India's L&T poised to set up shipbuilding unit

Larsen & Toubro (L&T), India's largest engineering conglomerate, is poised to set up L&T Shipbuilding, as a separate company, within two weeks. The shipbuilding company will announce the location of its large new shipyard in August.

L&T has earlier said it will invest around $110 million in this new yard, as part of the second phase of its entry into shipbuilding, and is eyeing vessels such as large crude carriers.

Formation of the shipbuilding company is part of what Chairman A M Naik told India's Business Standard is a "verticalization" effort under which at least five new companies will be set up. The companies will operate in L&T's new business areas of power projects, boilers, turbines, water and shipbuilding.

Each of these companies will have a CEO, a board, and finance and human resource management teams. L&T has also launched a global hunt for CEOs.

These CEOs will be a part of the group corporate management committee but would not initially sit on the L&T board. "We hope that some of the CEOs will eventually get into the main company's board," he said.

The companies will operate in L&T's new business areas of power projects, boilers, turbines, water and shipbuilding.

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