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N. Ramakrishnan

Mr K.V. Rangaswami

Chennai , Dec. 27

THE ECC (Engineering Construction and Contracts) Division of Larsen & Toubro Ltd will take up more projects on BOT (build, operate and transfer) route. The company will look for opportunities in this sector, according to Mr K.V. Rangaswami, Senior Vice-President, L&T, who has been appointed as an executive director on the board of L&T.

Mr Rangaswami, who will also be the Head of ECC, from January 1, 2005 told Business Line on Monday that L&T may take up majority stake in BOT projects, instead of settling for minority stakes as it was doing now.

ECC will also expand its operations in the ready mix concrete (RMC) business by setting up more RMC stations. It sells ready mix concrete as a product to all customers, including some who may be its own competitors in projects.

So far this year, it has added six RMC stations and the plan is to add about 10-12 stations every year. Having covered the major metros, ECC will set up these stations in second-rung towns and cities, according to Mr Rangaswami.

Mr Rangaswami will head the ECC division on the retirement of Mr A. Ramakrishna, Deputy Managing Director and President (Operations), L&T.

Mr Ramakrishna, who will retire on December 31 after 42 years in the company, has seen ECC's revenues grow from Rs 450 crore in 1992, when he was inducted into the board of directors of L&T, to over Rs 5,500 crore in 2004.

On the ECC division's performance for 2004-05, Mr Rangaswami said that it was on course to meet its projections of Rs 6,300 crore. Given the emphasis on infrastructure and with more industrial projects being taken up, the division could reasonably expect a 15 to 20 per cent growth in turnover in 2005-06. Overseas projects, which contributed to about 15 per cent of turnover, were also growing.

He said that L&T had set up an office in Kazakhstan to study the market. Though the potential for projects was encouraging, the company preferred to study the market before entering it. Otherwise, L&T's overseas focus would be in West Asia, Africa and SAARC (South Asian Association for Regional Cooperation) countries - Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka.

As far as industrial projects were concerned, Mr Rangaswami saw a definite increase in minerals and metals, especially steel. A number of water supply and sewage treatment and disposal projects were also coming up.

What would be the biggest challenge for the company? He replied that human resource was the single biggest challenge that L&T would have to deal with, as industrial and infrastructure project opportunities grew. Getting the right kind of people and retaining them was a challenge for the company.

Employees in the 32-40 age group, with about 10 years of experience in L&T, were targeted by multinational companies that were either setting up base in India or for their operations in other regions such as West Asia.

L&T was recruiting more entry-level engineers and taking steps to make it more attractive for them to stay in the company, he said.

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