Larsen & Toubro Looks To Capture $20-30 Bn Biz In Modularisation Space

Infrastructure major Larsen & Toubro on Friday said it expects to capture a $20-30 billion market opportunity in the modularisation segment over the next five years, driven by rising global demand for modular concepts amid severe weather conditions, remote project sites, and labour shortages.

The modularisation business is expected to grow to $100-150 billion during this period, the company added.

At the same time, the company announced completing the fabrication and delivery of 110 modules, weighing approximately 64,000 metric tonnes for Australia's largest 2.3-million per annum capacity urea manufacturing plant, Project CERES.

The project is being developed by Perdaman Chemicals & Fertilisers in Karratha, Western Australia, under the Saipem-Clough Joint Venture.

"We are seeing an opportunity for modularisation because skillset availability generally across the globe is decreasing, because there are a lot of other alternative trades and skills available, and opportunities available for the workforce.

"So, more and more you see that the modular consumption will get more propagated and therefore, the market size will grow as such," L&T Deputy Managing Director and President Subramanian Sarma said during a media briefing here.

"A very quick back-of-the-envelope assessment gives me that $100-150 billion of market opportunity will be available for the modularisation also. And I think that's the share of the market we want to address." When asked how much of that market L&T was looking at, Sarma said, " It may be easily 20 per cent".

"Of course, we will have to address that market properly; we will have to become competitive, and we will have to evaluate that," he said.

Stating that the modularisation market size is going to be global and not just in one location.

"When you are modularising, the beautiful thing is that we are agnostic to the geographical location because we are fabricating in India and we are supplying, and as long as there is a water body nearby, then the models can be shipped easily anywhere in the world," he added.

With the current situation where there is a shortage of workforce and a high cost or extreme weather conditions, we will have to go for hybrid types of solutions, he said.

"I think in various parts of the world, whether because of these extreme conditions or remote locations or front-end nature or shortage of workforce, modular concept will become more and more popular. I think when we have these hybrid solutions, L&T is very uniquely placed to capitalise on the opportunities that will be available," Sharma added.

He said the company was hopeful of penetrating and addressing this market and gaining some good market share.

On the Australian project, the company said L&T's scope comprised 47 pre-assembled units and 63 pre-assembled racks, fabricated at its Modular Fabrication Facility at Kattupalli, near Chennai.

The modules were shipped from India to Karratha across 23 marine shipments in fully tested, pre-commissioned and ready-to-install condition, it said.

Project CERES reflects how L&T is elevating India's role in the global project-delivery ecosystem, from a manufacturing base to a source of integrated engineering, technology and execution capabilities, said SN Subrahmanyan, Chairman & Managing Director, Larsen & Toubro.

"Delivering modular fabrication of this scale, with an excellent safety record, for Australia, demonstrates the depth of India's industrial ecosystem and its ability to meet demanding international standards.

"The landmark achievement strengthens L&T's position as a trusted global partner and reinforces India's potential to become a leading hub for complex modular solutions," he said.

Fabrication, equipment installation, integration, testing and pre-commissioning for the project were undertaken in a controlled environment, enabling parallel execution, greater oversight of safety and quality, improved predictability and fewer interfaces at the project site, the company said.

Much of the complex equipment, integrated into the modules, was fabricated at L&T's advanced manufacturing facility in Hazira, Gujarat.