Tenaris planning to spend $70-$80 million in Sault Ste. Marie

Tenaris Algoma Tubes Inc. is about to become the most comprehensive pipe manufacturing facility in Canada, city councillors will be told Monday.

As SooToday reported last month, the manufacturer is known to be on the verge of announcing its largest-ever investment in Sault Ste. Marie.

Documents prepared for City Council's meeting on Monday indicate Tenaris is planning to pump $70 million to $80 million into its local "industrial transformation project."

The existing Tenaris building will require a 30,000-square-foot addition to accommodate new cranes.

"Tenaris has indicated the project will create 75 new jobs in Sault Ste. Marie in Year 1 and an additional 50 new full-time employees (FTE)," says Tom Vair, the city's deputy chief administrative officer for community development and enterprise services.

"Tenaris jobs in Sault Ste. Marie include salaried employees who earn on average $100,000 a year and unionized employees who earn 50 per cent more than the average family income for the region," Vair said.

"The project will employ up to 50 FTE in project construction with significant investment in subcontractors during construction, and purchase of third-party services."

"There will also be an anticipated increase in procurement from Algoma Steel of up to $200 million for hot rolled coil that is incremental to their business today."

The following are additional details of the project, as outlined in a report prepared by Vair:

• Tenaris Canada will install a modern, productive electric resistance welded (ERW) pipe manufacturing line in Sault Ste. Marie
• existing Sault Ste. Marie seamless operations will be consolidated in one location with the new ERW manufacturing line, including a digitization and automation upgrade of the ERW pipe‐making process
• a new industrial system will be installed across the entire manufacturing operation
• the ERW line will include a slitter, ERW forming, welding and a finishing mill with automation, digitization and innovation connecting with the existing Sault Ste. Marie facility. This scope includes the relocation and upgrading of some existing equipment from other Tenaris facilities
• the company is prepared to begin work this fall for completion in 2021 if a decision can be made soon (based partially on confirmation of funding contributions)
• Tenaris would begin to order equipment and undertake construction preparation immediately with an expected project completion in October 2021
• the Sault plant will become the only facility in the world capable of manufacturing seamless and electric resistance welded pipes in all the grades demanded by the Canadian market with American Petroleum Institute and premium connections

Tenaris is seeking funding support from the provincial and federal governments.

Sault Ste. Marie's Economic Development Corp. has approved a $500,000 contribution.

City Council will be asked Monday to approve $500,000 in contributions from the city's economic development fund over two years.

"While Tenaris acknowledges it is a challenging time to invest given market conditions and the impact of COVID-19, they point out it is also the ideal time to perform the work necessary to be prepared to serve Canada’s oil and gas industry in the medium- to long-term," Vair says.

"From a national perspective, this investment will help ensure that these jobs stay in Canada and that the energy sector is supplied by Canadian manufacturing. The new production capabilities will also help to replace imports from outside of Canada thereby increasing GDP growth and employment."