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Planning & Design: NSTEIN, 82-2-336-7865
This report has been printed with FSC®
(Forest Stewardship Council®) certified paper
DAELIM Industrial Co., Ltd.
Engineering & Construction Unit
Daelim Bldg., 36, Jong-ro 1-gil,
Jongno-gu, Seoul, Korea
T: 82-2-2011-7114 / F: 82-2-2011-8000
www.daelim.co.kr
Petrochemical Unit
11F Korea Chamber of Commerce,
39, Sejong-daero, Jung-gu, Seoul, Korea
T: 82-2-3708-3000 / F: 82-2-753-1181
www.daelimchem.co.kr
DA
ELIM
2018 Co
rpo
rate Rep
ort
2018 Corporate Report
01
02
04
06
08
10
12
20
28
36
44
45
48
50
52
54
56
58
60
74
Corporate Profile
Message from the CEO
Business Highlights
Business Streams
Business Overview
Business at a Glance
Plant Business
Civil Business
Housing & Building Business
Petrochemical Business
Sustainable DAELIM
Research & Development
Safety & Health Management
Environmental Management
Corporate Governance
Ethical Management
Risk Management
Social Contribution
Financial Review
Organization & Management
Contentsㆍ Korea’s representative enterprise group with 79 years of history
ㆍListed as one of the top 100 companies in Korea for the last 63 years
ㆍ The first Korean contractor to earn US dollar by overseas construction work
ㆍ Korea's first exporter of plant sector
ㆍLarge-scale projects being implemented in 36 countries worldwide
ㆍ Korea's representative construction & petrochemicals group
ㆍ18th-largest conglomerate in Korea
ㆍ Pursuing to be a Global Lead Developer providing total solutions
ㆍ�Covering the entire value chain including planning & investment,
construction and O&M in petrochemicals, power generation,
civil engineering and housing & building
ㆍ Achieving a great synergy with affiliates based on global top-tier
competitiveness and core competencies in Engineering & Construction and
Petrochemical units accumulated throughout its history
SINCE 1939
USD 22.2 BILLION IN ASSET SIZE WITH 13 AFFILIATES
GLOBAL LEAD DEVELOPER
Corporate Profile
As one of Korea’s representative enterprise groups founded in 1939 with 13 affiliates
covering power generation, trading, logistics, manufacturing and leisure, Daelim Group
is led by Daelim Industrial, a global EPC contractor and petrochemicals company.
GR
OU
P–W
IDE S
YN
ERG
IES
Corporate Profile
ㆍ Korea’s representative enterprise group with 79 years of history
ㆍListed as one of the top 100 companies in Korea for the last 63 years
ㆍ The first Korean contractor to earn US dollar by overseas construction work
ㆍ Korea's first exporter of plant sector
ㆍLarge-scale projects being implemented in 36 countries worldwide
ㆍ Korea's representative construction & petrochemicals group
ㆍ18th-largest conglomerate in Korea
ㆍ Pursuing to be a Global Lead Developer providing total solutions
ㆍ�Covering the entire value chain including planning & investment,
construction and O&M in petrochemicals, power generation,
civil engineering and housing & building
ㆍ Achieving a great synergy with affiliates based on global top-tier
competitiveness and core competencies in Engineering & Construction and
Petrochemical units accumulated throughout its history
SINCE 1939
USD 22.2 BILLION IN ASSET SIZE WITH 13 AFFILIATES
GLOBAL LEAD DEVELOPER
As one of Korea’s representative enterprise groups founded in 1939 with 13 affiliates
covering power generation, trading, logistics, manufacturing and leisure, Daelim Group
is led by Daelim Industrial, a global EPC contractor and petrochemicals company.
GR
OU
P–W
IDE S
YN
ERG
IES
Since its foundation in 1939, Daelim Group has created great synergies with 13 affiliatesin 7 different fields, based on competitiveness and core capabilities of Construction and Petrochemical units accumulated throughout its 79 years of history.
CREATING VALUES TOWARDSGLOBAL LEAD DEVELOPER
Top-class Petrochemical Corporation. Production of HDPE, Polybutene & BOPP Film. No. 1 in Polybutene market share in the world.
Daelim Industrial (Petrochemical Unit)Yeochun NCCPolyMirae
Specialized petrochemical marketing. Global Transportation & specialized manufacturer for steel frame structure.
Daelim Corportation (Trade Division)Daelim C&SDaelim MotorDaelim Motorcycle
Offering total solution in system integration (SI), system management (SM) and network consulting.
Daelim Corporation(IT Convergence Division)
Two art museums specializing in photography, design and fashion. Daelim University College for fostering professional experts.
Daelim MuseumDaelim Educational Foundation
The largest hotel on Jeju Island. Maison Glad Jeju, Ora Country Club & Glad Yeouido, Glad Live Gangnam,Glad Coex Center, Glad Mapo.
Ora Resort
Manufacturing & Trading
Education & Culture
Leisure
IT
Petrochemical
Developing, investing and operating power projects to provide energy to people around the world.
Daelim Energy
Energy
Daelim Industrial (E&C Unit)Samho International Korea Development
Leading the Korean construction industry by successfully executingcivil engineering, housing & building and plant.
Engineering & Construction
Sang Shin Park
Senior Executive Vice President
Message from the CEO
The global economy of year 2017 was full of uncertainties studded with the hike in the US interest rate, trade
friction and diplomatic disputes amongst major trading partners, and strained inter-Korean relations. In the
domestic market, the construction industry has encountered difficulties as China’s retaliatory action concerning
the domestic deployment of Terminal High Altitude Area Defense (THAAD) and the reinforcement of the Korean
Government's real estate regulations have shrunk domestic demand and real estate investment sentiment has
dropped sharply.
In this challenging environment, the Housing & Building Business Division have focused on profit-oriented
orders selectively, and sales and profits have improved significantly as the major projects progressed in earnest.
On the other hand, though new orders for Plant Business Division and Civil Business Division were sluggish,
we have concentrated on innovation activities to resolve current business issues and improve profitability. The
Petrochemical Unit has achieved sound results despite rising oil prices through cost innovation activities and
focused on finding new business opportunities.
In 2018, we anticipate the business environment to be more difficult than last year due to the continuous rise in
interest rates, the spread of global trade disputes and the strengthening of real estate regulations by the Korean
Government.
However, we will surely accomplish the management goal of this year and establish a foundation for sustainable
growth. Continuing from the previous year, we will push forward steadfastly the five major management tasks:
managing Zero Loss Risks, developing the best human resources, securing absolute competitiveness, pursuing
cash-flow concentrated management, and reforming awareness. In particular, we will concentrate not only on the
slogan but on the practical implementation of the five tasks.
In addition, Daelim Industrial will surely continue to pursue the relation of coexistence with our suppliers. We will
keep in mind that our business will only be successful if our suppliers do not suffer losses or fall into difficulties.
We will respect each suppliers as partners in our practices, listen to their ideas, and practice mutual coexistence
and shared growth.
This year, our employees will once again be faithful to the basics and be leaders in fundamental innovation,
transforming this company into one that will never be in the red.
Thank you.
Dear Respected Stakeholders of Daelim Industrial,
On behalf of all employees, I would like to convey our heartfelt gratitude and sincere appreciation to all of you
for having shown unwavering support for Daelim Industrial last year.
Business Highlights
Financial Highlights
New Contracts 7,024,627 5,293,586 7,526,185 5,671,548
Order Backlogs 23,020,252 25,807,478 24,663,898 27,650,132
Net Debt 1,141,245 1,167,220 1,222,730 1,250,559
Debt to Equity Ratio 135.4% 140.8% 135.4% 140.8%
Exchange Rate of USD / KRW 1,071.40 1,071.40
* K-IFRS Consolidated Basis
Classification
2017
2016USD in thousands
2017
2016KRW in millions
For the Year
Sales 11,513,474 9,197,097 12,335,536 9,853,770
Operating Profit 509,519 391,439 545,899 419,388
Net Income 474,145 273,656 507,999 293,195
Owners of the Parent Company 457,806 247,622 490,493 265,303
Non-Controlling Interests 16,339 26,034 17,506 27,892
At Year-End
Total Assets 12,509,291 11,565,717 13,402,455 12,391,509
Current Assets 6,279,349 6,063,042 6,727,694 6,495,943
Non Current Assets 6,229,942 5,502,675 6,674,761 5,895,566
Total Liabilities 7,194,464 6,763,240 7,708,149 7,246,135
Current Liabilities 4,576,442 4,468,403 4,903,200 4,787,447
Non Current Liabilities 2,618,022 2,294,837 2,804,949 2,458,688
Total Shareholder's Equity 5,314,827 4,802,477 5,694,306 5,145,374
Performance Overview
New Orders
$ 7,024,627 (₩ 7,526,185)
2017
Net Debt Debt to equity ratio
$ 1,141,245(₩ 1,222,730)
2017
USD in thousands (KRW in millions) USD in thousands (KRW in millions)
Operating ProfitSales
30.17 %Increased
$ 391,439(₩ 419,388)
$ 509,519(₩ 545,899)
2016 2017
25.19 %Increased
$ 9,197,097(₩ 9,853,770)
$ 11,513,474(₩ 12,335,536)
2016 2017
135.4 %
USD in thousands (KRW in millions)
$ 5,293,586 (₩ 5,671,548)
2016
USD in thousands (KRW in millions)
$ 1,167,220(₩ 1,250,559)
2016 140.8 %
04 05
Market Review
Outlook for Sales
New Orders
Outlook forNew Orders
Business Streams
Daelim Group continually pursues to be a global developer that provides a total solution of project planning and investment, con-
struction and O&M in petrochemicals, power generation, civil engineering, rental housing and hotels, achieving a great synergy
with affiliates based on competitiveness and core capablilities of Construction and Petrochemial Units accumulated throughout
its history.
Operational Efficiency
Group-WideSynergies
Daelim establishes the best integrated
solutions within the budget, such as
guaranteeing the highest quality,
observing the construction schedule,
and securing the safety.
Project Identification & Planning
Daelim offers the operation &
maintenance service of the
world’s best level based on our
accumulated O&M experiences
in various areas such as power
plant, petrochemical plant, etc.
Operation & Maintenance
Daelim offers professional
services in petrochemical
marketing, logistics & shipping
and has outstanding material
procurement capability.
Trading
p.08
Business Overview
Research & Development
Safety & Health Management
Environmental Management
Corporate Governance
Ethical Management
Risk Management
Social Contribution
p.45
p.48
p.50
p.52
p.54
p.56
p.58
TOWARDS TOTAL SERVICE PROVIDER
CorporateBusiness Model
Investment & Financing
Daelim presents customized
financial structure and
conditions through the cost
minimization and profit
maximization by conducting
a strict review.
Daelim provides optimized
design and engineering
solutions, efficient
procurement process,
and best quality construction.
Design & EPC
· NCC and other
petrochemical plants
· Specialty product
· Technology licensing
Petrochemicals
· Coal-fired
· Combined cycle
· LNG
· Land/offshore wind
· Hydro-electric
Power Generation
· Dams
· Bridges
· Ports
· Railways
Civil & Infra
· Mines & minefields
· Resources trading
· Resources transportation
Resources Development
· Hotels
· Rental houses
Hotel & Others
06 07
Business Overview
Looking at the construction market in 2018, the slowdown in
the domestic housing market is expected to accelerate due to
interest rates rise on household loans with the government's
continuous real estate regulations.
The orders in overseas markets are increasing due to the
rebound of oil prices. However, it is necessary to focus on
profit-oriented orders selectively because low-priced bidding
competition is likely to reoccur. In the petrochemical market,
burden on material price is likely to increase due to the oil
prices rise. However, it is predicted that we will maintain a
solid margins as last year, as the market is in good demand.
Market Review
The total amount of new orders received in 2017 is USD 7 billion
including achievements at overseas branches while the order
backlog is USD 23 billion. The Housing & Building Business
Division achieved USD 4.3 billion by winning orders for
profitable housing projects selectively, despite uncertainties
from strengthening Government real estate regulations. The
Civil Business Division recorded USD 1 billion by winning
orders including the private bridge project in Turkey. The Plant
Business Division recorded orders of USD 1.7 billion in spite of
the difficult overseas business.
New Orders
Daelim Industrial will make the best effort for its 2018 sales
target of USD 8.1 billion; the amount has been determined on
the assumption that efforts to secure the profitability of the
Housing & Building Business Division, and the solid records
maintaining by Petrochemical Unit and affiliates. Looking by
our units, the Engineering & Construction Unit, considering
the completions of major plant sites are approaching, is
targeting USD 7.1 billion, a 24% decrease from the previous
year. The Petrochemical Unit aims at USD 1 billion, similar to
the previous year.
Outlook for Sales
We have set the target for the new orders in 2018 to USD 6.5
billion pledging to overcome the difficult conditions with
prudence. Housing & Building Business Division has set a
target of USD 4.7 billion for orders by expanding participation
in public-private joint development projects and responding
to market changes preemptively. The Civil Business Division
has set a target of USD 0.9 billion for orders, focusing on areas
where it has competitiveness such as bridge, port and dam.
Plant Business Division has set a target of USD 0.9 billion for
orders by striving to win orders in countries and processes
where we have strong strength and profitability considering
the relationship with domestic and overseas clients and the
competitive composition.
Outlook for New Orders
Sales in Daelim New Orders in Daelim
(₩ 7,526,185)
Total New Orders in 2017
$ 7,024,627
USD in thousands (KRW in millions)
Since its foundation in 1939, Daelim Industrial has been carrying out over 600 projects in 36 countries around the world for the
past 79 years and it is the only construction company in Korea that has maintained the top 10 Construction Capability Evaluation
Criteria for the past 55 years.
(₩ 12,335,536)
Total Sales in 2017
$ 11,513,474
USD in thousands (KRW in millions) * Others: Subsidiaries
(Daelim C&S, Daelim Motor,
Ora Resort, and etc.)
Engineering &
Construction Unit
87.0 %
Petrochemical
Unit 9.4 %
Others* 3.6 %
$ 10,013,806(₩ 10,728,792)
$ 1,084,522 (₩ 1,161,957)
$ 415,146 (₩ 444,787)
$ 1,719,123 (₩ 1,841,868)
$ 1,008,746 (₩ 1,080,771)
Plant Business
Division
24.5 %
Housing & Building
Business Division
61.2 %
$ 4,296,758 (₩ 4,603,546)
Civil Business
Division 14.3 %
08 09
Business at a Glance
Plant Business Division
Based on its top-notch technology, The Plant Business Di-
vision provides total service in various fields such as oil &
gas, petroleum refinery, petrochemical, and power plant in-
cluding not only engineering, procurement and construction
but also basic design, commissioning and O&M. Since our
expansion to the overseas plant market in 1973 as the first
among domestic construction companies, we have been suc-
cessfully executing more than 600 projects in the Middle East,
Southeast Asia, Africa and China.
· More than 600 projects completed or in progress in 30 countries
· Outstanding design competency accumulated over 40 years
(founded Daelim Engineering in 1974)
· Total service including Front End Engineering Design (FEED),
Engineering Procurement Construction (EPC), and Operation
and Maintenance (O&M)
· O&M competency acquired by operating petrochemical
plants (accumulated know-hows for more than 30 years)
Civil Business Division
The Civil Business Division has domestic top-level track re-
cords in various fields including bridge, dam, port, railway,
road, and water resource. In particular, we have secured
world-class technology capability to build suspension bridges
and cable-stayed bridges by our own. With our technology ca-
pability, we have implemented various overseas projects and
have advanced to be a global lead developer by providing a
total solution for project planning, financing, construction and
O&M.
· Achievement of self-reliant technology for suspension bridge
first in Korea and sixth in the world
· Winner of the Turkey Canakkale bridge project order, the
world’s longest suspension bridge
· No.1 performance of marine bridge in Korea
· Top-level of performance in all types of domestic civil works
Housing & Building Business Division
The Housing & Building Division has secured advanced tech-
nology and accumulated various experiences and data in the
housing and general building fields. Since the introduction
of the first apartment brand in Korea, Daelim Industrial has
accomplished the apartment sales of 160,000 households.
Moreover, we are leading diverse fields covering office build-
ing, hotel as well as medical, education, sports and logistics
facilities.
· Korea’s first apartment brand, e-PyunhanSaesang (launched in 2000)
· No. 1 construction record in hotel industry
· Korea’s largest-scale complex building and exhibition
construction performance
· Top-notch capability in technology proposal type projects in industry
· Cost competitiveness secured with specialized products
· Supplier of first New Stay, the first rental houses in Korea
· Largest apartment sales in Korea (e-PyunhanSaesang Hansup
City; 6,725 households)
Petrochemical Unit
The Petrochemical Unit has differentiated itself with its highly
competitive technology and production capacity in polyeth-
ylene, polybutene, and film sectors. It has been clearly demon-
strated by meaningful achievements: a superb metallocene
catalyst technology of the PE Business, the biggest market
share in the global PB market, the largest production capac-
ity of BOPP film in Korea. The Petrochemical Unit will solidify
its foothold in the market as a leading company based on the
existing competency, constantly developing new technology,
and enlarging our domination in the market.
· World’s largest PB production capacity
· Commercialization of Polyethylene first in Korea, and innova-
tive technology (World’s 3rd to commercialize HRPB (2009)
· Asia’s 4th largest NCC (Naphtha cracking center) (Joint Venture)
· Top-notch competencies in O&M (Maintains 95% or more of
annual NCC operation rate)
10
2,323,566
20.2 %
Financial Performances
Sales USD in thousands
Portion of Sales in Daelim
6,397,688
55.6 %Portion of Sales in Daelim
1,084,5221,292,552Portion of Sales in Daelim
11.2 % 9.4 %Portion of Sales in Daelim
Financial Performances
Sales USD in thousands
Financial Performances
Sales USD in thousands
Financial Performances
Sales USD in thousands
10 11
Plant Business
Core Competence
Service Portfolio
EnergyRefinery / Gas Petrochemical Industrial Facilities Environment
Daelim Industrial, a globally recognized business entity, has in our 45 years of business accumulated experiences and world-class
technologies which we have applied advantageously to the various fields we have been involved in. In the field of oil and gas,
refinery, petrochemical, power generation and other related fields, we have become a truly global contractor with 600 projects in
36 countries worldwide providing total service including FEED, EPC and O&M since entering the overseas plant market for the first
time as a Korean construction company in 1973. With more than 30 years of experience in the operation of our Petrochemical Unit
we have developed quality management capabilities and differentiated expertise in both petrochemical and refinery industries.
Currently we are diversifying overseas business into the energy plant market to discover and venture into new growth engines.
Isocyanates, Saudi Arabia
600
Kayan PC, Saudi Arabia (2008-2011)Completed the world's largest PC plant
SABUCO Butanol & Syngas Project, Saudi Arabia (2013-2015)Completed the world's largest butanol plant
Sohar Refinery Improvement Project, Oman (2013-2017)Completed the Oman's largest refinery expansion project
www.daelim.co.kr/eng/acpt/plantsList.do
Business Overview
45 years
45 years of experience in plant design competence
TotalTotal service including
FEED, EPC, Q&M
30O&M capability secured through plant operation of Petrochemical Unit
for over 30 years
More than 600 projects in 36 countries all over the world
12 13
14
Figure
Portion of Sales in DaelimUSD 2.3 billion
New Order in Plant Works USD in thousands (KRW in millions)
Portion of New Order in DaelimUSD 7 billion
Sales in Plant Works USD in thousands (KRW in millions)
$ 2,234,261(₩ 2,393,787)
2016
$ 2,323,566 (₩ 2,489,469)
2017
$ 9,483(₩ 10,160)
2016
20.2 %Market Environment
Since 2014, three major factors have contributed towards the
rise in oil prices to which is expected to rise to USD 60/bbl
in 2017. These are the expectations that OPEC would extend
production cuts, the increase in oil demand from China, and
political unrest in Saudi Arabia and geopolitical risk in the
Middle East. Though stable growth of crude oil demand due
to the global economic recovery and production cuts by oil-
producing countries are positive factors for rising oil prices,
orders for new projects are expected to remain sluggish due
to deficit financing by these same oil producing countries.
In 2018, instability within Iran’s domestic and international
markets has made it difficult for new projects to be placed
and delays are expected in securing investment funds. These
factors have driven us to diversify our business into potential
markets based on natural resources in the Russian Republic
and Oman.
Performance Review 2017
In 2017, we focused on securing profitability by avoiding
bidding for expansion. In addition, in order to prevent further
loss of projects under execution, we focused on improving
the structure by focusing on each project. Sales were USD
1.3 billion in Korea and USD 1 billion in overseas markets,
total of USD 2.3 billion.
Plan and Outlook for 2018
The Plant Business Division is striving to create a company
that is ‘never-in-the-red’ by propelling profit-oriented mana-
gement thoroughly rather than on external scale such as
orders and sales.
In order to overcome and identify the causation of the plant
division's loss incurred for the past few years, we are focu-
sing on identifying innovation tasks and internalizing them
to actual work. In particular, we will continue to improve
the procedures and systems for winning profitable projects.
More attention will also be given to high-value-added dev-
eloper businesses and private contracts by avoiding com-
petitive composition. In addition, expansion opportunities
for project orders will be executed by establishing a close
network with licensors and clients by strengthening tech-
nology sales through preemptive sales activities.
New Order
- LCC H-NC3 PKG 1 (NCC Revamping), Korea
- YNCC # 2 Green-field Development Investment Project,
Korea (2017-2019)
- Replacement of steam generators
in Hanbit Nuclear Power Plant 5 & 6, Korea (2017-2020)
- YNCC SM Expansion, Korea
24.5 %
Market Leadership
Fast Track, Malaysia
$ 1,719,123 (₩ 1,841,868)
2017
1514
Featured ProjectOmsk Refinery Deep Conversion Complex Project, Russia
Daelim Industrial’s first refinery project in Russia
Russia's largest oil refinery with a capacity of about 400,000 BPSD
Project worth of EUR 69 million (EPs)
Relevant Projects
Project Overview
Daelim Industrial signed a contract on April 29, 2016 to provide engineering and procurement
services for upgrading facilities at Omsk Refinery Deep Conversion Complex. This Refinery is
Russia's largest oil refinery complex with capacities about 400,000 BPSD operated by Gazprom
Neft, Russia's main state-owned client. The EPC value is worth about EUR 600 Million. The
Omsk refinery plant upgrading works is a project to produce a more environmentally and highly
efficient fuel for the Euro Standard (Euro-5) through the modernization of the old oil refinery
built in the past Soviet Union, including facilities such as HCU, HPU and SRU. Daelim Industrial
has been successful in the project execution based on its previous experiences in world-ever
capacity of hydrocrackers such as SRIP in Oman, Yanbu PKG4 in Saudi Arabia. This project is
even more meaningful as we have not only ventured into our first business in Russia but also
pioneered into an unknown market.
Plan for Value Creation
The Russian market has characteristics that allows only those companies that have proven
mutual trust and achievement with major state-owned clients to participate in the project. We
have successfully entered this market given our proven years of experience of many large-scale
refineries in the Middle East and Asia. We aim to gradually establish our position in Russia,
a market that has the largest gas resources in the world and is highly likely to develop in the
future.
Oil
Sohar Refinery Improvement Project, Oman (2013-2017)Oman's largest refinery expansion project
Yanbu Refinery PKG 3,4, Saudi Arabia (2010-2014) Completion of the world's largest gasoline production
Jubail Refinery PKG 2B, Saudi Arabia (2009-2013)First EPC project ordered and executed by Saudi Aramco
Omsk Refinery Deep Conversion Complex, Russia
1 st
69 EUR in millions
400,000 BPSD
1716
S-OIL Residue Upgrading Complex Project, Korea
Relevant Projects
Project Overview
Daelim Industrial has signed a contract for S-OIL Residue Upgrading Complex Project, which
is the largest chemical plant in Korean history for a single project, with a total value of about
USD 3.3 billion in July 2015. The site is located in Onsan, about 20 km away from Ulsan and we
accomplished M/C in April 2018 with an agreement which includes the design and business
management with a Fixed Lump Sum contract, as well as material purchase and construction
with a Cost Plus Fee contract. This Project covers upgrading facilities consisting of RFCC
(76,000 BPSD) and RHDS (28,490 BPSD), as well as ODC which produces downstream products
of Polypropylene (405 KTA) and Polyoxide (300 KTA). RUC is a plant that produces various
petroleum and petrochemical products. This project is an important undertaking for S-OIL,
which plans to expand its product groups by diversifying its downstream products.
Plan for Value Creation
A modular construction method has been introduced in the S-OIL project to overcome the
narrow site conditions and a short construction period. The installed module is the largest
amongst the plant modules in Korea with 36 m in length, 16 m in width, and 46 m in height
and weighs about 3,400 ton. The height is equivalent to a 16-floor apartment building, and the
weight is equivalent to the sum of 2,300 medium-sized cars. We have successfully completed
the S-OIL project and secured technology and cost competitiveness in the construction field of
the modular construction method, and will expand and apply it to future domestic and overseas
plant projects.
76,000 barrels
3.3 USD in billions
3,400 ton
76,000 barrels per day increased following the construction of RFCC, an advanced facility
Expansion of the refinery worth USD 3.3 billion
Domestic largest plant module weight 3,400 ton
Featured Project
Oil
ton
Sohar Refinery Improvement Project, Oman (2013-2017) Completion of the largest refinery expansion project in Oman
Refinery Master Plan - II Project, Philippines (2011-2014) Construction of the largest oil refinery in the Philippines (provided process integra-tion service of Daelim Industrial & Axens)
Yanbu Export Refinery Project Package No. 3 & 4, Saudi Arabia (2011-2014) Completion of the world's largest gasoline production facility
S-OIL Residue Upgrading Complex Project, Korea
1918
Civil Business
Service Portfolio
Karun Dam Project, Iran (1994-2001)Completed the largest dam in Iran (H=177m x L=498m x W=750m)
Yi sun-sin Bridge, Korea (2007-2013) Completed the longest span bridge (L=1,545m) in Korea (100% self-reliance of suspension bridge technology independence achieved first in Korea)
TUAS Terminal Phase1, Singapore (2015-present) Currently constructing one of the largest port facility in the world (caissons of 15,000 ton for 221 ships)
No. 1
221ships
2,023 m
Total
Daelim Industrial has the highest level of performance and know-how in various fields of civil construction such as roads, bridges, dams, river works, ports,
railways and underground subway systems. Based on such expertise we stand strong as the leading contractor in the construction of social infrastructures.
Having completed the Yi Sun-sin Bridge using our very own technology, we have brought up Korea to become the sixth fully self-reliant suspension-bridge
technology provider in the world. This high-tech technology constitutes the use of cutting-edge civil engineering method and high-level structural mechanics,
and countries that are able to administer all relevant areas from design to construction and maintenance by themselves, limited to the United States, China,
Japan, the United Kingdom and Denmark. We are the No. 1 contractor in Korea in terms of performance of specialized maritime bridges and are currently
building the world's longest suspension bridge in Turkey. In addition, as a global developer, we have provided total solution covering investment, planning,
design, construction and O&M.
Railroads /Subways
Roads / Bridges Dams / Riverworks /
Ports
Environment
6 th
Core Competence
Gogunsan Bridge, Korea
www.daelim.co.kr/eng/acpt/civilList.do
Business Overview
The world’s longest suspension bridge (length of 2,023m)
Total solution provider covering business development, planning, design, construction,
and O&M
Achievement of self-reliant technology for suspension
bridge first in Korea and sixth in the world
One of the largest port facility in the world (caisson of 15,000 ton for
221 ships)
No. 1 performance of maritime special bridges in Korea
20 21
22
$ 1,363,683(₩ 1,461,050)
$ 1,292,552 (₩ 1,384,840)
2016
2017
$ 200,149(₩ 214,440)
$ 1,008,746 (₩ 1,080,771)
2017
2016
Figure
Portion of Sales in Daelim USD 1.3 billion
Portion of New Order in Daelim USD 1.6 billion
11.2 %
14.3 %
Market Environment
In 2018, the number of domestic civil market orders to be
placed is expected to decline year-on-year due to long-term
low growth trend. Difficulties are expected in securing profit-
ability through new projects owing to intensified competition.
Overseas, structural low growth trend is expected to continue,
but relatively high growth is anticipated in the infra-structure
compared to other sectors. Statistics shows that largescale
Infra-structure planning and ODA/MDB investments will be
active in the Southeast and South Asia region, but orders in
the Middle East region will be decreased due to the general
decline in financial stability in the region. The Civil Business
Division will continue to gain competitive advantage in the
domestic market while doing its best to manage profitability
through efficient execution and continuous cost innovation
activities through our technical expertise perfected in the
Korean market. In terms of overseas civil business, we will
continue to expand our business opportunities and hedge risk
through partnerships with global leading companies.
Performance Review 2017
In 2017, despite the adverse market conditions we were rank-
ed first among domestic contractors in terms of securing
new contracts. Such success has landed us a total value of
USD 1 billion for new domestic projects in 2017, which was
made possible through our active participation in all forms of
projects such as technical proposal type bidding, competitive
EPC bidding and Social Overhead Capital (SOC) projects
among others. The Civil Business Division had a record
sales of USD 1.3 billion successfully completing 17 projects
including Dong Hongcheon-Yangyang Expressway Section
10, Deoksong-Naegak Expressway, Pohang New Port 1 pier
reconstruction, Southwest sewage heat heating BOT, Geum-
cheon-Cheongyang main pipe building 1.
Plan and Outlook for 2018
In 2018, we will focus towards enhancing our on-site const-
ruction capacity through strict risk management in order to
prevent the occurrence of additional costs during the execu-
tion phase, while continuing to strengthen inspections for
risks in cost and schedule impacts at our key sites.
Furthermore, the Civil Business Division plans to achieve our
target of USD 0.9 billion by selecting projects based on our
competitive advantages, and securing contracts that can
ensure the profitability of Daelim Industrial while satisfying
our clients’ requirements.
Plan and Outlook for 2018
Internationally, we plan to expand business opportunities
and hedge risk through partnership with global leading com-
panies. Domestically, we will secure operational business
through strengthening strategic partnerships with power
generation public enterprises, while also striving to pursue
new prominent and profitable business opportunities through
technical proposal type bidding.
Market Leadership
New Order in Civil Works USD in thousands (KRW in millions)
Sales in Civil Works USD in thousands (KRW in millions)
Sungai Brunei Bridge, Brunei
New Order
- Removal of sand island at Busan New Port (2017-2020)
- Saemangeum South-North 2-axes Road Construction Phase 1
Section 3 (2017-2022)
- Anseong-Seongnam Expressway line No. 29 Construction
Section 9 (2017-2022)
- Gangjin-Gwangju Expressway line No. 25 Construction
Section 7 (2017-2024)
- Paju-Yangju-Pocheon Expressway line No. 400 Construction
Section 1 (2017-2024)
2322
Canakkale BridgeProject, Turkey
Featured Project 2,023 m
The total project cost is USD 3 billion
The longest suspension bridgein the world with 2,023m of span length
3 USD in billions
Relevant Projects
Project Overview
Daelim Industrial was awarded by the Turkish Government to develop, construct, and operate
the Canakkale Bridge, the longest suspension bridge in the World, in March 2017. Canakkale
Bridge project is the first bridge project across the Dardanelles Strait connecting Europe and
Asia. It is indispensable for the revitalization of the southwestern region of Turkey and boosting
its economic development. It is a long awaited project of the Turkish Government and the current
president plans to commence the operation of the bridge by the 2023 for the commemoration
of the 100th anniversary of the founding of the Republic. The bridge span length will be 2,023m,
the longest suspension bridge in the World. This global landmark project is floated as BOT
(Built-Operate-Transfer) scheme under the PPP (Public Private Partnership). Daelim Industrial
is a lead member to involve in the investment, construction, operations of the project with the
construction and operation duration of 16 years and 2 months. The total project cost is USD 3.0
billion. Once the project is completed, it will be recognized as the World's longest suspension
bridge.
Plan for Value Creation
In completing this project, Daelim Industrial will have attained performances in design, cons-
truction and operation of the world’s longest bridge, proving once again our ability to perform
internationally with our world-class technology. At the same time, with the differentiated
technology, we will consolidate a firm foothold to lead in the high-value added global long-span
bridge market. Additionally, we will advance as a global developer by diversifying businesses
into the overseas transportation investment development in traffic infrastructure based on our
experiences in domestic transportation infrastructures investment development.
Yi Sun-sin Bridge, Korea (2007-2013) The longest span (length of 1,545m) bridge in Korea (Korean suspension bridge of 100% self-reliant technology)
Gogunsan Bridge, Korea (2009-2016) The first one-tower asymmetric suspension bridge in Korea, the landmark tourist attraction
Sungai Brunei Bridge, Brunei (2013-2017) Brunei's symbolic first cable-stayed bridge, shortened the distance of 40 km to 712 m
New Millenium Bridge, Korea
2524
Tuas Terminal Phase 1 Project, Singapore
Relevant Projects
Project Overview
The Singapore Tuas Port Development Project is a mega-scale port construction project that
will build 66 berths on a site of 1,337 ha with an annual trade volume of 65 million TEU. The
project will be developed in 4 phases, and the 1st and 2nd phases are under construction. We
have won the 2nd phase contract, the Tuas Terminal Phase 1 Project (TTP1), in February 2015 as
a consortium with Belgian Dredging International. The project which will build 20 berths (scale
of 2,000 TEU), was ordered by the Maritime and Port Authority (MPA) of Singapore with a total
project cost of SGD 2.4 billion. We will construct reclamation (300 ha), dredging, gravity type
wall (8.6km) by 2020.
Plan for Value Creation
The core process of caisson manufacturing is to continuously place caisson wall of 28 m height
by applying the slipform method. The slipform can be installed at 2.5 cm at one time, and about
22 cm per hour using a total of 36 hydraulic jacks (up to 42 ton of lifting capacity). This project is
a mega project of the Government of Singapore and has received a lot of attention both inside
and outside the country. Thus, it is a big challenge and opportunity for Daelim Industrial which
has been pushing forward its overseas construction. Through the successful implementation
of this project, we hope that it will become a major stepping stone for us to introduce our
maritime port construction technology widely and further expand our project in Singapore and
other overseas projects.
Featured Project
222 caissons
8.6 km
15,000 ton
No. of Caissons
8.6 km of Quay wall, the world's longest caisson quay wall structure
Caisson weight (15,000 ton)ton
Saemanguem, Korea (1992-2010) Breakwater (H=15.2m x L=2,693m x W=198m) / sluice gate (L=300m)
Jeju Naval Base Section 2, Korea (2010-2016)Mooring quay (L=2,400m) / Breakwater (L=652m)
Busan New Port West Container 2-5 Phase, Korea (2012-present) Caissons (4,880 ton for 27 ships) / quay wall (L=177m)
Singapore TTP1, Singapore
26 27
Service Portfolio
Daelim Industrial has secured advanced technology and accumulated various experiences and data in the housing and general
building fields. With dedication and enthusiasm, we have built major representative landmarks of Korea such as The National
Assembly, Sejong Center for the Performing Arts and Seoul Court Complex. In addition, we have opened a new era of premium
apartment brand for the first time in Korea with the launching of e-PyunhanSesang Apartments supplying a total of 160,000
household units. Furthermore, we are the leader in the corporate rental housing business starting with the supply of the first
‘New-Stay’ in Korea and have advanced to be a developer by creating group synergies through the launching of our new hotel
brand GLAD and O&M in D-Tower.
Commercial / Office
Housing Redevelopment / Reconstruction
Hotel / Resort Development Business
Business Overview
Housing & Building Business
1st
Core Competence
C-house
6,725 households
AMC
ACRO RIVER PARK, Korea
KAU Hospital, Saudi Arabia (1985-1992) Middle East’s largest general hospital
e-PyunhanSesang Hansup City, Yongin, Korea (2015-2018)Korea’s largest-scale housing sales project
e-Pyeonhan Sesang Dohwa, Korea (2015-2018) Completed the first enterprise type rental housing project (New Stay) in Korea
www.daelim.co.kr/eng/acpt/constructionList.do
Launched year of the first brand apartment in Korea, e-PyunhanSesang
Cost competitiveness secured with specialized products
Supplier of Korea's Largest Single-Unit Sale of 6,725 Households,
e-PyunhanSesang Hansup City
Daelim AMC, the first asset management company among
domestic construction companies for a corporate rental housing business
28 29
30
$ 4,138,625(₩ 4,434,123)
$ 6,397,688 (₩ 6,854,483)
2016
2017
$ 5,083,954(₩ 5,446,948)
$ 4,296,758 (₩ 4,603,546)
2017
2016
Figure
Portion of Sales in DaelimUSD 6.4 billion
Portion of New Order in DaelimUSD 4.3 billion
Market Leadership55.6 %
61.2 %
Market Environment
In 2017, domestic and overseas uncertainties expanded
into the real estate market due to increases in the US
interest rate and economic changes in Korea such as the
enhancement of household lending regulations and the rise
in loan interest rates. The number of apartment households
on sale was 340,000, a decrease of 140,000 households com-
pared to 2016. The orders for the private construction and
public construction market declined slightly compared
to the previous year. Due to the above market conditions,
the Housing & Building Business Division received lesser
orders year-on-year for all sectors including private housing,
redevelopment, reconstruction, public construction and
private construction in 2017.
New Order
- Jeju Shinhwa History Park Hotel 2-1 (2017)
- Amorepacific MC remodeling (2017-2018)
- Pyeongchang Olympic Temporary Athlete Village (2017-2018)
- Seogwipo Villa extension (2017-2018)
- Goyang Logistics Park (2017-2019)
- Suwon Deutsche Auto World New Construction (2017-2019)
- Busan Mandeok5 2BL (2017-2020)
- Uijeongbu Chu-dong Park 1 (2017-2020)
- Daejeon Yongun Housing Corporation (2017-2020)
- Guri Suta (2017-2020)
- Namdaemunno 5-ga Office (2017-2020)
- Daegu Cheongsu housing reconstruction (2017-2020)
- Happyhouse in front of Busan City Hall (2017-2020)
- Re-development of Uam 2-block housing (2018-2021)
- Yangju Okjeong 4th A-19 (1) (2018-2020)
- Donghae Danbong (2018-2020)
- Goyang Samsong efficiency apartment 4th (2018-2020)
- Uam 2nd district residential development New Stay (2019-2020)
- Samsung Hongsil Redevelopment (2019-2021)
- Busan Beomil 3rd District (2017-2022)
- Seocho Shindonga reconstruction (2018-2022)
- Incheon Woojin reconstruction (2020-2022)
- Gimpo North Side 5 Urban Environmental
Improvement Project (2020-2023)
Performance Review 2017
In 2017, the Housing & Building Business Division received
new orders worth USD 4.3 billion, which decreased signi-
ficantly due to the difficult market environment. However,
sales have reached USD 6.4 billion, an increase of USD 2.4
billion year-on-year, centering on private housing, redeve-
lopment, reconstruction and public construction.
Plan and Outlook for 2018
In 2018, the real estate market is expected to see an increase
in domestic and foreign uncertainties due to oversupply,
rise in interest rate, and enhancement of Government reg-
ulations while the volume of moving in is expected to be
the highest in the last 18 years. Therefore, the Housing &
Building Business Division will ensure stable occupancy
management by ensuring the quality of deadlines, resolving
defects promptly, and implementing moving-in marketing. In
addition, we will keep building our sustainable growth base
by strengthening competencies, securing competitiveness
in execution, and improving financial structure through
resolution of businesses not yet started.
New Order in Housing & Building Works USD in thousands (KRW in millions)
Sales in Housing & Building Works USD in thousands (KRW in millions)
Hankook Tire Technodome, Korea
3130
ACROTOWER SQUARE Project, Korea
Featured Project 3 times
1,221 households Total of 1,221 households, a first class large scale
apartment complex
60cm floor sound insulation material which minimizes floor noise
(3 times compared to conventional material of 20 cm)
Relevant Projects
Project Overview
In August 2017, Daelim Industrial completed ACROTOWER SQUARE, a first class large scale
apartment complex with seven buildings, a maximum of 35 floors and 1,221 household units.
It has European-style sensuous street mall linked to a big neighborhood park and a square as
well as community facilities including cafes and sports facilities all connected by bridges. Our
premium brand ‘ACRO’, which brings out images of comfort and high-quality living, is now a
landmark of Yeongdeungpo New Town, fronting the Han River and the life zone of Yeouido, one
of Seoul's three major business districts. In addition, it has played a big role in preoccupying the
premium apartment market by adding a sense of openness with the high-rise lobby finished
with quality materials.
Plan for Value Creation
With the success of ACROTOWER SQUARE following ACRO RIVER PARK, 'ACRO' as a luxury
residential brand by Daelim Industrial has been recognized by the general customers coun-
trywide. Based on this achievement, we have presented ACRO RIVER HEIM and ACRO RIVER
VIEW in succession and finished the sale with a high competition rate. Based on the ACRO
brand, we will continue to solidify our strong position in the premium apartment market by
improving competitiveness including enhancement of business management capabilities.
ACRO RIVER PARK, Korea (2013-2016)First-class apartment near the Han River in Korea
ACRO RIVER VIEW, Korea (2016-2018)Premium apartment with the highest rate of competition
Dokok Acrovill, Korea (1996-1999)First premium residential & commercial complex in Korea
ACROTOWER SQUARE, Korea
3332
Jeju Shinhwa History Park Hotel New Construction Project, Korea
Relevant Projects
Project Overview
Jeju Shinhwa History Park Project is a construction business to create 'Resort World Jeju', a
world-class complex resort with a total area of 3.98 million m2 including hotel, theme park,
water park, and condo in Seogwangri, Andeok-myeon, Seogwipo-si. It has been built with
a development cost of about USD 1.8 billion, building premium leisure and entertainment
facilities for domestic and foreign visitors. The Daelim Industrial Consortium has constructed
complex resort a total area of 195,273m² with 2 floors underground and 5 floors above ground
operating hotel, casino, MICE and duty free shops in the A district of the whole project since
January 15, 2016 and has hold the grand opening on August 22, 2018. The Jeju City Xinhua
Historical Park Hotel, operated by Marriott Hotel and Landing Jeju Development, is expected
to provide comfortable resting space and world-class entertainment facilities for domestic and
foreign tourists. Through this project, we have made a positive contribution to the revitalization
of the MICE industry and the development of Jeju Island tourism industry.
Plan for Value Creation
With the experience of the project, we have expanded the capacity of construction of large
hotels and large complexes. Daelim Industrial plans to position itself as a strong player in the
construction market such as luxury hotels and multi-resort hotels based on the experience of
numerous construction and hotel operations in hotels & resorts.
1.8 USD in billions
Featured Project
Project expenses totaling USD 1.8 billion
Four Seasons Hotel, Korea (2012-2015)A first-class hotel located in Gwanghwamun, the heart of Seoul
Conrad Seoul, Korea (2008-2012)Korea’s first Conrad hotel, the top brand of Hilton Hotels & Resorts
Grand Hyatt Incheon, Korea (2012-2014) Total of 1,024 guest rooms, certified as environment-friendly building (LEED Gold)
190,122 m2Total gross area of 190,122m2, Korea's largest complex resort
Jeju Shinhwa History Park Hotel, Korea
BIMEconomical and efficient construction through 3D BIM design
3534
Service Portfolio
Business Overview
Daelim Industrial has a leading position in the domestic petrochemical industry in terms of technology and production. We have
succeeded in the commercialization of metallocene polyethylene (mPE) based on our very own catalytic technology, developed
first in Korea. We developed a swing process that can produce general-purpose polybutene (conventional PB) and highly reactive
polybutene (HRPB) simultaneously, a first in Korea. In addition, we were recognized for our world-class technology capability
by becoming first amongst domestic petrochemical companies to succeed in selling technology in the US market. We also have
top-quality control capabilities based on our experience of operating petrochemical plants for more than 45 years. We continue to
strive to strengthen stability of business portfolios globally through active overseas investment.
Film BusinessPE (Polyethylene) Business
PB (Polybutene) Business
Petrochemical Business
Core Competence
PE1 Plant, Korea
PE (Polyethylene) BusinessEstablished a system to produce and sell 450,000 ton of PE per year
PB (Polybutene) BusinessTurned into the No. 1 PB producer in the world (capable for 185,000 tons per year)
Film BusinessGrown to be the No. 1 BOPP film maker in Korea
www.daelimchem.co.kr/eng/main.do
No. 4
45 years1st
Exported technology to the US for the first time as a domestic
petrochemical company
Securing Asian No. 4 NCC with annual ethylene output of 1.95
million tons (Joint Venture)
45 years of know-how in NCC-based petrochemical plant
operations
185 thousand
Polybutene production capacity of 185 thousand ton per year (Global No. 1 in the
open market)
36 37
38
$ 1,002,854(₩ 1,074,458)
$ 1,084,522 (₩ 1,161,957)
2016
2017
Figure
Portion of Sales in DaelimUSD 1.1 billion
Sales in Petrochemical Works USD in thousands (KRW in millions)
Market Environment
Thanks to the competitiveness of NCC (Naphtha Cracking
Center)-based products due to the low oil price, profitability
of the Petrochemical Unit has been improved in 2017.
In particular, increased demand caused by the global eco-
nomic recovery and delayed investment in large-scale ECC
expansion in the US have contributed to improving pro-
fitability along with tight supply and demand conditions.
Despite this condition, however, the conventional product
market has become more competitive as the self-sufficiency
rate in China rises and the supply of low-cost products
increases.
Performance Review 2017
The Petrochemical Unit has differentiated itself by con-
centrating its competency on manufacturing and sale of
specialized high quality & functional products. In 2017,
the Unit recorded a sale of USD 1.1 billion. Moreover, the
profitability improved significantly through market share
expansion, as it maintained the world’s No. 1 market share
in Polybutene and accomplished No. 1 market share in BOPP
domestic market. Although the competition in the general
petrochemical market has intensified in 2017, we focused
on sales expansion of highly profitable products based on
the thorough target market analysis and achieved a signi-
ficant performances through cost innovation activities in
manufacturing.
In 2018, the petrochemical industry is concerned about overall
decline of profitability due to raw material prices rising caused
by a decrease in raw material supply following the imple-
mentation of OPEC's decision to cut oil production and the
global economic recovery. Market competition becomes more
intense as the self-sufficiency of petrochemicals rises in China,
and the supply of low-cost conventional products shale-based
North America increases. Therefore, concentration in securing
cost competitiveness in the general-purpose bus-iness and
development and expansion of high-value added products are
necessary to maintain a sustained growth.
It is difficult to be optimistic about the market in 2018, con-
sidering oil price volatility and the contraction of the global
trade market due to the US protectionist measures. The
petrochemical division will strengthen its manufacturing
competitiveness through cost reductions and productivity
improvements in the existing businesses, and enhance pro-
duct competitiveness through high-value-added products
and sales expansion. In addition, we will actively respond to
the volatile raw material market by establishing a production
facility base with excellent raw material competitiveness in
low-cost regions and continue R&D and investment into the
specialty business based on accumulated assets. With these
strategies, the Petrochemical Unit will solidify its status as
the leading company in this high-value product market.
Plan and Outlook for 20189.4 %
Market Leadership
PB (Polybutene) Business USD in millions (KRW in billions)
Film Business USD in millions (KRW in billions)
Financial Performance by Services
PE (Polyethylene) Business USD in millions (KRW in billions)
$ 491(₩ 526)
2016 $ 579(₩ 620)
2017
$ 300(₩ 321)
2016 $ 344(₩ 369)
2017
$ 72(₩ 77)
2016 $ 95(₩ 102)
2017
PE2 Plant, Korea
3938
Petrochemical Joint Business Project, US
Featured Project
Joint venture with Thailand's largest state-owned petrochemical company
with nearly 40 years of experience
Total ethylene production (million) of US ECC (1.5 million ton) and
Yeocheon NCC (1.95 million ton)
Project Overview
In February 2018, Daelim Industrial entered into an investment agreement with PTT Global
Chemical (PTTGC), the largest petrochemical company in Thailand. Based on the agreement,
we will construct an ethylene cracking plant (ECC) which produces ethylene by cracking ethane
in Ohio, USA. Through this project, we will secure 1.5 million tons of ethylene and polyethylene
production facilities in the US, supported by an abundant domestic demand and cheap raw
material supply. It means we will be able to actively respond to changes in the external
environment such as fluctuations in oil prices by completing an optimized business portfolio
that simultaneously operates Yeochun NCC, the naphtha-based ethylene production facility
and ethane-based US ECC.
Plan for Value Creation
The location of the project in Ohio, USA, has logistical competitiveness because it is close to
the eastern part of the US market, which accounts for 70% of the US domestic polyethylene
market. In addition, it is advantageously positioned to procure raw materials as it is located
in the area of Marcellus and Utica Shale gas fields. Furthermore, this project will be a foothold
for us to take the lead in the petrochemical market by entering the North American market,
which has been practically impossible for Korean domestic petrochemical companies to enter
due to high entry barriers such as transportation costs.
Competitive Edge in PE Business
The PE Business is a representative area of Daelim Industrial’s Petrochemical Unit. Since
the adoption of Philips method in 1989 and Basell method in 1996, the PE Business
has established a system to produce and sell 450,000 tons of polyethylene per year by
continuously optimizing the operational efficiency, and has provided a range of products
to domestic and overseas manufacturers. In particular, with strong mechanical and
optical properties as well as low heat seal temperature, our mPE products were the first
to be commercialized in the industry and have been widely used for diverse purposes
including high-quality films. Also, HDPE products have been highly recognized for its
premium quality with the outstanding machinability and long term property in hollow
molding, such as large drums and pipe forming fields.JG summit NCC, Philippines
JV3.45 million ton
4140
Licensing90%+
The first export of manufacturing technology to the US among Korean petrochemical company.
Exporting more than 90% to global lubricant additive manufacturers
No. 1 Additional Polybutene Plant Project, Korea
Securing Polybutene production capacity of 185,000 ton per year (No. 1 in the world's open market)
Project Overview
Daelim Industrial Petrochemical Unit has invested a total of USD 69 billion in November, 2016,
and expanded the production capacity of highly reactive polybutene plant from 65,000 ton
to 100,000 ton. By completing this project, we have been able to produce polybutene with a
total production capacity of 185,000 ton including 85,000 ton of conventional general-purpose
polybutene and we have solidified the No. 1 production capacity in the world. In particular,
our technology and production capacity have been recognized through the independent
development of technologies that can produce general-purpose and highly reactive polybutene
in a single plant as well as the first export of polybutene manufacturing technology to the US
amongst domestic petrochemical company.
Plan for Value Creation
As global environmental regulations are strengthened, environment-friendly lubricant oil
additives and fuel detergent additive markets have expanded. The highly reactive polybutene
market is steadily increasing at an average annual rate of 4%, due to its characteristic that can
produce environment-friendly products with no chlorine content. Daelim Industrial's polybutene
products have been exported to more than 90% of global lubricant additive manufacturers
such as Lubrizol, Chevron and Infineum, all credited for their high quality. As a result of
this project, we are leading the market and have strengthened our position to be the global
No. 1 polybutene manufacturer.
Featured Project
Competitive Edge in PB Business
Daelim Polybutene was established in December 1993 with a capacity of producing 12,000
ton per year and after a series of expansions under the stabilized operation, it has turned
into the world’s largest PB producer capable of producing 185,000 ton per year. In particular,
we have succeeded in exporting our technology to the US market, a first among Korean
petrochemical companies. Thus, we have expanded the business area from production
to technology sales and have secured a leading position in the global polybutene market.
PB technology of Daelim Industrial has advantages of being able to provide customized
products successfully meeting customer needs by its swing process capable of producing
both conventional PB and HRPB in one factory while providing the highest quality products
based on our competency in the stable factory operation technology.
1
Daelim Industrial Petrochemical Unit, Korea
4342
44 45
http://www.daelim.co.kr/eng/rnd/center/Rnd01.do
SUSTAINABLEDAELIM
Daelim Industrial seeks to achieve superior competitiveness in technology by establishing the R&D Roadmap which corresponds to its
business strategies and by continuously investing in R&D. We strive to secure new growth engines through the technology commercializa-
tion and expansion to new markets with our future construction technology products.
Our Core Value
Research & Development
R&D Activity
Research and Development
We are constantly identifying new technical ideas in various
fields of construction such as architectural structure, mate-
rials, environment, facilities and civil works, special bridges,
environment, etc. We are continuously securing new techno-
logies through systematic research and development and im-
proving the technology through steady management. Daelim
Industrial will lead the construction sector by improving the
level of construction technology and engineering as well as
focusing on the fields of smart and convergence(IoT, ICT) for
the 4th industrial revolution.
R&D Vision
Global Technology Leader & Value Creator
Daelim Industrial leads the world’s construction technology by
developing future-oriented technology and creating new va-
lues through the technology commercialization.
Identifying construction technology, which meets
business division strategy and the needs at sites1
Commercializing developed technology and
increasing productivity through technology sales2
Securing absolute competitiveness through future-
oriented mid- to long-term technology development3
Research & Development
Safety & Health Management
Environmental Management
Corporate Governance
Ethical Management
Risk Management
Social Contribution
45
48
50
52
54
56
58
46 47
R&D Activity
Technical Support
Based on our unique safety and quality assurance processes,
we are striving to ensure safety and quality through periodic
site inspections preventing related problems in advance. For
the problems that have occurred, our experts simulate various
alternatives and provide optimized solutions according to site
characteristics to secure safety and quality, and to enhance
the value of construction products. In addition, we are provid-
ing integrated technology support solutions throughout the
entire lifecycle of the construction, from pre-construction to
defects support, reflecting increasing customer needs.
R&D Achievements
In 2017, we have focused on developing proprietary technolo-
gies that can secure technological and price competitiveness
as well as commercialize of the technologies. In addition, we
have conducted systematic R&D activities to cope with new
market environment and policy changes.
In 2017, technology development activities such as drone-re-
lated technology, localization of seawater processing technol-
ogy, health house specialized technology, and improvement
of building materials will create high added value through site
application and commercialization. We have reflected techni-
cal needs from sites with the mid-to long term perspectives
and constantly strived to achieve immediate result from the
short-term perspectives which can be immediately carried
out.
As a consequence of our continuous efforts, we were certified
2 new technologies as proprietary technology in 2017. In ad-
dition, we have applied 17 domestic patents as well as have
registered 11 patents and 1 overseas patents, achieving 263
domestic and overseas patents overall. We are focusing on
identifying future technology products that can secure abso-
lute competitiveness.
In order to form a professional group as an R&D profession-
al organization, we have continuously developed the human
resources training programs of existing Technology R&D In-
stitute and have nurtured global talents with excellent engi-
neering and communication capabilities both domestically
and overseas. In addition, we are strategically organizing and
managing employees efficiently to cope with changing envi-
ronments.
Technology Planning
For the future-oriented technology development, Daelim In-
dustrial provides support for the development of cutting-edge
construction technology through systematic planning and
management from the establishment of mid-to long-term
strategies to the performance management. Especially, spe-
cialists in each field gather to understand the advanced tech-
nology trends at home and abroad preparing for the 4th indus-
trial revolution, and plan the development of differentiated
technology products by predicting future technologies from
the mid- to long-term perspective.
Number of new technologies secured
Number of green technology secured
Number of effective technology agreements
Number of domestic and foreign patent secured
Amount of development technology royalty collected (6 cases)
6 cases 7 cases 42 cases 263 cases 3.3 USD million
Research Projects In 2017
Polyethylene Polybutene
· Improvement of HRPB quality· mPE for low temperature sealing· High Stiffness PERT Type II· mPE for Roto-molding
· EVA(EGM)· Synthetic paper (DSU, DSV, DYT) products
BOPP FilmPETROCHEMICAL
R&D GROUP
Structure & Material
Eco & Smart Housing
BUILDING R&D GROUP
Bridge
Dam & Harbor & Tunnel
CIVIL R&D GROUP
· Development of a model for marketable Korea-Passive House· Development of high performance dry floor system· Development of commercial geothermal energy slab system· Development of commercial smoke damper system· Development of design optimizing program for hydronic system based on BIM· Development of multi-function smart windows and doors product technology
· Development of technology for improving apartment frame process · Development of ALC block with reduced absorption rate and complete dry construction technology· Development of One-way Ribbed Slab System for reducing construction duration· Development of low-cost, high-efficiency remodeling technology for vertical expansion of old housing· Verification of PC slab performance for cold storage· Development on concrete technology promoted chloride durability
· Development of optimal pipeline construction technologies considering cold region environments· Development of earthwork volume management technology using a rotary-wing drone· A study for construction management techniques of driven piles in deep sedimentary layers· Development of tunnel blasting excavation technology for minimizing overbreak· Development of desander design method for run-of-river type hydropower project· Development of transient pressure analysis technic for dam waterway · Development of check-list for optimum design and construction of concrete dam
· Development of construction methods for superstructure of cable stayed bridge using super concrete· Development of optimal design and construction methods for cable stayed suspension bridge· Development of low cement self-compacting concrete technology· Development of PC shell construction method using Bracketless Support System· Development of new construction method for foundation of marine bridge
· Development of pre-treatment system for wastewater reclamation· Development of RO concentrate treatment system for wastewater reclamation· Development of seawater desalination system responding to red tide event· Establishment of the global network in the field of organic waste to energy
· Development of precast windmill tower using SUPER concrete
· Development of dedicated process simulator for KOSOL solvent developed in CO2 capture technology· Development of Basic Design Package· Technical Consultation of the detail design, construction and operation for CO2 capture plant
CCS (Carbon Capture
& Storage)
Water & Environment
Power Plant
PLANT / ENVIRONMENT
R&D GROUP
Specialty Products
Major Achievements in 2017
Research & Development
48 49
Activities for Zero Accident
Daelim Industrial is actively implementing various accident pre-
vention activities such as establishing Safety Management Plan
in yearly basis, operating safety & health management system,
conducting real-time safety warning activities via smart phone,
and providing constant trainings and inspections.
Each and every employee at Daelim Industrial strives to realize the zero accident and create a safe and pleasant working environ-
ment under the management principle to respect human. Strongly believing that the safety is not a choice but a requirement, we
have considered the safety as our top priority in executing all construction works.
Safety & Health Management
Safety Management Plan
We have established a Safety Management Plan by analyzing
accident cases within our company as well as in the construc-
tion industry over the past five years.
Under the slogan of ‘We can make ZERO accident', the 2017
top agendas of the policy have been set as following: ‘manage-
ment for 5 high-risk works,’ ‘employee management’ and ‘risk
assessment & strengthening safety checking activities.’ The
selected policies have been applied to all business divisions
and have served as a driving force for achieving zero accident.
OHSAS 18001 Oversite Evaluation for Sustainability
Management
In 2009, Daelim Industrial acquired OHSAS 18001, which is an
international safety & health management system for the ac-
cident prevention and continuous improvement of the safe-
ty and health level. Also, the adequacy of our safety & health
management system has been verified on an annual basis by
verification holders.
Activities for Zero Accident
Safety Checking Activities via Smart Phone
Safety checking via smart phone help find and eliminate risk
factors regardless of time and place. Consequently, it contrib-
utes to the protection of workers from danger by minimizing
the exposure time to risks.
Accident Rate
The accident rate of Daelim Industrial has been in the range
of less than 0.2%, which is outstanding performance com-
pared to industry average, represents a high level of safety
and health management of our company.
www.daelim.co.kr/eng/sustain/Safety.do
Zero accident at Oman SRIP site
5,585 million hours
Zero accident at e-PyunhanSaesang Yong-in Hansup City site
7.54 million hours KOSHA18001
Propelling to acquire safety and health management system certification from the Korea Occupational Safety and Health Agency(KOSHA) (targeting in the second half of 2018)
2,535 times
Total safety and health training time
27,237 hours
Number of real-time safety checking via smart phone
250,437 cases
Number of occupational health and safety inspections (corporate-wide, HQ, equipment, electricity, technology)
Low accident rate compared to the construction industry average (0.57%)
0.2 %
Our Core Value
0.51
0.13
0.57
0.18
20162015
Daelim Industrial
Industry Average
0.57
0.20
Status of Industrial Accident Rate for the Past 3 Years
2017(expected)
Major Achievements in 2017
50 51
Sites involved voluntary scattering dust agreement (120 out of 145 sites)
Construction waste recycling rate Environmental education hours per person
Energy savings energy consumption: 4,472TJ in 2016, 4,150TJ in 2017
83 % 89 % 3.41 hours 322 TJ
25,215
49,567
218,501
(Unit : ton CO2
-e)
Direct emissions (Scope 1)
Indirect emissions (Scope 2)
Other indirect emssions (Scope 3)
293,284Total
Environmental Management Activity
Daelim Industrial has been endeavoring to fulfill its social re-
sponsibilities in environmental field such as efforts to reduce the
GHGs and dust scattering and "Cleaning and Caring One Moun-
tain, One River and One Street" Campaign.
Daelim Industrial deeply sympathizes with the social impact of the environmental aspect caused by management activities and is
fully committed to environmental management activities in order to create a rich and comfortable living space on the basis of the
"Hansup Spirit," which is our management philosophy. These efforts have been accomplished through various activities including
aggressive response to one of the most serious social issues in Korea, fine dust reduction.
Environmental Management
Continuous Efforts to Reduce Fine Dust
We have been working to protect the public health and to
eliminate social side effects caused by fine dust. In order to
feel the necessity of fine dust reduction activity, we educate
not only our employees but also suppliers and their workers.
We provide them with education and information on hazards
of fine dusts while establishing a dust scattering reduction
plan considering the characteristics of each site and keep fol-
lowing the plan. This achievement can be confirmed in the
fact that the largest number of sites are involved among com-
panies signed voluntary scattering dust agreement with the
Ministry of Environment.
Environmental Management through Risk Analysis
Daelim Industrial has proved its leadership of global standard
by acquiring the certification in accordance with the latest
requirements of ISO 14001: 2015 in 2016. We are doing our
best to raise the level of environmental management through
continuous review and improvement activities for the require-
ments. In addition, we have established a Risk Management
Team for preemptive and active environmental management
activities, and have conducted risk analysis on all activities
including environmental aspects and reflected them in es-
tablishing management strategies. These activities are cor-
nerstone of sustainable management by not only preventing
environmental accidents, but also leading to environmental
performance in various aspects such as environment-friendly
construction methods, green technology development, and
new business development.
Our Core Value www.daelim.co.kr/eng/sustain/Env.do Greenhouse Gas Emissions Management
Korea Cap and Trade Scheme and GHG Independent
Assurance
Since 2010, Daelim Industrial has established a GHG invento-
ry voluntarily and has calculated and reduced its emissions
from before the implementation of the GHG & Energy Target
Scheme Guidelines. Since 2015, we have been included in the
Korea Cap and Trade Scheme and have established a moni-
toring plan for HQ, resorts and corporate building and submit
KAU(Korean Allowance Units) to the Government through ex-
ternal verification.
In addition, in order to fulfill our social responsibilities, con-
struction sites and construction equipment suppliers not in-
cluded in the Korea Cap and Trade Scheme are doing volun-
tary third-party verification to calculate and reduce emissions.
The emissions in 2016 are as follows (2017 data to be assured).
Environmental Management Activity
Social Responsibility in Environmental sector
We are contributing to the preservation of the environment
and creating a comfortable living space by constantly con-
ducting activities for the purpose of cultivating "Cleaning and
Caring One Mountain, One River and One Street" Campaign
all over Korea. Besides, we are working in various fields to do
our social responsibilities such as finding and spreading best
practices of environmental management through internal and
external competition, fulfilling voluntary agreement to reduce
scattering dust, and purchasing environmentally certified
products. In addition, we are actively preventing environmen-
tal complaints by operating a noise prediction program which
scientifically analyze the noise impact from construction work
and planning to establish effective mitigation measures.
Major Achievements in 2017
52 53
www.daelim.co.kr/invest/govern/GovernInfo.do
Daelim Industrial has pursued the sustainability management through the establishment of sound and transparent governance
and responsible management. We will continue devoting our best to protect the shareholder interests and create shared value of
stakeholders through the sustainability management.
Corporate Governance
Committee Functions Compositions
Finance Committee · Deliberation and decision-making on major financial issues
· 2 internal directors· 1 external director
Audit Commitee · Accounting audit· Operational audit· Appointment of external auditors
· 3 external directors
External DirectorNominationCommittee
· Recommendation for external director candidates
· 1 internal director· 2 external directors
CompensationCommittee
· Establishment of the compensation plan for registered board members
· Deliberation on the compensation level
· 1 internal director· 2 external directors
Board of Directors
Name Major Responsibilities
Sangwoo Kim CEO,Chairman of the Finance CommitteeMember of the Compensation Committee
Sangshin Park CEO, Member of the Finance Committee,Member of the External Director Nomination Committee
Haewook Lee Vice Chairman
Yong Nam Chairman of the Board of Directors, Adviser
Internal Directors
Name Major Responsibilities
Daljoong Chang Chairman of the Compensation Committee, Chairman of the External Director Nomination Committee
Hansang Lee Chairman of the Audit Committee
Chunghoon Lee Member of the Audit Committee ,Member of the Finance Committee
Joonho Han Member of the External Director Nomination Committee,Member of the Compensation Committee
Chanhee Park Member of the Audit Committee
External Directors
Organization of the Board of Directors
The Board of Directors of Daelim Industrial consists of 9 mem-
bers: 4 internal and 5 external directors. Daelim Industrial main-
tains the chairman of the board and CEO seperatedly according
to the board regulations; directors and members of the Audit
Committee are appointed at the General Meeting of Sharehold-
ers. With qualified experts appointed to the Board as the result
of the election, the Board of Directors can make practical contri-
butions to the corporate management. In particular, the External
Director Nomination Committee recommends external director
candidates who can make independent decisions from the com-
pany, the management and significant shareholders; external
directors are appointed by the resolution of the General Meeting
of Shareholders.
External directors should own expertise and experiences in
management, economy, accounting, law and related skills.
Therefore, a skill mapping is used for the candidate evaluation
by analyzing the relevance in respect of the diversity and com-
plementarity of duties of the Board of Directors.
Operation of the Boardof Directors
The Board of Directors has a comprehensive authority over
the corporate management, including rights in key decision-
making, management monitoring, and business execution.
The board shares its awareness about the corporate respon-
sibility with the entire company for the consumer protection
and environmental preservation. It also endeavors to under-
stand the influence of economic, environmental, and social ar-
eas. Making decisions on the corporate vision and goals, the
Board of Directors applies its decisions to the business being
responsible for the performance management. The Board of
Directors holds a regular meeting on a quarterly basis while a
special meeting is held on an ad hoc basis.
Daelim Industrial makes every effort to incorporate all opi-
nions of stakeholders including shareholders and employees
into the management process. Besides, minor shareholders
are entitled to call for the General Meeting of Shareholders
in accordance with the proper standards and procedures and
can also suggest agendas to be discussed at the meeting. In
addition, we operate a labor-management council (Hansup
Council), which contributes to the efficient communication
and information sharing between the employees and the
management.
Committees in the Board of Directors
The Finance Committee is consisted of 2 internal directors
and 1 external director, responsible for deliberation and deci-
sion-making on major financial issues and other issues dele-
gated by the Board of Directors.
The Audit Committee is consisted of 3 external directors, re-
sponsible for accounting audit, operational audit and appoint-
ment of external auditors.
The External Director Nomination Committee is consisted of
1 internal director and 2 external directors, responsible for
recommendation for external director candidates.
The Compensation Committee is consisted of 1 internal direc-
tor and 2 external directors, responsible for establishment of
the compensation plan of the registered board members as
well as consideration and decision the annual compensation
limit to be presented to the General Meeting of Shareholders.
Our Core Value
54 55
Ethical Management
Integrity management is a core value for Daelim Industrial to implement sustainability management and practice disclosure manage-
ment, ethical management and social responsibilities based on the foundation philosophy, the ‘honesty and trust’.
Ethical Management System
Since the foundation, Daelim Industrial has implemented in-
tegrity management based on the foundation philosophy of
the ‘honesty and trust’, and after clarification of its ethical
management, Daelim Industrial has established and operated
the global level of ethical management standards.
Ethical Management Roadmap
www.daelim.co.kr/eng/sustain/Intro.do
· Establish the Code of Ethics, Guidance, Cyber Shinmungo and Secretary
· Office for Ethical Management- Introduce Compliance Program (2004)
Declare new corporate philosophy based on ethical management (2000)
· Implement our guiding principles "Hansup" for improving the quality of life
Build the foundation for ethical management and promote corporate culture
· Listed in the DJSI World Index (Construction & Engineering in 2013)
· Promote voluntary compliance, sharing, and anti-corruption campaigns
Define Sustainable Management System
Settlement
Phase 2
Introduction
Phase 1
Innovation
Phase 3
CP Operation
Daelim Industrial operates Cyber Shinmungo to allow stake-
holders, such as employees, customers and suppliers, to re-
port unethical behaviors in a more convenient way regardless
of time and place; examples of unethical behaviors include un-
fair trades and corruption. Cyber Shinmungo helps to detect
and resolve employee's violation against ethical codes at an
early stage while handling public complaints as well. For all
cases reported through Cyber Shinmungo, the anonymity is
strictly protected and a thorough investigation and appropri-
ate subsequent measures are guaranteed.
Human Rights Policy
As a global company, we respect cultural rights, diversifica-
tion, belief and human rights. Hence, strict standards are in
place regarding social corruptions and human rights issues.
We faithfully comply with the standards required by the Uni-
versal Declaration of Human Rights, ILO, OECD and Ruggie
Framework, the corporate responsibilities to respect human
rights. Therefore, we do not allow any action that breaches
or restricts on human dignity. Moreover, we make effort to
disseminate and practice regarding the complicity of human
rights breaches and due diligence. As a result of increase in
overseas expansion, it became necessary to strengthen edu-
cation and auditing activities in order to prevent breach or
damage to the rights of local stakeholders.
Within its organization, respecting human rights of each sin-
gle employee is a basic principle for the entire business activi-
ties, and we carry out various programs. For instance, we op-
erate confidential grievance counselling services, and provide
breast feeding facilities for maternity protection. In addition,
in order to protect working environment for female labours
and to create healthy organizational cultures, we annually ca-
rry out preventing sexual harassment training subjected to all
employees. Every single employee of Daelim Industrial strives
to create human rights friendly corporate culture through job
training concerning human rights and manner to security
managers. Lastly, we do not employ any kind of child or forced
labour, in domestic or overseas sites, we do not employ any
person below the minimum legal age.
Organizational System of Ethical Management
· Legal guideline· Compliance supervision
· Prevention of corruption· Regular inspection· Investigation of report
Legal Support
Auditing & Monitoring
CEO
Ethical Management OfficeCompliance Council
Auditing & Legal Office
Operating System of Ethical Management
Training /Campaign
· Conducting employee training; providing manuals and guidelines for each compliance category
· Promoting campaign against gift exchanges during traditional holidays
· Pledging to practice Code of ethics by all employees
· Making resolutions for autonomous practice for all teams/sites
ComplianceOffice
Manager
· Spreading the basic guideline for compliance throughout the company
· Sharing cases of inspection results and striving for prevention of recurrence
SharingLessons
Inspection /Feedback
· Conducting regular & non-regular monitoring by the responsible organization (corporate ethics, fair trade, compliance of business laws)
· Identifying the fundamental causes of problems through the analysis of inspection results and conducting improvement activities
· Conducting Q&A and exchanging advices on issues on ethics & fair trade
· Sharing policies on competition within the organization
Q&A /Advice
GLOBAL BEST
Our Core Value
56 57
Risk Management
In the midst of the complicated business environment, the risk management is necessary for the stable business as well as for
both the growth and profit. Therefore, Daelim Industrial has been comprehensively managing risks in order to increase the corpo-
rate value and maximize the stakeholder benefit despite the growing uncertainty of the business environment.
www.daelim.co.kr/eng/sustain/Quality.do
Order risk
Key Risk 01.
Excution risk
Key Risk 02.
Ethical risk
Key Risk 05.
Safety risk
Key Risk 04.
Financial risk
Key Risk 03.
Risk ManagementBased on
Five Key Risks
We manage order risks by the three-step feasibility review as follows.
Preview by each business division → Review by relevant team leaders → Review by RMC
(Risk Management Committee), the highest decision-making organization
The Business Audit Office has taken charge of an overall management system for risks
(cost and construction period) of the company; the Building & Housing Business Division
has authorized the six committees to manage development projects and costs.
The integrated ethical risk management at the corporate level is in place throughout
the entire areas of the ethical management such as fair trade issues; we carry out reg-
ular and frequent assessments, assessment on execution, and CP (Compliance Pro-
gram) assessment while operating Cyber Shinmungo.
Through the Safety Operation Module & Risk Assessment (SORA), a risk evaluation
system developed by Daelim Industrial, we are implementing diverse accident preven-
tion activities. Moreover, we have conducted practical safety management activities
such as immediately eliminating dangerous factors using smart phone and introduc-
ing the employee suggestion system.
Financial risks are managed in three ways: market environment analysis, KRI (Key Risk
Indicator) management, and Group financial risk management.
- Market environment analysis: Macro economy, financial market, policy environment,
business environment (country, region)
- KRI management: Liquidity, working capital (accounts receivable/loan receivable),
financial exposure (net debt+PF), debt financing structure.
Order Risk
Key Risk 01.
Excution Risk
Key Risk 02.
Ethical Risk
Key Risk 05.
Safety Risk
Key Risk 04.
Financial Risk
Key Risk 03.
Risk Management
Daelim Industrial is fully aware of the importance of the risk
management to respond to the business environment that
is becoming diverse and intricate due to the diversified work
types and geographical regions. Accordingly, we have es-
tablished a thorough response system at the corporate level
through the integrated risk management framework. Also,
the monitoring system for key risk factors has been operated.
Risk Management System
Daelim Industrial has an efficient risk management system for
five key risks that impose significant influences on the busi-
ness.
Our Core Value
58 59
Social Contribution
We pursue a variety of social contribution activities based on our Hansup spirit (foundation philosophy), ‘to create a comfortable and
affluent way of life,’ in order to achieve the sustainable growth together with local communities.
www.daelim.co.kr/eng/sustain/ActVideoList.doOur Core Value
Social Contribution Activities
Sharing of Hope
A Series of Activities to Support the Physically Disabled and Reaserch in Relevant Fields and Students
Through Sharing of Hope activities, Daelim Industrial has delivered donations and financial supports to the physically disabled and
socially underprivileged who need rehabilitation. We support university students through our scholarship foundations. Since 2004, in
addition, Daelim Industrial has donated our electronic devices to its partnering rehabilitation facilities; some of the donated devices
are shipped overseas for the education in underdeveloped countries. Besides, we have established the Suam Scholarship Founda-
tion, a non-profit foundation, to support tuition for university students in commemoration of 50th anniversary in 1989.
Sharing of Love
A Series of Volunteering Activities, Partnering with Local Communities
For regular and constant volunteering activities, Daelim Industrial's employees are teaming up with welfare facilities delivering helps
to the underprivileged at every corner of the society. Employees are visiting these facilities on a weekly-basis to bake breads for
undernourished children and seniors, make bags and solar lanterns for children in underdeveloped countries, and take care of aban-
doned animals. A significant number of special interest groups are making their contribution as well by harnessing their knowledge
and skills. Throughout the country, on-site employees are also participating in the volunteering activity under the name of Hansup
Volunteer Group for local communities.
Sharing of Happiness
Residential Environment Improvement Activities for Ordinary Non-Housing Owners
Through our proficiency as a construction company, we have been carrying out Happiness Sharing activities to improve the worn-out
residential environment of the underprivileged since 2005. In 2017, besides, Daelim Industrial repaired old housing-clustered areas
and welfare facilities in Seoul and capital area by cooperating with the Group affiliates relevant to the construction industry: Samho
International and Korea Development Corporation. Thanks to outstanding talents of our employees, the activities are being conduct-
ed to enhance insulation and energy efficiency, such as the replacement of wall paper, floor paper and light bulbs with LED lights.
Sharing of Culture
A Series of Activities to Provide Opportunities for the Underprivileged to Explore Cultural Activities
By operating museums, we are providing modern art and design exhibition to the public as well as supporting young artists in Korea.
Daelim Museum, opened in 2002, has paved a path for the public to easily access and understand art under the vision of ‘In Everyday
Life’. In 2015, D MUSEUM was newly opened last year further expanding the contact point with the public. D Project Space, on the
other hand, opened in 2012 to support creative and experimental art works by introducing young Korean creators in various fields.
In addition to operating the museums, Daelim Industrial has been sponsoring art education and other relevant programs providing
opportunities for underprivileged children and teenagers to experience cultural activities. Since 1994, moreover we have promoted
cultural and artistic social contribution programs, such as exhibition visits and creating activities; the programs are being conducted
more than 10 times a year for approximately 400 children and teenagers.
Sharing of Nature
A Series of Activities for the Purpose of Environment Protection
To preserve and maintain a clean environment for the future generations, Daelim Industrial has carried out environment cleanup
activities. As part of the efforts, we have launched Clean Sharing Volunteer Group mainly consisting of Daelim Industrial employees.
The Clean Sharing Volunteer Group is working closely with local Governments in ten regions across Korea to conduct campaigns
such as Cleaning and Caring One Mountain, One River and One Street. Since 2005, in addition, employees and their families have
taken a part in cleanup activities at Namsan Mountain and have been continuing relevant activities on a regular basis.
Helping neighbors in need of more abundant lives, Daelim Industrial has been promoting five sharing campaigns: Sharing of Culture,
Sharing of Happiness, Sharing of Friendship, Sharing of Clarity, and Sharing of Hope. Especially, by operating the museum, we pro-
vide various cultural contents which can be easily accessed by the public and the cultural minority groups through characteristics
of the construction company, we actively deliver practical helps cooperating with communities in numerous sites throughout the
country, including the HQ.
Annual number of visitors to Daelim Museum, the largest number of private museums in Korea
13 years of activities to repair the house since 2005
Annual Volunteer Service hours
Annual numbers of employees participated volunteer service
Number of PCs, printers and other equipments donated to facilities for the handicapped
100 million 13 years 44,569 hours 4,971 persons 1,203
Daelim Museum Sharing of Culture Sharing of Nature Sharing of Hope Sharing of Love Sharing of Happiness
Major Achievements in 2017
60 61
Independent Auditors’ Report
To the Shareholders and the Board of Directors of Daelim Industrial Co., Ltd.:
We have audited the accompanying consolidated financial statements of Daelim Industrial Co., Ltd. (the “Company”) and its subsidiaries
(collectively, the “Group”), which comprise the consolidated statements of financial position as of
December 31, 2017 and 2016, respectively, and the related consolidated statements of income, consolidated
statements of comprehensive income, consolidated statements of changes in shareholders’ equity and consolidated
statements of cash flows, all expressed in Korean won, for the years ended December 31, 2017 and 2016, respectively,
and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in
accordance with Korean International Financial Reporting Standards (“K-IFRS”) and for such internal control as management determines
is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud
or error.
Auditors’ Responsibility
Our responsibility is to express an audit opinion on these consolidated financial statements based on our audits. We conducted our
audits in accordance with Korean Standards on Auditing(“KSAs”). Those standards require that we comply with ethical requirements and
plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement
of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal
control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of
the Group as of December 31, 2017 and 2016, respectively, and its financial performance and its cash flows for the
years ended December 31, 2017 and 2016, respectively, in accordance with K-IFRS.
Emphasis of matter
Emphasis of matter does not affect the opinion in the independent auditors’ report, but users need to draw attention
to following matters:
(1) Independent auditors’ emphasis of matters on Key Audit Matters for engineering-to-order industry
We determined, in the independent auditors’ professional judgment and from the matters communicated with those charged with
governance, Key Audit Matters that required independent auditors’ significant attention in performing the audit of the consolidated
financial statements of the current period in accordance with ‘Auditing Practice Guidance 2016-1’ in the Republic of Korea. These matters
were addressed in the content of our audits of the consolidated financial statements taken as a whole, and we do not provide a separate
opinion on these matters.
We have reflected results of the audit procedures on Key Audit Matters described below, in expressing an audit opinion on the
consolidated financial statements of the Group.
FINANCIALREVIEW
61
65
66
68
69
70
72
Independent Auditors’ Report
Selected Financial Data
Consolidated Statements of Financial Position
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Stockholders’ Equity
Consolidated Statements of Cash Flows
62 63
A. The accounting policy of input-method revenue recognition
As described in Note 2 ( Standards affecting presentation and disclosure and significant accounting policies) and Note 3 (Critical
accounting judgments and key sources of estimation uncertainty), the total revenue of the construction contract is measured based on
initially agreed contract amount. Meanwhile, the measurement of the contract revenue is affected by diverse uncertainties associated with
results of the future events. The total contract revenue is susceptible to the stage of completion calculated by the ratio of accumulated
construction costs to estimated total construction costs, and the total contract cost is estimated by reference to the expected future
figures, such as the material costs, the labor costs and the contract period.
As mentioned in Note 6 (Construction contracts), the change in the estimated total contract revenue and the estimated total contract cost
of the current period are ₩845,643 million and ₩1,258,953 million, respectively. Referring to these changes in estimation, the gain of the
current period is decreased by ₩355,435 million and the gain of the subsequent period is estimated to decrease by ₩57,875 million. Since
the possibilities of changes in the total contract revenue and total contract cost estimation exist, we identified the accounting policy of
input-method revenue recognition as a significant risk.
The major audit procedures performed regarding the input-method revenue recognition are as follows:
- Review the adequacy of the accounting policy of revenue recognition
- Analytical procedures and inquiries of the state of progress and significant change of the major projects as of December 31, 2017
- Analytical procedures of major financial indicators, such as the contract amount and estimated total contract cost, contract cost
ratio and ratio of progress billings due from customer
- Inquiries and document inspection about whether all conditions that the outcome of a construction contract can be estimated
reliably are satisfactory for the major contracts
- Analytical procedures and inquiries about whether the measuring method for the stage of completion that the Group used is able
to measure reliably the work performed
B. Uncertainty of estimate of the total contract cost
As explained in Note 3 (Critical accounting judgments and key sources of estimation uncertainty), the total contract cost is estimated by
reference to the expected future figures, such as the material costs, the labor costs and the contract period.
Furthermore, as the construction gain of the current period (or gain of the subsequent period) and progress billings due from customer
disclosed in Note 6 (Construction contracts) are affected by changes in the total estimated contract cost, we identified the uncertainty of
estimate of the total contract cost as a significant risk.
The major audit procedures performed regarding the impact of uncertainty of estimate of the total contract cost on the consolidated
financial statements are as follows:
- Analytical procedures of the changes in major items of the total contract cost compared to prior year
- Confirming the accounting policy of the Company regarding assessment and change in the estimated total contract cost, and
understanding and evaluating the internal control
- Inquiries and document inspection about contracts changed significantly by comparing the ratio of estimated total contract cost
to total contract amount as of December 31, 2017 and 2016
- Inquiries and document inspection about the estimated total contract cost as of December 31, 2017, changed significantly
compared to December 31, 2016
- Inquiries and performing additional audit procedures on significant change in the estimated total contract cost of ending contract
compared to prior year
C. Adequacy of the stage of completion
As a result of reviewing segment operating income disclosed in Note 4 (Segment information), the construction cost compared to total
contract cost is increased in overall by the impact of unpredictable change order and process delay due to the nature of construction
contract.
As measuring the stage of completion is affected by the uncertainty of measuring the total contract cost due to the nature of construction
contract, we identified the adequacy of the stage of completion as a significant risk.
The major audit procedures performed regarding the total contract cost and accumulated contract cost affecting measurement of the
stage of completion are as follows:
- Recalculation of the stage of completion
- Confirming whether only the contract costs reflecting fulfilled construction were included in the accumulated construction costs
and the related accounting policy of the Company
- Inquiries about reasons for stagnation of the stage of completion
- Document inspection of major sites with significant difference between the stage of completion and the construction progress rate
- Substantive test of adequacy of costs sampled from costs accrued in the current year including occurrence, cutoff and allocation
of construction contracts
D. Collectability of progress billing due from customers
As described in Note 6 (Construction contract), the amount of progress billing due from customers is ₩1,101,263
million as of December 31, 2017, and 8.22% of total assets. Considering the current state of contract
construction industry, we identified the collectability of progress billing due from customers as significant risks.
The major audit procedures performed regarding the project of which progress billing due from customers is
significantly increased are as follows:
- Analytical procedures of ratio of progress billing due from customers to accumulated contract revenue of each project
- Inquiries and document inspection of billing and payment conditions, liquidated damages, completion date, etc., according to
the contracts
- Confirm the contractee’s credit situation by checking business status and searching public announcement and news articles
- Inquiries about possibilities of impairment loss of progress billing due from customers and evaluation of recoverable amount,
and confirm the contract conditions
- Inquiries about billing delay and collectibility of the projects of which differences between billing ratio and the stage of
completion are significant
64 65
Notice to Readers This report is effective as of March 14, 2018, the auditors’ report date. Certain subsequent events or circumstances may have occurred between the auditors’ report date and the time the auditors’ report is read. Such events or circumstances could significantly affect the consolidated financial state-ments and may result in modifications to the auditors’ report.
March 14, 2018
Selected Financial Data
USD in thousands
2017
KRW in millions USD in thousands
2016
KRW in millions
Operating Results
Sales 11,513,474 12,335,536 9,197,097 9,853,770
Gross Profit 1,116,359 1,196,067 910,876 975,913
Operating Profit 509,519 545,899 391,439 419,388
Income Before Income Tax 630,323 675,329 407,322 436,404
Net Income 474,145 507,999 273,656 293,195
Financial Position
Current Assets 6,279,349 6,727,694 6,063,042 6,495,943
Non-current Assets 6,229,942 6,674,761 5,502,675 5,895,566
Total Assets 12,509,291 13,402,455 11,565,717 12,391,509
Current liabilities 4,576,442 4,903,200 4,468,403 4,787,447
Non-current liabilities 2,618,022 2,804,949 2,294,837 2,458,688
Total Liabilities 7,194,464 7,708,149 6,763,240 7,246,135
Capital stock 203,939 218,500 203,939 218,500
Other paid-in-capital 503,264 539,197 502,930 538,839
Retained earnings 4,105,534 4,398,669 3,657,350 3,918,484
Other equity (85,976) (92,114) (60,564) (64,888)
Non-controlling interests 588,066 630,054 498,822 534,439
Total Shareholder's Equity 5,314,827 5,694,306 4,802,477 5,145,374
Exchange Rate of USD / KRW 1,071.40 1,071.40
* K-IFRS Consolidated Basis v
E. Adequacy of accounting treatment of variations in contract work
As described in Note 6 (Construction contracts), the changes in estimated total contract revenue and estimated total contract cost in the
current year affect the gain (loss) directly. Furthermore, as the possibilities of variations in contract work regarding change orders agreed
with contractees after initial contracts are existed, we identified the adequacy of accounting treatment of variations in contract work as a
significant risk.
The major audit procedures performed regarding the accounting treatment of variations in contract work
are as follows:
- Confirm accounting policies related to the accounting treatment of variations in contract work and liquidated damages
- Understand and evaluate internal controls regarding review and approval of changed contract conditions by the adequate
authorities
- Inquiries and document inspection on reasons of significant change of the total contract amount
- Confirm adequacy of disclosures reflected variations in contract work in accordance with the amendment contract
- Confirm adequacy of the estimated total contract cost and the stage of completion, including additional contract costs related to
variations in contract work
Others
Our audits also comprehended the translation of Korean won amounts into U.S. dollar amounts and, in our opinion,
such translation has been made using the base rates announced by Seoul Money Brokerage Services, Ltd. on the date
of reporting period-end. Such U.S. dollar amounts are presented solely for the convenience of readers.
66 67
Consolidated Statements of Financial PositionAs of December 31, 2017 and December 31, 2016
USD in thousands
2017
KRW in millions USD in thousands
2016
KRW in millions
Assets
Current Assets
Cash and cash equivalents 1,803,038 1,931,775 1,472,071 1,577,177
Short-term financial instruments 123,200 131,997 44,781 47,979
Trade and other accounts receivables 2,356,014 2,524,233 2,284,234 2,447,328
Progress billing due from customers 1,027,873 1,101,263 923,918 989,886
Inventories 670,221 718,075 841,838 901,946
Available-for-sale financial assets 1,363 1,460 1 1
Derivative assets 2,172 2,327 2,865 3,069
Income tax receivable 4,573 4,899 6,066 6,499
Other current assets 249,827 267,665 478,700 512,879
Non-current assets held for sale 41,068 44,000 8,568 9,179
6,279,349 6,727,694 6,063,042 6,495,943
Non-Current Assets
Long-term financial instruments 23,958 25,669 8,560 9,172
Long-term trade and other accounts receivables 1,266,557 1,356,989 1,093,443 1,171,515
Investments in associates and joint ventures 1,199,326 1,284,958 1,056,992 1,132,462
Available-for-sale financial assets 332,525 356,267 433,561 464,517
Property, plant and equipment 1,932,994 2,071,010 1,833,345 1,964,246
Investment property 968,573 1,037,729 771,619 826,713
Intangible assets 65,504 70,181 57,277 61,366
Derivative assets 173 185 1,784 1,912
Deferred tax assets 378,346 405,360 183,172 196,250
Other non-current assets 61,986 66,413 62,922 67,413
6,229,942 6,674,761 5,502,675 5,895,566
Total Assets 12,509,291 13,402,455 11,565,717 12,391,509
* K-IFRS Consolidated Basis
USD in thousands
2017
KRW in millions USD in thousands
2016
KRW in millions
Liabilities
Current Liabilities
Trade and other accounts payable 1,897,839 2,033,345 1,799,271 1,927,739
Progress billing due to customers 1,049,877 1,124,838 1,177,669 1,261,754
Short-term borrowings and current portions of long-term liabilities
894,110 957,950 838,864 898,759
Income tax payable 141,123 151,199 104,868 112,356
Other current provisions 211,408 226,503 117,623 126,021
Derivative liabilities 11,926 12,778 12,506 13,398
Other current liabilities 370,159 396,587 417,602 447,420
4,576,442 4,903,200 4,468,403 4,787,447
Non-Current Liabilities
Long-term trade and other accounts payable 110,962 118,885 151,252 162,052
Borrowings and corporate bond 2,050,173 2,196,555 1,800,427 1,928,977
Net defined benefit liabilities 22,649 24,266 32,606 34,934
Provision for construction warranties 136,422 146,163 84,892 90,954
Other non-current provisions 38,941 41,721 38,791 41,560
Financial guarantee contract liabilities 84,764 90,816 59,794 64,064
Derivative liabilities 2,935 3,145 1,352 1,449
Deferred tax liabilities 151,996 162,848 103,167 110,533
Other non-current liabilities 19,180 20,550 22,556 24,165
2,618,022 2,804,949 2,294,837 2,458,688
Total Liabilities 7,194,464 7,708,149 6,763,240 7,246,135
Shareholders’ Equity
Capital stock 203,939 218,500 203,939 218,500
Other paid-in-capital 503,264 539,197 502,930 538,839
Retained earnings 4,105,534 4,398,669 3,657,350 3,918,484
Other equity (85,976) (92,114) (60,564) (64,888)
Non-controlling interests 588,066 630,054 498,822 534,439
Total Shareholders’ Equity 5,314,827 5,694,306 4,802,477 5,145,374
Total Liabilities and Shareholders’ Equity 12,509,291 13,402,455 11,565,717 12,391,509
* K-IFRS Consolidated Basis
68 69
Consolidated Statements of IncomeFor the Years Ended December 31, 2017 and 2016
USD in thousands
2017
KRW in millions USD in thousands
2016
KRW in millions
Sales 11,513,474 12,335,536 9,197,097 9,853,770
Cost of Sales 10,397,115 11,139,469 8,286,221 8,877,857
Gross Profit 1,116,359 1,196,067 910,876 975,913
Selling and administrative expenses 606,840 650,168 519,437 556,525
Opertating Income 509,519 545,899 391,439 419,388
Other income 281,424 301,518 103,381 110,763
Other expense 450,526 482,693 301,629 323,165
Financial income 58,194 62,349 80,359 86,096
Financial expense 175,964 188,527 105,700 113,247
Share of profits of associates and joint ventures 407,676 436,784 239,472 256,570
Income Before Income Tax Expense 630,323 675,329 407,322 436,404
Income Tax Expense 156,178 167,330 133,666 143,209
Net Income 474,145 507,999 273,656 293,195
Owners of the group 457,806 490,493 247,622 265,303
Non-controlling interests 16,339 17,506 26,034 27,893
Net Earnings Per Share
Basic and Diluted earnings per share of common stock 12 12,702 6 6,868
Basic and Diluted earnings per share of preferred stock 12 12,752 6 6,918
* K-IFRS Consolidated Basis
Consolidated Statements of Comprehensive IncomeFor the Years Ended December 31, 2017 and 2016
USD in thousands
2017
KRW in millions USD in thousands
2016
KRW in millions
Net Income 474,145 507,999 273,656 293,195
Other Comprehensive Income (Loss) (22,114) (23,694) (24,317) (26,053)
Items to not be reclassified
Remeasurement of defined benefit plan (138) (148) (11,278) (12,083)
Changes in retained earnings of associates and joint ventures
(10) (11) 2 2
Tax effects on the items to be not reclassified to profit or loss
1,666 1,785 2,732 2,927
Items to be reclassified
Gain (loss) on valuation ofavailable-for-sale financial assets
(793) (850) 6,596 7,067
Gain (loss) on overseas operations translation 1,864 1,997 (12,337) (13,218)
Positive changes in other comprehensive income of associates and joint ventures
(30,645) (32,833) 960 1,029
Negative changes in other comprehensive income of associates and joint ventures
9,428 10,101 (11,750) (12,589)
Tax effects on the items to be reclassified to profit or loss
(3,486) (3,735) 758 812
Comprehensive Income (Loss) 452,031 484,305 249,339 267,142
Owners of the group 433,759 464,729 226,146 242,292
Non-controlling interests 18,272 19,576 23,193 24,850
* K-IFRS Consolidated Basis
70 71
Consolidated Statements of Changes in Stockholders’ EquityFor the Years Ended December 31, 2017 and 2016
(in USD thousands) Capital stock
Other paid-in-capital
Retainedearnings
Other equity
NCI Totalshareholders’
equity
Balances as of January 1, 2016 203,939 471,244 3,427,842 (47,780) 430,259 4,485,504
Dividends - - (10,985) - (13,668) (24,653)
Comprehensive Income - - 239,100 (12,955) 23,193 249,338
Net income (loss) - - 247,622 - 26,034 273,656
Gain (loss) on valuation of available-for-sale financial instruments
- - - 4,971 (4) 4,967
Gain (loss) on overseas operations translation - - - (12,337) - (12,337)
Positive equity changes in other comprehensive gain on associates and joint ventures
- - - 729 - 729
Negative equity changes in other comprehensive loss on associates and joint ventures
- - - (6,318) (2,815) (9,133)
Changes in retained earnings of associates and joint ventures
- - 2 - - 2
Remeasurement of defined benefit plan - - (8,524) - (22) (8,546)
Realization of unrecognized retained earnings of associates and joint ventures and others
- - 1,393 - - 1,393
Changes due to subsidiary’s equity changes - 30,724 - - 58,953 89,677
Changes in scope of consolidation - 962 - 171 85 1,218
Changes in shareholders’ equity - 31,686 229,508 (12,784) 68,563 316,973
Balances as of December 31, 2016 203,939 502,930 3,657,350 (60,564) 498,822 4,802,477
Balances as of January 1, 2017 203,939 502,930 3,657,350 (60,564) 498,822 4,802,477
Dividends - - (10,986) - (12,619) (23,605)
Comprehensive Income - - 459,170 (25,411) 18,272 452,031
Net income - - 457,806 - 16,339 474,145
Gain (loss) on valuation of AFS financial instruments - - - (903) 62 (841)
Gain (loss) on overseas operations translation - - - 1,864 - 1,864
Positive equity changes in other comprehensive gain on associates and joint ventures
- - - (30,498) - (30,498)
Negative equity changes in other comprehensive loss on associates and joint ventures
- - - 4,126 1,717 5,843
Changes in retained earnings of associates and joint ventures
- - (7) - (3) (10)
Remeasurement of defined benefit plan - - 1,371 - 157 1,528
Changes due to subsidiary's equity changes - (66) - - 5,572 5,506
Changes in scope of consolidation - 400 - - 78,019 78,419
Changes in shareholders’ eaquity - 334 448,184 (25,411) 89,244 512,351
Balances as of December 31, 2017 203,939 503,264 4,105,534 (85,975) 588,066 5,314,828
* K-IFRS Consolidated Basis
(in KRW millions) Capital stock
Other paid-in-capital
Retainedearnings
Other equity
NCI Totalshareholders’
equity
Balances as of January 1, 2016 218,500 504,890 3,672,590 (51,191) 460,980 4,805,769
Dividends - - (11,770) - (14,643) (26,413)
Comprehensive Income - - 256,172 (13,880) 24,849 267,141
Net income (loss) - - 265,303 - 27,892 293,195
Gain (loss) on valuation of available-for-sale financial instruments
- - - 5,326 (4) 5,322
Gain (loss) on overseas operations translation - - - (13,218) - (13,218)
Positive equity changes in other comprehensive gain on associates and joint ventures
- - - 781 - 781
Negative equity changes in other comprehensive loss on associates and joint ventures
- - - (6,769) (3,016) (9,785)
Changes in retained earnings of associates and joint ventures
- - 2 - - 2
Remeasurement of defined benefit plan - - (9,133) - (23) (9,156)
Realization of unrecognized retained earnings of associates and joint ventures and others
- - 1,492 - - 1,492
Changes due to subsidiary’s equity changes - 32,918 - - 63,162 96,080
Changes in scope of consolidation - 1,031 - 183 91 1,305
Changes in shareholders’ equity - 33,949 245,894 (13,697) 73,459 339,605
Balances as of December 31, 2016 218,500 538,839 3,918,484 (64,888) 534,439 5,145,374
Balances as of January 1, 2017 218,500 538,839 3,918,484 (64,888) 534,439 5,145,374
Dividends - - (11,770) - (13,520) (25,290)
Comprehensive Income - - 491,954 (27,225) 19,576 484,305
Net income (loss) - - 490,493 - 17,506 507,999
Gain (loss) on valuation of AFS financial instruments - - - (968) 66 (902)
Gain (loss) on overseas operations translation - - - 1,997 - 1,997
Positive equity changes in other comprehensive gain on associates and joint ventures
- - - (32,675) - (32,675)
Negative equity changes in other comprehensive loss on associates and joint ventures
- - - 4,421 1,839 6,260
Changes in retained earnings of associates and joint ventures
- - (8) - (3) (11)
Remeasurement of defined benefit plan - - 1,469 - 168 1,637
Changes due to subsidiary's equity changes - (70) - - 5,969 5,899
Changes in scope of consolidation - 428 - - 83,590 84,018
Changes in shareholders’ eaquity - 358 480,184 (27,225) 95,615 548,932
Balances as of December 31, 2017 218,500 539,197 4,398,668 (92,113) 630,054 5,694,306
* K-IFRS Consolidated Basis
72 73
Consolidated Statements of Cash Flows For the Years Ended December 31, 2017 and 2016
USD in thousands
2017
KRW in millions USD in thousands
2016
KRW in millions
Cash Flows from Operating Activities
Cash generated from operating activities
Net income (loss) 474,145 507,999 273,656 293,195
Adjustments 426,145 456,572 391,029 418,949
Changes in assets and liabilities from operating activities
(434,471) (465,492) (509,434) (545,808)
Interest income received 40,734 43,643 34,050 36,481
Interest expense paid (105,381) (112,905) (89,751) (96,159)
Dividend income received 250,021 267,872 194,217 208,084
Income taxes paid (242,718) (260,049) (156,567) (167,746)
Net Cash Provided by Operating Activities 408,475 437,640 137,200 146,996
Cash Flows from Operating Activities
Decrease in short-term financial instruments 222,578 238,470 35,980 38,548
Decrease in short-term loans 257,122 275,480 33,171 35,539
Decrease in long-term financial instruments 4,776 5,117 315 337
Decrease in long-term loans 96,005 102,860 202,524 216,985
Reduction in capital stock of associates - - 14,560 15,600
Decrease in available-for-sale financial assets 146,018 156,445 447 479
Disposal of property, plant and equipment 2,186 2,342 5,510 5,903
Increase in government grants 236 252 339 364
Disposal of investment property 294 315 - -
Disposal of intangible assets 656 702 1,644 1,761
Decrease in non-current assets held for sale 39,536 42,359 - -
Net cash flow due to gain of control over a subsidiary 107,538 115,216 - -
Increase in short-term financial instruments (310,986) (333,190) (42,593) (45,634)
Increase in short-term loans (146,856) (157,342) (285,425) (305,805)
Increase in long-term financial instruments (7,043) (7,546) (10,043) (10,760)
Increase in long-term loans (344,991) (369,622) (158,430) (169,742)
Acquisition of investments in associates and joint ventures
(49,356) (52,880) (85,758) (91,881)
Increase in available-for-sale financial assets (15,500) (16,607) (115,389) (123,627)
Acquisition of property, plant and equipment (220,257) (235,983) (237,122) (254,053)
Decrease in government grants (17) (18) - -
USD in thousands
2017
KRW in millions USD in thousands
2016
KRW in millions
Acquisition of investment property (29) (31) (1,692) (1,813)
Acquisition of intangible assets (3,512) (3,763) (10,695) (11,458)
Net cash flow due to loss of control over a subsidiary - - (157) (168)
Net cash used in investing activities (221,602) (237,424) (652,814) (699,425)
Cash Flows from Financing Activities
Proceeds from short-term borrowings 1,461,331 1,565,671 1,463,672 1,568,178
Proceeds from long-term borrowings 336,556 360,586 434,496 465,519
Proceeds from long-term debenture 385,477 413,000 412,544 442,000
Proceeds from subsidiary's paid in capital 5,504 5,897 48,588 52,058
Disposal of investments in subsidiaries - - 64,835 69,464
Repayment of short-term borrowings (1,602,596) (1,717,022) (1,626,831) (1,742,987)
Repayment of current portion of long-term liabilities (417,635) (447,454) (739,726) (792,542)
Repayment of long-term liabilities - - (73,116) (78,337)
Debenture issue costs (1,421) (1,523) (1,419) (1,520)
Payment of dividends (23,605) (25,290) (26,220) (28,093)
Acquisition of investments in subsidiaries - - (9) (10)
Net cash provided by Financing activities 143,611 153,865 (43,186) (46,270)
Net Increase (Decrease) in Cash and Cash Equivalents 330,484 354,081 (558,800) (598,699)
Changes in Cash and Cash Equivalents due to Foreign Currency Translation
482 517 7,426 7,956
Cash and Cash Equivalents, Beginning of the Year 1,472,071 1,577,177 2,023,446 2,167,920
Cash and Cash Equivalents, End of the Year 1,803,037 1,931,775 1,472,072 1,577,177
* K-IFRS Consolidated Basis
74
Plant Business
Oil & Gas Plant
KOC Installation of Telemetry System, Kuwait (2012-2018)
Petroleum Refinery
Omsk Refinery Modernization Program, Russia (2015-2018)
S-OIL RUCP, Korea (2015-2018)
Chemical & Petrochemical Projects
Sulphur Handling Facilities Project, Kuwait (2013-2018)
Saudi SEP sSBR Project, Saudi Arabia (2016-2018)
LCC HNC3 PKG 1, Korea (2017-2018)
YNCC # 2 Green-field Development Investment Project, Korea (2017-2019)
YNCC SM Expansion, Korea (2017-2019)
Power Plants & Others
Thai Binh II CFPP Project, Vietnam (2012-2018)
Kais Combined Cycle Power Plant, Algeria (2014-2018)
Poseung Biomass Project, Korea (2015-2018)
San Buenaventura 500MW Coal Fired Power Plant, Philippines (2014-2019)
Shinseocheon 1,000MW CFPP Boiler PKG Project, Korea (2015-2020)
Replacement of steam generators in Hanbit Nuclear Power Plant 5 & 6,
Korea (2017-2020)
Civil Business
Road Projects
Gwangyang City Detour, Korea (2006-2017)
Byeollae Surrounding Road, Namyangju, Korea (2010-2017)
Yeosu Hwayang-Najin Road, Korea (2009-2018)
Ulreung Island Round Road, Korea (2011-2018)
Woongdong-Jangyu National Highway Expansion, Korea (2006-2019)
Sanseong Tunnel Connection Road Section 1, Korea (2013-2019)
Seoul Jemulpo Tunnel Section 2, Korea (2013-2021)
Milyang-Ulsan Expressway Section 7, Korea (2014-2021)
Ulreung Island Round Road 2, Korea (2015-2021)
Iksan General Industrial Complex entrance road, Korea (2012-2022)
Anseong-Seongnam Expressway Section 9, Korea (2017-2022)
Changwon Detour, Korea (2016-2023)
Pohang-Youngdeok Expressway Section 2, Korea (2016-2023)
Ansung-Guri Expressway Section 11, Korea (2017-2023)
Gimhae City Detour, Korea (2008-2024)
Gangjin-Gwangju Expressway Section 7, Korea (2017-2024)
Paju-Pocheon Expressway Section 4, Korea (2017-2024)
Railway Projects
Seoul Subway Section 923, Korea (2010-2018)
Gimpo Urban Railway Section 3, Korea (2014-2018)
Donghae Line Pohang-Samcheok Rail Section 10, Korea, (2015-2019)
Ulsan-Pohang Subway Section 2, Korea (2009-2020)
Daegu Line Daegu-Yeongcheon Subway Section 4, Korea (2011-2020)
Hongseong-Songsan Subway Section 5, Seohae Line, Korea, (2013-2020)
Dodam-Yeongcheon Subway Section 3, Korea (2015-2020)
Hongseong-Songsan Subway Section 8, Seohae Line, Korea (2015-2020)
HANAM lines (Sangil-Geomdansan) Construction of Double Track Railway Section 4
(Seoul Metro 5 Extension Line), Korea (2015-2020)
Samsung-Dongtan Metropolitan Express Railway 2 Tool Site, Korea (2016-2021)
Sillim LRT (Light Rail Transit), Korea (2017-2022)
Bridge Projects
Trans Pyeongtaek Lake Road Section 2, Korea (2014-2018)
Aphae-Amtae National Highway Section 2, Korea (2010-2019)
Yeongam-Haenam Tourism and Leisure Enterprise Cities Access Road Construction Work
Section 1, Korea (2015-2020)
Gwangju R&D Special Zone Access Road Site, Korea (2018-2020)
Saemangeum South-North Road Section 3, Korea (2017-2022)
Dam & Other Projects
Gagok District Reservoir, Korea (2002-2018)
Peace Dam Flood Control Capability Enhancement, Korea (2012-2018)
Hanam Misa Area Section 2, Korea (2012-2018)
Godeok Sandan Wastewater Treatment Plant Phase 1, Korea (2013-2018)
Sihwa MTV Phase 1 Landscaping, Korea (2013-2018)
Saemangeum Agricultural Biotechnology Lot Section 2, Korea (2015-2018)
Noryeokdo Bridge, Korea (2000-2019)
Sihwa Section 3, Korea (2007-2019)
Busan New Port West Container CY Site, Korea (2012-2019)
Taean Thermal Power Plant Units 9 and 10 Civil Works and Construction, Korea (2012-2019)
Busan New Port West Container Phase 2-5, Korea (2012-2019)
Shiheung Janghyeon District Section 1, Korea (2013-2019)
Sludge Recyling System in the Metropolitan Landfill Area phase 3, Korea (2017-2019)
Donghae Port Phase 3 North Breakwater Section 1, Korea (2016-2020)
Sand Island Destruction at Busan New Port, Korea (2017-2020)
Sihwa Sewage Treatment Plant, Korea (2018-2020)
Seonam Sewage Treatment Plant, Korea (2009-2021)
Echo Delta City Section 2-1, Korea (2016-2021)
Oryukdo Breakwater, Korea (2016-2021)
Chungju Dam Flood Control Capability Enhancement, Korea (2014-2023)
Overseas
Tirshuli Hydroelectric Power Plant, Nepal (2013-2018)
Hanoi Light-rail Line No. 3, Vietnam (2014-2019)
Gulpur Water Plant, Pakistan (2014-2019)
Temburong CC2 Bridge, Brunei (2015-2019)
Temdurong CC3 Bridge, Brunei (2015-2019)
Karian Dam, Indonesia (2015-2019)
Thomson Line T222 Subway, Singapore (2014-2020)
TTP1 Port, Singapore (2015-2020)
Canakkale Bridge, Turkey (2018-2022)
Cisokan pumped pumping-up Power households Plant, Indonesia (2016-2025)
Housing & Building Business
Residential Project
e-Pyeonhan Sesang Sekyo, Osan (2015-2018) 2,050 households
e-Pyeonhan Sesang Samsong City (2015-2018) 588 households
ACRO RIVER VIEW Sinbanpo, Korea (2015-2018) 595 households
Dasan, e-Pyeonhan Sesang S1, Korea (2015-2018) 1,685 households
e-Pyeonhan Sesang Yongin Hansup City, Korea (2015-2018) 6,800 households
e-Pyeonhan Sesang Samcheok Gyodong, Korea (2015-2018) 723 households
e-Pyeonhan Sesang Sejong River Park, Korea (2015-2018) 849 households
e-Pyeonhan Sesang Misa, Korea (2015-2018) 652 households
Pyeongchang Olympic Village, Korea (2015-2018) 600 householdss
e-Pyeonhan Sesang Yangju New Town Phase 2, Korea (2016-2018) 1160 households
e-Pyeonhan Sesang Terrace Opo, Korea (2016-2018) 573 households
e-Pyeonhan Sesang Songdo, Korea (2016-2018) 2,708 households
ACRO RIVER HEIM, Korea (2016-2018) 1,073 households
e-Pyeonhan Sesang Taejae, Korea (2016-2018) 624 householdss
e-Pyeonhan Saesang Youngjong Sky City, Korea (2016-2018) 1,520 households
Changwon Jaeun Apartment, Korea (2016-2018) 867 households
e-Pyeonhan Sesang Sangdo Nobility, Korea (2016-2018) 893 householdss
e-Pyeonhan Sesang Wonju Taejang , Korea (2016-2018) 893 householdss
e-Pyeonhan Sesang City Han-gang new city site, Korea (2016-2018) 748 households
e-Pyeonhan Sesang Youngjong Sky City Phase 2, Korea (2016-2019), 1,520 households
e-Pyeonhan Sesang Chudong Park, Korea (2016-2019) 1,561 households
e-Pyeonhan Sesang Seoul Nat’l Univ. (2016-2019) 1,531 households
e-Pyeonhan Sesang Myeongjang, Dongnae, Korea (2016-2019) 1,384 households
e-Pyeonhan Sesang Sejong Phase 2, Korea (2016-2019) 1,258 households
e-Pyeonhan Sesang Hansup City, Chuncheon (2016-2019) 2,835 households
e-Pyeonhan Sesang Samsong City Phase 2, Korea (2016-2019) 1,430 households
e-Pyeonhan Sesang Myeongji, Korea (2016-2019) 377 households
e-Pyeonhan Sesang Yeomchang, Korea (2016-2019) 499 households
e-Pyeonhan Sesang Milyang River, Korea (2016-2019) 441 households
e-Pyeonhan Sesang City Misa, Korea (2016-2019) 554 households
e-Pyeonhan Sesang Busan Port, Korea (2016-2019) 939 households
e-Pyeonhan Sesang Doksan, Korea (2016-2019) 859 households
e-Pyeonhan Sesang Sangrok, Korea (2016-2019) 597 households
e-Pyeonhan Sesang Yangju New City Phase 3, Korea (2017-2019) 1,556 households
e-Pyeonhan Sesang Samsong City Phase 3, Korea (2017-2019) 1,430 households
Dasan e-Pyeonhan Sesang, Korea (2017-2019) 491 households
e-Pyeonhan Sesang Siheung, Korea (2017-2019) 659 households
e-Pyeonhan Sesang Nohyeong, Korea (2017-2019) 418 households
Dasan Public Apartment A2, Korea (2017-2019) 973 households
e-Pyeonhan Sesang Ilgwang, Korea (2017-2019) 913 households
Daelime Apartment, Godeok (2017-2020) 4,066 households
e-Pyeonhan Sesang Chudong Park, Korea (2017-2020) 1,733 households
e-Pyeonhan Sesang Guri Sutaek, Korea (2017-2020) 733 households
e-Pyeonhan Sesang Nokbeon Station, Korea (2017-2020) 2,441 households
e-Pyeonhan Sesang Dongnae Oncheon, Korea (2017-2020) 439 households
e-Pyeonhan Sesang Songpa, Korea (2017-2020) 1,199 households
ACRO Seoul Forest, Korea (2017-2020) 280 households
e-Pyeonhan Sesang Bongmyeong, Korea (2018-2020) 459 households
e-Pyeonhan Sesang Boramae Phase 2, Korea (2018-2020) 859 households
Goyang Samsong 4th Efficiency Apartment Site, Korea (2018-2020) 1555 households
e-Pyeonhan Sesang Seonbugwangjang, Korea (2018-2020) 719 households
Commercial & Mixed Use Project
Ewha Womans University Magok Medical Center, Korea (2015-2018)
BIFC Phase 2, Korea (2015-2018)
PyeongChang 2018 OLYMPIC PLAZA & CEREMONIES VENUE, Korea (2015-2018)
Ulsan Knowledge Industry Center, Korea (2016-2018)
Gwanggyo Dentium New Company Building, Korea (2016-2018)
Dongtan Logistics Center, Korea (2016-2018)
AmorePacific Daejeon Remodelling, Korea (2017-2018)
Goyang Logistics Park, Korea (2017-2019)
Hanam Knowledge Industry Center Phase 2, Korea (2015-2018)
The National Sejong Arboretum, Korea (2016-2020)
Namdaemun Office, Korea (2017-2020)
Project in Progress
Daejeon R&D Center
Executive Vice President : Kisoon Park
Yeosu Plant
Vice President : Sungtae Joo
Film Business
Senior Vice President : Nowoong Park
PB Business
Vice President : Keunchang Park
PE Business
Vice President : Yoong Huh
Business Support
Vice President : Seunghyun Son
Jeonju Plant
Plant General Manager: Yongchan Kim
PETROCHEMICAL UNIT President & CEO : Sangwoo Kim
ENGINEERING & CONSTRUCTION UNIT
Business Division Business Office
Human Resource Management Office
Vice President :Yunho Kang
Safety & Quality Office
Vice President : Younghyuk Kang
Finance Management Office
Senior Executive Vice President : Sungwoo Park
Business Support Office
Vice President : Youngkwang Yoo
Corporate Planning & Management Office
Executive Vice President : Beomlack Hong
Plant Proposal Office
Plant Project Execution Office
Plant Engineering Office
Plant Procurement Management Office
D-Innovation Center Office
Housing Business Office
Building Business Office
Building Business Management Office
Customer Satisfaction Office
Overseas Marketing & Sales Office
Vice President : Jaedeuk Ha
Technology Research & Development Institute
Vice President : Chiyong Song
Legal & Compliance Office
Executive Vice President : Samsup Choi
Subcontract & Procurement Office
Senior Executive Vice President : Seungtae Jung
Plant Business Division
Senior Executive Vice President : Heonjae Yim
Housing & Building Business Division
Senior Executive Vice President :Sangshin Park
Civil Business Division
Senior Executive Vice President : Taeseob Yoon
Civil Domestic Business Office
Civil Overseas Business Office
Civil Proposal Support Office
Civil Project Management & Execution Office
Organization & Management
Plant Business
Oil & Gas Plant
KOC Installation of Telemetry System, Kuwait (2012-2018)
Petroleum Refinery
Omsk Refinery Modernization Program, Russia (2015-2018)
S-OIL RUCP, Korea (2015-2018)
Chemical & Petrochemical Projects
Sulphur Handling Facilities Project, Kuwait (2013-2018)
Saudi SEP sSBR Project, Saudi Arabia (2016-2018)
LCC HNC3 PKG 1, Korea (2017-2018)
YNCC # 2 Green-field Development Investment Project, Korea (2017-2019)
YNCC SM Expansion, Korea (2017-2019)
Power Plants & Others
Thai Binh II CFPP Project, Vietnam (2012-2018)
Kais Combined Cycle Power Plant, Algeria (2014-2018)
Poseung Biomass Project, Korea (2015-2018)
San Buenaventura 500MW Coal Fired Power Plant, Philippines (2014-2019)
Shinseocheon 1,000MW CFPP Boiler PKG Project, Korea (2015-2020)
Replacement of steam generators in Hanbit Nuclear Power Plant 5 & 6,
Korea (2017-2020)
Civil Business
Road Projects
Gwangyang City Detour, Korea (2006-2017)
Byeollae Surrounding Road, Namyangju, Korea (2010-2017)
Yeosu Hwayang-Najin Road, Korea (2009-2018)
Ulreung Island Round Road, Korea (2011-2018)
Woongdong-Jangyu National Highway Expansion, Korea (2006-2019)
Sanseong Tunnel Connection Road Section 1, Korea (2013-2019)
Seoul Jemulpo Tunnel Section 2, Korea (2013-2021)
Milyang-Ulsan Expressway Section 7, Korea (2014-2021)
Ulreung Island Round Road 2, Korea (2015-2021)
Iksan General Industrial Complex entrance road, Korea (2012-2022)
Anseong-Seongnam Expressway Section 9, Korea (2017-2022)
Changwon Detour, Korea (2016-2023)
Pohang-Youngdeok Expressway Section 2, Korea (2016-2023)
Ansung-Guri Expressway Section 11, Korea (2017-2023)
Gimhae City Detour, Korea (2008-2024)
Gangjin-Gwangju Expressway Section 7, Korea (2017-2024)
Paju-Pocheon Expressway Section 4, Korea (2017-2024)
Railway Projects
Seoul Subway Section 923, Korea (2010-2018)
Gimpo Urban Railway Section 3, Korea (2014-2018)
Donghae Line Pohang-Samcheok Rail Section 10, Korea, (2015-2019)
Ulsan-Pohang Subway Section 2, Korea (2009-2020)
Daegu Line Daegu-Yeongcheon Subway Section 4, Korea (2011-2020)
Hongseong-Songsan Subway Section 5, Seohae Line, Korea, (2013-2020)
Dodam-Yeongcheon Subway Section 3, Korea (2015-2020)
Hongseong-Songsan Subway Section 8, Seohae Line, Korea (2015-2020)
HANAM lines (Sangil-Geomdansan) Construction of Double Track Railway Section 4
(Seoul Metro 5 Extension Line), Korea (2015-2020)
74
Daejeon R&D Center
Executive Vice President : Kisoon Park
Yeosu Plant
Vice President : Sungtae Joo
Film Business
Senior Vice President : Nowoong Park
PB Business
Vice President : Keunchang Park
PE Business
Vice President : Yoong Huh
Business Support
Vice President : Seunghyun Son
Jeonju Plant
Plant General Manager: Yongchan Kim
PETROCHEMICAL UNIT President & CEO : Sangwoo Kim
ENGINEERING & CONSTRUCTION UNIT
Business Division Business Office
Human Resource Management Office
Vice President :Yunho Kang
Safety & Quality Office
Vice President : Younghyuk Kang
Finance Management Office
Senior Executive Vice President : Sungwoo Park
Business Support Office
Vice President : Youngkwang Yoo
Corporate Planning & Management Office
Executive Vice President : Beomlack Hong
Plant Proposal Office
Plant Project Execution Office
Plant Engineering Office
Plant Procurement Management Office
D-Innovation Center Office
Housing Business Office
Building Business Office
Building Business Management Office
Customer Satisfaction Office
Overseas Marketing & Sales Office
Vice President : Jaedeuk Ha
Technology Research & Development Institute
Vice President : Chiyong Song
Legal & Compliance Office
Executive Vice President : Samsup Choi
Subcontract & Procurement Office
Senior Executive Vice President : Seungtae Jung
Plant Business Division
Senior Executive Vice President : Heonjae Yim
Housing & Building Business Division
Senior Executive Vice President :Sangshin Park
Civil Business Division
Senior Executive Vice President : Taeseob Yoon
Civil Domestic Business Office
Civil Overseas Business Office
Civil Proposal Support Office
Civil Project Management & Execution Office
Project in Progress
DAELIM Milestones
Key Accomplishments
∙ 18th-largest conglomerate in Korean industry
∙ Projects being implemented in 36 countries worldwide
∙ Ranked the 54th in Top International Contractors from Engineering News Record in 2017
∙ The 4th on Korea Construction Capability Evaluation Criteria in 2017
∙ Participation to the Carbon Disclosure Project (CDP)
Organization & Management