L&T may spin off boiler business
Leading engineering firm Larsen & Toubro (L&T) has lined up plans to invest over Rs 2,500 crore in building a shipyard and expanding its engineering manufacturing unit to target growth across energy sectors like oil, gas and power.
In particular, L&T is eyeing exponential growth in the power equipment business and may consider hiving it off into a separate company.
It has set up a joint venture with Mitsubishi Heavy Industries to manufacture supercritical turbines and boilers at Hazira. “Power sector represents a huge opportunity for us. At present, Bhel is the only company in this sector. Hence, there is huge scope to grow our boilers and turbines business manifold,” L&T’s director and president (engineering and construction projects), K Venkataramana said. Later, L&T may consider hiving off its boilers and turbines business into a separate company.
Mr Venkataramana was speaking at a press meet during Chemcon 2007, a chemical engineers’ meet which was earlier inaugurated by West Bengal industries and commerce minister Nirupam Sen.“India’s ambitious 60,000 mw capacity addition has led to a shortage of power equipment suppliers leaving tremendous scope for a few more Bhel-like companies,” he said.
While L&T is investing Rs 1,000 crore in boilers and turbines, another Rs 1,000 crore has been lined up for building a new shipyard. L&T is also pumping in $30 million in Hazira which houses its heavy engineering facilities. The facility is engaged in design and manufacture of fabricated equipment including those for oil, gas and refineries.
Incidentally, L&T has invested about $165 million in developing an installation vessel at Sohar in Oman. “We are also developing capabilities to deliver deep water drilling rigs. L&T has tied up with an US-based company and are currently quoting for large sized deliveries,” Mr Venkataramana said.
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