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NEWS UPDATES 3 February 2010

Malaysia: Johor's oil and gas industry to get boost from pipe plant

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Malaysia’s Johor state, which plans to become the region's leading oil and gas hub by 2025, will receive a major boost with the opening of a speciality steel pipe manufacturing plant here on Feb 6, reported the StarBiz.

The 250 million ringgit (1$=3.4 ringgit) investment by Erndtebrucker Eisenwerk GmbH & Co KG (EEW, is the first of several major new investments in the state's oil and gas sector.

EEW, which has four other production facilities in Germany, Brazil and South Korea, with a combined annual production of 500,000 tonnes, is a world leader in large diameter carbon and stainless steel pipes for the oil and gas industry.

Menteri Besar Datuk Abdul Ghani Othman is scheduled to open the plant, located on a 8.1 hectare site in the Tanjung Langsat Industrial Park.

Johor, to date, has secured more than RM50 billion in new foreign direct investments in the oil and gas sector and EEW is among the first to begin operations since late last year.

The company is a joint-venture with Dynac Sdn Bhd, which is a Malaysian oil and gas firm, which also has a production facility in Tanjung Langsat.

The purpose-built EEW factory, which is one of the most modern in the world with state-of-the-art machinery and equipment for the production of submerged arc welding steel pipes, was built and commissioned in just 18 months.

The plant has created 140-odd highly-skilled manufacturing and engineering jobs, with the company sending nearly half of the workforce to South Korea and Germany for technical training.

Its production line, which stated operations in November last year, now has the capacity to produce 105,000 tonnes of steel pipes per year.

This includes highly specialised large pipes for offshore oil rigs or steel tubes for wind turbines, with diameters of between 1,250mm and 5,000mm, thickness of up to 120mm and lengths of up to 4,200mm.

"Some 40 percent of the SAW steel pipes from our Malaysian plant will be for the domestic market, with the balance for export," said EEW Malaysia Sdn Bhd Managing Director Thorsten Petermann.

He said the company decided to locate the plant in Johor to better serve its clients in South-East Asia and Australia.

"We expect global demand for steel pipes to remain strong, with sales from our Malaysian plant in the first year of operations to hit 500 million ringgit," he added.

Besides the oil and gas industry, the construction sector is also a burgeoning new market for EEW's range of products, especially heavy-duty steel sheets and beams.

EEW, a 72-year-old family-owned company from the North Rhine-Westphalia region of Germany, has been involved in the SAW pipe business since 1974.

It is now one of the world's leading producers, offering a complete product range for the offshore, oil and gas process plant and steel construction industry. - Bernama


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