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Larsen & Toubro (L&T) focuses on power gear, solar EPC to beat slowdown

According to reports, Larsen & Toubro (L&T), India’s largest engineering and construction company, plans to focus on power equipment business, EPC services for solar power plants and ship fabrication to beat the slowdown in its core engineering and construction business.

AM Naik, chairman of L&T said even though the firm lost some of the power equipment bids from NTPC, the Bombay Stock Exchange (BSE) listed firm is well prepared and ‘there is no doubt on our competitiveness.’ “There are few bids for power equipment coming during next four to five months and we are well prepared for it. We have orders for 25,000 mw (mega watt) capacity till January 2013, and hope to earn a 15-16 per cent return on the capital employed,” said Naik.

He said India has the capacity to meet the power requirements for boiler, turbine and generator (BTG) segment to set up electricity generating units. “If the Chinese import stops, we have enough capacity to meet the local demand with better quality and cost,” added Naik.

The company is also very hopeful of demand for engineering, procurement and construction (EPC) services for solar power-based electricity projects with increasing capacity coming on stream. Solar power projects are going to be in demand in coming years with technological advancement bringing down the cost of solar power generation, feel experts.

“I think price parity with conventional power projects can be achieved in the next five to six years. We would be well prepared to take the EPC job as the demand increases. However, we will not go into generation business to avoid conflict with our customers,” Naik said. The company also does not plan to venture into manufacture of solar thin films for solar photovoltaic generation.

The company is extremely hopeful of capitalising on healthy demand in the defense business catering to warships, frigates, in addition to speed boats, for which, it already has received orders. “We have requested the government to allow the private sector to participate in development of these vessels. We expect that defense would be one of the brightest divisions of L&T in next five to six years and the results would be there to see after 2020,” said Naik.

The company is also planning to incorporate nano-technology for manufacturing highly classified missile system units and wind mill components.

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