International energy services group Hunting PLC agreed to form a new 49%:51% joint venture with Jindal SAW Limited, the Indian conglomerate. The agreement formalizes a closer working partnership between the two businesses, following the formation of a strategic alliance in 2019 when Hunting and Jindal began cooperating to develop their presence in the rapid growth OCTG market in India.
Under the terms of the joint venture agreement, Hunting and Jindal will build a dedicated premium connection threading facility in Nashik province, near to Jindal’s existing steel mill operations, with a proposed 130,000sqft manufacturing footprint. The facility is targeted to be operational by the end of 2022, with three threading lines being commissioned over
time with an annual capacity of 50,000 metric tons. The facility will be utilized for all such manufacturing work once built and it is anticipated that the venture will employ c.100 staff once fully operational.
The joint venture partners will contribute up to an initial c.$6.0 million in cash, in proportion to the shareholdings noted above, with additional funding to be contributed via loans and/or cash flows generated from the joint venture.
The joint venture provides a mutual platform for significant growth in India, with Hunting’s premium connections being designated local content, as they will be manufactured domestically.
As part of the commercial agreement with Jindal, Hunting will provide a premium connection threading licence to the joint venture.
Jim Johnson, Chief Executive of Hunting, said “The Indian OCTG market provides significant growth potential for Hunting. We are delighted to have entered this joint venture agreement with Jindal, which leverages our excellent working relationship which we have built since 2019.”
Source: www.worldoil.com
Author: World Oil