Russian Pipeline Tycoon Focuses on Exports Ahead of Share Sale

(Bloomberg) -- ChelPipe Group, the Russian pipemaker looking to raise money through a share sale, plans to boost investment in the next few years to expand its services and number of countries it exports to.

The company invested $2.5 billion a decade ago on facilities for high-quality pipes that reduce oil and gas losses, helping it to better compete with foreign producers that dominated the Russian market. Now, it plans to spend 20 billion rubles ($310 million) through 2024 to expand client services and export markets.

“We see no sense in expanding output or building new facilities as the market is already is well supplied,” co-owner and Chairman Andrey Komarov said in an interview. “Investments will mainly be aimed at developing niche products, fixing bottlenecks, improving quality and expanding the number of regions where we export.”

ChelPipe, which supplied pipes for the giant Nord Stream 2 project linking Russia to Germany, wants to sell its premium products in more markets around the world. Its exports already doubled last year and Komarov wants shipments to keep making up at least 25% of sales, targeting regions in the oil rich Middle East, Americas and Europe.

Komarov became a billionaire after the previous investment program. His fortune now stands at $1.2 billion, according to the Bloomberg Billionaires Index. The new investments should help to make ChelPipe one of the most profitable pipemakers globally, according to Komarov.

The company doesn’t plan to buy overseas assets, but is considering joint production ventures abroad, including in the Middle East and U.S. Part of the planned investment through 2024 will go on expanding services to clients, including helping to deliver products and installing them, Komarov said.

ChelPipe in September raised $300 million through its first eurobond and is looking at options to raise more capital, Komarov said, declining to elaborate. The company, which in December approved selling about 25% of its equity, is looking for banks to help organize the sale, Bloomberg reported at the time.

--With assistance from Alex Sazonov.

To contact the reporter on this story: Yuliya Fedorinova in Moscow at yfedorinova@bloomberg.net

To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Nicholas Larkin, Dylan Griffiths

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