The Hindu Business Line : L&T in talks with Germany-based Voith to export paper machinery

Chennai, Aug. 16 Larsen & Toubro is in talks with Voith, Germany, with which it has a joint venture, for export of paper equipment such as drying cylinders and twin drum cylinders.

Voith deputed its sourcing expert for assessing the facilities, quality records and engineering capability. The expert rated the unit as a good source for procurement, notes L&T’s 2007-08 annual report.

According to the annual report, Voith will send enquiries to L&T for these equipment for global marketing. The machinery and industrial products division of L&T, under which falls the paper equipment manufacturing activities, has also initiated a dialogue with Hazemag for marketing crushing equipment in Germany and other European countries.

L&T has an equal joint venture with Voith – Voith Paper Technology (India) Ltd – which provides technological solutions and products.

According to the annual report, the division’s Kansbahal works, in Orissa, doubled the capacity of its foundry last year to 12,000 tonnes a year at a cost of Rs 15 crore. The Kansbahal works is an integrated machine building centre with facilities for casting, fabrication, machining and assembling.

New foundry

A new foundry is being set up in Coimbatore, Tamil Nadu, to cater to the growing demand for cast components for wind turbines. Spare capacity, after meeting the domestic demand, will be used to manufacture castings for the export market. The project is estimated to cost Rs 125 crore and it will begin commercial production in July 2009.

L&T has said that it will like to increase its earnings from international operations from 16 per cent of revenues now (2007-08 gross consolidated revenues of Rs 29,561 crore) to 25 per cent over the next few years. Apart from the revenues, international business has a spin-off benefit on domestic operations.

It precipitates a change of operational culture, since in order to remain globally competitive, every activity of the company needs to be benchmarked against the best in the world.

On China, the report says that L&T views China as a market, a manufacturing base, a sourcing base for the Indian market and a possible source for exports to third countries.

The report says that with the opening up of infrastructure development to the private sector, the financing of mega and complex projects has emerged as a major business opportunity. L&T has entered infrastructure project financing through a wholly owned subsidiary.

The venture is expected to focus on mid to large projects with an annual target of Rs 2,000-crore disbursements.

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