Mumbai: Engineering and construction major Larsen and Toubro is making a big entry into the power sector, with installed generating capacity of 5,000 MW power planned over the next five years.
L&T had, in November, tied up with Japan's Mitsubishi Heavy industries, to make steam turbines and generators. For this the company is setting up a separate joint venture with an initial capital outlay of Rs800 crore. (See: L&T & Mitsubishi tie-up to make super-critical steam turbines, generators in India)
The company would invest around Rs5,000 crore over the next five years, A M Naik, chairman and managing director of L&T, said on the sidelines of a function organised to celebrate the birth centenary of L&T's co-founder Holck Larsen.
(4 July 1907 - 27 July 2003)
L&T, he said, has floated a new arm, L&T Power Development, to take up major power generation projects, mainly thermal power projects L&T Power Projects, a unit of L&T, also had a joint venture with Mitsubishi for making boilers.
L&T, meanwhile, is in talks with Japan's Toshiba Corporation for setting up a joint venture in India to manufacture power plant equipment. (See: L&T may set up JV with Toshiba in power sector)
Reports quoting L&T sources said discussions with the Japanese company are at a preliminary stage.
Japanese news reports also said that L&T would hold majority stake in the joint venture, which will invest about $173 million to build plants for steam turbines and power generators.
Toshiba, which has been expanding its power business, acquired US nuclear power plant maker Westinghouse for $5.4 billion last year. (See: Toshiba buys Westinghouse for $5.4 billion). Toshiba, which makes electronic goods including DVD players, semiconductors, electric motors and power systems, is preparing for an expected surge of new investment in power plants in China, India and the US.
"By 2020 the market for nuclear power generation is expected to grow 50 per cent compared to 2005," Atsutoshi Nishida, Toshiba''s chief executive, said while announcing the acquisition from London during a press conference in February, this year.
Westinghouse, which has built most of the nuclear reactors in the United States, is likely to design the plants and service them as and when they materialise. Toshiba expects its nuclear power business to expand to three times the current level by 2015 as a result of operational and technological synergies with Westinghouse.
L&T,for its part, appears to be gearing up to take advantage of the huge investments coming up in the country's power sector, particularly nuclear power, an area in which Toshiba and Mitsubishi have a strong interest.
L&T was founded in Bombay (now renamed Mumbai) in 1938 by two Danish engineers, Henning Holck-Larsen and Soren Kristian Toubro, both of whom were strongly committed to developing India's engineering capabilities to meet the demands of industry.
Beginning with the import of machinery from Europe, L&T rapidly took on engineering and construction assignments of increasing sophistication. Today, the company sets global engineering benchmarks in terms of scale and complexity.