MAPÚA INSTITUTE OF TECHNOLOGY

SCHOOL OF CIVIL, ENVIRONMENTAL AND GEOLOGICAL ENGINEERING

Research Project:

JGC PHILIPPINES, INCORPORATED

GALANGCO, CAZZANDRA MAE C.

DATE OF SUBMISSION: MARCH 21, 2019

Engr. Jose Arnel P. Juan

Instructor
Introduction
Construction comes from the word 'construct,' which means 'to build.' Building
a sand castle, a fort out of pillows, or a house of cards are all examples of
constructing something. In engineering terms, construction is usually
associated with large structures like houses, railways, and power plants.

In terms of engineering, construction is the activity of putting together

different elements, using a detailed design and plan, to create a structure for a
certain location. When you construct large structures, you need to have a clear
plan of how you are going to do that. You also need to know the specific
location. Architects and engineers design and build the structure with that
location in mind.

Almost all construction projects can be broadly categorized into one of three
types of projects. Generally, they are buildings and houses, public works, and
industrial-type structures. Within each of these types of construction, there
are lots of sub-categories. For instance, buildings include both residential
homes and commercial skyscrapers. Building projects may involve renovations
on existing buildings or building from scratch. Public works involve roads,
railways, water and waste water distribution and purification systems, damns,
and bridges. Finally, industrial projects include refineries, pipelines, power
utilities, manufacturing plants, and telecommunication infrastructure.

Construction Industry is a sector of national economy engaged in preparation

of land and construction, alteration, and repair of buildings, structures, and
other real property. It is a booming industry and remain so with the
continuation of the development process especially in the developing
countries, like the Philippines.
THE COMPANY

JGC PHILIPPINES, INCORPORATED

JGC Philippines, Inc. was established in 1989 as the first global engineering
office of JGC Corporation of Japan. From then on, JGC Philippines has become
JGC’s largest overseas Engineering, Procurement and Construction (EPC)
subsidiary providing EPC and Facility Maintenance services for a wide range of
business fields including Petroleum Refining, Petrochemicals, Non-Ferrous
Metals Refining and Biofuels in the Philippines.

Environmental Analysis
A. MACRO-ENVIRONMENTAL FACTORS
Construction projects are distinctive in nature as each construction project is
different from the other. Construction projects have the following
characteristics: huge costs due to heavy investments, non-tradability of output,
etc. It is crucial and important to assess the risk involved in the project. It is the
external factors which are beyond the control of the company as less
information is available and this is the reason construction projects are quite
vulnerable and incur losses.
 POLITICAL

The political factors which affect the construction industry are regarding the
permits and documentation which must be obtained during the various
stages of construction. Political factors consider the degree to which the
government most probably may change or influence a certain industry or
the economy. For example, A new tax or duty which may result in a change
of the revenue generating structure of the organisation. The government
may impose these regulations on the industry.

 ECONOMIC

Economic factor basically includes the way the economy functions and the
impact it has on the working of the company. An increase in the rate of
inflation of the economy may affect the manner which the company sets
the price of its products. There will also be a change in the models of supply
and demand in the economy. Economic factors mainly include, economic
growth, foreign exchange rates, patterns, inflation rates, etc.

 SOCIAL

Social factors scrutinize all the events that may affect the market and the
community socially. The merits and demerits for the people residing in the
place where the project is setting up or taking place is also to be
considered. These include dynamics of population, global warming, career
altitudes, norms, cultural expectations, etc. These factors take into
consideration the social environment which is prevalent in the market and
determine or measure the determinants such as demographics, cultural
trends, population analytics, etc.

 TECHNOLOGICAL

These are related to innovations and changes in technology which may

result in a change in the industry’s operations and the market either
 favourably or unfavourably. This is also related to the amount of
technological awareness that the company possesses. As technology many
a times becomes obsolete within a few months after being launched, it is
crucial to consider it.

 LEGAL

This factor takes note of all legal aspects like quotas, resources, exports,
imports, employment, etc. Legal factors have both sides external as well as
internal. There are certain laws which may possibly change the external
environment of the company and there are numerous policies which the
company keeps for itself. Legal analysis accounts these two aspects and
after that it charts out certain strategies by taking these legislations into
account.

 ENVIRONMENTAL

The environmental factor most commonly includes all that influences or is

determined by the surrounding environment. Pestle environmental factors
generally take into consideration the environment in which business is
being carried out. It includes, but is not restricted to the weather, the
climate, the global changes in climate, the ground conditions,
environmental offsets, etc.

B. INDUSTRY/MARKET ANALYSIS

 POLITICAL FACTOR

President Aquino’s State of the Nation Address (SONA) last July 2010
highlighted the importance of Public-Private Partnerships (PPP). [1] The PPP
was seen as an important strategy for infrastructure development. It has
also been estimated that the pipeline of PPP projects (infrastructure
projects for transportation, water, power, health, and agriculture) for the
year 2012 will amount to USD 5.49B.
 ECONOMICAL FACTOR
- The Philippines’ gross domestic product (GDP) decreased from 7.6% in
2010 to 3.7% in 2011. This is due to the negative export growth rates in
2011 that was influenced by the global economic conditions particularly
the economic and financial crises in US and Euro countries.
- The domestic factors on the other hand include the decreasing demand
and negative growth rate in agricultural production and the under
spending of the government in infrastructure projects. Based on the GDP
projections of the International Monetary Fund (IMF), Asian
Development Bank (ADB) and World Bank, the Philippine economy will
slightly improve in 2012 due to the support of growth in private
consumption (higher OFW remittances), investment, and government
spending.

 SOCIAL FACTOR
Population Growth Rate

As of July 2011 the Philippines has an estimated total population of 103.775

million and out of this, 11.86 million reside in the National Capital Region
(NCR). The Philippines has an average population growth rate of 1.9% and the
NCR has an average population growth rate of 1.78%.

Age Profile

The majority of the population in the Philippines belongs to the working class
(15-64 years: 61.1% or 62,201,170 as of 2010). This is the portion of society
who are about to start their own families until those who are about to retire
from their respective careers. People in this segment are also the ones who
have the capacity to invest in residential developments.

Housing Backlog

As of the 28th of December 2011 Philippines’ housing backlog is currently 3.6

million. The insufficiency of available funding resulted to this housing backlog.
The government needs Php 1.7 trillion to address the Philippines’ housing
needs.
In 2011, several typhoons and flash floods occurred in the Philippines between
May and September. The Department of Social Welfare and Development
(DSWD) will develop recovery and rehabilitation projects for victims of flash
floods in NCR and other provinces with a total of 187,008 families. Also,
projects will be developed for the victims of typhoons that entered the
country, which affected 1.4 million families.

 TECHNOLOGICAL FACTOR
Last June 28, 2012, the general membership meeting of the Philippine
Constructors Association (PCA) was held to discuss the current issues that the
industry currently faces. In this meeting, innovation was considered as a driver
of productivity. According to Executive Director Cosette V. Canilao, the players
of the industry must be able to re-evaluate their resources and processes to
make it more efficient, responsive and relevant to the present stringent
requirements of the industry.

According to the Department of Public Works and Highways (DPWH), the

Philippines may adopt new construction trends in Japan, particularly on the
latest technology on roads and bridge construction. [12] The construction and
engineering technologies from Japan through the Japan International
Cooperation Agency (JICA) will help the Philippines build disaster-resilient
infrastructures that would mitigate the effects of climate change.

 LEGAL FACTOR
The construction industry is one of the most hazardous and risky occupations
in the country. With this, the Department of Public Works and Highways
(DPWG), the Department of Interior and Local Government (DILG), the
Department of Trade and Industry (DTI), the Department of Labor and
Employment (DOLE), and the Professional Regulation Commission (PRC) signed
a Memorandum of Agreement last May 4, 2011 to strengthen the campaign to
minimize accidents in construction activities. This MOA aims to “promote the
welfare of construction workers and prevent the recurrence of construction-
related incidents, notably the ones that recently killed or severely injured
workers early 2012.
 ENVIRONMENTAL FACTOR

Land development and construction have a direct impact on the

environment wherein land conversion from agricultural to urban and
residential greatly reduces bio-capacity (ability of the land to produce food
and other resources for the society). [16] Because of this, sustainable land
development is becoming more important in the construction industry. The
World Wildlife Fund (WWF) and Ayala Land, Inc. (ALI) developed an ALI
Sustainability Framework to chart, monitor, and report the company’s
progress in sustainable land development. The increasing awareness about
environmental impact of construction activities will eventually affect the
way residential and commercial developments are built.

In 2006, the Philippine Green Building Council (PHILGBC) was formed as a

national non-profit organization through the alliance of building and
construction industry leaders from the private and public sector. [17] This
organization was formed to ensure an ecologically and economically
sustainable industry. This resulted to a local green building rating system
that is now called Building for Ecologically Responsive Design Excellence
(BERDE). The BERDE scheme will serve as a benchmark for all property
developers in the country.

C. COMPETITION

D. SWOT ANALYSIS
 STRENGTHS
- With the help of satellite engineering centres, the parent company was
able to cover clients in any country of the world, which is commendable
- Good order backlog by signing several big deals in the past recent
months. (e.g. JGC was awarded the EPC Contract for Major Ethylene
Plant in the U.S)
 - Good order backlog by signing numerous big deals in the past recent
months. For example, JGC was awarded the EPC Contract for Major
Ethylene Plant in the U.S.
- Great goodwill developed over the years which will help in closing deals.
For example, the company donated a total of approximately 18 million
yen to support recovery from the damage done by Typhoon Haiyan in
the central region of Japan
- The company has a presence of doing projects in over 70 countries.

 WEAKNESSESS
- Though the company has several satellite engineering centres across the
globe, majority of its operations are focused in Japan predominantly and
other Asian countries. This means that the company hasn’t really
diversified its geographical risk and has a chance of losing margins in
case of a slowdown in this part of the country
- Competitive disadvantage due to non-participation in bid for huge
projects, when all its competitors in Japan and worldwide participated.
This could send a negative vibe among the company’s prospective clients

 OPPORTUNITIES
- Entry into North American market; by signing a major deal, JGC ventured
into its first world scale project in North America
- Opportunity to cash in on the huge relief work post the Japan
Earthquake; since Japan is the company’s breeding ground, it could
make its position stronger
- Global expansion through partnerships and acquisitions can boost the
company

 THREATS
- Intense competition which could affect the company's earnings growth
and market share - The competition is becoming increasingly intensive
 as project opportunities are fewer, while more and more companies are
vying for them. Price competition is escalating, especially when it comes
to small and medium-sized projects.
- Rising cost of construction material. Prices of other types of steel such as
hot rolled plate and cold rolled coil have increased.

Marketing Strategy
A. VISION
JGC Philippines, Inc. shall be a global EPC company like no other in
designing, building and delivering technologically advanced plants and
facilities that are of exceptional value to customers.

B. MISSION

JGC Philippines, Inc. is committed to creating a more prosperous future for

our clients, for people and for society through integrating our core
capabilities and technical expertise to generate innovative solutions.

a) JGC Philippines, Inc., is committed to the protection of its resources,

specifically the employees and physical assets against human distress
and financial loss resulting from accident occurrences. In fulfilling
this commitment, which is essential to and equally important as
production and quality objectives, we will provide and maintain safe
work environment and protect the public against foreseeable hazards
resulting from our construction operations. A continuous safety
inspection system is carried out Safety Engineers to determine the
compliance of the established programs and to produce safety
records. Management at all levels has the responsibility to enforce
the standards of safety and loss prevention in their project in
accordance with the requirement of the National Government Law,
Customer’s Safety Rules and Regulations, and Safe Construction
Practices. Motivate and provide employees with opportunities and
just rewards to achieve their full potential.

b) JGC Philippines, Inc. is committed to provide our customers with

quality and efficient service at the most competitive cost, to
 complete our commitments on time and to deliver our products with
confidence on their quality.

We shall achieve these objectives through the implementation of a

Quality Management System based on ISO 9001:2015, compliance
with applicable legal requirements and continual improvement of our
capabilities and processes, in support of the strategic direction of our
organization.

c) JGC PHILIPPINES, Inc. (JPHIL) will ensure to fulfill all compliance

obligations pertinent to environmental protection and will comply
with local and international standards and aims to achieve the
established environmental objectives and goals in support of the
strategic direction of our organization. JPHIL is committed to improve
continuously our environmental performance and develop ways to
prevent pollution. We will achieve these by: 1.0 Strict
implementation of our Environmental Management System (EMS on
ISO 14001; 2015). 2.0 Minimizing environmental effects of our work
processes, which may include new technology to be applied for
engineering, procurement and construction (EPC) business by having
prior review of their environmental impact. 3.0 Reduction of
resources consumption to minimize emission and discharge to the
environment: and, 4.0 Minimizing the quantity of waste and
improving waste disposal. JPHIL shall promote and maintain high
level of awareness to all personnel under its control, for better
understanding and continuous development of its project team on
the best environmental management practices in their respective
scope of work assignment.

d) JGC Philippines, Inc., a reputable Engineering, Procurement,

Construction (EPC) Company, shall establish, control and maintain a
secured business environment with its business partners. For this
purpose, JGC Philippines shall recognize the value of all information
assets including those of customers, vendors and subcontractors and
establish an Information Security Management System (ISMS) that
conforms to the requirements of ISO 27001:2013.

Based on this management system, JGC Philippines is committed to:

- Comply with all legal, corporate and other requirements pertinent

to information security;
 - Prevent unauthorized use, reproduction and destruction of all
information assets including those related to customer, vendors
and subcontractors and established documented procedures to
secure the confidentiality, integrity and availability of the
information;
- Protect the intellectual property rights of the company;
- Recognize, respect and protect the personal information of all
employees entrusted to the company;
- Establish a contingency plan to ensure business continuity in the
event of a natural disaster, act of terrorism, and computer attacks.
- Provide all employees with proper education and training to
implement, maintain and improve the effectiveness of the ISMS;
and
- Review regularly the effectiveness of the ISMS and subsequently
aim for its continual improvement.

CONCLUSION

PROJECTS

Polyethylene Plant Project (Bataan) Refinery Energy Efficiency Project (Bataan)