Sumitomo Metals’s seamless pipe joint venture VSB in Brazil holds inauguration

Vallourec & Sumitomo Tubos do Brasil Ltda (VSB), a seamless pipe joint venture of Sumitomo Metal Industries (Sumitomo Metals,) Sumitomo Corporation, and Vallourec of France, held the inauguration of its new steelworks in Jeceaba, state of Minas Gerais, Brazil, on Thursday, September 1, at 11:00 a.m. (local time.)

VSB began construction of a steelworks in 2007, as a base for global development of Sumitomo Metals’ seamless pipe business. It has recently completed construction of major facilities, which resulted in today’s inauguration.

The opening ceremony was attended by Dilma Rousseff (President of Brazil,) Hiroshi Tomono (President of Sumitomo Metals,) other senior executives of the joint venture partners, and people involved in the project. A total of about 600 people, including guests from Brazilian government bodies and business partners, celebrated inauguration of this big project that symbolizes fast-growing Brazil.

At the inauguration, Dr. Tomono, President of Sumitomo Metals, touched upon the historical relationship of Brazil and Japan and how Zico, a famous Brazilian coach and former footballer, once played for Japan’s professional soccer team Kashima Antlers, which is originated as Sumitomo Metals’ own soccer team, contributed to the development of the Japanese football as a coach of its national team. Dr.Tomono then stated “The launch of this VSB project enables us to globally supply our seamless pipe products from two bases, Japan and Brazil. Together with Vallourec, we would like to make our best in contributing to Brazil’s prosperous future.” Dr. Crouzet, Chairman of the Management Boardof Vallourec, stated that this steelworks was a great achievement for Vallourec. Brazil’s President Rousseff expressed her great expectations on VSB’s future, based upon Japanese and French technologies, in her speech. She also mentioned that her father used to work at Mannesmann, which is now a Vallourec Group company.

Operation of this steelworks has opened Sumitomo Metals’ new era of having two core bases of seamless pipe production in the world. Sumitomo Metals will supply high-end “Sumitomo’s pipe and tube” to our customers worldwide and grow with them. Brazil is an ideal location to serve markets such as South and North America, Africa, and the Middle East, and has good transportation infrastructure, including railways and port facilities. VSB also has the advantage of having an iron ore mine nearby. The company will expand the business by making it more competitive with Sumitomo Metals’ technology. Operation of VSB’s steelworks has also realized Sumitomo Metals’ strategy to grow in the overseas markets with Japan functioning as a base.

VSB has adopted a “charcoal blast furnace,” which uses charcoal made from eucalyptus trees grown in the contracted plantation, as a reducing material. The company will help preserve the global environment by making close to zero net emission of CO2.

Sumitomo Metals will promote an early start-up of the steelworks in order to contribute to energy development in Brazil and other parts of the world.

 

From left: Philippe Crouzet (Chairman of the    Management Board of Vallourec S.A.) and Dilma    Vana Rousseff (President of Brazil)    Right: Hiroshi Tomono (President of Sumitomo Metals)	From left: Hiroshi Tomono (President of Sumitomo Metals) and Jean-Paul Parayre (Chairman of the Supervisory Board of Vallourec S.A.)

Vallourec & Sumitomo Tubos do Brasil Ltda.

(1) Location:	Jaceaba, State of Minas Gerais, Brazil
	(near the capital city of Belo Horizonte)
(2) Representative:	Tancredo Martins Neto
(3) Business activity:	Production of high-grade seamless pipe
(4) Number of employees:	1,373 (as of the end of March 2011)
(5) Investment:	R$5billion
(6) Ownership:	Sumitomo Metals 40%; Sumitomo Corporation 4%; and Vallourec 56%
(7) Establishment:	July 2007
(8) Production capacity:	(i) Seamless pipe 600,000 metric tons of seamless pipe per year (Sumitomo and Vallourec will each sell 300,000 tons.)
	(ii) Crude steel 1,000,000 metric tons of crude steel per year (of which 700,000 tons will be used by VSB and the remaining 300,000 tons will be sold to Vallourec.)