L&T, NPCIL ink Rs 1,725-cr JV to roll out special steel, forging products

MUMBAI: India’s largest engineering conglomerate Larsen & Toubro (L&T) and state-owned Nuclear Power Corporation of India (NPCIL) on Monday formed a Rs 1,725-crore joint venture for specialised steel and forging products. While NPCIL will hold 26% in the JV, L&T will have the remaining stake, said L&T managing director AM Naik.

The equity component of the joint venture is Rs 500 crore and the integrated facility will be built in Hazira. The plant, scheduled to be commissioned by April 2011, will produce about 50,000 tonnes of finished forging every year.
The JV firm will supply finished forgings for nuclear reactors, pressurised and steam generators, in addition to heavy forging for critical equipment in the hydrocarbon sector as well as for thermal power plants, said Mr Naik.

India and the US are jointly working to finalise a civil nuclear energy cooperation deal, which was approved last year. Global nuclear equipment manufacturers, including General Electric and Areva, have entered into an agreement with NPCIL to set up high capacity nuclear reactors in India. It is also being expected that these companies could also source forging equipment from the new JV firm.

“The facility will be capable of starting commercial operations for domestic and exports by 2013,” said Mr Naik, adding that indigenous manufacturing of forging will be cheaper than the current imported equipment.

It will also close a critical gap in India’s ability to produce equipment for nuclear, thermal power and hydrocarbon plants and also enable significant reduction in cycle times.

SK Jain, chairman of NPCIL, said: “Affordability and self-reliance are the main objective for the new venture.” Currently, the overseas forging charges are high and have order backlogs of more than three years. While domestic forging facility will not only help reduce the cost but also cut execution time by saving on transportation.

With increased efforts for localisation of forging technologies, possibilities will open up for export of critical nuclear equipment, said Mr Jain. Currently, India’s nuclear power generation capacity is 4,120 megawatt and there are plans to add over 20,000 MW by 2020.