Time and again, Jacobs Engineering Group Inc. (JEC) has retained its fundamental business strategy of winning client confidence, building long-term relationships and thus prospering across diverse markets, worldwide. The company moved a step ahead in this direction through one more contract win, this time associating itself with a major investment in Texas.
Jacobs recently announced that it has won a contract to provide Project Management Consulting (PMC) services for a new pipe rolling mill near Corpus Christi, Texas. The contract was awarded by Tianjin Pipe (Group) Corporation (TPCO), a global leader in the manufacture of seamless pipes.
TPCO has major manufacturing facilities in China and Indonesia and is headquartered in Tianjin, China. Over the years, TPCO has captured over 40% of China's oil country tubular goods (“OCTG”) domestic market and has handled exports to over 100 countries in Europe, Americas, Asia, Africa and Oceania.
The new pipe manufacturing facility is TPCO’s first major mill in the United States, to be constructed in Gregory, Texas near the Port of Corpus Christi. The facility is scheduled for phased completions between December 2012 and end of 2014.
Jacobs, according to the contract, will be assisting TPCO with the coordination and management of engineering, procurement, and construction of the mill. This is expected to enhance TPCO's internal capabilities and resources. Engineering, procurement and construction of the new facility will include professional services, materials and/or labor from the United States, Europe and China. The venture is also expected to boost the internal capabilities of TPCO’s Chinese associate, Capital Engineering & Research Incorporation Limited (CERI). The Project Management Consulting services would be provided by Jacobs’ Houston and Shanghai operations.
The contract value has not yet been disclosed. However, the total value of the program is estimated to be approximately $1 billion.
About Jacobs
Jacobs Engineering Group Inc. is one of the world's largest engineering and construction companies providing services to a variety of industrial, commercial and government clients across a global network. The company directly competes with its peers, such as Fluor Corporation (FLR) and Foster Wheeler AG (FWLT).
We currently have a Neutral recommendation on the stock. Jacobs has a Zacks #3 Rank, which implies a short-term (1-3 months) Hold rating.
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