Apr 5 2007
United States Steel Corporation announced today that it has entered into a definitive agreement to form a joint venture with POSCO, the Republic of Korea's leading steel producer, and SeAH Steel Corporation (SeAH), a manufacturer of tubular products in the Republic of Korea, to design, engineer and construct a manufacturing facility capable of producing annually 300,000 net tons of spiral welded tubular products in the 24" to 64" outside diameter range with world-class coating capabilities. The newly formed joint venture will be named United Spiral Pipe, LLC.
Under the terms of the agreement, U. S. Steel and POSCO will each hold a 35-percent ownership interest in the joint venture, with the remaining 30- percent ownership interest being held by SeAH. The joint venture investment will total approximately $93 million, and profits of the joint venture will be shared between the partners based upon their respective ownership interests. The new spiral welded facility, which is expected to begin production in 2008, will be located adjacent to the USS-POSCO Industries (UPI) facilities in Pittsburg, Calif., on land currently owned by UPI.
As a result of this transaction, U. S. Steel, through its interest in the joint venture, will gain an attractive entry point into the large-diameter line pipe market in North America, which is experiencing strong demand due to a number of recently announced construction projects for new natural gas transmission infrastructure. Both the capacity and location of the spiral welded facility will favorably position the joint venture to build a presence in the rapidly growing North American large-diameter line pipe market. High- quality hot roll coil for the spiral welded mill will be supplied by both U. S. Steel and POSCO, with the joint venture responsible for marketing the finished products.
"POSCO has been a valued partner at UPI for more than 20 years, and we look forward to expanding our relationship with POSCO through this new joint venture," said U. S. Steel Chairman and Chief Executive Officer John P. Surma. "We also look forward to working with SeAH, whose expertise in producing and marketing spiral welded tubular products will be a valuable asset for the joint venture," Surma added.