Turkish Steel Pipe Manufacturer Borusan Mannesmann Will Set Up a $150 Producing Facility in the U.S.

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Researched by Industrial Info Resources (Sugar Land, Texas)--Turkey's leading steel pipe manufacturing firm Borusan Mannesmann outlined plans to invest in the United States. The company will build a $150 million manufacturing plant to produce pipes for drilling.

The pipe producer stated that it had to respond to the significant growth of shale gas production in North America. The annual capacity of the facility will be 300,000 tonnes to meet the demand driven by shale gas and oil production. The facility will produce steel pipes, which are used in oil wells and transfer lines.

The plant -which planned to become operational in second half of 2014- is expected to yield an annual revenue of $500-600 million depending on steel prices, the company said.

"This will be an investment to benefit from the advantages of shale gas production. It is an investment totally targeting the American energy sector, which uses smaller pipes or pipes mainly for drilling," said Agah Ugur, CEO of parent company Borusan Holding (Istanbul, Turkey) (ISE:BRSAN).

"Currenty, we are talking with Texas and Oklahoma to build the facility. We'll choose between these states according to incentive plans from the US. We'll finance 33% of this project from our own resources, for the rest we're planning to use U.S. Eximbank credit facilities, " he said in a press conference in Istanbul.

"This investment will double Borusan Mannesman's earnings before interest, tax, depreciation, and amortisation or EBITDA and will boost its annual sales by 60%," Ugur said. The company will also double its share in the U.S. oil country tubular goods (OCTG) market. The annual energy pipe consumption of the U.S. is 10 million million tonnes, including 6 million tonnes of OCTG pipes.

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