Welspun Corp is in focus now. The stock is buzzing on the back of a big order win — the company has won an order to supply pipelines for an onshore project in the US. Bloomberg TV India spoke to BK Mishra, MD of Welspun Corp.

The stock is up over 9 per cent. Give us a sense of what this project is going to entail. What is the time frame? What is the size of the order?

This is an order for the supply of a line pipe for a gas pipeline project in the US. It is actually in the north-east, and the size of the order is almost ₹1,400 crore. The delivery sort of requires us to probably produce these pipes anytime between January 2016 and the middle of 2017 — we have the flexibility. And, this is going to be probably coming into our sales figure — some quantity probably this year. But I think the major quantity will come in the next financial year.

How large is the kind of exposure you have to the US market right now?

We have a manufacturing facility in the US, where we produce close to 4,00,000 tonnes of pipes. This particular order would be almost 20 per cent of our total sales that we achieved probably in the last few years.

For the last three years we have done a million tonne plus and this is well beyond 215 tonnes. So it is almost like the 20 per cent of our total order that we do probably on a year-on-year basis.

How is the crude price panning out?

First and foremost the demand that we are probably servicing now or looking forward to service in the next 12-18 months, especially in the US market, are all gas driven. These are not really oil driven. Primarily, this demand is for supplying gas to Mexico from the Texan region in the US. Oil prices would certainly be impacting the demand for the smaller diameter pipelines, especially those used to gather oil from the production facility so that you hook it up to a trunk line to take it to the storage area, like in cushing, or to the refineries. So the small diameter certainly has an impact. But we have not really seen a very large impact on the large diameter as of now. It is probably a dichotomy that we have been witnessing despite low oil prices in the last six-eight months.

You have recently announced a joint venture with Wasco Energy. Can you give us some details on that?

From an investment perspective, it is about $14-15 million of investment, and it is almost like a 50-50 joint venture with Wasco. Our own capital contribution is probably going to be around $6.5-7 million. But it is actually for providing the last leg of the chain we did not have, which is basically for providing concrete wet coating for the offshore project where Welspun has been a prime player.

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