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Saturday, Sep 25, 2004

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L&T aims to become an Indian MNC

Our Bureau

Mumbai , Sept. 24

LARSEN & Toubro's five-year strategic plan for 2005-10 will be ready by February next year and will be put to its board of directors for approval, said the L&T Chairman and Managing Director, Mr A.M. Naik, at the company's AGM here.

This plan will review the overall positioning of L&T as well as its business portfolio which aims to turn L&T into an Indian multinational.

Around 60 per cent of the company's revenues, according to this plan, would come from construction and projects-related work and the rest will be from manufacturing and technology services.

The company will also set up a corporate centre to oversee inorganic growth in core areas, said Mr Naik.

Boston Consulting Group is advising it on the plan. However the company's defence-related activities were not under BCG's purview, said Mr Naik.

Rs 600-cr capex plan: The company has a capital expenditure plan of around Rs 600 crore for the current year. The expansion of its Hazira facilities to augment its defence sector capabilities and pre-bid tie-ups with global players for various projects are on the cards. The company's e-engineering services and embedded businesses have been integrated with the company's information technology business.

L&T is also planning to raise $250 million through foreign currency convertible bonds, he said.

There will be a special board meeting in October to debate the issue of a special additional dividend for 2003-2004, said officials of L&T.

Divestments: The company is rapidly shedding its low technology as well as unviable businesses, said Mr Naik. Its packaging business has been closed, while the divestment of its glass container business is still being pursued, he said. The sale of the glass container business is expected to fetch the company around Rs 100 crore.

All this will add to the EVA (economic value added) of the company, he said. The EVA figure for the company had improved from a negative Rs 350 crore to a positive Rs 50 crore after the demerger of its cement division, said Mr Naik.

The company's 33 lakh shares in Ambuja Cement Rajasthan will be eventually sold, but L&T would be doing it "when the price is right," he said.

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L&T aims to become an Indian MNC

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