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NW Pipe mulls options for its OCTG operations

Keywords: Tags  Northwest Pipe, Scott Montross, oil country tubular goods, OCTG, strategic review, acquisition, divestiture, joint venture energy tubulars


CHICAGO — Northwest Pipe Co. is reviewing its oil country tubular goods (OCTG) business as it focuses on water transmission.

The Vancouver, Wash.-based steel tube and pipe producer said the strategic review could lead to acquisitions, divestitures or joint ventures.

"Our long-term desire is to sharpen our focus on growing our core water transmission business through organic initiatives like the recent $12-million investment in our Saginaw, Texas, facility, as well as through acquisitions," Northwest Pipe president and chief executive officer Scott Montross said in a statement Sept. 30. The Saginaw mill’s spiral-weld steel pipe size range is expected to increase to 126 inches in diameter by 1-inch thick from 96 inches by ⅝-inch thick (amm.com, Jan. 17, 2012).

The OCTG review could also include adding downstream processing capability, according to Northwest Pipe, which is looking to reduce its exposure to "spot market" heat-treatment prices (amm.com, Aug. 6).

Northwest Pipe said it will continue with the expansion of its Atchison, Kan., facility, which is slated for completion in the first quarter of 2014, where it has invested more than $35 million.

The OCTG review could mark a sharp turn for a company that previously looked to turn itself into a "household name" in the energy tubulars business (amm.com, March 23, 2011).

Northwest Pipe has two divisions: water transmission and tubular products. The latter has increasingly focused on OCTG and line pipe amid a construction downturn combined with greater energy sector demand. The division has electric-resistance welded facilities in Atchison; Houston; and Bossier City, La., which was retooled to make energy tubulars (amm.com, Sept. 30, 2011).

But the company’s energy market expansion has come amid mounting overcapacity concerns, with both domestic and overseas mills adding or announcing new U.S. capacity (amm.com, April 30).

Northwest Pipe has said it expects the impact of a milestone OCTG trade complaint filed in July to be felt in the fourth quarter. But Montross also has said the company won’t rely on "trade cases to protect us."


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