Paolo Bassetti, executive vice-president with Tenaris international group, which last year derived turnover worth approximately 150m euros in Romania, says the piping market is going to expand over the following years, driven by the high demand from the oil sector.
"I expect this to be a very good year given that the market we operate on is connected to a sector that is faring very well, the energy one. At the mo-ment, all our production facilities in Central and Eastern Europe are operating at full capacity," stated Paolo Bassetti.
The Zalau-based Tenaris Silcotub pipe producer, part of the portfolio of Tenaris group, the world's biggest manufacturer of pipes, generated turnover worth 92.7m euros (270m RON), in the first half of this year, up 25% from sales posted during the similar period of last year. The company's net income advanced 2.4 times, reaching 8.9m euros (31.6m RON). Tenaris also owns the former Donasid Calarasi plant in Romania.
"The strong growth we've seen in recent years is primarily related to the energy market. Rising oil prices boosted drilling operations and increased the number of wells, and oil companies started asking for more and more complex pipes," explained Bassetti.
"Petrom for instance is now asking us for very complex corrosion-resistant pipes, which are high added value products," he explained.
This is why Tenaris has particularly focused on technologically upgrading the Zalau-based plant, in order to manufacture increasingly more sophisticated pipes. The rising share of high value-added products is one of the main factors behind the spectacular increase in the company's profit.
"Silcotub's activity is halted for the time being amid investments meant to boost pipe heat treatment capacities by 60%. These investments will not drive the quantity of manufactured pipes up, but will boost the production of high added value pipes," says Bassetti.
Technological investments Silcotub will carry out by yearend amount to $29m (around 23m euros). Besides technologically upgrading the Zalau plant, Tenaris also solved the problem of raw material supplies through the acquisition and retooling of Calarasi-based steel mill (the former Donasid plant). According to Bassetti, Tenaris Silcotub Calarasi produced 140,000 tonnes of steel in the first half of this year, compared with the 10,000 tonnes posted last year. By yearend, the steel mill is expected to produce another 190,000 tonnes, which would take total production to 330,000 tonnes in 2006.
"At this moment, the Calarasi steel mill manufactures around 95% of the steel the Zalau plant needs and exports to other plants we own in Europe. I am very happy with the fact that from importers of steel from Russia we've turned into exporters," says Bassetti.
For the future, Tenaris plans to create a unitary structure including the two companies of Calarasi and Zalau, with a single head office and a single executive management.
Tenaris in Romania
Derived turnover worth around 150m euros last year
Expects 2006 to be a very good year given the solid trend of the energy market, to which the market it operates on is connected
Tenaris Silcotub Zalau pipe producer, part of Tenaris group, posted turnover worth 92.7m euros in this year's H1, up 25% from the same period last year
Also owns Donasid Calarasi former steel mill, which now produces 95% of the steel Zalau plant needs and exports to other plants of Europe
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