Sunday, December 17, 2017

Interview - Gautam Suri (Interarch)

As a company we are focussed and have a fix on all possible growth areas

 

Since it commenced operations in 1984, Interarch Building Products Pvt. Ltd. has established itself as a leading turnkey pre-engineered steel construction solutions provider in the country with a significant market share in metal building systems. The Noida-based company has integrated facilities for design, manufacture, logistics, supply and project execution capabilities for pre-engineered steel buildings.

GAUTAM SURI, CTO and FOUNDER DIRECTOR spoke to SHRIKANT RAO on the prospects for his firm in the new growth centres being planned by the government. 

 

How the market performed for Interarch through 2013-14?

I can’t say the market has been very good, the business has been down, the economy has been slow and the margins have been under pressure with the amount of projects being less, but we have managed to sustain our turnover.

 

So what are the important projects you took up this year?

We have had some breakthrough. Besides our normal pre-engineered buildings work, we have done warehousing, some complex industrial buildings, also some heavy buildings for SMS Siemag. We are doing some heavy span structures – 75 to 100 metre span – for the cement industries – these include UltraTech, Mangalam Cement and Ambuja. We are also executing stadium with large pipe structures. Essentially now we are specialising on converting conventional structures into off-site manufactured pre-engineered steel. So we manufacture at a plant and supply to site where it is assembled. The infrastructure area is no longer pre-
engineered buildings, it is pre-engineered steel construction; from doing smaller buildings, 4-5 storeys, now we are getting into large tall building jobs.

 

The Modi government has announced plans to construct 100 smart cities and the industrial corridors. What is your vision for these areas and the prospects you are seeking there?

These are announcements. A smart city is a 25 year project. A lot of these new city projects are ripe areas for steel construction. For any kind of quick construction as happened in China, steel is the ideal material. People are beginning to realise the benefits of steel especially with today’s shortage of labour and materials like sand. So steel is becoming the preferred material.

As a company we have a fix on all the new areas coming up. For instance, in the industrial corridors that are coming up, we are doing a lot of work with major Japanese companies like SMCC Construction and Hitachi; we have just done work for Honda and Yamaha. Every year we are adding 30-40 projects for the Japanese companies. Now there is the Delhi Mumbai Industrial Corridor com-
ing up, and another coming up in the South. So our focus remains very much on all these important industrial developments which we feel will happen. As far as Interarch is concerned we will play a role when steel construction starts happening on the ground, when the building comes up. Right now the primary usage of steel is in manufacturing, retail, hotels and hospitals may be commercial complex but not much of residential at the moment. Steel can work for premium residential construction, not for low-cost. That is going to be the mix for some time.

 

Tell us about your manufacturing units?

As far as our manufacturing facilities are concerned, we have two at Uttarakhand– Pantnagar and Kichha and one at Sriperumbudur near Chennai. We are currently thinking of adding another one in Gujarat. As regards capacities we have a total of 1,20,000 MTPA in terms of steel buildings from the three state-of-the-art facilities. If you are talking about heavy structures then we have capability for most construction applications. We have begun augmenting manufacturing once we got into infrastructure because it involves heavy construction and because you are working with heavier steel, your welding procedures, machinery and material handling equipment has to be upgradede specially when we are doing it offsite.

 

Are you looking to raise capacity?

We already have added capacities at our production units. Our long term expansion plan is in Gujarat. We have already applied for land there.

 

Which are the states where you are hopeful of development, where you see things moving forward?

A lot of Greenfield developments are going to happen in Gujarat, it is a good place for investment. A lot of stuff was happening in the South before the slowdown. States like Tamil Nadu started off with a big bang and we went there because of the benefits, power, trained labour but all this has to be available on a sustained basis. Uttarakhand in that sense has been a good state, we went there because of the incentives, also on the whole, it is a good area to work and there are no negative issues.

 

What is your assessment of the prospects for the construction business under the new dispensation?

Projects have been slow in the last year – many of them are stuck – and they are not going to start moving immediately. With the new government in place the sentiments have been good but I think it will take 6-9 months before things starts actually moving on the ground. It will probably happen towards the end of the year. Stuck projects especially infra have to get away from environmental, raw materials like coal and other issues. We will probably start seeing results towards the end of this calendar year or the end of the financial year. The government has to focus on manufacturing first. That is required for job creation.

In India manufacturing has virtually come to a standstill in terms of expansion. It is one area which requires steel buildings. Warehousing is still at a very nascent stage. When the Goods and Service Tax (GST) is introduced the whole area will explode. Besides that there is so much work to be done on infrastructure where steel has an increasing role to play. With steel usage in India still very small compared to the rest of the world in all areas of construction, the market is wide open.

 

Tell us about Interarch’s strengths?

As far as Interarch is concerned, we are looking at pre-.engineered construction, not pre-engineered building per se. We are not a manufacturing industry. We are in the process of delivering a service, which starts from understanding the customer’s needs to the engineering – I have a 150 plus strong engineering team in house, people working full time there – to manufacture and deliver on time, in a phased manner to make sure the project is executed sequentially. Interarch places very high emphasis on safety and has an excellent track record. We have over 100 strong inhouse PMC team focused on project execution. We are among the only few companies in India which has in-house people. That is how we could execute the Delhi airport project. For the T3 job, I had 17-1800 workmen and 200 engineers at the peak of the work.

 

What is your emphasis on R&D?

There is no specific R&D in this line,  except that we keep improving manufacturing techniques and making them more efficient. We are converting site manufacturing work into plant manufacturing, because innovation is happening. Our planning systems keep evolving to suit our customer needs and requirements. Other than that no specific R&D is happening in steel. Globally there are new trends and new materials. Like recently we did a job for JCB in Jaipur where we used 450 grade steel – which is a very high grade – for the first time. It has never been used in buildings earlier.

 

What is the order book position right now and going forward what are your strategies to ensure growth?

I would say it is good. Anything more will be subject to business growth. The pie has reduced, it has to grow and there are far too many people fighting for it but we expect the market to look up in the coming year. 

 




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