Welspun Gujarat to form JV with TMK of Russia
MR BRAJA MISHRA (right), Chief executive Officer, Welspun Gujarat Stahl Rohren Ltd, and Mr B.K. Goenka, Vice-Chairman & MD, at a press conference in Mumbai on Wednesday. — Paul Noronha
Mumbai , Oct. 4
Welspun Gujarat Stahl Rohren Ltd, the flagship company of Welspun Group, signed an MoU with Volzhsky Pipe Plant (VTZ), a member of the TMK Group of Russia, to form a joint venture.
Welspun will hold 40 per cent stake in the joint venture with the rest held by TMK. The new outfit will be expanding the manufacturing capacities of VTZ’s plant in Russia for pipe products required by the oil and gas sector.
Supplying Equipment
"We will be investing around $150 million in the joint venture to set up additional capacities at the VTZ site.
The deal will provide for the transfer of TMK’s large diameter (LD) pipe business with an annual capacity of five lakh tonnes to the site of the Volzhsky pipe plant, apart from installation of hi-tech LSAW pipe welding line, bending facility and external and internal coating lines," Mr B.K. Goenka, Vice-Chairman, WGSRL, said.
The deal does not involve any cash transaction for Welspun. Instead, the Indian company would be supplying equipment worth $150 million to the new venture.
In return, it would get the 40 per cent equity in the new company.
LD pipes are used in construction of oil and gas trunk pipelines. In addition to Russia, TMK sells line pipes to Kazakhstan, Uzbekistan and other countries of the CIS and Caspian region.
Mr Goenka said the deal would consolidate Welspun’s global presence.
According to Mr Konstantin Semerikov, TMK’s General Director, the joint venture would enable the company to expand its presence in the pipeline market not only in Russia and the CIS, but also beyond.
Shares of Welspun Gujarat ended at Rs 72.80, down by 1.82 per cent on the BSE on Wednesday.
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