L&T to set up $11mn unit in China

Larsen & Toubro Ltd (L&T) today announced that it would set up a greenfield project in China for manufacturing high end air circuit breakers (ACB) or switch gears. The company plans to invest $11 million in the project.

The facility will be set up in the Wuxi New District, a hi-tech industrial park in the Jiangsu province of China on a 30,000 sq metre plot.

It will be equipped with state-of-the-art facilities for manufacture and testing, said R N Mukhija, president and member of the board of L&T. The company has signed a memorandum of understanding (MoU) with the Chinese authorities on this.

The ACB is part of L&T's expansive range of electrical and electronic products, widely sold in international markets including Europe. Developed through indigenous R&D, the ACB is powered by embedded software created by the company's engineers.

L&T, which has offices set up in Shanghai and Beijing, currently supplies high technology equipment for the hydrocarbon sector in the country and is in the process of completing supply of coal gasifiers for ammonia, methanol and coal liquefaction projects.

L&T has also received an order from Petrochina for supply of a reactor for its EO/EG (ethylene oxide/ethylene glycol) project at Liaoyang.

In addition to large equipment, L&T has supplied specialty industrial valves worth $25 million over the last two years to various petrochemical and power projects in China.

"Possible acquisition of a local valve manufacturing company is being considered to increase L&T's presence and address a larger share of the global market," according to a release issued by the company.

L&T last week decided to exit the tractor business by divesting its 50 per cent stake in a joint venture, L&T-John Deere to its foreign partner.

The divestment is in line with steps taken by the company to exit from non-core areas and focus on its core businesses, said A M Naik, chairman and managing director of L&T.

The core business includes engineering and construction, electrical and electronics, information technology and engineering services.

However, Naik did not reveal the price realisation for the divestment.