Thursday, September 20, 2007

Korean firm building oil city in Vietnam

GS Stretching Out Overseas
GS Engineering & Construction is building a satellite town in Nha Be, Vietnam.
GS Group, founded just three years ago, is now putting the spurs to its global business strategies.

In order to reduce its dependency on domestic markets in oil, construction and retailing, the group is now trying to find growth engines in overseas markets.

"The common task for all our subsidiaries is to develop new markets and new businesses for future growth," said GS Group CEO Huh Chang-soo at the company's strategic conference at the beginning of this month.

Huh met with Vietnamese Prime Minister Nguyen Tan Dung at the prime minister's office in Hanoi on Tuesday, where they exchanged views on economic issues including a satellite town development project by GS Group in Nha Be, Vietnam, and on developing deeper relations.

"We want to actively participate in construction projects such as building oil and petrochemical plants, expanding power facilities and improving the environment," Huh said.

GS Engineering & Construction took over the 1 million-sq.m. satellite town project in Nha Be in May, making it the first Korean company to acquire an exclusive development project in Vietnam. The company recently received an order for an Egyptian oil plant valued at $1.8 billion, the biggest overseas construction project ever by a Korean company.

GS is also building up its oil fields. In the offshore Cambodian block A, which is GS Caltex's first overseas oil field, good quality crude oil and gas were found in all five test wells during a preliminary exploration in March 2005. Now the company is working on a second exploration in the field.

GS Caltex joined an equity exploration of onshore test wells in Thailand, and GS Holdings, GS Caltex's parent company, is expanding its oil business by purchasing equity in fields in Indonesia, Yemen, Kazakhstan and elsewhere.

"We plan to break from our existing business structure which leans heavily upon domestic markets, and raise the proportion of sales in foreign countries up to more than 10 percent by 2010," Huh said.

(englishnews@chosun.com )