L&T inks pact with EADS to invest in defence biz

Mr A.M. Naik, Chairman & Managing Director, Larsen & Toubro, and Dr Stefan Zoller, Chief Executive Officer, EADS Defence & Security, at a press conference in Mumbai

Larsen and Toubro has tied up with Europe’s EADS Defence and Security division to form a joint venture company for defence electronics in India. The facility to be set up at Talegoan, near Pune, at a cost of Rs 100 crore will focus on design, development, manufacture and related service in electronic warfare, radar, military avionics and mobile systems (such as modular bridges). The formation of the joint venture is subject to approval of the Union Government. L&T intends to invest Rs 2,000 crore in defence-related businesses over the next three years, said Mr A.M. Naik, Chairman and Managing Director. EADS (European Aeronautic Defence and Space Co) is a global leader in aerospace, defence and related services. In 2008, EADS generated revenues of €43.3 billion and employed over 1,18,000. The group has within its fold Airbus as the leading manufacturer of commercial aircraft, with Airbus Military covering tanker, transport and mission aircraft; Eurocopter as the world’s largest helicopter supplier; and EADS Astrium, the European leader in space programmes from Ariane to Galileo.EADS’ Defence and Security division provides comprehensive systems solutions and makes EADS the major partner in the Eurofighter consortium as well as a stakeholder in the missile systems provider MBDA. In 2008, the revenues of the division were €5.7 billion.Mr Naik said, “For over two decades, L&T has been a major supplier of critical systems to India’s defence forces. These include a wide range of products like weapon launchers, naval systems and radar systems. This joint venture will create opportunities for development of defence electronic products and systems for the Indian defence forces and for the rest of the world.”L&T’s business in defence accounts for about Rs 400 crore. Mr Naik said over a period of five to seven years the joint venture would generate over Rs 2,000 crore. The joint venture company will develop and manufacture indigenous solutions for military requirement of domestic customers and the world market. The joint venture aims to provide the Armed Forces with locally produced hi-tech equipment and assured lifetime support. Since 2006, EADS DS has been working with the Defence Avionics Research Establishment, a DRDO laboratory, based in Bangalore. Dr Stefan Zoller, CEO of EADS Defence & Security, said: “EADS DS is a hi-tech company driving the development of integrated system solutions for armed forces and civil security worldwide. EADS would like to move beyond just providing high technology sales to India by creating an Indian industrial base with the development of a long-term partnership, including the transfer of technology wherever necessary. The cooperation with L&T is an important milestone on the way to increase our industrial footprint in India. The Indian defence and security market is growing fast and we want to grow with it.”Mr Zoller said EADS intends to ensure exclusivity to the L&T partnership in defence electronics and there would be no constraint in terms of cash or technical support from his side. EADS has earmarked overseas companies for the joint venture to supply, he said, declining to provide further details.

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