Robust Prospects for Pipe Manufacturers in Oil & Gas Sector

aaRaghav Jindal, MD, Jindal Pipes (ERW Pipes branded as “Jindal Star”)
Development of cross-country pipelines by major oil & gas, power and fertilizer companies will create substantial demand for electric resistance welded line pipes in the near future, foresees.

Being a major player in pipe manufacturing industry can you track us the sector’s present scenario?
We are seeing robust prospects for India’s electric resistance welded (ERW) pipes. The segment, with constant entry of newer players, has become increasingly competitive. However, with increased investments and focus on distinct segments like oil and gas, infrastructure, introduction of rural and urban water supply schemes, we see ample growth scope for the existing as well as new entrants. The current market condition definitely projects a positive outlook for the sector’s growth pace.

Can you review us the opportunities prevalent in the oil & gas segment for pipe manufacturers?
We see robust prospects for the pipe manufacturing industry in the oil and gas segment. Considering the opportunities ahead, we see substantial demands for ERW line pipes in the near future as major oil and gas, power and fertilizer companies are planning to develop numerous cross-country pipelines. With the increasing global demand for critical oil and gas pipelines, DP Jindal Group has chalked out massive expansion plans. Jindal Pipes has developed API 5L pipes upto X 70 from its existing manufacturing line pipe grade X 56.

How has your company planned to explore the opportunity in gaining prominence of affordable constructions?
Our pan-India dealer network is our strength. We already have a strong dealership presence in the tier-II and tier-III regions; they cater to the rising housing and construction demands at the most competitive prices. Besides, with the concept of affordability coming into focus, we are seeing potential demand and market opportunities for the PVC, uPVC and cPVC pipes, which have entered the plumbing segment. However, the metallic pipes still enjoyable its unbeatable advantages, which is being accepted and experienced for so many decades by the masses.

Has the accelerating cost of raw materials affected the pipe manufacturing industry?
The cost escalation in raw materials availability, freight, power and fuel has generated a direct impact on the industry’s business prospects. The direct impact on the business is being witnessed in terms of allotting a firm price on long-term basis to the end user. Besides, impact is also seen on the tender business, wherein typical validates ranges from 120-180 days. To sustain this competitive scenario we have adopted a sales mix involving actual users and dealers. However, our emphasis is more on dealer’s network since it caters to the major customer segment.

How do you analyze the export potential of the pipe manufacturing industry?
Incentives schemes by the government for the exporters are inadequate to compete with the international prices. The Chinese government on the other hand has given more benefits to the exporters, due to which in the near future they will be emerging with a maximum share of GI pipe manufacturers globally. The issue prevalent in India can be tackled by enhancing the export incentives and on a domestic front by simplification of the tax structure.

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