Power is an area of focus for L&T at the moment

Written by Mona Mehta | Updated: Nov 5 2009, 04:44am hrs
Larsen & Toubro (L&T) has bagged a Rs 6,897 crore engineering and construction (E&C) order from Maharashtra State Power Generation Company Ltd (Mahagenco) for super-critical boiler turbine generator (BTG) units. In an exclusive interview with FEs Mona Mehta, Ravi Uppal, chief executive officer and managing director, L&T Powerpart of E&C divisiondiscussed the future outlook for L&T Power, and its corporate strategy. Uppal explained how with the current huge order, Mahagencos 1980-mw project in Koradi, Nagpur will add close to 50 million units to the national grid everyday. L&Ts advanced supercritical thermal sets will ensure higher plant efficiencies and lower greenhouse gas emissions, thus introducing new and green era of environment friendly power generation. Excerpts:

With improved market conditions, is L&T strongly focussing at bagging major BTG contracts in the power sector in this financial year

Power is an area of focus for L&T at the moment. We have made substantial investments worth Rs 23,500 crore two years ago in setting up boiler and super critical manufacturing facilities in Hazira. For the purpose, L&T had entered into joint collaboration with Japanese partners, Mitushibhsi Heavy Industries. L&Ts boiler manufacturing facility in Hazira will be ready in December 2009 and turbine super critical by March 2010. With both these facilities coming up, L&T will be the second leading producers of super critical thermal power projects in India. L&T Power has built up its own inhouse capacity to produce machines, broilers in its own shop floors. Currently, BSEL is the leading producer of thermal power projects with facilities based in Haridwar and Trichi. Earlier, L&T was not producing power plant on its own, but were undertaking execution on the design and engineering turnkey basis. But now, L&T will start manufacturing power plant equipment on its own. Hence, now our immediate focus will be to produce machines from own shop floors.

Is L&T looking at any distressed BTG units acquisition of a small and medium sized power company

We are greenfield investments company and capable of producing 4,000 mw of power plant equipment every year. With these capabilities, L&T Power will become leading players in the sector. Hence, we do not feel the need for any distressed BTG units acquisition.

Where does L&T see itself in the next five years from now in E&C business, specifically in terms of position and revenues in the BTG units power business

In the first seven to eight months of the financial year 2009-10, L&T Power has bagged Rs 14,000 crore worth of orders of the total E&C business. Going forward, by the end of this financial year, we hope to bag orders worth Rs 80,000 crore. In the next five years, L&T Power sees itself to be a leading player in production and execution of thermal power projects. L&T Power hopes to achieve substantial revenues through the BTG units business in the E&C business. We are yet to evaluate the exact figures.

What are the major challenges L&T Power is currently facing in producing and executing BTG units in the power business How is the company planning to overcome those challenges

L&T has been into the power business since the past five decades. Like BSEL, L&T Powers focus in the task of generating additional power capacities is also enormous. India will have two leading companies in producing and executing thermal power plant projects. Hence, we feel, we can easily meet up the challenge of generating additional power capacities.