L&T to split ECC division

Kolkata, July 6: Infrastructure major Larsen & Toubro has decided to split its Engineering Construction and Contracts (ECC) division, that has seen sharp jump in business in recent years, to increase efficiency in managing growth.

"We have decided to split ECC division’s functional areas into four companies. ECC will be the holding company for it," L&T executive vice-president J. Ganguly said.

The functional restructuring has been effected since July 1 and the four divisions have began work independently, though some manpower allocation for the departments were yet to be completed, Mr Ganguly said.

Asked about the rationale behind the move, Mr Ganguly said, "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 two to three years after attaining a critical mass (revenue) of $1 billion to $1.5 billion each," he added.

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.

He said in 2006-07 the turnover of the ECC division was around Rs 9,500 crore which went up to Rs 13,000 crore FY 2008 and is expected to move to Rs 20,000 crore during this fiscal. — PTI