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| Sumitomo Metal, Vallourec To Form Seamless Pipe JV In Brazil |
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600,000 TPY Production To Start In 2010 For Global Markets Sumitomo Metal Industries Ltd announced March 28 that the integrated steel company and France's Vallourec Group have agreed to study the formation of a joint venture in Minas Gerais, Brazil that will produce high-grade seamless pipes for the world's markets. The joint venture will build seamless pipe production facilities with a blast furnace and a steelmaking plant, with investments totaling nearly Y200 billion. Sumitomo Corp will take part in the joint venture besides Sumitomo Metal and Vallourec. Plans assume that seamless pipe production of 600,000 tpy will start in 2010, of which Sumitomo Metal will take the first 300,000 tpy and Vallourec another 300,000 tpy. An equal number of representatives from Sumitomo Metal and Vallourec will sit on the management committee of the joint venture. The management committee will deliberate and determine how the joint venture should operate. Background The world's seamless pipe demand in oil and natural gas development projects shows steady growth nowadays amid active global demand for energy sources. In particular, marked demand growth is forecast for high-grade seamless pipes that stand a tough drilling environment. As a result, Sumitomo Metal and Vallourec have agreed to study construction of up-to-date production facilities for high-grade seamless pipes in Minas Gerais, Brazil. The agreement follows the overall consideration of essential matters such as low-cost availability of raw materials and energy resources and favorable access to markets with a potential of expanded demand for seamless pipes. Among promising markets are North America, the Middle East, and Africa. Both Sumitomo Metal and Vallourec represent the world's top-level manufacturers of high-grade seamless pipes. The two companies have alliance relations for nearly 30 years in the field of special couplings (which bear the product name of VAM) for seamless pipes used in oil and natural gas development projects. Until now, the two partners have promoted joint R&D work on VAM and have established VAM processing companies in the USA, Indonesia, and Vietnam. |
| last modified : Wed 04 Apr, 2007 [10:55] |
