hyundai E&C, which has served as the virtual backbone for Hyundai Group dating back to the days of group founder Chung Ju-yung.

Hyundai Group -- most likely to compete with Hyundai Kia Automotive Group -- has increasingly been showcasing the positive effects of acquisition of the former affiliate, claiming that the results would be beneficial not only for the company, but the nation as a whole.

Hyundai is one of the country’s top industrial companies whose business reach spans a wide variety of areas largely focused on inter-Korean affairs, logistics and finance.

“Acquiring Hyundai E&C is a priority vision we cannot forsake for the sake of securing a stable growth engine for the future,” Hyundai Group Chairwoman Hyun Jeong-eun said in a speech earlier this year.

She stressed that the group would put all of its efforts into the acquisition.
Established in 1947 by the late Chung, Hyundai E&C was put under the control of creditors including Korea Exchange Bank in 1997 following liquidity problems that erupted during the Asian financial crisis of 1997-98.

The plans to sell 35 percent of Korea’s largest builder with management rights by the end of the year were released last month, with the official sales announcement to be issued Sept. 24.

According to industry estimates, acquiring the company would require up to 3-4 trillion won.

The most notable positive impact the group’s acquisition of the construction firm would have, according to Hyundai officials, is that it would help the group continue pursuing such joint projects, not to mention its foray into Russia.
Hyundai currently has plans for developing the Northern region of Russia, and it recently signed a memorandum of understanding with Industrial Investors of Russia.
Projects with North Korea hit a snag amid strained inter-Korean relations, but the group said that a vast synergy would be inevitable once the ties get back on track.
Hyundai Asan, an affiliate of the group, has been at the forefront of the projects with Pyongyang, and would receive a boost in their building of facilities in the North with the acquisition of Hyundai E&G, company officials said.

Hyundai currently exclusively has rights for building large-scale social overhead capital in the North, such as installing electricity and communications infrastructure, laying railroads and building airports.
“These projects also would contribute to national interests by reactivating business ties between the two Koreas,” company officials said.
The synergy does not stop there.

Other Hyundai affiliates also would contribute to helping bolster both the construction firm and the group as a whole so that it may make bigger contributions to the local business environment, market watchers noted.
Hyundai Securities, for instance, could help secure stable funds for Hyundai E&C through project financing and other advanced financial tools. It also could offer efficient risk-management for the construction company.

Shipping and receiving construction equipment and materials would become easier and more convenient when going through the logistics network provided by its logistics arms Hyundai Merchant Marine and Hyundai Logiem.

Hyundai Elevator, another sister firm, could assist with its state-of-the-art transport equipment that can be efficiently utilized at construction sites.
Another upside for Hyundai Group would be its procurement of a stable business portfolio that no longer depends solely on Hyundai Merchant Marine for sales.
But the competition for Hyundai E&C may be fierce.

Hyundai Kia Automotive Group, led by Chung Mong-koo, the surviving eldest son of the Hyundai founder, has been eyeing the construction firm as well.
The current Hyundai Group head Hyun Jeong-eun took over the group after the death of her husband Chung Mong-hyun, another son of Chung Ju-yung.

Critics have noted that the automobile maker may have other reasons for seeking the purchase, such as to snap up other Hyundai affiliates.
They also point to the fact that the automaker already has a construction firm under its arm, Hyundai Amco, which brought in 1 trillion won in sales last year for the group.

By Kim Ji-hyun (

Hyundai Motor submitted their Bid to Acquire Hyundai Engineering

Hyundai Motor Group, parent of Korea’s two largest carmakers, will bid  for a $2.5 billion stake in Hyundai Engineering & Construction Co., setting up a contest between the nation’s second-richest man and his brother’s widow

The group, which includes Hyundai Motor Co. and Kia Motors Corp., will submit a letter of intent today, it said in a regulatory filing in Seoul.

A successful bid would reunite Hyundai Motor with former affiliate Hyundai Engineering, the nation’s largest builder. Hyundai Engineering’s creditors, including Korea Exchange Bank, will accept final bids for their combined 35 percent share in the construction company by Nov. 12, sale arrangers Bank of America Corp.’s Merrill Lynch & Co., Woori Investment & Securities Co. and Korea Development Bank said last week.

“Buying into Hyundai Engineering is a part of Hyundai Motor’s efforts to develop a new engine of growth,” said Yim Eun-young, a Seoul-based analyst at Dongbu Securities Co. “It’s not unreasonable for Hyundai Motor to consider acquiring a stake if the price is reasonable.”

Hyundai Engineering’s market capitalization is about 8.32 trillion won, pricing a 35 percent stake at about 2.91 trillion won ($2.5 billion), based on today’s closing share price.

Hyundai Motor Group will compete with Hyundai Group, which said today it may submit a preliminary bid for the stake before Oct. 1. Hyundai Group affiliates Hyundai Merchant Marine Co., Hyundai Elevator Co. and Hyundai Securities Co. said in August they planned to make an offer.

Hyundai Motor and its affiliates severed ties with the former Hyundai Group in 2000 as part of a plan to split the business into three operations, each of which was to be managed by one of founder Chung Ju-yung’s three sons.

The carmaker is controlled by Chung Mong-koo, the son of the founder, while his brother’s widow, Hyun Jeong-eun, controls the current Hyundai Group. The old Hyundai Group’s shipbuilding unit, which includes shipyard Hyundai Heavy Industries Co., was also spun off.

Hyundai Motor is involved in the construction business through its unlisted Hyundai Amco Co. unit and has no plans to merge it with Hyundai Engineering, it said today. The group also said it would keep the current workforce at Hyundai Engineering after a takeover.

“We decided to bid for Hyundai Engineering in order to strengthen the group’s business portfolio for future growth,” Hyundai Motor Group said in a regulatory filing today.

While a stake in Hyundai Engineering could help protect the automaker from a sudden slowdown in the car business, it risks losing focus if it expands into a new industry, said Park Hwa-jin, a Seoul-based analyst at Shinyoung Securities Co.

“It’s too early to judge how Hyundai Engineering could contribute to Hyundai Motor Group while it still has many things to accomplish in the car business, such as adding environmentally friendly models,” Park said.

Hyundai Motor was unchanged at 161,500 won in Seoul trading Monday, while Hyundai Engineering gained 4.9 percent.

Hyundai Merchant Marine, Korea’s second-largest shipping line, jumped to its highest in almost three years in Seoul trading. The company rose by the daily limit on speculation a battle for Hyundai Engineering may also lead to a fight for control of the shipping line, said Kang Seong-jin, an analyst at Tong Yang Securities Inc.

Should Hyundai Motor Group acquire a stake in Hyundai Engineering, the deal may be its largest since 1998 when it acquired shares in Kia Motor Corp. for 1.2 trillion won in cash and assumed debt of 2.7 trillion won, according to data compiled by Bloomberg.

The group plans to finance the acquisition internally, it said. Hyundai Motor and Kia had combined cash and equivalents of 9.2 trillion won as of the end of June, according to their financial statements.

Hyundai Engineering’s creditors plan to sell their stake for as much as 20 percent more than its market value, an official at one of the creditors said earlier this month. He declined to be identified because the information isn’t public.
Hyundai Motor Group hired Goldman Sachs Group Inc. and HMC Investment & Securities Co. as financial advisers while Kim & Chang was picked as a legal advisor to work on the bid, it said in the filing, confirming previous local media reports.

Hyundai Group steps up campaign in Hyundai Engineering & Construction Acquisition Race


The clash over Hyundai Engineering and Construction between Hyundai Motor Group and Hyundai Group is spilling onto the public stage.

Hyundai Group, which is going head to head with Hyundai Motor Group as one of two companies that submitted letters of intent to Hyundai E&C’s creditors, has taken to newspaper and television advertising to argue its legitimacy and play down that of the auto giant in bidding for the construction company. The successful bidder will acquire 34.88 percent or a little less than 39 million shares, with prices expected to come in at between 3.5 trillion won ($3.1 billion) to 4 trillion won.

Hyundai Group is led by Hyun Jeong-eun, the widow of Hyundai Group founder Chung Ju-young’s third son Chung Mong-hun, while Hyundai Motor Group is headed by Chung Mong-koo, the late elder Chung’s eldest surviving son.

On Monday, major local dailies carried an advertisement from Hyundai Group that insinuates that Hyundai Motor Group should concentrate on the auto industry.

The advert contains a drawing of a sports car on top of which a phrase saying “expecting the world’s No. 1 automobile company” is written in bold.

In small print it goes on to pose the questions “why are international credit rating agencies concerned about a carmaker’s entry into the construction industry?” and “why do carmakers listen to their labor unions?” The latter referring to Hyundai Motor Co.’s union’s opposition to the company’s plans to acquire Hyundai Engineering & Construction, a deal expected to require up to 4 trillion won.

The advert finishes with the advice that by focusing on the auto industry, an auto brand envied by others could be born and with the phrase “Hyundai Group will guard the future of Hyundai E&C.”

This is not the first time Hyundai Group has used advertising as a tool to show its determination to acquire Hyundai Engineering & Construction.

In the run up to the submission of letter of intent for bidding for the construction firm, Hyundai Group television commercial that show pictures of Chung Ju-young and Chung Mong-hun, with the voice actor saying that Hyundai Engineering & Construction was “everything” to the two Chungs.

For Hyundai Group and Hyundai Motor Group, Hyundai Engineering & Construction possess more than financial value. In addition to being the country’s largest construction firm, whose revenues came in at nearly 9.3 trillion won and operating profits at 418.9 billion won last year, Hyundai E&C is often considered to be the foundations of Chung Ju-young’s Hyundai Group, from which the two conglomerates were spun off.

As such, the sale of Hyundai E&C has been as much a family affair as a major business deal right from the outset.

In July, reports of senior members of the Chung family meeting and promising support for Hyundai Motor Group’s acquisition attempt surfaced.

However, the report was quickly dismissed following the revelation that Rep. Chung Mong-joon, who was allegedly present at the meeting, was not in the country at the time of the supposed meeting.

Hyundai Motor Group, however, is taking the adverts in stride and says that it has no plans to retaliate.

“The group has no plans to response to the advertisements directly or in an emotional way,” a Hyundai Motor Group official said.

“Our plan is to prepare for and carry out the procedures required for acquiring Hyundai Engineering and Construction.”

By Choi He-suk  (


Hyundai Engineering is on the Bidding hotseat between Hyundai Group and Hyundai Motors

The bidders for Hyundai Engineering and Construction will be assessed fairly and neither side is currently at an advantage, Korea Finance Corp. President Ryu Jae-han said on Friday.

Holding 11.12 percent of Hyundai E&C’s shares, Korea Finance Corp. is the builder’s largest shareholder.

Speaking in Washington, Ryu said that neither Hyundai Motor Group, nor Hyundai Group has a clear advantage and that factors other than the bid price will come in to play in selecting the acquirer.

“The price will have a higher weighting, but the decision will be made through a comprehensive assessment including factors such as the ability to raise funds and management vision,” Ryu said.

Citing the case of Daewoo Engineering and Construction, Ryu emphasized that factors other than the bid amount will carry significant weight in making the decision. In 2006, Kumho Asiana Group acquired Daewoo E&C at more than 6 trillion won ($5.4 billion), but the conglomerate was thrown into disarray by liquidity problems arising in part from the deal.

“At this point, neither Hyundai Group nor Hyundai Motor Group can be seen to be at an advantage. The new owner of Hyundai E&C will be selected through fair assessment.”

Hyundai Group is led by Hyun Jeong-eun, the widow of Hyundai Group founder Chung Ju-young’s third son Chung Mong-hun, while Hyundai Motor Group is headed by Chung Mong-koo, the late elder Chung’s eldest surviving son.

The two conglomerates are in a two-way race to acquire Hyundai Engineering & Construction, the country’s largest construction company that recorded revenues of nearly 9.3 trillion won and operating profits of 418.9 billion won last year. The builder is also considered to be the foundation of Chung Ju-young’s Hyundai Group, from which the current Hyundai Group and the auto giant were spun off.

The successful bidder will acquire 34.88 percent or a little less than 39 million shares, with prices expected to come in at between 3.5 trillion won to 4 trillion won.

In terms of scale and ability to raise funds, Hyundai Group is far from an even match for Hyundai Motor Group.

In April, Hyundai Motor Group’s assets were valued to be about 100.7 trillion won by the Fair Trade Commission, making it South Korea’s second largest conglomerate.

In comparison, the assets of Hyun’s Hyundai Group came in at about 12.4 trillion won.

Hyundai Motor Group is also at a clear advantage in terms of liquid assets. The carmaker is thought to have had about 4 trillion won as of March. In comparison, Hyundai Group is said to have secured about 1.5 trillion won from in-house sources.

Concerning Hyundai Group’s advertising campaign that appeals to public sentiment, Ryu said that he was “perplexed” and that Hyundai E&C’s creditors will stick to principles in making the sale.

“I understand (the advertisements) as part of Hyundai Group’s strategy, but I think the act of appealing to public sentiment could become a burden for the deal,” Ryu said.

“The Korea Finance Corp. and other creditors will be faithful to the principle of getting a high price while making a good sale.”

Hyundai Group has aired a series of television commercials arguing its legitimacy over Hyundai E&C, and took out front-page adverts in more than 20 dailies implying that Hyundai Motor Group should concentrate on the automotive industry.

Concerning the sale of Hynix Semiconductor, of which the Korea Finance Corp. holds 2.6 percent, Ryu said that if the sale is not concluded by the end of the year, the creditors will have to look for alternatives.

As for the plans to privatize Korea Development Bank, Ryu said that he estimates the bank to be worth at least 20 trillion won, twice as high as the market estimation of 10 trillion won.

By Choi He-suk  (


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