Larsen & Toubro sees $1.5-billion annual business in nuclear power by 2015

Infrastructure major Larsen & Toubro said it sees a $1.5-billion (Rs 6,690 crore) annual business opportunity from nuclear power in another three to five years, despite the recent accident and sequel at Fukushima in Japan.

The company expects a major part of the growth in this business to come from nuclear power producers outside India, in the US, Britain and France. "A number of reactors in these countries would go for replacements of some of the parts and upgrades. That would be an opportunity L&T will be looking at," said M V Kotwal, president-heavy engineering.As a part of its heavy engineering division, the company manufactures vessels for pressurised heavy water reactors, fast breeder reactors, steam generator assemblies, heat transport systems and other critical equipment. The company is also engaged in engineering, procurement and construction of nuclear power plants.

Currently, the nuclear business contributes three per cent of its heavy engineering business, but this can go up to 15 per cent in another five years. Kotwal noted safety standards of nuclear plants across the world were being reviewed after the Fukushima disaster. "There has been a pause in orders from outside India in the short term. But in the long term, we see no impact," he said.

L&T's high-grade metal forging foundry in Hazira, to be commissioned early next year, will contribute to the plans. The company hopes to upgrade it to international standards by 2013-14 and then look at high-grade forgings for nuclear power plants. Initially, the unit will look at forgings for the hydrocarbons business, rolls for steel plants and turbine rotors for power plants.

"We have already commissioned the furnace at the unit and will start work by the second quarter of next year," said Kotwal. The forging unit is being set up with a planned investment of Rs 2,000 crore and it has already invested Rs 1,500 crore in the first phase. The orders for this business are expected to come from obroad. It already exports 60 per cent of its forgings to 40 countries.

L&T has aimed to double its revenues in the next four to five years and has set similar targets for the heavy engineering business. "We are seeing improvement. Orders which have been pending have started reviving, especially in the hydrocarbons segment on the refining side," said Kotwal.

He also said activity in the exploration of the oil-rich tar sands in Canada (Alberta province) had revived after hit by a slowdown. "If they come up, we can see some orders next year and the year after," said Kotwal.