Flowserve Finalizes Joint Venture Contract with SUFA Technology Industry Co., Ltd. CNNC
Flowserve announces the final signing of an amendment to a nuclear power industry joint venture agreement with SUFA Technology Industry Co. Ltd. CNNC
DALLAS, Apr 15, 2010 -- Flowserve (NYSE: FLS), a leading provider of flow control products and services for the global infrastructure markets, today announced the final signing of an amendment to a nuclear power industry valve joint venture agreement, originally announced in March 2009, between Flowserve and SUFA Technology Industry Co. Ltd. CNNC (SUFA).
Since the initial announcement, both parties have been actively working to complete the amendment, which has now been finalized and clarifies the path forward of the joint venture.
The joint venture, called SUFA - Flowserve Nuclear Power Equipment (Suzhou) Co., Ltd., will be headquartered in Suzhou, in the province of Jiangsu, China. SUFA will contribute 55% of the joint venture's registered capital, while Flowserve will contribute 45% of the joint venture's registered capital.
Under the agreements, both parties will contribute nuclear power industry valve technology and build a joint manufacturing facility. The joint venture plans to manufacture safety-related valves, including Main Steam Isolation Valves (MSIVs), exclusively for China's civilian nuclear power industry. MSIVs are used to assist in the safe shutdown of a civilian nuclear reactor in the unlikely event of a rupture in the plant's steam piping.
"This joint venture will help promote the expansion of China's civilian nuclear power market," said Tom Pajonas, President of the Flowserve Flow Control Division. "This joint venture supports Flowserve's Chinese nuclear power strategy. We believe it will provide additional opportunities to continue supporting this important market."
"This amendment will satisfy the Chinese government's nuclear power development strategy, and will make this joint venture a successful nuclear valve manufacturer in China," said Jiangang Qiu, Vice President of China National Nuclear Corporation (CNNC) and Chairman of SUFA.
Flowserve has been supplying valves to the Chinese civilian nuclear power generation market for more than 20 years.
About China National Nuclear Corporation (CNNC)
CNNC is the Chinese agency that mainly manages nuclear power infrastructure in China. The agency owns and operates nuclear power plants across China, and is the major force of nuclear technology development and nuclear power design in the country.
About Flowserve Corp.
Flowserve Corp. is one of the world's leading providers of fluid motion and control products and services. Operating in more than 55 countries, the company produces engineered and industrial pumps, seals and valves, as well as a range of related flow management services. More information about Flowserve can be obtained by visiting the company's Web site at www.flowserve.com.
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The forward-looking statements included in this news release are based on our current expectations, projections, estimates and assumptions. These statements are only predictions, not guarantees. Such forward-looking statements are subject to numerous risks and uncertainties that are difficult to predict. These risks and uncertainties may cause actual results to differ materially from what is forecast in such forward-looking statements, and include, without limitation, the following: a portion of our bookings may not lead to completed sales, and our ability to convert bookings into revenues at acceptable profit margins; changes in the global financial markets and the availability of capital and the potential for unexpected cancellations or delays of customer orders in our reported backlog; our dependence on our customers' ability to make required capital investment and maintenance expenditures; risks associated with cost overruns on fixed-fee projects and in taking customer orders for large complex custom engineered products; the substantial dependence of our sales on the success of the petroleum, chemical, power and water industries; the adverse impact of volatile raw materials prices on our products and operating margins; our ability to execute and realize the expected financial benefits from our strategic realignment initiatives; economic, political and other risks associated with our international operations, including military actions or trade embargoes that could affect customer markets, particularly Middle Eastern markets and global petroleum producers, and non-compliance with U.S. export/re-export control, foreign corrupt practice laws, economic sanctions and import laws and regulations; our exposure to fluctuations in foreign currency exchange rates, particularly in hyperinflationary countries such as Venezuela; our furnishing of products and services to nuclear power plant facilities; potential adverse consequences resulting from litigation to which we are a party, such as shareholder litigation and litigation involving asbestos-containing material claims; a foreign government investigation regarding our participation in the United Nations Oil-for-Food Program; our foreign subsidiaries autonomously conducting limited business operations and sales in certain countries identified by the U.S. State Department as state sponsors of terrorism; our relative geographical profitability and its impact on our utilization of deferred tax assets, including foreign tax credits; the potential adverse impact of an impairment in the carrying value of goodwill or other intangibles; our dependence upon third-party suppliers whose failure to perform timely could adversely affect our business operations; the highly competitive nature of the markets in which we operate; environmental compliance costs and liabilities; potential work stoppages and other labor matters; our inability to protect our intellectual property in the U.S., as well as in foreign countries; obligations under our defined benefit pension plans; and other factors described from time to time in our filings with the Securities and Exchange Commission.
All forward-looking statements included in this news release are based on information available to us on the date hereof, and we assume no obligation to update any forward-looking statement.
Technical Contact: Paul Fehlman, 972-443-6517, Vice President, Financial Planning & Analysis and Investor Relations
Media Contact: Steve Boone, 972-443-6644, Director, Global Communications & Public Affairs