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Murali Gopalan
Mumbai, June 30: Larsen & Toubro (L&T) has roped in Boston Consulting Group (BCG) of the US for a restructuring exercise that will involve a detailed review of its business portfolio and revalidate strategies in its endeavour to become an Indian multinational.
L&T's managing director and chief executive officer AM Naik told The Financial Express that he was "deeply committed to the creation of L&T as a premium conglomerate and enhancement of shareholder value." He added that this had always been the top priority when he had taken over as CEO and that the appointment of BCG was a step in that direction.
A release issued by the company here on Wednesday states that the management has given a clear mandate to BCG to suggest definitive measures for value creation through accelerated growth and enhanced profitability. The entire exercise will last a little over three months and the recommendations will be submitted by mid-November this year.
BCG's scope of work would include the following:
Restructuring and streamlining of operations has been an ongoing process at L&T for nearly a decade. The company, at that time, had decided to get out of unprofitable operations (which led to the sale of the shipping division) and form joint ventures for other crucial activities. The idea was tousher in the latest technology which only multinationals could provide.
Thus, the construction equipment business at Bangalore was spun off as a 50:50 joint venture with Komatsu of Japan and an encore is expected shortly with the division at Pithampur. Talks were at an advanced stage with Case Corporation of the US, which was recently taken over in a worldwide acquisition by New Holland. Other joint ventures for vital operations have been formed with world leaders like Sargent & Lundy, Ramboll, Chiyoda and others.
Some important decisions on the cement and information-technology businesses are expected to be taken during the current financial year and through 2000-01. L&T has clearly indicated that engineering, procurement and construction will continue to be the backbone of the company as it contributes to nearly 55 per cent of total turnover.
L&T bags Rs 196cr contract
L&T, along with Engineers India (EIL), has won a $45.45-million (around Rs 196 crore) contract from the Oil & Natural GasCorporation for its clamp-on related modification and pipelines project. The combine, according to a release, has won this in the face of stiff international competitive bidding. The objective of this project is to enhance oil production and augment water-injection network.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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