Welspun prefers EPC to 'Greek and Latin' E&P

Vol 16, PW 6 (04 Oct 12) People & Policy

Once known for making towels, BSE-listed Welspun Group is not the least bit woolly-minded about its future.

Akhil Jindal, director group finance and strategy, is clear that Welspun’s key thrust in coming years will be its core pipe manufacturing and offshore EPC business for the oil and gas as well as other sectors, not E&P. Jindal forecasts Welspun’s current revenues of around Rs15,000cr ($3bn) will more than double to Rs35,000cr ($7bn) by 2016.

Of this, textiles and pipe manufacturing will cover Rs25,000cr ($4.7bn) but the rest will be mainly from EPC contracts. Welspun holds a 35% stake in EPC contractor Leighton Welspun - fast emerging as one of the most aggressive bidders for offshore and onshore construction projects in India.

Leighton Welspun won a $252m ONGC contract to replace ageing Mumbai High pipelines this May and is also locked in battle with L&T to win ONGC’s offshore Heera Redevelopment (HRP-II) three-well platform project. “We will continue to bid for high-end infrastructure projects and focus on producing steel pipes,” says Jindal.

“We have orders for 1.3m tonnes of pipes against 850,000 tonnes last year. This is the largest amount in our history.

” Welspun wants to go further and win orders equivalent to its total installed pipe manufacturing capacity of 2.2m t/y across factories in Gujarat, the US and Saudi Arabia. Jindal is less upbeat about Welspun’s E&P joint venture with Gujarat-based Adani Group, Adani Welspun, which has three blocks in India and two in Thailand.

“We don’t see any major thrust there,” he says. “At Welspun we have a manufacturing mindset.

You need a different mindset for E&P. To us E&P is like Greek and Latin.

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