Schulz to Build Two New Pipe Factories in Campos

German steel products manufacturer Schulz will build two new pipe factories in Brazil, the company said in a statement.

Schulz's Latin American unit recently opened a seamless tube unit in Campos in Rio de Janeiro state, the same city where two new units will be built.

One of the new units will also produce seamless pipes, while the other will turn out welded pipes, the company said in a press release published on the sidelines of the Brazil Offshore exhibition in Macae, also in Rio state.

"Our estimate is that the seamless pipe unit will start operations in December 2007," Schulz Latin America's executive manager Marcelo Bueno said in the release.

Investments in the two units will total 104mn reais (US$54mn), the company said.

"One of our goals with these two units is to supply the US market. Our branch in the US will buy most of our pipes," Bueno told reporters. Only 20% of production will be sold in Brazil, he added.

The company's distribution center is located in Sao Goncalo in the metropolitan area of Rio de Janeiro, close to the Campos basin and the upcoming petrochemicals complex Comperj.

"Our seamless pipes unit will give us suitable facilities to supply [Brazil's federal energy company] Petrobras, increasing the share of Brazil-made parts to oil platforms such as P-56.

Schulz also supplied pipes for Petrobras' P-51 and P-52 platforms.

If the tender offer to sell pipes to P-56 is successful, Schulz could see 50mn reais in additional revenues.

"With our strategic location, no other pipe manufacturer in the world is as ready as Schulz to supply Comperj, oil platforms and sell to other countries," Bueno said.

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