India’s largest pipe manufacturer, PSL Ltd, is augmenting its manufacturing capacity by 300,000 metric tonnes (mt), or about 20 per cent, to meet demand from the oil and gas and water treatment sectors.
The current manufacturing capacity is 1.475 mt and a new 300,000 mt unit is being erected at Visakhapatnam. It will start commercial production by April.
Further, the Rs 2,600-crore turnover company is relocating about 300,000 mt of capacity to Chennai, from its other 11 pipe mills in the country. This is to gain locational advantages, as many new pipeline projects are coming up in South India. The company had earlier raised Rs 200 crore from the secondary market through issue of securities to fund the expansions, said Managing DirectorAshok Punj.
“With this, we will be able to meet demand for the next few years in India and abroad,” he told Business Standard.
Orders worth Rs 5,000 crore from the oil and gas sector and Rs 2,500 crore from the water treatment sector are likely be placed with pipe manufacturers within the next 18 months, Punj said. At present, PSL has an order book of Rs 2,200 crore from the oil and gas and water segments.
Sources said the Indian pipe industry is among the top three manufacturing hubs after Japan and Europe. The market for pipes in the country is about Rs 10,000 crore and is dominated by PSL, Jindal Saw and Wellspun. Raw materials account for more than 70 per cent of the total cost. Normally, orders for pipes are placed by infrastructure companies when steel prices are low.
