Larsen and Toubro Ltd will buy out Komatsu Ltd's 50% share in their joint venture. L&T, India's biggest engineering company would wholly own the construction equipment and hydraulic components manufacturer.
The new LTK would continue to manufacture construction equipment and hydraulic components. Komatsu on the other hand would continue to manufacture construction equipment such as hydraulic excavators.
The presence of Komatsu in India started in 1965 when the country ordered an order for the Ministry of Defence to build crawler tractors, Komatsu then partnered with L&T in the mid-90's after liberalization in the country opened opportunities in industries such as mining and construction. In 2013, the joint venture company posted gross sales of 1,615 crore in FY13.
When the joint venture was formed, the L&T brand equity grew the business in the next ten years. Even with the joint venture, Komatsu put up a facility to build dump trucks in Chennai as the country grew 9% economically.
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