L&T Secures $954 Million EPC Orders in Indian Metal Industry

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Larsen & Toubro Limited (BOM:500510) (L&T) (Mumbai, India) and its global technology partners have secured several engineering, procurement and construction (EPC) contracts with an aggregate value of $954 million from domestic clients in the metal industry.

A consortium of L&T, Outotec Oyj (HEL:OTE1V) (Espoo, Finland) and Paul Wurth Italia SpA (Genoa, Italy) secured a $634 million deal from Tata Steel Limited (BOM:500470) (Mumbai) to set up a 3,800-cubic-meter blast furnace and a pellet plant with a capacity of 6 million tons per annum in Jamshedpur. L&T's share of the contract was valued at $395 million. L&T and Outotec will set up the pellet plant over an area of 768 square meters. This will be L&T's first EPC undertaking for pellet plants and will also be the world's largest plant when commissioned. Outotec will provide engineering services, proprietary and critical equipment, and technical assistance for setting up the plant. The project is slated for commissioning within 33 months. The blast furnace will be constructed at Jamshedpur by L&T and Paul Wurth and is scheduled to be commissioned within 30 months.

The L&T-Paul Wurth partnership has also secured a repeat order from Tata Steel for setting up a 2.5-million-ton-per-year blast furnace, which should be completed in the next 30 months. This order has been awarded to the consortium following its recent success in commissioning the largest "H" blast furnace with a capacity of 2.5 million tons per year at the Jamshedpur steel plant in a record 25 months, which is reportedly the shortest time taken globally for setting up and commissioning such a large-sized furnace.

The L&T-Outotec partnership clinched a $188 million deal to set up a 360-square meter sinter plant as part of the expansion program of Steel Authority of India Limited (BOM:500113) (SAIL) (New Delhi) to ramp up production capacity at its Rourkela Steel Plant to 4.5 million tons per year. L&T's share of the order amounts to $147 million. This project is also slated for commissioning within a period of 30 months. This is the sixth sinter plant being developed by the consortium in India. The consortium successfully set up a 2.3-million-ton-per-year sinter plant for Tata Steel's plant in Jamshedpur. It is also setting up a 5.7-million-ton-per-year sinter plant in Kalinganagar, Orissa, for Tata Steel, and a sinter plant with a total capacity of 3.8 million tons per year for SAIL's IISCO Steel Plant in Burnpur, West Bengal. The total value of this order is $190 million; L&T's share amounts to $160 million.

Recently, the L&T-Outotec consortium clinched a $140 million order from Bhushan Steel Limited (BOM:500055) (New Delhi) to set up a sinter plant with a production capacity of 4.6 million tons per year at Meramandali, Orissa. This project is slated for completion within 30 months. L&T's share in this order is valued at $112 million.

Outotec is a recognized industry leader in sintering and pelletizing technology based on traveling grates. While Outotec will provide engineering and technical services and ensure supply of proprietary and imported equipment for these projects, L&T will be responsible for detailed engineering, procurement of indigenous mechanical equipment, instrumentation, electrical and civil works.

L&T has also secured a $130 million repeat order from Hindustan Zinc Limited (BOM:500188) (Rajasthan) to set up a zinc electrolysis plant with a capacity of 210,000 tons per year in a period of 17 months.

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