Shapoorji Pallonji sees major upcoming events bringing in further opportunities in the construction sector
Pioneering Indian construction firm Shapoorji Pallonji (SP), which is on the threshold of its 150th year in business with a number of ‘firsts’ to boot, reports an “extremely good” year with its order book having quadrupled in size over the past year.
Known to be one of the oldest construction firms in India, the company set foot in the Gulf in the early 1970s when it won the contract for the construction of the palace of the Sultan of Oman after beating off stiff international competition, thus becoming the first Indian construction company to venture into international markets.
Today, SP has firmly established itself in the GCC through innovation and state-of-the-art technology, which have become the hallmarks of the projects it has executed in the region, and has recently earned a coveted “Contractor of the Year Award” in Qatar.
Its global footprint now covers India, Sri Lanka, the Mena (Middle East and North Africa) region and Sub-Saharan Africa.
In an exclusive interview with Gulf Construction, M D Saini, the managing director and CEO of Shapoorji Pallonji Engineering and Construction and the group’s international wing Shapoorji Pallonji International (Spint), says the region offers the construction sector huge scope in infrastructure development especially due to various upcoming mega events including the Expo 2020 in Dubai, UAE and Fifa World Cup 2022 in Qatar.
“To grow in this market, SP has formulated various event-specific strategies to tap these opportunities. Backed by its reputation in the industry, SP has decided to further penetrate the market with the basic STP model – which is segmenting, targeting and positioning. SP aims to pursue and execute projects which are strategic in nature and huge in magnitude in terms of contract value and area,” he says.
With the GCC’s construction sector expected to see exponential growth between 2015 and 2018, SP anticipates multifold prospects in the coming years as it cashes in on the boom.
Saini says the GCC is considered as a domestic market for SP International, which is headquartered in Dubai, UAE.
PROJECTS & CHALLENGES
SP has undertaken projects in all the GCC countries, where it is currently carrying out more than 35 projects ranging in value from $30 million to $635 million. Some 16 of these developments are located in the UAE and include the Marriott Hotel Abu Dhabi, a hotel for Dubai Inn, Landmark’s headquarters, Hyatt Place hotel and service apartments, Amesco towers at Jumeirah Lake Towers, Mudon townhouses, Amity International School, Sulaiman Habib Hospital, and enhancement works at The Walk at Jumeirah Beach Residences (JBR), among others.
It is also executing four projects in Qatar, four in Saudi Arabia and one in Kuwait, which include prestigious projects such as the Pharmacy College for Qatar University and South East Car Park for Qatar Foundation in Qatar; the Commanders College, buildings in the King Abdullah Financial District (KAFD), the AKH office tower and other major infrastructure in Saudi Arabia; as well as the Al Sabah Hospital in Kuwait.
Among the largest and most challenging of these projects is the Al Sabah Hospital, SP’s pioneering project in Kuwait, according to Saini. The company’s scope of works on this prestigious healthcare development includes design, construction, and procurement of medical equipment, furniture and maintenance for the 617-bed hospital. The project, which is currently in the design phase, is to be completed in four years under an estimated $635-million contract.
Saini says that due to the magnitude of work involved, the number of consultants, subcontractors, vendors and suppliers is very large, and hence the management and coordination between them to keep the project on schedule and within budget is “going to be a challenge”.
Meanwhile, ‘The Walk’, a bustling waterfront promenade in the heart of JBR in Dubai, ranks among its striking projects in the region. SP’s scope of work on this $60-million project consists of enhancement of two major areas – the ‘walk’ and podium – and is due for completion in March next year.
The walk enhancement includes the revamp of the façade and landscaping for six sectors (Murjan, Sadaf, Bahar, Rimal, Amwaj and Shams) while work on the podium includes enhancement of the retail extension, retail to residential unit conversion, landscaping and refurbishment for the bridge, lift lobby, and rest area for two sectors (Bahar and Rimal).
“As the project is at one of the most prominent and crowded areas of Dubai, we face the challenge of executing the work with utmost safety and quality without hampering the daily activities of the visitors,” says Saini.
Also on the list of striking projects worldwide is a high-rise residential building in Colombo, Sri Lanka. Al Tair, as it is called, is unique because of its structure in which one of the tower is inclined and resting on the other tower, he explains.
“Work on the 68-storey twin-tower residential building project commenced a few months ago and is scheduled for completion in 40 months. Due to its complex structure, the project team is working very hard on the execution methodology to ensure it is successfully completed with utmost safety and quality,” says Saini.
SP counts among its recent successes the Park Towers in Dubai International Financial Centre (DIFC), a challenging residential/office mixed-use structure that has two composite curves vertically and horizontally on its external faces.
“We worked diligently with our facades subcontractor to ensure close coordination and integration of the façade with the building structure,” says Saini.
Another challenging project that the company has completed is the Kabul Serena Hotel in Afghanistan, which was carried out in the face of the turmoil in the country. “Apart from the risks and threat to life, there were huge logistics problems which made it difficult to bring materials across borders, in addition to lack of reliable market information and no feedback from local suppliers/vendors. These challenges were handled by the project team through proper due diligence and a detailed project management plan,” he says.
Citing another project, he says: “In South America, we built a 15,000-capacity cricket stadium at Guyana. Here too, logistics were a main challenge: we had to import a large volume of construction materials from India and neighbouring countries. Getting a good subcontractor was another challenge since there were only a few who had experience in finishing works of such projects.”
Shapoorji Pallonji is a highly-diversified conglomerate whose heritage in India dates back to 1865, when it built a reservoir in Mumbai to meet the water supply needs of the city. Today, headquartered in Mumbai and Dubai, the group employs more than 230,000 staff including architects, engineers, managers and a skilled workforce with offices in 25 countries worldwide.
SP International employs more than 1,900 staff for its international operations with a further 13,500 skilled people working for the company on various projects. The company, which recorded a turnover of $400 million for the 2013-14 financial year, has set a target to double the figure during the current financial year.
SP has executed projects covering more than 175 million sq ft in the past few years worldwide including industrial, commercial, healthcare, hospitality, power, residential and stadiums. It is the first construction company in India to be ISO 9001-2000 certified and currently possesses the latest ISO and Oshas certifications for quality, health safety and environment management systems in most of the countries where it is working. As an engineering and construction company, SP can deliver end-to-end solutions for construction activities which include complete architecture/engineering (A&E) services, construction and commissioning of a project as well as more standard construction activities.
With its roots firmly in the construction industry, the company has successfully diversified into sectors including real estate, agriculture, textiles, business automation, and shipping and logistics.
Commenting on business, Saini says the company has done well in terms of new orders in the financial year 2013-14, which is almost four times the figure recorded in the previous year.
Following its successful forays into the Kuwait and Sri Lanka markets, SP is currently exploring the potential of markets in Kenya, Malaysia, Tunisia, Ethiopia, the CIS countries, Morocco, Cameroon, Tanzania, Gabon, Mozambique, Brunei, Mauritius, Equatorial Guinea and other growing markets.
To cater to its burgeoning market, SP has expanded its capabilities on all fronts, with its human resources having been doubled in the last few years; and its fleet increased manifold to meet the demand of operations.
Saini points out that given that most clients seek to associate with construction partners having design and build capabilities, SP has its own design centres/studios in Dubai and Mumbai to fulfil the needs of design-and-build projects of any magnitude.
The company has taken many initiatives to increase its competitive edge in the market. It has created project-specific joint ventures and signed up consulting agreements with large international construction and project management groups and has been quoted for special projects like airports and stadiums.
In other activities, SP has formed a consortium with Modular Concepts and Eurohealth Systems to provide end-to-end solutions for healthcare projects. The consortium will provide services ranging from market studies and feasibility analyses to operations and building management facilities.
Amongst the consortium members, Eurohealth Systems specialises in market and feasibility studies, building management software and facility management services; SP delivers design and construction services; while Modular Concepts supplies and installs medical equipment.
SP has also been exploring modular construction from full steel containers to flat pack, semi-finished and pod systems for hotels, service apartments and hospitals. The company believes that it has a substantially knowledgeable design group to implement a key construction system approach for the Middle East and Africa region.
Recognition of its ability as a contractor and its remarkable services came as recently as September when SP’s subsidiary in Qatar, Shapoorji Pallonji Qatar, was awarded ‘Contractor of the Year’ award at the Qatar Contractors Forum and Awards 2014. The award was received by Saini himself.
Commenting on the award, he says: “The award means a lot to us as a company, and sets forth the standard we aim to maintain throughout the region. Having only been in Qatar for five years, we feel this is a great achievement, and is a feather in our cap as we enter our 150th anniversary in 2015.”
The company has to date delivered three major projects in Qatar which include multiple buildings and infrastructure, and looks forward to working on more complex projects in the future.
Commenting on the industry accolade to SP, award panellist Dr Sarah Prichard, BuroHappold Engineering, says: “We were really impressed with the involvement that Shapoorji Pallonji has in its work in Qatar, not only for contracting, but also for delivering value to its clients while conscientiously looking after its staff and labourers.”
With ongoing projects across the Mena region and Sub-Saharan Africa, SP was recently shortlisted as one of the companies invited to bid for the build contract for two Fifa World Cup 2022 stadiums, namely the 32,000-capacity modular Al Bayt stadium and the 45,000-capacity Al Wakrah stadium.