Argentine giant vies for RI seamless pipe venture<\/p>\n
By Riyadi<\/p>\n
CAMPANA, Argentina (JP): Siderca SAIC of Argentina, one of the
\nworld's largest producers of seamless pipes, is looking to set up
\na joint venture with Indonesia's Bakrie Group in order to
\npenetrate the East Asian market.<\/p>\n
A memorandum of understanding was signed on Saturday for the
\nintegrated production of seamless pipes in Indonesia.<\/p>\n
The agreement was signed by their respective presidents,
\nAburizal Bakrie of the Bakrie Group and Paolo Rocca of Siderca.<\/p>\n
\"We agree to strengthen our current strategic alliance and
\nhopefully we will be able to upgrade our current cooperation into
\nforming a joint venture,\" Aburizal said at Siderca's headquarters
\nin Campana, 100 kilometers north of Buenos Aires.<\/p>\n
The venture will expand on their current arrangement, in which
\nthe Argentinean company gives technical assistance to Seamless
\nPipe Indonesia Jaya (SPIJ), a subsidiary of the publicly-listed
\nBakrie & Brothers.<\/p>\n
SPIJ commenced commercial production in 1993 at its plant in
\nCilegon, West Java. It imports US$20 million a year in unfinished
\nseamless tubes from Siderca and puts the finishing touches on the
\ntubes before selling them to its consumers, mostly oil and gas
\nfirms in the region.<\/p>\n
\"This cooperation is important for us because we want a
\nbackward integration of our industry toward building a hot mill
\nto produce seamless tubes,\" Aburizal said.<\/p>\n
The $300-million finishing plant in Cilegon has an annual
\nproduction capacity of 150,000 tons of seamless pipes. However,
\nthe plant runs at only one-third of its total capacity because of
\na limited market.<\/p>\n
Aburizal explained that SPIJ cannot compete in the region
\nbecause it still imports unfinished seamless tubes from
\nArgentina, which incurs high freight costs.<\/p>\n
SPIJ hopes to put an end to its losses and break even by next
\nyear.<\/p>\n
\"When we have our own hot mill we will be able to run our
\nmills more efficiently and compete in the global market,\"
\nAburizal said, adding that some $250 million will be invested in
\nthe hot mill.<\/p>\n
Rocca said his company wants to make Indonesia its main base
\nin East Asia to challenge the regional domination of Japanese
\nseamless pipes producer Sumitomo.<\/p>\n
\"We already supply the market. However, the closer the market
\nto Japan, the less we can penetrate the market, and we think that
\nthe Cilegon plant could be a platform to serve the region,\" Rocca
\nsaid.<\/p>\n
Siderca, together with its affiliated companies -- Dalmine in
\nItaly and Tamsa in Mexico -- controls the largest market share of
\nthe world's seamless pipes trade with 23 percent, followed by
\nMannesmann 19 percent and Sumitomo 12 percent.<\/p>\n
Siderca, Dalmine and Tamsa had combined seamless pipes exports
\nof 1.3 million tons last year, of which 29 percent went to
\nEuropean and former Soviet Union countries, 21 percent to
\ncountries in the Middle East, 19 percent to Latin American
\ncountries, 11 percent to the United States, 9 percent to China, 8
\npercent to Africa and 6 percent to East Asia, excluding China.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/argentine-giant-vies-for-ri-seamless-pipe-venture-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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