Sumitomo Metals to Invest for Chinese Seamless Pipe Threading Business

Sumitomo Metal Industries and Sumitomo Corporation announced on Wednesday they reached the preliminary agreement with Vallourec on investment into Chinese joint venture established by Vallourec. The JV manufactures special threading named “VAM” used in joints of seamless steel pipes for oil and natural gas development. The JV will be shared at 51% by Vallourec, 34% by Sumitomo Metals and 15% by Sumitomo Corp. VAM was co-developed by Sumitomo Metals and Vallourec, which is the world no.1 threading for seamless steel pipe joints. The JV, VAM (Changzhou) Oil and Gas Premium Equipment, is located in Changzhou Region of China with about 160 employees. The JV will start operation in mid 2007 with output capacity at 50,000 tonnes per year. Demand for premium joints is increasing in China to apply for seamless pipes used in oil and natural gas development. Sumitomo Metals can strengthen its sales power against Chinese oil companies by realization of the investment into the JV.