The Hindu Business Line : L&T `homes in' on building electricals

LARSEN & Toubro's electricals division is charting thepath from industry to homes, as it decides to focus more on building electricals, cashing in on the construction boom in the country.

"There are lots of buildings, apartments, multiplexes and shopping centres coming up. They will want the best equipment for themselves," said Mr. R N. Mukhija, Member of the Board and President (Operations) at Larsen & Toubro. "We could end up like Anchor, even selling switches."

The company's Moulded Case Circuit Breaker, which was designed by its switchgear design team (and won the best product prize in its category at the electrical industry exhibition Elecrama 2006), is a case in point. "From larger scenarios, we are moving towards the home," said Mr Mukhija.

L&T's tie-up with France-based Hager for Miniature Circuit Breakers some years ago marked its entry into the building segment. "This lead us into building electricals. We are looking at top building electricals."

From larger switchgear to air circuit breakers and miniature circuit breakers, the company's "to-the-building" approach was well charted out, said Mr Mukhija. L&T has had a series of products along the low-voltage switchgear line.

During Elecrama 2006, the company tied up with Hager of France again, this time to offer Hager's Home Comfort Solutions System (branded TEBIS), a `lifestyle statement product.' TEBIS allows users to choose various scenarios for electricity savings and combining the usage of various devices such as air-conditioners, geysers and music systems.

L&T has close to a 40 per cent market share in the low-voltage switchgear industry. It has 100 R&D engineers working on this line of products. "Providing them excitement helps to attract and retain them. In an industry where somebody can be 40 or 50 times bigger than our own company and can attract them, this calls for many human resource challenges," said Mr Mukhija.

One of L&T's strengths in the switchgear industry is that it has been able to retain all of its nearly 500-strong distributor network, which competitors are constantly seeking to dislodge, said Mr Mukhija. He personally knows each of the distributors.

"Price is not the secret weapon. It is L&T's approach, product quality, service, personal rapport with them," he said.

He points out that while revenues from the electricals and electronics segment grew by 26 per cent during Q3 this fiscal compared to the year-ago period, the segment's results at Rs 61.15 crore were high by over 76 per cent, showing higher margins.

L&T had recently entered into an agreement to acquire Nashik-based Datar Switchgear under a scheme to be approved by the Board for Industrial and Financial Reconstruction.

Datar manufactures miniature circuit breakers and earth leakage circuit breakers, which L&T imports from Hager for the premium-end of the building segment.

With the products from Datar, L&T will be able to serve both the premium and mass market in India where the building electrical segment has tremendous potential.

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