Copper pipes sector to log 25% growth

The Rs 1,000 crore domestic copper pipes and tubes industry is poised for around 25 per cent growth in the next two-three years on rising demand from the construction, electrical and electronics sectors.

Despite the country's low per capita consumption of copper, in general, at about 400 gm, the demand for pipes and tubes has increased to 33,000 tonne vis-a-vis production that is just a one-third at 11,000 tonne. The balance is being met through imports.

"Growth of copper pipes and tubes depends on the progress of their end-users, which are growing at 25 per cent. Refrigeration, in particular, has witnessed a growth of 25-30 per cent over the last few years on changing consumer pattern, from upper class to middle class, owing to rising income of the average middle class."

"So, the copper pipes and tubes sector is also expected to grow exponentially in the future," Ratan Mardia, managing director, Nissan Copper, today said at the launch of the company's initial public offering, in a bid to enter the capital market.

Rising input costs are a major concern for copper pipes and tubes manufacturers throughout the world, and India is no exception.

They use copper cathode or scrap as raw materials, prices of which have surged about 200 per cent during the last two years. Consequently, several small and medium-size copper tube and pipe units have closed down as they have not been able to pass the higher costs of production on to their customers.

Nissan Copper is viewing this as an opportunity, as the company thinks that this problem will lead to uncompetitive units being rooted out of business.

The company is planning to expand its copper pipes and tubes manufacturing capacity at Umbergaon, Gujarat and Silvassa at an investment of Rs 35 crore.

Under the expansion drive, it will install two furnaces with a capacity of 750 kg each, one extrusion press of 5,000 tonne and two lines of drawing of pipes.

The present expansion in its various plants would lift the copper pipes capacity to 2,400 tonne from the current 1,200 tonne, and ingots/ billet bars capacity to 10,800 tonne from 7,200 tonne now.

The expansion will take section/ mother tube/ flat/ wire bars capacity to 5,400 tonne from 2,400 tonne at present.