L&T to sell plastics business to Japanese firm Toshiba Machine

Larsen & Toubro (L&T) will sell its plastics machinery business to Japanese firm Toshiba Machine for an undisclosed sum. The company also said it has won orders worth Rs 2,051 crore from Oil and Natural Gas Corp (ONGC) and Petroleum Development Oman.

Toshiba Machine is part of Toshiba group of companies and is involved in manufacture of injection moulding machines and other machinery.

"L&T signed a share sale and purchase agreement, pending final closing conditions, with Toshiba Machine Co Ltd, Japan to sell its entire stake in L&T Plastics Machinery Ltd (LTPML)," it said in a statement.

Without disclosing the sale price for the LTPML, the company said, "The move is in line with L&T's strategic road map to exit non-core businesses and rationalises its portfolio".

LTPML, which manages the plastics business, is a wholly-owned subsidiary of L&T and had reported a profit of Rs 11 crore in the last fiscal, while its total sales stood at Rs 206 crore.

Toshiba Machine has manufacturing units in Japan and China and it primarily caters to the Asian and North American markets. The company had reported a sales of 119 billion yen and PAT of 6 billion yen for the year ended March, 2012.

L&T also announced that it has won Rs 1,302 crore order from Petroleum Development Oman and Rs 749 crore contract from ONGC.

The ONGC contract is for total Engineering Procurement Construction and Installation (EPCI) of four wellhead platforms in the Mukta, Bassein and Mumbai High South oil fields and will have to be completed by April 2014, it said.

The contract was won in an international competitive bidding, L&T said, adding that the project is part of ONGC's strategy to develop marginal fields to meet India's rising energy demands.

The Rs 1,302 crore ($235 million) order from Petroleum Development Oman (PDO) is for executing EPC of Oman's Saih Rawl Depletion Compression phase-II project, L&T said.

PDO is the leading oil exploration and production firm in Sultanate of Oman and accounts for more than 70 per cent of country's crude oil production and nearly all of its natural gas supply.

The project involves installation of 76 MW of gas compression capacity with 4 trains and modification of the condensate handling system at the captive power project.

"This will enable the Saih Rawl main (oil) field to produce maximum annual daily load of 30 million standard cubic meters a day (MSCMD) gas," L&T said.

Shares of L&T were trading 1.18 per cent down at Rs 1,381 on the Bombay Stock Exchange.