Chairman Park Seung-joon of Construction Guarantee.

Since its founding in 1963, Construction Guarantee has supported construction companies in their individual pursuits and has contributed to the development and growth of the construction industry in Korea. Construction Guarantee was the first institution of its kind in Korea, and it has played a leading role in making the construction industry a pivotal force in the Korean economy by providing financial credit to construction enterprises.

With 50 years of experience, Construction Guarantee continues to strive in its main business endeavors of guarantees and loans. Our business extends to insurance, Sejong Field Golf Club, and the CG Construction Management Training Center.

CG so far has 103 trillion won worth of guarantees issued for various construction projects outstanding, both at home and abroad, for its 11,000 members with its 5.5 trillion won in capital as its guarantee base. Its operation includes, besides the issuances of guarantees for various construction projects, all government construction projects, providing loans to its member construction firms, leasing and investment. 

Fitch, the third largest credit ratings company in the world, gave CG an “A”, while AM Best, an insurance industry credit ratings company, gave CG and “A+.” The letter of recommendation for CG issued by the Ministry of Land, Infrastructure and Transport has played no minor role in boosting the credit ratings for CG.

So many tailor-made guarantees signed with the banks in foreign countries where the Korean builders are in operation have also been a strong point for CG,

CG signed cooperative agreements with ENBD, the largest bank in the United Arab Emirates and the DDIB, the 7th largest bank in UAE. CG went on to sign qcsimilar contract with JASINDO, a government owned insurance company in Indonesia to facilitate construction project support guarantees for Korean builders in the S.E. Asian country. CG, meanwhile, is in the process of signing the cooperative agreements with other foreign banks including BNI, one of the four largest banks in Indonesia, the Arab Bank in Jordan, BDO in the Philippines, and SBI in India.

CG also has been signing counter guarantee contracts with domestic banks with extensive overseas networks, starting with Eximbank in 2008, Woori Bank in 2012 and Shinhan Bank and KEB Hana Bank this year, as the guarantee limit for those banks is those of the club, not for the club members. Shinhan has a large network in Southeast Asia, while KEB Hana has an extensive network in the Middle East.

CG has been signing joint guarantee agreements with domestic organizations which facilitate the provision of joint guarantees to overseas infrastructural projects and SMEs’ overseas construction projects jointly by CG and domestic banks. The financial institutions joining CG in issuing joint guarantees include Eximbank, Korea Trade Insurance Corp. KDB, Seoul Guarantee Insurance, the Overseas Construction Association of Korea and others. These financial institutions look for sharing risks by issuing joint guarantees to support SMEs to undertake overseas construction projects, despite their poor financials.

Chairman Park Seung-joon said CG is ready to give its support to our construction firms to do whatever business they want in overseas markets for the sake of the development and progress of the construction industry in Korea.

The chairman came to CG in November 2015 as the first person to take over the top post at CG from the private sector since it was set up in 1963. He went on the record as the first chairman from the private sector who steered CG to post a net profit of 172 billion won last year by saving 86 billion won in expenses. 

A view of the CG building in Seoul.(Photos: CG)