Welspun Stahl plans Rs 200 crore Gujarat spread

Welspun Gujarat Stahl Rohren, the Indo-German joint venture promoted by the Rs 2,000 crore Welspun group, is planning a greenfield expansion of Rs 200 crore in Gujarat.

The company has outlined an expansion plan, which includes setting up of a two lakh tonne per annum longitudinal seam submerged arc welded pipe plant, a 40,000 tonne per annum spiral pipe plant, a two lakh tonne per annum high frequency induction weld pipe plant and three-layer polyethylene coating plant at Anjar in the Kutch district.

B K Mishra, chief executive officer, Welspun Gujarat Stahl Rohren, said, "With the emerging opportunities in the oil and gas industry, our current expansion is aimed at taking full advantage of the prevailing business climate. The proposed expansion plans are expected to be commissioned by December 2004 and would catapult the company's turnover to Rs 1,800 crore in the next two years."

The company is targetting a turnover of around Rs 1,000 crore for the current financial year. The investments for the expansion project will be met through debt and internal accruals. While around Rs 130 crore would be met term loans, the balance will be through internal accruals, Mishra said.

"The central and state governments have declared special benefits by exempting 16 per cent excise and 4 per cent sales tax for units set up prior to December 2004 in the Kutch district," he said.

The excise and tax exemptions would add to the company's bottomline, while the new plant at Anjar would enable the company to take advantage of the proximity to the ports at Kandla and Mundra, Mishra said.

Welspun Gujarat Stahl Rohren posted a total income of Rs 751.75 crore for the nine months between April 2003 and December 2003, against a total income of Rs 305.9 crore in the corresponding period of the previous year.