Algoma Tubes growing on eve of 5th anniversary.

Jorge Mitre still remembers how Algoma Tubes started.

Nov. 2 marked the company's fifth anniversary--an operation some people say was doomed to fail.

But multi-national Tenaris, the company which purchased Algoma Tubes from former owner Algoma Steel, has proven the naysayers wrong.

"TenarisAlgoma Tubes is a healthy company financially speaking," Mitre, managing director, says.

"We put our money where our mouth is."

The company has grown from "zero" production in 2000 to an expected 200,000 metric tons of seamless piping in the next year.

As Canada's only seamless manufacturer. Algoma Tubes invested in a new heat treatment line last year to increase the quality of the Sault Ste. Marie product. This year, they will add to the size and bump up capacity by introducing a new seamless diameter pipe.

Currently, the company imports a 9 5\8" piping from their operations throughout the world, but because oil and gas drilling in Canada has taken priority, they will be rolling out their own premium product.

They will be making space in one of their mills and bringing in state-of-the art rolling machines and new technology within the next two years.

Without government funding assistance, Algoma Tubes will produce what is called green piping for the 95/8" product, then transfer it over to the heating, treating and finishing department beside the mill.

The 9 5/8" piping underwent rigorous testing according to the ISO/FDIS 13679 CAL IV, the most demanding of industry performance standards, which is intended for the production and injection of tubing and casing for gas service. Finite Element Analysis was also performed on the 7", determining it to be a qualified product for extremely heated applications, making it more than appropriate for Canadian projects.

Customers come first

The reason for adding the 9 5/8" line is not so much to cut costs, he says, as it is to provide flexibility to their customers.

"This gives us a chance to deal with changes in the order at the last moment," Mitre says.

Currently, the operation manufactures 23/8" to 7" piping.

More production calls for more employees. Algoma Tubes will increase its workforce by up to 150 people bringing the total number to or near 700 workers.

It is a strategic move on behalf of the company. Since it began five years back the mill has taken on increased activity.

"This is part of plan to expand and just move forward to take care of the market," Mitre says.

Construction projects will be contracted out. The expansion will be designed in-house.

Tenders are probably going out "as we speak," Mitre says.

Products are for the most part shipped across Canada and the United States.

Parent company Tenaris has operations in North America, South America, Europe the Middle East, Africa, Asia and Oceania. It has commercial offices in Fort McMurray, Calgary and a service yard in Nisku, AB. In Alberta, they are working with Nexen Inc. on the Long Lake Project and from Nisku are providing technical assistance to Husky Energy's Tucker Lake Project.

The steel market has evolved from an annual steel growth rate of 0.5 per cent in 1999, to 5.6 per cent the following years, Mitre said at a Canadian Heavy Oil Association symposium held last year. The increase was mainly due to developing nations like China at the expense of industrial nations. The forecast is that the industry should remain robust for the next two years and Tenaris will be focused on providing gas and oil companies with the means to tackle some of Canada's most challenging oil and gas wells.

www.tenaris.com

By KELLY LOUISEIZE

Northern Ontario Business