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Interpipe to set up regional HQ in Dubai next month
DUBAI — Ukraine's Interpipe, a global producer of steel pipes and railway wheels, will formally enter the Middle East market through the UAE by setting up a regional headquarters in Dubai's Jebel Ali free zone by next month and a warehouse in the same area by next year.
Oleksandr Kharchenko, director for corporate affairs, Interpipe, yesterday said this developed following the recent inclusion of the company in the list of oil and gas pipes suppliers of Abu Dhabi National Oil Company (ADNOC) and Kuwait Oil Company (KOC). He said Interpipe, the largest steel-pipe maker in Ukraine, posted a 48-per cent growth in its Middle East sales for the first-half of the year and a 50-per cent rise in regional turnover for the whole 2006. "Thus it is a very important and competitive market for us," he said.
He added that Interpipe, whose last year's total revenue reached $1.44 billion and which had a gross profit of $503.28 million, is set to float its shares on the London Stock Exchange by next year. He stressed, though, that the planned IPO (initial public offering) is not to source for more funds. "It's not because of money because we are a very profitable company," he said. "We just want to understand the real value of our company by improving the management system." He added that Interpipe has already tendered for international financial advisers for this purpose.
Kharchenko said that as part of the pre-qualification process, which took at least nine months, the ADNOC and KOC representatives did a technical audit of Interpipe's financial standing and looked into its pipe producing technologies and management system.
Rostyslav Chudnovsky, the company's director of tubular sales for the oil and gas industry, expressed delight earlier that the two leading oil-producing companies had found Interpipe's products to have the highest quality standards.
"We are delighted to become an official supplier of KOC and ADNOC," he said. "This opportunity allows us to extend our customer base and improve our sales geography in the Middle Eat market." Kharchenko said his company has been doing business in Dubai for the past seven years through three or four local partners in the industrial sector that sell Interpipe products to other big companies. He added that the first three to four years had been spent only to understanding the market.
While 65 per cent of Interpipe's 2006 revenues came from sales to clients in the oil and gas industry, the company also manufactures special pipes for heavy machineries and industrial pipes for the construction sector. Kharchenko said Interpipe has the advantage of both having state-of-the-art production units and a strategic location to deliver purchase-orders within 60 days at the latest because Ukraine has good access to the sea. The delivery will even become faster with the setting up of an Interpipe warehouse next year, he stressed.
He said Interpipe produce steel pipes and railway wheels from a total of three million tonnes of steel every year. He added that the company, which also sells steel wheels to railroad firms in Europe and India, buys its raw materials from Ukrainian and Russian suppliers.
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