Welspun to acquire 40 per cent stake in JV with TMK

Mumbai, Oct 4 (UNI) Welspun-Gujarat Stahl Rohren today announced it has entered into a 40:60 joint venture with Russia's largest manufacturer and exporter of pipe products in oil and gas sector, TMK Group.

The agreement provides for the transfer of TMK's LD business that comprises of about 5,00,000 tonnes of LD (Spiral Facility) and installation of hi-tech LSAW pipe welding line, bending facility and external and internal coating lines to the Volzhsky Pipe Plant (VTZ) in Russia.

Briefing the media here today, the company Vice Chairman and MD, B K Goenka said, ''While TMK would be bringing 580 million USD for this JV initially, their investment will go up to 1 billion USD by the end of 2008.'' Forty per cent of the TMK's initial investment amount will come to us with immediate effect, he added.

The enhancement in the capacity of Volzhsky unit will be used for the production of Longitudinal Submerged Arc Welded (LSAW) pipes with 20'' to 56'' diameter with one seam, up to 40 millimeters wall thickness and up to 18 meters length.

The company CEO&Member of Board, Braja Mishra, said that the turnover of Welspun Gujarat Stahl Rohren Ltd for the current fiscal was projected to be 700 million USD, compared to 450 million USD it had during the previous year. He said that his company was fast on its way to become a one billion USD company in near future.

Welspun Gujarat reported net sales of 18.3 billion rupees during last fiscal that ended in March this year. The company is placed at No 3 in its respective field but the joint venture will help it become No 1 by the end of 2007, he claimed.

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