ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(76)69
Vol.1976/9004

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COMMISSION
OFTHE
EUROPEAN COMMUNITIES
SecretariatCOM(76)69 final
Brussels,2ndMarch1976.
CONFIDENTIAL
COMMUNICATION FROM THE COMMISSION
TOTHE COUNCIL
Request foranAssent ,pursuant to
Article 56§2(a)oftheECSC Treaty ,
forthegrant ofaredevelopment loan
toNatural GasTubes Limited (UK)
CGM(76 )69final

COlTFIIEïITIAL
COMffflTICATION TOTHECOUNCIL
Subject:RequestforanAssent,pursuanttoArticle56§2(a)ofthe
ECSCTreaty,forthegrantofaredevelopment loantoNatural
GasTubesLimited(UK)
I.ESSENTIAL EJKMiATIOlT
Applicant;NaturalGasTubes,Ltd.(UK)
Beneficiary ;NaturalGasTubes,Ltd.(UK)
Project: Construction ofweldedsteeltubes
Location:Tafamaubach IndustrialEstate,EbbwVale,S.Wales
Investment;2,843,450£(+4»9millionu.a.)
950»000£(+1,64millionu.a.)
120jobsofwhich100willbeofferedinpriority
toex-ECSCworkersofBritishSteelCorporation's
EbbwValeworks.Applicant;
Beneficiary ;
Project;
Location:
Investment ;
Loanrequooted :
Jobscreated:

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II.ADMISSIBILITY
TheplannedreductioninlabourrequirementsatBritishSteelCorporation
EbbwValeworkswillmakeabout1900workersredundantin1975*The
applicantisamongthefirmswhichhasacceptedthelocationat
Tafarnaubach Industrial .Estateinordertoutilisepartofthework
forcebeingmaderedundantbytheBSCclosures.Theapplicantagrees
togiveprioritytotherecruitementofex-ECSCworkers,anditis
likelythat100outof120postswillbeofferedtoex-steelworkers.
III.THEUHTERTAKIMG
Description :
Légalstatus:
Established :
Administrative Headquarters :
Registeredoapital:UaturalGasTubesLimited
LimitedCompany
1966
London
£600,000
IV.THEPROJECT
Itisproposedtoerectaplantfortheconstruction ofweldedsteel
tubesof2"-7"(50mm-175nominaldiameteratTafarnaubach
IndustrialEstate,EbbwVale.
Acquisition ofthesitehasbeenagreedandallthenecessaryplanning
permissionsareintheprocessofbeingobtained.
Theplantwillconsistofaweldingtubemillwithappropriaterolls
Ï
andtoolingandfinishingequipment,slittingline,threadingmachines
andaseamannealer.DeliveryofthisequipmentfromtheUSAhasbeen
arrangedforSeptember1975*
Itisplannedtocommissiontheplantinmid-1976andwhenfullyin
operationtheplantwillemploy120people.
EbbwValeisaspecialdevelopmentareaandtheprojectqualifiesfor
aRegionalDevelopment Grantandselectiveassistanceunderthe
IndustryAct.

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V.THEÏIARKET
Ithasbeenestimatedthatthemarketfornon-alloyweldedtubesin1978
willbe1.55milliontonnes.Thisfigurehasbeenarrivedatbyapplying
forecastgrowthtoeachindustrialsectortobesupplied.Ofthis1.55
milliontonnes,itisestimatedthat655,000tonneswillbefortubesof
sizescapableofbeingmanufactured bythisplant.Atpresentmorethan
100,000tonnesoftubesofthesesizesareimported.
Theestimatedavarageannualoutputoftheplantwheninfullproduction
of34,500tonnesrepresents5l/4/Softheestimatedavailablemarket.
Thefollowingtableshowstheanticipated .productmixs
ProductgroupAnnual
Production
tonnes
GaslisttubetoBS1387
StructuraltubetoBS4360
ScaffoldingtubetoBS1139
Ordinarypressuretubeto
API,5L,5LX
Ordinarypressuretubeto
BS3601
HighpressuretubetoBS3602
BoilertubetoBS30598,900
17,000
3,500
1,400
1,000
1,000
1,700
34,500
VI.SOCIALASPECTS
IthasbeenagreedwiththeIronandSteelTradeConfederation thatthis
unionwillberecognized ,whichmeansthatpreferencetoworkforcewill
begiventoredundantsteelworkersfromEbbwVale.
Aretrainingprogramisbeingdevisedincooperation withBritishSteel
CorporationandtheEmploymentServicesAgent(DepartmentofIndustry).

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VII FINANCIAL ASPECTS
Thesummarized ,financing plan fortheproject isasfollows for1976'
£'000
Site ,buildings and .machinery 2,844
Working capital 1,033Share capital
Regional Develop­
ment Grant
Department of
industry loan
ECSC loan
Bank loan
3,882£'*000
.600
592
1,400
950
340
3,882
With more than 20percent ofthecost ofthefixed investment being
provided bythefirm 'sresources theplan canberegarded asacceptable .
VIII .CONCLUSIONS
(a)TheCommission ,after considering thecase inallits
various aspects ,considers that therequest complies
with Article 56§2(a)oftheECSC Treaty andthat the
proposed investment iseconomically sound .Inconsequence
theCommission ha.sapproved aloan tollatural GasTubes Limited
foramaximum amount of£950,000 (+I.64million u.a .)
oritsequivalent .,value *Foranamount ofupto1,64 million
European Units ofAccount therate ofinterest will boreduced
by3percentage points forthefirst five years after the
payment orpayments .
(b)TheCommission invites theCouncil togive itsassent tothe
foregoing decision .