Samil PwC: "Crisis-Hit Construction Industry Needs Growth Strategies Such as M&A and AI Adoption"

"Tomorrow's Construction and Today's Issues" Seminar Held

Amid a complex crisis facing the domestic construction industry-including economic recession, rising interest rates, surging raw material prices, and compounded by safety risks-experts have suggested that strategies such as mergers and acquisitions (M&A), research and development (R&D) innovation, and the strategic adoption of artificial intelligence (AI) are essential for sustainable growth.

Samil PricewaterhouseCoopers announced on the 25th that it held a construction industry seminar titled "Tomorrow's Construction and Today's Issues" at the Amore Hall on the second floor of its Yongsan headquarters in Seoul on the 24th. The seminar was organized to analyze the latest trends and key issues in the construction industry and to propose response strategies for domestic companies. More than 200 corporate representatives and experts attended the event. In his opening remarks, Ryu Giljoo, Client Service Leader at Samil PricewaterhouseCoopers, emphasized, "It is time for the construction industry to seek new vitality in response to digital transformation, the advancement of AI, changes in workforce structure, and the growing demands for ESG and sustainability."

Lee Heejung, Senior Research Fellow at Samil PricewaterhouseCoopers Management Research Institute, stated in her presentation on "The Future of the Construction Industry" that "the domestic construction sector has now entered a period of structural decline, and to overcome this and achieve growth, it is necessary to pursue restructuring based on market logic, diversify business and adjust portfolios, accelerate digital transformation, and uncover new business opportunities aligned with global megatrends." She also highlighted the need for M&A and open innovation to expand business areas and strengthen capabilities, the establishment of cooperative relationships between large and small-to-medium enterprises, and expansion into overseas markets.

Jo Hongrae, Partner at Samil PricewaterhouseCoopers AX Node, delivered a presentation on "AI Transformation Strategies and Regulatory Changes," where he provided concrete case studies of AI applications in planning and design, procurement, construction, operation and maintenance, safety, and management within the construction sector. He also introduced an AI agent developed in-house by Samil PricewaterhouseCoopers. Additionally, he outlined a roadmap for corporate AI transformation, including the introduction of AI engines, the development of department-specific AI solutions, and the application of AI across the entire corporate value chain.

Min Kyungpil, Consulting Partner at PricewaterhouseCoopers, in his presentation on "Innovation in Safety Management Systems: The Future of Sustainable Construction Sites," pointed out that "safety accidents pose a significant threat to corporate sustainability." He stressed that, in order to respond to market and regulatory changes, companies must identify and manage controllable areas and foster a safety climate that encompasses awareness, systems, and infrastructure to prevent accidents. To this end, he proposed improvements in areas such as open communication, the S-QCD framework, risk management before construction commencement, collaborative safety goal-setting, and AI-based safety systems.

Hwang Sungpil, Audit Partner at Samil PricewaterhouseCoopers, explained major changes related to IFRS 18 financial statement presentation and disclosure, which will be applied from fiscal years beginning January 2027, including the income statement and management performance measures (MPMs) defined by management. He advised, "As methods of presenting operating profit and loss are expected to differ by company, it is necessary to prepare in advance by considering the unique characteristics of each industry and the effects of the amendments."

Son Seungwoo, Financial Advisory Partner, reviewed the current state of risk management among domestic construction companies and introduced case studies on the use of feasibility studies for financial risk management in his presentation on "Feasibility Study (F/S) Review and Utilization Cases for Project Financing Sites." He emphasized, "During construction booms, risk management often becomes lax due to performance-oriented strategies and optimistic business outlooks, while in downturns, accumulated risks can have a simultaneous impact, deepening the crisis." He added that it is essential to conduct feasibility studies by internal organizations and external specialists with independence and objectivity, as well as to regularly update site-specific data and manage project profitability in real time.

Lee Yoonseok, Tax Advisory Partner, introduced typical types of transfer pricing and international tax issues that can arise during domestic and international tax audits when Korean global construction companies carry out or complete overseas projects, during his presentation on "Transfer Pricing Issues and Mutual Agreement Procedures for Overseas Projects." He advised, "Tax issues related to overseas construction projects inevitably lead to double taxation, significantly increasing outflows, and thus can become a major financial risk. To actively manage transfer pricing risks for overseas projects, it may be effective to conduct preliminary reviews and apply for mutual agreement procedures to resolve double taxation."

On the 24th, Han Jaesang, Construction Industry Leader at Samil PricewaterhouseCoopers, spoke at the seminar "Tomorrow's Construction and Today's Issues" held at the Samil PricewaterhouseCoopers headquarters in Yongsan-gu, Seoul. Samil PricewaterhouseCoopers

Han Jaesang, Construction Industry Leader (Partner) at Samil PricewaterhouseCoopers and organizer of this seminar, stated, "Going forward, Samil PricewaterhouseCoopers will continue to provide a wide range of specialized services for the construction industry and establish itself as a business partner supporting the industry's resurgence."

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