Profiteering by linepipe industry: Who is going to bell the cat?
Pumped up with a double dose of government support -- high anti-dumping duties coupled with compulsory local value addition policies -- the line pipe industry is riding high. 8Here are some rough calculations: -- In seamless pipes, the average realization is Rs 55,000 to Rs 60,000 per ton, while EBITDA per ton is of the order of Rs 7650. -- Now pipe companies are targeting to reach the Rs 11,000 mark or even more. -- In the ERW segment, the average realization is Rs 45,000 to Rs 50,000 per ton, with earning EBITDA per ton of Rs 4,500 to Rs 5,000. -- They are now looking at Rs 8000 or more 8The point is that such profiteering raises the cost for the oil & gas industry owned by the government. 8Is this a case of filling up private coffers, as these companies are controlled by a handful of highly connected individuals, at the expense of the government? 8Who is going to bell the cat here? Click on Reports for more