Member Article

Brazilian blend for expanding Express

Just three years after gaining a foothold in the Brazilian oil and gas market, a Tyneside based firm is buying out its South American partner to take full control of the growing business.

Express Engineering, which is this year celebrating 40 years in business, established a £2 million 50:50 joint venture with Brastec in Sao Paulo, creating Petrotec, in 2010.

Within a year, the first components – sub-sea connectors used in pipelines for the transport of gas and oil from undersea wells to the surface rig or ship – rolled off the production line, and Petrotec now has customer approvals for most of the major sub-sea equipment providers located in the region.

In 2012, further investment saw the company relocate to a larger 55,000 sq. ft. Purpose built factory, with further options for expansion as demand for its products in the burgeoning offshore exploration and extraction market grew.

Now, following the deal, Express is the 100% owner of Petrotec, which it will continue to expand in the new factory. It is anticipated that the current workforce of 45 will grow to over 100 Brazilian nationals, with extra support being provided from the UK.

Petrotec’s focus will be as a subsea product supplier whilst Brastec, which recently expanded its operations to Europe and the UK, will focus all resources on the development of its Global subsea and offshore equipment strategy.

Said Nigel Davison, Managing Director with Express Engineering on the Team Valley: “We are delighted with how well things have developed in Brazil. The venture was designed to enable both companies to take advantage of the huge business opportunities in one of the world’s most active oil and gas extraction markets.

“With two of the three largest sub-sea reserves discovered in recent years off the Brazilian coast, around half the global drilling and underwater equipment manufacturing capacity is expected to be focused on the region.

“By duplicating the technology and equipment used in here in the UK we have created the capability to provide in-country manufacture for customers who are seeking to increase their ‘local content’, an initiative being driven by the Brazilian government.

“Brastec and Express will continue to assist one another and share market opportunities and the directors of both companies are confident that this change of ownership will benefit all involved.”

This was posted in Bdaily's Members' News section by Paul Dobbie .