Last year, KOLON GLOBAL, which recorded a large number of new orders, embarked on improving its corporate structure.
Last year, KOLON GLOBAL, ranked 19th in domestic construction capability assessment, plans to reduce its reliance on the dwelling sector, which is greatly affected by the real estate market, and instead expand new orders in the institutional sectors such as civil engineering and plants to restructure its financial structure.
According to the Financial Supervisory Service's electronic disclosure system (DART) on the 11th, KOLON GLOBAL exceeded 4 trillion won in new orders in the construction sector last year. This is KOLON GLOBAL's highest ever order achievement.
When looking at new orders last year by institutional sector, construction orders were approximately 2.3 trillion won, infrastructure orders about 1.9 trillion won, totaling about 4.2 trillion won. Last year's new order amount surpassed the previous highest order amount in 2022 (3.6569 trillion won) in two years.
KOLON GLOBAL's highest historical new order performance was significantly influenced by the non-dwelling sector. Last year, KOLON GLOBAL recorded over 2.3 trillion won in new orders from non-dwelling projects such as Korean Air’s new engine maintenance plant, Merck’s bio facility construction, and Jeongeup Biomass Power Plant construction. New orders in the non-dwelling sector have increased each year from about 800 billion won in 2021 to approximately 1.1 trillion won in 2022, approximately 1.6 trillion won in 2023, and about 2.3 trillion won last year, filling more than half of total orders with non-dwelling projects.
◇ KOLON GLOBAL construction sector, as a core business pillar
In particular, the non-dwelling sector can begin construction quickly and has a short timeline, allowing for immediate revenue recognition. KOLON GLOBAL is expected to rapidly reduce the proportion of its revenue from the construction and dwelling sectors.
In this context, KOLON GLOBAL will improve cost rates to maximize revenue. At the end of last year, KOLON GLOBAL implemented organizational changes focused on strengthening cost and order competitiveness, establishing the Cost Planning Team and the High-Tech Business Office.
A KOLON GLOBAL official noted, “Despite difficulties such as rising raw material prices and labor costs due to the impact of the Russia-Ukraine war last year, we achieved a record high of 4.2 trillion won in new orders,” adding that “based on the new organization, we will diversify our business structure, which is heavily tilted toward construction.”
The construction sector of KOLON GLOBAL is a core business that accounts for most of its total revenue. KOLON GLOBAL is divided into the construction and infrastructure sectors, the trading sector, and sports center operations. According to the Financial Supervisory Service's electronic disclosure system, KOLON GLOBAL's consolidated revenue for the first three quarters of last year was about 2.2085 trillion won.
Currently, KOLON GLOBAL has remaining projects at the Daedeok Bongmyeong and Ulsan Yaum sites. While concerns about unsold units have been raised, a KOLON GLOBAL official explained that both sites have excellent business viability, including location, which will lead to increased sales rates and complete sales.
KOLON GLOBAL's strong performance in the construction sector is underpinned by the brand competitiveness of its dwelling brand "Hanulche." KOLON GLOBAL's "Hanulche," launched in November 2000, is a first-generation housing brand in the construction industry. KOLON GLOBAL's construction capability evaluation ranking was 16th for two consecutive years in 2021 and 2022, setting a record, but it has dropped to 19th from 2023.
KOLON GLOBAL secured a contract worth 116.8 billion won for the Busan Hadang 1 district last year, accumulating a total of 665.7 billion won in contract performance solely in the urban repair sector. KOLON GLOBAL is advancing its Mooa Town projects, starting with the first project site, Bundong 1-10 District (2,060 units) in Seoul, followed by Myeonmok Station 3 Areas 1-3 (702 units) and Cheonho 1-2 Areas (385 units).
◇ Veteran in housing and infrastructure, Vice President Song Hyuk-jae appointed
KOLON GLOBAL appointed Vice President Song Hyuk-jae as the new head overseeing the construction headquarters and infrastructure headquarters at the end of last year. After being promoted from executive director to vice president, he will oversee both the infrastructure headquarters and the newly designated construction headquarters, which includes the dwelling sales team and urban repair sales team.
Vice President Song, born in 1966 and a graduate of Inha University, has been with KOLON GLOBAL since 1990. He has served as head of the civil engineering technical sales team and an executive responsible for civil engineering, and has held the position of head of the infrastructure headquarters. He is regarded as a ‘veteran’ in the construction and infrastructure sectors with over 30 years of experience.
A KOLON GLOBAL official said, “Vice President Song will drive KOLON GLOBAL’s continuous growth based on his experience spanning civil engineering and dwellings,” adding that he will play a coordinating role between the newly established High-Tech Business Office and the existing construction headquarters, which was set up in December of last year.
Currently, KOLON GLOBAL has the highest level of order backlog in its history. KOLON GLOBAL's order backlog is at a level of 13.8 trillion won, securing over five years’ worth of workload based on last year’s revenue.
KOLON GLOBAL also undertook a significant organizational restructuring to strengthen its non-dwelling business. In the first half of last year, it eliminated the architectural technology sales team and established public sales and architectural sales teams. Moving forward, it plans to accelerate the expansion of new orders through detailed order strategies tailored to each client.