Welspun Foregoes Lone Star Joint Venture and Begins Construction of New Steel Pipe Mill in Little Rock

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Researched by Industrial Info Resources (Sugar Land, Texas). What started out as a 60/40 joint venture between India-based Welspun Gujarat Stahl Rohren Limited (Mumbai, India) and Lone Star Technologies Incorporated (Dallas, Texas) has turned into to solo project for Welspun. Civil and site preparation work is underway for a new $100 million steel pipe mill and coating complex at a 740-acre site adjacent to the Little Rock Port Authority on the Arkansas River.

The project will entail the construction of three buildings totaling almost 500,000 square feet, including the main 320,000 square foot pipe manufacturing building, a 120,000 square foot pipe coating plant, and an additional 25,000 square foot building. Engineering is 60% complete on the project. Construction is moving forward for the pipe coating plant with plans to set equipment in November 2007. Coating line equipment is scheduled to be shipped from Germany starting in October 2007. Construction of the main pipe mill building will not take place until early next year with full operation by September 2008.

Initially envisioned as a joint venture project with Lone Star Technologies, Welspun opted out of the joint venture agreement after U.S. Steel purchased Lone Star in late March 2007. Industrial Info began tracking plans for this project early this year when the joint venture was studying several sites in Southwestern U.S. for a new plant to produce 300,000 tons per year of large diameter steel pipe. Little Rock was selected over sites in Memphis, Saint Louis, and New Orleans.

This will be Welspun’s first pipe mill outside of India.

Commencement of construction activity on this project is a good example of the growing competition of steel pipe producers building new capacity in the U.S. to meet growing oil and gas pipeline construction projects. For more information on this trend see related February 9, 2007 news article - Activity for North American Steel Pipe Mill Capacity Expansion Reaches Fevered Pitch.

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