Forward Integrated Model
Forward Integrated Model
Vikram B Sharma, MD, Supreme Infrastructure India Ltd tells Niranjan Mudholkar that his company believes in dreaming big and diversifying
Please tell us something about the origin of your company
Supreme Infrastructure is a forward integrated model from the quarrying and crushing operation into infrastructure. I believe the quarrying and crushing operation is the mother activity of all infrastructure activities since it involves sourcing the core requirements in terms of aggregates.
My father – Mr BS Sharma – was in this business since the 1960s. In 1983 he along with his two partners – who were contractors in road works – started a company called Supreme Asphalts Pvt Ltd.
The primary activity of this company was setting up a hot mix plant in Powai (Mumbai) and doing small contracting road works worth Rs30 lakh and so on in Mumbai. In 1988, the two partners moved out and my father took complete control of the firm.
What have been the highlights of your company’s journey so far?
Initially, it was a small company doing only road works with the order size restricted to the maximum of Rs one crore and within Mumbai. Then we started enhancing our competencies and started taking orders worth Rs10 crore.
Although our expertise was in road works, we started diversifying into other infra segments like drainage, pipeline and railways. We also started taking road projects that involved bridges and other associated structures thus further strengthening our position.
In 1994, we undertook several redevelopment projects that involved the entire urban infrastructure including roads in the earthquake affected regions of Latur, Parbhani and Nanded. This took us beyond Mumbai.
After completing my BE Civil in 1998, I joined the firm and we took a big job – the approach road for the Bandra Worli Sea Link. That job involved 16 lakh m3 of earthwork within a record time of nine months. This project which we did as a sub-contractor earned a bonus for our contractor of 20% of the project value.
Then we moved into projects that were Rs20 crore+ with a Greenfield project in Amravati that involved 13 bridges including a river bridge. In 2004, we moved into Rs 40crore+ cycle with a Western Express Highway project from Jogeshwari-Vikhroli link road to the airport.
Basically, this is the model that I have personally followed of taking bigger as well as diversified projects instead of restricting ourselves. Of course, while doing these key projects, we were also doing several smaller projects.
In 2007, we moved into the Rs100 crore+ cycle with projects like a Golden Quadrilateral project in Karnataka for NHAI, an IT park in Powai, entire Thane city’s drainage works and so on. We also got listed the same year with the intention of having a good networth and a financial standing. And we have given the investors what we have promised.
In short, this is how we have grown – Started off as a quarrying and crushing company, taking up road projects and then diversifying across the infrastructure segments. It has been about dreaming big and diversifying.
And while doing all this, we continue to do quarrying and crushing. The company today owns 100 acres of quarrying land near Padgah. Basically, we maintained the backward integrated model while doing the forward integration.
How has your company evolved vis-a-vis the infrastructural growth in the last 10-15 years? How geared up is your company to take advantage of the opportunities?
We have increased our execution cycle every second year and grown substantially in the process. But while growing, we have continuously enhanced our expertise as a company.
All core construction related activities are done in-house. There is not a single sub-contractor involved.
What are the key challenges faced by your company?
The first challenge was of course to get the organisation established. The next challenge for me personally was to take the organisation into the bigger league by convincing the contract awarding agencies as well as many people within the organisation that we were capable of taking up bigger projects.
And the evolution had to happen without souring relationships and within the existing structure. The challenge was to take these people along with. The people factor has always been important for Supreme and it will always be.
To give just an example, six of my classmates also joined the company along with me and four of them continue to work with me.
HR has been a major issue for Supreme but now we are taking care of it in an organised manner. We have appointed a very senior professional to handle this department in our company.
Your outlook for future?
Let me narrate a personal incident for answering this question. On my first day at college, I said that I will be the GS (general secretary) of the college. And I did become the GS of the college. The point is, when I decided to be the GS, I also planned how I wanted to achieve it.
With regards to Supreme Infrastructure, we will have to give our bottomlines and processes of working out a good feel factor. We have to attain the bottomline so that we have the capacity to execute. Supreme, as a company has a very good capacity of execution. And that is because of the complete involvement of the people who work here.
It is indeed an astonishing fact that we don’t have sub-contractors except for labour contractors; we do everything in-house. It is this inherent capacity of execution that gives us the confidence.
In terms of industry outlook, order books are going to flow in.
Traditionally, the highways sector was the only organised sector at a time but now the power industry is getting better organised than the highways.
Railways is getting itself organised too. Irrigation is good. Mining will be big time. And as a midcap company, the USP of Supreme is that we have the capacity to execute with a presence in different verticals. Despite being an emerging midcap company, we have a strong presence in roads, buildings, bridges, flyovers, drainage, jetties and even RMC. Last year, we bid for contracts worth Rs400 crore, this year we are bidding for contracts worth Rs2500 crore. And we are doing projects in various parts of the country. Now, all we need to do is maintain the momentum.