Welspun Corp, which is the flagship arm of the $3 billion Welspun Group making steel pipes for the oil and gas sector, will hold 51 per cent in the joint venture while the Malaysian partner Wasco, which is a fully-owned subsidiary of WahSeong Corporation, will own the rest, Welspun Group said in a statement.
The joint venture will augment Welspun Corp's, which is one of world's largest large diameter steel pipes makers, offering to the market duly supported by Wasco's strong credentials in concrete weight coating business globally, the statement added.
CWC is a plant-applied coating that provides negative buoyancy for offshore pipelines, river/road crossing applications. Concrete coating protects offshore pipelines from external corrosion at water crossings or in swamps along with mechanical protection at highways and railroad crossings. The capital expenditure for the project forms a part of the planned capex of around Rs 200 crore for the current fiscal, the Mumbai-based company added.
The joint venture will provide Welspun with strategic advantage of becoming a one-stop solution for steel pipe coating market.
The JV will also help both partners to reduce the time to market, apart from helping Wasco expand its footprint across the subcontinent.
The CWC sector has traditionally been limited to a few domestic projects but of late the government has increased investments in this area and offshore projects of 600-700 km are expected to come up over the next three-four years.
Similarly, the demand is also rising in overseas markets. The BK Goenka-led Welspun Corp has manufacturing units in India, the US and Saudi Arabia for longitudinal (LSAW), spiral (HSAW) and HFERW/HFIW pipes. It also offers a range of high grade line pipes for carrying oil and gas apart from providing coating, bending and double jointing facilities.
Wasco Energy has over 50 years of experience in coating for off-shore line pipes and has facilities across Asia, Europe and the US. It counts Chevron, Shell, Petronas, BP, Exxon, and Statoil among its clients.