India-based Welspun Corp’s pipe production remained flat at 268,000mt in Q3 FY2021 (Oct-Dec) from the prior-year quarter on a consolidated basis. The company’s sales volume was up by 14pc to 285,000mt in Q3.
BK Goenka, chairman of Welspun Group said, “The growth seems to be robust in the India and Saudi market and we expect US markets to also comeback strongly in the later part of the year.”
Welspun Corp has a manufacturing capacity of more than 2.5 mn mt in Dahej, Anjar, Mandya and Bhopal in India. Its overseas units are at Little Rock in the USA and Dammam in Saudi Arabia.
The company expects a surge in pipe demand as the government has asked the oil PSUs to increase capital expenditure in FY2021 and FY2022 to stimulate economic activity.
Demand for pipes in the domestic water segment across the states has been muted as resources have been diverted to the fight against the pandemic, the company said. A significant increase in steel prices has created an additional disruption as project costs have considerably escalated. However, water remains a key focus area for the company.
Bhopal Project completed
Welspun’s Bhopal project, including its expansion, has been completed. Total capacity at Bhopal now stands at 305,000mt. This will cater to growing demand for water, oil and gas infrastructure in Central and East India.
The company said its prospects in export market, especially Australia, Middle East, East Africa and Latin America, have improved. The company remains cautious of a further flare up in steel prices which is “a key risk” as project costs significantly increase.
The company said that American market for oil and gas, which will spur demand for pipes, has improved with a pickup in oil prices and better than expected production and demand. The company awaits the new government’s stand on the energy policy.