February 12, 2008 -- Finland's Outokumpu and Saudi Arabia's Armetal have agreed to set up a joint venture in Riyadh, which will have the capacity to produce 10,000 tpy of stainless pipe.

Outokumpu will take 51 percent of the joint venture, which will trade as Outokumpu Armetal Stainless Pipe Co Ltd (OSTP), with Armetal holding the remaining stake, according to the Finland-based steelmaker.

The venture will expand Armetal's existing pipe product range by installing a new mill, which will have the capacity to produce 10,000 tpy of stainless pipe up to 6 inches in diameter. It also plans to invest in expanding Armetal, so it can produce pipe up to 24 inches in diameter.

The market for stainless pipe in the Middle East is growing fast as a result of the oil, gas and desalination industries, Outokumpu noted.

The goal of the new venture is to focus on developing the process pipe business and to become the preferred supplier in the region, it added.

"In the development process, the company [OSTP] will utilise the strength of being a part of both a strong local company Armetal, with knowledge of the local market, combined with the know-how and product range available from Outokumpu Stainless Tubular Products," it said.

Armetal, a company of Al-Hejailan Group, manufactures architectural stainless steel from its plant in the Second Industrial Zone in Riyadh.

Source: Metal Bulletin News Alert Service