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Tubes Division
The companies belonging to the Tubes Division are described in the section on “Group Structure and
Operations”.
The cold-finished tubes product segment saw a major expansion with the acquisitions of Vallourec
Précision Etirage S.A.S. (VPE) and of the Zeithain hot tube rolling mill from the Vallourec Group on July 2,
2007. A precision tubes group has been created with a capacity of over 300 ktons of seamless and
welded-drawn precision tubes, constituting a global market share of around 10%. The three companies
VPE, MRS and SMP have been included in the group of consolidated companies since the start of
the second half of the year. Mannesmann Precisión Mexico (MPM) was also acquired as of October 31,
2007, but has not yet been consolidated.
In 2007, the companies of the Tubes Division participated to an even greater extent than before in the
favorable conditions of the steel tubes market. Persistently strong demand for oil and gas pipelines
remained a key factor. Power plant investments, particularly in China, generated high demand for heat
exchangers and boiler tubes. Demand for tubes in mechanical and plant engineering, as well as in the
automotive industry, remained sound, as before.
Compared with the already very high level of the previous year, the consolidated order intake of the
Tubes Division in 2007 rose 40% to € 3,137 million. In particular, the large-diameter pipe business
reported 227% year-on-year growth due to the booking of the major Nord Stream project (EP), which
was a large part of the gratifying developments. A decline in orders in the HFI-welded pipelines business
(– 4%) reflected lower bookings in the standard business, mainly during the second half of the year.
The increase in seamless stainless steel tubes (+77%) was primarily due to the high level of selling
prices of the orders received. The leap in the result (+42%) of the precision tubes product segment is
mainly attributable to the integration of the new companies, VPE and MRS; when adjusted to exclude
these factors, there was a slight increase of 1%, which reflected an improvement in selling prices.
Order Intake in the Tubes Division
0 500 1,000 1,500 2,000 2,500 3,000
in € mil. FY 2007 FY 2006
2,235
3,137
The far above-average bookings in the large-diameter tubes business fed through into year-on-year
growth in the Division’s consolidated order book which had expanded 59% to € 2,491 million by the
end of 2007 as against year-end 2006. This already safeguards capacity utilization for most companies
well into 2008, and even into 2009 for EP.
In 2007, the Tubes Division reported a 4% year-on-year increase in tubes shipments to 1,267 ktons.
While the large-diameter tubes business (–57 ktons; particularly EP), the HFI-welded pipelines business