This document summarizes discussions from the 10th Annual Pipe and Tube Conference held by Borusan Mannesmann in Baytown, Texas. Key strategies discussed for pipe producers to remain profitable included building strong supplier relationships, offering competitive domestic OCTG, diversifying product lines, focusing on continuous production through downturns, and implementing initiatives like an RFID tracking system. Panelists debated whether recovery was on the horizon for the pipe industry given factors like oil prices over $50, OPEC adherence to cuts, rig count growth, import controls, domestic capacity additions, and political/environmental uncertainties.

1. AMM – 10th Annual Pipe and Tube Conference
Borusan Mannesmann
Baytown, Texas

2. Borusan Mannesmann
Session 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

3. • 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

4. • 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 2015
15 in 2016
What strategies are being utilized to remain profitable?
Build strong relationships

5. 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

6. 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

7. 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 adds
Korea
USA Political // USA Politics
Environment

8. AMM – 10th Annual Pipe and Tube Conference
Borusan Mannesmann
Baytown Texas