Welspun to form 40% JV Russia's TMK Group
VTZ is a part of the Russian TMK Group, the largest manufacturer and exporter of pipe products in oil and gas sector.
By PTI |
MUMBAI: Welspun Gujarat Stahl Rohren Ltd, the flagship company of USD 1-billion Welspun group, on Wednesday signed a MoU with Volzhsky Pipe Plant (VTZ) to form a joint venture company in which it will hold a 40 per cent stake.
VTZ is a part of the Russian TMK Group, the largest manufacturer and exporter of pipe products in oil and gas sector.
"Welspun will be investing close to USD 150 million in the JV to set up additional capacities at the VTZ site and the JV aims at clocking a turnover of USD 1-billion by 2009 fiscal," Welspun's Vice Chairman and MD B K Goenka told reporters here.
The transaction will provide transfer of TMK's LD business and installation of hi-tech LSAW pipe welding line, bending facility and external and internal coating lines on VTZ's sites.
LD pipes are used in construction of oil and gas trunk pipelines. In additiona to Russia, TMK also sells line pipes to Kazakhstan, Uzbekistan and other countries of the CIS and Caspian regions.
Goenka added that the JV would give Welspun an opportunity to cater to the growing need of the oil and gas industry in Russia and the CIS countries.
The JV will look at marketing the products globally and will also enter into tie-ups for the same, he said.
After the commissioning of LSAW that is scheduled for December 2007, the JV's total capacity would be scaled up to one million tonnes per annum of large diameter welded pipes.
In 2005, the LD business of TMK clocked a turnover of USD 587 million and EBIDTA of USD 76 million.
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