LARSEN & Toubro has got contracts worth Rs 5,300 crore ($1.1 billion) to build offshore platforms for ONGC, signalling a return of large orders from hydrocarbon companies and also setting the stage for similar contracts from power companies.
This is also the first time that L&T would build integrated offshore platforms on its own, compared to the previous times when the firm jointly build such projects with global majors such as Hyundai, L&T president operations K Venkatraman said. Interestingly, L&T got the current contracts after beating global biggies such as Samsung, Hyundai and NPCC. â€œWhile overseas, companies are issuing contracts on select projects, in India, there will soon by more such contracts in the power and oil and gas sectors,â€ said Mr Venkatraman. â€œThe trend seems to have started.â€
This statement assumes significance as most engineering companies recently said that while orders were drying up, those from the hydrocarbon industry had almost stopped as the fall in crude oil prices had led to a contraction in capex plans in the hydrocarbon sector. In fact, order inflows for L&T were lower by about 20% to Rs 9,600 crore in the fiscal first quarter.
The power industry is also likely to see more activity especially as a growing demand has starkly highlighted the shortfall in generating capacity.
The manufacturing sector took a major portion of the hit from a slowing global economy as customers postponed purchases and inventories reached alarming levels. The situation also prompted many companies to shut units and to also reduce manpower.
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