Steel pipe makers head to West Asia

The West Asian region has emerged as a strategic market for the Indian steel pipe manufacturers.

For instance, Man Industries Ltd recently became the first Asian company to issue a global depository receipt at Dubai International Financial Exchange and raised Rs 157 crore (Rs 1.57 billion).

PSL, one of the largest pipe producers in the country, plans to set up a manufacturing unit in the West Asian region to cater to the local market. Again, Indian steel pipe manufacturers get a big chunk of their orders from the economically booming Gulf countries.

D Datar, vice-president, corporate, MIL, said, "Two years ago, the global demand for steel pipes was pegged at 24,000 km. In the next 10 years, it will multiply several times to 2,00,000 km. Almost 40 per cent of this demand will come from the West Asian countries."

MIL recently emerged the lowest bidder for Rs 400-crore (Rs 4 billion) pipeline project in the Middle East in an international competitive bidding.

Other than MIL, other players such as Welspun-Gujarat Stahl Rohren and Jindal Saw are focusing on this market to drive up their turnover.

The region's hydrocarbon sector is witnessing a rapid growth in the oil and gas distribution network. Moreover, there are hardly any local player to cater to this sector.

"In fact, other than the Indian players, there are hardly any pipe makers in South Asia," said an industry expert.

PSL's Atul Punj couldn't have agreed more and said, "We see the region as having a very good potential. We have done projects in Sudan, which is strategically close to the Gulf, have projects in Saudi Arabia and are bidding for another one in Kuwait."

The company's new facility in the region will have a capacity of 75,000 tonne per annum. "The construction cost will also be almost the same except for the high labour and land rates in the region," added Punj.

The facility will have a pipe mill and a coating plant. The equipment for the plant will be sourced from the company's manufacturing unit in Daman.

Interestingly, until a few years ago Indian steel pipes found little acceptance in terms of quality in the international market.

But the fact that PSL got its latest $55-million order from a Qatar company after the latter evaluated PSL's Indian facilities, is a testimony to the technolgical advance made by the company in Mumbai.

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