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JGC Corporation
Medium-Term Management Plan

New Horizon 2015

(April 2011 March 2016)

November 10, 2010

Keisuke Takeuchi
Chairman and CEO

Contents

1. New Horizon 2015 Medium-Term Management Plan

2. Business Strategy
3. EPC Business Reinforcement
4. Investment and Service Business Expansion
5. Summary of Current Medium-Term Management Plan
Scenario 2010

JGC Group aims at becoming a

Program Management Contractor

& Investment Partner

Medium-Term Management Plan

1-1. Targets

Fiscal 2015
(Targets)

Net Profit

50 billion

ROE

At least 10%

Dividend
Payout Ratio

25% of net profit on a

consolidated basis

1-2. Figures and Projections

800

billion yen

billion yen

60
55

700

600

Net Sales (left axis)

50

Net profit (right axis)

45
40

500
35
30

400

25
300
20
15

200

10
100
5
0

0
2001

2002

2003

2004

Scenario for Growth

(April 2001 March 2006)

2005

2006

2007

2008

2009

Scenario 2010
(April 2006 March 2011)

2010

2011
(projected)

March 2016

New Horizon 2015

(April 2011 March 2016)

1-3. Positioning
5-year plan focused on 10 years in the future

Transition to new corporate vision

=

Program Management Contractor

& Investment Partner

Next Medium-Term
Management Plan

New Horizon 2015

2010

2015

2020

1-4. What is Program Management?

Program Management involves effectively planning and implementing
business strategies and providing services in all areas, from EPC and
investment through to operation services and manufacturing.
Program Management

FEED
Business
planning and
implementation

EPC

O&M

Planning and management services

PMC
Business investment and operation
Manufacturing, IT services, etc.

EPC: Engineering, Procurement and Construction

FEED: Front-End Engineering and Design
O&M: Operation and Maintenance
PMC Project Management Consulting

Business Strategy
We intend to transform JGC Group into a
Program Management Contractor & Investment Partner.
Therefore, in an effort to create new value in line
with our customers wide-ranging needs,
we are reinforcing the competitiveness of our core EPC business
business,
while simultaneously continuing to create a new wave of growth
in our investment and service business.

2-1. Market Environment (1)

Market environment in the overseas hydrocarbon EPC
sector is likely to remain positive in the future, amidst
increasingly fierce competition
Sectors Markets are expanding steadily in non-hydrocarbon sectors
(non-ferrous metals, pharmaceuticals, medical)
Social infrastructure investment (water, power, rail, etc.) is
growing into a massive market
Promising developments in the overseas hydrocarbon EPC
sector in South America, Russia, and Central Asia, as well as
th Middle
the
Middl East,
E t North
N th Africa,
Af i
Southeast
S th
t Asia
A i and
d Oceania
O
i
Regions Social infrastructure development concentrated in emerging
countries
Focus of capital investment by our domestic customers
shifting overseas
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2-1. Market Environment (2)

Scale of annual investment in social infrastructure sectors
(Projected average annual investment from 2008 to 2030)
Massive demand expected
p
due to population
p p
growth,
g
, industrial
diversification and urbanization in emerging countries

Water

$870 billion

Power

$600 billion

Oil and gas

$480 billion

Rail and roads

$300 billion

Coal

$30 billion
Source: 2009 ECC Conference
IEA World Energy Outlook 2009

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2-2. New Horizon 2015 Medium-Term Management Plan: Business Model

EPC business:

Developing business in new sectors

as well as existing sectors

Investment and Service:

Increasing business investment and

businesses developing planning and
management services

EPC business

Existing sectors

Investment/Service
businesses
Business investment and
operation
Planning and management
services

New sectors

Manufacturing,
IT services, etc.
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2-3. Manpower Resource Projections

Increasing employees at overseas EPC subsidiaries to
take groupwide manpower to approximately 13,000
Manufacturing,
etc
etc.
2,200
Manufacturing,
etc.
2,000

Overseas EPC
4,200

Overseas EPC
6,000

Domestic EPC
2,700

Domestic EPC
2,700

JGC
Main Office
2,100

JGC
Main Office
2,100

Total: 11,000 employees

Total: 13,000 employees

Fiscal 2009 (actual)

Fiscal 2015 (projected)

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2-4. Organizational Strategy: Becoming a Genuinely Global Group

Continuing to reinforce and expand overseas EPC subsidiaries, in
the interests of the expansion and growth of JGC Group as a whole.
Option of establishing new overseas EPC subsidiaries.
Becoming a genuinely global group,
group consisting of a widespread
network of EPC subsidiaries in a number of countries and regions
Filling managerial positions with local personnel and actively
recruiting local talent
JGC Gulf (Saudi Arabia)
JGC
JGC Main Office
Vietnam
JGC Algeria
JGC Philippines
JGC Singapore
JGC Indonesia

14

2-5. Technology Development Strategy

New Technology for New Business
Priority Strategy
Accelerate commercialization of development technology
and become more active in the licensing business
Create and promote new businesses in growth sectors
Promote external partnerships through open innovation

Demonstration facilities for

propylene manufacturing
technology

Core Sectors
R
Resources

M
Manufacturing
f t i

Social
infrastructure and
life sciences

Environment and
new energy

JGC Coal Fuel (JCF)

Testing new CO2 recovery

technology
(INPEX Koshijihara Plant)

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EPC Business Reinforcement

We intend to enhance the competitiveness of our EPC business
within a rapidly changing market environment, based on
the four core elements of our EPC business strategy
increasing competitiveness in the hydrocarbon sector,
expanding operations in non-hydrocarbon sectors,
sectors
reinforcing overseas EPC subsidiaries, and developing business
in new EPC sectors.

16

3. EPC Business Reinforcement (1)

1. Increasing competitiveness in the hydrocarbon sector
Drastically improve cost competitiveness
R i f
Reinforce
marketing
k ti capabilities
biliti and
d strengthen
t
th relationships
l ti
hi
with clients
Market development
(North Africa, Australia, South America, Russia, Central Asia, etc.)
Further reinforce project execution capabilities

2. Expanding operations in non-hydrocarbon sectors

Further expand operations in the non-ferrous metals sector
Expand overseas operations in the pharmaceuticals and
medical sectors
17

3. EPC Business Reinforcement (2)

3. Reinforcing overseas EPC subsidiaries

Focus on localization in oiloil and gas
gas-producing
producing countries
Increase orders for small and medium scale projects
Reinforce cooperation within the Group

4. Developing business in new EPC sectors

Expand and reinforce operations in the F-LNG sector
Break into the market for overseas nuclear power projects
Look into infrastructure projects
Incorporate modular construction* into project services
*Modular construction: Method whereby plant facilities are manufactured on
a small scale in separate locations and then assembled on site

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Investment and Service Business Expansion

We intend to promote operations in market areas
such as business investment, planning/management services,
and the manufacturing industry. We aim to provide services as
an investor and owner
owner, and also as a service provider
with intimate understanding of the needs of our clients.

19

4. Investment and Service Business Expansion (1)

1. Investment
Background

Environmental conservation

Shift towards renewable energy

Growth in emerging
g g countries

Growing
g need for energy
gy and
social infrastructure development

Power and new energy sectors

IPP & IWPP,
solar energy,
bioethanol,
coal slurry (JCFTM)

Resource development sector

Continuing oil and natural gas
development
Entering mineral resource
business

Environment and water sectors

Environmental conservation in
China
Stepping up construction,
management and O&M in the
overseas water and sewage sector

New sectors
Urban infrastructure development
(including airports) and new
industrial development
(pharmaceuticals, medical,
housing, agriculture)
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4. Investment and Service Business Expansion (2)

2. Planning and Management Services
Expand planning and implementation management
services in the resource development and
social infrastructure development sectors,
as an investor and owner.
Business planning and implementation
FEED (Front-End Engineering Design)
PMC (Project Management Consulting), etc.
21

4. Investment and Service Business Expansion (3)

3. Manufacturing, etc.
Catalyst and fine chemicals business
Step up overseas expansion
Expand exports of FCC catalysts
Increase exports of environmental catalysts to Europe and the US,
and expand feedstock sales via subsidiary in China
Promote overseas production and sales of fine chemicals

IT services, consulting
g business, etc.
Continue with overseas expansion
Promote groupwide cooperation in the social infrastructure
development sector (ICT*, environmental consulting, etc.)
Provide multifaceted services in cooperation with overseas EPC subsidiaries
(*ICT: Information and Communications Technology)

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Medium-Term Management Plan

23

Summary of
Current Medium-Term Management Plan
Scenario 2010

24

Summary of Scenario 2010 (1)

Numerical Targets Achieved

Actual Figures

Scenario 2010 Numerical Targets

Sales

600 billion

Sales

608.5 billion (Fiscal 2006)

Net Profit

30 billion

Net
Profit

31 5 billion
31.5
billi
(Fi
(Fiscal
l 2008)

At least 11.0%

ROE

15.2% (Fiscal 2007)

ROE

25

Summary of Scenario 2010 (2)

Established Combined Business Model (EPC + non-EPC)

EPC business

Non-EPC business
Developed and made strong

Surpassed targets in core

EPC b
business
i

progress with investment

business
Total investment to date:
40.0 billion

26

Summary of Scenario 2010 (3)

Main EPC Business Projects
(Including projects currently underway)

Sector

Project

Oil, gas and

resource
development

Hawiyah NGL (Saudi Arabia), Gassi Touil gas processing (Algeria),

gas processing (Abu Dhabi), Manifa crude oil processing (Saudi Arabia)
Dung Quat Refinery (Vietnam), Sohar Refinery (Oman),
Cosmo Sakai Oil Refinery (Japan)

Petroleum refining

Tangguh LNG (Indonesia), Yemen LNG (Yemen), Gorgon LNG (Australia),

LNG/GTL

Papua New Guinea LNG (Papua New Guinea), Pearl GTL (Qatar)

Petrochemicals and
chemicals

Rabigh, JCP, NCP (all in Saudi Arabia)

Non-ferrous metals

Rio Tuba nickel smelting, Taganito nickel smelting (both in Philippines)

Pharmaceuticals
and medical

Construction of numerous domestic pharmaceutical plants and hospitals

27

Summary of Scenario 2010 (4)

China

Major Investments
UAE: Taweelah B&A2 IWPP

Saudi Arabia: Rabigh IWSPP

Juhua HFC23 recovery and decomposition CDM

Alternative cement raw material CDM (Inner Mongolia)

Alternative cement raw material CDM (Zhejiang Province)

Cement plant residual heat recovery and generation CDM

Coalmine methane generation CDM

Seawater desalination business

Japan
10 DME promotion business

Spain: Solar thermal generation business

11 Matsuzawa Hospital PFI business

18

12 Investment in Ebara Engineering Services

17

USA: Oil and gas field production

and sales business

13 Pharma Services business

14
15

Philippines: Bioethanol production

and power supply operations

Indonesia: JCF business

16
Australia: Water and sewage business

Algeria: Power plant O&M business

Power and desalination

Emission trading (CDM)

New energy

Water

Resource development

Power plant O&M

Other businesses

28

Taweelah IWPP
(Abu Dhabi)

Seawater Desalination
Business (China)

A Collaboration of JGC and Hyflux

29

Note on Future Outlook

This presentation may contain forward-looking statements about JGC Corporation.
You can identify these statements by the fact that they do not relate strictly to
historic or current facts.
These statements discuss future expectations, identify strategies, contain
projections of results of operations or of financial conditions or state other
forward-looking information. These statements are based on currently available
i f
information
ti and
d representt the
th beliefs
b li f off the
th managementt off JGC Corporation.
C
ti
These statements are subject to numerous risks and uncertainties that could
cause JGC Corporations actual results, performance, achievements or financial
condition to differ materially from those described or implied in the forward-looking
statements.
JGC Corporation undertakes no obligation to publicly update any forward-looking
statements after the date of this presentation. These potential risks and
uncertainties include, but are not limited to: competition within the financial
services industries in Japan and overseas, our ability to adjust our business focus
and to maintain profitable strategic alliances, volatile and sudden movements in the
international securities markets, and foreign exchange and global economic
situations affecting JGC Corporation.
For questions concerning this material, please contact:
JGC Corporation
PR and IR Department
Tel: 81-45-682-1111 Fax:81-45-682-1112
E-mailir@jgc.co.jp

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