CHICAGO Chinas WSP
Holdings Ltd. might have thrown in the towel on its Houston
division, but Japans Nippon Steel & Sumitomo Metal
Corp. (NSSMC) has high hopes for the facilitiesand the
potential they offer in the high-end oil country tubular goods
(OCTG) market in the United States.
NSSMC confirmed that it has
acquired WSP Houston OCTG Inc. for $43 million through its
Southern Tube LLC subsidiary. The company said it plans to make
additional capital investments in the facilities after the
acquisition closes and have a "full-fledged" commercial
operation on the site by 2015, the company said.
NSSMC aims to tap into the U.S.
energy sectors strong OCTG demand, especially the
high-end products needed to withstand harsh drilling
environments, it said. Shale drilling, for example, requires
OCTG and connections capable of withstanding more intense
pressures and more corrosive environments than that used in
traditional shallow or vertical drilling.
"NSSMC intends to utilize its
accumulated customer assets, technology and product capability
and accelerate its global strategy by fully entering the U.S.
market," it said.
As part of that strategy, the
Houston heat-treatment and threading operations will be
supplied by material from NSSMC Wakayama Steel Works in Japan
and Vallourec & Sumitomo Tubos do Brasil Ltda (VSB), NSSMC
Construction on VSB, a
$1.6-billion joint venture between Frances Vallourec SA
and Japans Sumitomo Metal Industries Ltd., began in 2008.
The mill is expected to have an eventual annual production
capacity of 1 million tonnes of steel and 600,000 tonnes of
tubes. The VSB pipe mill was inaugurated in September 2011 (
amm.com, Feb. 22).
Finishing product made outside
the United States at the Houston facility is similar to the
strategy once envisioned by WSP, which previously said it could
restore its presence in the United States by selling product
made in Thailand and finished in Houston into the U.S. market
after a dumping petition was successfully filed against energy
tubulars from China (
amm.com, June 15, 2011).