Jacobs Signs Exclusive Deal With Novartis
Pasadena-based Jacobs Engineering Group Inc. said Tuesday that it signed an exclusive contract to oversee all future engineering and construction projects for global drug giant Novartis.
Jacobs will be the only company to provide engineering, architecture and other related services for Novartis in the United States, Europe and India. Neither financial terms nor length of the contract was disclosed.
“This simply means that if Novartis decides to build something, anything, they’ll come to us,” said Jacobs Senior Vice President Craig Martin. “Then, we will arrange the project, from the beginning.”
“It’s not new, but it’s an increasing trend within the engineering and construction industry,” he said. “These companies benefit by using all of our resources.”
Basel, Switzerland-based Novartis does not have any immediate plans to build new plants. But as part of the contract, Jacobs’ first major project includes overseeing a multimillion-dollar expansion of Novartis’ active ingredient plant in Ringaskiddy, Ireland.
Under the contract, Jacobs will not necessarily complete the construction but will oversee and advise Novartis in everything from building infrastructure, civil engineering and electrical issues, to dealing with government approvals for new facilities.
“By having such an agreement, it’s like Novartis will have about 17,000 professional people in engineering and construction services at their disposal,” Martin said.
Tuesday’s contract is just the latest such alliance for Jacobs. The company, with annual revenue of about $3 billion, signed a deal in January with Houston-based Equistar Chemicals, a producer of ethylene and other chemicals, to perform small capital-improvement projects totaling $100 million a year.
Jacobs formed a similar alliance with Chicago-based FMC Corp., a chemical and farm machinery maker, in September 1999, and with at least two others in 1998.
In New York Stock Exchange trading, Jacobs shares rose 69 cents to close at $28.06, while Novartis’ American depositary receipts gained 38 cents to close at $64.24.
