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Threading plant to have capacity of 20,000 tonnes a year in Brunei

Publication Date : 06-12-2013

 

The US$32 million facility for an integrated Oil Country Tubular Goods (OCTG) supply and threading plant to be constructed next year will have a capacity to produce approximately 20,000 tonnes a year.

Sumitomo Corporation, one of the parties that have signed on to this project, said the semi-finished products will be produced in Wakayama, Japan or Vallourec & Sumitomo Tubos (VSB), Brazil.

Signing the agreement with Brunei Shell Petroleum were Nippon Steel and Sumitomo Metal Corporation (NSSMC) and Sumitomo Corporation in a ceremony held at The Empire Hotel & Country Club, recently.

OCTG are pipe and tube products used in the petroleum industry, such as drill pipes, pipe casings, and oil pipes.

Sumitomo stated that due to the development of this factory, they assume some spillover businesses would be found in sectors such as construction, transport, tools, housing, education and so on.

The Japanese company also said that skilled labour will be required in the future joint venture, especially in the areas of engineering, accounting and human resources. “We would like to hire as many skilled Bruneians as we can,” it said in the email statement.

Minister of Energy at the Prime Minister’s Office Yang Berhormat Pehin Datu Singamanteri Col (Rtd) Dato Seri Setia Mohammad Yasmin Hj Umar said 14 hectares have been allocated at Salambigar Industrial site for the threading plant.

He said that the construction of the plant will begin next year. Operations are expected to begin in 2016.

Sumitomo Corporation also said that the products manufactured in Brunei will be for the Brunei market. “(NSSMC and Sumitomo) have supplied seamless OCTG to Brunei Shell Petroleum for over 40 years,” said the company.

NSSMC and Sumitomo said in the email response that they both hope to enhance the relationship with BSP through the supply of local threaded products.

Asked why Brunei was chosen to build its OCTG factory, Sumitomo Coporation said that it “is a business opportunity in response to the Brunei Government and BSP’s requirements on local business development in Brunei”. On top of that, tax incentives have also supported them in deciding to establish the threading shop in Brunei, the company said.

It will be Sumitomo’s first time to run a business in Brunei and it expects it will be a challenge to understand the people, culture and way of doing business here.

“We then need to ensure that the company maintains a stable supply with high quality and good services at the customer’s satisfaction,” it said.

At the moment there are no plans for the company to cater their products for any other country besides Brunei. However, during the signing ceremony, the Minister of Energy in his opening speech said that in the second phase of the project, Brunei may consider exporting the products regionally.

The factory is expected to create direct employment for about 150 people, of which 100 will come indirectly from the sub-contractors.

 

 

 

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