Welspun Gujarat Stahl Rohren Ltd (WGSRL), the flagship company of the $1 bn Welspun Group, has bagged orders for Rs 1,166 crore from the US and West Asia for SAW pipes.
Will spend $90m for setting up US facility
MUMBAI: Welspun Gujarat Stahl Rohren Ltd (WGSRL), the flagship company of the $1 billion Welspun Group, has bagged orders worth Rs 1,166 crore from the US and West Asia for SAW pipes.
The new orders have taken the company’s pending order book position to about Rs 5,166 crore. The company has received two orders from US last month — of Rs 1,070 crore and Rs 700 crore.
DNA Money first reported in its April 11 edition that Welspun Gujarat would bag a series of orders from US and West Asia in the next two months.
Highly placed sources said Welspun is also in a bidding stage for almost Rs 10,000-12,000 crore of fresh orders and further expected to receive enormous orders from major oil & gas producers, both at home and abraod.
The company is setting up new facility in the US, which would be capable of producing 350,000 tonnes of spiral welded pipes with coating and bending capabilities and the facility is expected to get completed by July 2008, with total investment of $90 million.
Welspun Gujarat has been also short-listed for over 2 million tonne projects in Qatar, Nigeria, Russia, Iran, US and Indonesia.
B K Goenka, vice chairman and managing director, Welspun Group, said: “We got successive new orders within a span of a month. We expect WGSRL to emerge into a stronger and robust company in the coming years.”
Analysts said the pipeline industry is growing at such a rapid pace that most of the companies would be busy for another four-five years through replacement pipes and new pipes but rupee volatility and high fuel and freight cost incurred in importing and exporting of goods may impact profit margin.
Welspun’s SAW pipe sales have grown at a CAGR of 37% over FY03-06. Moreover, Welspun Gujarat has technical expertise and pre-qualification and accreditation from the global oil and gas majors.
In the global market, Welspun Gujarat supplied pipes to oil and gas majors such as British Gas, Exxon Mobil, Shell and in domestic front, it supplies to GAIL, IOCL, ONGC and BPCL.
According to the industry estimates, the global capacity for producing SAW (submerged arc welding) pipes is 20,000 km, and India plays a significant role with 25% market share. Based on plans announced by major oil and gas majors, the global demand for SAW pipes is expected to grow to 1,00,000- 1,20,000 km over the next five years.
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