L&T to buy out Komatsu subsidiary in joint venture

MUMBAI: Larsen & Toubro (L&T) on Friday announced that it would acquire 50% stake in L&T-Komatsu (LTK) held by Komatsu Asia & Pacific, a wholly-owned subsidiary of Komatsu, Japan. With this buyout, LTK will become a wholly-owned subsidiary of L&T. LTK will continue to manufacture construction equipment and hydraulic components, according to a release. Komatsu will be responsible for the production of equipment, including hydraulic excavators.

Komatsu’s India connection dates back to 1965 when it had procured an order from the Ministry of Defence to build crawler tractors. Komatsu teamed up with L&T in the mid-90 s soon after the winds of liberalisation threw open opportunities in fields such as mining. The joint venture company posted gross sales of . 1,615 crore in FY13.

While L&T-Komatsu capitalised on the brand equity of L&T and grew the business over a decade, Komatsu charted an independent course and built a facility to manufacture dump trucks in Chennai in 2007, riding on the prospects offered by the economy that was then growing at 9%. Komatsu is now expanding across the country.