We’ll be in top five globally
In this interaction with Niranjan Mudholkar, Atul Punj, Chairman of the Punj Lloyd Group says he believes in tapping new opportunities and seeking footprints in new markets
You inherited a small construction company that was deep in debt and then built it into the diversified global conglomerate that it is today. How far or near are you from your vision of building Punj Lloyd amongst the top five construction companies in the world?
In any start-up company, there is a little bit of madness and one needs to put in all ones effort to get going. We acquired the construction division which had a turnover of Rs30 million and a debt of Rs50 million. So, we were technically bankrupt. The VP Singh government was in power at the time therefore no oil and gas projects were been finalised in India. We had no choice but to seek business elsewhere. After immense hard work, we got our first pipeline project in Indonesia.
However, we had no guarantees; no bank would support us — till I finally met Mr Vaghul from ICICI. I must have met and was turned down by all the banks, but that one meeting turned the tide for us. So, luck and timing is important — and of course one has to have the courage and conviction to go out and do something.
The world in the last financial year has seen a big turmoil. It’s said that after the Great Depression, this was the worst time for the global economy. It was the time when the companies world over started to think, restructure and cut costs, wherever they could. We have also taken initiatives where we have tried to curb the effect of the global slowdown. The present situation has improved as far as the orders are concerned and the company is sailing well after the global meltdown. I think, in another two years’ time we will achieve the feat of being amongst the top five EPC companies of the world.
Currently, how does Punj Lloyd’s order book stand in total value (unexecuted orders as well as new orders received)?
The order backlog for the Punj Lloyd Group on consolidated basis has gone up to Rs 26,205 crore. This is the total value of unexecuted orders as on December 31, 2009 and new orders received after that day.
You have considerable global presence when compared to other Indian infrastructure companies. How are your revenues divided between global projects and those happening in India in terms of percentage?
Sixty nine percent of our revenues come from global projects and 31% comes from Indian projects.
Do you see this equation changing in the next five years? How and why?
We are present in over 17 geographies. Our strategy is not to completely depend on one economy, rather we believe in tapping new opportunities and seeking footprints in new and promising markets.
We are a global company and are ready to undertake projects in any part of the world including Kazakhstan, Africa, Middle East and South East Asia. This ‘can do’ attitude results in our robust presence worldwide. Also, with the infrastructure and power sector opening up in India there is a lot of promise to be seen in these sectors.
Which sector/s will drive the growth for Punj Lloyd going ahead? Why?
The macro environment has improved as far as both the Global and Indian markets are concerned. The Indian Government is taking huge steps to improve the infrastructure in the country. Considerable investment in the infrastructure sector is planned, especially in power and roads, holding great promise. The recovery and firming up of oil prices also makes us positive on the prospects for our oil and gas business from Middle East countries. So in totality I would say the overall picture looks quite good at this point of time and we expect to improve the quantum and quality of orders we will receive in near future.
About six months back, you announced an ambitious restructuring plan for the entire Group with the aim of creating independent entities. How is that working out?
The Group decentralised its operations in various regions to allow the regional heads to meet their set targets. The Group had achieved significant annual growth rate of over 50% in the last few years and this restructuring was a major initiative to sustain high growth through empowerment with greater focus on profitability and accountability. It is working extremely well as the respective heads have been empowered in various geographies to successfully capture and implement larger and more complex opportunities that await us.