Market conditions
In 2016, Van Leeuwen was faced with continuing difficult market conditions, particularly in the energy segment. Since the end of 2014, low oil prices have had a strong negative effect on investments in the oil and gas industry. The number of projects coming onto the market was at a low point in the first half of 2016. As a result, our sales volume in this segment decreased significantly.
Traditionally, Van Leeuwen has a strong position in supplying new (greenfield) projects, particularly in downstream. Our order book for these projects, in part due to the unfavorable investment climate, was low at the beginning of 2016. Following a very weak first half of 2016, after the summer, the number of requests for downstream projects increased and Van Leeuwen managed to book a number of large projects. The order book increased steadily, and was at a considerably higher level at the end of 2016 compared to the beginning of the year.
The maintenance and turnaround market showed a positive trend, as oil companies particularly wanted to optimize their downstream operations. On the basis of MRO contracts, Van Leeuwen supplies materials from stock on a daily basis to large and smaller petrochemical and chemical plants.
For several years now, Van Leeuwen has had a contract with ExxonMobil. We take care of all MRO deliveries throughout the world for this company and supply their projects. In 2016, deliveries were made to various sites in Europe, Asia and North America, and even for turnarounds in Africa. A number of projects in Antwerp and Singapore were successfully completed. Last year we also supplied the RAHC (Rotterdam Advanced Hydro Cracker) project in the Botlek, the Netherlands, and the SCANfining project in Beaumont, Texas.
In Europe, Van Leeuwen is primarily active in a large number of industrial segments and has a strong market position. The volume within the various industrial segments was in line with the previous year and in some European countries there was in fact a small increase. There was no significant growth in the machine and cylinder construction segment, while there were positive developments in the steel construction and construction segments. Aside from products such as seamless pipes and bar materials, welded pipes and hollow sections in particular form a key product group in these segments. Unfortunately, during 2016, prices largely remained stable at an historically low level. During the second half of the year there were significant price increases in the welded segment.