Financial Daily from THE HINDU group of publications
Thursday, May 18, 2006
Financial Daily from THE HINDU group of publications Thursday, May 18, 2006 |
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Shipping Corporate - Mergers & Acquisitions Logistics - Shipping L&T forays into dredging business Our Bureau
Mumbai , May 17 Larsen & Toubro has entered the dredging business by acquiring a majority stake in International Seaport Dredging Pvt Ltd, an India-based company. L&T acquired 61 per cent stake in the company for an undisclosed amount from Belgium headquartered Dredging International NV, which holds the remaining 39 per cent stake. This announcement comes only two weeks after L&T's entry into the shipbuilding business with a contract of Rs 440 crore from a Netherlands-based company. L&T's entry into the dredging business is also in synergy with its ports construction business, where the company is a major construction partner in several Indian public and private ports. "This acquisition (of the dredging company) is in line with L&T's strategy to strengthen its position in ports and harbours," said a statement from the company. In India the dredging business provides immense opportunity, with no notably large dredging company in operation other than the state-owned Dredging Corporation of India, said an official with L&T. The current dredging capacity in India is unable to meet the demands of ports and harbours, which have to contract for dredging with foreign flag vessels. Hiring foreign flag vessels involves mobilisation and demobilisation costs (cost of bringing a vessel from its current location and back), what with dredging activity being in high demand worldwide and dredging vessels having to be deployed from various parts of the world. The many ports coming up in the country will yield enough business for L&T, said the official. L&T itself is involved in the construction of major ports at Nhava Sheva, Dhamra, Chennai, Mundra, Gangavaram, Hazira, and other places. Initially, the company's dredging operations will concentrate on India and neighbouring countries. Later on, it will seek international opportunities, he said. Dredging International, part of the DEME Group, is a major player in the global dredging market, its core activity being dredging and land reclamation. Its modern and high-tech trailing suction hopper dredgers and mighty cutter suction dredgers are deepening fairways and reclaiming new land in South America, West Asia, Australia, Africa, and Europe, in addition to building ports in India, said an L&T statement.
Related Stories: More Stories on : Shipping | Mergers & Acquisitions | Shipping | Larsen & Toubro Ltd
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