Korean companies are fast establishing themselves in the growing Central Asian market as the region undergoes economic development.
Local construction firms made a name for themselves in carrying out large-scale projects in the Middle East, and they are now proving themselves again in Central Asia.
Although Central Asian nations are rich in natural resources and manpower, they are only now focusing on establishing basic infrastructure, presenting a huge market for those with the construction capabilities.
As such, local builders such as Hyundai Engineering & Construction and POSCO Engineering & Construction are hoping to cash in on the construction boom.
Hyundai Engineering & Construction is currently collaborating with GS Engineering & Construction and Samsung Engineering on a large chemicals plant in Uzbekistan, which in turn laid the foundations for the company winning a $2.01 billion gas treatment project in the country.
Other firms such as Samsung C&T have also been gaining ground in Central Asia.
Samsung has been working with Korea Electric Power Corp. on a $4.9 billion project in Kazakhstan since 2009. The project is one of the largest to be issued by the Kazakh government and will see the construction of a coal power plant that will generate about 9 percent of the country’s overall electricity output.
Although large, the scale of projects awarded to Korean firms remains in the shadows of those they carried out in the Middle East.
However, experts say that strategies tailored to the Central Asian markets could allow Korean builders to reap the fruits of the region’s economic development to the fullest.
“(Korean firms) approach entering these markets from the stance that they are creating jobs and helping local firms grow,” a Korean construction industry analyst said.
He also said Korean firms could enter the market by investing in indigenous companies.
Korean firms are also making waves in the burgeoning Central Asian markets in the unlikely field of food and beverages.
In Russia and associated markets, where global giants such as Nestle failed, Korean products such as canned coffee and milk-based soft drinks have become household names.
This expansion into Central Asia is also seeing Korea’s financial companies make headway in overseas markets, a feat that had largely eluded local financial firms for some time.
While local banks have established a foothold in China, results from other markets had been lackluster in the past.
However, with Central Asian markets presenting huge potential, local banks are pursuing overseas expansion in a renewed drive.
Last year, Woori Bank established an office in Vladivostok, laying the foundations for its plans for eastern Russia.
Shinhan and Kookmin banks entered the Central Asian market much earlier.
Shinhan set up a subsidiary in Kazakhstan in 2008, while Kookmin bought into that country’s BCC bank at around the same time. For Shinhan Bank, which is part of a larger financial group, its foray into Kazakhstan appears to have served as a bridgehead for affiliates.
In July, Shinhan Card followed its banking affiliate to the Central Asian nation.