Sumitomo Metals Enhances Collaboration with Vallourec for Seamless Tube

Sumitomo Metal Industries announced on Thursday the firm arrived at an agreement to enhance collaboration with Vallourec, French major seamless steel tube maker. Both companies will acquire share at US$ 120 billion for February 27 to Ended December 2009. Their collaboration is first.

They arrived at agreement to enhance seamless tube processing business of special joint for a development of oil and natural gas in USA. They amalgamate VAM.USA, special joint processing company of joint company by Sumitomo Metals, Vallourec and Sumitomo Corporation, and Atlas Bradford, the subsidiary of Vallourec, which will establish VAM.USA.LLC on Friday.

VAM.USA.LLC’s capital composition is 34% of Sumitomo Metals, 15% of Sumitomo Corporation and 51% of Vallourec. Sumitomo Metals invests at US$ 86 million. The employee is about 500 peoples. VAM.USA.LLC processes and sells Special joint. Sumitomo Metals and vallourec aim to expand the market of VAM by the expansion of service to users and reduce production cost by the concentrate of volume. VAM.USA.LLC is expected to hold top share in USA.

Sumitomo Metals and Vallourec joined hands about VAM of seamless tube in 1976, which operate special joint processing company in Indonesia, Vietnam and China together. Moreover, the firm is constructing the production equipment of seamless tube in Brazil, and will start the operation in 2010.

Sumitomo Metals said the demand for seamless is expected to increase in medium and long term plan and to extend the demand for high grade tube and special joint for steel, and VAM’s share would increase in USA or other country.