MNCs eye L&T electricals unit

If you can't beat 'em, join 'em. That's the motto that multinationals Schneider Electric, GE and Siemens are adopting in the domestic electrical and electronics market. 
 
The MNCs, which have been facing competition from conglomerate Larsen &Toubro, are looking at either taking over or partnering L&T's Rs 1,000 crore (Rs 10 billion) electrical and electronics business. 
 
L&T commands a market share of over 40 per cent in most of its electrical and electronics product categories. 
 
R N Mukhija, director and senior vice-president (operations) said: "There were proposals from multinational companies. We are bullish on the growth opportunities that our electrical and electronic business offers and are not keen on such proposals at this juncture. It is one of L&T's core businesses and we expect the turnover of this division to more than double in the next five years." 
 
"We have been able to maintain our leadership in this category and our research and development capabilities would further enable us to enhance our market share. Currently, new products account for around 33 per cent of the division's turnover, while the target is to touch 50

per cent," Mukhija added. 
 
The division has already emerged as an outsourcing base for many multinationals. Mukhija, however, refused to divulge the names of companies which have a contract manufacturing alliance with L&T. 
 
"Contract manufacturing would be the key growth driver," he added. The company has earmarked Rs 40-42 crore (Rs 400-420 million) for capital expenditure in the current fiscal. 
 
L&T recently revamped and modernised the manufacturing facilities of its electricals and electronics division which houses around eight strategic business units. 
 
The products manufactured by this division include switchgears, power control centres, metering protection systems, medical equipment, and petroleum dispensing pumps. 
 
It also provides embedded system software solutions, enterprise networking and IT infrastructure to its customers. The petrol dispensing pumps business registered maximum growth in the last financial year.