이 기사는 2022년 05월 18일 08:12 thebell 에 표출된 기사입니다.

Lotte Engineering & Construction (Lotte E&C) is poised to see its Vietnamese operation bear fruit 15 years after it made a foray into the market.

Lotte E&C said in its regulatory filing on Monday that it generated 43.9 billion won ($34 million) in revenue in 2021, which accounted for only 0.9% of its total revenue of 5.7 trillion won. Yet, the country commanded the largest share of the builder’s revenue except for South Korea.

The builder entered the Vietnamese market in 2007 as it won an order to build the first Lotte Mart store in Ho Chi Minh City.

The company established local entity Lotte E&C Vietnam and won a 380.9 billion won order to build Lotte Center Hanoi in 2009 from Coralis Vietnam, which is 100% owned by Lotte Shopping’s Luxemburg entity.

Lotte E&C then focused on infrastructure projects including Da Nang-Quang Ngai Expressway, LoTe-Rach Soi Expressway and Yen Vien-Lao Cai Railway upgrading project to reduce reliance on orders from its affiliates. Yet, the company failed to win any big orders except for a 172 billion won Lotte Mall Hanoi project.

The company shifted its focus to a real estate development business in 2018. It joined an urban development plan led by Vietnam’s Phu Cuong Group to install a 725-unit apartment complex in Ho Chi Minh City. Lotte E&C owns a 51% in the project, which is expected to generate $98 million in sales from selling the residential and commercial spaces.

In 2019, Lotte E&C set up Lotte Land to accelerate the business. Lotte Land focuses on housing and new town development projects in Vietnam.

Lotte E&C is also expected to generate profits from Lotte Properties HCMC Company. Lotte E&C is the largest shareholder of the company, a special purpose company jointly created by Lotte E&C, Lotte Shopping, Hotel Lotte and Lotte Asset Development to promote Thu Thiem Eco Smart City project in Ho Chi Minh City.

Lotte Shopping was initially the largest shareholder of Lotte Properties HCMC Company with a 40% stake and Lotte E&C had a 15% stake in the company. Yet, the builder increased its stake to 51% last year by injecting 88.5 billion won to take control of the firm’s business.

The Thu Thiem Eco Smart City project, which has showed little progress so far, is expected to speed up after Lotte E&C chief executive Ha Suk-joo met Phan Van Mai, chairman of the Ho Chi Minh City People's Committee, on May 13 to partner on the construction of Thu Thiem Eco Smart City. The complex will be built on a 50,000 square meter area and consist of a shopping mall, hotel, office building and apartment building.

Lotte E&C submitted a construction plan to the Vietnamese government and is waiting for approval. The city of Ho Chi Minh plans to help with the approval process and the company expects construction to start next year. (Reporting by Ki-ryong Jun)