December 02, 2008

L&T decides to splits ECC division into 4 companies

PTI reported that Larsen & Toubro has decided to split its engineering construction and contracts division that has seen sharp jump in business in recent years to increase efficiency in managing growth.

Mr J Ganguly executive VP of L&T said that "We have decided to split the ECC divisions’ functional areas into four companies. ECC will be the holding company for it." He added that the functional restructuring has been effected since July 1st 2008 and the four divisions have begun work independently, though some manpower allocation for the departments was yet to be completed.

Mr Ganguly said that "With the business becoming too big we need to take steps to reduce the management response time to act quickly to the market. And this is possible when a company is small. We may take these four companies of the ECC division to the public in the next 2 to 3 years after attaining a critical mass of USD 1 to USD 1.5 billion each."

The ECC is the largest construction company in India and has ranking globally operating in four major areas building and factories, infrastructure, power and minerals, metals & water. The ECC division contributes nearly 50% of L&T's revenues. Beside ECC, L&T has Engineering & Construction Projects, Heavy Engineering, Electrical & Electronics, Machinery & Industrial Products and Information Technology & Engineering Services.