Engineering and construction major Larsen & Toubro has drawn up plans to ramp up its international business by three times over the next five years.
The move is likely to take L&T's share in the company's total business from 15 per cent to 25 per cent.
L&T chairman and managing director AM Naik told Business Standard on Monday that the strategic plan was now being given final touches and would be announced next month.
Under the plan, the company will increase its total overseas revenue from $500 million (around Rs 2,200 crore) to $1.5 billion (around Rs 6,500 crore) by 2010, of which $1 billion will come from West Asia alone. The region now contributes $340 million (around Rs 1,500 crore) to L&T's turnover.
Naik, who has been spending his "weekends in the Gulf" over the past several months, said L&T would set up one company each in Qatar, Kuwait and the United Arab Emirates by the end of this calendar year. In other words, one new firm will be floated in the region every six weeks.
It has already set up companies in Oman and Abu Dhabi. These companies -- mostly joint ventures with local firms where L&T will have financial and management control -- will bid for projects in these countries.
Without revealing the finer details of the growth strategy, Naik said the company would grow at 17-20 per cent rate during the next five years.
Back-ofthe-envelop calculations suggest that this growth will help the company post a turnover of $6 billion (nearly Rs 26,000 crore) by 2010 compared with $3.2 billion (nearly Rs 14,000 crore) now. Its international business will earn 25 per cent of this turnover, or $1.5 billion.
The overseas push is an integral part of Lakshya, the five-year growth plan L&T has outlined in consultation with the Boston Consulting Group. The last five-year strategic plan ended in March 2005.
"Once the business gets a quantum jump, a president and his team will look after the businesses in West Asia," Naik pointed out. The company is looking for mostly organic growth. "Of this target, 15 per cent will come from organic growth while the balance 2-4 per cent from inorganic growth," he said.
In China, L&T has begun outsourcing components and raw materials besides setting up a small manufacturing unit to make switchgears. L&T has offices in Shanghai and Beijing and supplies technology and equipment to hydrocarbon companies.
L&T has supplied speciality industrial valves worth $25 million in the last two years to Chinese petrochemicals and power projects.
The company has recently set up a switchgear plant in China and is considering taking over a local valve-producing firm.
In the US and Europe, the focus is on medical equipment and heavy engineering.
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