JK Sardana, Managing Director, UB Engineering Ltd
This is what you call evolution. What began as Western India Erectors back in 1963 has gone on to achieve unprecedented growth in the sphere of EPC projects, infrastructure and electromechanical installation of large industrial projects; today, we know this entity as UB Engineering. JK Sardana, Executive Director, UB Engineering Ltd, takes Pia Sinha through the company's journey.
In 1963, BW Gadgil, SV Wadthekar and Asha P Gadgil formed a partnership firm in Kolkata called Western India Erectors essentially to undertake contracts for the execution of heavy electrical and mechanical construction work. The company undertook projects like the erection of boilers and turbines, piping and electrical installation work for power projects, fertiliser and chemical plants and cement and sugar plants, both in the public and private sector. The partnership firm was subsequently converted into a private company in 1970 and started operations from Pune.
In 1988, the company came under the UB umbrella and has been involved in a host of activities ranging from EPC projects to erection and testing of mechanical equipment, piping work and electrical work. In 2005-2006, a complete facelift and restructuring of the company was planned with the aim to accelerate growth and to ensure that turnovers doubled. In March 2007, when I came on board, I ensured that the company was cleared of all debt, with a clear balance sheet. Most of the company's outstanding success can be traced from 2005 onwards. From 2007 to 2010, our turnover has risen from Rs 200 crore to Rs 527 crore.
Till March 2007, we did only construction work and EPC projects for transmission and distribution systems. We then realised we could do the same for the mechanical sector. The idea of a balanced portfolio was appealing and we commenced activities in the mechanical division in 2008. For a long while, we had also been eying civil works. This made us consider the possibility of branching out into the civil domain. Our first civil work was for IOCL Panipat. The project was valued at Rs 17 crore and was successfully completed within the stipulated time frame. In late 2009, we conceived the idea of entering the sphere of road construction, and formally entered this space in January 2010.
We have also been involved in a lot of fabrication work at site for numerous clients; this planted the thought of setting up our own fabrication workshop. This workshop is currently under construction in Chhattisgarh and we hope to begin production shortly. Among other recent developments, we have set up an international division in Delhi to handle the overseas electrical business. Currently, we are bidding for a host of international electrical projects and hope to start receiving orders within the next six months.
Our project basket is immensely varied. Ongoing projects include a power project comprising three units of 660 MW each for Adani Group at Tiroda, Nagpur. The order value is about Rs 200 crore and it is one of the biggest orders the company has ever received. We are also executing an EPC project of interplant piping work and equipment erection of BOF and CCP at SAIL, Rourkela, which is at an estimated order value of more than Rs 190 crore. Our third big project is the 4×350 MW coal-based Kamalanga Thermal Power Project at Dhenkenal, Orissa, for SEPCO, Kamalanga. Similarly, we have established ourselves as EPC contractors for substations and transmission lines. We are currently executing a project comprising the design, engineering, supply, erection, testing and commissioning of 400 kV and 220 kV substations at various locations for Delhi Transco Ltd at a contract value of Rs 90 crore.
We are also executing a host of electrical projects including the Rs 88 crore village electrification project in Madhya Pradesh, as well as flood lighting work for the Bangladesh border. We are also on the verge of commissioning a 400 kV project for Delhi Transport Ltd in Bawana, which is expected to be complete in a year. We recently completed a blast furnace project for SAIL at Burnpur and substation projects in Haryana. Essar, Hazira and Reliance are among our other prestigious clients. As far as cement projects are concerned, we recently completed plants for My Home Industries, Hyderabad, and ACL in Guntur.
Our efforts at establishing a strong international presence are slowly gaining ground. Six months ago, we completed a 1,250 MW hydro machine project in Sudan at a value of Rs 100 crore. Our team is currently in Saudi Arabia as we plan to re-enter the Saudi market in the power, oil and gas sector in a big way.
Our newly launched company UB Infrastructure will take charge of all road projects and associated JVs. We are in talks with a South African and German company for tying up with us for road projects in India. The South African company will participate in equity while the German company will supply its new technology. Most of our tie-ups are project specific; for the EPC business (mechanical), we have a tie-up with Elecon, a Vadodara-based group for material handling projects. Once we start receiving more orders, we could look at making these tie-ups and JVs for a longer term.
As a construction company, we update our implementation techniques to reduce time schedule and cost and improve the quality of project execution. We also keep ourselves updated on new construction equipment being launched in the market, which ensures greater productivity at site.
We are setting up a factory to manufacture plastic moulded products for the FMCG sector in collaboration with an Italian company, OSMAP, in Pune. Although this is not in synergy with our line of business, we thought it would be great to put the land in Pune to good use and partner this business. Construction is expected to commence in early 2011.
Ensuring a safe working environment is a top priority. We undertake periodic on-site training and provide each worker and supervisor with a safety booklet demonstrating safe working patterns. We have also increased the number of safety officers at site, and the improvement is visible with accident rates being lowered by a remarkable 60-70 per cent.
Dealing with red tapism
Red tapism is prevalent in the government sectors and public undertakings. Today one has to bear with the practice being adopted by these organisations. We are looking forward to the day when work will be awarded based on capability rather than the concept of lowest price bid. We are also trying to focus our business on the private sector where such red tapism is not in existence.
In the past few years, the Union Budget has placed lot of emphasis on infrastructure development. The measures annou-nced have generated many opportunities and led to aggressive growth across the infrastructure sector. As UBEL is one of the prime companies in power generation and distribution, our experience in the recent past has been excellent. We believe that, continued financial prudence, hands-on operational emphasis and a continuous strategic approach to business expansion will be axiomatic for corporate success.
Having diversified into so many spheres of activity, we are concentrating on consolidating the business wholly this year and hope to close the order book at Rs 2,000 crore. We see plenty of opportunity in the distribution sector, considering that innumerable projects are coming up on a BOT basis. The power sector too promises a truckload of opportunities. We may enter distribution circuits and are presently analysing the scope. With things moving at such speedy pace, we hope to achieve greater milestones in time to come!
Established: 1963Top management (promoters): SD Lalla, Chairman; JK Sardana, Managing Director; Sunil Nayyar, Chief Operating Officer; MP Sabnis, Chief Financial Officer; B Chakrabarty, Senior Vice-President - Operations; NC Pandey, Senior Vice-President - Head, Electrical Division; Roopesh Jha, Business Head-Road & Civil Works; Hemal Ghelani-Vice President (UB Ostan Ltd)Turnover: Rs 527 croreNo. of employees: 1,222Centre of operation: Pune, New Delhi, Kolkata, Khartoum (Sudan)