May 18, 2010
Sumitomo to purchase Oil Country Tubular Goods ("OCTG") premium threading/trading company in South East Asia Forecasting market expansion in Asia/Middle East, Sumitomo enhances its capability to serve customers in the region
Sumitomo Corporation (President and CEO: Susumu Kato; Headquarters: Chuo-ku, Tokyo, Japan; hereinafter, "Sumitomo") has entered into a conditional agreement with SCOMI Engineering Bhd (SEB), a Malaysian listed engineering and logistics company, to acquire 100% of SCOMI OMS Oilfield Services Pte Ltd and SCOMI OMS Oilfield Holdings Sdn Bhd (hereinafter,"OMS") for total consideration of USD 100-110 million (subject to contractually agreed price adjustment mechanisms). It is anticipated that (subject to satisfaction of various applicable conditions, including SEB shareholder approval) this transaction will close by the end of June 2010.
OMS is a machine shop business headquartered in Singapore, with operations at 10 sites in 7 countries mainly for the Asian region, offering premium threading, repair and manufacturing services in relation with tubular pipes to customers in the oil & gas industry.
.Its main customers are multinationals /national oil companies and OCTG equipment/service providers. OMS has a well established reputation among its customers for its quality of work and service.
Sumitomo has been seeking to expand its services in the oil and gas industry generally and to offer OCTG equipment and relevant services globally. Based on its own current sales of OCTG, Sumitomo Corporation has been expanding globally its business activities in areas such as Supply Chain Management （15 sites in the Europe, Africa and Asia and North America and Australia）,pipe production and threading of OCTG products. Following its entry into the oil field service industry in 2007 via a partnership with HOWCO Group (a manufacturer of semi-finished products for use in oil and gas production wells), Sumitomo has been looking to expand its business in this area. The proposed acquisition of OMS is a strategic transaction for Sumitomo in this market and significantly increases network coverage in the region.
In the current environment, with oil and gas prices highly volatile and increased production by the Chinese mills, Sumitomo considers this transaction an important investment to secure its current competitive position in the market. This is also the first large scale investment in the South East Asian region by Sumitomo's tubular business.
Sumitomo aims to improve the services it provides to customers by leveraging the strengths of OMS's local machine shop network. In addition, Sumitomo will seek to develop links between its existing business infrastructure (including assets, customer base and human resources) and that of OMS.
【Snap shot of OMS】
Two machine shop subsidiaries owned by SEB which are based in Singapore and Malaysia, together with their respective subsidiaries.
Premium threading services/manufacture/repair/trading of oil & gas well related equipment.
3. Operations: 10 sites over 7 countries
Singapore, Malaysia (Johor Bahru, Kemaman and Labuan), Thailand (Songkhla), Indonesia (Balikpapan, Jakarta), Brunei, Australia (Darwin), Saudi Arabia (Abqaip)
* Jakarta site is under construction
4. Number of employees: Approximately 350
Corporate Communications Department,