OMK Opens New U.S. Pipe Plant
Mar. 7, 2013
On 26 February 2013, United Metallurgical Co. (OMK) held a grand opening ceremony for a new OMK Tube pipe plant in Houston, Texas. The plant’s rated capacity is 200,000 tonnes of carbon and low-alloy casings and tubing. Total investment in the plant will amount to 3 billion rubles (US$97.8 million) by 2015.
The official event gathered over 150 people: representatives of Russian and U.S. metallurgical, oil and gas companies, construction companies, equipment suppliers, managers and employees of OMK enterprises. Honorary guests were shown around the plant which is fitted with advanced high-tech equipment.
Construction of the plant began in the second quarter of 2012 and the first pipe was produced in December 2012. OMK Tube can manufacture pipes of the following parameters: diameter from 60.0- to 177.8-mm, wall thickness from 3.0-to 12.7 mm. At present, the process technology is mastered, and works to drive the production to the rated capacity are conducted. Equipment from Nakata (Japan), Termatool (U.S.), EFD (Norway), and others was supplied by Nippon Steel Trading (Japan). Steel used to make the pipes is sourced from local steel producers. The possibility of sourcing steel from the OMK’s Casting and Rolling Complex in Vyksa, Russia, in the future is being considered.
OMK president Vladimir Markin said of the event, “Construction and launching of our own pipe plant in the U.S. is a logical step for OMK to implement the strategy of the business’s geographical and product diversification. This implies widening the country’s sales markets due to establishing new production facilities in the regions abroad with steady demand. The U.S. market is very important for OMK. Our own facilities for production and finishing of casings and pipes for main pipelines, as well as established distribution network, will enable OMK to widen and strengthen its positions on the North American market.”
OMK’s products have been sold on the U.S. market since 2004 through its local office located in Houston. In 2011, the company acquired Houston-based Tubular Solutions Inc., a finishing, heat treating, threading (including premium threading) and beading facility. The new pipe plant is located in the neighborhood of pipe processing facilities, enabling the reduction of transportation expenses as well as the prompt execution of orders. Having now launched the plant, OMK is now able to satisfy demand of its U.S. clients in full with a production chain from production of steel pipe (OMK Tube), to finishing and processing (Tubular Solutions), and sales to end customers through its own distribution networks (Vyksa-OMK trading company). North American assets are operated by OMK North America Inc., a Vyksa-OMK subsidiary.
Vyksa-OMK trading company will distribute the products manufactured both at the U.S. plant and Russian enterprises of OMK. The largest oil and gas deposits are located in Texas, and almost half of all U.S. refineries are concentrated around Houston. All this makes Texas an important consumer of oil and gas pipes. In the future, growth of demand in OCTG pipes is expected in the U.S. due to shale development. This creates new and large-scale opportunities for OMK development in North America.