Tour Technip 6-8
Company Perspectives
Technip's professional activities are ruled by a code of business ethics, which defines the principles regarding its teams' working relationships with all parties involved. The main guidelines of this code are client-oriented policy, based on quality and professional excellence and offering the highest standards of honesty, integrity and fairness. Technip's strategy and activities are based on these essential values. Moreover, by becoming a member of the UN Global Compact, the Group underlines its commitment to the Compact's nine principles which relate to human rights, labor and the environment. Technip subscribes to the principles of continuous improvement and sustainable development in its efforts to meet the needs of the present without compromising the ability of future generations to meet their own needs. The Group is now listed in the Dow Jones Sustainability Index (DJSI) which comprises the best performing companies according to a list of economic, environmental and social criteria.
Technip is a leading global engineering firm with a focus on the energy industry. Its main line of business is constructing turnkey oil production and refining facilities. Although oil and natural gas projects account for most of its business, the company also works on a wide range of industrial plants. An experienced firm, the company has completed more than 2,000 projects in more than 115 countries. About 20 percent of its 20,000-strong workforce is based in France. It has major foreign offices in Italy, Germany, the United Kingdom, Norway, Finland, The Netherlands, the United States, Brazil, Abu-Dhabi, China, India, Malaysia, and Australia. Africa and the Middle East account for about half of revenues. The company maintains a fleet of more than a dozen vessels to service offshore projects.
Origins
Technip was established in 1958 by IFP, Institut Français du Pétrole, as Compagnie Française d'Etudes et de Construction Technip. Tasked with engineering refineries and petrochemical plants in France and its territories, Technip was building a liquefied natural gas (LNG) facility in Algeria in 1962. A second such plant followed ten years later.
Technip was involved with Eastern European markets well before the fall of the Iron Curtain. It was building chemical plants and refineries in Bulgaria by 1972. Technip's New York engineering office, which was working on some projects in the U.S.S.R., was scaled back in the late 1970s due to a lack of U.S. sales.
In the early 1980s, Technip was busy building projects such as an LNG plant in Iraq and a chemical factory in Saudi Arabia. Export sales were FRF 2.6 billion in 1981, according to Les Echos. Another source, however, had total turnover at FRF 2.7 billion in 1982. The number of employees at the company reached 3,500 in 1983.
1984 Crisis
The company underwent restructuring and rounds of layoffs in the mid-1980s. Technip lost FRF 1.42 billion ($148 million) in 1984, when it had about 2,750 employees. They were on strike in January 1985 to protest job cuts. Company president Pierre-Marie Valentin told Platt's Petrochemical Report that the problems were due to Technip's high costs and relatively narrow range of process services. He added that the French engineering sector was in need of consolidation. Technip was able to take over competitor Creusot-Loire Entreprises (CLE), the project engineering unit of Creusot Loire S.A., during the industry downturn. CLE also was making layoffs, cutting its 1,100-strong workforce by a third.
Petro-Canada, which had been using Technip for consulting and repair work, invested in the company during its mid-1980s crisis. The French government soon stepped in, however. The oil company Société National Elf Aquitaine ended up with about one-third of shares. IFP retained a similar holding. The remainder was held by the TOTAL oil company, Gaz de France, and some French banks, which had written off loans worth FRF 428 million in the restructuring.
Technip was soon in the black again. Turnover reached FRF 7 billion in 1986, with a net profit of FRF 30 million. Hydrocarbons and bulk chemical work accounted for half of the group's business. By the end of the decade, Technip had joined the Soviet Union in an engineering joint venture and was building a number of plants in China. It also established a branch office in Abu Dhabi that would over the course of a couple of decades develop a considerable design capacity. By 1990 Technip counted more than 1,000 contract awards in 85 countries. Sales exceeded FRF 7 billion ($1 billion) in the early 1990s and the company was profitable. It had 5,400 employees, more than half of them overseas. According to Reuters, international work was soon accounting for 92 percent of turnover. In 1993 Technip expanded into different types of plant construction through the purchase of Speichim, which specialized in the phosphate and agrochemical segments.
Public in 1994
Technip underwent a public stock offering in France in 1994 in an offering that valued the firm as a whole at about FRF 4 billion (roughly $750 million). Elf, Total, Gaz de France, and IFP each eventually reduced their holdings to 12 percent. The company's shares listed on the New York Stock Exchange in 2001.
Technip's Asian business was dampened by the financial crisis in the region in the late 1990s, but overall the company was able to make progress. It acquired the oil and environmental businesses of Mannesmann Demag in 1999.
A Major Merger After 2000
Sales were a little shy of FRF 3 billion in 2000. In April, Technip acquired an initial 29.7 percent investment in Coflexip, an offshore construction specialist.
In October 2001, Technip acquired a majority (98.36 percent) holding in Coflexip as well as a controlling interest in ISIS, a holding company that formerly had been owned by the national oil institute IFP. The group was subsequently known as Technip-Coflexip for a couple of years. Coflexip had itself made a major acquisition in January 2001, buying Aker Maritime's Deepwater Division.
Coflexip was merged with Technip in July 2003, when the group name went back to simply Technip. The company's corporate identity was updated, and three Paris offices employing 2,700 people consolidated into one tower in the business center La Défence. During the year, Technip Germany launched a joint venture with a unit of Russia's Lukoil.
With net sales of FRF 5.1 billion in 2004, the company was counted among the top five full-service engineering and construction firms for the hydrocarbon/petrochemical industry, which accounted for 95 percent of revenues.
Technip specialized in lump sum turnkey (LSTK) projects for major oil companies and governments in emerging markets, a business that was proving less attractive to U.S. companies. Technip continued to be heavily involved in the Middle East. Qatargas II, a colossal $4 billion LNG joint venture with Japan's Chiyoda Corporation, was launched toward the end of 2004. An executive told Middle East Economic Digest that the company had traditionally lost out to low-cost Japanese companies in the Gulf's LNG business. After acquiring Coflexip, Technip pushed into Egypt's offshore market, while it withdrew from Iraq, where it once had a thriving presence, due to security and political issues.
Business Week Online observed that Technip was poised to profit from high oil prices due to renewed interest in oil production and development. At the same time, it avoided the more risky exploration side of the business. The company also was studying opportunities outside the energy sector, in fields such as fertilizers and life sciences. It was putting its Speichim treatment technology to use in ethanol and biodiesel plants.
Principal Subsidiaries
CITEX (99.97%); COFRI (99.99%); Engineering Re (Switzerland); Eurobatch (99.76%); PT Technip Indonesia (60%); S.C.I. CB3 Defense; Seal Engineering (99.76%); SNPE Ingénierie Defense (99.96%); Technip Americas (United States); Technip C.I.S. (Russia; 70%); Technip Eurocash (60%); Technip Far East (Malaysia); Technip France (77.61%); Technip Germany; Technip Holding Benelux B.V. (Netherlands); Technip Iberia (Spain; 99.99%); Technip International AG (Switzerland; 99.84%); Technip Italy (95.30%); Technip Nouvelle-Calédonie (New Caledonia); Technip Offshore International; Technip Overseas (Panama); Technip Portugal (77.08%); Technip Tianchen (China; 60%); Technip TPS (99.94%); TPG UK (90%); TPL--Tecnologie Progetti Lavori (Italy; 95%); TTIL SNC (60%).
Principal Divisions
Offshore SURF (Subsea Umbilicals, Risers, Flowlines); Offshore Facilities; Onshore/Downstream Industries.
Principal Competitors
Saipem S.p.A.; Stolt Offshore M. S. Limited.
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