Engineering firm L&T plans to scale up modular construction techniques to accelerate project execution and reduce on-site assembly time.

Engineering, procurement and construction (EPC) major Larsen & Toubro (L&T) is scaling up its modularisation capabilities to address persistent industry challenges, including skilled labour shortages, high labour costs, extreme weather conditions, and remote project locations. Rather than treating conventional construction and modularisation as mutually exclusive options, the company is advancing hybrid solutions, according to Subramanian Sarma, deputy managing director and president of L&T.

“A very quick back-of-the-envelope assessment gives me that about $100 to 150 billion of market opportunity will be available for modularisation over the next five years or so,” Sarma said. He made these remarks at an event marking the completion of Project CERES, L&T’s modularisation project for Australia. The initiative involved the fabrication and delivery of 110 modules, weighing approximately 64,000 metric tonnes, for Australia’s largest urea manufacturing plant, which has a production capacity of 2.3 million tonnes per annum.

Modularisation entails fabricating and assembling project components off-site before transporting them to the final location, significantly reducing on-site construction work and improving overall execution efficiency. The Australian facility is being developed by Perdaman Chemicals & Fertilisers in Karratha, Western Australia, under a Saipem-Clough joint venture. L&T classified the order as ‘Significant’, valuing it at approximately Rs 1,000–2,500 crore. The company’s scope included 47 pre-assembled units and 63 pre-assembled racks, all fabricated at its modular fabrication facility in Kattupalli, near Chennai.

L&T’s chairman and managing director, S N Subrahmanyan, noted that the company’s modularisation journey began seven to eight years ago. It now operates three fabrication yards in Oman, Hazira in Gujarat, and Kattupalli in Chennai, boasting a combined fabrication capacity of roughly 200,000 tonnes. Sarma confirmed that these facilities have sufficient capacity to take on additional large-scale modular projects. “Of the 200,000-tonne combined capacity, even if half is allocated to L&T’s offshore business, about 100,000 tonnes would remain available for onshore modularisation,” he explained. “This would allow roughly three projects of the scale of the Australian project to be undertaken concurrently.”

Beyond heavy industrial applications, L&T is also exploring smaller, road-transportable modules, particularly for domestic projects. This approach enables selective modularisation where it effectively addresses labour constraints while maintaining logistical feasibility. “In India, we predominantly use it for our own use,” Sarma said, adding that the company aims to expand modularisation beyond hydrocarbons into sectors such as steel and thermal power. Globally, L&T identifies strong opportunities in markets like Mozambique, Canada, Australia, and the US Gulf Coast, where remote sites, limited skilled workforces, or elevated labour costs complicate traditional construction methods.

Addressing workforce dynamics, Subrahmanyan revealed that L&T currently employs approximately 400,000 workers at any given time but faces a shortfall of around 60,000 labourers. Sarma echoed this sentiment, noting that labour availability and capability are industry-wide challenges, and modularisation represents a viable component of the solution. L&T has previously delivered modular projects for clients including Linde in Singapore, Shell in the Netherlands, and Dangote in Nigeria. According to Sarma, the successful execution of the Australian project will further strengthen client confidence in L&T’s capacity to deliver large-scale modular projects from India.

On the policy front, Sarma disclosed that L&T is engaged in discussions with the government regarding targeted support for modularisation. The company is also in dialogue with authorities and the Reserve Bank of India concerning credit-line facilities, concessional taxation for export projects, and export incentives.

In parallel, L&T is expanding its footprint in the data centre sector, pursuing both EPC contracts and independent development initiatives. “Our ambition is to set up at least 250 megawatts to 400 megawatts of data centre capacity in the near future,” Sarma stated. Regarding West Asia, Sarma emphasized that the region remains a critical market despite ongoing operational headwinds. “The order booking in the Middle East was always good,” he observed, noting that international order-book growth reached approximately 27 per cent in the first quarter of FY27. Finally, addressing emerging energy trends, Sarma indicated that L&T anticipates three to four coal gasification projects materialising over the next two to three years and plans to actively pursue them.