U.S. Steel, Posco and SeAH Venture to Build Spiral Weld Pipe Mill in U.S.
Apr. 5, 2007
United States Steel has entered into a definitive agreement with Posco and SeAH Steel to create a manufacturing facility capable of producing 300,000 net tons per year of spiral welded tubular products in the 24- to 64-inch outside diameter range. The new facility, which will be called United Spiral Pipe, LLC, will also have access to world-class coating capabilities.
U. S. Steel and Posco will each hold a 35% ownership interest in the joint venture, with the remaining 30% ownership interest being held by SeAH. The joint venture investment will total approximately $93 million, and profits of the joint venture will be shared between the partners based upon their respective ownership interests.
The new spiral welded facility, which is expected to begin production in 2008, will be located adjacent to the USS-Posco Industries (UPI) facilities in Pittsburg, Calif., on land currently owned by UPI. Both U. S. Steel and Posco will supply high-quality hot roll coil for the spiral welded mill, and the joint venture will be responsible for marketing the finished products.
"Posco has been a valued partner at UPI for more than 20 years, and we look forward to expanding our relationship with Posco through this new joint venture," said U. S. Steel Chairman and CEO John P. Surma. "We also look forward to working with SeAH, whose expertise in producing and marketing spiral welded tubular products will be a valuable asset for the joint venture," Surma added.
U. S. Steel’s 35% interest in the newly formed joint venture will help the company gain an attractive entry point into the large-diameter North American line pipe market, which is currently experiencing strong demand due to projects for new natural gas transmission infrastructure.
Posco is the Republic of Korea's leading steel producer. SeAH Steel Corp. is a manufacturer of tubular products in the Republic of Korea.