MODEC, Inc. reached an agreement with Toyo Engineering Corporation (“TOYO”, President & CEO: Haruo Nagamatsu) to execute a Memorandum of Understanding (MOU) to enter into discussions and to conduct the Feasibility Study (“FS”) regarding the alliance in the Engineering, Procurement, Construction and Installation (EPCI) business for Floating Production Storage and Offloading (FPSO) vessels. Subject to the result of the discussion and FS, the business alliance also contemplates the establishment of a joint venture company by the end of 2021.
Potential demand for FPSOs is expected to remain consistent with global demand for oil and gas, and
development of new projects is also expected to proceed steadily. Therefore, MODEC and TOYO recognize the important roles they play in contributing to the society by supplying stable energy through the FPSO business.
Furthermore, both companies recognize that efforts to realize a decarbonized society are one of the missions as leading companies in each industry, and MODEC and TOYO aspire to explore into a new business as well as to develop new technologies for next-generation FPSOs through the synergies of the two companies.
Based on these backgrounds and expected synergies between MODEC and TOYO, key expectations toward the business alliance are:
(1) Enhancing engineering and project management capabilities;
(2) Enhancing and optimizing human resources and organizational structure;
(3) Leveraging capacities to address multiple large-scale projects;
(4) More cost-competitive offering to secure projects;
(5) Enhancing profitability of EPCI business through efficient cost estimate/reduction initiatives;
(6) Developing new technologies applicable to next-generation FPSOs; and
(7) Exploring new technology and product opportunities in growth markets for realization of decarbonized
society.
