ALKHOBAR, 28 March 2006 — Building on the growing Indo-Saudi relations, especially in the economic sector, the local YBA Kanoo Group announced yesterday evening the formation of a joint venture to produce electrical switchgears and systems, with India’s leading engineering company Larsen & Toubro Limited (L&T).
L&T is considered among the largest engineering and construction companies in Asia. The company is the largest manufacturer of low-voltage electrical switchgear in India.
The plant is being set up at a cost of $15 million in the Second Industrial Area of Dammam.
The joint venture between will offer to the local market, intelligent architecture for control and distribution of power, entailing manufacturing, marketing and sales of switchboards and related system solution and allied products. The products are used wherever there is a requirement for power and water distribution.
At a later stage the joint venture facility envisages to offer automation solutions for the petrochemical sector and the up- and down-stream hydrocarbon sector throughout the region.
Announcing the joint venture, Abdul Aziz Qassim Kanoo, deputy chairman of YBA Kanoo, said the new joint venture is a manifestation of deep and historical ties between Saudi Arabia and India.
Giving out the details of the new project, A.M. Naik, the chairman and the managing director of the group, expressed the hope that the upcoming joint venture would be the first of the many projects of their company in the Kingdom and in the Gulf.
L&T Electricals Saudi Arabia is expected to be on stream by early next year. However, according to Bader Abdul Aziz Kanoo, efforts are being made to initiate basic work in some rented area until the plant is ready for operation.
In the first year of its production, the company plans to produce 1,000 boards. However, within the next few years the plant would be able to produce 10,000 boards a year. Once it reaches this level, the company would be controlling roughly 15 percent of the total Saudi market for the boards. This market is believed to be growing by somewhere between 8 and 10 percent per annum in the Kingdom. Once the Kanoo joint venture plant reaches the projected level of 10,000 bards per annum, it would generate employment for about 200 people.
The Indian group is also evaluating the possibility of similar joint ventures for manufacturing of valves and heavy engineering facility in the region. L&T Group of India is also actively considering setting up an electro-mechanical construction facility in the Kingdom, the CEO of the group told the press here.
