[Photo by Daelim Industrial Co.]
South Korean construction company Daelim Industrial Co. landed a 2.3 trillion won ($ 1.9 billion) deal with Iran’s Isfahan Oil Refinery to add oil refinery facilities, becoming the first builder bagging an order from the Middle East country since the lifting of the international economic sanctions last year.
Daelim Industrial said Thursday that it has received a final letter of award (LOA) from Isfahan Oil Refinery to improve and optimize production facilities in the Iranian oil refinery. The deal, which is worth 2.3 trillion won, is the largest contract secured by a domestic construction company in Iran, the Korean builder claimed.
The project, due for completion in 48 months since groundbrekaing, is to add facilities that will be used to produce high value-added products to the oil refinery located 400 kilometers south of Tehran, the capital of Iran. Under the deal to be officially signed in January 2017, Daelim Industrial will be in charge of design, equipment and material procurement, construction and financing.
Since the lifting of the international economic sanctions on Iran, Korean firms have rushed to the Middle East country in hopes for a breakthrough in its sluggish export performance and waning domestic demand through the windfall from Iran. Tehran was expected to announce 50 oil plant and social overhead projects worth $185 billion this year alone.
Among them, Daelim Industrial became the first company to win a contract. It won confidence from its clients in Iran after it had not pulled out of the country during the sanctioned period. Daelim Industrial was also the first Korean builder to tap into the Iranian market after South Korea and Iran established diplomatic relations in 1962. Beginning with the civil engineering work in Isfahan military facility in May 1975, Daelim has clinched 26 projects worth $4.5 billion in total over the past 40 years.
Shares of Daelim Industrial closed Thursday at 87,100 won, up 5.32 percent or 4,400 won from the previous session.
By Chung Soon-woo
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]