South Korea's Lotte Group is to construct the tallest building in the world -- nearly one-third as tall again as the highest building in Japan, the Landmark Tower in Yokohama -- at a cost of some 1.2 trillion won, over $1 billion.

The ground-breaking ceremony is scheduled for later this month and it is anticipated that the 464.5-meter tower, to be erected in the city of Pusan at the southernmost tip of South Korea, will be open by for business by November 2005. In comparison, the Landmark Tower stands a mere 291 meters tall.

The 107-story building, to be named Pusan Lotte World, will tower over the World Trade Center in New York, which stands 410.5 meters high, and surpass the 88-story Petronas Towers in Kuala Lumpur, which is at present the world's tallest building, at a height of 452 meters.

The company already operates the hugely popular Lotte World shopping, hotel and entertainment complex in central Seoul, but this new venture is designed to out-do even that, says Ho Kang Suk, manager of Lotte's International Division in Pusan, which is overseeing the project.

"The building will have seven underground floors and will house shopping malls and several entertainment facilities, including a theme park," he said. "There will also be a hotel with 1,500 guest rooms."

The preparation work on the project has been confidential, Ho said, and Lotte only went public with the grandiose scheme after getting the go-ahead from the city government in late November.

"It will be the tallest building in the world, so naturally there are lots of restrictions on the project," Ho said. "Serious traffic congestion during the building work is just one problem, but we have reached agreement with the local government here and all the problems have been solved." The tower, which will command spectacular views over the Sea of Japan from its position right beside Pusan's harbor, has been designed by Baum Architects Co., based in Seoul, and in consultation with The Leonard Parker Associates architectural design company, in Minneapolis.

"The building will effectively be divided into two parts," said Yong Kyung Cha, a member of Lotte's project team," with a total floor space of more than 300,000 sq. meters.

"Roughly half will be devoted to the hotel complex, while the rest will be occupied by the department store and entertainment facilities," he said.

Artist's impressions of the structure show three massive columns supporting a sphere at their apex. The floors beneath the sphere will give hotel guests unparalleled views over the surrounding region, while the underground levels and associated structures will house the shopping and entertainment complexes.

Lotte might be forgiven for raising some eyebrows in a country still suffering the effects of an economic crisis in late 1997 and struggling to come to terms with increasing corporate failures and rising unemployment, but Ho believes Pusan Lotte World could become a national project that will raise South Korea's profile and image both at home and overseas.

"Yes, things have been difficult in (South) Korea for a few years now," he conceded, "but Lotte has a strong financial basis and we are actively looking to expand our business in several new directions."

The Lotte Group reported revenue of $14 billion in the last financial year and has interests in six core business areas, the largest of which is tourism and distribution. It already operates the largest hotel chain on the peninsula.

Lotte may also be looking to Japan, with Pusan already linked to Fukuoka, Osaka and Shimonoseki, in Yamaguchi Prefecture, by ferry or flight and Japan's improving economy encouraging more people to take trips overseas.

"Construction of this new building will have a very positive economic effect on the region," said Park Sang Khil, deputy director of the Korean International Trade Association in Tokyo. "It will create many new jobs and increase tax revenues."

"Pusan is Korea's second city and I can only see the building having positive effects on the city," he said, adding that Pusan is also the home town of Lotte's chairman.

Lotte has remained financially strong while other South Korean companies -- notably Daewoo and Hyundai -- have struggled since the 1997 crisis, Park said, "because many of the firm's main projects are here in Japan."

Tsugimoto Goto, deputy general manager of Itochu Management Consulting Ltd. and an expert on South Korean economic affairs, pointed out that having separate business interests in Japan and Korea helped protect Lotte.

"The Japanese arm of the Lotte Group is a very cash-rich company," he said. "It's activities here are mainly in the very profitable light industry sector, while it limited its activities in South Korea and had no investment in heavy industry.

"Lotte focused on the service industry in Korea and yes, the economy there still has some problems," he said, "But consumer activities are still steady."

Even with its completion in 2005, however, Pusan Lotte World will still be dwarfed by the world's tallest self-supporting structure, the CN Tower, in Toronto, which rises 546.3 meters above the Earth's surface.