Annual Report FY 2009-10 - Welspun

th15 Annual Report 2009-10Message from Chairman and Managing DirectorMy dear fellow stakeholders,What an eventful year this has been! When we began the year, the World was at its lowest ebb. Continuous slidein commodity markets and stock markets worldwide was causing nervousness all around us, people werebehaving as if there was no tomorrow. I remember my theme of last year's message was 'TRUST'. I hadmentioned, “In these testing times, we believe that only 'Trust' can take the world out of this financial maize”. Ialso said, “'Trust' is the nucleus of earnest hope and we at Welspun will come out much stronger and bettercorporate out of this challenging period”.Chartering New TerritoriesDear Friends, I am happy that we have completely outperformed ourselves on all counts. As regards to customertrust, we bagged multiple orders mostly from our renowned Oil & Gas customers enabling us to finish this year ata healthy order book of Rs. 6400 Crore no mean achievement - considering the fact that in the first 6 monthsthere were hardly any orders. I believe that the recovery in the commodity prices, particularly oil which is nowhovering around $80 a barrel will lead to flurry of new orders for the high-end pipes that we specialize in. We arearguably one of the largest line pipe company in the world and I always get motivated by this leadership positionfor an Indian Company which is global in all respect.Global ReachOur U.S. plant got commissioned last year with a motivating message of Mr. Mike Beebe, Governor, State ofArkansas, who said, “The commitment that Welspun made to Arkansas has not only been met, its beenexceeded. They have actually invested more money and hired more people than they had committed to do andwe are very very grateful to them”. This facility is truly an American Corporation hiring local people (almostaround 600), using local transportation for its inward and outward movement, paying local taxes and thusenabling all-round socio-economic growth of the State of Arkansas. The facility has clearly shown its mettle in itsfirst year of operations itself, with remarkable contribution in top-line and bottom-line.New initiatives - Our Growth driversOur better-than-expected performance of the U.S. plant has cemented our belief that Welspun need to providelocal solutions from its global experience. To cater to the very large Middle-East and North-African market,Welspun signed a landmark agreement - wherein Welspun will own over 50 percent equity in a state-of-the artSpiral Pipe and Coating Mill with full operational control - Another step in our journey to become a GlobalCompany with regional production facilities.The year also witnessed another significant development in the form of our foray into the 'World ofInfrastructure'. Our subsidiary Welspun Infratech Ltd. acquired a majority stake in MSK Projects India Ltd. (MSK).This acquisition will enable Welspun to move a step forward towards complete integration by being a one-stopsolution- from Manufacturing of Plate & Coil to Line Pipe and finally to Pipe laying. The Vadodara (Gujarat, India)based MSK has three decades of rich experience in working with some of the large PSU's mostly from Oil & Gasindustry. MSK's business model includes EPC projects in roads, industrial construction, PPP (Public PrivatePartnership) and ownership of several BOOT (Build Own Operate Transfer). We truly believe that our Company isnow a 'Pipe Infrastructure Company' with a vision to not only supply pipes but also lay them and wherevereconomically viable, own and operate them.6