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Thursday, Nov 27, 2003

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Welspun-Gujarat to hike Dahej unit capacity

Archana Chaudhary

Mumbai , Nov. 26

WELSPUN-Gujarat Stahl Rohren Ltd (WGSRL), the Rs 384-crore submerged arc welded (SAW) pipes manufacturer, plans to expand capacity of its Dahej unit through debottlenecking.

The company will invest close to Rs 25 crore in debottlenecking its existing plant, which it currently operates at 70 per cent capacity. WGSRL anticipates a rise in demand for SAW pipes within and outside the country.

WGSRL is also awaiting a nod from the Gujarat Government for developing a jetty at Dahej at a cost of Rs 5 crore, the company CEO, Mr Braja Mishra, told Business Line.

WGSRL is currently executing a Rs 390-crore order, bagged in May this year, for making SAW pipes for GAIL's Dahej Vijaipur Pipeline Project (HBJ upgradation).

In addition, the company's joint venture Eupec Welspun Pipe Coating India Ltd has also received Rs 40-crore order for the same project to coat the 82.5-km pipeline.

WGSRL is also working on two projects for Iranian companies worth $102 million (approximately Rs 468 crore). "We are targeting a number of projects which will form a part of the national gas grid announced by GAIL," Mr Mishra said.

The company is also looking at projects abroad especially in Russia and Iran, he said.

WGSRL has the capacity to manufacture pipes around 1,000 km annually at its Dahej unit. The company can make pipes of diameter ranging between 16 inches to 60 inches.

The demand for SAW pipes in the Oil and Gas sector is estimated around 17,000 km over the next five years. Of this, demand from the gas sector is expected to be 13,000 km. As for export markets, the demand is estimated to be 52,000 km over the next five years.

Pipelines provide a cheaper alternative to transport oil and gas with costs as low as Rs 1.30/km. According to analysts, this works out 50 per cent cheaper than rail and 70 per cent cheaper than road transport.

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