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IFAS – Indian Pipe Industry

Presented by:
Sidhartha Sarma Baruah(454)
Sorabh Sachar(455)
Sreedev Nair(456)
Sreenandan Nambiar P.(457)
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Agenda







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Introduction
Industry Overview
APL Apollo Tubes Ltd. Overview
Welspun Corp Ltd. Overview
IFAS: Introduction
VRIO Framework
Company-wise Strengths & Weaknesses
IFAS Table

3 .  Freight cost is another key cost component due to higher imports and exports.  The industry is highly Raw Material (RM) intensive with the RM cost accounting for more than 70% of the total cost for steel and PVC pipe companies.  The penetration level of pipelines in oil & gas transportation is low at 32% in India as compared to 59% in USA and 79% globally.  These companies depend heavily on imports and hence many companies have integrated backward to reduce dependency on imports and price volatility. With the fall in commodity prices and Baltic Dry Index pipe companies will be benefited in the coming quarters. However lower penetration levels represent the huge scope for growth for the pipe industry.Pipe Industry in India  The Indian Pipe Industry is among the top three manufacturing hubs after Japan and Europe.

 A positive trend is expected in the Indian pipe industry to continue in the next 3-5 years on the back of high oil and gas discoveries worldwide. replacement demand from US and European countries. Supreme.  Key Players: Jain irrigation systems. Indian companies have augmented their export sales over the last three to four years. water & sewage transport and irrigation facilities. Prince 4 . Chemplast.  With the low cost quality products and various certifications.Pipe Industry in India  Indian companies produce a wide range of steel. increased efforts by the Government of India (GoI) on infrastructure development for laying pipelines for oil & gas transport. Reliance. cement and PVC pipes which are used in various critical and non-critical applications. DCW. Finolex. Jindal SAW.

00 0 .580 210 100-150 ~2.Industry Overview: Structure Pipe Penetration Level Schemes in pipeline Rajiv Gandhi Drinking Water Mission Addition to irrigation facilities National Gas grid City Gas Distribution Total 5 Rs Bn 73 1.

Industry Overview – Products Summary 6 .

6 %  Exponential growth in user industries such as real estate.000 TPA with high speed technology supplied by Kusakabe.APL Apollo Overview  Group installed capacity of 490. UAE and Sri Lanka to support exports to 35+ countries .  Strong distribution network with direct marketing teams and 10. Ireland.ERW Black Pipes. infrastructure. etc. Galvanised Pipes. telecom. PreGalvanised Pipes and Hollow Section Pipes  Expected sales growth with a CAGR of 71.000+ retail outlets  7 Overseas distribution centres in USA. Japan  Vision of US$ 1 Bn revenue and installed capacity of 1 Mn TPA by 2015  Manufactures 250+ variants of tubes  Product portfolio . UK. Germany. commercial vehicle. France.

Snapshot 8 .APL Apollo .

Total & Elpaso  Facilities at Dahej & Anjar.Welspun Pipes Overview (Welspun Corp Limited)  Largest Pipe manufacturer in the World  Ranked as the 2nd Largest (Large Diameter) Line Pipe Manufacturer in the World – Financial Times UK .2008  Approved by almost every Oil & Gas major including Transcanada. Shell.5 mn MTPA  Welspun Middle East LLC. USA) and Damam. Little Rock.It can produce up to 300. Mandya (Karnataka).Plate cum Coil Capacity of 1. (Saudi Arabia)   Total Pipe capacity of 2. (Arkansas.000 9 MTPA of Spiral Pipes .2 mn MTPA State-of-art Plate-cum-Coil mill at Anjar. Gujarat India . a pipe manufacturing and pipe coating facility in Saudi Arabia is one of the largest Spiral Pipe manufacturing facilities in the region . Gazprom. (Gujarat).

Welspun Group Overview 10 .

Internal Factor Analysis Summary (IFAS) 11  Internal Factor Analysis summary is a breakdown of the weaknesses and strengths of factors within an organization that contribute in accomplishing the set targets of the organization.  Strengths: characteristics of the business that give it an advantage over others  Weaknesses: characteristics that place the business at a disadvantage relative to others .

The Question of Value: Does a resource enable a firm to exploit an environmental opportunity.The VRIO Framework: An Overview The VRIO framework is a good tool to examine the internal environment of a firm. rare. and/or neutralize an environmental threat? 2. and costly-to-imitate resources?  12 .  VRIO “stands for four questions one must ask about a resource or capability to determine its competitive potential: 1. The Question of Organization: Are a firm’s other policies and procedures organized to support the exploitation of its valuable. The Question of Rarity: Are the resources used to make the products/services rare? 3. The Question of Imitability: Is what a firm is doing difficult to imitate? 4.

reporting structures.The VRIO Framework: An Overview 13  If there are high costs of imitation.  Organized properly deals with the firm’s structure and control (governance mechanisms—compensation. . relationships. etc). management controls. the firm may enjoy a period of sustained competitive advantage.

The VRIO Framework: An Overview 14 .

Internal Factor Analysis Strengths APL Apollo accredited with ISO 9001:2000 ISO 14001:2004. APL . OHSAS 18001:2007 and UL. south and west India. proximate to customers  Possesses a range of more than 300 products  Installed cutting-edge manufacturing technology (Kusakabe. CE and SGF France certifications  Only steel tube manufacturer with units located in north. Japan) at all plants  International footprint across +35 countries  Direct reach to retail consumers through own distribution network  Distinct business model with capacity to inroad into adjacent business space 15 .

.Internal Factor Analysis Weakness Products are commoditized.  16 Management of affairs at multiple locations.  APL . though the company has acquired Lloyds line Pipes Limited to fortify its export turnover. Non-significant presence in exports so far.  Effective management of conflict of interest that may arise between dealer network and own distribution network.  Industry is fragmented amongst small regional players and is highly competitive.  Volatility in raw material prices requires pro-active handling.

Welspun .Internal Factor Analysis Strengths 17  Strategic vendor status with top global retailers  Pricing power  Strong Supply Chain  Good Financial Leverage  Unique Product  Customer focus through marketing research and data analysis  Global footprint & Product Innovation  Customer Loyalty  Brand Name .

Welspun .Internal Factor Analysis Weakness 18  Inability to control certain costs like labour. etc.  Changing policies and rising inflation in India  Inadequate control over the entire value chain  Lack of Online Presence .

IFAS Table APL Apollo Tubes Ltd. 19 .

20 .IFAS Table Welspun Corp Ltd.

THANK YOU 21 .