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MUMBAI (Thomson Financial) – India’s engineering and construction conglomerate, Larsen & Toubro Ltd. (L&T) will invest about 20 billion rupees on the construction of a majority-owned shipyard project in south India, according to a senior company official.

MV Kotwal, senior executive vice president heavy engineering, L&T, told Thomson Financial News (TFN): “The company will spend 20 billion rupees to construct the shipyard near Ennore and the work will start by the end of the next calendar year.” The first ship will be rolled out by the end of 2011 or the beginning of 2012, the official added.

Kotwal told TFN that for its shipbuilding operations, L&T will not have major technological collaborations but will tie up with other companies for niche areas like ship-designing.

The ships coming out of Ennore will be highly specialized vessels like compressed natural gas (CNG) or liquefied natural gas (LNG) carriers and defence vessels, said Kotwal adding that the shipyard will initially fulfil domestic demand and subsequently will cater to domestic naval establishments and international customers.

Kotwal told TFN that “some years” hence the company’s shipbuilding business aims to earn $1 billion in revenues. The company, through its shipbuilding facility at Hazira, in the western Indian state of Gujarat, is building 10 ships for about $350 million, and will focus on the shipbuilding sector in the coming years, AM Naik, chairman, L&T told reporters while announcing its annual results on Thursday. Source CNBC