JGC Corporation Invests in Brazil’s Shipbuilder EAS

JGC Corporation, along with IHI Corporation and Japan Marine United Corporation (JMU), has finalized plans to invest in Estaleiro Atlantico Sul S.A. (EAS), one of Brazil’s largest shipbuilding companies, headquartered in the state of Pernambuco.

JGC, IHI, and JMU will set up a special-purpose company, which is scheduled to sign a contract with EAS at the end of June to acquire 25% of the shares of EAS (due to the increase in capital, EAS will issue new shares.) Following this, the investment company will look for other investors, to push the amount of EAS shares held by Japanese companies to a maximum of one third of the company’s total.

Petrobras, the Brazilian state-owned oil company, has been investing in the development of offshore oil and gas fields. Brazil’s crude oil production capacity, which currently stands at two million barrels per day, is projected to rise to 4.2 million barrels per day by 2020, which will make Brazil one of the world’s leading offshore oil & gas producing countries. JGC has been carefully considering strategies for offering high-level engineering technology to the Brazilian market, and we believe that by teaming up with IHI, known for its comprehensive manufacturer of machinery, and JMU, known for its shipbuilding expertise, we can optimize our contribution.

Meanwhile, EAS is Brazil’s largest manufacturer of large scale crude carrier and offshore platform & structure, and is currently in the midst of numerous high-profile shipbuilding projects for Petrobras, including tankers and drill ships for oil & gas development. Moreover, with plans to enter the FPSO (Floating Production, Storage and Offloading system) construction business, EAS is likely to continue growing rapidly as a company.

To help further these plans, top executives of EAS’s shareholder visited Japan last year, and met with Chairman Emeritus Yoshihiro Shigehisa and other top managements of JGC. Both companies agreed on a future strategy of mutual guidance in engineering technology and project management for offshore oil & gas development and related construction projects, and JGC began to give capital investment in EAS serious consideration.

Through this investment in EAS, JGC hopes to gather further expertise in the realm of offshore engineering & construction for development of offshore oil & gas, and expand our offshore business field in the world.

[mappress]

Press Release, June 14, 2013