The construction industry's crisis is dragging on. With high interest rates, surging construction costs, and a freeze in the project financing (PF) market overlapping, midsize builders increasingly find their footing eroding. Kang Kyung-min, who joined Kukdong Engineering & Construction late last year and now spearheads the housing brand strategy for three companies—Namkwang Engineering & Construction and Keumkwang Enterprise among them—is racing to turn crisis into opportunity. Having spent 30 years in construction and accumulated wide-ranging experience spanning civil engineering and architecture, Kang declared his ambition: "By strengthening our architecture business, including urban redevelopment, we aim to break into the top 10 builders by combined revenue across the group's three construction firms—Kukdong, Namkwang, and Keumkwang—by 2030."
According to Kang, the combined construction capacity of Kukdong, Namkwang, and Keumkwang ranks around 20th among all builders. Revenue stands just above 1 trillion won. "To break into the top 10, we need to push revenue up another notch to 4.5 trillion won," he said. "Civil engineering is enough to keep the company running, but to grow, we have to build up architecture—especially housing."
Kukdong's current business mix is roughly 7-to-3 between civil engineering and architecture. Kang has set a goal of flipping that ratio to 3-to-7 within five years. He does not mean to shrink civil engineering revenue, but rather to shift the axis of growth by substantially expanding architecture, including housing. "All three companies struggled in the 2010s, but now we've regained stability and are ready to run again," Kang emphasized.
The first task is rebranding. The apartment brands of the three construction firms—Kukdong, Namkwang, and Keumkwang—have been unified under "Housetory." Kukdong's existing "Star Class" brand will be applied to residential-commercial complexes and general buildings. In the second half of the year, the company plans to refresh the corporate image (CI) of all three firms, aiming to unveil it ahead of next year's 80th anniversary.
Underlying the brand integration is a new residential philosophy called "The K-House." It is a concept for a future-oriented housing platform that combines smart home technology with lifestyle services to continuously improve the living environment even after move-in. "The cleanup of the Housetory and Star Class brands is in its final stage, and in the second half we're preparing the CI renewal of the three firms along with a new group vision," Kang said. "Marking next year's 80th anniversary, we will show consumers the direction of The K-House that the three construction firms pursue."
The recent contract for the Dong-A Apartment reconstruction project in Michuhol-gu, Incheon, is cited as the first fruit of this change. The project is the first redevelopment Namkwang and Kukdong have undertaken since establishing their unified housing brand system. It also marks their first successful contract for a 1,000-unit-scale project. "Until now we focused on small-scale redevelopment of around 200 to 300 units, but this contract gave us the confidence to take on bigger sites," Kang stressed. He added, "It's true both companies carried a defeatist mindset after going through hard times. The experience of winning a 1,000-unit private-sector project is changing the internal atmosphere." Since taking office, Kang has sharply strengthened exchange among the firms. He explained that by recently consolidating sales and strategy meetings, the firms' information capabilities have begun to be shared, naturally raising their competence. "In the second half, we plan to take on another 1,000-unit redevelopment contract in the metropolitan area," he added.
The opportunities Kang is eyeing are small- and midsize redevelopment projects and public-private participation projects involving public entities. He judges that reconstruction in the Gangnam area has already become a battleground for the high-end brands of major builders. "Not every home can become like Apgujeong, and not every consumer wants only high-end apartments," Kang said. "On top of that, mid-rise apartment complexes worth reconstructing in Gangnam are rapidly disappearing."
By contrast, in the metropolitan area—Gangbuk, Incheon, and Gyeonggi—he sees markets that midsize builders can penetrate continuing to emerge, such as Moa Towns, street-housing redevelopment, small-scale redevelopment, and urban complex projects. "Opportunities will arise for midsize firms with design and planning capabilities," he said. "We're actively examining private-participation projects involving not only the Korea Land and Housing Corporation (LH) but also the Seoul Housing & Communities Corporation (SH) and the Gyeonggi Housing & Urban Development Corporation (GH)."
His housing product strategy also takes a different direction from high-end. He argues that Gangnam's current high-end apartment complexes are virtually closer to hotels than homes, and that in most residential areas—except a tiny few—facilities like swimming pools, saunas, and movie theaters are not needed inside the complex. Kang described this as the "high-end paradox." "The high-end market is bound to hit a limit, and a market that provides comparable residential quality at reasonable prices will surely emerge," he said.
Kukdong's core housing strategy is modularization and standardization. The idea is to raise the proportion of standardized modules from the early design stage to shorten construction periods and improve the cost structure. With labor shortages worsening, it is hard to control both schedule and cost under the existing methods. "Construction, too, will soon shift rapidly to a method of fabricating and assembling blocks like shipbuilding," Kang emphasized. "To shorten schedules, standardization is essential."
Flexible interior layouts within units are another key strategy—allowing the number of rooms and spatial configuration to change with family composition and lifestyle shifts. "You can't turn a 30-pyeong unit into a 40-pyeong one, but within a 30-pyeong unit you can change the layout to two, three, or four rooms," Kang explained. "By appropriately mixing wall-bearing and column-bearing structures, we want to build homes that can respond to life-cycle changes."
Still, the market environment remains challenging. The variables Kang worries about most are interest rates and raw material prices. "Real estate development projects are absolutely affected by interest rates, and lately signals of rate hikes have been coming out strongly," he said. "The moment rates rise, development projects effectively become difficult." He added, "If war fallout makes construction cost increase pressure a reality and rates rise too, conflicts between contractors and associations over construction costs could recur as they did two or three years ago."
Kang stressed the role of the central and local governments amid the crisis. "If construction cost conflicts grow, the central and local governments must actively take on a mediating role," he said. "Since funds from the Korea Housing & Urban Guarantee Corporation (HUG) are like a welcome rain for struggling associations, additional policy funding needs to be secured." He also believes the barriers to the corporate rental market should be lowered. "After the jeonse fraud cases, rental anxiety among young people has grown, but the government alone cannot handle all the stable rental supply," he said. "Financial support and an institutional foundation must be put in place so companies can stably supply rental housing."
Entering his sixth month in office, Kang emphasized that the environment surrounding the construction industry has been changing rapidly lately, and that the industry must build the capacity to respond to technological advances and external variables. "When I took office early this year, I only worried about government policy, but I was shocked by the physical AI shown at the electronics and IT show 'CES,' and I nearly lost my mind over the U.S.-Iran war," he said. "There are many changes happening to the projects I initially pursued."
Kukdong is also pursuing the adoption of physical AI to cope with labor shortages and safety issues. Won't a midsize firm, rather than a large conglomerate, face difficulties adopting new technology? "It will be hard to be a first mover, but I think being a fast follower is possible," Kang explained. "The idea is to adopt it quickly once we confirm that major firms like Hyundai E&C or Samsung C&T have proven its usefulness."
These days construction sites can hardly operate without foreign workers, but their skill levels fall short of expectations and the risk of safety accidents is rising. Even the few skilled workers available fill the sites of big companies first. "It's not that we lack the technology, but situations are arising where we can't work because we lack skilled workers," Kang said. "In the end, construction sites have no choice but to move toward physical AI."
Kukdong is reviewing the application of on-site automation technology, centered on its Process Innovation Team and AX Team—labor management using facial recognition, automation of hoist cars for material transport, [BODY]
AI-based process analysis is a prime example. CEO Kang predicted that "innovative changes will emerge at construction sites within the next two to three years."
Kang also saw a strong possibility of restructuring in the construction industry. His assessment is that companies with weak capital and insufficient cost management and planning capabilities will struggle to survive. "In the era of low interest rates, it was relatively easy to undertake development projects by raising leverage, but now it is difficult to pursue development without the backing of equity capital," he said. "Restructuring will be inevitable, centered on regional construction firms." He also expected the gap to widen further between companies capable of handling specialized infrastructure—such as semiconductor plants, power stations, and small modular reactors (SMRs)—and those that cannot. Even so, Kang repeatedly expressed his determination to find opportunity amid crisis and challenge himself toward sustained growth beyond mere survival. "I wonder if there has ever been a time in history when crises in the construction industry have ended," he said. "Since all employees are doing their best with a mindset of giving it another go, it won't take long to restore our former reputation."
He is…
△ Born in Jeju, 1969 △ Department of Economics, Sungkyunkwan University △ HDC Hyundai Development Company (IPARK), 1997–2025 △ Head of Urban Redevelopment Division, HDC Hyundai Development Company (IPARK), 2023 △ Head of Housing Business Division, Namkwang Engineering & Construction, 2025 △ CEO of Building Division, Kukdong Engineering & Construction, 2026
