Vallourec cedes its German activities and stops the manufacture of tubes for industry in Europe

The manufacturer of French tubes Vallourec announced Wednesday the sale of its German activities and the cessation of manufacturing in Europe of tubes for the industry.Vallourec, which comes out of a long financial restructuring process, "made the decision to launch the process of transferring its German assets," said CEO of the Edouard Guinotte group and the deputy managing director Olivier Mallet, during aconference call on the occasion of the publication of 3rd quarter results, still losing.

Vallourec's German activities are based on two factories located in Dusseldorf and Mulheim, employing some 2.200 people for an annual turnover greater than 600 million euros.These rolling mills are no longer competitive, explained the two leaders, "with more than 700 million euros in cumulative losses over the period 2015-21 despite successive recovery plans".

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The factories "are not intended to be closed, they will be sold," they insisted.The offer should be launched in the coming days or weeks."Our analysis is that the market in Europe suffers from overcapacity and competition from production at lower cost in Eastern Europe, we believe that a competitor could be interested in the resumption of our activities on a marketAssaini, ”said Olivier Mallet.

Only activities related to oil and gas tubes, very profitable, will see their manufacturing transferred to the Brazilian factories of the group."The group's carbon footprint will be improved because the intensity of the carbon emitted by tonne of tubes produced in Brazil is 30% lower than that of the tubes produced in Germany," said Edouard Guinotte.

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Most of the group's manufacturing will be carried out in the United States, Brazil and China.In Europe, Vallourec will keep four factories in France and one in Scotland (about 2.000 employees in total).The realization of these operations should generate an increase in the EBITDA operating profit of 130 million euros per year and an annual reduction in investment expenditure of 20 million euros, it is specified in a press release.

In the third quarter, Vallourec recorded a net loss of seven million euros, in net reduction compared to that of 2020 (-69 M EUR), which also lesses the loss over nine months at 49 M EUR, against a hole636 M EUR in 2020.From July to September, Vallourec's turnover increased from 23% to EUR 391 million against 319 last year.But over nine months, turnover contracted 5% to 1.13 billion euros.