India Scenario

India is one of the fastest growing major economies in the world and the third largest
consumer of petroleum products, after US and China. Although there is an increased focus
on gas and renewables, demand for oil has always been on the rise, and is estimated to
grow at least until 2040. As per the report published by India Brand Equity Foundation
(IBEF), India’s energy demand is expected to double to 1,516 million tons of oil equivalent
by 2035 from 723.9 Mt in 2016. Moreover, India’s share in global primary energy
consumption is projected to increase by two-folds by 2035. India has always been an import
dependent nation in the Oil and Natural Gas (“O&NG”) sector. India’s domestic crude oil
production of 36.95 million tons in 2015- 16 barely met 20 percent of its oil needs. Natural
gas output at 32.249 billion cubic meters meets less than half of its needs. As a result of
significant dependence on import, Indian Government has set a target to reduce
dependence on crude imports by 10% by 2022. Given the growing demand for crude oil in
India and its wide application in household and industrial activities, it is apparent that there
will be major investments in this industry in future. The Government of India has recently
revamped the regulatory framework in the upstream sector with a view to attract foreign
investment (i.e., a shift from NELP to HELP), and this is also consistent with the
government’s objective to facilitate ease of doing business in India. While the Government
of India resolves teething issues in the O&NG sector, the landscape in the O&NG sector
promises to be dynamic with scope for growth of business entities.

WATER INDUSTRY

Capital expenditure on water and wastewater infrastructure in India is set to increase by

83% over the next five years, hitting an annual run rate of $16 billion by 2020. The utility
market is set to top $14 billion within five years, while annual spending in the industrial
sector will approach $2 billion. Due to the central and state governments’ renewed vigor in
propounding the reduction and eventual elimination of pollution in India’s rivers, the
wastewater treatment sector is expected to grow faster than water treatment, exhibiting a
CAGR of 15.3% to reach $6.78 billion in 2020, up from $3.3 billion in 2015. Spending on
water supply will grow from $5.56 billion to $9.4 billion over the next five years. (source-
Global Water Intelligence report).
The present government has unveiled initiatives that promise to transform India’s rival those
in developed nations. In order to speed up the construction of water and wastewater
projects across the country, the government is adding new incentive tools – such as priority
release of budget allocations on the basis of reforms implemented by states in the previous
year – whilst also undertaking a review of water tariffs. The Atal Mission for Rejuvenation
and Urban Transformation (AMRUT) – the present government’s successor to the JNNURM –
and the Smart Cities Mission are aimed at realizing the government’s ambition of bringing
the quality of India’s water supply and sanitation to a level currently enjoyed by developed
economies. INR500 billion ($7.7 billion) has been allocated for investment in 500 towns and
cities under AMRUT, with INR480 billion ($7.4 billion) put aside for upgrading 100 cities to
attain ‘smart’ status. Water and wastewater infrastructure is anticipated to constitute up to
40% of the total investment under these initiatives. The Indian Rivers Inter-link is a proposed
large-scale civil engineering project that aims to effectively manage water resources in India
by linking Indian rivers by a network of reservoirs and canals and so reduce persistent floods
in some parts and water shortages in other parts of India. The Inter-link project has been
split into three parts: a northern Himalayan rivers inter-link component, a southern
Peninsular component and starting 2005, an intrastate rivers linking component. The project
is being managed by India's National Water Development Agency (NWDA), under its Ministry
of Water Resources. NWDA has studied and prepared reports on 14 inter-link projects for
Himalayan component, 16 inter-link projects for Peninsular component and 37 intrastate
river linking projects
STEEL PIPE INDUSTRY- INDIA

Increased opportunities in the domestic sector have led to increase in domestic consumption
of large diameter welded pipes at a faster pace. Over the long term, the outlook of the
industry is expected to remain stable as capacity utilization levels of domestic large
diameter welded pipes players are expected to improve gradually. Furthermore, realisations
are expected to improve in FY18 on the back of increase in steel prices during FY17. Despite
the present economic pressures post-implementationof GST and banks tightening loan
disbursals, the balance has tilted towards India. Foreign Direct Investment (FDI) received in
Construction Development sector from April 2000 to March 2017 stood at US$24.3-billion,
according to the Department of Industrial Policy and Promotion (DIPP). And, one of the
sectors that has seen growing interest is the Pipes industry, which has seen a flood of capital
investments, resulting in modernization and capacity creation. For 2018-19, the government
has given Rs 8,860 crore to Water Resources Ministry, up from Rs 6,887 crore in 2017-18 for
implementing key projects such as Namami Gange, Pradhan Mantri Krishi Sinchayi Yojana
and river inter-linking etc. There has also been a major investment in natural gas grid by the
Ministry of Petroleum and Natural Gas. India is also seeking to double its existing gas
pipeline infrastructure of 15,000 km, as the
government aims to provide a clean energy source to consumers. The Prime Minister’s
north-east policy offers immense potential in infrastructure development, which includes
transportation of gas and water. The turnaround time
has also started with the implementation of ‘Urja Ganga’ project by the Gas Authority of
India Ltd. These initiatives are expected to further drive demand up in the next few years for
pipes as expansion of national gas grid and new water projects across the country would
mean higher domestic orders and revenues over the next two years at least. Huge demand
for large diameter pipes is expected to follow, with states like Telangana, Andhra Pradesh,
Gujarat, and Madhya Pradesh being the major drivers. Nevertheless, low penetration of
pipes coupled with the various initiatives taken by the government – setting up National Gas
Grid and revamping the water and sanitation infrastructure – provides domestic business
opportunity of more than` 30,000-crore which is expected to benefit the Indian Line Pipe
industry, which is among the top three manufacturing hubs for large diameter welded pipes
(SAW pipes) . However, the penetration level of pipelines in oil and gas transportation is
quite low at 32 percent in India as compared to 59 percent in USA and 79 percent globally. It
is this low penetration of pipes in the domestic market that provides a huge business
opportunity. Until recently, imports from China were a major challenge for local
manufacturers. But, now the government has addressed the issue in a recently announced
policy, mandating to provide preference to domestic products in government procurement.
Imported steel must undergo a minimum prescribed value addition of 15 percent in order to
be eligible for procurement by government departments. With the government’s increased
thrust on improved water supply and sanitation infrastructure, the line pipe demand in India
is expected to remain robust in the coming 3-5 years. The projects funded by the World
Bank and Asian Development Banks are scheduled to be completed by 2020 which shall be
beneficial to the large diameter spirally welded pipes (HSAW) and Ductile Pipe players.

DUCTILE IRON PIPES SCENARIO

India Ductile Iron pipe market is expanding owing to increasing water development
infrastructure, increasing awareness on water conservation and aim to become 100% open
defecation free nation. Further increasing population of the country, huge investment on
Water Infrastructure Development, Improving Sanitation Coverage in the Country, Water
Conservation Schemes and increasing number of housing units are also the growth drivers
of India’ Ductile Iron Pipe Market. India is the second most populous country in the world but
it is leading in terms of lack of water supply and sanitation facilities. The Ductile Iron pipe
market is likely to have strong linkages with investment in water infrastructure development
and India is witnessing huge investment in water projects under “Swachh Bharat Abhiyaan”,
Atal Mission for Rejuvenation and Urban Development (AMRUT) and various other State level
projects, the DI & HDPE pipe sector is anticipated to witness a bright outlook in upcoming
years. The major aim of these projects is the make sure that every citizen of India has
optimum access to safe and hygienic drinking water. The government of India has been
focusing on providing housing to each and every citizen of India by 2022. Rise in number of
houses in the country will increase the need for constructing pipe infrastructure to transport
water. In India, Ductile Iron pipe market has also been growing owing to pipe’s durability,
tensile strength, resistance and pressure
bearing ability. The Ministry of Water Resources estimated that by the year 2025, the
requirement for water in India will increase to 120 billion cubic meters. This has significantly
increased the demand of DI pipes for construction of potable water supply projects,
sanitation facilities and water supply infrastructures. Government of India has been focusing
on improving its economy and they have initiated Make in India initiative which has aided
companies to manufacture Ductile Iron Pipes within the country.

INDIA INVESTMENT PLAN INDIA

The Government is striving to attract investments in oil & gas exploration in India by
bringing out policies to boost oil
exploration and thereby save on imports and precious foreign exchange. In this context, the
implementation of Hydrocarbon Exploration Policy (HELP) will especially necessitate capital
expenditure by oil exploration companies, primarily ONGC and Oil India, resulting in
generation of good demand for oil & gas pipes over next few years. Oil and Gas industry in
India is in the midst of drive towards self -sufficiency and upgrading to meet BS VI standards
by 2020.
Investments in domestic oil & gas exploration and refinery space (ex RIL) is expected to go
up from average of ` 65,000 cr in 2012-17 to average ` 80,000 cr in 2017-20. Seamless
tubes industry– carbon and stainless steel combined, which constitutes 7-12% of the overall
capex in either exploration or refineries, is set to be a large beneficiary of the underlying
capex momentum. Further, Government, in its push for “Make in India” programme, has
introduced a policy for providing preference to domestically produced iron & steel products
including Pipes. This policy has further provided a safeguard for domestic producers of
pipes.
Market Segment & user industries

Oil & gas exploration Drilling Casing & tubing, drill Pipes

Power Boiler & heat exchangers Tubes

Defense Pipe & tube

Petrochemicals Pipe & tube

Nuclear, thermal, hydro Pipe & tube

Automobile Pipe &Tubes, Bearing steel tube

General engineering Pipe & tube

Refineries Pipe, process Piping & tube

Fertilizer Pipe & tube

Dairy & Sugar Pipe & tube

Mechanical & structure Pipe & tube

Chemical Pipe & tube

Paper & pulp Pipe & tube

Pharmaceutical Pipe & tube

Cryogenic service Pipe & tube

End customer details in India;
Chemical & Engineer, Food, dairy, Power & Oil & Gas
Pharma procurement Auto & Sugar processing
& Boiler, Food
construction processing
Asian Paints Adani Hazra Dhampur Sugar Godrej & Boyce HPCL
Port mills Ltd Mfg Ltd
Unichem BGR energy Gujrat Ambuja INOX India pvt Indian Oil
laboratories ltd system Export Ltd ltd
L&T SSP Pvt Ltd Thermax Ltd Reliance
Industries
SWEZ India Pvt Shree renuka Shreeje process
Ltd Sugar Ltd engenering
Overcon Air Balaji Amines Ravi Industries ONGC
tech Pvt Ltd ltd
NCC Nagarjuna SPML LTD
Agrichem Ltd
PUNJ Lyod ltd

Annual Pipe Production in India

Carbon & Alloy Steel Seamless Pipes & tubes - 9,00,000 MT

Anti-Corrosion 3LPE/ 3LPP/ FBE/ IFBE coating – 2.2 Million SQM

Stainless Seamless pipes & tubes - 80,000 MT

Stainless welded pipes & tubes - 50,000 MT

Key Pipe Coating paints supplier in India;

1. Shalimar paints
2. Bombay paints
3. PPG
4. Akzonobel
5. Jotun
6. Berger
7. Sherwin-Williams Co
8. Hempel
9. 3M
Key Pipe & tubes manufactures:

Customer Annual paint consumption

(KL)
Jindal Saw 1500
Mah Seamless 500
Ratnamani Metal 400
APL Apollo 300
Surya Roshni 200
Man Industries 400
Gandhi Spl Tube 300
Good Luck 400
JTL Infra 100
Umiya Tubes 100
Remi Edelstahl 80
RMG Alloy Steel 100
PSL 80
Zenith Birla 40
Welspun Corp 30
Total Paint consumption 4500 KL

Basically there is two type of products served in market

1. Food grade- AWWAC210 Epoxy coating- ASP- 180.00 per/ltr (100%VS)

2. Gas flow for Oil & gas- 210.00 (69% VS)