French firm buys 75% stake in tubes maker CST

The $5.2 billion French seamless steel tubes maker, Vallourec, has taken over Hyderabad-based tubes maker CST for an undisclosed amount.

In a deal, sealed last week, Vallourec subsidiary Valtimet acquired 75 per cent of CST, which has been renamed CST Valinox Ltd. CST officials confirmed the deal.

In a press release posted at its website, Vallourec said that the new company would produce tubes for power plant condenser and feed water heater.

CST Valinox aiming its first-year sales at around Rs 90 crore.

Vallourec products include hot-rolled seamless tubes and precision tubes for the automotive, mechanical, power generation and petrochemicals industries.

The energy sector contributes almost 60 per cent of its sales. More than half of the company's revenues come from non-European markets and has presence in Southeast Asia, China and West Asia.

CST was formed in 1996 and began commercial production four years later. The company, with a manufacturing facility in Hyderabad, was set up in technical collaboration with Canadian major Associate Tube Industries.

The Indian company focusses on the power sector and has bagged BHEL orders from for three years, said a company official. This fits into Valinox's profile as it claims to be the world leader in welded stainless steel and titanium tubes for power plants.

Under the new management, CST Valinox will see its capacity rise from the present 1,200 metric tonnes per year to 3,600 metric tonnes. For the expansion, said the CST official, the company is sourcing mills from Germany.

"These would be transported by the month end and production would commence in the first week of July," said the official.