Larsen weighs plan to build large reactors

Larsen & Toubro (L&T) plans to set up a greenfield facility to manufacture large reactors for oil, gas and fertiliser industries in the West Asian market. The company is also exploring the option of acquiring similar facilities in the region.

"The strategy of having a manufacturing presence for heavy reactors and other equipment aims at reducing cost and time involved in transporting them from India to West Asia," said MV Kotwal, senior executive vice-president - heavy engineering, L&T.

He said the company had identified three locations for a fresh facility to manufacture 100 reactors a year. Also, it was in acquisition talks with local players, he added.

Large reactors weighing 2,000-3,000 tonne are used to convert gas into oil, or petrochemical speciality reactor, he said. He, however, refused to divulge further details.

Industry sources said setting up a greenfield project with this size would cost Rs 100 crore. Gulf will be a prominent market for the group.

Oil, gas and infrastructure development will be two main areas L&T would like to thrust upon. In the infrastructure arena, L&T has plans to acquire an overseas process engineering company.

It also has plans to set up a design engineering centre in Dubai. Inernational operations would contribute to 25 per cent of the group's overall revenue, of which more than 60 per cent will be generated from the Gulf.

L&T, acquired 61 per cent stake in International Seaport Dredging, promoted by Dredging International NV.

(DI), for an undisclosed amount. In 2005, it invested $ 11 million in China for the manufacture of high end air circuit breakers (ACB) or switch gears.