Dr. Heinz Jörg Fuhrmann - Schau Verlag Hamburg

tubes
Largest individual order in the history of EUROPIPE
Baltic Sea Pipeline contract signed
The order calls for 860,000 tons of large-diameter pipes to be produced in Mülheim.
Capacity utilization is assured
Nord Stream AG and EURO-
PIPE GmbH have signed a
contract for the supply for
steel pipes to construct the
Baltic Sea Pipeline. EUROPIPE will provide
around 75 percent of the pipes for
the first leg of the 1,200 kilometer pipeline
from Vyborg in Russia to Lubmin
near Greifswald in Germany. The order
for the other 25 percent went to Russian
pipe producer OMK.
EUROPIPE’s share of the deal
amounts to 860,000 tons of high-quality
steel pipe, representing an investment in
excess of a billion euros by Nord Stream
AG, the international joint venture set up
to design, build and subsequently operate
the Baltic Sea Pipeline.
The contract is itself an important step
towards completion of the first section
of the line slated for 2010. By the time
construction work begins in 2009,
roughly a third of the pipe – 400 kilo-
Interview with Wolfgang Eging, Director of Tubes
With contracts safely signed, from left: Henning Kothe and Matthias Warnig, both of Nord
Stream, and Dr. Michael Gräf and Lauri Malkki, both of EUROPIPE
“Securing and extending our leading
position worldwide”
The Tubes Division of Salzgitter AG has undergone some changes: We talked with Tubes
Director Wolfgang Eging about growth strategies and concentration on welded tubes.
stil In business terms, the Tubes Division of
Salzgitter AG is in outstandingly good
shape. How much of this is due to the strategic
decision to focus on welded steel tubes?
wolfgang eging The Tubes Division has
now been highly profitable for 4 years in
succession. In the 20 years before that,
there was never a comparable period in
which we were so successful. Following
the takeover of Tubes by Salzgitter AG in
the year 2000, there was very soon a question
mark over the industrial leverage
that came with our interest in Vallourec
as a manufacturer of seamless tubes. We
had only limited scope to exercise any influence
over the listed Vallourec Group,
and as the Tubes Division evolved, we felt
it made sense to separate ourselves from
V&M and our stake in VLR. With this
in mind it was logical to focus on welded
tubes, at the premium end of the market.
We aim to achieve growth by offering
sophisticated solutions in order to secure
and extend our leading position
worldwide. The resources released from
the seamless side of the business are being
used proactively.
stil The tubes business is becoming increasingly
international – not just in the
field of large­diameter pipes. What challenges
do you see facing precision tubes?
eging As a result of our concentration on
the premium segment, based on our activities
and our growth strategy we see ourselves
very well placed to come out on top.
That is particularly due to the acceptance
that our products enjoy in the marketplace
and their popularity among our precision
tubes customers in Europe.
PHOTO: EUROPIPE
meters – must be in store at various logistical
depots, ready to be laid. Which
means that by then the entire production
chain must be completed, from steelmaking,
plate rolling, tube manufacturing
and coating through to transportation
to the storage sites.
The 860,000 tons of large-diameter
pipe booked by EUROPIPE represent the
largest single order in the company’s history.
EUROPIPE will manufacture the entire
order at its Mülheim works. The
plate required to produce the pipes will
be ordered by EUROPIPE from its shareholders
Dillinger Hütte and Salzgitter.
For Salzgitter’s part, the input material
The pipeline will connect
Russia and the European Union
will be supplied from the plate mill at
Mannesmannröhren Mülheim GmbH.
This order alone represents capacity utilization
in excess of 40 percent over 18
months at EUROPIPE. The internal coating
and external corrosion-proofing included
in the order will be carried out by
EUROPIPE’s subsidiary MÜLHEIM
PIPECOATINGS (MPC) GmbH, which
in turn will benefit from as much as
60 percent capacity utilization.
stil What role does the acquisition of manufacturers
in France and the new company in
Mexico have to play?
eging By acquiring VPE and the plant in
Zeithain producing input stock, we have
laid the foundation on which to become
Europe’s market leader. We intend to develop
this position and use it to offer sophisticated
solutions for our customers in the
automotive and other industrial sectors.
The acquisition in Mexico provides a
nucleus for development outside of Europe.
In future, we aim to secure a strong
position for our automotive business in
the NAFTA territories.
stil The high prices for oil and gas are adding
impetus to pipeline projects the world
over. On the other hand, steel and tubes
production is very energy­intensive. At
what point will this development become
critical?
eging Let’s think back to the 80’s and 90’s
when an oil price of 30 US dollars a barrel
was judged to be the balance point between
exploration and the risk of under-
The total cost of the Baltic Sea Pipeline
will be in the order of six billion euros.
That’s around 15 percent less than for an
overland pipeline – including the operating
costs for a 25-year period. This is due
mainly to the comparatively high operating
costs for a land-based pipeline and
the associated compressor stations. The
mining the development in gross
national product.
As we now know, this boundary
has shifted with sustained effect.
Worldwide demand for energy
continues without a break and
we have already reached an oil
price of 100 US dollars a barrel.
The demand for tubes for oil and
gas exploration, transportation
and energy generation is huge. Among the
particular factors dictating this demand
are the tremendous growth dynamics in
the BRIC countries (Brazil, Russia, India
and China) and the need to replace existing
power stations.
stil It has long since ceased to be enough
just to make quality tubes – customers demand
comprehensive service. What do we
offer our customers?
eging As a business model, simply manufacturing
tubes is a thing of the past. We
have been offering our customers far more
for a long time now. We support them
with customized solutions, from the initial
pipeline will connect Russia and the European
Union via the Baltic. EU demand
for imports of natural gas is expected to
reach 536 billion cubic meters by 2015 –
compared with 336 billion in 2005. The
Baltic Sea Gas Pipeline will be able to
fulfill around 25 percent of the additional
demand.
The natural gas pipeline across the Baltic Sea
Wolfgang Eging
idea through to production. Our
Trading Division, which is a global
organization, and also the Group’s
own research and product-based
development facilities play an outstanding
role. As a Group, we offer
consultancy, production, supply,
an international logistics network
and other support functions,
all from a single source.
stil The companies that make up the Tubes
Division have changed their names and
logos. What were the reasons behind this?
eging Our brand name is Salzgitter Mannesmann.
What we are doing is combining the
Mannesmann product name, which is recognized
worldwide as a synonym for quality
and competence in tubes, with the success
story that is Salzgitter. For this reason, as has
already happened at the Trading Division,
we have prefixed all of our companies with
the name “Salzgitter Mannesmann”. So both
the Tubes and Trading Divisions now equally
underscore the solidarity between Salzgitter
and the synonym for tubes (Mannesmann).
18 stil stil 19
tubes
Planned Nord­
Stream­Pipeline
Planned service
platform
Pipeline of the
European natural
gas network
Pipeline planned
or in construction
Territorial
border