L&T Forms JV With Mitsubishi

Larsen & Toubro (L&T) will set up joint ventures with Japan''s Toshiba Corp and Mitsubishi Heavy Industries (MHI) to commission manufacturing facilities for super-critical turbines and boilers, which are used in coal-fired power generation plants. The two joint ventures will have an aggregate capital outlay of about Rs 600 crore. L&T inked an agreement with MHI to float a JV- L&T MHI Boilers - for super-critical boiler plant on April 17 in Tokyo. The JV will be capitalised at Rs 300 crore, with L&T owning 51%. Initially, the JV will have a staff strength of 50, which will go up to 1,250 once production achieves momentum. MHI had signed an agreement with L&T in last October for licensing its supercritical pressure boiler technology. The agreement with Toshiba for setting up a turbine plant is likely to be signed next month, said sources close to the development. Hitherto, state-owned Bharat Heavy Electricals (Bhel) is the only power equipment manufacturer that has tied up for large-size supercritical boilers so far in India. In 2005, it signed a technology transfer agreement with French power major Alstom. The new JV will handle the full spectrum of activities relating to supercritical pressure boilers, from manufacture and sales to installation and after-sale services. The sales targets for the new JV are set at $435 million after three years and $690 million after five years.