India-based Welspun Corp’s pipe production drops by 56pc to 130,000mt in the first quarter of FY2020-21 (Q1) from the prior year quarter. The company’s sales volume fell by 30pc to 222,000mt in the quarter. Of the total sales volume, 138,000mt was sold in the India market, the US operation sold 43,000mt and Saudi-Arabia 41,000mt.
The company has a robust order book of 3,56,000mt from oil and gas, exports and water projects, according to the company’s earnings call. Also, the government has announced a 14,700km addition gas pipelines project, which is at various stages of development to complete the National Gas Grid.
Under the National Infrastructure Pipeline (NIP), an investment of Rs1 lakh crore is expected between FY2020-2025 to expand the oil & gas pipeline network in the country. State-owned companies have initiated tendering activities for various construction projects.
In the domestic water segment, the company is confident that irrigation projects will drive demand, however, some delays are expected in states that continue to struggle due to the pandemic. Welspun has started receiving enquiries for upcoming projects in the Middle East and South East Asia.
US operations were impacted due to a lack of orders amid the COVID-19 pandemic, but now the company’s plants in Little Rock (HSAW and HFIW) have restarted operations. At HSAW, execution of a large order from a longstanding customer is under progress. The HFIW operations continue to run but at a lower utilization rate.
Saudi Arabia plant is fully operational after a prolonged shutdown. It has recently secured its first order under a long-term agreement with a large customer to supply HSAW pipes for oil and gas application.