NILES, IL--(Marketwired - Jul 9, 2014) - MFRI, Inc. (
Perma-Pipe will provide its Xtru-Therm® advanced insulating process equipment, technology and training for the manufacture of insulated piping systems used to distribute hot and cold fluids. The factory will be located in TSP's new production facility in the Santa Marta, Colombia free zone. TSP will provide steel pipe, casing and tubing, and corrosion coating for the line pipe. Perma-Pipe will own 49% of the joint venture while TSP will have a 51% ownership position.
The joint venture -- which will initially serve the oil and gas markets in Colombia, Mexico, Venezuela, Ecuador and Peru -- will commence with a three-year, multi-million dollar, blanket order to supply pre-insulated pipe for a major Latin American oil company. Production is expected to begin in late 2014 and the facility will be fully operational in early 2015.
MFRI President and CEO Bradley Mautner commented, "We are very excited to be partnering with Tayrona Steel Pipe, a well-established pipe distributor that is expanding its capabilities into pipe manufacturing. Our expertise in thermal analysis and market-leading insulation capabilities are an excellent complement to Tayrona's offerings and will enable us to offer a more complete package to our customers.
"Our Company's entry into South America represents another step in our strategy to take advantage of emerging markets worldwide. It will also further diversify our geographical portfolio, provide additional opportunity to enhance our business in 2015, and increase our levels of activity in future years. Colombia is the fourth largest producer of oil in South America and has a pro-business environment coupled with low inflation and GDP growth in excess of 4%. These factors make Colombia an excellent starting point for entry into the Latin American market. Over time, we expect opportunities to develop for our joint venture to serve the insulated piping needs of other markets throughout Latin America."
Fati Elgendy, President of Perma-Pipe, remarked, "We are delighted to establish Perma-Pipe as the first pre-insulated pipe manufacturer in this important market. Santa Marta is well located in Colombia, within a short distance of Venezuela and enjoying logistical advantages to the Caribbean Islands. The combination of TSP's established position in Latin America and Perma-Pipe's expertise in providing high-quality piping solutions offers an outstanding opportunity to participate in the region's emerging infrastructure and industrial development needs."
Forward-Looking Statements
Statements and other information contained in this announcement that can be identified by the use of forward-looking terminology constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 as amended and are subject to the safe harbors created thereby. These statements should be considered as subject to the many risks and uncertainties that exist in the Company's operations and business environment. Such risks and uncertainties include, but are not limited to, economic conditions, market demand and pricing, competitive and cost factors, raw material availability and prices, global interest rates, currency exchange rates, labor relations and other risk factors.
About MFRI
MFRI, Inc. manufactures pre-insulated specialty piping systems for oil and gas gathering, district heating and cooling as well as other applications. MFRI also manufactures custom-designed industrial filtration products to remove particulates from air and other gas streams. In total, MFRI has manufacturing operations at 10 locations in six countries. For more information, visit the Company's website, www.MFRI.com.
About Perma-Pipe
Perma-Pipe Inc. is the largest manufacturer of pre-insulated piping systems for District Heating and Cooling in North America, and a global leader operating six strategically placed manufacturing facilities worldwide. Its full product line also includes pipe-in-pipe containment systems for environmental control of hazardous fluids, subsea oil & gas pipelines and equipment, above and below ground insulated piping systems for industrial applications, liquid leak detection and location for its piping systems, and stand-alone applications such as computer rooms and data centers. For more information, visit http://permapipe.com/.
About Tayrona Steel Pipe
Tayrona Steel Pipe (TSP) is a manufacturer of high-quality steel line pipe as well as casing and tubing, for the oil and gas industry. TSP has strategic partnerships with the world's largest manufacturers of steel pipe, and offers the special products and premium connections required for extreme applications and offshore drilling for unconventional wells, as for shale gas and shale oil. TSP has offices in Venezuela, Peru, Ecuador and Mexico.