The large Engineering, Procurement, and Construction (EPC) contractor Larsen & Toubro (L&T) intends to increase its capabilities in modular construction. This is being done to address challenges related to the shortage of skilled labor, high labor costs, extreme weather conditions, and remote construction sites.
Subramanian Sarma, Deputy Managing Director and President of L&T, stated that the company is moving towards hybrid solutions, no longer viewing traditional construction and modular construction as mutually exclusive options. He noted that preliminary assessments indicate a market opportunity of between $100 billion and $150 billion for modular construction over the next five years.
These statements were made at an event marking the completion of L&T's modular construction project for Australia—the CERES Project. Under this project, L&T manufactured and delivered 110 modules weighing approximately 64,000 metric tons for Australia's largest urea plant, which has a capacity of 2.3 million tons per year.
This plant is being developed by Perdaman Chemicals & Fertilisers in Carrat, Western Australia, as part of a joint venture between Saipem-Clough. L&T classified this order as 'Significant,' estimating its value at approximately 1,000–2,500 crore rupees. L&T's scope of work included 47 pre-assembled skids and 63 pre-assembled racks, which were manufactured at the company's modular production facility in Kattupalli, near Chennai.
According to Chairman and Managing Director S N Subrahmanyan, L&T's journey into modular construction began about seven or eight years ago. The company currently operates three production sites: in Oman, Hazira in Gujarat, and Kattupalli in Chennai, with a total production capacity of about 200,000 tons.
Sarma reported that these three sites are sufficient to undertake additional large-scale modular projects. Even if half of the total 200,000-ton capacity is allocated to L&T's offshore business, about 100,000 tons will remain for onshore modular construction. This would allow for the simultaneous execution of approximately three Australian-sized projects.
The company is also considering the use of smaller modules that can be transported by road, especially for domestic projects. Sarma clarified that this would enable L&T to selectively apply modular construction in projects where it can solve labor resource issues while maintaining transportability.