Hyundai, Daewoo sign Turkmenistan fertilizer plant deals

South Korea’s Hyundai Engineering Co. and Daewoo Engineering & Construction Co. are likely to win orders to build fertilizer plants in Turkmenistan, expanding their presence in Central Asia.

Hyundai Engineering said it signed a memorandum of understanding with the Federation of Turkmenistan Industrial Entrepreneurs on Tuesday for a $1.4 billion project to build an ammonia urea fertilizer plant in Balkan, the westernmost of the five regions of the country.

The factory is set to produce 1.2 million tons of urea fertilizer and 665,000 tons of synthetic ammonia a year, according to the plant engineering and construction unit of Hyundai Motor Group on Wednesday.

“It is expected to win more deals in the future as the company formed strong trust relationships with local governments and ordering agencies in Turkmenistan through successful completion and implementation of projects for various industries,” Hyundai said in a statement.

The company started its business in the country with a $1.4 billion deal for a gas desulfurization plant in 2009 and worked on other projects such as a $530 million refinery in 2012 and a $3.4 billion petrochemical complex in 2014.

DAEWOO TO BUILD TWO PLANTS

Separately, Daewoo said on Wednesday it inked an MOU to construct two fertilizer plants in the Central Asian country.

The builder is set to build phosphate fertilizer facilities with an annual capacity of 300,000 tons in Turkmenabat and another ammonia urea fertilizer factory in Balkan, which has similar capacities of urea fertilizer and synthetic ammonia with those of Hyundai’s plant in the region.

“We will seek to enter Turkmenistan with the fertilizer plant MOU, hoping to expand our participation into all other sectors including plants, power plants and home construction based on Daewoo’s extensive performance,” a company official said.

Daewoo did not disclose further details such as the values of the projects, saying it will determine these after further discussions with onsite inspections.

Write to Sesung Oh and Jong-Pil Park at sesung@hankyung.com
Jongwoo Cheon edited this article.