Larsen and Toubro plans to invest Rs 51 crore (Rs 0.51 billion) for setting up 17 Ready-Mix Concrete plants by 2006 across the country and achieve a turnover of Rs 500 crore (Rs 5 billion) from the business.
"We plan to invest Rs 51 crore (Rs 0.51 billion) for setting up 17 new RMC plants by 2006," L&T executive vice president K V Rangaswami, told PTI in New Delhi on Tuesday.
The company plans to carry out the RMC plant expansion in to phases by adding four units in 2003-04 and the remaining 13 units by 2005-06.
The Engineering Construction Contract division will set up an RMC plant each in Cochin, Vizag, Hyderabad and Mysore in 2003-04.
L&T plans to put up the other plants in Chandigrah, Ahmedabad, Pune, Nagpur, Kolkata, Jaipur, Bhopal and Lucknow by 2005.
L&T has set a turnover target of Rs 500 crore (Rs 5 billion) for the RMC segment, which would contribute to five per cent of the Rs 9,000 crore (Rs 90 billion) turnover of ECC division by 2006, he said.
RMC primarily comprises of cement, aggregates, water and other ingredients, which are weigh-batched at these centrally located plants. It is then delivered to the construction site in L&T transit mixers.
L&T at present runs 18 RMC units in different parts of the country, Rangaswami said.
The RMC segment in the ECC division is expected to contribute Rs 200 crore (Rs 2 billion) by the end of the current fiscal.
L&T's ECC division posted a turnover of around Rs 4,400 crore (Rs 44 billion) in 2002-03, as against Rs 3,300 crore (Rs 33 billion) in 2001-02.
The division has set a target of over 13 per cent growth in sales at Rs 5,000 crore (Rs 50 billion) from its engineering, construction and contracts business in this fiscal, Rangaswami said.
"Only five per cent of total cement produced in India goes to RMC production, in contrast to 85 per cent cement consumed by such plants in the US and Japan," he added.
The business of ready-mix concrete has great potential in developing countries like India, he said.
Keeping this in mind, L&T had decided to strengthen its RMC network across the country. "Our focus area would be the southern and western regions for putting up RMC plants," Rangaswami said.
"Use of RMC can eliminate storage, inventory and wastage of raw materials including mobilisation of plant and equipment at sites," he added.
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