The Hindu Business Line : PSL to expand Vizag pipe mills capacity by 1.5 lakh tonnes

The company is raising $5 million or around Rs 25 crore through allotment of 9 lakh shares of Rs 10 each at Rs 252 per share to IFC to fund the expansion plan.

Kolkata , Dec. 27

PSL Ltd plans to expand its steel pipe making capacity by 1.5 lakh tonne per annum (tpa) at its Vizag plant.

Mr Ashok Punj, Managing Director, told Business Line today that the plan is to enhance the capacity of the two mills by 75,000 tpa each at Vizag.

"The expansion plan has been undertaken owing to unfolding market in Orissa, particularly in steel sector, and Andhra Pradesh for oil & gas related activity in the Kakinada region," Mr Punj added. The project is expected to be completed by March 2007.

The company is also planning to set up a unit abroad to cater to the overseas markets. "The unit is likely to be located in the West Asian region. However, plan for the overseas project including site selection would be finalised in the next fiscal," the PSL Managing Director added.

The company is currently executing orders from Doha and has been bearing additional cost on logistics by serving them from the country.

The company is raising $5 million or around Rs 25 crore through allotment of 9 lakh shares of Rs 10 each at Rs 252 per share to IFC to fund the expansion plan.

Meanwhile, the company has bagged an order worth Rs 240 crore from GAIL for Dahej-Uran pipeline project through a competitive bidding process. This represents over half of the total order size of the Dahej-Uran project of Rs 405 crore. The order is for 30 inch API 5l x 70 grade pipes of 197 km with three layers of external and internal coatings.

Mr Punj said that the company expects to complete the supply before the scheduled timeframe of eight months from now. With this order, the dynamic order book position of the company has reached around Rs 1,250 crore.

The current softening in steel prices would enable the company to maintain a "reasonable" profit margin, he indicated. Though the production for the Dahej-Uran pipe would begin in the fourth quarter of this fiscal, the effect of it in the balance sheet could be felt in the next financial year beginning from April 2006.