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December 7, 2011
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Jacobs Engineering Group Inc. (JEC) has recently reported to win a series of contracts. The new client list includes Shell India Markets Private Limited, Marine Corps Services and a newly formed joint venture between Honeywell and Sinochem.
The contract from Shell India Markets Private Limited involves establishing an integrated organization with Shell Projects & Technology for its Project Design office in Bangalore, India. The new organization is expected to deliver a full range of engineering and design services for onshore upstream (oil and gas) and downstream major capital projects, mainly in the Middle Eastern and Far Eastern regions. Besides, partnership between Shell and Jacobs for the new establishment is expected to ensure optimized blend of strong technical and engineering design capabilities. The contract will be for a period of five years with provision for further extension. The value, however, remained undisclosed
Jacobs has also been chosen to provide engineering and acquisition support to the Marine Corps Systems Command (MCSC), Information Systems and Infrastructure Product Group (PG/ISI), Program Manager Marine Corps Network and Infrastructure Services (PM MCNIS) for Enterprise IT Acquisition.. The contract has been awarded to Jacobs under the Commercial Enterprise Omnibus support services (CEOss) Blanket Purchase Agreement (BPA). The contract has a base period of one year and two option years, with a potential value of $42.4 million through June 2014.
Jacob’s engineering and procurement services contract for the newly formed joint venture between Honeywell and Sinochem has been intended to meet the demand of more energy efficient and environmentally compliant industrial materials in the world. The joint venture, to be located in Taicang, Jiangsu Province, plans to produce HFC-245fa, an energy efficient, non-ozone-depleting rigid foam blowing agent used in insulation for appliances, construction, transportation and other applications. The work will be executed by Jacobs' operations in Mt. Laurel, N.J. and Shanghai, China and is expected to start production in late 2013. The construction value has not yet been disclosed.
Jacobs is one of the world's largest and most diverse providers of technical, professional, and construction services. With a significant market share, Jacobs presently constitutes a significant part of huge global infrastructure market. The company directly competes with its peers, viz. Fluor Corporation (FLR) and Foster Wheeler AG (FWLT).
We currently hold a Neutral recommendation on the stock. Jacobs has a Zacks #2 Rank, implying a short-term (1-3 months) Buy rating.
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