Welspun forms JV with Russian firm

Welspun Gujarat Stahl Rohren today announced formation of a joint venture pipe company with the Russian major TMK group.

Welspun Gujarat will hold 40 per cent stake in the JV-MK Welspun, while Russia's largest manufacturer and exporter of pipe products in oil and gas sector, TMK, will control 60 per cent stake.

B K Goenka, Vice Chairman and Managing Director of Welspun, said TMK group would shift its large dimensional pipe business with capacity of 500,000 tonne to the new company. Welspun will have the responsibility to install a 500,000 tonne of longitudinal plant in the company. The installation would cost around $150 million to Welspun.

With the JV, Welspun targets to have a revenue of Rs 4,000 crore in 2008 against last year's Rs 1700 crore, he said.

The JV will provide Welspun access to Russia and the CIS markets, the second largest in the world after the US. Welspun now have a 1 million tonne capacity of pipe making in India with export base in the US, Iran, Oman and Libya.

Long dimensional pipes are used in the construction of oil and gas trunk pipelines. Russia's largest consumers of these products are Gazprom and Transneft. It also sells line pipes to Kazakhstan, Uzbekistan and other countries of CIS and Caspian region.

"This partnership will leverage our high-quality, submerged arc weld production capabilities with TMK's strong regional presence and extensive sales and marketing expertise, allowing us to provide a wide array of products for onshore and offshore line pipe requirements to our customers," he added.