How foreign developers feel on the Russian construction market
Despite the crisis (or probably even due to it), foreign developers’ companies get more and more interested in work in Russia. Foreign builders try the Russian market on with an eye for the development of their business on the territory of our country. Attending exhibitions and different forums is one of the best ways to feel what is going on in the Russian construction industry. Today we are talking with the representatives of the Korean company of LOTTE Engineering and Construction, Mr Jhun Seong Hee, Chief Advisor, and Mr Chris Do, General Manager of the Overseas Building Team International, who kindly agreed to give and exclusive interview to the “Construction.RU” online journal.
- Mr Jhun, Mr Do, first of all thank you for your agreement to give an interview to “Construction.RU”. And the first question is as follows: your company deals with all spheres connected with construction – super high-rise and multi-complex construction, civil works, retail, hotel, housing and plant works construction - a very wide range. What is preferential? What is, let us say, the meta-task of the company?
- Actually, there is no priority as long as we can make a profit. We work as a contractor. In some cases we purchase land, develop it and build our residential buildings and apartment condominium complexes. Sometimes we participate in governmental building projects, like highway construction or some other infrastructure arrangement. As far as construction is concerned, we do every aspect of it.
- Do you have employees of all professions in your company or do you use other companies to fulfil specific projects?
- We have about 2,000 engineers involved with almost every sector of construction, and our total number of employees is about 4,000. Sales in 2015 totaled $4 bln. And we have international contractors, 11 regional branch offices and 5 subsidiaries in 12 countries for quite a number of high-rise projects: for example, a 123 storey building of LOTTE World Tower which is 555 m high, and other super high-rise in Korea and Vietnam. And of course, other relevant experiences of the company.
- This is very interesting. And now a kind of provocative question. You’ve said you take every kind of job which makes you a profit if you can do a good job. So, which is the priority – a good job or a profit?
- You know, we are a private commercial company working in the construction sphere. We can go with feasibility and a small profit, but most likely we will go with profit and good prospects; for example, if we start some special construction work in Russia, and it looks feasible in the future, yes, we come at it aggressively. If it is very difficult and not possible to make a profit or, say, we are losing money – we’ll have to think about it.
- I see Moscow on the map of your company. Do you have an office here?
- Yes, we have had good experiences in Russia – three projects in Russia have already been completed, including the ones in Moscow and Kaluga. A confectionery factory was built in Kaluga (Lotte Confectionery). Currently, we are working on a luxury hotel in a historical preservation area – it is a restoration and interior project.
LOTTE Plaza, Moscow
- So, you have a lot of work in Russia. And what are your further plans connected with our country?
- If possible, we’d like to expand the range of our construction business in Russia. We work together with local contractors and designers from our affiliate company, or Korean designers, or work with local designers – we like to make a kind of combination depending on the situation. I do not think Russian companies will allow us to work with Korean engineers and workers. So, to make our business efficient here, we have to work with Russian construction companies.
When a Russian company has a specialty then we utilize its strong points and go forward together: the strong points of the two parties together give good results.
- Is it difficult to work with Russian specialists? And with Russian authorities? And in general in Russia?
- Well, I have not got any specific experience with the governmental side, but I do not see any specific difficulties. When we decide to get in, we get in. And we have to understand other countries, other people and other ways of working. When we decide to work here, we hire Russian people and work together.
- How do you evaluate the level of Russian specialists?
- Actually, we prepare a basic concept of the project. But the development of a project’s architectural drawings are usually done by Russian architects – they are more familiar with cold weather construction. Then we discuss and adopt the project before we start any kind of construction. We do not insist on our own methods, we respect the local means of construction, the relationship with the government – everything. We go into it together, and this is the only way.
- Do you cooperate in developing technologies or creating new ones? Or do you bring your company’s technologies, already developed, onto the Russian market?
- As far as high-rise building is concerned, we have to apply related technologies and the experience we have because construction should be fast, efficient and beautiful – then you can make a profit. Otherwise we lose – so, in any case we come with our technology and work together with yours. Besides, Russia is not a small country, and we can move from one place to another – Moscow, Saint Petersburg, Yekaterinburg, etc. High-rise buildings are the kind of product we can sell because they come together with high quality construction equipment, good quality materials, and good design. And all these together make high-rise building beautiful and easy.
- And long-term, I should add, because it is very important that they be sustainable and reliable…
- How much attention does your company pay to the environmental friendliness of your objects? Actually, you deal with territorial development on a large scale. So, what do you do for environmental protection?
- We work on the Korean peninsula and we will work in almost any place in the world. Environmental issues are extremely important to every construction company. The first time we come to a country, we analyze all local regulations. The Russian government lays stress on environmental protection issues, and we put this first and foremost and study local regulations and special cases, and we cannot go on without taking them into account.
- Well, you build so much here, in Russia. Do you take any measures towards the promotion of your company or do you just work as you work?
- We like to expand our territory, but that is not easy. We first have to gain credibility, and that’s why we attended the 100+ Forum in Yekaterinburg, to feel out the industry – we are not in a hurry, but when the time comes there is a chance you might call on our support. Then we might be ready to work together.
- Thank you very much for the interview. I wish you every success.