Since 2016, Vallourec has implemented a large-scale reform plan with unprecedented strength and remarkable results. According to the original plan, Vallourec will reduce costs by 400 million euros from 2016 to 2020. This goal was achieved ahead of schedule due to its cost reduction of 445 million euros in 2018. Subsequently, it proposed a target of reducing costs by 200 million euros from 2019 to 2020, which has already reduced costs by 141 million euros in 2019. In terms of downsizing, Vallourec has downsized 21% globally since 2014, including 35% downsizing in Europe and 19% downsizing in Brazil. Through the successful implementation of the reform plan, Vallourec's tonnage tube manufacturing costs (excluding raw material costs) and general management costs have decreased by about 40% compared to 2016.

While reducing costs, Vallourec is also reshaping the global market. In Europe, Vallourec has aggregated its production capacity into two production centers and has become a production and research center for high-end products. As an important puzzle for Vallourec to reshape the global layout, the two production bases in Brazil and China will become its new competitiveness centers. At present, Vallourec's production base in Brazil, VSB, has achieved further structural optimization and cost reduction. 60% of VSB's total output is for export; Tianda, a production base in China, has completed the integration with Vallourec's global system, and the proportion of high-end products From 4% in 2017 to 20% in 2019. The capacity utilization rate of these two production bases facing the international high-end oil and gas market has increased from 19% in 2015 to 55% in 2019, making the total export of high-end products from 40,000 tons in 2015 to 300,000 tons in 2019. It is planned to increase to 500,000 tons by 2024.

Cost reduction and global restructuring have reduced Vallourec ’s production capacity in Europe to 25% of global capacity, and its successful creation of a new center of competitiveness has reduced Vallourec ’s breakeven point by 25% compared to 2017.

With the support of two bases in Brazil and China, Vallourec's bid rate in the OCTG (Special Oil Pipe) market has increased significantly. In 2019, Vallourec won a huge order of 900 million Euros from ADNOC (Abu Dhabi National Petroleum Corporation), and will provide this customer with global solutions supported by innovative digital services. The products include supply from European, Brazilian and Chinese production bases. API and high-end pipe products. In Brazil, Vallourec has become the supplier of choice for major customers such as Petrobras (Petroleum), Shell (Royal Dutch Shell), TechnipFMC (Dehiner Forms).

In the next step, Vallourec will continue to advance its reform plan. In addition to continuing to strengthen its global advantages in technology, research and development, and services, it will invest another 65 million euros to support Brazilian iron ore mining and increase 3 million tons. Iron ore production capacity; providing customers with updated digital solutions; proposing a new cost reduction plan, which will reduce the cost by 200 million euros from 2021 to 2022; by increasing the level of industrialization of Tianda's production of high-end products and promoting VSB and Tianda Customer certification will increase the proportion of Tianda's high-end products to 40% by 2024.