Trelleborg is to acquire a Brazilian business in the offshore oil and gas industry from a subsidiary of Veyance Technologies Inc. Through its Trelleborg Engineered Systems business area, the Swedish firm announced it has signed an agreement for the acquisition, expanding its offering in the Brazil oil and gas industry. The business focuses on specially designed oil hoses for surface and deep-sea applications for the strongly growing offshore oil and gas extraction industry in Brazil.

Lennart Johansson, President of the Trelleborg Engineered Systems business area, said the investment represents a step in Trelleborg’s quest to strengthen its presence in Brazil in the offshore oil/gas industry.  Mr. Johansson further reiterated that the acquired operation complements Trelleborg’s current technology in oil hoses and is thus an excellent addition to the firm’s product portfolio, globally as well as in Brazil. Trelleborg’s customers are moving more and more of their production to Brazil and it is crucial to ensure that Trelleborg has manufacturing close to their units, noted Johansson.

The plant is located in Santana de Parnaiba, close to São Paulo. Trelleborg will take over the lease on the facility, which is 15,000 m2, acquire the existing equipment and assume responsibility for the some 100 employees. The seller is Veyance Technologies do Brasil Produtos de Engenharia Ltda.

The acquisition is expected to be finalized in the first quarter of 2011, and will be followed by investments in supplementary production equipment. It is anticipated that production can commence gradually as of the second half of 2011. The purchase consideration is approximately SEK 40 million and Trelleborg will initially invest approximately SEK 25 million during 2011. A successive positive earnings effect is forecast from the second half of 2012.

Trelleborg has reported significant sales in the oil/gas industry in Brazil for a long time now and, in November 2010 the Group announced an investment in a new facility in Macaé, north of Rio de Janeiro, for the manufacture of such items as subsea buoys for deep-sea applications. In recent years, large deposits have been discovered off the coast of Brazil and, by 2014, Brazil is forecast to be the largest market in the world for the products and solutions that Trelleborg offers.

The Trelleborg Group currently has 1,000 employees in Brazil and is established in technology development, production and sales in the country.

14th March 2011