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DOCUMENTS "COM"
COM(82)762
Vol.1982/0230

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COMMISSION
OFTHE
EUROPEAN COMMUNITIES
GenerolSecretariatBrussels,22November1982
FOROFFICIAL USEONLY
Communication fromtheCommission totheCouncil
Requestforassent,pursuanttoArticle56(2a)oftheECSCTreatyto
thegrantingofaconversion LoantotBergrohr GmbHHeme,
FederalRepublicofGermany
C0MC82)762final

Communication totheCouncil
Subject:Requestforassent,pursuanttoArticle56(2a)oftheECSCTreaty
tothegrantingofaconversionloantOBergrphr GmbHHeme,Federal
RepublicofGermany.
THECOMPANY No.370
Applicant :BergrohrGmbHHeme
RegisteredOffice :Heme,NorthRhine-Westphalia
Parentcompanyof :PreviouslyfullyownedbytheBergfamily.Aspartof
applicant theprojectdescribedbelow,DillingerHuttenwerke
AGhavenowacquiredaholdingfromtheownerfamily
andtakenovertheequityfromacapitalincreaseagreedrecently.Thisgives
DillingerHuttenwerke AGa47.6%interest,expectedtoberaisedto50%.
Recipient :BergrohrGmbHHeme
Fieldofactivityof :Thecompanymanufactures longitudinally weldedsteel
recipient pipesandtubesinalirelevantsteelqualities
accordingtoestablished domesticandforeignstan­
dards,inlengthsupto12m.Thepipesareusedashigh-pressure pipesfor
carryingoil,gasandwater;tubesinthe30"to160"diameterrangewith
wallsupto31/4"thickareusedforpilingpoles,mooringpostsandsupports
inharbouranddrillingrigconstruction,mechanicalengineering andthe
construction ofpowerstations.

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II.THEPROJECT
Description :Theinvestmentprojectinvolvestheconstruction ofa
newpipeworksonLandtobeboughtbyDillingerHutten-
werkeAG,intheimmediatevicinityofDillinger'splatemill.Theplanned
annualcapacityofthenewworks,onatwo-shiftbasis,is200,000to250,000
tonnesintherange30"(762mm)to64"(1600mm)withwallthicknesses from
0.375"(9.5mm)to1.5"(38.1mm).Themaximumlengthofthepipesortubes
istobeAOft(12.20m).Aftercompletionoftheproject,thecompany's
annualcapacitywillrisefromthepresentlevelofsome300,000tonnesto
over500,000tonnes.
Cost : DM'000
:Land 1 ^
D....I 22,000:Buildingsl
:Plantandmachinery 68,000
:Other22,000
:Total 90,000(+38.15MioECU)
Schedule :Construction tobegininJuly1982.Thenewworksto
becommissioned attheendoffirsthalfof1983.
Market :Inthecompany'sopinion,thecurrentprospectsfor
worlddemandforlarge-diameter pipesandtubesareas
followsruntil1985:some8,500,000to9,000,000tonnesperyear;1986to
1990:some9,500,000to10,000,000 tonnes'peryear.Intermsofrelativesig­
nificance andquantities needed,themarketsmayberankedasfollows:
1.USSR;2.UnitedStates/Canada(Alaska);3.CentralandSouthAmerica;
4.MiddleEast;5.FarEast;6.Africa;7.Europe-.Thecompany'ssalesinthe
financialyear1981brokedownasfollows:4%onthehomemarket;9%toEEC
countries and87%tonon-member countries .
Asaresultoftheincreaseincapacityto500,000-550,000tonnesperyear,
Bergrohr GmbHHeme'smarketsharewillrisefromsomewhatover3%to6-6.5%.
ThankstoitsexcellentcontactswiththeUSSR,theUnitedStates/Canada,
CentralAmericaandtheMiddleEastanditsflexibility,thecompanybelieves
thatitwillbeabletoutilizeitscapacity.Foritsfurtherdevelopment,the
companywillbenefitsubstantially fromtheadvantagesresultingfromthe
investmentproject;theseinclude:
-theability,thankstotheincreasedcapacity;tobecomealsoasupplierfor
largeprojects;
-afullerandwiderproductrangeforpipesofmorethan48";
-immediatevicinityoftheplatemillandhencesecuresupplies;
-timeandtransportcostsavings;
-jointresearchanddevelopment withDillingerHutte.
Environment :Environmentalprotection measuresinaccordance with
currentlegislation .
Thesectoralandcompetition aspectsoftheprojecthavebeencloselyexamined;
theydonotmilitateagainstthegrantingoftheloanappliedfor.
Theprojectappearstobeeconomically sound;itwillmakeasignificant contribu­
tiontotheredevelopment oftheregionwhichissufferingtheeffectsofadecline
inECSCindustries .

-3-
III.THEREGION
Projectlocation :Dillingen,Saarlouis,Saarland.
Unemployment rate :AttheendofMay,theunemployment ratein
theSaarlouis labourofficedistrict was9.7
comparedwith6.9%fortheFederalRepublicasawhole.
Nationalaidstatusof :Regionaldevelopment area.
proiectarea
TheECSCindustryhasbeenanimportantsourceofemploymentinthearea.
IV.CONFORMITY WITHARTICLE56OFTHEECSCTREATY •
ECSCredundancies in :Therestructuring progrdmme,whichprovides
projectarea forthetechnical andeconomicmergerof
Stahlwerke Rochling-Burbach GmbHandNeunkircher
Eisenwerk AG,theconstruction ofanewsteelworksatVolklingen andtheclosing
downoftheliquidphaseatNeunkirchen,entatts' ^redundanciestotallingsome
8,700intheperiod1978to1983.
Jobstobecreatedbytheproject :Thenewworkscreatesabout220jobs-190
shopfloor andsome30whjte-collar.Addedtd
thesearesome30jobsformaintenance andsome50jobsatDiIlingerHiitte
connectedwithnewworks.Introduction ofathirdshiftwouldmeanafurther
80to100jobs.
Training :Becauseoftheirtraininginthesteelin­
dustry,formerECSCworkersareparticularly
wellsuitedforthejobs.Anyretrainingthatmayprovenecessarywillbe
carriedoutwiththeassistance'ofthelabourOfficeand/orDillingerHiitte.
TheCommissionconsidersthattheapplication complieswithArticle56(2a)
oftheECSCTreatyandthatthenewjobstobecreatedbytheprojectare
capableofabsorbingredundant ECSCworkersintoproductive employment.

-4-
V.CONVERSION LOAN
Loanappliedfor :dm45million
Loantobegranted :TheCommission hasapproved aloanof
DM45million(about19.07 MioECU)
orequivalent totheabovementioned
companyinaccordance withArticle56
applicationcriteria COJC82,
29March1979)
Interestrebate 3percentage pointsperyearforfive
yearson6MioECU*
Jobbasisofinterestrebate 300jobssuitableforformerECSC
industryworkers,towhomtheywillbe
offeredinpriority.
VI*COUNCILASSENT
TheCommission requeststheCounciltogiveitsassentto'theforegoing
decision-