India's Welspun Secures $192 Million of Pipe Orders

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Researched by Industrial Info Resources (Sugar Land, Texas)--Welspun Gujarat Stahl Rohren Limited (BSE:532144) (WGSRL) (Mumbai), a flagship company of Welspun Group (Mumbai), recently announced that it has secured pipe orders worth $192 million from international and domestic markets. These orders are expected to take the company's present order book value to about $1.8 billion. For the year ended March 31, 2009, WGSRL recorded total sales of $1.22 billion. The present order book value is approximately 1.48 times the value of sales.

WGSRL, which is the second-largest line-pipe manufacturing company worldwide, produces plates, coils, horizontal submerged arc welded pipes, longitudinal submerged arc welded (LSAW) pipes, and electric resistance welded pipes. In February of this year, WGSRL, commissioned its pipe manufacturing unit in Little Rock, Arkansas. The API-certified production facility was built at a cost of $150 million and has a capacity of 350,000 tons per year. Welspun Tubular LLC, a fully owned subsidiary of WGSRL, will operate the facility. The manufacturing unit, spread across 740 acres, will have the capability to produce pipes with lengths of 40-80 feet, outer diameters of 24-60 inches and wall thickness of 6-25 millimeters. The plant will also handle coating and double-jointing procedures. The facility currently employs about 300 people. WGSRL hopes to make this facility a one-stop shop, taking care of all of the pipe-related needs of the firm's customers in the U.S.

WGSRL recently suspended operations at its plate mill in Anjar, Gujarat, to complete the construction and erection of its coil mill. Development of the steckel mill, with a capacity of 1.5 million tons per year, is part of the company's backward integration strategy, which is expected to not only help in the manufacture of high-quality coils, but also provide greater flexibility in production capability. The mill is set to be commissioned by the third or fourth quarter of this year. Work has also commenced on the 300,000-ton-per-year LSAW facility at Anjar, which is expected to be commissioned by the second quarter of 2010. In April of this year, the company announced that it will spin off the 1.5 million-ton-per-year plate and coil mill into a separate entity. This will help the firm strategically focus on management and product development. With the expansion plan, which is expected to take the total production capacity to 1.8 million tons per year, WGSRL hopes to become the largest line-pipe manufacturing company in the world by 2010.

Recently, WGSRL announced that a resolution was passed at the extraordinary general body meeting held on June 25, 2009, in which the company's board secured approval to proceed with issuing securities of up to $250 million or its rupee equivalent. Foreign institutional investors can now acquire stakes of up to 49% of share capital in WGSRL.

WGSRL is part of the $3 billion Welspun Group that has business interests in energy, textiles and pipes. The Welspun Group operates in more than 50 countries and employs approximately 20,000 people. WGSRL, established in 1995, has supplied pipes and allied products to many large-scale projects worldwide, including the "Independent Trail" in the Gulf of Mexico, which is considered to be the world's deepest pipeline project. Over the years, the company has won several awards in India and throughout the world. In 2008, WGSRL was named the "Most Valuable Company in Metal Pipes" by The Dun and Bradstreet Corporation (NYSE:DNB) (Short Hills, New Jersey) and "Emerging Company of the Year" at the Economic Times' corporate excellence awards. In 2007, Business Today and Construction World NICMAR respectively named WGSRL the "Fastest Growing Company" and the "Fastest Growing Steel Products Company."

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