L&T Sets up Aerospace Component unit !!
LARSEN and Toubro (L&T) is foraying into international defence and aerospace in partnership with Boeing and EADS. The Indian engineering major has drawn up a mega plan to set up two defence and aerospace component manufacturing units in Coimbatore (Tamil Nadu) and Talegaon (Maharashtra) with an investment of Rs 500 crore. Both Boeing and EADS have agreed to source the components from L&T for their domestic and international use. “L&T has acquired 300 acres of land in Coimbatore for a precision manufacturing complex, the initial construction of which will take a year.
The Talegaon plant will be specifically meant for supporting the weapons system,” said a source. In February 2007, L&T had signed memoranda of understanding (MoUs) with both companies at the Aero India Aerospace show in Bangalore. The idea was to establish a long-term and profitable relationship to address the needs of the aerospace and defence markets in India and around the world. The agreement between L&T and EADS defines the formation of working teams to build a joint business model and appropriate common strategies on several key segments of the aerospace and the defence market. “The agreement is only for purchasing the components.
In future, the companies may consider forming a joint venture if the international business picks up well. Boeing and EADS are interested in tapping the Indian market, which is worth $7-8 billion annually,” said the source. L&T’s defence engineering division makes Pinaka rocket launchers for the Indian Army. It is also joining bids for a project to refurbish the Bofors artillery guns. L&T is one of the probable candidates to bag the Indian government’s Raksha Udyog Ratna status, which will enable the company to bid for defence projects. The company is also working with the Indian navy for developing the prototype of a submarine.
