Venus Pipes -; Tubes approves capacity expansion of Rs50 crore for tube mill; stock zooms ~3%

22 Sep 2022 , 09:19 AM

Venus Pipes & Tubes Limited has approved an Rs50 crore capacity expansion for a bigger diameter Tube Mill to produce stainless steel welded pipes.

This new line will expand the existing welded pipe range to a maximum diameter of 20″ (508mm) and thicknesses up to SCH80s, with a capacity of 700 mt per month. The project will be supported by a combination of debt (term loan) and internal accruals, with commercial production projected to begin in Q1FY24.

To support the higher dia. welded pipe process, the planned extension will comprise a tube mill as well as the whole finishing infrastructure, including an annealing furnace, pickling and passivation setup, high-end testing, and so on.

This increase in capacity will be in addition to the ongoing growth of 600 MT per month of welded pipes up to 48 inches. After both of these capacity expansion projects are completed, total Welded capacity will nearly triple from 700 MT per month to 2,000 MT per month by FY24.

“With the resurgence of India’s CAPEX cycle resulting in healthy demand for our goods across End User Industries, this capacity increase will provide us an advantage and enable us to capture greater market share in this category,” said Arun Kothari, Managing Director, Venus Pipes & Tubes.

Additionally, the extra 500 MT per month (on top of the existing 300 MT per month) capacity for seamless pipes/tubes is on track. So, after projected expenditure, the total Welded (2000 mt per month) and Seamless (800 mt per month) capacity will be 2800 mt per month.

At around 9.21 AM, Venus Pipes was trading 2.97% higher at Rs576.45, against previous close of Rs559.80 on NSE. The scrip opened at Rs565.70.

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