Welspun Corp Ltd. expects strong demand for pipelines in the US and Saudi Arabia as governments and energy companies increase spending on infrastructure to secure oil and gas supplies, Managing Director Vipul Mathur told NDTV Profit in a television interview.
The company has an order book of about $2.5 billion, or nearly Rs 25,000 crore, across the US, Saudi Arabia and India.
Mathur said execution of this order book would be the main focus from here. "We have a reasonable amount of confidence that we should be hitting this mark," he told NDTV Profit.
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The revival in pipeline spending marks a shift from the earlier view that fossil fuels would decline quickly as renewables expanded, Mathur said. The Russia-Ukraine war and the conflict in West Asia have changed how countries assess energy security, he said. "During our lifetimes, oil and gas is going to stay for sure,” Mathur said. “A lot of countries are now working in terms of energy security."
The US remains a key market for Welspun Corp. Mathur said easier permitting, surplus gas and oil production, and strong export economics were driving new pipeline projects. He pointed to the gap between US gas prices and international prices as a reason for companies to invest in evacuation and export infrastructure.
Welspun Corp has already added capacity in the US and is commissioning a new facility. "The company is also replacing one small-diameter line pipe capacity with another. Together, these moves will add close to 400,000 tonnes of capacity in that market," Mathur said.
Demand is also being supported by data centres, which require uninterrupted power and are expected to depend on gas-fired power plants. "Gas-fired power plants will require gas. Gas will require pipeline," he said.
In Saudi Arabia, Welspun Corp is setting up two plants, including a ductile iron pipe facility for water infrastructure and a line pipe facility. Together, they will have capacity of about half a million tonnes. Mathur said Saudi demand was being driven by spending on security and energy security, including long-distance pipelines to evacuate oil and gas.
Muted Business In India
India, however, is likely to remain subdued. "India is a little muted story… I'm not seeing any exponential growth… the growth is going to be almost static," Mathur said. He added that momentum should hold at current levels. He also flagged water infrastructure as a key area of growth. "The government is very keen on developing the water infrastructure… that business will grow," he said. He said the company is "wait and watch" on India visibility for now, with more clarity expected over time.
Welspun Corp remains debt-free and cash-generating, with its US business contributing strongly to earnings and future investments.
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