L&T seeks to strengthen presence in Oman

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MUSCAT -- L&T Oman (L&T), a joint venture of Indian engineering giant Larsen & Toubro Limited and The Zubair CorporationThe Zubair Corporation of Oman, aims to build on its robust performance of 2009 to emerge as a key player in the Sultanate's rapidly expanding construction and infrastructure development sector.

A team of top executives from the parent company was in Muscat late last week on a visit designed to review L&T Oman's operational successes of last year, and to chart a strategy for the joint venture's energetic future growth.

The team, comprising K V Rangaswami, L&T Board Member and President of the Construction Division, and V B Gadgil, Senior Vice-President and Chairman of L&T Oman, met with L&T Oman's senior management led by M Shyamsunder, Chief Executive, to explore opportunities for consolidating and strengthening the engineering conglomerate's presence in the Sultanate.

Speaking to the Observer, Rangaswami outlined the joint venture's ambitions for the future. "Our aim is to be an integral part of Oman's development which, under the progressive vision of His Majesty Sultan Qaboos and his prudent policies, will guide and provide an environment of growth and opportunities. As the third largest construction firm in Oman, we aspire to have a good share of the construction business. With some luck, we can reach the very top within the next 3-4 years, especially with a number of big construction jobs currently under tender."

The global economic crisis, the Board Member said, had a marginal impact on L&T's Oman operations. "We were successful in obtaining major orders, and also expanded our portfolio by entering the infrastructure segment," he stated.

L&T Oman successfully executed a sizeable portfolio of projects during 2009, including a raft of grid substations and primary stations, a Toyota mega-body shop facility for Saud Bahwan Group, and a heavy engineering manufacturing facility at Sohar.

The company also saw its order book swell during 2009, with new electrical contracts accounting for a significant chunk of the order inflow. Besides a number of building construction orders, the company also won a contract to build an interchange at Al Athaiba and to dualise the Al Ansab carriageway in Muscat Governorate. Equally prestigious was a contract linked to the development of the Oman Botanic Garden.

Going forward, Rangaswami is strongly upbeat about prospects for a steady growth in L&T's order book position. "The large outlay planned by the Omani government for the power and related sector in the coming years will be a great opportunity for us, given our significant presence in Oman. Furthermore, having made an initial foray into the infrastructure segment in Oman and the huge government spending on the anvil, we see good growth opportunities ahead."

In particular, L&T Oman has its sights on a much-coveted contract for the modernisation of Muscat and Salalah airport terminals -- an infrastructure prize potentially worth in excess of a billion dollars. As one of the largest airport builders in the region, L&T has the expertise and wherewithal that few other contenders for the contract can match, says Rangaswami.

"L&T, with its EPC capability of having executed four of the largest world-class airports in India, has proven in-house engineering, procurement and project management strengths, which it can bring to bear on this prestigious contract.

L&T also has abilities to assimilate the best of talent from across various countries, including consultancy organisations specialising in airport construction." In addition to executing the Bangalore International Airport (with a capacity of 11.5 million passengers per annum) and Hyderabad International Airport (12 million passengers), L&T is also implementing a world-scale gateway at New Delhi, capable of handling 36 million passengers per year. It is also engaged in the modernisation of Mumbai International Airport, which will be equipped to handle 40 million passengers per year.

Having performed creditably in 2009-10, the parent company has now set its sights on loftier objectives, going forward, says Rangaswami. "The company maintained its all-round growth track record and produced significant increases in order inflow, sales and profitability. The order book position crossed the $22 billion (Indian Rs 100,000 crore) mark for the first time in March this year, representing a 43 per cent rise over the 2008-09 tally. Consolidated revenues were about $10 billion, which is 11-12 per cent higher than the previous year's figure. For 2010-11, we expect a 20 per cent growth in revenues and a 25 per cent rise in order inflow."

At the same time, L&T is making further inroads into the potentially lucrative GCC and regional markets.

By Conrad Prabhu

© Oman Daily Observer 2010