Larsen & Toubro has entered into a partnership with Japan’s Mitsubishi Heavy Industries to source technology for shipbuilding. Mistubishi would provide design and training support to L&T for the first three years. The collaboration is being built on the successful partnership that the two companies have had in producing power-generating equipment based on super-critical technology.
“The technological agreement would help us take ahead our three-pronged activity under the shipping division, which would entail commercial shipbuilding, repair and retrofit and defense vessels. Together, the three would help us realise benefit in a bad economic phase,” MV Kotwal, director on the board of L&T and head of L&T Shipbuilding subsidiary, told Financial Chronicle.
Under the terms of the agreement, Mitsubishi will provide design support and a broad range of training in ship construction and quality control. Besides, support activities will further include consultation on future expansions, overseas procurement of shipbuilding materials and marketing efforts. The tie-up signifies the Indian major’s intent to become a major force in this business, rivaling shipyards in Norway, South Korea and Singapore.
The extent of royalty and other fees payable by L&T has not been disclosed.
“L&T will produce ships from its Hazira shipyard, while production from our new shipyard in Kattuppali, Tamil Nadu, would become operational by March 2012. We would build specialised vessels, LNG carriers, LPG vessels as well as defense vessels. Vessels built at both these shipyards using the Japanese technology will be marketed globally. We will also build vessels for Mitsubishi itself,” said Kotwal.
Shashank Abhishek, a senior infrastructure analyst with BNP Paribas, said the agreement being long term in nature, would not have any short-term impact on its balance sheet. “However, it would help L&T compete with the global best in the business from Korea and China. Though right now, the shipping sector is not doing well across the globe, it’s a good initiative to forge ahead in the sector as a long-term strategy,” Abhishek said.
- Beginning early next year, Mitsubishi will train L&T Shipbuilding engineers at its Nagasaki Shipyard & Machinery Works, and at Shimonoseki Shipyard & Machinery Works in Yamaguchi Prefecture.
The keel-laying of the multipurpose deck cargo vessel, built for Oy Gaiamare Ab, was held at STX Turku. Maritime Security Companies
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