The Hindu Business Line : L&T to focus on nuclear, defence, aerospace sectors

LARSEN & Toubro's heavy engineering department (HED) is placing increasingly elaborate emphasis on the areas of nuclear power, defence and aerospace, having decided to place singular focus on high-end high technology (and high-margin) businesses for the future.

Currently, these areas account for Rs 250 crore of HED's revenues of Rs 1,000 crore. "But the ratio is going to increase. Defence, aerospace and nuclear power contracts constitute almost Rs 1,000 crore of the division's backlog of around Rs 1,500 crore," said Mr P.M. Mehta, Board member and Senior Vice-President at L&T, who also heads the heavy engineering department. "The revenue target from this segment for 2007-08 is Rs 1,000 crore."

Getting contracts in the defence and nuclear segments is not easy, said Mr Mehta. It is a slow, deliberate and rigorous process. However, L&T is exploring every opportunity on the horizon, he said.

In-principle talks are on with the Nuclear Power Corporation, other private companies and State governments for joint venture projects in nuclear power; talks are on with the Navy to allow L&T to do sub-assemblies or component work for Mazagaon Docks for manufacture of submarines (for which L&T is already approved as second manufacturer).

"The Indian Space Research Organisation and L&T are also talking of jointly exporting components and systems of our own technology in the future," said Mr Mehta.

"We think that with liberalisation, all this can happen in a couple of years," said Mr Mehta.

On its own steam and often at its own cost, L&T has produced a number of prototypes of products including missile launchers for the Defence Research Development Organisation, said Mr Mehta. L&T is also pushing for increasing its contribution to the Brahmos programme.

Some of the unique opportunities the company is exploring is manufacture of spares for field guns (such as Bofors) following technology transfers from the original manufacturers, as well as upgradation of old field guns.

And it is not just the domestic sector that L&T is exploring. It is in talks with the government for seeking permission to enter the export market in defence and nuclear power. "NPC itself has organised visits from French and Russian establishments to see L&T's facilities," said Mr Mehta.

"Similarly, we also had visits from companies like Boeing and Airbus and others to look into the possibilities of our exporting some of the components," he said. "However, the qualification process is lengthy and actual export may take some time."

L&T has even hired some ex-Naval officers and other experts for its defence-related plans. "We are prepared for the long haul that it will take to establish ourselves in this area," said Mr Mehta.

More Stories on : Engineering | Outlook | Research & Development

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
India pre-pays ADB loans worth Rs 5,294 crore

US seeks enhanced trade as India raises BPO issue

L&T to focus on nuclear, defence, aerospace sectors

SAIL plans to expand capacity to 20 mt in 8 years

TMB issue: Pact signed for share transfer

Global Trust Bank mulls rights issue

FII inflows to persist despite IPO rush, say brokers

SAARC nations impose ban on poultry imports