[Let's Run Again K Construction] LH Leads K-Construction Revival as Part of Team Korea

Leading Investment Projects to Support Private Companies' Overseas Expansion
Building Order Bases in Vietnam, Indonesia, and the Philippines

[Asia Economy Reporter Cha Wanyong] On the 25th of last month, the groundbreaking ceremony for the ‘Hung Yen Province Clean Industrial Complex’ (1,431,000㎡, approximately 430,000 pyeong), a joint investment project between Korea Land and Housing Corporation (LH) and companies from Korea and Vietnam, was held locally in Vietnam. This is the first Korean-style industrial complex for domestic companies entering Vietnam.

Three days later, on the 28th, LH held a smart city project briefing session for the delegation of the Saudi Minister of Municipal and Rural Affairs and Housing, who visited Korea following the Korea-Saudi bilateral summit, supporting the bid for the construction of NEOM City.

Earlier in October, negotiations began for participation in the pilot project for public official housing construction, which will serve as a foothold for Indonesia’s new capital relocation project. LH is moving swiftly to achieve the government’s vision of “annual orders worth 50 billion USD and becoming one of the world’s top four construction powers.”

At the groundbreaking ceremony for the Hung Yen Clean Industrial Complex held in Hanoi, Vietnam on November 25, attendees are taking a commemorative photo. From the left: Pham Truong Tam, Chairman of the Industrial Complex Management Committee; Duong Xuan Ha, Chairman of Ecopark; Lee Han-jun, President of Korea Land and Housing Corporation; Lee Seong-hae, Chairman of the Metropolitan Area Transport Committee; Tran Quoc Ban, Governor of Hung Yen Province; Oh Young-joo, Ambassador of the Republic of Korea to Vietnam; Dang Ngoc Quynh, Vice Governor; Seon Byeong-su, Head of VTK Corporation. Photo by Ministry of Land, Infrastructure and Transport.

◆ Focus on G2G Projects... Leading Support for Korean Companies’ Construction Orders = The newly launched Hung Yen Province Clean Industrial Complex is Vietnam’s first Korean-style industrial complex targeting Korean companies as tenants, with Korean companies participating throughout the entire construction process including design, construction, and operation. The project is implemented by a local joint venture, VTK (Vietnam Together Korea), in which a consortium of Korean companies including LH holds 75% equity and local Vietnamese partners hold 25%.

By providing one-stop administrative, financial, and tax services from the tenancy stage through factory operation, Korean companies, which previously faced difficulties individually searching for local factory sites, are expected to find it much easier to do business in Vietnam. LH is establishing local subsidiaries not only in Vietnam but also in Myanmar and Russia to create global production bases for Korean companies by developing Korean-style industrial complexes.

LH is not only constructing Korean-style overseas industrial complexes but also leading various overseas projects based on government-to-government (G2G) cooperation, such as participating in Indonesia’s capital relocation project and building smart cities in the Philippines. Through co-hosting the Korea-Saudi Housing Cooperation Forum, global business conventions, and training programs inviting officials from partner countries, LH is strengthening networks with key partner countries and solidifying the foundation for Korean companies’ overseas construction orders.

Additionally, based on its experience in constructing the administrative capital city, LH has been negotiating with the Indonesian government since 2019 to participate in the Indonesia capital relocation project, which has a total project cost of about 40 trillion KRW. In April, LH submitted a letter of intent to participate in the pilot project for public official housing in the new capital, valued at 600 billion KRW, and began formal negotiations in October.

In December, LH held a project briefing session for Korean companies and recruited companies wishing to participate. If the LH consortium undertakes the pilot public official housing project, it is expected that Korean companies will gain a competitive advantage in the upcoming bidding for the full-scale Indonesia capital relocation project.

In the Philippines, LH is promoting the construction of a Korean-style smart city called Clark New Town. The ‘Clark Smart City’ project involves building a new city approximately 1,047,000㎡ in size (equivalent to 147 soccer fields) within the Clark Special Economic Zone, a former U.S. military base near the capital Manila. In April and June, LH signed MOUs with the Philippine Clark Development Corporation to advance the project and aims to submit an official project proposal in the first half of next year.

This project completed a feasibility study in June with support from the Ministry of Land, Infrastructure and Transport’s K-City Network program, and plans to enter the market jointly with domestic engineering firms, smart city solution providers, and construction companies. Currently, many construction companies are showing interest not only in the smart city construction but also in the subsequent mixed-use building development projects following land development.

◆ Establishing New Business Models to Address the Climate Crisis = In addition, LH is promoting a residential environment improvement project linked to greenhouse gas reduction in Karachi, Pakistan’s primary economic city. LH invests in improving the residential environment of slum areas by installing water purification facilities, supporting housing renovations, installing streetlights, and creating parks. The greenhouse gas reduction performance secured through this process (approximately 1.3 million tons over 10 years) will be sold in the form of carbon emission credits, creating a new business model.

A meeting between LH and relevant Pakistani ministries to improve residential environments and reduce greenhouse gas emissions in the Karachi area of Sindh Province, Pakistan.
[Photo by Korea Land & Housing Corporation]

Through the greenhouse gas reduction achievements obtained from this project, LH expects to contribute to the Korean government’s national greenhouse gas reduction target (NDC) while also supporting overseas orders for Korean companies during the project implementation. Currently, LH is working closely with the Pakistani Ministry of Climate Change, Sindh Province, UN Habitat, and other counterpart government agencies and international organizations, and plans to proceed with full-scale project implementation after obtaining national approval for the project plan.

Considering the higher risks of overseas investment projects compared to domestic projects, LH plans to focus on creating success cases in Southeast Asia for the time being, taking into account new overseas market entries by Korean companies and relocation demand from China. In the future, LH intends to expand support for Korean companies’ construction orders to emerging markets such as India, the Middle East, and Latin America.

An LH official stated, “In line with government policies, we will actively support the overseas expansion of Korean companies in design, construction, and finance by leveraging LH’s accumulated development project know-how and credibility over many years, and continue efforts to contribute to enhancing economic cooperation between countries.”

This content was produced with the assistance of AI translation services.