Welspun Corp’s (WCL) pipe production declined by 46pc to 879,000mt in FY2021 (April 1, 2020 – March 31, 2021) from 1.6mn mt during the same time last year. The Indian company’s output was nearly half at 214,000mt in Q4 2021 compared with 417,000mt in the prior-year quarter.
Outlook
The company expects global demand for pipes to increase as the oil and gas sectors are beginning to show signs of post-pandemic recovery with climbing oil prices and a preference for gas over oil as an energy source.
In India, which is one of the few countries with the faster energy consumption rate, WCL will focus on expanding its water and natural gas pipelines in FY 2022.
WCL is anticipating a revival for pipes in the USA during H2 2022, as the government may allow stalled natural gas projects to resume.
The company’s Saudi Arabia business is expected to pick up in late 2022 after a weak Q4 FY2021. WCL also plans to divest 30pc of its joint venture in the country to enhance liquidity.
Quarterly Production
WCL’s Q4 production in the last fiscal continued trending down with a 20pc decline from 268,000mt in Q3 2021.
Sales
The company’s FY 2021 sales volumes were down 33pc at 1mn mt from 1.5mn mt in the previous year. Welspun’s Q4 FY2021 sales tallied at 247,000mt, down 41pc from 418,000mt during the same quarter last year and 13pc from 287,000mt in Q3 FY2021.
Acquisitions
WCL plans to acquire a demerged division of Welspun Steel (WSL) that specializes in manufacturing rebars and billets. WSL is located in Anjar, India, and has a DRI plant with a 100mt per day capacity.
WCL plans to commission a Greenfield project at the WSL site by 2022 to produce thermo-mechanical (TMT) bars. Welspun Corp has forecasted an annual capacity increase from 250,000mt to 400,000mt once the unit begins operations.