Amid a prolonged downturn in the construction industry, Dongbu Corporation is accelerating the diversification of its business portfolio by expanding orders from public civil engineering into urban redevelopment projects in Seoul and the greater metropolitan area, as well as private development projects. Analysts say the company's strategy of pursuing both external growth and improved profitability is bearing fruit, building on stable orders in public infrastructure, its traditional strength, while adding the growth potential of urban redevelopment and the profitability of private development.
According to Dongbu Corporation on the 14th, new orders in the first half of this year totaled approximately 1.46 trillion won, up about 30% from the same period last year (approximately 1.12 trillion won). Even as uncertainty in the industry persists due to the housing market slump and rising construction costs, the company has secured work in a balanced manner across both public and private sectors, reducing its dependence on any single type of construction.
In the public sector, the company strengthened its order base around roads and public housing. After winning transportation infrastructure projects such as the Jecheon-Yeongwol Expressway and the Gyeyang-Ganghwa Expressway, it also secured 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. In addition to the road and port sectors where it already holds a competitive edge, the company is growing public housing into another stable pillar of orders.
In the private sector, urban redevelopment and mixed-use development projects in Seoul drove performance. Orders for urban redevelopment projects, including the Sinnae-dong Moa Town and Bangbae-dong street housing redevelopment projects, totaled approximately 445 billion won, exceeding 30% of total new orders in the first half. This resulted from a selective ordering strategy centered on Moa Town and street housing redevelopment projects, which move relatively quickly. Along with this, the company also won the Third Pangyo Techno Valley (127.9 billion won) and the Chuncheon Hyoja-dong residential-commercial complex (101.5 billion won), expanding its private development business.
The company maintains a selective ordering policy that comprehensively reviews business viability and profitability, client reliability, cost burden, and project risk, rather than pursuing simple external growth. Its approach is to secure stable work in public civil engineering, then add high-growth-potential areas such as redevelopment, mixed-use development, and advanced industrial facilities as supplementary pillars. As of the end of March this year, the contract backlog stood at 13.2109 trillion won, with public and private contracts accounting for 51.8% and 48.2% respectively, achieving a balance. However, since redevelopment projects take time to progress through permitting and construction start, the speed at which orders convert into actual revenue and profit is cited as a future challenge.
"This year's order performance is notable for delivering balanced results across major segments including civil engineering, public housing, private housing, and urban redevelopment," a Dongbu Corporation 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."
