The oil services company says it can no longer produce competitive steel tubes in Western Europe.
Less than two years after a previous social plan, Vallourec announced on Wednesday the cessation of its European seamless tube manufacturing activity. This will lead to the closure of several factories, including those located in Germany and Saint-Saulve (North), he detailed. A total of 2,950 jobs will be cut worldwide. The challenge, as presented by the new CEO of the group Philippe Guillemot, is to stop the haemorrhage of cash. The group emerged in February 2021 from a restructuring plan which resulted in the elimination of 1,000 jobs (including 350 in France) and a seizure of power by creditors. A recapitalization of 300 million euros followed in June 2021. Vallourec was slightly profitable in 2021.
“Faced with competition from Eastern European countries, Europe can no longer be a production base for tubes destined for the Middle East or other geographies, argues Philippe Guillemot. Our competitors have drawn this conclusion a long time ago.The group had put its German tube manufacturing plant, which employed 2,135 employees, up for sale at the end of 2021. The site swallowed 100 million euros per year for seven years. In the absence of a buyer deemed serious, Vallourec announced its closure on Wednesday.
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End of a story
The French factory in Saint-Saulve depended directly on German production. It will therefore also be closed, which will lead to the dismissal of around a hundred employees. The site had more than 1,000 ten years ago, during the splendor of the oil service industry. So today is the end of the story between the small town in the suburbs of Valencienne and Vallourec, which had already separated from the Ascoval steelworks in 2017.
The Aulnoye-Aymeries site, near Maubeuge (North) is not spared. Vallourec will keep the two factories it operates there. Philippe Guillemot, however, poses two conditions for the continuation of the activity. First, find new outlets outside the hydrocarbons market. To facilitate the achievement of this objective, the Scottish site of Bellshill will be closed (70 jobs will be eliminated) and its production repatriated to Aulnoye. The second condition to be fulfilled, the success of a new activity of “additive manufacturing“. One, or even several robots, will be installed to manufacture steel parts in small series or custom-made like a 3D printer.
Vallourec also wants to streamline its R&D department by bringing its teams together on a single site, and will therefore cut around a hundred positions in Aulnoye. But Aulnoye will become the group’s global R&D steering center, promises the CEO. In addition, around sixty positions will disappear at Vallourec’s headquarters in the Paris region. In total, no less than 300 jobs will be cut in France as part of a job protection plan. At the end, there will remain 1,300 Vallourec employees in France.
Production for the Middle East will be concentrated in Brazil, and locally for North America. The objective of the planNew Vallourecis to lower the breakeven point so as not to burn cash in lean times. Enough to generate an additional 230 million ebitda (gross operating surplus) in a full year, from 2024.
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