Jindal Saw faces order execution, logistics disruptions in the Middle East

Jindal Saw Limited's operations in the Middle East continue to face disruption from the regional conflict, affecting order execution, capacity utilization and logistics, according to comments made during the company's Q2 FY27 Earnings Conference Call.

An existing job-work order for approximately 600,000 tons of pipes for Saudi Arabia has been significantly delayed due to the conflict, said Vinay Kumar Gupta, President and Head Treasury of Jindal Saw Limited. The delay has affected capacity utilization and revenue recognition, although it has not tied up working capital because the arrangement involves customer-supplied raw materials. Gupta said the company and the buyer are exploring alternative transportation and logistics arrangements to facilitate shipments.

Gupta also said operations at the company's Abu Dhabi ductile iron (DI) pipe facility have been significantly affected. Production has been reduced, with sales restricted to customers within trucking distance due to regional security concerns and employee safety considerations. The plant delivered 29,000 tons of pipes in the July-September quarter, compared with 34,000 tons in the previous quarter.

Despite the disruption, the Abu Dhabi subsidiary had an order book of approximately USD 195 mln, covering 177,000 tons of pipes, as of September 2026, providing visibility for the next 9-12 months, Gupta said.

On the company's regional investment plans, Gupta said the proposed seamless pipe plant in Abu Dhabi's KEZAD industrial area, with an annual capacity of 300,000 tons and an estimated investment of USD 330 mln, is progressing through the initial development and construction phase. Procurement of critical long-lead equipment is underway, with commercial operations targeted for FY2028-29.

In Saudi Arabia, Jindal Saw Limited's 51:49 joint venture with local partner Buhur is developing two pipe manufacturing facilities, for helical and longitudinal pipes, each with a planned capacity of 300,000 tons per year. Land has been secured and letters of credit for long-lead equipment have been established. Gupta said interim financial closure is expected in the coming months, while acknowledging that regional security concerns could create near-term uncertainty around project execution, logistics and investment timing.

Gupta said the company's investments in the UAE and Saudi Arabia remain part of its long-term regional strategy, aimed at strengthening local manufacturing, improving customer access and reducing exposure to international logistics risks.