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Welspun Corp Ltd, the flagship company of the Welspun Group, has entered into a joint venture agreement with Wasco Energy Ltd, a wholly-owned subsidiary of Malaysia-based Wah Seong Corporation Berhad, for setting up a concrete weight coating plant at Anjar, Gujarat.
Welspun Corp, one of the leading global manufacturers of large diameter steel pipe, will hold 51 percent and Wasco will hold 49 percent in the joint venture company.
Concrete weight coating (CWC) is a plant-applied coating used to provide negative buoyancy for offshore pipelines or for river/road crossing applications. CWC protects the external corrosion for pipelines installed offshore at water crossings or in swamps along with mechanical protection at highway and railroad crossings.
The capital expenditure for the project forms a part of FY 2015-16 planned capex of around Rs 200 crores.
The demand for CWC pipes has traditionally been limited to few domestic projects. However, there has been an increase in demand over the past two years. The government has been steadily increasing investments in this area. Offshore projects of approximately 600-700 kms are expected over the next three to four years, which would have a requirement for concrete weight coating. Additionally, there are a few large offshore export projects scheduled to be launched in the same time period.
The JV will provide Welspun with the strategic advantage of becoming a one-stop solution for steel pipe coating needs to service all offshore requirements for the oil & gas industry. The new venture will also support Wasco to expand its foot print across the Indian subcontinent.
