Alwyn Bowden, President & CEO of Essar Projects talks with Infrastructure Today on his vision for the company.
Your company is at an important juncture. Where do you move on from here?
We have built up the kind of expertise that doesn't exist with anyone else in India. We are in the unique position where our sister companies have placed large-scale orders (say, for a complete steel plant) for projects, with us. Such opportunities to undertake projects at such a large scale do not come to too many contractors anywhere in the world. Because of this we have developed skill sets normally only available with the larger Western contractors.
We are probably the first generation of a new style of Indian contractor, a generation with a broad base of expertise and experience delivered at a large scale, and with ambitions to match; now what we have to do is to change market perception of what Indian contractors can do. For the next year that is what we will be doing, and if we can, we will change the whole Indian marketplace as well.
What is the current reality in the marketplace?
The Indian contracting sector has yet to prove itself to the market. Even today customers are disparaging about the capabilities of Indian contractors and in some sectors still bring in PMC contractors from other parts of the world to supervise contracts. Actually, this is unnecessary and highly expensive.
Which industries do you see as the most promising right now?
I would have to say the oil and gas industry, both onshore and offshore; the reason being, we have a better chance of securing work at a reasonable price, we can make reasonable money there and we can bring our skills to work there. In other sectors like civil and building, we are competing against people some of whom are delivering projects in a way that we would not deem proper. The delivery is not up to the quality standards that we see in other parts of the world. You also still see a lot of contracts being awarded to those who under-deliver. This will be a big problem as time goes on.
We are a big contractor and we have all the skills in-house. We can deliver US$ 1 to 2 billion projects, easily and efficiently, and we want to deliver to customers who will appreciate our skills and our drive to meet our targets.
Would you say that as a large contractor you have the luxury of cutting down the price a little, as compared to the smaller ones?
The industry has to change. Today, customers feel that they cannot rely on the Indian contracting sector because the quality of work being delivered is often sub-standard. The scale of projects on offer is too small to support large project thinking and practices and that has to change if the skill and capabilities of the Indian Contractors is to grow. The smaller contractors often do not know what they are up against when they take a project of a large magnitude. This means that we are often competing against someone who does not have the experience to understand the nature of the job, and that can put us at a disadvantage. Hopefully, this is a short-term problem! Notwithstanding this we are confident in our ability to deliver completed projects more competitively and in better time than our brethren smaller or larger.
Similarly the developers are focusing on how they are going to deliver the projects, but that is not their job. Their job is to focus on the financing side. The construction work should be left to the experts and the experts have to be allowed to gain expertise, after which they can be trusted and left to do the job. That is what we are waiting for, to happen in India.
Will you expand your foray into oil & gas, infrastructure, and the like?
We are a very broad spectrum contractor. We have built a refinery and we are doing more large scale refinery work now. It is an unique part of our history because not many contractors in the world have built a refinery. Similarly we have gained unique strengths in other sectors. We intend to build on these strengths across multiple sectors and territories, wherever we can add value.
What is the rate of growth you see for your company in the next 3-5 years?
Our Korean competitors peg their annual growth targets at 30-40 per cent. Whilst we wouldn't presume to suggest the same, the opportunities exist and so do the projects.
Are you focusing mostly on India?
We are not targeting India as being our sole market. We take the view that as part of risk management, we cannot have all eggs in one basket. So while half our interest is in India, the other half spans external markets-mainly, Africa, South-East Asia, Australasia and South America.