In just 14 short
years, J.M. Bernhard, Jr., Chairman, President, and C.E.O. of The Shaw
Group, has grown his business into the world's only vertically-integrated
provider of complete piping systems and comprehensive engineering, procurement
and construction services to the power generation industry. The year 2000
proved to be a period of dynamic change, significant growth and rewarding
performance for Shaw. The company doubled its size, increased its backlog
to over $2 billion and watched its stock price appreciate by more than
an impressive 300%.
Beyond a well-developed
strategy, two significant developments occurred this year that directly
point to a profitable future for the Company. First EntergyShaw L.L.C.,
a jointly-owned and operated company, was formed to provide management,
engineering, procurement, construction and commissioning services for
the building of power generation plants for Entergy Corporation's wholesale
operations in North America and Europe. Second, the acquisition of most
of the operating assets of Stone & Webster, a premier name in the engineering
and construction world with over a hundred years serving the power generation
industry. This strategic acquisition strengthened Shaw's presence in the
power industry, complemented and enhanced its traditional strengths in
pipe fabrication and project execution and enables the Company to provide
a more complete, cost effective package of products and services for its
power and process customers.
"With this combination
[Shaw and Stone & Webster], we believe that Shaw will be a leader in setting
a new paradigm in an industry that has warranted change," stated
Bernhard. "Stone & Webster has a recognized name in the industry,
and its premier engineering capabilities complement our strategy and strength
in the power market, particularly our announced joint venture with Entergy."
Only weeks before
entering into the bidding arena for assets of Stone & Webster, a letter
of intent was signed between Shaw and Entergy Corporation to form the
above referenced venture, EntergyShaw. At the time, EntergyShaw was slated
to manage the installation of over 30 turbines that Entergy had contracted
for delivery with General Electric (GE). On the heels of Shaw closing
the Stone & Webster acquisition, Entergy announced a proposed merger with
FPL Group, which combined with Entergy's unregulated business, would increase
the total number of turbines to be installed by EntergyShaw to over 70
turbines.
"What was already
a great combination of capabilities and resources was even further enhanced
by Entergy's proposed merger with FPL Group and our acquisition of the
assets of Stone & Webster." Bernhard said. "We planned to build
our management and other personnel throughout the year in anticipation
of the workload resulting from EntergyShaw, but the Stone & Webster transaction
placed us ahead of the game, especially when Entergy announced its proposed
merger with FPL Group."
Whether gas-fired,
coal-fired or nuclear generated facilities - Shaw boasts an impressive
portfolio of experience in the power industry that dates back over a century.
Bernhard says as long as demand for electricity exists, his company will
participate in a major way.
"Our strategy
for growth is sound. It is flexible. It allows the Company to respond
nimbly to market conditions. It grants us the freedom to make timely acquisitions
and form mutually beneficial alliances. It positions us to take advantage
of opportunties as they arise. And it has allowed us to extend our horizons
without diluting the core competencies that make up the foundation for
the Shaw Group.
"Through our
adherence to this strategy, we have evolved our company into a global
enterprise positioned to benefit from the build-up of activity in the
power generation industry--strengthened by our proprietary technologies
and expertise in the other industries we serve.
"We look forward
to a future of exceptional performance and reward for our global family
of employees, customers, partners and shareholders," Bernhard told
World Cogeneration for the Class of 2001.
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