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West Bengal: mindless malignancy Small units prefers to remain small... to the lack of interest on the part of these to focus on original research. This despite the much lower costs of such research in India. The industry which thrived on the protection of a closed economy and the advantage of a vast domestic market, has failed to organise its evolution on healthy lines An enemy’s enemy is a friend Modi storms Silicon Valley Solar, solar everywhere … PC’s preference for professionals The power-full Hindujas Put expensive assets created to use... More Shakti to resource mobilisation... Contrarian cousins Return to king coal for urea... Muffled voices for merit… Online not in line with brick and mortar businesses... No mega rail project for Tamil Nadu Sweeter prospects for sugar TIAM turns a full cycle Kinetic Karnataka Focus on quality of power - its only around 170-180V Why land prices zoom in TN? The Gulf aviation boom Paytm karo... 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Diamond jubilee of Egmore Samskrt School WTO Meet: resolved to meet again Revving up the manufacturing sector EVM is tamper-proof Robber barons everywhere When small is no larger beautiful.. Colour-Chem’s colourful KRVS Godspeed, Chief Minister JJ Where is Rajaji? Protest masters... Measuring roof tops in terms of KW/MW Rs.1600 crore paper board plant of TNPL Liberal imports idling indigenous capacities Roaring Ro-Ro facility CRS, a jewel among managers, is no more. Plummeting profits of PSBs An inexplicable neglect The brown list of Venkitaramanan The star of Spencers is no more Excel Generators provide the vital back-up He continues the focus on social amelioration Gay abandon in pricing China invests in India R Sridhar steps down as CEO of Shriram Capital Remembering Indira Sivasailam... Lesson from Chandrababu Naidu Fuel for thought He saved millions from starvation... Engineering seats go abegging B H Kothari - a tribute When the President was rendered homeless… Moily’s bold thrust Permanent secretariat for TN GIM Eternal support for capitalisation of PS banks Fortune 500 review Come elections, come advertisements... A yen for wastage… Breaththrough in malaria control Cement prices continue to rise… Naidu will soon build a new Hyderabad More Shakthi to Das’ elbow
 
L&T- the specialty of special purpose vehicles

A decade ago, engineering and construction giant Larsen & Toubro conceived a bold, new plan: to form separate subsidiaries or special purpose vehicles to focus on new projects. This enabled the company to access and acquire expertise in new areas such as toll roads and bridges, airports, seaports, metro and rail systems.  I remember the foresight and passion with which A Ramakrishna (AR) explained this foray.

Of course, such a pioneering effort, involved certain business risks. AR took efforts to explain the benefits of the toll road concept, which found resistance in the initial period. In quick time, the concept gained acceptance and opened the floodgates for massive expansion of quality road network. With handsome funding by the private sector, road construction recorded growth as never before.

Equally innovative was the lead taken by L&T ECC to form a separate company for the construction of the Bengaluru airport. Its reputation and record were helpful in ensuring participation by reputed global companies. This experience was a big stepping-stone for taking up construction of the much larger airports at Delhi and Mumbai.

Such enterprise extended to form more such companies. The large Dhamra Port in Odisha in partnership with the Tatas is another major venture. K V Rangaswamy who headed the construction division pointed to L&T gaining rich expertise in such diverse fields for engineering and construction, build value and sell its share in such projects to good profit. The company thus derives twin advantages: getting  orders for constructing such large projects and on completion, to sell these at profit.

The L&T Shipbuilding Ltd on which L&T has invested around Rs 4000 crore is another example of a handsome diversification. This project has three components: an engineering unit, shipbuilding cum repair facility and a container port. The present recessionary conditions come in the way of full utilisation of the niche facilities created. With the expected turn around of the economy, the operations would become profitable.

 The construction division had been accounting for around half the revenues of the giant corporation. With the slowdown in the economy affecting the manufacturing sector in the current year, the construction division may account for larger share, of around 75 per cent, of the revenues of the corporation.

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