JGC Concludes an Agreement with IHI Plant Services Corporation to Transfer its Pharmaceutical EPC Business

JGC Holdings Corporation (Representative Director, Chairman and Chief Executive Officer: Masayuki Sato) announces that JGC Japan Corporation (Representative Director, President: Shoji Yamada, hereinafter referred as to 'JGC Japan') has concluded an agreement with IHI Plant Services Corporation (Representative Director, President: Takashi Murasumi, hereinafter referred as to 'IPC') to transfer the EPC (Engineering, Procurement and Construction) business of the pharmaceutical plant owned by IPC (hereinafter referred as to 'the pharmaceutical EPC business').

1. The Background and Purpose of the Business Transfer

Since the 1980s, JGC Japan has executed over 600 projects of related facilities/ equipment in the pharmaceutical field and has established itself as a foremost EPC contractor of pharmaceutical plants in Japan. Further, as the 'transformation of EPC operations' stands as one of the key strategies in our medium-term management plan - 'Building a Sustainable Planetary Infrastructure 2025' (BSP2025), we at JGC Japan have positioned the pharmaceutical field as one of our growing fields in the EPC market and we are aiming to further expand the business.

At present, the domestic pharmaceutical market in Japan is revitalized with the background of the return of production locations in Japan as new drug development progresses, and strong demand in the domestic pharmaceutical market is expected in the future. Along with the strengthening of our technological capabilities to meet clients' needs, JGC Japan will aim to further increase our capabilities in project execution as stated in the BSP2025.

On the other hand, the IHI Group has consolidated its operation systems, from the design, manufacturing to installation, maintenance, servicing of the plants in the natural resources, energy, and environment field in IPC. The company has also been examined measures to strengthen its competitiveness in the EPC business of the pharmaceutical plants.

JGC Japan has keenly examined the transfer of the pharmaceutical EPC business as one of the various options for realizing our business expansion in the pharmaceutical field. We have made the decision to enter into an agreement with IPC to transfer the pharmaceutical EPC business upon determining that combining JGC Japan's human resources, knowledge, and experience in the pharmaceutical field with IPC's human resources and knowledge cultivated in the said field would connect to the further business expansion in the pharmaceutical field for JGC Japan.

The impact of the business transfer on JGC Holdings' consolidated financial results for the fiscal year ending in March 2022 will be minimal. If items that must be disclosed emerge due to future progress, etc., they will be disclosed in a timely manner.

2. Schedule

• Conclusion of the Business Transfer Agreement: August 2021
• Transfer of Business Effective: November 2021 (tentative)
• Completion of the Transfer of Business: April 2022 (tentative)

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