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Welspun Corp Ltd.

BSE: 532144 Sector: Metals & Mining
NSE: WELCORP ISIN Code: INE191B01025
BSE 00:00 | 18 Dec 150.25 -4.95
(-3.19%)
OPEN

155.05

HIGH

155.30

LOW

149.20

NSE 00:00 | 18 Dec 150.10 -5.00
(-3.22%)
OPEN

155.00

HIGH

155.90

LOW

149.05

OPEN 155.05
PREVIOUS CLOSE 155.20
VOLUME 34300
52-Week high 197.00
52-Week low 103.30
P/E 92.75
Mkt Cap.(Rs cr) 3,985
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 155.05
CLOSE 155.20
VOLUME 34300
52-Week high 197.00
52-Week low 103.30
P/E 92.75
Mkt Cap.(Rs cr) 3,985
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Welspun Corp Ltd. (WELCORP) - Chairman Speech

Company chairman speech

My dear fellow stakeholders

It is with great eagerness that I look forward to sharing my thoughts on Welspun Corpwith you every year. This gives me an opportunity not only to introspect on what we did inthe year gone by but also share my thoughts for the Company for the future.

FY18 in review

I believe FY18 was a year of inflection for Welspun Corp.

During the year we saw significant changes in policy across the globe. The year sawthe rise of protectionist policies by all major economies especially on the steel side.Oil & gas as well as steel prices were volatile with an increasing trend in pricesespecially in the latter half of the year. The rupee appreciated from the FY17 level formost part of the year. We started the year with a modest order book of around 600 KMT.Undoubtedly the business environment was challenging.

However we demonstrated our resilience in this tough environment. We booked new ordersin excess of 2 Million MT for the year a record for your Company. We ended at ahistoric-high order book of 1.6 Million MT. WCL crossed the 1 Million MT milestone insales volumes – fifth time in six years that this coveted milestone was achieved. Ouroperational performance also reflected in our financial position. With a continuous focuson maintaining financial discipline your company was able to bring down the gross debtlevels as well as the interest costs during the year. We made pre-payments of close toRs.7bn of higher cost debt mainly consisting of NCDs. The undivided focus towardsrealigning debt book to match the business and repayment of debt wherever possible hasyielded results with net debt going down by more than half to Rs.4.2 Billion at FY18 end.All this has been made possible by the Company's global manufacturing base technicalexcellence client accreditations and reach across major key markets. WCL'smulti-locational line pipe capacity – spread across India US and Saudi Arabia –helped us become a local player in each of these key markets and overcome any localcontent restrictions. Our exceptional track record and experience of delivering pipes withstringent specifications gives us an edge for prestigious and challenging projects. Ourtechnical prowess and strong customer relationships has made us one of the preferredvendors for clients globally. We have also been continuously working on expanding ouroffering; the latest example being our Concrete Weight Coating facility.

A positive outlook for FY19

We are optimistic on the demand situation for FY19. The recent rise in the crude oilprices has improved the outlook for the pipeline market as higher prices are expected todrive investment into the sector. Demand for small diameter pipe continues to show goodtraction in Americas region. Large diameter segment is showing early signs of revivalwith gas export projects gaining momentum. Demand from oil & gas segment in MENA isexpected to pick-up over the course of the year. We see strong demand in the domesticmarket especially in the water segment driven by river-linking and irrigation projectsacross states. In India large diameter pipe demand for the Oil & Gas segment isexpected to be driven by expansion of National Gas Grid while small diameter pipes isexpected to be driven by City gas distribution and North east connectivity projects.However competitive pressures remain in the domestic market. Demand outlook for our Plateand Coil Mills division remains satisfactory although margin challenges remain. Our orderaccretion in FY18 has laid a solid foundation for growth in FY19 and beyond. This willenable significant capacity utilisation and better margins particularly for the US andSaudi Arabia facilities. We have no major capex plans for the year which should helpgenerate positive cash flows and reduce our net debt further. Your company is well ontrack to achieve its vision of being nil net debt by 2020.

Long-Term Growth Potential

With increasing global population GDP and improving living standards as per theindustry estimates global energy demand is expected to grow by about 25 percent by theyear 2040. The world will need to pursue di3erent economic energy sources to keep up withthis considerable demand growth. The fuel mix will consistently evolve although oil andgas would remain the dominant source of energy for next couple of decades. The capacity ofcurrent global pipeline infrastructure continues to be deficient compared to the futurerequirements. There are bottlenecks in the transportation of oil and gas from theproducing regions to the consuming areas or to the export terminals. Even distributionhubs are short on storage capacity as well. These factors provide opportunities for thelarge diameter pipes across the globe.

Apart from oil and gas the water segment also provides a huge opportunity for growth.Depleting availability of fresh water and lack of effcient infrastructure for transportingriver water and desalinated seawater will drive pipeline demand. In the Middle East theopportunity for pipelines lies in the fact that most of the desalination plants are atquite a distance from the consuming centres. While in India interlinking of major riversand irrigation projects are expected to provide huge potential demand for pipes.

Your company will continue to leverage its strengths – local presence in keymarkets approvals from all major customers technical expertise – to maintain andgrow its leadership position in large-diameter pipelines.

Technology

At Welspun we put technology at the forefront of everything we do. With our dedicatedR&D Facility to facilitate capability enhancement capacity expansionde-bottlenecking automation and product development programs we have acquired anexperience of delivering pipe with stringent specifications for several prestigious andchallenging projects. We have a team of technical experts who belong to variousinternational technical committees for oil and gas pipeline research continuouslyresearching on steel strain-based and deep sea pipelines welding technology andconsumables and quality integrated management systems.

Human Capital

As the first principle of the business we at Welspun consider our human capital as ourbiggest resource. Thus we are constantly working on enhancing our human resource deliveryby adopting the latest & best practices for people development and technology orientedhuman resource. One of the key highlights of the year was the stabilization of SuccessFactors (SF) one of the best-in-class Human Resource Management Systems. Your companycontinues to remain focused on building an agile organization that delivers on businessstrategy and provides an enriching employee experience.

Sustainability

Welspun believes in doing business which is not only consistent with the environmentbut also helps sustain the same in the long run. Your company has worked on severalinitiatives towards energy effciency emission and water management to minimize the impactof the business activity on the environment. The waste generated at the Anjar plant isused in co-processing at a nearby cement plant as it has a high calorific value. We willcontinue to play our part responsibly in and around the region we operates in.

My Sincere gratitude

I take this occasion to express my heartfelt gratitude to our Board of Directors ourManagement our dedicated employees' and our esteemed customers and suppliers bankers andinvestors for their devotion support and commitment to Welspun. I strongly believe thatwith your support we will be able to strengthen our engineering excellence and reach newheights thus setting benchmarks for the whole industry.

Balkrishan Goenka

Chairman

Welspun Group