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On The Path of Global Leadership… WELSPUN CITY, ANJAR May 2011 Page 1
On The Path of Global Leadership… WELSPUN CITY, ANJAR May 2011 Page 1

On The Path of Global Leadership…

On The Path of Global Leadership… WELSPUN CITY, ANJAR May 2011 Page 1

WELSPUN CITY, ANJAR

Disclaimer

Disclaimer Certain statements made in this presentation may not be based on historical information or facts

Certain statements made in this presentation may not be based on historical information or facts and may be “forward looking statements,” including those relating to general business plans and strategy of Welspun Corp. Limited (“WCL"), its future outlook and growth prospects, and future developments in its businesses and its competitive and regulatory environment. Actual results may differ materially from these forward-looking statements due to a number of factors, inter alia including future changes or developments in WCL's business, its competitive environment, its ability

to implement its strategies and initiatives and respond to technological changes and political, economic, regulatory and social conditions in India.

This presentation does not constitute a prospectus, offering circular or offering memorandum or an offer invitation, or a solicitation of any offer, to purchase or sell, any shares of WCL and should not be considered or construed in any manner whatsoever as a recommendation that any person should subscribe for or purchase any of WCL's shares. Neither this presentation nor any other documentation or information (or any part thereof) delivered or supplied under or in relation thereto shall be deemed to constitute an offer of or an invitation by or on behalf of WCL to subscribe for or purchase any of its shares.

WCL, as such, makes no representation or warranty, express or implied, as to, and does not accept any responsibility or liability with respect to, the fairness, accuracy, completeness or correctness of any information or opinions contained herein. The information contained in this presentation, unless otherwise specified is only current as of the date of this presentation. WCL assumes no responsibility to publicly amend, modify or revise any forward looking statements contained herein, on the basis of any subsequent development, information or events, or otherwise. Unless otherwise stated in this document, the information contained herein is based on management information and estimates. The information contained herein is subject to change without notice and past performance is not indicative of future results. WCL may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such revision or changes. This presentation may not be copied and disseminated in any manner.

THE INFORMATION PRESENTED HERE IS NOT AN OFFER INVITATION OR SOLICITATION OF ANY OFFER TO PURCHASE OR SELL ANY EQUITY SHARES OR ANY OTHER SECURITY OF WCL.

This presentation is not for publication or distribution, directly or indirectly, in or into the United States, Canada or Japan.

These materials are not an offer or solicitation of any offer of securities for purchase or sale in or into the United States, Canada or Japan.

Welspun Group

Welspun Group Brief Synopsis • One of the fastest emerging global groups, with multiple countries strategy

Brief Synopsis

One of the fastest emerging global groups, with multiple countries strategy and manufacturing facilities

Group companies enjoys market leadership positions :

Top 2 Large Diameter Pipe Company in World - Financial Times, UK

Global Recognitions

Company in World - Financial Times, UK Global Recognitions Welspun Corp Star Performer Award for the

Welspun Corp

Star Performer Award for the year 2008-09 All India Export Excellence Awards - EEPC 2010

year 2008-09 All India Export Excellence Awards - EEPC 2010 Welspun Corp Economic Times “Emerging Company

Welspun Corp

Economic Times “Emerging Company of the Year Award” for Corporate Excellence - 2008

Globally renowned towel company

Excellence - 2008 • Globally renowned towel company Welspun India Gold Trophy for “Best Exporter” –

Welspun India

Gold Trophy for “Best Exporter” – Textile Promotion Council (TEXPROCIL) 2008

Global relationship with marquee clients including Fortune 100 companies like Exxon Mobil (Golden Pass Pipeline), Chevron, Shell, Bechtel, Wal- Mart, Target etc

Equity investment by renowned investors like ICICI Life, Temasek (Govt. of Singapore), 3i (UK), Genesis (UK)

Excellent relationship with domestic and international lenders

relationship with domestic and international lenders Welspun Corp 2nd Largest (Large Diameter) Line Pipe

Welspun Corp

2nd Largest (Large Diameter) Line Pipe Manufacturer in the World - Financial Times UK - 2008

Pipe Manufacturer in the World - Financial Times UK - 2008 Welspun India Supplier of the

Welspun India

Supplier of the Year Award J C Penny - 2008

Key Markets

80% export mainly to US, Europe, Latin America, Middle East etc

International Setup

Christy, UK

Sorema, Portugal

Textile facility in Mexico

Office in Manhattan-NY, Huston-US

Pipe facility in Arkansas, US

Pipe Facility in Saudi Arabia (In process)

Arkansas, US • Pipe Facility in Saudi Arabia (In process) Welspun India Earth Care Awards –

Welspun India

Earth Care Awards Times of India and Jindal Steel Ltd - 2008

Care Awards – Times of India and Jindal Steel Ltd - 2008 Welspun India Sustainability Award

Welspun India

Sustainability Award - Walmart - 2007

- 2008 Welspun India Sustainability Award - Walmart - 2007 Welspun Corp One of the fastest

Welspun Corp

One of the fastest growing large companies in India Business Today - 2007

growing large companies in India – Business Today - 2007 Welspun India 4 Gold Trophies for

Welspun India

4 Gold Trophies for Outstanding Export Performance Textile Promotion Council (TEXPROCIL) - 2007

WCL An Introduction

WCL, flagship company of Welspun Group, is one of the largest pipe manufacturing company in the world

Incorporated in 1995, the Company offers a complete range of high grade line pipes ranging from ½ inch to 100 inch

used inter alia for transmission of oil & gas

Partner of Choice for more than 50 Oil & Gas Giants across the globe with a geographically diverse client base including Chevron, Exxon Mobil (Golden Pass Pipeline), Saudi Aramco, British Gas , Kinder Morgan etc

International footprint

Accredited with ISO 9001, ISO 14001 and OHSAS 18001 certifications

Strong order book of U.S. $ 1.5 Bn

Shareholding Pattern, as on Mar. 31, 2010

41.07%

35.77%

Bn Shareholding Pattern, as on Mar. 31, 2010 41.07% 35.77% 23.10% 0.06% Promoter Mutual Funds FII

23.10%

0.06%

PromoterPattern, as on Mar. 31, 2010 41.07% 35.77% 23.10% 0.06% Mutual Funds FII Public, Banks and

Mutual Fundsas on Mar. 31, 2010 41.07% 35.77% 23.10% 0.06% Promoter FII Public, Banks and Financial Institutions

FII31, 2010 41.07% 35.77% 23.10% 0.06% Promoter Mutual Funds Public, Banks and Financial Institutions Note 1.

Public, Banks and Financial2010 41.07% 35.77% 23.10% 0.06% Promoter Mutual Funds FII Institutions Note 1. Net Debt at INR

Institutions

Note

1. Net Debt at INR 7,349 MM as on 31 Mar, 2010 2. Average exchange rate of US$1 = Rs 43.51 from 01-Apr-06 till 31-Mar-07

May 2011

of US$1 = Rs 43.51 from 01-Apr-06 till 31-Mar-07 May 2011 Steady Growth in Revenues and

Steady Growth in Revenues and Profit

Consolidated Total Revenues

(INR

MM) CAGR (07-10): 40%

80,000

60,000

40,000

20,000

0

73,503

57,395

58,604

26,834

39,945

26,834 3 9 , 9 4 5
26,834 3 9 , 9 4 5
26,834 3 9 , 9 4 5
26,834 3 9 , 9 4 5
26,834 3 9 , 9 4 5
26,834 3 9 , 9 4 5
26,834 3 9 , 9 4 5
26,834 3 9 , 9 4 5
26,834 3 9 , 9 4 5

US $ MM

2006-07

617

(2)

2007-08

991

(3)

2008-09

1,250

(4)

2009-10

1,637

(5)

9M 2010-11

1311 (6)

Gross Profit

(INR MM)

CAGR (07-10): 62%

12,500

9,500

6,500

3,500

500

11,301

9,447

5,845

4,768

5 , 8 4 5 4,768 2,666
5 , 8 4 5 4,768 2,666

2,666

2,666
2,666
2,666
2,666
2,666

US $ MM

2006-07

61

(2)

2007-08

145

(3)

2008-09

(4)

104

2009-10

252

(5)

9M 2010-11

211

(6)

Summary Market Statistics

 

As of May 09, 2011

INR MM

US$ MM (6)

Share Price (INR/ US$)

189.05

4.22

Market Capitalization

38,693

865

Enterprise Value (1)

46,042

1,029

Note

3. Average exchange rate of US$1 = Rs.40.29 from 01-Apr-07 till 31-Mar-08

4. Average exchange rate of US$1 = Rs.45.91 from 01-Apr-08 till 31-Mar-09

5. Average exchange rate of US$1 = Rs.44.90 from 01-Apr-09 till 31-Mar-10

6. Exchange rate of US$1 = Rs. 44.7300 on May 09 2011

Page 4

Facilities Corporate StructureProductsManufacturing

WCL An Introduction

StructureProductsManufacturing WCL – An Introduction Promoters (41.07%) W e l s p u n C o

Promoters (41.07%)

Welspun Corp Limited (WCL)

Public and Others (58.93%)

i t e d ( W C L ) Public and Others (58.93%) WCL – 100%

WCL 100%

WCL – 100%   WCL – 100%
 
WCL – 100%

WCL 100%

Welspun Pipes Inc, USA

Welspun Plate and Coil Mill Division Manufacturer of state-of-art Plates and Coils

 

Welspun Natural Resources Pvt. Ltd. Oil & Gas Exploration Activities

Welspun Energy Ltd Solar & Renewable Energy

1 0 0 % B e n e f i c i a l I

100% Beneficial Interest

1 0 0 % B e n e f i c i a l I n

100% Beneficial Interest

 
1 0 0 % B e n e f i c i a l I n

Welspun Tubular LLC

 

Welspun Infratech Ltd.

Manufacturer of Pipes,

Welspun Global Trade LLC

Infrastructure

 

Coating and Double jointing

 

(Welspun Projects ltd)

 

Pipes

 

- Longitudinal (LSAW)

Plates & Coils

Oil and Gas

Renewable Energy &

 

- Helical / Spiral (HSAW)

 

Infrastructure

- Electrical (ERW)

 

Anjar & Dahej Pipe Mills

Premier integrated set-up for manufacturing welded

pipes. Installed state-of-the-art-technology and is completely geared to meet the requirements of the global industry.

The Longitudinal Pipes division (LSAW) has a capacity of 350,000 metric ton per annum.

The Spiral Pipes division (HSAW) has a capacity of 550,000 metric ton per annum.

The ERW Pipes division has a capacity of 200,000 metric ton per annum.

It also has Coating capabilities

Little Rock , Arkansas, USA

With manufacturing facility on a 740-acre site adjacent to the Little Rock Port Authority, the $150 million facility commissioned in February 2009.

This API certified facility currently employs more than 300 people and is capable of producing 350,000 tons of HSAW pipes annually for the use of the oil and gas industry.

The facility can produce Pipes from 24 to 60 inches as outer diameter; 6 mm to 25 mm as wall thickness and length of 40 -80ft.

It also has Coating and Double Jointing capabilities and is a one-stop-solution provider to Welspun's

valued customers

May 2011

Dammam, Saudi Arabia

Manufacturing facility of 300,000 tons of

HSAW pipes annually for the use of the oil and gas industry.

Plate-cum-Coil Mill

This backward integration at Anjar, Kutch,

Gujarat, India has annual capacity to produce 1.5 million tones of Plate and Coil with plates (up to 4.5 meters wide, 140 mm thickness) and Coil (up to 2.8 meters wide, 25 mm thickness) with strength of 120,000 PSI.

This mill can cater to high end specialized product requirement of Line Pipe Industry (API grades), Shipping, Heavy construction, Bridges, Boiler plates, Wind blades etc.

Page 5

Growth at Infinity Growth Revenue Rs. 58,604 mn. 9M FY 2010-11 - 100,000 tons HSAW
Growth at Infinity
Growth
Revenue
Rs. 58,604 mn.
9M FY 2010-11
- 100,000 tons HSAW Plant in Karnataka
operational
Investment in Middle East with HSAW
capacity of 300,000 MT operational
- 350,000 MT pipe capacity addition under
implementation in India
Rs. 73,503 mn.
2010
Foray into infra & pipe laying for O&G and
water through MSK Projects India Ltd.
Rs. 57,395 mn.
2009
350,000 tons US Spiral Mill commissioned
Rs. 39,945 mn.
2008
150,000 MT Spiral Mill commissioned
Commissioning of Plate Mill & 43 MW Power Plant
Rs. 26,834 mn.
2007
Anjar Facility , A Key Contributor
Approvals from O&G majors for new facility
Rs. 18,298 mn.
2006
Rs. 10,385 mn.
2005
New Capacity at Anjar, Gujarat for HSAW & Coating
Rs. 8,277 mn.
2004
Merger of coating J.V. with WCL
Rs. 2,565 mn.
2001
Pipe Coating in JV with EUPEC, Germany
Dahej, Gujarat
Rs. 585 mn.
2000
LSAW, Dahej, Gujarat
Rs. 180 mn.
1998 HSAW, Dahej, Gujarat
Incorporated
1995
Embarked on a Growth Journey
8

Welspun Corp Limited: Strong Value & Growth Story

Welspun Corp Limited: Strong Value & Growth Story 1 Strong Industry Fundamentals 2 Robust Business
1
1

Strong Industry Fundamentals

2
2

Robust Business Fundamentals & Healthy Order Book

3
3

Global Footprint & Pre Approved with Oil & Gas Majors

4
4

Strong Management Team with Proven Execution Capabilities

5
5

Exponential Growth in Revenues & Margins

1. Strong Industry Fundamentals

Relatively Few Major Players

Industry is highly capital intensive with high barriers to entry

Niche markets exist which have been effectively exploited by Welspun

Reliability and reputation for excellence are paramount, as pipelines are used for critical applications such as oil and gas transport

Prospects for the industry brightening with oil prices gaining strength

Global Demand

Business potential of around USD 69 Bn (3) - Simdex

Replacement of the old pipelines in US

New Gas is required to replace annual decline in existing gas supplies in North America, which shall enhance demand for new pipelines

Shale Gas gradually increase its share in total gas requirement in US

Alaska Pipeline project -another boost to the demand for pipes

Domestic Demand

Low pipeline penetration in India provides huge potential

Natural Gas as a source of energy is growing at a rapid pace and shall grow the demand for pipelines

Formation of the Petroleum & Natural Gas Regulatory Board (PNGRB) to give boost to trunk pipelines

City Gas Distribution set to take-off

Liquefied Natural Gas (LNG) terminals projects to

enhance pipe demand

Water Infrastructure projects: A Key driver for HSAW pipes

Source: Industry Sources

International Demand Outlook till 2016

 

Business

 

Total

Potential

Length

Quantity

(US$

Region

Projects

Region Projects (kms) (MMT) (1) Bn) (2)

(kms)

Region Projects (kms) (MMT) (1) Bn) (2)

(MMT) (1)

(MMT) (1)

Bn) (2)

North America

185

North America 185 64,578 13 15

64,578

North America 185 64,578 13 15

13

13

15

Latin America

38

Latin America 38 28,596 6 7

28,596

Latin America 38 28,596 6 7

6

6

7

Europe

127

Europe 127 42,208 8 10

42,208

Europe 127 42,208 8 10

8

8

10

Africa

50

Africa 50 23,725 5 6

23,725

Africa 50 23,725 5 6

5

5

6

Middle East

120

Middle East 120 39,346 8 9

39,346

Middle East 120 39,346 8 9

8

8

9

Asia

126

Asia 126 69,278 14 17

69,278

Asia 126 69,278 14 17

14

14

17

Australasia

61

17,764

4

4

Total 707 285,495 57 69 Source: Simdex, US, Jan 2011 Update
Total
707 285,495
57
69
Source: Simdex, US, Jan 2011 Update

Domestic Market Size

Business

Total Length Quantity Potential (1) Company (kms) (KMT) (US$ Bn) (2) GAIL 6,663 1,332 1.6
Total Length
Quantity
Potential
(1)
Company
(kms)
(KMT)
(US$ Bn) (2)
GAIL
6,663
1,332
1.6
RGTIL
2,750
550
0.7
GSPL
5,675
1,135
1.4
Total
15,088
3,017
3.7

Source: GAIL India Ltd Presentation Aug 10 / Company data

Welspun is well placed, with global clients and state-of- the-art technology, to capitalise on this opportunity

Note 1. Conversion rate of 200 tonnes / km

2. Conversion rate of $1,200 / ton

3. As illustrated in the adjoining tables

of $1,200 / ton 3. As illustrated in the adjoining tables Share of Expected Demand Until

Share of Expected Demand

Until 2016

Australasia

9%

North America

26%
26%

Asia

18%

Latin America

5%

Middle East

17%

Europe

Africa

18%

7%

Source: Simdex, US, Jan 2011 Update

Proposed pipeline of GAIL

Phase I by 2011 (Under Execution)

 

Length

Cost

Add. Cap

Name of Pipeline

Name of Pipeline

(Kms)

(Kms)

(Rs Cr)

(Rs Cr)

(MMSCMD)

DVPL Ph -II / Vijaypur Dadri

1,115

1,115

10,830

10,830

80

Dadri - Bawana - Nangal

646

646

2,349

2,349

31

Chainsa - Jhajjhar - Hissar

349

1,259

35

Sub Total

2,110
2,110

14,438

146
146

Phase II by 2012 (Approved in 2009)

Phase II by 2012 (Approved in 2009)
Phase II by 2012 (Approved in 2009)
Phase II by 2012 (Approved in 2009)

Name of Pipeline

Name of Pipeline

Length

Cost

Add. Cap

(Kms)

(Kms)

(Rs Cr)

(Rs Cr)

(MMSCMD)

Jagdishpur - Haldia

2,050

2,050

7,596

7,596

32

Dabhol - Bangalore

Dabhol - Bangalore

1,389

1,389

5,014

5,014

16

Kochi - Mangalore - Bangalore

1,114

3,263

16

Sub Total

Grand Total

4,553 6,663 15,873 64 30,311 210
4,553 6,663 15,873 64 30,311 210
4,553 6,663
4,553
6,663

15,873

64

30,311

210

Source

GAIL India Investor Presentation , August 2010

2. Robust Business Fundamentals & Healthy Order Book

2. Robust Business Fundamentals & Healthy Order Book Strongly Positioned • Welspun serves several marquee customers

Strongly Positioned

Welspun serves several marquee customers like Exxon Mobil (Golden Pass Pipeline), Kinder Morgan, Ruby

(El Paso) and GAIL because of its

specialized offerings

It has long term contracts with giants like TransCanada; and framework agreements with Chevron, Saudi Aramco, etc

Successfully expanded into highly

competitive North and Latin America to

take advantage of higher realizations

Current Capacities ‘000 MT pa 2,200 1,800 1,400 1,000 1,850 1,500 1,300 600 350 200
Current Capacities
‘000 MT pa
2,200
1,800
1,400
1,000
1,850
1,500
1,300
600
350
200
350
200

(200)

1,000 1,850 1,500 1,300 600 350 200 350 200 (200) LSAW HSAW ERW Total Plate Mill

LSAW

HSAW

ERW

Total

Plate Mill

 

Pipe

LSAW HSAW ERW Total Plate Mill   Pipe Existing Capacities New Capacities Going Strength to

Existing Capacities

Total Plate Mill   Pipe Existing Capacities New Capacities Going Strength to Strength FY07 FY09 FY10

New Capacities

Going Strength to Strength

FY07 FY09 FY10 Oil & Gas Co 36 >50 >50 Approval Production 501 717 814
FY07
FY09
FY10
Oil & Gas Co
36
>50
>50
Approval
Production
501
717
814
( '000 MT)
Revenue
571
1,250
1,637
(US$
MM)
PAT
36
47
136
(US$ MM)
Glob
No. of countries
Global
Global
al
Export Market
67%
76%
77%
Production Growth ‘000 MT 900 814 718 800 670 720 700 600 501 500 377
Production Growth
‘000 MT
900
814
718
800
670
720
700
600
501
500
377
384 373
400
300
193
200
100
0
FY06
FY07
FY08
FY09
FY10
9M FY11
Pipes
Plates

Export Market Gaining Dominance

100%

80%

60%

40%

20%

0%

33% 17% 24% 23%
33% 17% 24% 23%

33%

33% 17% 24% 23%

17%

24%

23%

33% 17% 24% 23%
33% 17% 24% 23%
83% 77% 76% 67%
83%
77%
76%
67%
33% 17% 24% 23% 83% 77% 76% 67%
33% 17% 24% 23% 83% 77% 76% 67%
33% 17% 24% 23% 83% 77% 76% 67%
FY07 Export
FY07
Export

FY08

Domestic

FY09

FY10

2. Robust Business Fundamentals & Healthy Order Book

2. Robust Business Fundamentals & Healthy Order Book Raw Steel Process Steel Slab (API Grade) Selling

Raw Steel

Business Fundamentals & Healthy Order Book Raw Steel Process Steel Slab (API Grade) Selling Price (

Process

Fundamentals & Healthy Order Book Raw Steel Process Steel Slab (API Grade) Selling Price ( 1

Steel Slab

(API Grade)

Order Book Raw Steel Process Steel Slab (API Grade) Selling Price ( 1 ) : $

Selling Price (1) :

$ 850- 900 /ton.

Process

Process Steel Plates/ Coils (API Grade) Selling Price ( 1 ) : $ 1,000-1,050 /ton .

Steel Plates/

Coils (API Grade)

Process Steel Plates/ Coils (API Grade) Selling Price ( 1 ) : $ 1,000-1,050 /ton .
Process Steel Plates/ Coils (API Grade) Selling Price ( 1 ) : $ 1,000-1,050 /ton .

Selling Price (1) :

$ 1,000-1,050 /ton.

Process

Selling Price ( 1 ) : $ 1,000-1,050 /ton . Process Pipes (API Grade for O&G)

Pipes

(API Grade for O&G)

( 1 ) : $ 1,000-1,050 /ton . Process Pipes (API Grade for O&G) Selling Price

Selling Price (1) :

$ 1,300-1,400/ton.

Welpsun’s Value Chain (from Slabs to Pipes)
Welpsun’s Value Chain (from Slabs to Pipes)

2. Robust Business Fundamentals & Healthy Order Book

2. Robust Business Fundamentals & Healthy Order Book Order Book • Orders Booked during FY 09

Order Book

Orders Booked during FY 09

-

$ 1.6 bn

Orders at the beginning of FY 10

-

$ 1.6 bn

Orders Booked during FY 10

-

$ 1.3 bn

Orders executed during FY 10

-

$ 1.6 bn

Orders at the beginning of FY 11

-

$ 1.4 bn

Orders Booked during FY 11 (YTD)

-

$ 1.4 bn

Orders executed during 9M FY 10

-

$ 1.3 bn

Current Orders in Hand (938 k Tonnes)

-

$ 1.5 bn

Raw material tied up for all outstanding orders

Majority of the shipping finalized

Current Order Book Geographical Distribution by Volume

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

86% 14%
86%
14%

Export

Domestic

Some of the Top Clients for Pipes Client

Country

Enterprise

USA

Transcanada Pipe Line Limited

Canada

Gas Authority of India Ltd.

India

Indian Oil Corporation of India

India

Saudi Aramco

Middle-East

3. Global Footprint & Pre Approved with Oil & Gas Majors

Footprint & Pre Approved with Oil & Gas Majors Global Market Expansion Iraq Iraq Saudi Arabia

Global Market Expansion

Iraq Iraq Saudi Arabia Saudi Arabia Spain Spain Russia Russia Canada Canada Venezuela Venezuela US
Iraq
Iraq
Saudi Arabia
Saudi Arabia
Spain
Spain
Russia
Russia
Canada
Canada
Venezuela
Venezuela
US (Trader Mkt.)
US (Trader Mkt.)
China
China
Tunisia
Tunisia
US (Projects)
US (Projects)
Algeria
Algeria
Bangladesh
Bangladesh
Libya
Libya
Mexico
Mexico
Malaysia
Malaysia
Oman
Oman
Egypt
Egypt
Peru
Qatar
Qatar
Bolivia
Indonesia
Indonesia
Sudan
Sudan
Columbia
Columbia
Year 2000–2001
YearYear 20002000––20012001
YearYear 20012001––20022002
Year 2001–2002
Year 2002–2003
Year 2002–2003
Year 2003–2004
Year 2003–2004
YearYear 20042004––20052005
Year 2004–2005
Year 2005–2006
Year 2005–2006
YearYear 20062006––20072007
Year 2006–2007
YearYear 20072007––20082008
Year 2007–2008
Year 2008–2009
YearYear 20082008––20092009
Year 2009
2010
World’s largest diameter steel pipe producers (1) 2007 output (million tonnes) Salzgitter/Europipe* (Germany) 1.3
World’s largest diameter steel pipe producers (1)
2007 output (million tonnes)
Salzgitter/Europipe* (Germany)
1.3
Welspun (India)
1.0
JFE (Japan)
0.7
Sumitomo (Japan)
0.7
Evraz** (Russia)
0.6
Nippon Steel (Japan)
0.6
Riva (Italy)
0.6
PSL (India)
0.5
JSW (India)
0.3
ArcelorMittal (Luxembourg)
0.2
Stupp (US)
0.1
Tata/Corus (India/UK/Netherlands)
0.1
Others***
7.3

What Sets WCL Apart From Competition

Decade Long Experience

All Solutions Under One Roof

High Capacity Equipment to Meet Future Demand

Backward Integration with In-house Plate-cum-Coil-Mill

Framework Agreements

Features

- Selected few companies considered for supplies that meet stringent process of qualification

- Typically customers with large requirement over a period of time

- Flexibility in pricing terms and continuous business

Current Framework Agreements

- Chevron, Saudi Aramco (pipe purchase agreement)

3. Global Footprint & Pre Approved with Oil & Gas Majors

Footprint & Pre Approved with Oil & Gas Majors AGIP NTPC BECHTEL ONGC BRITISH GAS PETRO

AGIP

AGIP NTPC
AGIP NTPC

NTPC

BECHTEL

BECHTEL ONGC

ONGC

BRITISH GAS

BRITISH GAS PETRO CHINA

PETRO CHINA

BRITISH PETROLEUM

BRITISH PETROLEUM PETRONAS, MALAYSIA

PETRONAS, MALAYSIA

CHINA NATIONAL PETROLEUM CORPORATION

CHINA NATIONAL PETROLEUM CORPORATION PDO, OMAN

PDO, OMAN

CPMEC, CHINA

CPMEC, CHINA PGN, INDONESIA

PGN, INDONESIA

CHEVRON (Framework Agreement)

CHEVRON (Framework Agreement) QATAR PETROLEUM

QATAR PETROLEUM

DOW

DOW RELIANCE INDUSTRIES LIMITED

RELIANCE INDUSTRIES LIMITED

RUBY (ELPASO)

RUBY (ELPASO) SAIPEM, SNAM

SAIPEM, SNAM

EGYPTIAN GENERAL PETROLEUM CORPORATION

EGYPTIAN GENERAL PETROLEUM CORPORATION SAUDI ARAMCO (Framework Agreement)

SAUDI ARAMCO (Framework Agreement)

ENTERPRISE

ENTERPRISE SHELL

SHELL

EXXON-MOBIL (GOLDEN PASS PIPELINE)

EXXON-MOBIL (GOLDEN PASS PIPELINE) STOLT OFFSHORE – Acergy

STOLT OFFSHORE Acergy

GAIL

GAIL SONATRACH

SONATRACH

GASCO, ABUDHABI

GASCO, ABUDHABI TOTAL

TOTAL

GASCO, EGYPT

GASCO, EGYPT TECHNIP

TECHNIP

GAZPROM (STROYTRANSGAZ)

GAZPROM (STROYTRANSGAZ) TRANSCANADA (Long Term Contract)

TRANSCANADA (Long Term Contract)

KINDER MORGAN

KINDER MORGAN UNOCAL

UNOCAL

MOGE, MYANMER

MOGE, MYANMER PERU LNG (HUNT OIL)

PERU LNG (HUNT OIL)

N.A.O.C. - NIGERIA

N.A.O.C. - NIGERIA VIETSOPETRO

VIETSOPETRO

NPCC, ABU DHABI

NPCC, ABU DHABI

Accreditation Process A significant entry barrier

Approval from major domestic / international oil and gas companies

2 3 years

Seeking API

approval

1 year

Setting up plant 2 years

gas companies 2 – 3 years Seeking API approval 1 year Setting up plant 2 years

3 - 5 years

gas companies 2 – 3 years Seeking API approval 1 year Setting up plant 2 years
gas companies 2 – 3 years Seeking API approval 1 year Setting up plant 2 years
gas companies 2 – 3 years Seeking API approval 1 year Setting up plant 2 years
gas companies 2 – 3 years Seeking API approval 1 year Setting up plant 2 years
gas companies 2 – 3 years Seeking API approval 1 year Setting up plant 2 years
gas companies 2 – 3 years Seeking API approval 1 year Setting up plant 2 years
gas companies 2 – 3 years Seeking API approval 1 year Setting up plant 2 years
gas companies 2 – 3 years Seeking API approval 1 year Setting up plant 2 years
gas companies 2 – 3 years Seeking API approval 1 year Setting up plant 2 years
gas companies 2 – 3 years Seeking API approval 1 year Setting up plant 2 years
gas companies 2 – 3 years Seeking API approval 1 year Setting up plant 2 years
gas companies 2 – 3 years Seeking API approval 1 year Setting up plant 2 years
gas companies 2 – 3 years Seeking API approval 1 year Setting up plant 2 years
gas companies 2 – 3 years Seeking API approval 1 year Setting up plant 2 years

4. Strong Management Team with Proven Execution

Capabilities

4. Strong Management Team with Proven Execution Capabilities Management Team Mr. B.K. Goenka is the Chairman,

Management Team

Team with Proven Execution Capabilities Management Team Mr. B.K. Goenka is the Chairman, and the chief
Team with Proven Execution Capabilities Management Team Mr. B.K. Goenka is the Chairman, and the chief
Team with Proven Execution Capabilities Management Team Mr. B.K. Goenka is the Chairman, and the chief
Team with Proven Execution Capabilities Management Team Mr. B.K. Goenka is the Chairman, and the chief
Team with Proven Execution Capabilities Management Team Mr. B.K. Goenka is the Chairman, and the chief

Mr. B.K. Goenka is the Chairman, and the chief architect of the Welspun Group. Today, with his entrepreneurial ability and professionalism, he has built up one of the most admired business conglomerates

Mr. R.R. Mandawewala is the Managing Director. He has been a key contributor in Welspun’s journey. A Chartered Accountant by profession and with over 20 years of experience, he has cross-industry expertise varying from Textiles to SAW pipes.

Mr. M.L. Mittal serves as Executive Director. A Chartered Accountant by profession, Mr. Mittal has been instrumental in arranging Long Term Loans and Working Capital Facilities. During his tenure, the Company has successfully funded several expansions projects.

Mr. Akhil Jindal serves as Director of Corporate Affairs. He graduated with an Engineering Degree and thereafter an MBA from Indian Institute of Management, Bangalore. Mr. Jindal is responsible for strategic inorganic/organic initiatives within the Group and has spearheaded large fund raisings, cross border acquisitions, private equity raisings and financial closure of projects exceeding over US$ 1 bn.

Mr. David J. Delie serves as President Welspun Tubular LLC. A graduate in Science (Electrical Engineering) and a Masters Degree in Engineering Management from the University of Pittsburgh, he has an extensive 33-year background in the steel and pipe industry. Mr Delie has served on the Board of Directors of Berg Steel Pipe Corp., EB Pipe Coating, Inc., the American Iron & Steel Institute (AISI).

Inc., the American Iron & Steel Institute (AISI). May 2011 Mr. Asim Chakraborty is Executive Director
Inc., the American Iron & Steel Institute (AISI). May 2011 Mr. Asim Chakraborty is Executive Director
Inc., the American Iron & Steel Institute (AISI). May 2011 Mr. Asim Chakraborty is Executive Director
Inc., the American Iron & Steel Institute (AISI). May 2011 Mr. Asim Chakraborty is Executive Director
Inc., the American Iron & Steel Institute (AISI). May 2011 Mr. Asim Chakraborty is Executive Director

May 2011

Mr. Asim Chakraborty is Executive Director and Plant Head of the Anjar facility. A Civil Engineer from the University of Kolkata, Mr. Chakraborty has been instrumental in timely construction of various projects

Mr. L. T. Hotwani is Director, Supply Chain Management

of Welspun Corp Limited. With a rich experience of over 36

years, Mr. Hotwani is instrumental in sourcing raw materials and managing supply chain with global players

Mr. B.R. Jaju serves as Director & CFO. A Chartered accountant by profession, member of Company Secretary (FCS), as well as a Law Degree (LL.B). He has a rich experience over 30 years in finance and global M&A activities. Mr. Jaju has been awarded 3 times as Best Performing CFO in the year 2003, 2005

and 2006, by the most credible nationally renowned jury.

Mr. Prashant Mukherjee serves as Director of Welded Pipes. A Graduate in Science (Engineering, Mech) with over 24

years experience mostly in the Oil & Gas Pipe Industry, Mr.

Mukherjee has been instrumental in implementing expansion projects in the Company

Mr. Vipul Mathur is the Director of Marketing & Sales (Pipes & Plates Division). A Science Graduate and Masters in Business Administration (MBA) in Marketing, he has a rich experience of over 16 years in the Oil & Gas Pipe Industry

Page 14

4. Strong Management Team with Proven Execution Capabilities

4. Strong Management Team with Proven Execution Capabilities LSAW Pipes ERW Pipes HSAW Pipes Coating of
4. Strong Management Team with Proven Execution Capabilities LSAW Pipes ERW Pipes HSAW Pipes Coating of
4. Strong Management Team with Proven Execution Capabilities LSAW Pipes ERW Pipes HSAW Pipes Coating of

LSAW Pipes

ERW Pipes

Management Team with Proven Execution Capabilities LSAW Pipes ERW Pipes HSAW Pipes Coating of Pipes May

HSAW Pipes

Management Team with Proven Execution Capabilities LSAW Pipes ERW Pipes HSAW Pipes Coating of Pipes May

Coating of Pipes

4. Strong Management Team with Proven Execution Capabilities

4. Strong Management Team with Proven Execution Capabilities Plates Plates US Plant May 2011 Page 16
4. Strong Management Team with Proven Execution Capabilities Plates Plates US Plant May 2011 Page 16

Plates

4. Strong Management Team with Proven Execution Capabilities Plates Plates US Plant May 2011 Page 16

Plates

4. Strong Management Team with Proven Execution Capabilities Plates Plates US Plant May 2011 Page 16

US Plant

4. Strong Management Team with Proven Execution Capabilities Plates Plates US Plant May 2011 Page 16

4. Strong Management Team with Proven Execution Capabilities

4. Strong Management Team with Proven Execution Capabilities US Plant • Rationale for US Plant –

US Plant

Management Team with Proven Execution Capabilities US Plant • Rationale for US Plant – Opportunity to

Rationale for US Plant

Execution Capabilities US Plant • Rationale for US Plant – Opportunity to locate closer to customers

Opportunity to locate closer to customers who were facing supply challenges

Transportation cost becomes quite large for inter-continental shipment

Existing capacity in the US was not able to serve the requirement of US clients

State of the art facility at Little Rock, Arkansas. Commissioned in Feb-09 and has obtained all API approvals

Key supplier for last 5 years in US with client list that includes Chevron, Exxon Mobil (Golden Pass Pipeline), Kinder-Morgan and Ruby (El Paso)

Framework agreement with Chevron, making Welspun one of the three global preferred vendor for next 3-5 years

Supplied pipes for world‟s deepest pipe- line in Gulf of Mexico

In 9M FY 2011 utilization levels ramp-up to 63%

5. Exponential Growth in Revenues & Margins

5. Exponential Growth in Revenues & Margins Sales (volume) („000 MT) CAGR (06-10): 22% 814 850

Sales (volume)

(„000 MT)

CAGR (06-10): 22% 814 850 695 641 640 650 501 (#) (#) 450 371 387
CAGR (06-10): 22%
814
850
695
641
640
650
501
(#)
(#)
450
371
387
356
(#)
250
154
50
2005-06
2006-07
2007-08
2008-09
2009-10
9M -2010-11
# Plates

EBITDA (1)

(INR MM) CAGR (06-10): 68% (8) 13,186 12,000 10,493 (6) 8,000 6,555 6,348 3,384 4,000
(INR MM)
CAGR (06-10): 68%
(8)
13,186
12,000
10,493
(6)
8,000
6,555
6,348
3,384
4,000
1,655
0
2005-06
2006-07
2007-08
2008-09
2009-10
9M-2010-11
US$ MM
(2)
37
(3)
78
(4)
163
138 (5)
(7)
294
235 (9)

Consolidated Revenues (1)

(INR MM)

CAGR (05-10): 42% 100,000 73,503 75,000 58,604 57,395 50,000 39,945 26,834 18,298 25,000 0 2005-06
CAGR (05-10): 42%
100,000
73,503
75,000
58,604
57,395
50,000
39,945
26,834
18,298
25,000
0
2005-06
2006-07
2007-08
2008-09
2009-10
9M-2010-11
(5)
(2)
(4)
US$ MM
413
617 (3)
991
1,250
1,637 (7)
1311 (9)
Profit After Tax
(INR MM)
PAT Margin (%)
CAGR (06-10): 78%
6,104
16.0%
6,000
5,150
12.0%
4,500
3,408
(6)
8.0%
3,000
2,135
1,425
4.0%
1,500
614
0
0.0%
2005-06
2006-07
2007-08
2008-09
2009-10
9M -2010-11
(2)
(3)
85 (4)
47 (5)
US$ MM
14
33
136 (7)
115 (9)

Notes

1. Excluding Other Income

2. Using avg. exchange rate of US$1 = Rs.44.28 from 01-Apr-05 till 31-Mar-06

3. Using avg. exchange rate of US$1 = Rs.43.51 from 01-Apr-06 till 31-Mar-07

4. Using avg. exchange rate of US$1 = Rs.40.29 from 01-Apr-07 till 31-Mar-08

May 2011

Notes

5. Using avg. exchange rate of US$1 = Rs.45.91 from 01-Apr-08 till 31-Mar-09

6. Includes extraordinary items : forex provisioning of INR1,256MM, Inventory write-down of INR 385MM, ECB provisions of INR 178MM

7. Using avg. exchange rate of US$1 = Rs.44.90 from 01-Apr-09 till 31-Mar-10

8. Includes recovery of past forex provisioning ( in FY09) , which is reflected in better realization and cost of material

9. Exchange rate of US$1 = Rs.44

705

as at 31-Dec-10

Page 18

5. Exponential Growth in Revenues & Margins

EPS (Rs./Share)(Diluted)

35

28

21

14

7

0

CAGR (06-10): 61%

28.4 23.3 18.3 11.5 8.7 4.2 2005-06 2006-07 2007-08 2008-09 2009-10 9M-2010-11
28.4
23.3
18.3
11.5
8.7
4.2
2005-06
2006-07
2007-08
2008-09
2009-10
9M-2010-11

ROCE and ROE (%)

25%

20%

15%

10%

5%

0%

R OC E R OE 21.8% 21.7% 21.0% 19.1% 19.5% 17.3% 14.7% 13.7% 12.2% 11.4%
R OC E
R OE
21.8%
21.7%
21.0%
19.1%
19.5%
17.3%
14.7%
13.7%
12.2%
11.4%
2005-06
2006-07
2007-08
2008-09
2009-10
21.0% 19.1% 19.5% 17.3% 14.7% 13.7% 12.2% 11.4% 2005-06 2006-07 2007-08 2008-09 2009-10 May 2011 Page

5. Exponential Growth in Revenues & Margins

5. Exponential Growth in Revenues & Margins Consolidated Balance Sheet (Rs. Mn.) FY2009 FY2010 Change

Consolidated Balance Sheet (Rs. Mn.)

FY2009

FY2010

Change

Sources of Funds

     

Shareholders' Funds

     

Share Capital

932

1,022

89

Reserves and Surplus

14,664

27,990

13,325

 

15,597

29,011

13,414

Minority Interest

0

0

(0)

Foreign Currency Monetary Item Translation Difference A/c

-

75

75

Loan Funds

   

-

Secured Loans

26,435

18,654

(7,780)

Unsecured Loans

103

6,822

6,718

 

26,538

25,476

(1,062)

Deferred Tax Liabilities (Net)

2,488

3,352

865

Total

44,623

57,915

13,292

5. Exponential Growth in Revenues & Margins

5. Exponential Growth in Revenues & Margins Consolidated Balance Sheet (Rs. Mn.) FY2009 FY2010 Change

Consolidated Balance Sheet (Rs. Mn.)

FY2009

FY2010

Change

Application Of Funds

     

Fixed Assets

     

Gross Block

34,844

38,810

3,966

Less:Depreciation/Amortisation/Impairment

3,847

5,889

2,042

Net Block

30,996

32,921

1,924

Capital Work-In-Progress

5,808

5,412

(396)

 

36,804

38,333

1,529

Investments

1,140

1,596

456

Foreign Currency Monetary Item Translation Difference A/c

355

-

(355)

Current Assets, Loans and Advances

   

-

Income Accrued on Investments

113

13

(99)

Inventories

26,113

20,322

(5,791)

Sundry Debtors

4,601

8,077

3,476

Cash and Bank Balances

9,470

17,028

7,558

Loans and Advances

5,552

6,031

479

 

45,848

51,471

5,623

Less : Current Liabilities and Provisions

   

-

Current Liabilities

38,955

32,291

(6,663)

Provisions

601

1,219

618

 

39,555

33,510

(6,045)

Net Current Assets

6,293

17,961

11,668

Preliminary Expenses

0

0

(0)

Deferred Revenue Expenditure

31

25

(5)

Total

44,623

57,915

13,292

Consolidated Balance Sheet as on 30 th Sept 2010

Consolidated Balance Sheet as on 30 t h Sept 2010   Particulars H1 FY 2011 As
 

Particulars

H1 FY 2011 As at 30.09.2010

 

Unaudited (Rs. Mn)

A Sources of Funds

 

1 Shareholders Fund

 

a

Share Capital

1,023

b

Reserves and Surplus

31,470

c

Share Application Money

-

d

Minority Interest

1,548

2 Loan Funds

38,913

3 Foreign Currency Monetory Item Translation Difference Account

38

4 Deferred Tax Liabilities-Net

3,761

 

Total

76,753

B Application of Funds

 

1 Fixed Assets

40,296

2 Build Operate and Transfer Projects Expenditure

4,159

3 Investments

13,065

4 Foreign Currency Monetory Item Translation Difference Account

5 Current Assets, Loans and Advances

 

a

Inventories

19,002

b

Sundry Debtors

12,998

c

Cash and Bank Balances

13,132

d

Loans and Advances

4,964

Less

4

Current Liabilities and Provisions

 

a

Current Liabilities

29,404

b

Provisions

1,482

5

Miscellaneous Expenditure

25

 

Total

76,753

Breakdown of Production and Sales in Metric Tonnes (MT)

9M & Q3 FY 2010-11 Highlights

Major Highlights in 9M FY11

Summary of 9M & Q3 FY11

Major Highlights in 9M FY11 Summary of 9M & Q3 FY11 (Rs. Million) • Sales strengthened

(Rs. Million)

Sales strengthened by volume growth and consolidation of Infra business and is up by 2%

Interest costs lower by 42%, due to repayment of high cost debt

Depreciation is higher by 17%, due to capitalization of new capacities and consolidation of Infra business

PAT at Rs. 5,150 million reflects the growth of 16% on a YoY basis

Net Debt of Rs 11,120 million and Net Debt Equity Ratio of 33%

     

Growth

9M

9M

Growth

Particulars

Q3 FY11

Q3 FY10

%

FY11

FY10

%

Sales

15,862

16,395

-3%

58,604

57,528

2%

Reported EBITDA*

3,154

3,561*

-11%

10,493

10,336*

2%

Interest

454

428

6%

1,046

1,790

-42%

Depreciation

653

511

28%

1,808

1,541

17%

PAT

1,465

1,668

-12%

5,150

4,439

16%

Cash PAT

2,297

2,300

 

7,481

6,191

21%

EPS (Rs./Share) - Diluted

6.65

7.83

-15%

23.26

20.91

11%

Reported EBITDA

19.9%

21.7%

 

17.9%

18.0%

 

Margin (%)

PAT Margin (%)

9.2%

10.2%

 

8.8%

7.7%

 

Status of Projects

Capacity of Pipes is being increased to 2.2 million MTPA:

*Reported EBITDA and Profits for the quarter and nine months period ended 31st December 2009 includes Foreign Exchange realignment gain of Rs 590 million and Rs 1,260 million.

LSAW expansion of 350 K MTPA at Anjar in Q1 FY 2012.

HSAW plant of 100K MTPA at Karnataka is now fully

operational.

Saudi Plant commences production in Q4 FY11

New Initiatives

The company successfully completed the investment in the Saudi plant, which has commenced production in Q4

FY11

Implementation of L-SAW plant at Anjar is on schedule, and is likely to be commissioned by the end of Q1 FY12

The Mandya plant in Karnataka has started production and is ramping up to achieve desired level of production.

Welspun Middle East is establishing its presence in Dubai to cater to the bouyant markets of Middle East and Africa.

Breakdown of Production and Sales in MT

Production Volume (in

           

tons)

Q3 FY11

Q3 FY10

Change

9M FY11

9M FY10

Change

Total Pipes Consolidated

211,787

156,679

35%

719,613

613,544

17%

Plates & Coils

144,279

93,586

54%

372,635

276,749

35%

Sales Volume (in tons)

Q3 FY11

Q3 FY10

Change

9M FY11

9M FY10

Change

Total Pipes Consolidated #

163,611

170,216

-4%

639,862

610,319

5%

Plates & Coils*

124,511

112,329

11%

355,937

288,279

23%

# Company recorded higher inventory of pipes in Q3 FY11due to delay in shipment of certain export orders. The above inventory of finished pipes is being dispatched in Q4 FY11 ensuring that the company achieves its annual sales target and records its highest ever sales in FY11. * Includes Internal Sales

Summary

1 1

5 Exponential Growth in Revenues & Margins

Revenues have grown at a

CAGR of 42% over the last

five years

PAT has grown at a CAGR of 78% in the same period

4

Strong Management Team

with Proven Execution

Capabilities

Recognized by the FT as the second largest steel pipe producer in the world in 2007

First Indian company to supply pipes for offshore projects in US

Strong Industry

Strong Industry

• •

• •

Fundamentals

Fundamentals

Capital intensive, high

Capital intensive, high

barriers to entry

barriers to entry

North America expected to

North America expected to

lead demand

lead demand

to North America expected to lead demand lead demand Robust Business 2 Fundamentals & Healthy Order
to North America expected to lead demand lead demand Robust Business 2 Fundamentals & Healthy Order

Robust Business 2 Fundamentals & Healthy Order Book

Strong volume growth

Order Book in excess of US$ 1.5 Bn

Capacities of global size

Comprehensive product mix

3 Global Footprint & Pre Approved with O&G Majors

Presence across more than 25 countries

Pre-approved with more than 50 O&G Majors

Welspun on the Path of Global Leadership

Welspun on the Path of Global Leadership Scale Leadership Cost Leadership Scale of operations through large

Scale Leadership

Cost Leadership

Scale of operations through large economic plants across the globe

Produce world class products at the least cost and maintain competitive edge

Technology

Adopt and innovate cutting-edge technology to satisfy stringent requirements of customers

Leadership

Quality Leadership

Process Leadership

People Leadership

Consistent focus on quality at all levels; be the best in delighting customers

Most efficient and effective processes to achieve optimal utilizations

Best in class people : Produce extraordinary results

Global Leadership Serve Globally, Act Locally

Key questions on recent updates

Key questions on recent updates What is Welspun's exposure to current civil proceedings? During the previous

What is Welspun's exposure to current civil proceedings?

During the previous year one of the customer reported defect in the pipes supplied alleging grade of steel used did not meet the specifications, the company replaced the defective pipes and also provided for the expected loss on this account. During the year the said customer initiated legal action against the company in the United States of America claiming loss / damages of $ 66 million on account of defects in the pipes supplied, consequently the company also initiated legal action against the steel supplier claiming corresponding loss / damages it may suffer on account of this claim of the customer. Hence the company does not expect any liability on account of the claim against it.

Thank You

Thank You For further details, please contact: Akhil Jindal Director - Corporate Affairs Email: akhil_jindal@welspun.com

For further details, please contact:

Akhil Jindal Director - Corporate Affairs Email: akhil_jindal@welspun.com

Navin Agarwal AVP - Corporate Affairs Email: navin_agarwal@welspun.com

Company Website: http://www.welspuncorp.com