On November 25, 2024, Vallourec, the global leader in premium seamless tubular solutions for the energy, industrial, and construction sectors, announced its decision to divest from its Indonesian logistics operations. The company entered into an agreement to sell its approximately 99% stake in PT CPPI and PT SCN, collectively known as the Logistics Group, to CKB Logistics, a subsidiary of ABM Investama Tbk. The deal, valued at approximately €20 million, with €2.9 million of that sum contingent upon an earn-out, marks a strategic shift for Vallourec as it seeks to streamline its operations and refocus on its core business areas.
Based in Batam, Indonesia, the Logistics Group provides integrated port and logistics services, primarily to clients in the energy, industrial, construction, and logistics sectors. Over the years, the company has also serviced Vallourec, supporting its operations with essential logistics functions. PT CPPI and PT SCN, while predominantly owned by Vallourec’s Indonesian subsidiary, PT Citra Tubindo, have become important players in the local logistics landscape. PT Citra Tubindo itself specializes in heat treatment and premium threading services, particularly for the energy and oil and gas industries.
This sale aligns with Vallourec’s ongoing strategy of optimizing its asset portfolio and improving capital efficiency. By divesting non-core assets like the Logistics Group, Vallourec aims to sharpen its focus on its primary business of manufacturing high-performance tubular products. The company has been undergoing a series of strategic moves to streamline operations, reduce costs, and enhance profitability, ensuring that its capital is being utilized most effectively. The sale of this logistics division will also help the company maintain a leaner, more agile asset base as it continues to adapt to changing market conditions.
The transaction is expected to close in the fourth quarter of 2024, subject to customary closing conditions and necessary regulatory approvals. Despite the sale, Vallourec has emphasized its ongoing relationship with the Logistics Group. The company will continue to use the services of the Logistics Group under similar contractual terms, ensuring that its logistical needs remain met even as ownership of the business changes hands. This continuity will allow Vallourec to maintain its supply chain operations without disruption while benefiting from the enhanced focus on its core competencies.
Philippe Guillemot, Vallourec's Chairman and CEO, expressed confidence in the company’s strategic direction following the sale. He noted that the divestment of the Logistics Group was in line with Vallourec's broader strategy of refocusing on its core business and improving capital utilization. "This transaction furthers our goal of creating a leaner, more agile asset base," said Guillemot. He also extended his gratitude to the employees of the Logistics Group for their dedication to excellence during their time with Vallourec, acknowledging their contribution to the company’s success.
For CKB Logistics, the acquisition presents an opportunity to expand its footprint in Indonesia's growing logistics market. As a subsidiary of ABM Investama, CKB Logistics has a strong track record in the logistics sector and is well-positioned to integrate PT CPPI and PT SCN into its operations. The move also aligns with ABM Investama's broader strategy of expanding its logistics and infrastructure capabilities across Southeast Asia. The acquisition will not only strengthen CKB Logistics’ service offerings but also enhance its ability to cater to the increasing demand for logistics solutions in the energy and industrial sectors.
Vallourec's decision to divest from the logistics sector comes at a time when many global corporations are reevaluating their asset portfolios to prioritize core business operations. This trend has been accelerated by the need for greater agility and the increasing importance of sustainable, cost-efficient business models. For Vallourec, this transaction is a step towards achieving these goals, as it allows the company to redirect resources toward its core steel and tubular production operations, which are expected to drive the company's future growth.
