MUMBAI, June 8: The Rs 5,300-crore Larsen & Toubro is in talks with Case Corporation of the US for a joint venture in loader backhoes, which are used as earthmoving equipment in the construction industry. Talks are on, and a decision is expected by January, sources say.

The new company, L&T-Case, will acquire the engineering major's Pithampur (Madhya Pradesh) works which makes loader backhoes and vibratory compactors. Currently, L&T is a distributor for a wide range of construction equipment manufactured by Case Corp. Escorts has a share of 80 per cent in the loader backhoes segment and the L&T-Case joint venture is expected to eat into this significantly.L&T is also in the process of finalising a 50:50 joint venture for hydraulic excavators with Komatsu of Japan.

The new company will take over the existing facility at Bangalore and the spinoffs in technology are expected to be considerable.At present, L&T is the distributor for hyraulic excavators manufactured by Case Poclain SA of France.The construction and earthmoving equipment is an integral part of L&T's Group 1 which has its manufacturing facilities in Bangalore and Pithampur. The two joint ventures will only acquire select divisions which will be spun off as L&T-Case and L&T-Komatsu respectively.In its endeavour towards strengthening its EPC (engineering, procurement and construction) activities, L&T has entered into a strategic alliance with British Oxygen Company for turnkey air separation plants and projects on a build-own-operate (BOO) basis. British Oxygen is among the top names in the world for atmospheric gas and plant sale with a turnover of œ4.5 billion.

The combine will bid for air separation plants and BOO projects both here and abroad. Sources say there will be "tremendous business potential" in steel and petrochemical projects. L&T's EPC activities alone are expected to contribute Rs 9,000 crore to the turnover by the turn of the century and the company is focussing on this to "become a market leader and globally competitive."The key sectors that have been identified for EPC are power, cement and oil and gas. Refineries and fertilisers are as important but with the lacunae on the import duty structure, occupy second place. In steel, the tieup with British Oxygen will ensure building expertise in air separation plants.Thus, when the Gopalpur steel plant with a capacity of 2.6 million tonnes of hot rolled coils gets under way, L&T is confident of holding its own in EPC for the power and oxygen units. The estimated revenue here will be Rs 1,000 crore (Rs 200 crore from oxygen and the balance from the 250 mw power plant).

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.