Over the past several months, Pemex has delayed payments to Tenaris beyond the agreed due dates, resulting in significant credit exposure to Pemex, which represented approximately 20% of that private company’s overall credit exposure as of December 31, 2023.
Historically, Tenaris has not had any significant write-offs due to uncollectible receivables related to this customer.
Although the company is in ongoing discussions and Pemex is making partial payments periodically, at this stage Tenaris cannot predict whether or not its exposure to Pemex will be reduced, nor the timing of this reduction.
If this Luxembourg-based multinational company is not able to reduce its exposure to Pemex and Pemex’s payment defaults, its revenues and profitability would be negatively affected.
Pemex
However, Tenaris indicated that it has a strong and long-standing relationship with Pemex, one of the world’s largest producers of crude oil and condensates and one of its largest customers.
In Mexico, Tenaris’s fully integrated seamless pipe manufacturing plant is located near Pemex’s main exploration and drilling operations, some 13 kilometers from the port of Veracruz on the Gulf of Mexico.
Located on an area of 650 hectares, the plant includes two state-of-the-art seamless pipe mills and has an installed annual production capacity of approximately 1 million 230,000 tons of seamless steel pipe (with an outside diameter range of 2 to 20 inches) and 1 million 200,000 tons of steel bars.
The plant is served by two highways and a railroad and is close to the port of Veracruz, which reduces transportation costs and facilitates product shipments to export markets.
Other plants
In Veracruz, located near its fully integrated seamless pipe manufacturing plant, the company operates a threading plant that produces premium quality fittings and accessories.
In addition to the Veracruz facility, the company operates a manufacturing plant near Monterrey in the state of Nuevo Leon, Mexico, for the production of weldable pipe fittings.
This facility has an annual production capacity of approximately 15,000 tons.