SM Entertainment founder and chief producer Lee Soo-man delivers a speech at the 2022 Global Infrastructure Cooperation Conference at the Shilla Seoul, Tuesday. Yonhap

SM Entertainment teams up with Samsung C&T, Hyundai E&C for NEOM project

By Park Jae-hyuk

K-pop artists are expected to play major roles for Korean builders to participate in the construction of Saudi Arabia's NEOM smart city, according to industry officials, Wednesday.

During Tuesday's opening ceremony of the Global Infrastructure Cooperation Conference (GICC) in Seoul, SM Entertainment founder and chief producer Lee Soo-man indicated his company's intention to team up with the government and construction firms paying keen attention to the $500-billion project to build a new city on a 26,500-square-kilometer site near the Red Sea.

"I have had opportunities to participate in projects for future cities. Since 2019, we have participated as an adviser in the Qiddiya project, which is well-known around the world as a mega entertainment city constructed by Saudi Arabia," Lee said in his speech. "We also signed an MOU on Aug. 19 with the Saudi Arabian government. I am participating as a producer for the Saudi pop-producing project for the future cultural industry of Saudi Arabia."

It has been unusual for a top executive in the entertainment industry to deliver a speech at an event for the construction industry.

Speculation has therefore been raised that SM Entertainment may host a concert in Saudi Arabia, when Lee visits the Middle Eastern country next January, with Minister of Land, Infrastructure and Transport Won Hee-ryong and construction industry officials. When Saudi Arabia's Minister of Culture Badr bin Farhan Al Saud visited Korea in June, Lee promised that SM Entertainment would host a concert there.

Minister of Land, Infrastructure and Transport Won Hee-ryong, left, poses with NEOM Chief Investment Officer Manar Almoneef, during the 2022 Global Infrastructure Cooperation Conference at the Shilla Seoul, Tuesday. Courtesy of the Ministry of Land, Infrastructure and Transport

"Even traditional fields such as construction are now incorporating new elements, such as IT, semiconductors and cultural awareness," the land minister said in his congratulatory remarks for the conference, arousing hope for the cooperation between SM Entertainment and construction firms.

The ministry has continuously emphasized that it will enable local builders over the next five years to win overseas construction contracts collectively worth $50 billion each year, by creating a second construction boom in the Middle East.

NEOM Chief Investment Officer (CIO) Manar Almoneef, who had a 40-minute closed-door meeting with Won before the conference, asked Korean builders and tech firms to join the NEOM project.

"We've identified a number of investment opportunities and areas of collaboration with all our partners, from Korea and around the world, to come and take part in some of these opportunities," she said.

In June, a consortium including Samsung C&T and Hyundai E&C won a $1-billion order to build a tunnel for NEOM's "The Line" project. HanmiGlobal is in charge of managing the construction. Representatives from the three Korean firms also attended the closed-door meeting between the land minister and the NEOM CIO.

Other construction firms, such as Daewoo E&C, have shown interest in the project, amid their ongoing efforts to improve their worsening profitability through contracts for construction projects overseas.

Concerns, however, have remained over the sustainability of NEOM, as Saudi Arabia has yet to disclose the specifics of the project, except for the new city's external design. Some Western media have expressed skepticism about NEOM, pointing out its remoteness, questionable economic feasibility and the forced evictions of local residents from the site.

Industry officials expect Saudi Arabia's Crown Prince Mohammed bin Salman to discuss further details with President Yoon Suk-yeol and domestic construction industry officials when he visits Korea this fall.