RIYADH, 10 January 2008 — Japan’s biggest engineering firm, JGC Corp., has announced plans to accelerate expansion in the Middle East, setting up a unit in Saudi Arabia this spring to oversee petroleum, natural gas and other petrochemical projects in the region.
“Our purpose of establishing this new company is to contribute to further economic growth of the Kingdom and to strengthen the relationship between the Kingdom and Japan,” Masahiro Aika, managing director of JGC Arabia Ltd., Saudi Arabia, said yesterday. He added that JDG would be the world’s first major engineering company to have the capacity to handle all phases of plant construction in Saudi Arabia.
JGC Corp. provides engineering, procurement and construction services for various types of plants worldwide. It is currently involved with several mega projects in the country, including the petrochemical complex of PetroRabigh, a joint venture between state-owned Saudi Aramco and Japan’s Sumitomo Chemical.
“By setting up a local unit, the firm hopes to find more business opportunities, mainly medium-sized projects worth $500 million,” he said.
He said the unit would target annual sales turnover of some $500 million. The total sales of JGC Group from its global projects are estimated at $6 billion.
The unit, set up in Alkhobar with an initial capitalization of about $20 million and some 150 staff, would be expanded to about 500 eventually, including Saudi nationals during the next five years, the company said.
“JGC Corp. sees the Middle East as the most important market since the region is increasing its investment in refinery and petrochemical production capacities on the back of rising oil prices.”
For the business year to March, the company expects more than 50 percent of its total sales turnover to come from plant construction projects in the Middle East.
In December, the official said it won a contract for an ethylene plant project of Saudi Polymers Company. The firm did not disclose terms of the deal; the contract was estimated at about 150-200 billion yen.
