Dongbu Construction is drawing attention as it seeks to expand its scale and strengthen profitability by using public civil engineering as a foundation while broadening its order portfolio into redevelopment projects in Seoul and the metropolitan area, as well as private development projects, amid a construction industry downturn. Industry observers say its strategy of diversifying its business structure is proving effective, adding the growth potential of urban redevelopment and the profitability of private development to the stability of public infrastructure, its traditional strength.
According to Dongbu Construction on the 14th, new orders in the first half of this year totaled approximately 1.46 trillion won, up about 30% from around 1.12 trillion won during the same period last year. Notably, the company secured work evenly across the public and private sectors without being concentrated in any particular construction type, even as uncertainties such as a housing market slump and rising construction costs persisted.
In the public sector, the company expanded its order base around two main pillars: roads and public housing. After winning transportation infrastructure projects such as the Jecheon-Yeongwol expressway and the Gyeyang-Ganghwa expressway, it went on to secure a series of public housing projects, including the Gwanggyo A17 block and Hanam Gyosan A1 block private-participation public housing projects, as well as the Suwon Dangsu 2 and Incheon Gyeyang A-19 block projects. The company maintained its technological capabilities and construction experience in roads and ports, its existing strengths, while developing public housing into a separate, stable order pillar.
In the private sector, redevelopment projects and mixed-use development in Seoul drove performance. Orders from urban redevelopment projects alone, including the Sinnae-dong Moa Town and the Bangbae-dong street housing redevelopment project, reached approximately 445 billion won, exceeding 30% of total first-half orders. This was the result of selectively targeting Moa Town and street housing redevelopment projects, which move relatively quickly. The company also secured the Third Pangyo Techno Valley project worth 127.9 billion won and the Chuncheon Hyoja-dong residential-commercial complex worth 101.5 billion won, broadening the scope of its private development business.
The company maintains a selective order approach that comprehensively reviews business viability and profitability, client trust, cost burdens and project risks, rather than pursuing mere expansion of scale. The method involves securing stable work in public civil engineering, then adding fields with high growth potential such as redevelopment, mixed-use development and advanced industrial facilities as supplementary pillars. As of the end of March this year, its contract backlog stood at 13.2109 trillion won, with public and private orders accounting for 51.8% and 48.2% respectively, achieving a balance. However, since redevelopment projects take time to secure permits and begin construction, the speed at which orders convert into actual revenue and profit is cited as a future challenge.
"This year's order performance is characterized by even results across major sectors including civil engineering, public housing, private housing and urban redevelopment," a Dongbu Construction official said. "In the second half as well, we will build a balanced order portfolio between public and private, and between civil engineering and building and housing, so as not to be excessively affected by fluctuations in any particular market."
