A good decision in a difficult time has paid off for Valloruec, a manufacturer of tubular steel for the oil and gas industry, based in Boulogne-Billancourt, France.
“Back in 2008 we saw a shift in the market to a smaller diameter pipe which is used for hydraulic fracking and decided to serve this market from a U.S.-based plant,” explains Skip Herald, managing director of Vallourec OCTG North America. “It turned out to be a great decision.”
The company unveiled its new seamless pipe mill in Youngstown, Ohio earlier this month, becoming the first fully integrated site in the United States that combines steel making, pipe rolling, heat treatment, threading, inspection, storage, shipping and value-added services.
Locating this new facility in Youngstown came after an exhaustive search of U.S. locations. “Given the history of the workforce in steel and automotive we knew we could draw enough talent to staff our new operation.” But the reason ran deeper than experience. “In my thirty years of experience in the oil and gas industry this group of people, coming from a variety of occupations including construction and even teaching, was the most impressive I have ever seen.”
The steel industry in Youngstown can trace its roots back to 1802 when the first blast furnace west of the Alleghenies was erected in Poland Township, near Youngstown. It averaged only two tons of iron a day. At its peak in the 1950s, the Mahoning Valley was, by volume, the fourth-largest steel producing region in the United States. But the region’s fortune changed in 1977, known as Black Monday, when Youngstown Sheet and Tube announced it was closing its Campbell Works. Many other mills followed suit and left and the region is still feeling the effects.
Part of Vallourec’s mission is to help improve the economic situation of this city. Partnering with the city and state the company is helping to upgrade the physical surroundings by clearing the area of abandoned buildings and houses and even purchasing adjacent properties and improving them.
From a corporate perspective the plant’s location is key as it is in close proximity to the developing Marcellus and Utica shale regions. “With this new pipe mill, we are able to participate even more actively in the development of shale hydrocarbons in North America,” said Vallource’s Chairman Philippe Crouzet during the opening ceremony.
The company invested $1.05 billion in the plant, which will have an annual production capacity of 350,000 tons of small diameter seamless tubes and will employ 350.
The plant is part of the Vallourec Star’s network which includes operations in Texas and Oklahoma. Together these North American operations constitute 29% of the global corporate revenue.