Jacobs Engineering Group Inc. (JEC) was recently selected as a clients’ engineer for assembling a new 2×150 Megawatt electric (MWe) power plant in Barangay Bato, Toledo City of Philippines for an undisclosed amount. The company was awarded the deal by Therma Visayas Inc. (TVI), a subsidiary of Aboitiz Power Corporation. The venture, scheduled to be completed by 2017, aims to meet the growing energy demand of Philippines.
Contract Details
As per the terms of the contract, Jacobs will review the design of the project and provide construction components to the Engineering, Procurement and Construction (“EPC”) firm of the project, Hyundai Engineering Co., Ltd.
Also, Jacobs is supposed to scrutinize the quality of the construction by reviewing its test procedures, inspecting off-side fabrication shops and submitting technical credentials on grounds of relevant standards and design codes.
The new power plant in Philippines will include two fluidized bed boilers with steam and reheat turbine generators. However, the plant will also include a jetty for coal unloading. Moreover, a conveyor system, water and waste treatment machines, specialized unloading equipments and certain ancillary buildings will be present in the plant.
Benefits of the Contract
Philippines, being an emerging economy, is witnessing rapid industrialization. Fast economic growth has accelerated the energy demand in the country. TVI’s power plant will support the country’s progress by satisfying its energy demand to a considerable extent. Working as the owners’ engineer for this prestigious deal, Jacobs will strengthen its position as one of the best professional, construction and technical service firms worldwide.
Moving Forward
Jacobs is one of the most popular technical services providers in the global forum. It offers professional, technical and construction services to diversified public, industrial and commercial clients.
On Nov 11, 2014, Jacobs received a multi-year contract from Chevron South Africa and Texas Department of Transportation. Coupled with these deals, the new energy contract will likely augment the brand value and margins of the company in the upcoming quarters. However, such positive outcomes can be offset by currency or exchange rate volatilities in the future.
Considering that the benefits of the new contracts are yet to bear fruit, Jacobs is currently carrying a Zacks Rank #4 (Sell). Some better-ranked stocks worth considering in the industry include AECOM Technology Corporation (ACM), Willdan Group, Inc. (WLDN) and Best Buy Co., Inc. (BBY). While AECOM Technology and Willdan Group both sport a Zacks Rank #1 (Strong Buy), Best Buy Co. carries a Zacks Rank #2 (Buy).
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