BORUSAN MANNESMANN BORU INITIATED A NEW INVESTMENT FOR LINE PIPE MARKET

Borusan Mannesmann Boru (BMB), one of the leading European producers in the welded steel pipe industry, initiated a new investment plan, targeting current and future demand potential in large diameter line pipe industry. BMB will establish a new facility with an annual production capacity of 250,000 tons at Gemlik campus, where the company’s biggest production capacity is already located. The new facility, expected to cost about 90 million USD, will manufacture API grade large diameter line pipes to be used in energy industry.

The investment has been designed to be a state of art production facility with respect to production technology, capability, flexibility, plant lay-out. Additionally, the location of the investment, Gemlik/Turkey, is strategically important as the new facility will be adjacent to Borusan Port, which will bring competitive advantage in terms of both inbound and outbound logistic costs as well as efficiency improvement in inventory management.

BMB is now stronger in the large diameter line pipe market

The strong demand potential stem from oil and gas distribution projects in target markets combined with the strong brand recognition and market positioning of BMB has led to the investment decision.

Commenting on the new investment, Mr. Bülent Demircioğlu, Chairman of The Board says:

“One of the strategic targets of Borusan Mannesmann Boru is to invest in high end product segments, thus increasing the value creation for our stakeholders. In order to utilize current and future market opportunities, we have decided to make an investment for line pipe market. In our target markets, being Turkey, Europe, North Africa, Middle East and America, many important projects are on the agenda and in scope of BMB. Nabucco and Southern Stream projects are the biggest ones among our targeted projects list. We have reinforced our position in this sector by being a reliable pipe supplier in many important projects such as Baku-Tbilisi-Ceyhan, Shahdeniz, Blue Stream. As a result of this investment decision we will become stronger and more competitive among our national and international peers. Our investment decision, in a time of global crisis, shows our trust and commitment to the promising future of our company as well as our country, Turkey”

Borusan Mannesmann is very experienced in international markets

Borusan Mannesmann Boru has already undersigned important pipe line projects. BMB gained very important experiences in the production of high quality gas and oil line pipes by taking part in important projects such as Baku-Tbilisi-Ceyhan, Shahdeniz, Blue Stream, Iran-Turkey natural gas pipe line. Building on this credible reference list, BMB has successfully penetrated into Iran, Algeria, Europe and recently to USA markets.

BMB has successfully completed the Elba Express project in February 2009. The agreement with a contract value of 170 million USD, was signed at the end of 2007 and BMB was chosen as the “sole pipe supplier” for the delivery of FBE coated large diameter spiral pipes for Elba Express Project. Pipe delivery started in May 2008 and successfully completed in total of 9 months, earlier than the original time schedule. Upon the successful completion of Elba Express Project, BMB has achieved to win another important tender in the USA market. Currently, pipe deliveries for the new project continue successfully.