13, rue Beaumont
Tenaris shall pursue the highest standards of quality and customer care in its products and services. Tenaris recognizes that the strict compliance with customer commitments and the surpassing of their expectations is the responsibility of all its employees. Tenaris shall adopt common standards of quality for its products and services, measure customer satisfaction and provide transparent information to its customers.
As a manufacturer and supplier of steel pipe products, Tenaris SA is the leader in world production of seamless steel pipe, carrying 20 percent of the world trade in seamless steel pipe and 30 percent of world trade in oil country tubular goods (OCTG). At Tenaris's manufacturing facilities, located in Argentina, Brazil, Canada, Italy, Japan, Mexico, and Venezuela, annual production exceeds three million tons of seamless pipe and 850,000 tons of welded pipe. Tenaris engineers collaborate with customers in research and development to create pipe and tubular products that tolerate the requirements of unique utilization situations. With offices in more than 20 countries, Tenaris facilitates a streamlined procurement process, offering project and supply chain management from product design and manufacturing through product handling, inventory, and distribution anywhere in the world. Tenaris customers include multinational companies in the oil and gas, automotive, and mechanical industries. In South America Tenaris is the primary supplier of welded steel pipes used for gas pipelines. Techint Group owns approximately 60 percent of Tenaris stock; Tenaris is part of an integrated product services strategy for Techint's operations in industrial engineering, supply, and infrastructure construction worldwide.
Early History: 1900s-80s
Tenaris formed through the consolidation of three geographically disparate, but not unrelated, steel pipe manufacturers: Dalmine SpA of Italy, Siderca SAIC of Argentina, and Tubos de Acero de Mexico SA (Tamsa) of Mexico. Dalmine began manufacturing seamless steel tubes in 1909. Though it listed on the Borsa Italiana in 1924, the company was nationalized under Mussolini's dictatorship. Agostino Rocca, a prime mover in the Italian steel industry during the 1930s, became managing director of Dalmine in 1935. Along with his son Roberto, in 1945 Rocca founded Compagnia Tecnica Internazionale, later renamed Techint, providing engineering and construction for industrial development. Techint's South American Division, formed after Agostino emigrated from Italy to Argentina, built the production plants for Siderca, in Campana, Argentina, and Tamsa, in Veracruz, Mexico. Operations at both factories began in 1954. Techint held ownership interests in both companies and managed the Siderca facility. Tamsa listed on the Bolsa Mexicana de Valores in 1953 and Siderca on the Bolsa de Comercio de Buenos Aires in 1958. Tamsa became the first Mexican company to be listed on an exchange in the United States in 1967, through the New York Stock Exchange's American Depository Receipts (ADR) program.
Roberto Rocca, who became president of Techint in 1978, initiated the consolidation of the three steel pipe manufacturers as part of a long-term plan to integrate steel and steel product manufacturing with its construction activities, especially pipeline construction, which occurred on a global basis. During the mid-1980s Techint developed Siderca's operations, expanding the steel mill facilities at Campana and acquiring Siat, an Argentine welded pipe manufacturer, in 1986. Under Roberto's direction Siderca invested in product research and development, and Siderca became known worldwide as a low-cost producer of seamless steel pipe and tube. Through Siderca, Techint acquired a controlling interest in Tamsa in 1993 and began to manage that operation, known for its electric-furnace pipe and tube mill, with Paolo Rocca as president. When Italy privatized industry, Siderca obtained a controlling interest in Dalmine in 1996.
Formation of DST Alliance: 1990s
Through the consolidation of the three steel pipe companies, Techint formed a new company, DST Alliance, the world's largest producer of seamless steel pipe. DST formed a $2 billion entity, with Dalmine valued at $400 million, Siderca at $1 billion, and Tamsa at more than $600 million. Dalmine, Siderca, and Tamsa continued to operate autonomously, but in a coordinated manner, with all three companies using the DST trademark. Production at each company tended towards different kinds of pipe, with little overlap or competitive disadvantages. Siderca produced welded and seamless pipe, casings, tubings, and line pipe for the oil and gas industry. In addition to these products, Tamsa produced mechanical and structural seamless pipe, primarily used by the automotive industry. Dalmine produced seamless steel pipe applied to automotive, mechanical, and machinery uses. While each company maintained a significant hold on local markets, they exported a significant amount of product as well, with Siderca and Tamsa exporting about 80 percent of production and Dalmine about 50 percent of production. As president of DST, Rocca intended to exploit these varying strengths in the international marketplace to create an efficient steel pipe supply line to industrial projects worldwide, particularly by integrating management services with product supply.
Through alliances with several steel pipe manufacturers worldwide, DST improved its base of product and technology. In 1996 Tamsa and Corporacion Venezolana de Guayana formed Tavsa to acquire control of the Sidor seamless steel tube mill. A 1997 supply and licensing agreement with NKK Corporation of Japan gave Siderca access to carbon steel products as well as to advanced technology for premium pipe used in deepwater oil and gas recovery; in turn Siderca supplied NKK with steel pipe. In 2000 Siderca expanded its relationship with NKK, forming NKKTubes. The new entity, 51 percent owned by Siderca, managed the Keihin Works, NKK's seamless tube manufacturing facility. Siderca expanded an existing association with Brazil's Confab, a manufacturer of welded steel tubes and industrial equipment, acquiring a controlling interest in Confab in 1999. An agreement with Algoma Steel of Canada established a seamless steel tube manufacturing facility in Sault Ste. Marie, Ontario, which operated under the name Algoma Tubes; Siderca managed the plant and DST handled marketing and distribution.
DST changed its name to Tenaris in April 2001 and announced its new corporate identity at the Houston Offshore Technology Conference. Tenaris took its name from the Latin word tenax, the root of tenacious, which means to hold a firm grip. The name reflected the company's international standing, in that the word could be understood in many languages. An advertising campaign followed, emphasizing Tenaris's position as a global network of integrated steel pipe manufacturing and supply management operations. Through global and local trade publications, Tenaris introduced the brand along with the company's eight steel mills, offering a variety of services that utilized the combined capacities of the mills.
2001-03: Establishing Presence in International Service and Supply
With production and technology in place, DST began to offer project and supply chain management services, from product design through distribution and inventory. One of the company's first major successes involved collaboration with Shell Canada, to meet the needs of extracting heavy oil at the Peace River oilfield in Alberta. Through intensive study and experimentation at the Tamsa and Dalmine mills, Tenaris Pipeline Services provided Shell Canada with line pipe capable of handling steam injection underground, necessary to thin heavy oil for easier extraction. The new grade of pipe, ranging from 10 to 14 inches in diameter, withstood temperatures up to 698 degrees Fahrenheit and pressure up to 11,700 pounds per square inch. Tenaris delivered the pipe in January 2001. The successful implementation of that technology earned the company orders from other companies requiring high-grade line pipe for steam injection methods of heavy oil extraction.
Tenaris's technological capabilities attracted business from companies involved in offshore oil and gas extraction. Tenaris designed and produced pipe for the shallow water portion of an oil and gas export pipeline at Horn Mountain in the Gulf of Mexico. The pipe had to meet specifications of the American Petroleum Institute (API) as well as British Petroleum (BP). Engineers from BP determined the metallurgical conditions for "sour service," a balance of a high level of corrosion resistance and reduced metal hardening, and Tenaris engineers determined how to produce it; API inspectors collaborated on its specifications as well. Collaboration occurred in face-to-face meetings and through video conferencing. Once production specifications were finalized, Tenaris produced the pipe at its Siderca and Dalmine mills within five weeks and delivered it in June 2001, earlier than scheduled.
In June 2002 Tenaris Global Services signed a five-year, $80 million agreement with ChevronTexaco, to supply well casing and oil production tubing for international affiliates in Argentina, Canada, Europe, Nigeria, and Venezuela. Tenaris managed the supply chain, beginning with pipe design and manufacturing through delivery and inventory management, and accommodated the unique needs of each affiliate.
In its research center in Argentina, Tenaris developed pipe for deepwater oil and gas production which occurred at increasing depth offshore. As pipe supply and project manager for the TotalFinaElf E&P USA's Canyon Express project in the deepwater Gulf of Mexico, Tenaris developed a low-carbon steel pipe that met the requirements of a hydrogen sulfide environment and intense water pressure, at a depth of 7,200 feet and temperatures as low as minus 21 degrees Fahrenheit. In addition to providing over 30,000 tons of pipe for the 118-mile line, produced at its Tamsa and Dalmine plants, Tenaris color coded joints for efficient, economical welding at sea.
Tenaris provided 10,000 tons of pipe for Pioneer Natural Resources' Falcon project in the deepwater Gulf of Mexico. The specific requirements of that project involved solving delivery and welding problems that would allow gas and oil to be extracted economically. Pioneer used the reel-laying process, flexible pipe spooled in 5,400-ton increments, placed vertically and welded at sea. The oversized length of the double-jointed pipe required special handling procedures as the product was transported from the Siderca facility to Mobile, Alabama.
In 2003 Tenaris introduced a new connective technology, TenarisBlue, a dopeless pipe thread for applications where worker safety and environmental sensitivity were primary concerns. A metal-to-metal seal through premium pipe threading, TenarisBlue Dopeless offered a more effective enclosure for gas and liquid than using an absorbent material as a secondary seal. ConocoPhillips used the technology at its Ekofisk X50 offshore oil well in Norway, the first application of dopeless pipe offshore.
Continuing Worldwide Expansion: 2003-04
Though Techint had united its steel pipe operations under Tenaris, the company did not have complete ownership of those operations; Tenaris owned 71.3 percent of Siderca, 50.8 percent of Tamsa, and 47.2 percent of Dalmine. Consolidation of ownership occurred in 2002 and 2003, with Tenaris reorganizing from a base in Luxembourg. The process involved obtaining approval for exchange offers, of Tenaris stock for Siderca, Dalmine, and Tamsa stock, with the exchanges in Italy, Argentina, Mexico, and the United States, and then making exchange offers to shareholders. Exchange transactions took several months to complete. The three companies were delisted in 2002, then Tenaris relisted as a single company on the New York Stock Exchange, and on the Italian, Buenos Aires, and Mexican stock exchanges. The board of directors elected Roberto Agostino chairman and his son, Paolo Agostino, chief executive officer; however, after Roberto's death, Paolo became chairman as well. Exchange offers continued in 2003, and by the end of the year Tenaris owned 99.9 percent of Tamsa, 99.9 percent of Siderca, and 88.4 percent of Dalmine.
Tenaris operated profitably at this time, earning net income of $194 million in 2002 and $210 million in 2003, with revenues at $3.2 billion both years. An unusually large sales volume for welded pipe delivered to large pipeline projects in Ecuador, Peru, and Brazil in 2002 and seamless pipe for projects in the deepwater Gulf of Mexico delivered in 2003 maintained stable sales volume, though war in Iraq significantly impacted sales to the Middle East and Africa. With production plants operating at 95 percent capacity in 2003, Tenaris invested $120 million in production, technology, safety, and environmental standards at its facilities worldwide. Tenaris and Confab built a new casing processing plant in Sao Paolo, Brazil, and planned to add production of pumping equipment for the oil industry in late 2004.
Alliances continued to play a significant role at Tenaris, in expanding its worldwide product base. Through an agreement with Sandvik Materials Technology of Sweden, Tenaris began to distribute Sandvik's seamless stainless steel downhole production tubing for the oil industry. The companies agreed to collaborate on the development of new products, with Sandvik to handle manufacturing and technology and Tenaris to handle marketing and distribution. Tenaris formed a five-year alliance with Socotherm in Italy, to share technology on pipe coating. Through Confab Tenaris already operated a joint venture with Socotherm, as pipe-coating contractor with plants adjacent to Tenaris mills in Argentina. Active industrial development in China prompted the formation of an alliance with Tianjin Pipe Corporation in December 2003. With Tenaris holding majority ownership, the joint venture planned to build a pipe threading plant and oil production accessories facility in Tianjin, China.
Tenaris opened a service center in Francisco de Orellana, Ecuador, near oil and gas drilling activity in the eastern part of the country. The center offered product design, material requirement planning, maintenance, inspections, tube preparations, and administration services.
Tenaris sought to increase its holdings in 2004, acquiring the assets of Algoma Tubes from Algoma Steel for $9.6 million. Tenaris signed a letter of intent for the acquisition of a controlling interest in S.C. Silcotub SA of Romania. That company produced small-diameter, seamless pipe for OCTG and other industrial uses. Facilities included a steel pipe mill, finishing plant, and cold-drawing plant. In April Tenaris announced an agreement with Sidor, a steel producer in Venezuela with ties to Techint, to purchase a production facility for prereduced hot briquetted iron from Posven, another Venezuelan company. A joint venture with Sidor, in which Tenaris would hold a 55 percent interest, would acquire the plant for $120 million. The plant would supply Tenaris with low-cost, high quality ferrous raw material.
Principal Subsidiaries: Algoma Tubes, Inc. (Canada); Confab (Brazil); Dalmine SpA (Italy; 88.4%); NKKTubes (Japan; 51%); Siat (Argentina); Siderca SAIC (Argentina; 99.9%); Tavsa (Venezuela); Tuberos de Acero de Mexico SA (Mexico; 99.9 %).
Principal Competitors: IPSCO, Inc.; JFE Holdings, Inc; Lone Star Technologies, Inc.; Maverick Tube Corporation; Sumitomo Metal Industries Ltd.; United States Steel Corporation; Vallourec SA.