In North America: Adding VAM threading facility in Youngstown, Ohio
In Saudi Arabia: Closing of Zamil Pipes acquisition
Boulogne-Billancourt, 30 November 2011 – Vallourec, world leader in premium tubular solutions, today announced the advancement of two projects to strengthen its premium positioning to serve the OCTG1 markets of North America and the Middle East.
In North America, Vallourec will construct a new premium threading facility in Youngstown, Ohio, through its subsidiary VAM USA LLC. This decision is supported by the development of unconventional Oil & Gas drilling of shale resources, driving increased demand for premium connections. The new VAM facility will be located next to Vallourec's existing and soon to be commissioned pipe mills and close to customers operating in both the Marcellus and Utica shale areas. It will complement the VAM USA manufacturing facilities in Houston, Texas and enable the Group to expand its finished goods offer combining pipe and premium connections. Representing an investment of US$ 57 million (€ 42 million), the new production facility will ramp-up in phases, starting with one manufacturing line operating in mid-2012, and multiple lines operating by the end of 2013.
In Saudi Arabia, Vallourec completed the acquisition of Zamil Pipes on 25 November 2011, for a total consideration of € 97 million. This acquisition provides Vallourec with ready-to-run heat treatment capacity and threading facilities of up to 100 kt of pipe per year which will be combined with the existing project to build a VAM threading facility, on the same site. These operations reinforce Vallourec's local presence with end-finishing facilities to serve the premium OCTG market in Saudi Arabia and the Middle East.
Philippe Crouzet, Chairman of Vallourec's Management Board stated:
"Increasingly complex and challenging drilling conditions and important safety and environmental considerations are driving demand for premium OCTG and VAM® connections – the leading premium connections in the world. These investments are fully in line with our strategy to strengthen our local presence and provide more premium solutions both in North America, where we are a leading domestic supplier of OCTG; and in Saudi Arabia, in response to growing demand from the world's largest oil producer, Saudi Aramco, and other customers in the Middle East."
1 OCTG = Oil Country Tubular Goods
VAM® is a registered trademark of the Vallourec Group