Engineering conglomerate Larsen & Toubro’s Shipyard at Kattupalli is likely to achieve break even in the next two to three years for which it is banking heavily on the orders from the defence sector and exports, said a senior official.
“L&T has eight defence manufacturing units. Kattupalli is one of the recent additions,” said Jayant D. Patil, member of the board and whole time director (Defence Business). “Currently, it is operating at 10% of its utilisation capacity.”
While the other units have achieved the break-even, Kattupalli might take at least two to three years, due to its low capacity utilisation. Currently, it operates at 10% capacity. While production capacity of existing units can be expanded by more than two to three times, Kattupalli can be expanded by five times, he said.
On the order book position, Mr. Patil said: “We had bagged three major contracts of close to ₹4,000 crore from Indian Coast Guard and Navy. The first project for Coast Guard is almost complete. In the second schedule, the boats have been constructed and ready for delivery. As far as the third project is concerned, we have handed over the Offshore Patrol Vessel (OPV), six months ahead of schedule. The delivery of the remaining OPVs will be done once in every six months.”
About the Kattupalli facility, he said: “The utilisation capacity can go up once we receive orders from the Ministry of Defence. The tenders are in the pipeline. We along with Reliance have bid for the Landing Platform Dock (LPD). It is a big project and we don’t know when the tenders will be opened. Till then, we are looking at exports for growth. For the current year, we don’t have any major investments in Tamil Nadu,” he said.
Currently, L&T defence business accounts for 4% to 5% of its standalone turnover and it plans to double it to 10% by 2021, he said.
By: The Hindu
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