Entry 8# Kim Han gil

Daewoo to build new zone in Oman
April 24, 2008

Daewoo Shipbuilding and Marine Engineering Company will join the trend of local companies developing new cities in emerging economies, with an industrial and tourism complex in Oman. The world’s third-biggest shipbuilder said in a statement yesterday that it signed a memorandum of understanding with the Middle Eastern country to develop an industrial and tourism zone with a residential town for workers. The zone will be built by 2020 in Duqm, a port city about 450 kilometers (280 miles) south of Oman’s capital, Muscat.The value of the project and other details will be decided later, the statement said. It might be worth around $20 billion, a source said.Under the deal, Daewoo Shipbuilding and a state-run Omani company will establish a 50:50 joint venture for the project. In the tourism district, hotels, hospitals and leisure facilities will be built. The industrial sector will have a ship repair yard and additional port facilities.

In 2006, the local shipbuilder signed an agreement to build and run the yard, which will be the biggest in the Middle East.After signing the MOU with Oman’s finance minister, Ahmed bin Abdul Nabi Macki, in Seoul yesterday, Daewoo Shipbuilding chief executive officer Nam Sang-tae said, “Oman is the second biggest gas exporter to Korea and so it is a very important economic partner. We thank the government of Oman for giving a chance to participate in the country’s economic development.”Other local companies are also actively participating in new city development projects in Asia, Eastern Europe and Africa. Posco Engineering and Construction, an affiliate of the world’s fourth-biggest steelmaker Posco, is constructing a new town in Vietnam. State-run Korea Land Corporation is participating in new residential town development projects in Azerbaijan and Algeria as project manager.

By Moon So-young Staff Reporter [symoon@joongang.co.kr]

This strategy is good solution that improve daewoo's gross profit. Korea's building industry is already became maturity. It means there are so many comepititors and it cause some problems with limit demands in korea. As you know, Dae woo is not popular building company in korea. So this expand to abroad will be good solution that overcome domestic's limit demands.

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