Oct. 07, 2011
Expansion of Seamless Tubular Products Business in the U.S.
Sumitomo Corporation (Chuo-ku, Tokyo; President and CEO: Susumu Kato; hereinafter "Sumitomo") hereby announces that it has acquired a 19.47% interest in V&M TWO LLC (President: Pascal Braquehais; hereinafter "V&M2"), a manufacturer of small-diameter seamless steel pipe based in the U.S. state of Ohio, from Vallourec S.A. (Paris, France; Chairman: Philippe Crouzet; hereinafter "Vallourec").
Development of unconventional energy resource has recently been growing in the United States, including oil and gas shale plays, for which production is expected to expand over the medium- to long-term. Concurrently, demand for the small-diameter seamless OCTG used in these shale plays is increasing. At a production facility it is being constructed nearby, V&M2 will manufacture these pipes and efficiently supply them to the major shale plays such as Marcellus Shale in Pennsylvania, one of the biggest OCTG consuming areas in the U.S..
[Overview of V&M2's steel pipe mill]
V&M2 has commenced construction of a production facility to manufacture small-diameter seamless steel pipes on a property adjacent to the premises of V&M STAR LP (President:Joel Mastervich; hereinafter "VMS"), another Ohio-based seamless steel pipe manufacturer, in which Sumitomo owns a 19.47% interest. The initial investment amount of the new steel pipe mill is approximately US$650 million, and scheduled to be completed for operational launch by mid-2012 and planned to go into full commercial operation by the end of that year with an annual output capacity of 350,000 tons.
By taking a stake in V&M2, Sumitomo aims to enhance its seamless tubular products business in the Unites States and strengthen its long-term alliance with Vallourec. In relation to this, V&M2 is planning to integrate its business with that of VMS in the future. Sumitomo intends to leverage this integration to expand its business in the U.S. market.
[Ownership of interest in V&M2]
Ownership after transfer: Vallourec: 80.53%; Sumitomo: 19.47%
Date of transfer : September 2011
[Outline of V&M TWO LLC]
・Name :V&M TWO LLC
・Site location Registered office :Delaware, U.S.A; Plant: Ohio, U.S. A.
・Establishment :December 2009
・Number of employees :Approx. 350 (planned)
・Main business :Manufacturing and sales of seamless steel pipes
・Production capacity :350,000 tons/year
[Outline of V&M STAR LP]
Name :V&M STAR LP
Site location :Registered office: Delaware, U.S.A; Plant: Ohio, U.S. A.
Establishment :July 2002
Number of employees :Approx. 800 (as of the end of 2010)
Main business :Manufacturing and sales of seamless steel pipes
Production capacity :500,000 tons/year
Corporate Communications Department,