The French oil services and industrial group Vallourec announced on Wednesday that it would put its German activities up for sale.
The company's factories, located in the Düsseldorf and Müllheim region, employ 2,200 people.
They generate a turnover of 600 million euros in the manufacture of tubes for European industry and the Middle Eastern oil and gas sector.
"This is a fundamentally transforming project for our group,"
insisted its CEO, Édouard Guinotte, on Wednesday.
German activities have generated losses of around 100 million per year since 2015 despite successive recovery plans.
The operation is expected to ultimately increase gross operating income by 130 million per year and reduce investment expenses related to German sites by 20 million per year.
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Vallourec sells its German activities and stops manufacturing tubes for industry in Europe
With this move, Vallourec completely exits the market for tubes for European industry, a sector under competition from lower-cost countries in Eastern Europe. On the other hand, the activity of manufacturing tubes for the oil services sector will be relocated to Brazil. Vallourec will invest 100 million in its South American site to continue serving the Middle East market.
"Tubes made in Brazil and sold in the Gulf are 25% cheaper than those produced in Germany,"
argues the CEO.
Vallourec also published its results for the third quarter on Wednesday, with gross operating income of 128 million euros, up 80% over one year.
The group is emerging from a period of debt restructuring, completed in June after a capital increase of 300 million euros.
