Lupatech S.A. have three business segments: Energy Products, Flow Control and Metallurgy.
The Energy Products Segment offers high value-added products and services for the Oil & Gas sector, including deepwater platform anchoring ropes, valves, oil wells completion tools, tube coating, natural gas compressors, sensors and services.
The Flow Control Segment heads the national rankings in the production and sale of industrial valves, primarily for the chemical, petrochemical, pharmaceutical, pulp and paper and construction industries.
The Metallurgy Segment is among the international leaders in the development and production of parts, complex parts and sub-assemblies, mainly for the global auto industry. It employs the precision casting and steel injection processes, techniques that it pioneered in Latin America. It also produces high-corrosion-resistant cast-alloy housings for industrial valves and pumps, chiefly for applications in the oil and gas industry.
Energy Products Segment
The Brazilian oil and gas market, as well as the alternative energy market, especially ethanol and biodiesel, is currently being transformed due to heavy ongoing or planned investments to increase local production, while Lupatech’s operations are focused on the expansion and maintenance of energy source production infrastructure through the supply of equipment or services or a combination of both.
In particular, the recently-announced discoveries of oil and gas reservoirs in Brazilian waters, our main market, have substantially boosted the Company’s business prospects, since the oil and gas majors will have to make substantial investments in order to build the necessary extraction infrastructure.
Brazil’s state-owned oil company Petróleo Brasileiro S.A. – Petrobras, or Petrobras, the Company’s largest client in the industry, has announced plans to investment approximately US$112 billion from 2008 to 2012, representing an average of US$22.5 billion per year, being 87% in Brazil and 13% abroad (focus in Latin America, Western Africa and Gulf of Mexico. This amount represents a 29% growth when compared to their previous plan (PN 2007-11). On September 2008 it is expected to be released the new investment plan for the next 5 years, and the market believes that there will be an expressive growth.
Success in this segment depends largely on the ability of suppliers to meet strict quality and technological standards imposed by other industry participants, principally Petrobras and its contractors under Engineering, Procurement, Construction and Project Management Agreements, or the EPC Agreements (Engineering, Procurement and Construction – shipyards). We believe we are one of the few Brazilian products and services suppliers who qualify in the highest quality level in the suppliers list of Petrobras (“Level A”). Our products and production processes have international certification and incorporate state-of-the-art technologies.
Besides the leadership of Lupatech, the Company benefits from the credibility and close relationship with clients due to the long term relationship, high quality standards, innovative technologies and international certifications that we have. The Company is also recognized for its maintenance services and its organized and highly skilled sales force.
Lupatech believes that the Brazilian government’s current policy of promoting the use of Brazilian-made products and services in its projects for the oil and gas industry, coupled with the small number of Brazilian manufacturers with the capacity to make the necessary capital investments to meet the industry’s strict manufacturing requirements, and particularly Petrobras, will contribute to the continued development of its business. The Company also supplies small clients in the gas industry, including state-owned companies such as Companhia de Gás de São Paulo - Comgás (British Gas).
Flow Control Segment
The Flow Control Segment comprises all our valves manufacturer units, producing valves of different sizes, alloys, types, specifications and with different target markets. Valves are used to control flow in pipelines, and are used in all industrial segments, regardless the sector there are in. The Brazilian and Latin American valves market, different from other markets, is highly fragmented. Our intention is to consolidate this market in Latin America, increasing our presence in countries we are already in as Brazil and Argentina, as well as to increase the types of valves offered to the market.
Lupatech is also the leader in Brazil in the manufacture of valves. The Company’s well-known brands “Valmicro”, “Mipel”, “Valbol” and “Jefferson”, supplies to several industrial sectors, mainly the chemical, ethanol, pharmaceutical, steel, paper and pulp and food industries. Lupatech serves large clients, such as Rhodia, Basf, Companhia Vale do Rio Doce - CVRD, Votorantim and Sadia, as well as the oil and gas industry.
Important to mention that the Company has its own casting unit (Carbonox) producing parts of valves using investment casting, working 100% dedicated to the group, without external clients. This allow us to not only guarantee the supplying of parts but also to assure their quality using production processes with high level technical requirements and control.
Metallurgy Segment
The Company is a leader in Brazil in the metal segment and is widely-recognized in the international market for the development and production of parts, complex parts and subassembly operations targeted to the global automobile industry.
Lupatech serves large clients, including General Motors, OPEL, Bosch, Dana Albarus, International and Eaton. The Company’s casting process division, Microinox, establishes long-term partnerships with customers because of its IT devices and the quantity of the products it produces. Lupatech’s steel injection subsidiary, Steelinject – Injeção de Aços Ltda., is the pioneer in Latin America in the production of highly complex parts for industries and products with high added value and complexity.
In this segment is also included our subsidiary Itasa, a specialized casting facility in the supplying of parts to the automotive chain and parts for valves and pumps to be used in the oil and gas sector.
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