RELATED: Vallourec site scene of Valley's manufacturing renaissance
By JAMISON COCKLIN
A milestone was reached Wednesday with the dedication of Vallourec Star’s new seamless-pipe mill, when top company
officials hailed the plant as the core of its North American business where sales are booming and growth is projected to be steady for years.
A siren cried out around noon over the facility’s yard when the formal ribbon was cut, harkening back to a time when the Youngstown Sheet & Tube Co.’s Brier Hill Works, where the Vallourec site sits, used to call its workers to lunch breaks.
Vallourec, a global company with manufacturing facilities in more than 20 countries and global sales of $6.7 billion last year, excitedly promised a new age of success Wednesday to members of themedia, the Mahoning Valley business community, local and state officials and other VIPs who joined the company to celebrate.
“We felt very strongly that we had a core competency here in pipe-making. We like our skilled labor, and we like the fact we have a very senior workforce in Youngstown,” Joel Mastervich, president and chief operating officer of Vallourec Star, told reporters at a press conference before the dedication ceremony. “We’ve had great cooperation along the way at every level from local, state and federal officials to great support from the business community here. When you add all those together, we’ve had an exceptional result.”
First announced in February 2010, the new state-of-the-art seamless pipe mill sits on 2 acres and stretches nearly a mile long. Its price tag was $1 billion, and about 350 employees now work at the plant. Adding in the plant’s steelmaking operation, the entire facility’s tally is about 500 employees.
As unconventional shale gas drilling, or fracking, continues to captivate the energy industry, oil and gas producers are hungry for small-diameter pipe — such as the kind produced at the new facility — that can go deeper and reach farther.
Philippe Crouzet, chairman of the Vallourec management board, said such tubes are the company’s core business. Vallourec serves the electric power generation industry as well, with tubes that can yield higher output for next-generation facilities and reduce emissions significantly.
Though the company’s expertise extends into the automotive, construction and petrochemical industries, too, the oil and gas industry is considered key to the company’s global growth. Last year, both North America and South America were Vallourec’s leading sales markets, with the oil and gas industry accounting for 61 percent of all sales.
Vallourec has doubled its research and development budget to meet the demands of producers heading into more remote parts of the world offshore and others looking to go deeper underground onshore. Its aim, Crouzet said, is to become the No. 1 domestic supplier of premium oil and gas products by providing top quality from its facilities and providing the best possible engineering and design solutions for the industry’s ever-increasing high-tech needs.
Once its finishing operations are fully operational, Vallourec Star in Youngstown will soon become the country’s first fully integrated tube facility, capable of making steel, rolling and treating it and then finishing the pipe for commercial sale to the oil and gas industry.
Vallourec's facilities in Youngstown, Oklahoma and Texas accounted for 29 percent of the company’s revenue last year. This alone, Crouzet said, demonstrates that Vallourec Star in Youngstown will be at the forefront of the company’s strategic growth in North America.
“I have an extensive history in oil and gas, and I’ve seen more change in the last five years than I have in the last 25 years of my career,” said Skip Herald, managing director of Vallourec’s OCTG North America division.
This, Herald said, has meant “huge demand.” Vallourec plans to increase its production target in 2014 to 350,000 tons per year. Overall, the facility is capable of producing 500,000 tons of pipe per year, which could mean an expansion to accommodate additional production and more jobs down the road, Herald added.
The facility is fully automated with control centers that monitor every step of the pipe-making process. It is complete with threading, heat treatment, cooling and inspection lines. It even features a metallurgy lab, which allows personnel to test the structural integrity of the steel in a matter of minutes — a time-saving step that otherwise would take weeks outside the plant.
Drew Ridgley, a process engineer who began working at Vallourec Star about two years ago, said the manufacturing process and quality of product at the new mill is “top-notch,” with orders at the factory so abundant that workers there barely can fill them fast enough.
The Youngstown/Warren Regional Chamber has estimated that Vallourec Star’s economic impact on the Mahoning Valley stands somewhere near $1 billion, generating about 2,000 spin-off jobs created by its own supply chain.
Mark Russo, an automation process engineer who started working at the mill around the same time as Ridgley, said he “loves” working there and joined Ridgley in telling a reporter to “go ask the restaurants on Belmont Avenue” and other businesses near the facility what kind of impact it has had on the area.
That, they say, is all the proof anyone needs.