A subsidiary of Foster Wheeler AG’s Global Engineering and Construction Group (Global E&C) received a contract from Abu Dhabi Polymers Company Ltd. (Borouge) to provide engineering and consultancy services in the United Arab Emirates. The financial details were undisclosed and Foster intends to record the booking as and when the work is released by Borouge.
The contract win comes close on the heels of a contract win for the subsidiary from Wood Mackenzie to provide consultancy services for two projects in Peru. The contract was announced on Sep 25 and the two projects that require consultancy services include the Energy Security and South Pipeline Project in Peru.
Coming back to the contract from Borouge, Foster is required to conduct studies and provide the front end engineering design, engineering, project management and support services for capital projects and plant modifications for the projects assigned by Borouge, as per their client specifications. This will require Foster to provide long-term sustainable relationship with Borouge’s customers as it will be providing comprehensive services for their projects.
Therefore, by establishing long term sustainable relations, Foster expects to achieve its key strategic objective of having a strong presence in the Middle Eastern region. Hence, this contract marks an important milestone for Foster Wheeler, as Middle East is one of the primary growth regions for Foster’s business. During fiscal 2012, Middle East contributed 7.3% of the total geographic revenue and 9.7% of the total revenue generated by the Global Engineering and Construction division. Further, about 26.8% of the total new orders booked by Foster in fiscal 2012 were from the Middle East region.
Foster Wheeler’s Global E&C Group provides technical and economic analyses and study reports to owners, investors, developers, operators and governments. These services include concept and feasibility studies, market studies, asset assessments, environmental assessments, energy and emissions management, product demand and supply modeling and technology evaluations. In the recent past, the Global E&C Group has also received a contract from Statoil ASA (STO - Analyst Report) to conduct a feasibility study to upgrade the latter’s Mongstad Refinery in Norway.
Foster currently has a Zacks Rank #2 (Buy). Other stocks in the industry worth buying at the moment are Pernix Group Inc. and VSE Corp. (VSEC - Snapshot Report). Both have a Zacks Rank #2 (Buy).