Korean construction firms eye Iranian market

12 February 2014 0 Comments

12 February 2014

The Korean contractor GS Engineering & Construction has begun to survey the Iranian construction market with the aim of being among the first foreign companies to enter if international sanctions are lifted.

Before sanctions the Iranian market was worth $2.5bn to Korean firms in 2009, making it Korea’s fifth largest market, reports a Korean newspaper.

According to the International Contractors Association of Korea, Iran’s construction market was worth $89bn in 2013 and is expected to rise to $154bn by 2016.

The bulk of this growth is expected to be in petrochemical plant and transport infrastructure.

An official from GS E&C told newspaper Dong-a Ilbo, “Most of Iran’s strategic projects of building gas processing facilities in South Pars were granted to Korean construction companies. Iran is an important market for Korean firms.”

Iran and the International Atomic Energy Authority signed a nuclear roadmap agreement in November 2013 (Wikimedia Commons)

Two multinationals, Hyundai E&C and Daelim, are reported to have opened offices in Tehran, and an official from a large construction firm said, “Since gaining trust from a client is very important in the Middle East, Korean construction firms have maintained relationships with Iranian clients even after sanctions.”

Since many western governments imposed sanctions on Iran, many Chinese and Indian firms have gained ground.

Iran has indicated that it also wants to improve relations with Russia. Ali Akbar Salehi, the head of the Atomic Energy Organisation of Iran said on Monday that he was in “serious talks” with Russia over the construction of a 4MW nuclear plant.

Meanwhile, a report by Iran’s Oil Ministry has predicted a building boom in western Iran after petrochemical plants in Hamedan, Lorestan, Mahabad and Kurdestan begin operation over the coming year and work begins on “downstream” industries.

Iran has 18% of global natural gas reserves and the world’s fourth-largest proven oil reserves. According to the US Treasury, the economic blockade has cost Iran $120 billion in lost revenues since 2010.