Vallourec is out to steel its clients' businesses -- the company ranks among the world's top producers of steel tubing. It caters to oil and gas, automotive, and mechanical engineering customers worldwide. Vallourec's seamless tubes unit makes welded and drawn tubes primarily for the energy industry, while its automotive and specialty products division makes tubes and stainless steel products for the auto industry, among others. Its Vallourec & Mannesmann Tubes subsidiary produces seamless tubes. Following a few years of acquisitions, divestitures, and general reorganization, the energy sector (including the oil and gas and power generation markets) accounts for more than two-thirds of Vallourec's sales.
The company's revenues were off some 7% in 2010. While Vallourec's sales volumes were up, its prices were down -- particularly in its power generation segment -- due to long-term contracts signed in recessionary times (2008-09). Net income also took a tumble, dropping 22% in 2010 due to lower prices combined with increased operating costs.
Vallourec's strategy for growth is to specialize in the most promising areas of the energy sector, focusing on developing technological innovations and providing quality service to remain competitive. The company seeks to maintain and enhance its production facilities through both targeted acquisitions and capital investment projects. Vallourec operates some 50 production facilities and five research and development centers in more than 20 countries.
The company acquired offshore line pipes specialist Serimax in 2010 for $200 million. The all-cash deal will enhance Vallourec's existing offshore line pipe operation. Also in 2010, the company opened or expanded facilities in France, China, Brazil and the US; acquired UAE-based drill pipe maker Protools; and opened a new tube rolling R&D facility in Germany.
In 2009 Vallourec acquired Dubai-based DPAL FZCO, a supplier of drill pipes, in a deal that strengthened its distribution network in the Middle East.
Oilfield equipment maker Grant Prideco agreed in 2008 to sell most of its OCTG (oil country tubular goods) unit to Vallourec for $800 million. That same year Vallourec also formed a joint venture with Sumitomo to construct a pipe mill in Brazil.