Engineering major L&T has plans to grow its defence business five fold in the next five years, according to the company's CMD A M Naik. "By 2010 our defence business will grow from the current Rs 200 crore (Rs 2 billion) to Rs 1,000 crore (Rs 10 billion)," said Naik.
L&T has been working with Defence Research and Development Organisation and Indian Space Research Organisation for production of submarines and missile launchers.
But Naik lamented the fact that despite the government's approval two years back, there was still very little transparency on the issue of private sector participation in defence manufacturing.
"If the government follows the ISRO or Nuclear Power Corporation's model of technology transfer in defence production as well, we could become significant exporters, instead of depending heavily on imports," he said.
According to Naik, L&T's reactor projects are considered to be among the best in the world.
"That came about because of our association with NPC," he added. But he believed that clarity would emerge after the general elections on the issue.
"We are hopeful that our ongoing work in defence will reach fruition soon, to gives the revenues that we are looking for," he said. He denied any plans about hiving off defence production as a separate entity.
"We will make it into a special business unit when we attain the requisite volumes," he said.
In a month's time L&T will start the process of reassessment of all its businesses that would help the company determine the segments it should exit and the new ones it should enter, he said.
"This is a process we undertake once in every two years. During the last such exercise we decided to enter the cement business and focus on high-tech engineering," he said.
L&T core-committee which undertakes this exercise comprises Naik, the board of directors and the heads of its all SBUs.
