Vallourec, world leader in premium tubular solutions, has hosted its Investor Day in Belo Horizonte in Brazil.
The management of the Group held presentations illustrating the theme "Towards a new Vallourec."
Mr Philippe Crouzet chairman of the management board said that "Expecting the fundamentals of the energy markets to remain strongly supportive, we pursue our strategy of investing where the growth is. As our new projects are progressively coming on stream, we are strengthening our industrial and commercial positions to benefit from the growing oil & gas markets and to efficiently address our customers' needs, through more local presence and more premium capacity. Implementing this transformation, we are building a new Vallourec, structurally more competitive, thanks to higher premium volumes, a lower cost base, and increased flexibility."
After the successful start up of the new integrated plant in Brazil in 2011, and the commissioning of the new rolling mill in the United States mid 2012, both operations will complete their technical ramp up in 2012 and will be fully available in 2013. These state of the art mills will complement recently added or currently under construction new finishing capacities in Europe, China, Indonesia, the Middle East and Nigeria, allowing the Group to capture market growth and optimize its industrial footprint. With greater specialization of its European mills, Vallourec will be in a position to ensure better allocation of its production and commercial resources.
Vallourec is engaged in a thorough transformation, evolving from a Europe centric export company to a global leader with excellent local positions, supported by reinforced local content offer, differentiated service and greater customer proximity to further develop market penetration. Vallourec's success continues to be backed by a strong technological leadership built upon experience and innovation. In the oil & gas market, Vallourec also benefits from the broadening scope of solutions it provides to its customers beyond OCTG, such as drill pipes, offshore line pipes and local services.
During the presentations held at the Investor Day, the management announced some new initiatives aimed at consolidating the Group's position in two of its main regions of growth, the United States and Brazil.
United States: optimized industrial organization
In order to further integrate the new small diameter rolling mill under construction, "V & M Two", with the adjacent existing V & M Star mill located in Youngstown, the two companies will merge in 2012. As V & M Two was 100% owned by Vallourec, whilst V & M Star is 80.53% owned by Vallourec and 19.47% by Sumitomo Corporation, Sumitomo Corporation has purchased 19.47% of V & M Two from Vallourec. The operation, that will strengthen industrial synergies between the two pipe mills, was concluded on 29 September 2011. At the time of the transaction Vallourec cashed in USD 100 million relating to Sumitomo Corporation's contribution to the financing of V & M Two's investment to date.
Brazil: new offer in alloy line pipe and new Research Centre in Rio
In Brazil, Vallourec's subsidiary V & M do Brasil, has signed a Collaboration Agreement with German manufacturer Butting, in order to produce high quality carbon steel line pipes internally lined with special corrosion resistant alloys. These pipes are designed to withstand the most aggressive environments, and therefore will be particularly suitable for the development of the Brazilian pre-salt fields. Joining their technologies, the companies will be able to produce and market a high end product "Made in Brazil".
Already working closely with Petrobras on the development of tubular solutions for pre-salt offshore exploration from its R&D centre in Belo Horizonte, Vallourec is taking a step further in this collaboration by setting up a new research centre in Rio Vallourec Research Rio de Janeiro. It will be located in the Technological Park of Rio, close to Petrobras' research centre, CENPES. Essentially focused on pre-salt topics, it will cover all related Vallourec activities including drill pipes, umbilicals and accessories. In addition, the Center will benefit from synergies with UFRJ (Universidade Federal do Rio de Janeiro) in development areas such as the environment, robotics and energy consumption. The opening is scheduled for beginning of 2013.
