“Today we have a reasonable global presence”

jasleen

Jasleen Kaur | October 22, 2014


Ashok K Purwaha, CMD, Engineers India Limited
Arun Kumar

An electrical engineer from Delhi University, AK Purwaha, as chairman and managing director, has led Engineers India Ltd to new heights. One of south Asia’s leading design and engineering organisations, EIL has spread its wings further under him. From being an engineering solutions consultancy company focused on oil, gas, petrochemical and non-ferrous metallurgy industries, EIL has now diversified into sectors like infrastructure, water and waste management, solar and nuclear power, and fertilisers. Having spent more than 37 years in the oil and gas sector, Purwaha, who has been with EIL for five years now, is set to retire next year. In an interview with Jasleen Kaur, he talks about the company’s future plans and how it aims to increase the overseas consultancy business. Excerpts from the interview:

The overseas consultancy business of EIL has grown in the last year. What are your plans next?
One of our strategies is to look at the overseas segment but (primarily) in our core areas of work – hydrocarbon and non-ferrous. In non-ferrous, we are very strong in the aluminum sector, be it mining, refining, or smelting. So we are focusing on geographical regions like the Middle East, Africa, southeast Asia, and Latin America. In each region we are focusing on countries in core areas of our work, and within those countries we are focusing on (specific) companies and their projects.

There have been some successes. We have entered newer geographies like Bangladesh, Nigeria, Turkey and Angola. We are also getting assignments in countries like Oman, the UAE and Algeria. Today we have a reasonable global presence but we would like to do better.

So the company is more focused on overseas orders in the consultancy space?

I would say EIL is going to concentrate on the overseas segment in a more focused way. We are targeting to increase our overseas consultancy business to about 25 percent in the next three to five years from the current range of about 12 percent.

Within the country, we continue to look at the hydrocarbon sector and other areas of non-ferrous where we have a leading position, and to ensure we remain in those positions. At the same time, we are diversifying in high-growth areas of power, particularly renewable energies, water and waste water management, fertilisers.

We are also looking very closely at the nuclear sector, where we have been providing some services.

EIL has diversified into sectors like water and waste management, solar and nuclear power. Have they been successful forays?
About 85 percent of our business comes from the oil and gas and petrochemical sectors. The rest is distributed among infrastructure, water and waste management, nuclear, solar, fertiliser etc.

What about competition in these new sectors?

We are very clear that any business or geography we step in, we have to follow the law of the land and business as it happens. Once we are in any of those markets we look at competitors and try to ensure our system and processes are such that we are able to compete with the best and deliver the projects of right quality in targeted time and cost.

What kind of work are you taking up in diversified sectors?
Initiatives taken in terms of diversifying EIL into high-growth sectors of fertiliser, power (solar and nuclear), infrastructure, water and waste management have met with considerable success. In water and waste water management, we are currently doing a prestigious project for the Delhi Jal Board of laying interceptor sewers along Najafgarh, supplementary and Shahdara drains to abate pollution in the Yamuna. The project will strive to improve hygienic conditions of all sub-drains and the three major drains, as well as to clean the Yamuna.

In the fertiliser sector, we are undertaking assignments in Nigeria, Bangladesh and Indonesia. In solar, a 5-MW solar PV plant of GAIL was commissioned recently for which EIL has provided project management services. Breakthrough business was also secured in this sector from AREVA Solar USA, for providing services for its 125-MW solar thermal plant in Rajasthan.

EIL is also entering into an SPV with other PSEs for setting up mega-projects in the renewable (energy) sector in the country. In addition to projects under water and waste management, EIL is working for development of the national data repository for the directorate general of hydrocarbon, development of data centres for UIDAI and institutional buildings.

What are the opportunities EIL is now eyeing?

We will continue to ensure that we retain our premier position in the core areas of our work. We want to diversify strategically into high-growth areas in tandem with the government’s policy of investment and growth – both at the centre and state levels.

In the overseas segment, we are more focused on the hydrocarbon sector. We are also opening engineering offices in UAE and southeast Asia. These are some of the broad strategies to ensure that we continue to have a leading position.

Net sales of EIL was '435 crore for the first quarter ended June 2014, compared to '443.2 crore for the same quarter last fiscal. What are your targets for the remainder of the current fiscal?
There have not been many projects in the domestic market in the last two or three years. However, with the new dispensation at the centre, an air of optimism in the markets and the scenario appears to be changing. I am hopeful there would be more investments in all infrastructure sectors in the coming years. This includes energy and hydrocarbon. We will therefore have a much better time in the coming months. People can look at our order book, which last year had a total inflow of about '1,170 crore. Today, in just four months (of the new fiscal), we have already crossed '1,570 crore. The revenue realisation of these projects will come in the coming quarters.

Since investment in newer projects was limited over the last few years, we started looking at things strategically, focusing more on the overseas segment. There has been some success (globally) – in Nigeria, for instance, we are providing our design, engineering and project management consultancy services for the largest refinery in Africa, with capacity of 20MMTPA and 600,000 TPA polypropylene plant. We are also providing our project management services for fertiliser plants in Nigeria, Bangladesh and Indonesia.

You are about to complete five years in EIL. What would you call your biggest contribution?
Our company has got a great inherent strength of people. Our asset base is human resource, and we take pride that we have the best human resource in India. We have to our credit some of the most complex projects. We have diversified well in the last five years into various areas and in the overseas segment, and we have been able to crack some of the newer geographies and business segments. All these have been made possible only because of our human asset and great team effort.

What are the succession plans?
EIL has a very structured and robust training programme in place at all levels of its organisational hierarchy to develop managerial/behavioural competencies as well as technical and domain-related competencies. To build a strong leadership pipeline for future, EIL is also undertaking leadership development programmes at the middle and senior management level that leverages existing internal talent pool and ensures that knowledge, skills and thought process from senior leaders is successfully transferred to the next level.

This interview appeared in the October 16-31, 2014 print issue

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