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    B2B Project On

    LARSEN & TOUBRO Its All About Imagineering


    Group 8


    SANA NABI 08PG044

    MANDANNA T.M 08PG034


    ROHAN NAIR 08PG043

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  • 8/14/2019 b2b Project on Larsen & Toubro



    Larsen & Toubro Limited (L&T) is a technology, engineering, construction and

    manufacturing company. It is one of the largest and most respected companies in India's

    private sector.

    Seven decades of a strong, customer-focused approach and the continuous quest for world-

    class quality have enabled it to attain and sustain leadership in all its major lines of business.

    L&T has an international presence, with a global spread of offices. A thrust on international

    business has seen overseas earnings grow significantly. It continues to grow its overseas

    manufacturing footprint, with facilities in China and the Gulf region.

    The company's businesses are supported by a wide marketing and distribution network, and

    have established a reputation for strong customer support.

    L&T believes that progress must be achieved in harmony with the environment. A

    commitment to community welfare and environmental protection are an integral part of the

    corporate vision.


    Engineering & Construction Projects (E&C)

    Heavy Engineering (HED)


    Electrical & Electronics (EBG)

    Machinery & Industrial Products (MIPD)

    IT & Technology Services


    Founded: 1938

    Number of employees: 35000(2007)

    Revenue: US$ 8.50 Billion (2009)

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    Headquarters: Mumbai, India.


    The L&T vision reflects the collective gaol of the company. It was drafted through a large

    scale interactive process which engaged employees at every level, worldwide.

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    Engineering and construction

    In engineering and construction, L&T's technology capabilities include a strategic mix of in-

    house strengths and the expertise of its joint venture partners. Engineering Centres at Mumbai,

    Vadodara and Delhi carry out process design and simulation, analysis of computational fluid

    dynamics, mechanical design, failure analysis and trouble shooting.

    L&T has set up an engineering and project management centre in Abu Dhabi, to undertake oiland gas related projects as well as engineering and consultancy services.An engineering centre in Sharjah is an extended arm in the Gulf. This is supplemented

    through collaborations with key partners: L&T-Valdel for engineering services in the

    upstream hydrocarbon sector, L&T-Chiyoda for the mid and downstream sectors, and L&T

    Sargent & Lundy for the power sector.The engineering services provided by L&T's Engineering Design Research Centres at

    Chennai and Kolkata include feasibility studies, project reports, system engineering,

    architectural, structural and civil design for infrastructure development projects.

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    L&T-Ramboll Consulting Engineers provides civil engineering and consultancy services for a

    wide range of projects in the transportation sector - ports, airports, highways and bridges.


    L&T's design & engineering capabilities in manufacturing enable it to set new benchmarks in

    terms of scale, sophistication and speed. The Company has dedicated engineering centres at

    the manufacturing locations. Two 'Technology Development Centres' have been set up to

    develop new products and manufacturing technologies. L&T also collaborates with the

    organisations like ISRO to bolster its capabilities in the strategic sectors of aerospace, defence

    and nuclear power.

    L&T's Electrical & Electronics Division is a pioneer in the design of switchgear andswitchboards that are engineered for tropical conditions. It has built further on this experience,

    and has leveraged its R&D strengths to develop a host of new products and features.

    In 2008-09, the division filed applications for over 100 patents, improving its previous years

    score of 101 patents. Cumulatively, L&T's Electrical & Electronics Division has applied for

    and secured 409 patents - a landmark for an Indian company. Patent applications cover

    innovations made on a variety of low voltage indigenously developed switchgear products

    like the air circuit breakers (ACBs) and moulded case circuit breakers (MCCBs), medical

    products, petroleum dispensing pumps, tooling solutions and switchboards.


    L&T provides its global clients with the winning edge through the development of optimal

    solutions. L&T's e-engineering services leverage the Company's own engineering heritage and

    experience. The Embedded Systems unit provides technological assistance across a broad

    spectrum - design, maintenance, re-engineering, testing, prototyping and industrial design.

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    The following are the portfolio of products and services offered by L&T

    1. Engineering & Construction Projects(EPC)

    L&Ts engineering and construction track record consists of successful implementation of

    turnkey projects in major core and infrastructure sectors of the Indian industry. L&T has

    integrated its strengths in process technology, basic and detailed engineering, equipment

    fabrication, procurement, project management, erection and construction and commissioning,

    to offer single- point responsibility under stringent delivery schedules. It is the only Indian

    EPC company pre- qualified for executing large, process-intensive projects for oil and gas,

    refinery, petrochemical and fertiliser sectors.

    The various sectors for which L&T has done turnkey projects are Oil and Gas, water, Power,

    Cement and allied machinery, Engineering services and Railway projects.

    2. Heavy Engineering:

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    L&T is acknowledged as one of the top five fabrication companies in the world, with

    engineering and manufacturing capabilities that are among the most sought after in industry.

    Operating at the higher end of the technological spectrum, L&T has led the way in

    introducing new processes, products and materials in manufacturing. It has the logistics

    capabilities of fabricating and supplying over- dimensional equipment to tight delivery


    The products in this category include hydrocrackers, reactors, heat exchangers,

    polymerization reactors etc.


    Shipbuilding represents a new thrust for L&T in the high technology manufacturing space and

    is in line with its strategic growth objectives. L&T is developing a shipyard capable of

    constructing vessels of up to 150 metres in length and displacement of 20000 tonnes at its

    heavy engineering complex at Hazira near Surat on Indias west coast. The focus will be on

    construction of commercial vessels, warships for the navy and the coast guard.


    The Engineering Construction & Contracts (ECC) division of L&T is Indias largest

    construction organisation. Its leading edge capabilities cover every discipline of construction

    civil, mechanical, and electrical and instrumentation. L&T has also expanded its focus to the

    Middle East, South East Asia, Russia, CIS, Mauritius, African and SAARC countries. It also

    has keen interest in the markets of Indian Ocean rim countries, Africa and Latin America.

    Construction includes construction products like support structures etc. They also provide

    construction services like Fire Protection, Building Automation (IBMS), Vertical

    Transportation, Plumbing and Sanitary, Surveillance and Security Systems,

    Telecommunication networks, Electrification, Kitchen, Laundry, Water and Effluent

    management, Medical equipment for buildings

    Electrical & Electronics

    L&T is a major international manufacturer of a wide range of electrical and electronic

    products and systems. In the electrical segment, the Company holds leadership position in lowtension switchgear in India, and is rapidly establishing itself in international markets. Its

    products are widely sold in markets in Europe and Australia. Recently, L&T set up a new

    manufacturing base for high-end air circuit breakers in China. It joined hands with Saudi

    Arabias reputed house of Kanoo to offer a range of high-end intelligent electrical systems to

    Saudi Arabian market. L&T also manufactures custom- engineered switchboards for

    industrial sectors like power, refineries, petrochemical and cement. In the electronic segment,

    L&T offers a wide range of meters and provides complete control and automation systems for

    industries. Medical equipment and systems manufactured by it include advanced ultrasound

    scanners and patient monitoring systems. They also manufacture medical equipments likeECG machines, electrosurgical diathermies and ultrasound scanners etc.

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    Information Technology

    Larsen & Toubro Infotech Limited, a 100 per cent subsidiary of L&T, offers comprehensive,

    end-to-end software solutions and services with a focus on Manufacturing, BFSI and

    Communications & Embedded Systems. It provides a cost cutting partnership in the realm ofoffshore outsourcing, application integration and package implementation.

    Machinery & Industrial Products

    L&T manufactures markets and provides service support for critical construction and mining

    machinery surface miners, hydraulic excavators, aggregate crushers, loader backhoes and

    vibratory compactors.


    Turnkey Proj Construction EPS

    Hydrocarbon Construction Services Refinery

    Power Infrastructure Oil & Gas

    Cement Engg. Services Petrochemicals

    Engg. International Projects Fertilizers

    Petroleum Coal Gasification

    Aero space

    Thermal Power

    Nuclear Power

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    The offerings are divided into two parts i) Project Executions

    ii) Products

    The projects are executed not only in the domestic sector, also in the international locations.

    The credentials what it has earned over the last decades has made a distinct branding for the

    companies. The latest order of Rs. 6900Cr from Mahagenco has established the company in

    the international Power Equipment Business.

    The industrial products like the welding products, Valves, Switchgear, Metering Systems are

    known for high standard technologies & relaiblity.





    Switchgear Information




    Electrical Systems Engg.




    Metering Systems Embedded


    Medical EquipmentControl

    Petroleum Dispenser

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    Company recognises that people are the real source of competitive advantage. It is through

    people that ECC delivers total customer satisfaction. These values are reflected in our

    Human Resources practices which have earned national recognition several times.

    The employee goes through a process of continuous learning, assisted by training

    programmes. Apart from on-the-job training and technical training, over 100 programmes on

    general management and behavioural topics are conducted each year. Interactive CD-ROM

    based programmes have enabled employees learn at their pace.

    ECC has always believed in experimentation with and implementation of new ideas. HR

    practices such as collaborative performance appraisal, career & succession planning, team

    rewards have been institutionalised.

    An extensive and rigorous recruitment process ensures quality induction. L&T's Graduate

    Engineer Trainee recruitment process covers India's major engineering colleges and

    institutions. Programmes, plant visits and comprehensive information-sharing facilitate


    Division has an ongoing organization development programme, which is one of the longest

    sustaining OD efforts in India.

    The basic principles of Human Resources policies include

    Recruitment based solely on merit by following well-defined and systematic selection

    procedures without discrimination

    Sustain motivated and quality work force through appropriate and fair performance

    evaluation, reward and recognition systems

    Identify training needs within the Organisation and design and implement those need

    based training programmes resulting in continuous up gradation of knowledge, skills

    and attitudes of the employees

    Maintain a quality Human Resource Management System to meet the internationalstandards as per ISO 9001. Plan, design, train, equip and motivate the department staff

    to meet this standard of expectation.


    Work culture emphasises:

    Freedom to experiment

    Continuous learning and training

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    Quality in all aspects of work

    Rewards based on performance and potential

    A majority of L&Ts processes are ISO certified and comparable with the best in the world.

    The company has an on time/ on budget project completion rate higher than the average for its

    industry, which translates to highly predictable construction & Engineering services delivery

    for its clients.


    Oil & Gas Power Construction Electrical &


    LG BHEL HCC Schneider

    Hyundai LG Gammon Siemens

    Samsung Alstom Nagarjuna ABB


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    L&T's participates in building a healthy community through continuing initiatives in several

    areas of healthcare, with a focus on mother & child care and HIV/AIDS awareness. All L&T

    locations, including construction sites, have in-house AIDS awareness programs. Five

    additional mother & child care centres were set up in 2006-07. In partnership with local

    NGOs, these centres benefit children of commercial sex workers, street children and tribal

    communities. Through health care centres and regular family camps L&T organizes health

    checkups, provides gynaecology and laboratory facilities, carries out free cataract surgeries

    and intra ocular lens implants, and helps maintain health data for children. Supply ofequipment and aid for orphanages and physically challenged children, periodic counselling to

    combat rampant alcoholism, awareness camps on childcare, reproductive health, sanitation,

    dental check-up, provision for safe drinking water, cancer awareness etc. are other healthcare

    activities that L&T supports.


    L&T's diverse and sustained programmes in education provide underprivileged children with

    learning opportunities through supply of educational materials, teaching aids, recreational

    tools and up scaling school infrastructure. L&T also enriches children's lives through

    programmes like summer camps, maths coaching, providing facilities like science

    laboratories, scholarship to deserving students, etc.

    The vocational training institutes of the Larsen and Toubro Public Charitable Trust provide

    local communities with skill-based training in Formwork, Masonry, Agro Mechanics,

    Electricals, Fabrication, Welding and Housekeeping. Various diploma courses are also

    conducted by L&T Institute of Technology for the children of employees. L&T hasdeveloped training modules in local languages in six centres across India for imparting skills

    sets in construction. L&T Training Centres provide courses for improving the standards of

    electrical engineering practices and for upgrading knowledge of maintenance, repair and



    Global warming: at L&T, we have always been conscious of the need to maintain harmony

    with the environment. We continuously seek newer environment-friendly approaches in all

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    our operations energy conservation, exploring alternative sources like wind and solar

    energy, waste water reduction, etc.

    The Zero Discharge approach of the Powai Campus saves over 350,000 litres water every day

    through water treatment and recycling. More than 13,500 trees have been planted in different

    L&T campuses in the last year, and an additional 4,000 saplings were distributed among local



    L&T and its employees have provided relief measures during natural calamities like

    earthquake and floods. L&T has assisted in disaster relief through employee and corporate

    donations, employee volunteering, supply of construction material, medical and food supplies.

    After the floods in Surat (Gujarat-India), L&T played a major role in road-clearing

    operations, organising medical camps, and supply of food, water, clothes and other reliefmaterials.


    L&T encourages employees to volunteer for CSR activities, resulting in a self-driven

    approach while retaining consistency. L&T employees and the ladies clubs formed by their

    families at different locations, serve their communities by investing personal resources and


    From taking initiatives in building the next generation of productive citizens, empowering

    women, paying regular visits to old age homes and orphanages, to organising blood donation

    camps, our employees have always believed in truly making a difference to the world in

    which they live.



    i) L&T-Sargent & Lundy Limited

    A joint venture with Sargent & Lundy (USA), it offers a complete range of engineering and

    design services for the power sector.

    ii) Larsen & Toubro (Oman) LLC

    A joint venture between L&T International FZE and The Muscat Trading Co. LLC

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    iii) Bangalore International Airport Limited (BIAL):

    A JV of Karnataka State Industrial & Investment Development Corporation (KSIIDC),

    Airports Authority of India (AAI), Siemens, L&T and Unique (Zurich Airport) of

    Switzerland, to develop an airport at Devanahalli, Bangalore on BOOT basis.


    1) L&T-Case Equipment Private Limited

    A joint venture of L&T and CNH America LLC (CNH America LLC is a wholly owned

    subsidiary of CNH Global N.V., USA, which has manufacturing and marketing facilities

    worldwide. It is the world's largest manufacturer of loader backhoes).

    2) L&T Komatsu Limited (LTK)

    A joint venture of L&T and Komatsu Asia Pacific Pte Ltd., Singapore, a wholly owned

    subsidiary of Komatsu Ltd., Japan. LTK manufactures hydraulic excavators and high

    pressure hydraulic equipment, such as cylinders, turning joints, radial flow pumps, axial

    piston pumps, Cam-lobe radial piston motors, axial piston motors, gear boxes / drives and


    3) Tractor Engineers Limited (TENGL)

    A wholly-owned subsidiary of L&T. It designs and manufactures crawler undercarriage

    systems for excavators, blast-hole drills, bulldozers, amphibious dredgers, mobile crushers,

    etc. Apron feeders, chain conveyors, scraper conveyors, track modules, and crawler lowers

    are tailor- made by TENGL for material handling, and mining applications. TENGL

    manufactures centrifugal slurry pumps, which have found wide acceptance in industrial

    application and oilfield exploration.

    4) Audco India Limited (AIL)

    A joint venture company with equal equity holding by L&T and Flowserve Corporation,

    USA It is a leading manufacturer of industrial valves, with four independent and specialised

    manufacturing facilities.

    5) L&T-Demag Plastics Machinery Limited

    A 50:50 joint venture of L&T and Demag Plastics Group, Germany, it is the market leader in

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    India, involved in the manufacturing of a range of injection moulding machines for

    processing of thermoplastics and thermosets. The joint venture partner, Demag Plastics

    Group, Germany is a world leader in the field.

    6) EWAC Alloys Limited

    A joint venture of L&T and Messer Eutectic Castolin Holding GmbH, Germany. It

    manufactures special purpose welding electrodes, brazing rods, welding and soldering fluxes,

    powder alloys and delivery systems, flux-cored welding wires, cold repair compounds and

    wear plates.


    Railway bridge construction in Western Thailand in 1956. It was later immortalized by the

    film The Bridge on the River Kwai. It was obstructed by the companies from Germany &

    Japan. So, it concentrated on smaller orders to build its credibility. In 1976, it got the

    subcontract for Abu Dhabi International Airport which was the landmark for its credibility.

    It was in the mid-90s when the Indian government had initiated the liberalization process that

    L&T revisited its options overseas. Due to its prior experience in the UAE, the Middle East

    was an obvious choice. To build up a reputation as a quality provider of engineering and

    construction services, L&T management decided to follow a policy of Take only what you

    can deliver, bidding for contracts only when it was confident of timely completion. Based on

    the business policies of the Gulf countries, L&T went for joint ventures wherever required to

    secure contracts. In 1994, L&T Oman LLC was established as a joint venture with The Zubair

    Corporation, a leading business group of the Sultanate of Oman. In the UAE, L&T registered

    as an independent corporation in 1996. In Saudi Arabia, L&T established a joint venture

    called L&T Saudi Arabia LLC in 1999. In 2001, L&T incorporated a wholly owned

    subsidiary called L&T International FZE at Sharjah to provide project consultancy, equipment

    lease services and maintenance of plant and machinery in the Gulf region.

    By mid 2006, almost all the Emirates had announced infrastructure plans, the total cost of

    which was estimated to be approximately $270 billion over the next ten years. Recognizing

    the growth potential, L&Ts management decided to expand its resource base and opened new

    offices in Dubai, Sharjah and Ras al Khaima in addition to Abu Dhabi. Some of the

    prestigious projects executed by L&T include four bridges at Palm Island, residential

    buildings at the Dubai Marina and construction of Raysut Cement Plant, Oman. Exhibit 1

    provides a detailed list of projects successfully executed by L&T E&C in the Middle East.

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    Apart from the Gulf region, L&T E&C also gradually expanded its overseas operations to

    Russia, the CIS countries and China. Projects executed include a hydrogen reformer package

    for Dalian petrochemicals

    in China, turnkey construction of international hotels at Uzbekistan and construction of

    residential township at Zernograd, Russia.



    For the offerings like Turnkey Projects, Construction Projects, Engineered Products &

    Systems, IT, Financial services, Shipbuilding, the company directly maintain relationship

    with the customers.

    Promotional strategies adopted by the organisation are:

    Trade Shows

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    Product Brochures

    Direct selling

    The EEPI & MVI categories are dependent on the respective distributors. The sales reps of

    the company along with the distributors market those products.



    L&T launched a corporate Branding campaign where it projected its capabilities in every

    category as IMAGINEERING.

    As part of corporate brand building plans, L&T has produced a series of TV commercials on

    its business verticals. Each commercial shows some of its business offerings, and highlights

    the role that plays in everyday lives. The commercials were telecasted on CNBC- Indias

    leading business channel till December 26, 2008.

    The advertisements focus on two core values of the organization:


    Customer focus and development focus

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    FOR ENGINEERS : A benchmark in innovation

    FOR A TRAVELLER : Fewer hours travelled, more hours lived

    FOR THE RECORD : Asias highest

    FOR KONKAN RAILWAY : Accolades

    FOR US : Imagineering as usual

    The company gives its message that

    As how it has achieved the excellence of being Asia highest

    How it as created a level of performance and innovation through its engineering

    How it is serving to the needs of its customers & consumers by providing them with

    revenues generated plus consumer satisfaction.

    More over for Konkan Railways, the project achieved is a matter of pride but

    For L&T it is merely creative & Innovative & Planned design based on what started

    with an imagination & now has taken a practical shape.

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    Distribution Channels at L&T Various Divisions

    It has a global supply network with offices in 10 locations worldwide, including Houston,

    London, Milan, Shanghai, and Seoul.

    L&T Construction Division:

    All the distribution is project based, and the sales are made through direct marketing. This is a

    Zero Level Channel Structure and this enables direct control to L&T project development


    L&T Engineering Equipment:

    The equipment is dealt through dealers and other channels of delivery where the equipment

    sale can be made through dealers e.g., turnkey, valves etc

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    The sales pitch is made and followed up and detailed later on by the Dealers present in the

    Area, The distribution network is based on each geographical area.

    L&T Financial Services:

    In spite of increased competition from alternate distribution channels, L&T believes that

    independent agents continue to represent a major chunk of carriers' business. Hence it is

    imperative for carriers to focus on enriching their relationship with Agents. L&Ts suite of

    services enables insurance companies to achieve a 'Carrier of choice' status amongst agents.

    The Agency Relationship Management Solution, Agency Point includes:

    Agency Portal

    Mobile Based Agency Management Solution Agency - Carrier Interface Solution

    these services enable insurance carriers to retain its top agents, while developing an

    attractive proposition to attract new agents.

    L&T EmSys:

    The channel of distribution is entirely corporate sales based, and project based, which is a

    Zero Level Channel structure. The projects are acquired through Relationships and a few

    dealers. The Distribution is entirely dependent on the Customers requirement.

    The overseas offices of EmSys are located in USA, Europe and Japan along with a network of

    Business Associates in various places.

    Larsen & Toubro e-Engineering Solutions

    This subsidiary focuses on providing engineering solutions using PLM technology. It

    provides engineering services. It operates from off-shore engineering centres at Vadodara,

    Chennai and Bangalore with onsite teams to cater to engineering requirements of global

    clients, many of them Fortune 500 companies.

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    Larsen & Toubro Valves Business Group

    The marketing network is supported by an experienced team of valve specialists. The

    distribution is completely project based, and the teams develop relations with the

    customer to meet requirements. It is a leading global supplier of industrial valves and

    customized solutions for major Refinery, LNG, GTL, Petrochemical and Power


    Larsen & Toubro InfoTech:

    The channel of delivery is again a zero level structure, wherein a project is handled just like a

    TCS or an Infosys to achieve maximum control and no Intermediaries.


    Price management is the disciplined method to understand the various cost components of

    transaction and to enforce a process to eliminate unstructured decision, thereby lead to

    improve the bottom line growth. Companies today are under great to increase the value for

    their shareholder on one hand and to satisfy continuous demand for the customers on the other


    Aggressive pricing (predatory pricing):

    In business and economics, predatory pricing is the practice of selling a product orservice at a very low price, intending to drive competitors out of the market, or create barriers

    to entry for potential new competitors. If competitors or potential competitors cannot sustain

    equal or lower prices without losing money, they go out of business or choose not to enter the


    Biggest competitor of L&T is BHEL which takes part in all the bids of construction

    deals. L&Ts aggressive pricing strategy not only outbid BHEL but other overseas players

    also such as Chinese and Koreans, who are known for low pricing strategies.

    Penetration strategy:L&T acquired TAMCO switch gear in Malaysia. After the acquisition the switch gear

    products were sold at a very low price so as to attain a significant market in Malaysia.

    Grasim and L&T deal:

    LNT and Grasim deal lead to increased consolidation in the cement industry. This deal

    leads to increase in consolidation in the cement industry and considerable improvement in the

    cement prices. Demand has been growing consistently and on the other there is less increase

    in capacity. Demand growth, driven by construction demand such as roads and housing, was

    over 8-9 per cent per annum over the medium term, lifting cement demand to 125 million

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    tonnes in FY05 from the 107 million tonnes in FY03. As the giants have consolidated they

    enjoyed monopoly to a certain extent and increased the cement prices to some extent.

    Multinational players would become marginal players. In fact, the biggest MNC

    player in India, Lafarge, had only a 3 per cent market share. Five Indian companies owned 55

    per cent market share and the rest of the market were shared by 44 players of median capacity

    of 1.2 million tonnes. Any potential player would have to make several acquisitions to gain

    market shares comparable with the top Indian players.

    Bid price

    A bid price is the highest price that a buyer (i.e., bidder) is willing to pay for a good. It isusually referred to simply as the "bid."

    L&T has been engaged itself in several bids with one of the most successful being of

    Rs 300 crore order for construction of the ductile iron spun pipe (DISP) plant of KIOCL Ltd,

    earlier known as the Kudremukh Iron Ore Company Ltd, the public sector undertaking under

    the ministry of steel and mines. KIOCL plans to set up a 100,000 tonnes per annum DISP

    plant at Mangalore as part of its diversification. L&T emerged as the L1 bidder for the

    project. The KIOCL board shortlisted L&T through a global bidding route for the proposed


    Waterfall Strategy

    A popular strategy followed by L & T Ltd. Is the price waterfall strategy (also called Pocket

    price waterfall). It is the set of prices, price adjustments and cost elements that defines how

    list price gets to net price and how net price gets to net margin.

    Price waterfall depicts the build up of L & T ltds engineering products prices from a base

    price to the list price and then the discounts that are given to the dealers to get to the Invoice

    price, the rebates terms, bonuses and other Discounts that affect the Pocket Price, the Pocketmargin based on Cost of Goods sold and the Net margin based on the other fixed costs.

    The Price Waterfall Strategy shows the different prices that are included in the pocket price to

    get to the dealers price for the L&T Ltd. Engineering and electrical products.

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