The Brazilian subsidiary of Vallourec, Vallourec Tubos do Brasil, said late on Wednesday during the Brazil Steel Congress, being held in Sao Paulo from June 8-9, that it will soon start exporting the seamless steel pipes it produces at its Jeceaba plant to Europe by 2017.
According to the company, since the plant’s launch in September 2011, the Jeceaba facility has always eyed the export market, but exports were mainly focused to the Middle East.
“We’re initiating the qualification [process for starting exporting to Europe] because [these] are complex products from the point of view of their application in deep waters for the oil industry,” said Alexandre de Campos Lyra, IABr’s new president, who’s also a senior vice-president for the Vallourec Group in South America.
“Before closing a massive sale [of pipes] and developing a [exporting] route, we need to qualify the Jeceaba plant, even if we need just to sell pipes for one of our units in Europe. At this moment we’re qualifying the route, which should be concluded by the end of this year and 2017. It should then become a common exportation route,” the executive said.
Lyra said exporting pipes to Europe wasn’t expected at Vallourec’s initial plans in Brazil. The Jeceaba plant has exported pipes to the Middle East since its launch, and the company has a subsidiary in Saudi Arabia that doesn’t produce steel, concentrating much of its activities in the pipe finishing process.
Since Vallourec reorganized its operations worldwide, including in Brazil, exports to Europe have become feasible.
Earlier this year, the Francebased tube and pipe producer announced it will transfer pig iron and steel output at its Belo Horizonte mill, in the state of Minas Gerais, by 2018.
Vallourec’s No. 2 blast furnace at its Belo Horizonte plant was idled in April this year, and the company will halt output at its No. 1 blast furnace in the same mill in H2 2018.
The Belo Horizonte steelworks area should also be deactivated by 2018. As the Belo Horizonte mill is closed, Vallourec will concentrate pig iron output at its Jeceaba plant.
In addition to the cut in capacity in Minas Gerais, Vallourec will merge the two companies it has in Brazil, Vallourec Tubos do Brasil and Vallourec & Sumitomo Tubos do Brasil, into one company. The new company will be called Vallourec Soluções Tubulares do Brasil, in which Vallourec will have an 85 percent stake, while Nippon Steel & Sumitomo Metal Corporation, NSSMC, will retain another 15 percent stake. Vallourec & Sumitomo Tubos do Brasil (VSB) is a JV between Vallourec and NSSMC. Vallourec has a 56 percent stake in the company, while NSSMC has another 44 percent stake in the business.