India's Larsen & Toubro Supplies Nuclear Canisters to Transnuclear Incorporated

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--A slowdown in India's economy has led to projects being deferred and investment capital becoming harder to obtain. These developments, coupled with high interest rates and high inflation, have led to a somber outlook for industry. Larsen & Toubro (BSE:500510) (L&T) (Mumbai), the country's largest engineering conglomerate, is looking abroad for new orders, and the company is now targeting to raise revenues from outside India to 15% to 20%, from the current 10% to 12%.

The group's chief financial officer, R. Shankar Raman, said that the opportunity spectrum in this period last year was about $100 billion, but they recently found that half of that total has been deferred. L&T cut its order growth guidance for the current fiscal year by a third to 5% in October. "We've not seen any cancellations in our order book," he said. "There are deferments. People are sitting and waiting and watching."

In line with this strategy, the company has executed the first order of dry shielded canisters from Transnuclear Incorporated (Columbia, Maryland), an Areva S.A. (EPA:CEI) (Paris, France) company, for storage of radioactive waste. In addition to the 12 units of canisters covered by the order, L&T is ready to dispatch an additional two canisters for the next order.

This is the first U.S. order for nuclear equipment from India. The canisters are for leading nuclear utilities in the U.S. and have been manufactured in accordance with the U.S. Code of Federal Regulations (10CFR) and Nuclear Safety Class 1 standards. The manufacturing of the stainless steel canisters for boiling water nuclear reactors involves maintaining stringent tolerance requirements.

Five repeat orders have been placed by Transnuclear for the supply of canisters to leading utilities in the U.S. and Switzerland, bringing the total ordered to 73 units. L&T sees the order as an international endorsement of the company's capabilities and as a first step in participating in the potentially large global nuclear equipment market.

L&T has been manufacturing critical components like nuclear reactors, steam generators, control rod drive mechanisms, heat exchangers ,valves and NSSS pipelines over the past four decades and has pioneered manufacturing technology, equipment manufacturing and site/plant services for the Indian nuclear power program. The company has received the INS Industrial Excellence award for outstanding contributions in the nuclear power plant sector.

L&T is the only Indian manufacturer authorized by the American Society of Mechanical Engineers (ASME) to use the entire range of N, NPT, NA stamps and NS certification. These permit L&T to design, manufacture and construct nuclear island equipment to U.S. standards.

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