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EBARA, MC and JGC Agree to Joint-venture in Water Business

JGC Corporation logo EBARA CORPORATION (EBARA), Mitsubishi Corporation (MC), and JGC Corporation (JGC) have agreed that MC and JGC will each acquire a 33.3% share of EBARA's wholly-owned Ebara Engineering Services Co., Ltd. (EES), thereafter giving the three shareholders equal management of the subsidiary.

The new joint venture aims to parlay each company's strengths into a stronger business platform for EES in Japan and further expansion in the global market for water business, where European companies have a commanding presence. EES has engineering expertise in water business, and has built up know-how and a Japanese network in the operation and maintenance (O&M) of water supply and sewage systems. MC possesses a global network as well as expertise in business management and financing, while JGC has a proven track record in global engineering and project management.

This joint venture is the first step in a strategy to grow a competitive Japanese consortium in the global water market, leveraging each partner's advanced technologies and business capabilities. The group hopes that EES will promote greater developments in water infrastructure that can eventually contribute to safe and sustainable water supplies the world over, including desalination, reuse, and purification.

EBARA Corporation is considered a pioneer in Japan's water-treatment industry. For decades, the company has been the primary EPC provider for Japan's water treatment plants. In April, 2009, all of the EBARA Group's water-treatment business units were integrated into EES, the aim being to establish a general water company by unifying marketing, construction, and O&M functions. Now EES takes over all the water related business with a strong track record in the manufacturing and sales of related facility and machinery from its parent company EBARA, and also EES is Japan's top O&M company for water and wastewater treatment facilities, employing over 2,000 well-trained operators at some 300 such facilities around the country, providing O&M service and water treatment chemicals.

Mitsubishi Corporation (MC) has been accumulating management know-how in the water business for more than a decade. The trading company has had interest in Manila Water Company Inc. in the Philippines since the latter was founded in 1997. Manila Water is considered one of the world's most successful examples of privatization in the water business. MC also established Japan Water Corporation through a joint venture, which is Japan's leading O&M company. In April 2009, MC established its Corporate Development Section to concentrate on new business fields such as new energy, environment, and water. The company expects to see growth in these fields over the medium- to long-term, and by leveraging its global network of operations and partners, nurture these fields into next-generation earnings pillars.

JGC Corporation has been engaged in enterprise investments reinforcing its water business as one of its core operations. JGC is a shareholder in three IWPP projects in Abu Dhabi and Saudi Arabia, and has launched a joint venture with Singapore's Hyflux Ltd. for a large-scale sea water desalination project in Tianjin, China. JGC has achieved satisfactory results in lake water purification projects in China. JGC has developed proficiency in project management through numerous, large-scale projects in energy and petrochemicals. The company intends to parlay this along with its global EPC implementation network, project management capabilities, and total engineering expertise into a broader and more comprehensive portfolio in the water business

Published 24/02/2010

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