Ranked as Korea’s leading CM company and the 13th best in the world, SAMOOCM Architects & Engineers is firmly focused on being a global leader in its field. SAMOOCM CEO Hur In explains how a corporate restructuring in 2014 has enabled SAMOOCM to transform itself into an expert construction management (CM) company that is single-minded in pursuit of its goals, as it carves out a global niche through innovation and expertise.
The government has attempted to implement an overhaul of the economy in the face of various structural problems and an ongoing decline in the export model, which has served the country well for more than half of a century. We are observing measures to try to nurture a more creative, innovation-led economy. Your company was formed 40 years ago when this country was a very different place. Can you expand on how SAMOOCOM is adapting to this economic shift and maintaining your competitiveness in this era of reduced growth?
The growth of the domestic economy is expected to be less than 2.6% in 2015 and 3% in 2016. Indeed, the stagnation of the construction management (CM) market has become a major threat to our industry. Nevertheless, SAMOOCM took a leap forward in 2015 to be ranked 13th in the world and 1st in Korea in the ‘Top 20 Global Construction Management and Program Management Fees’ listings by Engineering News Record (ENR).
Based on the strengths we have been built since 1976, we aim to create a 100-year-old company, SAMOOCM, by not only quantitatively expanding our core businesses, CM and design, and exploring new engines for growth, but also qualitatively enhancing our sound management practices.
In 2014, the design part of our company was spun off to become an affiliate of Samsung, and the remaining company transformed into an expert construction management company. At the same time, we changed our name from SAMOO Architects & Engineers to SAMOOCM Architects & Engineers. This has allowed us to be much more focused on pursuing a wider variety projects which are solely beneficial for our business.
Here at home, we can see a flurry of activity related to the Winter Olympics in 2018. However, some experts are also predicting a slowdown in the housing market due to tighter regulations on household lending, coupled with an ageing population. What is your assessment of the growth prospects for the domestic construction industry in the coming years leading up to the 2018 Olympics?
For the Winter Olympics in 2018, our company has been carrying out works on the Pyeongchang Olympic Plaza for the opening and closing ceremony, and the Gangneung Speed-Skating Stadium. After the event, the utilization of Winter Olympics-related facilities and nearby tourist attractions will be an issue; therefore, SAMOOCM is preparing to contribute to the creation of value by participating in those projects. Until recently, a temporary boom in the domestic construction market led a revival of construction orders; however, since 2016, construction orders have declined rapidly and it is expected that this period of economic stagnation will continue. Therefore, targeting niche markets is becoming more important than ever.
SAMOOCM is one of the world’s leading firms in its subsector. What are its international strengths and globally competitive advantages?
We have differentiated know-how and experience in healthcare, semiconductor facilities, bio-facilities, airports, and other major infrastructure areas. Moreover, through active research and practical application of tools and techniques such as building information modeling (BIM), green-building, and design for safety (DFS), we have been playing a leading role in global trends.
Operating a Technical Research Institute that provides high-quality services such as BIM, green-building, DFS, and management for design, schedule, cost, safety and quality, our company is regarded by clients as a company with strong technical support mechanisms.
As everyone knows, pre-construction services heavily influence the success or failure of a construction project. As pre-construction services become more important, CM and design become the reliable barometers of the business. Our company is a design-based CM company, unlike many of our domestic competitors. We provide differentiated services by being involved from the development planning (DP) phase, which allows us to provide optimal designs reflecting the client’s needs. On the basis of CM and design services, we have fully established business networks involving market research firms, realty stocks, investors, operators, financial institutions and real estate appraisal firms.
Korean construction companies in general have been badly hit by the sustained slump in oil prices, which has affected the Middle East, traditionally their main market. Korean construction firms received orders worth $11.88 billion from the Middle East in the first quarter of the year, down 44% from a year earlier, according to the International Contractors Association of Korea (ICAK). What impact has this slowdown in the Middle East construction market had on your overseas business, and which overseas markets have the most potential for your company at present?
This year we created the Infrastructure Business Team in order to converge civil engineering and architecture and expand our business lines to power plants, railways, roads and water treatment. Also, by operating Future Strategy TF, we are setting out a clear path for the future.
In the overseas market, our first venture was the KOICA architecture project in South America in 2007. Since then we have entered into the Vietnamese, Cambodian, and Indonesian markets.
Currently, the Infrastructure Business Team is also seeking to extend our business abroad. Based on our cumulative know-how in healthcare and industrial facilities, we already entered into markets in the Middle East, Africa, and Eurasia. In Africa, we work in partnership with Korea’s national development agency on major aid projects. Also, through overseas affiliated companies in Philippines and Vietnam, we are building key bases in order to expand our service lines to the global CM/engineering market.
If we look at the US as an example, much of the infrastructure dates to the big building programs of the 1930s and 1950s and is in dire need of an upgrade. What is your assessment of the potential for SAMOOCM to gain a firm foothold in the American CM market?
The US is already a leading country in CM services, so we have been trying to learn from CM firms there. Currently, we lack the conditions to enter into the US market. However, we have previous experience of working closely with American CM firms such as Hill International and Turner Corporation. Moreover, we are trying to closely cooperate with CM firms in the US on some overseas projects currently being prepared. Based on our relationship and experiences with US firms, we hope to enter into not only the US market, but various overseas markets.
Last year Korea signed up as a founding member of the Asia Infrastructure Investment Bank (AIIB). What impact do you envision this will have SAMOOCM in terms of overseas contracts for major infrastructure projects?
The AIIB is still in its infancy but there is an expectation from the Korean government and construction companies that this can lead to more high-value projects in the region for Korean contractors. Some of our work in overseas markets is done through government contracts, so we aim to continue to cultivate strong relations with governments in order to take full advantage of any opportunities which may arise from AIIB.
As we mentioned, SAMOOCM is celebrating its 40th anniversary this year and it is now firmly established as one of the world’s leading CM firms. As President and CEO, what is your vision for the future of the company?
SAMOOCM is now 40 years old, but in some ways we are only two years old, as we began to stand alone as a construction management company in 2014. We have now entered a fully ripe period after growing for a long period of time.
I was honored to be elected as CEO of our company in 2014. I feel a heavy sense of responsibility and a sense of purpose. In 2015, we decided our vision was to be a solid leading company in the CM service area.
I have strong faith in our employees who have helped SAMOOCM come so far. All of our employees, from new employees to myself, will do our best to ensure SAMOOCM is a solid global leading company in the CM service field.