Welspun Corp, a pipeline manufacturer, as a part of its expansion strategy in the US, expects to capitalise on the rising demand for oil & gas pipelines in the region amid rising energy expenses.
US Expansion and Rising Demand for Oil & Gas Pipelines
The company has invested $300-350 million in two plants in the US as it expects its US manufacturing operations to benefit from increased drilling activity, higher global oil and gas consumption and investments in pipeline infrastructure. One plant has been commissioned, while the other will follow towards this year end.
The company already has a significant presence in India and Saudi Arabia.
As per Economic Times, Vipul Mathur, Managing Director and CEO said, “We saw that the global supply chain was getting disrupted, and we felt it would be a good idea to invest in the US and be ready when the opportunity arises.”
Welspun Corp’s total global pipe manufacturing capacity stands at around 3.5-4 million for line pipes and ductile iron pipes, with 2 million tonnes of capacity in India, and around 1 million tonnes in the US and Saudi Arabia each.
The company estimates a 30-35% market share in the US oil and gas pipe market, with increased drilling, higher energy consumption, and supply disruptions involving several traditional oil and gas suppliers expected to boost demand.
Infrastructure led growth opportunities
In Saudi Arabia, Welspun has invested around $100-150 million on an oil and gas pipe manufacturing facility. Welspun has a presence in the region through East Pipes, which was formerly known as Welspun Middle East.
The expectation is that Saudi Arabia’s infra spending under Vision 2030 will generate substantial demand for pipes, particularly as the country looks to diversify its oil evacuation routes and strengthen energy infrastructure.
Expansion into Specialised, Value added pipes
In bid to expand into other revenue sources, Welspun Corp intends to focus on specialised, value-added pipes rather than standard pipes. “We don’t want to be a commodity player. We are interested in niche, value-added segment,” Mathur said.
