Even state-of-the-art industrial plants need facelifts from time to time. That's where Foster Wheeler comes in. The international engineering and construction contractor designs, builds, and upgrades industrial processing facilities and manufactures power equipment through its two business units: Global Engineering & Construction (E&C) and Global Power. The E&C Group (more than 80% of revenues) serves companies in the oil and gas, chemical, pharmaceutical, and biotechnology markets. Its Global Power arm supplies combustion and steam generation equipment for energy and industrial clients. Foster Wheeler also offers construction management, environmental remediation services, and waste-to-energy conversion.
As reflected in its sales figures, Foster Wheeler has an international bent. Asia, Australasia, and Europe make up about two-thirds of sales. It also is involved in large gas projects from Saudi Arabia to the Philippines. The company operates from offices in about 25 countries around the world in places such as Singapore, Turkey, Chile, France, India, Italy, England, China, and South Africa. Foster Wheeler is focusing on geographic expansion and service diversification in high growth markets such South America and China.
To this end, the company in 2014 agreed to purchase South Africa's MDM Engineering Group Limited in a cash transaction valued at about $109 million. The deal aims to boost global capability and capacity for Foster Wheeler's minerals and metals businesses.
In the US it continues to make inroads to the pharmaceutical industry and it has built up its position as a major constructor of research, development, and manufacturing facilities in the North American market. In recent years Foster Wheeler also has grown its Houston office, which specializes in upstream oil and gas operations.
The company is continuing to expand its services and heighten its technological offerings both organically and through acquisitions. The Global E&C group is involved in the design of facilities in new and developing market sectors such as carbon capture and storage, solid fuel integrated gasification, and biofuels. In 2010 the company bought the sulfur recovery technology of FLSmidth CEntry to add to the Global E&C group's operations. In early 2012 Foster Wheeler's Global Power Group established a market presence in scrubbers, fabric filters and related equipment through the acquisition of German company Graf-Wulff.
Like most companies, Foster Wheeler has grappled with the effects of the global financial crisis. Clients who were concerned about the uncertain world economy held off on starting new projects or scaled back planned investments. Revenues and net income reflected that as numbers dropped from 2008 through 2010. The company's financial results during the economic downturn were impacted by low demand and increasing competition. In 2010 and 2011 Foster Wheeler began to see an uptick in activity as clients moved forward with their capital spending plans.
Revenues grew by 10% in 2011. However, net income fell by nearly 25%. The decline was mostly due to lower earnings in the Global Engineering & Construction group. Foster Wheeler remains focused on booking new projects around the globe and is confident that overall economic growth and growing demand for oil and gas, electric power, and petrochemicals will drive business.