JV set up in Brazil to manufacture seamless pipe

Sumitomo Metal Industries Ltd. said it will manufacture seamless pipes in Brazil through a joint-venture with Vallourec of France and Sumitomo Corp.

Eric Watkins
Senior Correspondent

LOS ANGELES, Mar. 29 -- Sumitomo Metal Industries Ltd. said it will manufacture seamless pipes in Brazil through a joint-venture with Vallourec of France and Sumitomo Corp. Production is expected to begin by mid-2010 in the state of Minas Gerais, with investment costs pegged at 200 billion yen.

The new plant will have annual production capacity of 1 million tons of steel, from which 600,000 tons of seamless pipe will be made. Vallourec will hold a 50%-plus stake in the joint venture, with the balance to be held by the two Japanese firms.

The need for pipe in Brazil to carry ethanol was announced recently. Petrobras Brazil's state-run Petroleo Brasileiro SA (Petrobras) in February signed a memorandum of understanding (MOU) with Japan's Mitsui & Co. and Brazil's Construciones e Comercio Camargo Correa SA to study the construction of pipelines for exporting ethanol to Japan (OGJ Online, Feb. 28, 2007).

And early in March, the Japan Bank for International Cooperation signed an MOU to provide Petrobras with $8 billion to help it export ethanol to Japan (OGJ Online, Mar. 06, 2007).

Contact Eric Watkins at hippalus@yahoo.com.

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