JEC Jacobs Engineering Group Inc

Recently, Jacobs Engineering Group Inc. (JEC) announced that it has received two strategic contracts from South-East Asian Chemical companies.  One of the contracts is from Flexsys Malaysia Sdn Bhd, a subsidiary of Solutia Inc. and the other is from Evonik Methionine SEA Pte Ltd, a wholly-owned subsidiary of Evonik Industries AG.

According to the contract from Flexsys, Jacobs will be providing engineering, procurement and construction management (EPCM) services in support of the Kuantan Resin plant in Kuantan, Malaysia. The value of the contract has not yet been disclosed. This resin plant is being constructed by Solutia Inc in order to produce Butvar® polyvinyl butyral (PVB) resin, which are used to improve adhesion, strength, durability and flexibility of products around the globe. The project has been scheduled to be completed by 2013.

On the other hand, contract with Evonik include engineering, procurement and construction management (EPCM) services to be provided by Jacobs for a new methionine production complex at Jurong Island, Singapore at an undisclosed value. Evonik invested $636.5 million in the new production plant, with a planned capacity to produce 150,000 metric tons per annum of amino acid DL-methionine and intermediates. The project is scheduled for a start-up in 2014. Besides, Evonik Industries AG has also awarded Jacobs with a polyamide 12 production facility contract in Asia, wherein Jacobs is entrusted to provide basic engineering services.

Jacobs will provide execution activities to both the projects from its office in Singapore with support from other offices in the region.

The company’s growing international exposure through contract wins and diversification have been raising investor confidence over time. The new contracts across South East Asia are thus anticipated to strengthen such confidence further.

Jacobs’ proven track record of on-time service delivery as well as retention of its long-term relationships with existing clientele has been providing an edge over the industry players, such as Fluor Corporation (FLR) and Foster Wheeler AG (FWLT).

We currently have a long-term Neutral recommendation on the stock. Moreover, the company maintains a Zacks #3 Rank, which translates into a short-term (1-3 months) Hold rating.

 
FLUOR CORP-NEW (FLR): Free Stock Analysis Report
 
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