Hindustan Unilever Acquires Minimalist for ₹2,955 Crore
Welspun Corp Partners with Saudi Aramco for LSAW Pipe Plant
Last Updated: 15th January 2025 - 03:42 pm
Welspun Corporation has signed a Memorandum of Understanding (MOU) with Saudi Aramco to set up a cutting-edge longitudinal submerged arc welding (LSAW) line pipe production plant in Saudi Arabia. The announcement has been well-received by investors, as the strategic partnership is expected to enhance Welspun's global footprint and strengthen its position in the Middle East, a critical hub for the oil and gas industry.
Welspun Corp's share price rose by 5.97% to ₹773.25 following this announcement.
In its regulatory filing, the company stated:
"We are pleased to announce that Saudi Aramco and Welspun Corp have signed a Strategic Cooperation MOU to establish an advanced LSAW line pipe manufacturing facility in the Kingdom of Saudi Arabia at the ongoing Aramco IKTVA Forum & Exhibition 2025. The facility will have an annual production capacity of 350,000 MT."
The partnership aligns with Saudi Aramco’s In-Kingdom Total Value Add (IKTVA) program, which focuses on increasing local content in goods and services within Saudi Arabia to boost job creation, economic growth, and innovation. By contributing to this initiative, Welspun Corp not only taps into a long-term growth opportunity but also positions itself as a key supplier in the region’s large-scale infrastructure and energy projects. The company’s plant will support Saudi Aramco’s diverse requirements for oil, gas, hydrogen transmission, and carbon capture, utilization, and storage (CCUS) technologies.
The new manufacturing facility will be located in Dammam’s 3rd Industrial City, a strategic location known for its strong infrastructure and proximity to key industrial zones and ports. The plant is expected to be operational by mid-2026, enabling Welspun to meet the region’s rising demand for high-quality line pipes, essential for transporting oil, gas, and other critical resources safely and efficiently.
Despite this positive development, Welspun Corp’s recent financial performance has faced headwinds. The company’s consolidated net profit for Q2 FY25 dropped 25.4% to ₹286.95 crore, down from ₹384.54 crore in Q2 FY24. Net sales also saw an 18.7% decline, falling to ₹3,301.83 crore in the same period. The decline has been attributed to fluctuations in raw material costs and reduced demand in some international markets. However, analysts believe that the new facility in Saudi Arabia could help the company rebound in the coming years by securing large, long-term contracts.
The partnership with Saudi Aramco reflects Welspun's commitment to strengthening its relationships with leading global energy companies and expanding its technological capabilities. By investing in a state-of-the-art manufacturing unit in the Middle East, Welspun Corp is aiming to secure a stronger foothold in the region and capitalize on growing infrastructure development.
As global energy demands evolve and the push for cleaner technologies such as hydrogen intensifies, Welspun's strategic move could serve as a catalyst for future growth. By aligning with Saudi Aramco’s vision for a more self-sufficient energy supply chain, Welspun Corp is also contributing to broader sustainability goals through infrastructure that supports carbon capture and emissions reduction.
Welspun Corp is primarily engaged in the manufacture and distribution of steel products, particularly welded line pipes, which are crucial in various industries such as oil and gas, water distribution, and structural applications. The company has a strong track record of executing complex projects worldwide, serving customers in over 50 countries. Its product portfolio includes LSAW, HSAW (helical submerged arc welding), and ERW (electric resistance welding) pipes, which are known for their durability and reliability.
- Flat ₹20 Brokerage
- Next-gen Trading
- Advance Charting
- Actionable Ideas
Trending on 5paisa
02
5paisa Research Team
Indian Market Related Articles
Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing. For detailed disclaimer please Click here.