Vallourec & Sumitomo Tubos do Brazil Starts Test Run of New Iron Works in June

Vallourec & Sumitomo Tubos do Brazil (VSB), a joint company by Sumitomo Metal Industries and Vallourec to produce seamless steel tubes in Brazil, will start test run of some facilities such as a billet heating furnace in or after June and enter commercial operation this autumn. VSB plans to acquire oil majors’ certifications and international standards to start commercial shipment in fiscal 2011 ending in March 2012.

VSB plans to acquire American Petroleum Institute (API), American Society for Testing & Materials (ASTM) or oil majors’ certifications such from Shell Oil and Exxon Mobile. At the same time, VSB tries to increase long-term contracts with new oil companies and national oil companies to enhance market shares in South America, Middle and Near East, and North America.

VSB was established in Minas Gerais, Brazil with total investment of approximately 200 billion yen. VSB has constructed integrated production system for seamless steel tubes, including blast furnaces with an output capacity of crude steel at 1 million tonnes per year.

The iron works will hold 2 blast furnaces with each capacity of 400 cubic meters. VSB will consume 700,000 tonnes of crude steel yearly and sell 300,000 tonnes to Vallourec. VSB plans to produce seamless steel tube at 600,000 tonnes per year with 168.3-406.4 millimeters diameter. Sumitomo Metals and Vallourec plan to sell VSB’s products at each 300,000 tonnes per year. The employee number will be about 1,500.

VSB will also introduce pelletizing equipment which can use low quality powder coal by pelletization. Oil majors positively expect for VSB’s operation start.