Driving growth via infra boom
Having recently bagged the Rs1,212 crore Chennai airport contract, CCCL is now aiming at further consolidating its position in the burgeoning infrastructure development space in India and the Middle East, says R Sarabeswar in an interview with Rajesh Kulkarni
Launched in 1997 by four former employees of Larsen & Toubro, Chennai-based Consolidated Construction Consortium Ltd. (CCCL), an integrated construction service provider, has been making steady inroads in the industrial, commercial, residential, and infrastructure development space.
Having established its presence as a leading pan-India player in these segments, CCCL has been steadily expanding its clientele with a string of recent major orders that include a Rs58 crore order from Apollo Tyres for constructing their factory building at Oragadam (near Chennai) and a Rs92 crore order for piling work from Bharat Heavy Electricals Limited (BHEL), for their proposed 2×500 MW power plant at Athipattu.
More recently, CCCL made the news when it bagged the prestigious Rs1,212 crore Chennai airport project from the Airports Authority of India (AAI), in collaboration with Canadian infrastructure company Herve Pomerleau International and the Chennai airport’s cargo complex project worth approximately Rs68 crore.
With this, CCCL’s total order book now stands at Rs4,250 crore, to be executed over a period of 26 months. For R Sarabeswar, the company’s chairman and CEO, bagging the twin projects is in keeping with CCCL’s strategy to focus on participating in greenfield projects. “Winning the Chennai airport contract is a major victory for us. It’s also by far the largest order bagged by CCCL from the AAI till date. It will help consolidate our position in the infrastructure space.”
The project includes the expansion of the airport’s Kamaraj terminal building (74,500 sq m), expansion of Anna International terminal building (65,000 sq m), multilevel car parking for the domestic terminal, a substation, surface car parking for the international terminal, an elevated road in front of the terminal building (bridge 1 km) and a face lift to the existing terminal buildings.
CCCL is already associated with airport projects at Delhi, Dehradun, Mangalore, Thiruvananthapuram, and Tiruchirapalli. “We are informed that the Trichy airport will be inaugurated on October 20, 2008, around the same time the foundation stone will be laid for the new airport at Chennai,” informs Sarabeswar. “The Mangalore airport should be ready by January 2009, followed by Trivandrum and Dehradun.”
The company has thus far executed 334 projects, comprising 104 industrial projects, 172 commercial projects, 14 infrastructure projects and 44 residential projects across 14 states and union territories in India.
The company’s existing client roster includes market leaders such as Infosys Technologies Limited, HCL, Hyundai, Mahindra & Mahindra, Ascendas IT Park limited, Manipal University, Airports Authority of India and Infosys Foundation.
The lure of foreign shores
Having carved a niche in the domestic market, the company is in the process of strengthening its foreign business expansion plans, beginning with the fast growing Dubai market. CCCL has tied up with a Dubai-based firm for undertaking construction activities jointly in the UAE. It already has a license for constructing high rise buildings in Ajman and is in the process of acquiring similar capabilities in Dubai.
“The UAE infrastructure sector is booming. Dubai alone has one-third of the world’s tower cranes employed at its numerous ongoing projects. We have already tied-up with a Dubai-based player,
M/s. Innotech Construction LLC,” says Sarabeswar.
“Moreover our exposure to foreign markets like the GCC region has proved to be a great staff retention tool for us. We have succeeded in retaining most of our experienced personnel looking for international exposure, by allowing them to be a part of our Gulf operations,” he adds.
As part of its expansion strategy, the company has also firmed up plans to venture into food processing through its subsidiary company via a Special Economic Zone near Tuticorin with an initial outlay of approximately Rs300 crore.
“For this venture we have already appointed Master Planner, a leading US-based food processing player. The master plan for this SEZ facility is also nearing completion,” he informs.
Commenting on the impact of the prevailing global economic meltdown on his company’s bottomlines, Sarabeswar stresses that the impact has been negligible.
“That’s because our exposure to the residential property development business is quite negligible,” he avers. “Its total contribution to our overall revenues is just around 1%.”
Firmly entrenched on the growth path, CCCL recorded a Profit-After-Tax (PAT) of Rs18 crore (as of June 30, 2008), on a turnover in excess of Rs389 crore. With a slew of orders in his kitty, Sarabeswar is upbeat about the future. He says, “We have been growing at about 45% per annum and are confident that we will maintain this growth rate in the coming years also. Moreover given our recent successes in bagging infrastructure development projects, I feel there is a definite possibility of further top line growth.”