The Hindu Business Line : PSL bags orders worth Rs 380 cr from Sharjah, Malaysia; plans China venture

Pipeline
Rolled out first pipe from its new $16-m Sharjah facility.
Petronas Malaysia orders at $43 m; 3 orders in Sharjah worth $50 m.
In Sharjah, co will also provide coating services.

Mumbai June 20 Mumbai-based PSL Ltd, a Rs 1,500-crore pipe manufacturing company, has bagged orders worth Rs 380 crore from Sharjah and Malaysia. The company on Saturday rolled out the first pipe from its newly inaugurated $16-million Sharjah facility.

"Petronas Malaysia has contracted for $43 million and in Sharjah we have three orders worth $50 million. Pipes for Petronas will be supplied from the Kandla unit in Gujarat while for Sharjah the supply will partially be from the new unit there," said Mr Ashok Punj.

Petronas will use PSL pipes for its Peninsular Gas Utilisation Project - a Malaysian internal gas network. The order will be executed by March 2008.

Apart from supplying pipes, the company's unit in Hamriyah Free Trade Zone, Sharjah, will provide coating services both for onshore and off-shore pipelines and cater to the UAE, Saudi Arabia, Oman, Qatar and Kuwait.

The Sharjah facility has an installed capacity of 75,000 tonnes per annum of spiral pipes with facilities for three-layered polyethylene (3LPE) coating, internal liquid epoxy coating, and concrete weight-coating.

The company is also planning a China venture. "We are in discussion with two separate companies in China and will pick the best among them. The investment will be to the order of $50-60 million and we are undecided on the equity holding pattern," Mr Punj said.

The company has received various concessions for its Mississippi venture under the Katrina Rehabilitation Package (KRP). PSL, along with the A&L Group of US, is setting up a pipe manufacturing unit on 156 acres at the Bay St. Louis at a cost of $55 million.

The concession package offers a 99-year lease for land at $1 a year, tax exemption of $10 million and tax-free bond for 20 years worth $50 million.

"We will be able to raise funds from the market at lower interest rate through the tax-free bond. Of the $55 million US venture, we will be investing $20 million for holding 75 per cent equity, A&L will invest $5 million for the remaining equity and $30 million will deployed from the tax-free bonds. The remaining $20 million from the bond will be utilised for working capital and other expenses," Mr Punj said.

The company intends importing steel from China and Korea as prices in the US were on the higher side.