A Billion Dollar Dream
A Billion Dollar Dream
In this interaction with Niranjan Mudholkar, Kishore K Avarsekar, CMD, Unity Infraprojects Ltd tells how after starting with small projects, Unity has today grown to have a diversified presence across infrastructure segments.
Unity Infraprojects Ltd was established in 1979 by Kishore K Avarsekar – a civil engineer by profession and now its chairman & MD. Avarsekar wanted to start his own company since childhood. After a brief stint with MCGM and PWD, he eventually started off on his own doing some simple jobs. Later, he started taking projects with building societies and banks. After the banks reposed trust in his abilities, he then started the era of driving government sector projects.
How was the beginning of Unity?
We started from the Mumbai region, grew through Vashi and when there was the infrastructure boom, we landed up doing some good infrastructure projects in the interiors of Maharashtra.
When we were into our growing phase, we brought the turnkey concept. Today we have evolved that concept into the design and build concept and we have successfully replicated it in various projects.
What have been the highlights of your company’s journey so far?
Unity crossed the magic figure of Rs1000 crore net sales to Rs1130.79 crore in the 2008-09 fiscal. Another feather in the cap was an award for Professionally Managed Company from the Construction Industries Development Council. This award was conferred on Unity for Client Services and employee welfare activities.
In the view of worldwide financial crisis, many companies downsized on employee strength, salaries and their welfare budget but our recruitment ratio has increased by 15% in the fiscal 2008-09.
What is your assessment of the infrastructure scenario?
If India improves its physical infrastructure the country’s entrepreneurial drive would comfortably propel it to double-digit economic growth to rival China’s. According to a government blueprint, a quarter of new investment in core infrastructure is expected to come from the private sector.
New projects include the US$50bn Delhi-Mumbai industrial corridor, the North–East freight corridor, the high-speed rail links between main cities and improved cargo handling at ports.
The government is also looking at the feasibility of constructing 15,600 km of expressways in addition to the already planned 1000 km by 2015. The country also aims to have 500 airports operational in the next decade and plans to develop projects worth Rs2000 crore in the current fiscal.
The Ministry of Shipping is planning to develop six port projects worth Rs2183 crore in the southern states. Some big size projects are also taking shape in the power sector. So these are good signs.
What are the key challenges faced by your company? How are you addressing them?
The FY 2008-2009 was a tough year owing to the economic meltdown. Also the enforcement of the model code of conduct for general elections in the first half of 2009 restricted bidding opportunities from Government sector in that period.
Construction opportunities from real estate too had dried up with a number of planned projects being put on the back burner. Interest rates have risen significantly over the past 12 months and this had been coupled with a restricted availability of funds. Further, accessing funds from the capital markets was no longer a viable proposition at least in the short term.
This impacted virtually the entire corporate world. However, by announcing back to back stimulus packages, Government liberalised various rules and regulations. This eased the liquidity pressure and gave a boost to spending and investment.
The positive impact on the construction industry has been the slackening prices for commodities particularly steel and oil. This is likely to significantly benefit companies across the sector. Moreover, the pressure on availability of manpower, both technical and non-technical has significantly eased and the associated HR costs will be far more rational now. Considering that India is going through a massive infrastructure development; recruiting, training and retaining the best talents is the biggest challenge.
In order to maintain our bottomline, we have selectively cut down and postponed our capex and reduced overheads and started detailed risk-mitigation exercise with the focus on the quality of contracts.
Name some of your major completed projects?
Unity Infraprojects Ltd has executed diverse range of notable projects throughout the country. In Agartala, we have completed railway tunnel for north-east frontier railways in a record time.
One of the notable and widely appreciated projects was the 411 room, Five Star Hotel at Shiv Chhatrapati Krida Sankul, Balewadi, Pune.
Another important project was Tansa Dam. Seismic evaluations conducted showed the dam to be unsafe when subjected to Maximum Credible Earthquake. Unity successfully completed the work of strengthening of this dam.
To meet the growing demands of increasing air traffic, expansion and modification of Chhatrapati Shivaji International Airport Terminal 1B was planned to optimise the requirements for the coming decades.
We competed and qualified against big industry players to get this turnkey fast track project. There are many such projects which have been executed nicely with all specifications.
Name some of your key on-going projects?
UIL has 47% orders from civil, 33% from Irrigation and 20% from transportation verticals. In the West, we have a diversified project portfolio sharing 65% in the order book. 51% work has been executed for JVLR Road Project phase II, the most technically complex projects micro-tunnelling, Mumbai and Storm Water Pumping Station at Haji Ali for MCGM are moving ahead steadily.
National Sports Club of India and Orchid Tower are on the verge of completion. Other projects like Tata memorial hospital, Swan Mills, BARC Utility Building and Offbeat Mall project are almost 90% done.
Moving to the second major business hub – North Zone where company is executing 25% work. Major works of road development for HSRDC is on the fast pace construction. Another road development project for Pink City Expressway at Rajasthan is in the initial stages. Throwing lights to Major Dhyanchand National Stadium, New Delhi – 72% work has been executed so far and 23% work accomplished for Mandoli Prison Complex project, Delhi.
The South Zone is sailing steadily by contributing 10% to the order book. In the South Zone, Approximately 23% work has been executed for Kondapur Towers, Hyderabad and Project Seabird, Karwar. Other Project, Nizam Institute of Medical Sciences, Hyderabad has been developed to 37%.
Your outlook for future?
Infrastructure expansion is a prerequisite to further economic growth. Indian construction companies are comfortably placed in terms of their current order books and there is no cause for concern for the next couple of years.
Indian infrastructure companies will see plenty of business opportunities, particularly after the second half of 2009. Unity has a significant pan India presence and with the experience of executing diverse range of projects throughout the country.
Now, we are also looking for opportunities in the South Asian Subcontinent. We are open to opportunities anywhere in the world. We are open to foreign collaboration for technical expertise and already have active foreign joint ventures in place.
We are standing at the threshold of exciting opportunities to bag big size projects across sectors. We are also planning to foray into power Sector. Our vision is to become a billion dollar company and to place Unity as a brand with transnational presence.