02 January 2013

Turkey's Borusan Mannesmann to establish $150mn steel pipe manufacturing plant in the US

- Plant scheduled to start production in mid-2014 
- Plant will focus its output on OCTG and ERW line pipes 
- Target revenue for US-based company estimated at $500mn 
- Location decision not finalized, Considering Texas and Oklahoma

Istanbul - 02 January 2013 (PRNewswire) - Turkey's leading steel pipe manufacturer, Borusan Mannesmann, will invest 150 million USD in the United States to establish a steel pipe manufacturing plant to cater to the energy sector. This plant is set to start production in 2014 and will make Borusan Mannesmann a global player in the industry. 

Borusan Mannesmann, one of the foremost manufacturers of the European steel pipe industry, will establish a pipe manufacturing plant with an annual production capacity of 300,000 in the United States. With an investment of 150 million USD, the plant will focus its output on OCTG and ERW line pipes. The target revenue for the US-based company is estimated at 500 million USD

Scheduled to start production by mid-2014, the plant is designed to produce the thick-walled and high-strength pipes suitable for state-of-the-art, advanced OCTG technology used in 'shale gas' production. Final decision on the location of investment is not finalized yet but Texas and Oklahoma are the leading states to attract the investment through their incentive programs. The facility will be built on nearly 125 acres of land and provide 350 people with employment when it becomes operational. 

Agâh Uğur, Borusan Holding Group CEO, comments, "Borusan Mannesmann is among the leading players of the steel pipe market in Europe. One of its top goals is to become a global player in the pipe industry. This investment is not only a way to insert Borusan Mannesmann into the U.S. market; it is also the first step to becoming an international manufacturer."

"Borusan Mannesmann grows and expands by focusing on production for high-value-added sectors such as energy and automotive. In a first for the Turkish industry, we are now becoming the first Turkish company to invest in the steel pipe sector in the United States with this venture. This is our second overseas investment after our automotive pipe manufacturing plant in Italy. We have a strategic and long-term view of the American market due to its size and quality approach. Favorable changes to the energy policies in the United States, as well as the advancements in the shale gas technology, were the factors that hastened our investment decision at this time of global recession." 

To date, Borusan Mannesmann has realized many oil and natural gas pipeline projects in Turkey, Central Europe, and North Africa. The Elba Express and Line 300 natural gas pipeline projects brought the company prestige in the U.S. market. Over the last three years, Borusan Mannesmann has become one of the largest international companies that export to the United States the pipes used in oil and natural gas exploration and extraction. 

Thanks to breakthroughs made in the technical and commercial fields, Borusan Mannesmann has increased exports from 90 million USD in 2009 to 184 million USD in 2012. With 40 percent of its exports currently destined for the United States as well as this noted significant increase, Borusan Mannesmann is well on its way to accomplish its goal as a strong local and international player in the market. 

Source: Borusan Mannesmann