Visions - Spring 2009 - 14

Tubular Group New Tubular Acquisitions Keeps The Pipeline For Growth Open Additional Investment in Tubular-Related Companies Enhances and Strengthens SCOA Tubular Group’s Value Chain Opportunities D espite an overall economic downturn, SCOA’s Tubular Group continues to achieve success in the area of OCTG pipe business. Based on its predictions of strong long-term energy demand and consistent future growth in this business, the group is confident in its high-grade seamless pipe business, including businesses that provide premium OCTG connections and the heat treatment for pipe material. To that end, two recent acquisitions of companies that produce these connections and heat-treated materials are helping SCOA establish and maintain new business within the group’s value chain. Firstly, SC, SCOA and Sumitomo Metal Industries, Ltd. announced that they will jointly acquire a 49% equity interest of V&M Atlas Bradford fromVallourec SA. The acquired company is recognized for its premium OCTG connection brand known as Atlas Bradford® in North America. In addition, SC and SCOA will also acquire a 19.47% equity interest inV&M TCA, which specializes in heat treatment operations for seamless pipes used for oil and natural gas development, and in fact has the number one heat treatment processor for high grade OCTG in the U.S. These investments will further strengthen our long standing collaboration in the field of seamless pipes business in the US. The acquisitions were from longstanding tubular partner Vallouric SA, and plans are underway to merge this entity into V&M Star in June 2009. “TCA is the leading supplier of high-grade OCTG in US, especially for anti-corrosion, which is best used in combination with V&M Star's high quality pipes,” said Masahiko Yokohama, General Manager, Corporate Planning at V&M Star and V&M TCA.“The addition of these two assets to the value chain will strengthen our leading position in the industry.These acquisitions strengthen our value chain by bridging the steel industry and the energy industry, and by increasing our market share of higher value-added products in future.” In order to enhance the premium connection business, V&M Atlas Bradford was also integrated with an existing Vallourec-Sumitomo joint venture (VAM USA) to create a new entity,VAM USA LLC, on February 27th of this year. This participation also ensures the security of the existing VAM premium connection business whichVallourec and SMI have been collaborating on since 1976. “VAM USA had been owned byVallourec, Sumitomo Metals and SC for over 20 years,”Yokohama said,“but with this transaction, SCOA became a shareholder of the newVAM USA, which will benefit our position by optimizing the efficiency of management in the U.S. Yokohama also said that the Atlas Bradford® brand carries weight in the OCTG community as well, and the acquisitions bring SCOA into the fold at just the right moment. “AB is the top-shared premium connection and has been winning `best customer satisfaction’ awards for years, which will benefitVAM USA in enhancing its lead position in the U.S.’s premium OCTG market,”Yokohama said. “This will also allow us to strengthen our joint ventures such asVallourec & Sumitomo’s Tubos do Brasil, which will begin production in 2010,” he added. For more information, please contact Masahiko Yokohama at Masahiko.Yokohama@sumitomocorp.com 14 visions Spring 2009
Visions - Spring 2009

Table of Contents for the Digital Edition of Visions - Spring 2009
