The Shaw Group, Inc. History

Company Perspectives:

As we look to the future, we see a world that has undergone many changes over the years. There have been ups and downs in the technology sector. The economy has been strong at some points, erratic at others. New global markets have emerged, bringing with them noteworthy shifts in political, social, and economic alliances. Shaw has successfully managed these uncertainties. We have not been afraid to adapt and evolve, and we know how to prosper in unpredictable times. That will never change. And it is why we believe Shaw will continue to win for many years to come.

Key Dates:

1987:

The Shaw Group is incorporated.

1993:

The company lists on the NASDAQ.

1994:

Shaw acquires Fronek Company.

1994:

Shaw enters into a joint venture in Bahrain to fabricate pipe.

1995:

The company buys full ownership of a Venezuelan fabrication facility.

1996:

Shaw buys Allied Piping Products (APP) in Louisiana and Pipe Shields, Inc. of California; moves from the NASDAQ to the NYSE.

1997:

Shaw acquires NAPTech, Inc. of Utah, a piping systems and module designer and fabricator.

1997:

Shaw buys Prospect Industries PLC of the United Kingdom.

1998:

The company purchases Cojafex, BV of Holland, a leading company of pipe fabrication technologies.

2000:

Shaw buys Stone & Webster (S&W), a provider of engineering, procurement, and construction services to the power plant industry.

2000:

Shaw enters into an Entergy-Shaw joint venture.

2001:

Shaw contracts with BASF to engineer and manage the construction of an ethylene plant in China; Shaw announces an agreement with PG&E's National Energy Group for the construction of four gas-fired power plants.

2002:

Shaw purchases The IT Group, a leading environmental remediation firm.

Company History:

The Shaw Group, Inc. is the world's only vertically integrated provider of complete industrial piping systems and of comprehensive engineering, procurement, construction, and maintenance services to the power generation industry. It is the largest supplier of fabricated industrial piping systems in the United States and one of the leading suppliers worldwide. The company also performs work for the process industries, including petrochemical and chemical processing and petroleum refining, and for the environmental and public infrastructure sectors. A Fortune 1000 company, Shaw currently has offices and operations in North and South America, Europe, the Middle East, and Asia-Pacific.

Building a Pipe Fabrication Company: 1987-1994

James M. Bernhard, Jr., founded the Shaw Group in 1987. After graduating from college in the early 1970s, he worked his way through the ranks of various Baton Rouge pipe fabrication and contracting companies. This experience gave him an expert's education in the operations of the pipe fabrication industry.

The fabrication of complex piping systems for power generation facilities and process facilities, including petrochemical and chemical processing and petroleum refining, is complex and demanding. Materials such as steel, titanium and aluminum are the raw materials of fabrication. These materials are formed into pipes with diameters as large 72 inches and walls as thick as seven inches. Some of these pipes become parts of "critical piping systems" used in high-pressure, high-temperature or corrosive applications. Such systems must withstand pressures up to 2,700 pounds per square inch and temperatures up to 1,020 degrees Fahrenheit. These critical systems are used in power generation.

By the mid-1980s, the U.S. pipe fabrication industry was experiencing significant difficulties. Power plant construction was at a low ebb domestically, as was refinery construction due to a decline in oil and gas exploration. At the same time, pipe fabrication was a craft performed by skilled welders brought to construction sites for that sole purpose. This handicraft approach kept piping prices high, and contributed to a large-scale exodus from the industry.

Bernhard believed that the industry could again become successful in the United States. He wanted to transform pipe fabrication from a craft industry to an industry that produced its product in factories using machinery to the extent possible. Such a change in fabrication practices, he believed, would reduce piping costs and allow the domestic pipe fabrication businesses to become profitable again.

To implement his ideas, Bernhard founded The Shaw Group in 1987 and purchased the Benjamin F. Shaw Company, a century-old pipe fabricator. In 1998, its first full year of operation, Shaw reported revenue of $29.3 million. By 1993 when the company went public, its revenue had increased to $120.7 million.

Becoming a Total Piping Re

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