Tenaris Focuses on Higher Value, Rocca

Chairman and CEO Paolo Rocca of Techint Group visited Japan on April 5 and 6 to view Tenaris NKK Tubes after the major earthquake. The chairman of world largest steel pipe maker said to a reporter of Japan Metal Bulletin the group focuses on development of high end products including Dopeless technology and special joint while the group improves the rolling and heat treatment technology. He said the group launches new joint series for shale gas in April. He emphasized the group tries to follow the trend to increase the credibility when the energy development needs better pipe with higher resistance for temperature, pressure and corrosion under severe development condition.

Mr. Rocca said all people of Tenaris got a major shock on the quake and get anxious about people and operation of Tenaris NKK Tubes while Japanese facilities and around 600 workers and the family in Japan had no major damage and restarted the operation 2 days after the quake. He said all Japanese employees held meeting on support by Tenaris on April 6. He said Tenaris NKK Tubes donated US$ 500,000 through Japanese Red Cross Society and Tenaris will make donation in 15-20 days to match donation from all employees in Tenaris group.

Mr. Rocca said Tenaris NKK Tubes keeps the operation with billet supply from JFE Steel as usual continuing shipment both for domestic market and export. He emphasized the group tries to keep the supply for worldwide users while Tenaris NKK Tubes’ operation could be affected by limited power availability and the shipment could be delayed. He expects Tenaris NKK Tubes could resume daytime operation in the week from April 11 while the operation was only in nighttime to save power consumption.

The serious accident at Japanese nuclear station could impact on world nuclear power trend. World power generation industry would shift to coal and natural gas based thermal power plants. Mr. Rocca said the accident could impact on steel pipe market in various aspects including users’ activities, supply chain and risk management on products. He said the market should be severer on quality and credibility of steel pipe products and stability of the supply chain. He said the change could be for Tenaris when the firm has global system to support the users while Tenaris also has severe quality control standard.

Mr. Rocca said many countries including USA, China and European nations will review pending nuclear power projects and check existing facilities and they would be more cautious for future projects. He expects natural gas and liquid natural gas could be more important energy in long term when dependence on oil is uncertain due to political issues in Libya and North Africa.

Mr. Rocca said radiation level is normal for Tenaris NKK Tubes’ operation despite of serious accident at Fukushima Daiichi Nuclear Station. He said the group doesn’t ship products with more than 0.5 micro sievert per hour of radiation under the international standard. Under the standard, he believes no country reject the access. He emphasized the group checks radiation level of shipping products and accepting materials severely for customers’ safety. He expects Japanese steel industry will keep steel export with certain standard for radiation level when Tenaris group had no cancelation of the order due to the radiation issue.

Mr. Rocca said proposed merger of Nippon Steel and Sumitomo Metal Industries is positive for steel pipe industry and whole steel industry. He expects the merger creates strong world competitive steel maker by utilizing rich resources for investment and research and development and such consolidation has no impact on the competitive condition. He said Tenaris welcomes further consolidation in the industry when the group experienced major consolidation for past 10 years.

Mr. Rocca said the group tries to expand production capacity for high valued products through more than US$ 2 billion of investment in 2009-2011. He said Tenaris Tamsa in Mexico launched new pipe rolling mill with up to 7 inches of outer diameter in December 2010 ramping up the operation while other group companies also invest for further value in Italia, Argentina, Romania, USA, Canada and Japan. He emphasized the group tries to follow the growing oil and gas market under higher oil price when the group keeps the healthy finance position even during financial crisis.