AMM – 10th Annual Pipe and Tube Conference

Borusan MannesmannBaytown, Texas

Borusan MannesmannSession 3: New realities for pipe producers

Strategies for 2017 and beyond: what is the new reality faced by producers?

• What strategies are being utilized by pipe producers to remain profitable?

•Have duties placed on some imported HRC changed the price competition between welded and seamless tube?

•How do utilization rates compare to this time last year? What is expected for 2017?

• Is recovery on the horizon or will turbulence dominate the immediate and medium term?

Kim Leppold, Senior Analyst, Metal Bulletin Research Joel Johnson, CEO, Borusan Mannesmann John Hritz, President & CEO, JSW Steel North America Piotr Galitzine, CEO, TMK IPSCO

• Over 1.5 Million Man-hours without a lost time accident• OCTG Casing and Line Pipe production - API 5CT / 5L• Annual output of 300,000 tons

• 4 1/2’’ to 10 3/4’’, up to 0.625’’ wall• Heat treat and finishing up to 13 3/8’’ – HC, EHC, CY• API and Semi-Premium Connections• RFID real time pipe tracking system• 3rd party inspection on site (EMI, SEA, FLD)• On site rail spur (BNSF + UP) and easy dock access

BMP Baytown Texas

• Strong ties with top tier domestic steel mills• Nucor, SDI, AM, Big River

• 100% committed to the distribution system

• Focusing our distributor partnerships 43 in 2014

26 in 201515 in 2016

What strategies are being utilized to remain profitable?

Build strong relationships

What strategies are being utilized to remain profitable?

• Continuous production through the bad old days of 2016. We didn’t stop while others did.

• Offering competitive domestically produced carbon OCTG

• Diversifying into focused amounts of line pipe

• Initial steps to roll out our RFID system for use past our yard

Service

What strategies are being utilized to remain profitable?

Focusing On Continuous Improvement

• Yield• 2016 was 5 % better than 2015• 2017 YTD is 2 % better than 2016

• Efficiency • 2016 was 18 % better than 2015• 2017 YTD is 16 % better than 2016

Is recovery on the horizon or will turbulence dominate immediate and medium term?

Recovery // Turbulence

Oil price > $50 // If OPEC falters on cuts

Rig count growth // Too much too fast? E&Ps

truly making money?

Import Controls // Domestic capacity addsKorea

USA Political // USA Politics Environment

AMM – 10th Annual Pipe and Tube Conference

Borusan MannesmannBaytown Texas