Joint Company Established by TOYO and SOG in Brazil

04/25/2012 | 03:37am Toyo Engineering Corporation (TOYO, President and CEO Yutaka Yamada) and SOG - Óleo e Gás S.A. (SOG, CEO Mauricio Godoy), a leading engineering company in Brazil, have agreed to establish a joint company to further reinforce operations in Brazil. Both companies aim to establish a holding company "TS Participações S.A." in June 2012 with a shareholding ratio of 50% per each company. The new company affiliates "TOYO-SETAL Engenharia Ltda." engaging in EPC of onshore business, and "Estaleiros do Brasil Ltda. (EBR)" engaging in EPC of offshore business including FPSO. Both companies will be established as fully held subsidiaries. EBR will own and operate a module fabrication and integration yard for the offshore business in the state of Rio Grande do Sul in the southern part of Brazil. SOG has handled a wide variety of projects in Brazil in the fields of oil, gas, petrochemicals and infrastructure, constructed offshore facilities (including FPSO and offshore platforms), and also operated a shipbuilding yard. TOYO has been collaborating with SOG for many years in oil and gas projects in Brazil. After making its first entry into Brazil in 1965, TOYO has engaged in a diverse range of large scale projects, and is now carrying out various projects in Brazil including 3 FPSO projects. TOYO opted to establish this joint company in response to the Brazilian Government policy of "Increasing the ratio of domestic production" and "Promoting technology transfer" as well as in accordance with TOYO's management strategy of expanding and upgrading the network of localized EPC bases in emerging countries. Brazil is blessed with an abundance of natural resources and maintains steady economic growth thanks to its increasing domestic demand. In this favorable environment, more investment than ever is expected to be made in development of offshore oil fields as typified by pre-salt oil fields and their downstream facilities as well as in infrastructure such as power generation and transportation systems. Foreign businesses, including Japanese companies, are expected to increase the number of their manufacturing bases and investment in development of natural resources. TOYO and SOG will contribute to the growth of the Brazilian economy through this company and exert efforts to expand business opportunities in the country. In future, the company will develop business in other South American and West African countries. Summary of Joint Company Company name TS Participações S.A. (It owns "TOYO-SETAL Engenharia Ltda." and "Estaleiros do Brasil Ltda." Location São Paulo with offices in Rio de Janeiro and São José do Norte, Federative Republic of Brazil Outline of business EPC contractor of onshore and offshore business such as oil, gas, petrochemicals, infrastructure and etc. Operation of the module fabrication and integration yard for the offshore business Ratio of shareholding TOYO 50% : SOG 50% About SOG - Óleo e Gás S.A. (SOG) SOG is one of the leading Engineering, Procurement and Construction (EPC) contractors in Brazil with specialized engineering team as well as with decades of experience in high complex projects. SOG has large experience in more than 400 projects, including 100 projects with Petróleo Brasileiro S.A. - PETROBRAS. SOG offers the most optimized EPC solutions for the Onshore and Offshore segments and is prepared to act in other segments such as Petrochemicals, Chemicals, Mining, Infrastruture, Power and Process and has been developing the shipyard (EBR) dedicated to Offshore segment.