Major Korean Construction Companies Pursue Modular Construction Opportunities
South Korea’s housing dilemma is widely discussed and most acute in expensive locales in the Seoul Metropolitan area—and it is rightly seen as the nation’s top domestic issue. Problematic elements include the soaring cost of housing, rising household debt and a lack of affordable housing for the young. To address this, the South Korean government has set a target of building half a million public housing units by 2027, out of which, 72 percent will be built in Seoul, Gyeonggi and Incheon.
However, delivering such volumes requires a different approach to construction as the country, recently breaking its own record for the world’s lowest fertility rate faces a shortage of skilled workers. And that solution is modular construction.
According to ‘Markets & Market Data’, a global market research institution, the global modular construction market is expected to grow from $82.3 billion in 2020 to $108.8 billion in 2025. In addition, data from the Korea Construction Policy Institute predicted that the domestic market would grow to $2 billion (2.22 trillion won) by 2030.
Some of the largest Korean Chaebols, such as Samsung and GS, have begun to take action. Recently, Samsung C&T, the top construction company in the country has been making active inroads into the modular market by entering into a partnership with a Latvian modular construction company, to advance into the global construction market. Last December, Chairman Lee Jae-yong of Samsung C&T had a rendezvous with Saudi Crown Prince Bin Salman in order to tap into its extensive Middle East connections for the super-large Neom City project in Saudi Arabia.
POSCO E&C, the fourth largest, has made a swift entrance into the market as well. Han Seong-hee, CEO, has openly declared his attraction toward modular. GS E&C, the third largest, recently established a subsidiary called XiGEIST to dedicate to the wooden modular housing business. Canada Wood Korea continually supplies technical support and training for the design and construction of wooden houses design and construction to XiGEIST.
Not only do construction companies have high hopes for the market, but governments do too.
In November of last year, the Ministry of Land, Infrastructure and Transport (MoLIT) initiated the ‘Modular Housing Policy Consultative Body’, comprising representatives from industry, academia, research organizations, and the government, to push forward modular housing and stimulate the industry, and began to undertake the scheme seriously.
Kwon Hyuk-jin, head of the Housing and Land Office of the Ministry of Land, Infrastructure and Transport, said, ” Modular housing could be the answer to the housing market’s predicament arising from the current economic recession.”
To see this trend for yourself, we welcome you to participate the 2023 Korea Build exhibition which will be held at KINTEX in Ilsan from February 16th to 19th where Canada Wood Korea will have a booth featuring panels of wooden modular construction and provide various wood construction technical info to visitors.
* KOREA BUILD WEEK, running since 1986, has tracked the developments in Korean construction and architecture, and is currently responsible for setting the direction for construction and architecture around the world. This all-inclusive exhibition encompasses the entire construction industry, including foreign/domestic building materials, technologies, architecture, and interior design.