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| L&T, EADS announce JV for defence tech |
| Press Trust of India / Mumbai May 05, 2009, 11:24 IST |
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Larsen & Toubro (L&T) today announced the formation of a joint venture company with EADS Defence & Security to develop and manufacture defence electronics products including radars, avionics, electronic warfare in India to cater to domestic and overseas markets.
The yet-to-be-named venture, which is awaiting clearances from the Indian government, would target to clock Rs 2,000-2,500 crore revenue in five-seven years, L&T Chairman and Managing Director A M Naik told reporters here.
Naik said that the JV would be based at Talegaon in Pune, where the engineering major has an existing facility, and will invest Rs 100 crore to start with which would go up as per the requirements.
"Work on the JV will start in a matter of next few months. We are expecting to get all the approvals and taking orders from early 2010," Naik said, adding that if required, another facility adjoining the existing plant could be set up.
L&T has already significant presence in the defence sector and generates around Rs 400 crore revenue a year. EADS Defence & Security is the largest player in the sector in Europe.
The shareholding pattern of the joint venture was not disclosed today as Naik said this would be decided as per the guidelines of the Government. As of now, foreign ompanies can hold upto 26 per cent in a defence venture.
EADS Defence & Security's Chief Executive Officer Stefan Zoller said India's huge budget in defence and its increasing investment on the education system to create a pool of skilled engineers have helped the company to choose India in its objective to spread outside Europe.
"The cooperation with L&T is an important milestone on the way to increase our industrial footprint in India. The Indian defence and security market is growing fast and we want to grow with it," Zoller said.
"The investment is related to the size of the company. Whatever investment is required, it will be given," he said.
L&T is working with Indian armed forces and DRDO. It is the largest player in the private sector in the defence system and make products such as weapon systems, avionics, IT & engineering services, power and automation systems, radar and sonar systems, ships & submarines and marine products.
The Indian major has manufacturing facilities at Mumbai, Coimbatore, Ranoli, Hazira, Kanchipuram and Talegaon. The joint venture company would develop and manufacture indigeneous solutions for military requirements of India and abroad.
The scope of the JV is to establish a global centre of excellence, which will not only cater to the domestic market but worldwide also.
"It will make electronic warfare, radars, military avionics and mobile systems," L&T's Whole-time Director M V Kotwal said.
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