Tuesday, April 04, 2006

L&T eyes offset clause windfall in aviation sector

Chennai: Larsen & Toubro (L&T) is in talks with aircraft makers Airbus and Boeing to provide sub-assembly services and components, depending on clarification on the ‘offset clause’.
Domestic air carriers Air-India and Indian, have placed aircraft orders worth over $10 billion with Boeing and Airbus.
It is still not clear about the terms of the ‘offset clause’. The clause specifies that industry of the country placing orders should get a part of the business.
As in the case of defence order, for example, if the order is over Rs 300 crore, nearly 30 per cent of the contract should be procured from the country which places the order, according to the clause.
In any case, L&T is well positioned to pick up orders from the aircraft majors, once they start buying components from India. One of the products the company is ready with is ‘advanced composites’, or reinforced metals, used in aircraft applications.
04/04/06 Business Standard