We will never get tired of say- ing it: The Mahoning Valley is benefitting from a $1 billion-plus investment by a company headquartered in France.
By any measure, that’s big news. But when viewed within the context of the burgeoning shale-gas industry, it’s momentous.
V&M Star, owned by Vallourec, which has its offices in the outskirts of Paris, this week produced its first steel pipe at the state-of-the-art facility in the Youngstown-Girard corridor along Route 422. The plant had an initial price tag of $650, but that has grown to $1.1 billion.
The continuous production of seamless pipe began Oct. 26 following the commissioning of the different equipment in the rolling mill.
For long-time readers of The Vindicator, this news will bring back memories of the Mahoning Valley’s steel-making heyday when the giants of the industry would announce the launching of new product lines or the installation of new equipment. U.S. Steel, Republic Steel, Jones & Laughlin, they were all here. At one time, the Valley was one of the leading steel producing regions in the country.
But that ended three decades ago, which is why the start-up of V&M’s rolling mill is of such great significance.
The new mill is scheduled to begin selling product next year, and will support the long-term development of shale exploration nationally. There is growing demand for small diameter oil and gas pipe and connection. The V&M mill will also make line pipe, green pipe for drill pipe and coupling stock.
The mill will employ 350 workers earning an average salary of $50,000-plus.
That’s just one aspect of Vallourec’s investment in the Valley.
Another of its companies, VAM USA, LLC, a Houston-based manufacturer of premium pipe connections, is developing a new finishing plant in the former Indalex facility in Girard. The cost of the project is $57 million.
“Our products are the industry leader in the natural gas production industry,” said Justin Wallace, president of VAM USA, when the project was announced last year. “Expanding in Youngstown made sense for us as it brings us very close to customers working in both the Marcellus and Utica shales, where business is booming. Our new facility will enable us to improve service to existing customers and connect with new customers.”
Once fully operational, VAM USA’s Youngstown finishing plant will employ an estimated 100 full-time workers. Production was scheduled to begin in phases this year, ramping up to full production by the end of 2013. When the finishing plant is operating at full capacity, VAM USA will have the ability to thread pipe produced from the new V&M Star mill in Youngstown, as well as seamless pipe produced by other pipe mills in the northeastern United States.
V&M Star LP and VAM USA are both affiliate companies of the Vallourec Group. Ownership of VAM USA consists of a partnership between Vallourec, Sumitomo Metals and Sumitomo Corp.
According to Tom Humphries, chief executive officer of the Youngstown-Warren Regional Chamber, V&M has a melting facility “under consideration.”
“It would be an additional $350 million investment,” Humphries said. “They’re not done yet.”
As we said at the outset, the investment of more than $1 billion by Vallourec in the Mahoning Valley is impossible to downplay. It is a significant on many levels.