Vallourec cuts 3,000 jobs and closes Saint-Saulvay plant

The oilfield services company says it can no longer produce competitive steel pipes in Western Europe.

Less than two years after the previous social plan, Vallourec announced on Wednesday that it was ending its seamless pipe business in Europe. This will lead to the closure of several factories, including those located in Germany and Saint-Solvay (North), he said. A total of 2,950 jobs will be cut worldwide. The challenge presented by the group’s new CEO, Philippe Guillemot, is to stop the cash flow. The group emerged in February 2021 as a result of a restructuring plan that saw 1,000 job cuts (including 350 in France) and a creditor takeover. A €300 million recapitalization followed in June 2021. Wallourek has been slightly profitable in 2021.

Faced with competition from Eastern European countries, Europe can no longer be a manufacturing base for pipes destined for the Middle East or other regions, says Philippe Guillemot. Our competitors have long made such a conclusion.At the end of 2021, the group put up for sale its German pipe plant, which employs 2,135 employees. The site was absorbing 100 million euros a year for seven years. Due to the absence of a serious buyer, Vallourec announced the closure on Wednesday.

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End of story

The French factory in Saint-Solva was directly dependent on German production. Therefore, it will also be closed, which will lead to the dismissal of about a hundred employees. The site was over 1000 years old ten years ago, during the heyday of the oilfield service industry. So today ended the story between the small town in the suburbs of Valenciennes and Vallourec, which had already split from the Ascoval steel mill in 2017.

The Olnoe-Aymery section, near Maubeuge (north), is not spared. Vallourec will keep two of its plants there. However, Philippe Guillemot puts forward two conditions for the continuation of activities. First, find new markets outside the hydrocarbon market. To facilitate the achievement of this goal, the Scottish plant Bellshill will be closed (70 jobs will be eliminated), and its production will be repatriated to Aulnoe. The second condition to be fulfilled is the success of the new activity”production of additives“. One or even several robots will be installed to produce steel parts in small batches or to order, like a 3D printer.
Vallourec also wants to streamline its R&D department by bringing its teams together on one site, and therefore will cut about a hundred positions in Aulny. But Aulnoye will become the group’s global R&D management center, the CEO promises. In addition, about sixty positions will disappear at the Vallourec headquarters in the Paris region. In total, at least 300 jobs will be cut in France as part of the job protection plan. Eventually 1,300 Vallourec employees will remain in France.

Production for the Middle East will be concentrated in Brazil and locally for North America. Purpose of the planNew Vallorecis to lower the break-even point so as not to burn cash during difficult times. Enough to generate an additional 230 million EBITDA (gross operating surplus) for the full year starting in 2024.

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