UPDATE 1-Japan's JGC plans Saudi plant-building unit
(Updates with company confirmation)
TOKYO, Jan 9 (Reuters) - Japanese plant engineering firm JGC Corp (1963.T) plans to accelerate expansion in the Middle East, setting up a unit in Saudi Arabia this spring to oversee petroleum and natural gas plant projects in the region.
The firm said it will 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 plants. It is currently involved with several large projects in the country, including the chemical complex of PetroRabigh, a joint venture between state-owned Saudi Aramco and Japan's Sumitomo Chemical (4005.T).
By setting up a local unit, the firm hopes to find more business opportunities, mainly smaller projects worth 20-30 billion yen ($184-276 million) that would otherwise miss its radar.
Japan's biggest plant engineering firm said the unit will target annual revenues of some 50 billion yen.
The unit will be set up in Dhahran with an initial capitalisation of about 2 billion yen and some 100 workers, which will be expanded to about 400 eventually, including local engineers, the company said.
JGC sees the Middle East as a crucial 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 40 percent of its 560 billion yen turnover to come from plant construction projects in the Middle East.
In December, the company said it won a contract for an ethylene plant project of Saudi Polymers Company. The firm did not disclose terms of the deal, but the contract was estimated at about 150-200 billion yen.
Shares of JGC ended the morning session up 1.6 percent to 1,894 yen, outperforming a 0.8 percent fall of the benchmark Nikkei average .N225. ($1=108.85 Yen) (Reporting by Taiga Uranaka)
