Building with Confidence

“We are aiming a turnover of ` 5,000 crore in the next couple of years,” says Satish Parakh, Managing Director, Ashoka Buildcon
 Ashoka Buildcon, a multi-faceted infrastructure development company in India, is striving to expand in new markets. In an exclusive interview with ACE Update, Satish Parakh talksabout the company – its journey, success story and roadmap. He also digs deep to unearth the bottlenecks for infrastructure sector. He feels that India needs to revisit its bureaucratic set-up.
In roads and highways sector, Ashoka Buildcon has successfully executed a number of projects establishing new benchmarks. Please elaborate on the journey of the company.Ashoka Buildcon Ltd. has come a long way. Starting off as a small time contracting firm, today Ashoka Buildcon has emerged as a leader in highway infrastructure development.
Our origins can be traced back to 1976, when our Founder Chairman Ashok Katariya quit his government job and laid the foundation of the company in order to fulfil his vision.
From 1976 to 1982, the company was engaged in contract based assignments for government and semi government bodies.  Though the jobs were small, the company was getting noticed for its speed and quality of work.
The next level for the company was the period between 1982 and 1986, where we started constructing commercial buildings in the regions of Nashik, Pune and Mumbai.
The period between 1986 and 1997 was an important phase in our journey as we diversified into construction of industrial plants and institutional buildings. This diversification proved to be a major turning point. At that time industrial construction was not considered to be a lucrative business to engage in, but we had a different view. We were foreseeing a boom in the industry as well as the educational sector and expecting several opportunities to open up. The scenario eventually turned out to be the way we had expected and our company earned a first movers advantage in this sector.
Our fast execution speed and high-quality helped us become a preferred choice for multinational companies and we were able to work for major brands in the country including Mahindra and Mahindra, Samsonite, Godrej Pilsbury, Hindalco. The company became a national player and we were winning and executing projects in various parts of the country.1997 was the year when Ashoka Buildcon took a major leap by venturing into the infrastructure development sector through public-private partnership projects. Yet again it was a sector where builders were hesitant to participate. We faced challenges particularly in terms of raising finances from banks for completing our first BOT-based projects. We were still successful in completed it ahead of schedule. Since then there has been no looking back and we are today positioned as one of the leaders in the BOT-based highway sector with a project portfolio of 28 BOT projects which is the largest by any private player in the country.
In the year 2010, Ashoka Buildcon went public and the IPO was oversubscribed by over 15 times. The company is now listed on BSE and NSE.
In 2010, we added another sector to our profile. We ventured into the field of power transmission and distribution. In the very first year we bagged orders worth over ` 1,000 crore. Today all our projects are being executed ahead of schedule and we are competing neck to neck with well established players in the sector. How has this journey been helpful in achieving milestones and paving the way for its progress and growth in the industry?Our journey is a reflection of our working methodology. We have always believed in staying ahead of the curve by identifying opportunities before others do and get first movers advantage. This has been a critical factor for our success.
We are the first unlisted company to acquire investment of ` 100 crore from IDFC. IIF also invested over ` 200 crore in Ashoka Buildcon. Recently, SBI Maquarie invested ` 800 crore in our projects. L&T formed a joint venture with us for a prestigious highway project in Nashik, Maharashtra. Such associations have been benefited the entire industry.
We have learnt that to stay ahead of the competition one has to be equipped with updated technology, advanced machinery and a very dedicated work force. Our efforts are to ensure that we are always strong in all these areas. We have our own R&D wing which enables us to explore newer and better ways of completing projects.
We have always accepted challenges and the calculated risks we have taken have earned us dividends. Our in-house expertise in all the aspects of construction empowers us to be minimally dependant on third parties which results in increased control over project execution.
Our milestones include a list of several projects which have been completed ahead of schedule without any compromise in the quality of work. Some of the projects were considered impossible due to technical and geographical difficulties yet our team was able to complete them with splendid results.
We have recently completed two major bridges on river Rupnarayan in West Bengal. The project was so difficult that for 10 years construction companies were not willing to take up the challenge. We completed the two bridges (1.1 kms each) in 12 months which was 18 months ahead of schedule.
Similarly, the highway we built for RIDCOR in Rajasthan was very challenging as it was faced by extreme climatic conditions. Our team made optimum utilisation of time and resources and completed the project 95 days ahead of schedule, resulting in a bonus of ` 1.90 crore.
We have been trendsetters in many ways for the industry. Our major contribution is in reducing the time that was estimated for completion of civil engineering projects. To quote an example, in 1999 we created a record by constructing a 90 tonnes cast in-situ bridge within a period of only 38 days against an allotted time of 12 months. This changed the entire scenario in terms of the time that was allotted to builders for completing projects.
Similarly we promoted the milling technology, which again brought a great change in the Indian highways sector. Presently we are working on rain water harvesting systems to prevent the rain water on highways from getting wasted. We are hopeful that it too will emerge as a trend changer in the sector. Which are your major focus areas as far as EPC business is concerned?With respect to EPC business, we will continue to focus on national and state level highways construction. We believe that the coming years will be very good for the sector.
Also we shall be bidding for power transmission and distribution projects. We are already present in the states of Maharashtra, Chhattisgarh and Tamil Nadu and are looking forward to penetrate in other states as well.
Availability of manpower is a major concern. How is Ashoka Buildcon addressing this issue?Our human resources management has always been a strong department. Our attrition rate is fairly low when compared to the sector at large. Most of our management team members comprise of individuals who had joined the company at trainee levels and have worked their way up the ladder. These individuals have emerged as assets for the company who take ownership of their assignments and deliver results.
We also have in-house training division that grooms fresh candidates. Our Ashoka Training Institute offers short-term courses for supervisory levels which have proven to be very effective in increasing the effectiveness of our work force.
What other challenges is EPC sector facing today?Our country seriously needs to revisit its bureaucratic set-up. The whole sector needs to be put on a fast forward mode when it comes to approvals, settling disputes and addressing major issues which require government intervention.
Land acquisition, requisite approvals and uncertainties with regards to escalation in prices of raw material, manpower and other resources continue to hamper this industry.
We also feel that the new land acquisition act is going to be a challenge for the government because it may lead to increase in land prices without addressing the issue of dispute resolutions and time for acquisitions. Are you looking for any foreign collaboration to strengthen your position in the overseas market?We are open to the idea of foreign collaborations. Our business development team is looking into such initiatives. If we find something suitable to our profile, we may venture into the same.  What is your target for next couple of years?We are aiming a turnover of ` 5,000 crore in the next couple of years. However, our target is not just about increasing the volume of business; we want to continue to be a major contributor to the industry in terms of national development, environmentally beneficial construction methodologies, improving the levels of occupational safety and building of a better society. We want to help in nation building.

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