L&T to invest Rs 70 cr in FY '10 for expansion in EBG division

Larsen & Toubro will invest Rs 70 crore in its electrical and electronics division (EBG) in the current fiscal.

"We had been investing around Rs 100 crore each year in the last three years in the EBG division. This year, our capex plan for the division is Rs 70 crore," L&T Board Member and Head of the EBG division R N Mukhija said here today.

The EBG division comprises an electrical and automation operating company (EAOC) as a vertical and two strategic units -- petroleum dispensing pumps and systems (PDP) and medical equipment and systems (MED).

Mukhija said the company would put in Rs 20 crore to set up a manufacturing facility for its MED business at its facility in Mysore.

"We have 15 acres there. We will be using only five acres for putting up the facility. We have some other plans for the remaining land," Mukhija said, without elaborating.

L&T's EBG division contributes 8-10 per cent of L&T's turnover and has been recording around 30 per cent growth in business annually for the past few years, barring 2008-09, when the growth rate might turn out to be lower, he said.

The EBG division has, in recent years, enhanced capacities at its Navi Mumbai, Ahmednagar and Mysore units. It started a switchgear-manufacturing facility in China in 2006, set up a joint venture company in Saudi Arabia for manufacturing switchboards and established an automation integration centre in Dubai.

In April 2008, the EBG division acquired Temco, a medium-voltage switchgear company. Temco, one of the best acquisitions by any Indian Inc in recent times, according to Mukhija, has manufacturing facilities in Malaysia, China, Indonesia and Australia.

Stating that the division was not looking at further acquisitions, Mukhija said that it would now focus on consolidating operations after doubling its business in the last four years or so.

"We have embarked on a lean manufacturing journey and want to get the maximum out of our existing operations," he said.

Mukhija said from 2003-04 to 2008-09, the EBG division filed 409 patent applications. Of the 409, 58 are for switchgear products, 16 for energy meter products, 14 for medical equipment, 12 for tooling products and eight for petroleum dispensing products.

It spent 4-5 per cent of its revenue on R&D each year and employs 300 people.

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