NEW YORK Ferrostaal Piping Supply GmbH is inaugurating its first U.S. office in Houston to take advantage of a competitive energy market.
The company, which has more than 60 years experience as a supplier of pipe and pipe accessories such as flanges, fittings and elbows, traditionally works with large engineering, procurement and construction companies, especially petrochemical, refineries and fertilizer plants.
However, while much of Ferrostaals activity has been concentrated on Germany and Western Europe, it is moving quickly into North America due to low-cost natural gas, a top executive said.
"Pipe has been an important import item into the U.S. for a number of years already and is probably one of the largest importers of pipe in the last few years. Today, when we talk about the U.S., everyone is talking about fracking," Ulrich Pruss, managing director of the Essen, Germany-based company, told AMM an interview. "In the next couple of years, from our point of view, there will be lots of investments in new plantsbe it refineries, petrochemical plants, fertilizer plants, whatever. These plants require lots of pipesseamless pipesplus those accessories. Wed like to play a role in this business."
This summer, the company opened subsidiary Ferrostaal Piping Supply USA Inc. to manage contracts from engineering, procurement and construction companies, develop new business and get into the traditional trading space by importing and exporting pipe.
"Houston is one of the most important cities in the world regarding energy, oil and gas. Most companies around the world that are involved in this industry have opened up offices here already," Ferrostaal Piping Supply USA president Axel Bartschat said. "There are also a lot of foreign manufacturers of pipe that have opened up or will be starting production in the next couple of years. Its not only manufacturers of pipe, were also seeing companies like Voestalpine (AG) investing in a mill in Corpus Christi to produce hot-briquetted iron for the steel industry."
Unlike most traditional pipe traders, the company also offers accessories such as fittings and flanges to provide a "one-stop shop" for customers, Bartschat said.
"When we talk about a contract with one of the (engineering, procurement and construction companies), it usually means combining materials from up to 20 different sub-suppliers and manufacturers. Here, we have our central warehouse in the Netherlands where we can bring every material together and package (it) in accordance with the requirements and needs of our end customers," Pruss said.
A number of U.S. producers recently filed anti-dumping and countervailing trade petitions vs. oil country tubular goods imports from nine countries, which could potentially stymie additional foreign material (amm.com, July 2). However, Bartschat said the company will unlikely be affected due to its relationships with European mills.
"The case covers most of the cheap pipe origin countries like Vietnam, Turkey, Ukrainethe list goes on. For us, weve done more business in the past with high-end European-based mills. So, when domestic prices rise, which will most likely happen here, well see mills out of Europe become more competitive. ... We are definitely looking at origins of pipe from countries not accused of dumping," Bartschat said.
"We are of the opinion that this business segment will grow, but it wont fly anytime soon," Pruss said.