Despite the economic downturn in Brazil and a cut in investments announced by state-run oil producer Petrobras, a major pipe consumer, France-based tube and pipe producer Vallourec expects a “limited decline” in domestic sales in Brazil in 2016, according to a media report.
Vallourec expects the retraction in 2016 in Brazil to be smaller than in 2015, as Petrobras, one of the company’s major global clients, continues developing activities and explorations that demand more complex and higher value-added products, the company’s CEO, Philippe Crouzet, told local newspaper Valor.
According to the executive, Petrobras didn’t order tubes in Q4, as the oil producer wanted to reduce inventories. The move is said to have had a major impact in Vallourec’s domestic sales in Brazil in 2015. The company didn’t disclose numbers for tube sales in Brazil in 2015.
As for the company’s activities related to the mining and automotive segments, Vallourec said it doesn’t have a very positive outlook for the Portuguese-speaking nation. “We still lack elements for optimism. Forecasts aren’t clear whether there could be a retake [in these sectors].”
A media report noted Brazil is the only country where Vallourec develops products for the automotive industry. Vallourec said its Jeceaba plant, in the state of Minas Geirais, will become one of the company’s most competitive complexes.