Larsen & Toubro (L&T) Executive Chairman A. M. Naik has asked the government to frame strong anti-dumping laws to protect India’s manufacturing sector from cheap imports from China.
“China has been dumping around the world and this has raised great concern. Eighty per cent of what is being dumped is from China. Nobody now wants to invest in manufacturing as there is no safety net. Unless government gives guarantee, people are not interested to set up units,” said Mr. Naik while answering shareholders’ queries at the company’s 67th annual meeting in Mumbai on Friday. “Recently, I had been to Germany and they were very concerned about dumping from China. They fear that they will soon be losing their manufacturing capability,” Mr. Naik said.
He said that L&T had been actively pursuing with the government to restrict the import of cheap power project equipment from China, and this had resulted in the imposition of 21 per cent duty on all such imports.
“Large scale import of power equipment from China by Indian power producers has created a major problem for us. The quality of Chinese equipment is inferior and the lifecycle of such plants is questionable. You, as shareholders of those (power) companies, should question their management as to why they are going in for such equipment,” Mr. Naik said.
He said that L&T saw a bright future of its defence business in the long-run and the company was investing to build capabilities. “The defence sector shows good promise in the medium-to-long-term for in the land and marine business segments. The Defence Offset programme and the recent government initiatives of encouraging private sector for partnering defence public sector undertakings provide a range of opportunities,” he said. Mr. Naik said that despite the gloom in the domestic and world economy, L&T had fared better and was looking up to seize large opportunities in each of the sectors it operated. He said that the company had now a cash reserve of Rs.5,000 crore and might raise more resources in future depending upon the capital requirement.
At the AGM shareholders approved a resolution appointing Mr. Naik as Executive Chairman of the company from October 1, 2012, for five years. The board had, on March 9, 2012, appointed Mr. Naik as Executive Chairman and it was to be cleared by the shareholders. Now, Mr. Naik will retire only in September 30, 2017, and will focus on value creation in the company while K. Venkataramanan, CEO and Managing Director, will lead the company on a day-to-day basis.
