International products and agencies are now offering their architectural and real-estate services in India. Has this eaten into the growth pie of local talent or has it sharpened the focus on design, innovation, quality standards, economy and global competitiveness? Here are some perspectives that emerged at the CW Round Table.
India has been in the global spotlight for a while now. Today, the Indian architecture and real-estate sectors are witness to many international products and players. Against this backdrop, will India rise to its true potential or is it deemed to be an underachiever? This was the question posed at the CONSTRUCTION WORLD Round Table, held on July 27, 2012, at The Intercontinental in Mumbai. The primary focus was on design, innovation, quality standards, customisation, cost and global competitiveness, in order to prepare the construction industry to keep pace with competition, and take 'India Global'. Leaders from the construction and architecture sectors - national and international UAE-based Jeremy Lester, flew in from Dubai - expressed their views and vision for 'India Global' with Pratap Vijay Padode, Managing Director and Falguni Padode, Group Managing Editor, of ASAPP Media Information Group.
The result was a mix of experiences and recommendations drawn from an overview of the current scenario in India:
Alok Goel CEO, Nitco The tile industry has been evolving rapidly. Initially, the industry was divided into two parts: organised players, and low quality and cost manufacturers. However, I've gathered from my visit to many countries over the past year that the so-called 'dual quality' suppliers have started opting for top-class plants. One of my dealers rightly pointed that there are no bathrooms anymore, just glamour rooms. Being designed like the best resting area, new printing technologies enable larger tile formats and bigger slabs. And while natural stone is becoming more expensive, this technique gives tiles a natural look with consistency and at a much lower cost. Also, with digital technology, natural stone can be printed and prepared on time, preserving the natural variation. Moreover, a new generation of entrepreneurs is coming to Gujarat and a second generation of highly educated people from western universities. I was pleasantly surprised to hear manufacturers in Gujarat discussing how issues in Greece are affecting India's GDP. They talk like economists. That is the intellectual level now and it will work extremely well for India.
Jeremy Lester Chief Executive International, Grocon India is an exceedingly difficult place to do business. Heavy bureaucracy and the level of corruption make it a very complicated market for international players. Considering the immense talent, resource and capability in India, the country needs to be an importer of knowledge; listen to somebody's ideas, localise and steal them and prove them for the local market. Here, safety is an important area and an opportunity for us. Safety in real estate is deplorable and this should be improved. Innovation means delivering buildings on time with better quality and smarter methods. There are claims about reducing the impact of real estate on environment. But I am not sure if this includes social and economic sustainability and durability of real-estate developers. International businesses have done a great job in terms of localising, investing and growing local talent in India and I absolutely endorse this idea of internationalisation and localisation coming together. India is competing on a global stage. Although a huge market, it is probably the slowest and a high-risk market for returns. This is something for everyone to be aware of and work against in the near future.
Ewart Lazarus Executive Director, Chowgule Construction Technologies Pvt Ltd In some developed countries, Germany for instance, the use of construction chemicals amounts to about $7 billion; in the US, it is about $6 billion, and in China $4 billion. India as a whole is around half a billion dollars. Hence, standardisation through various associations and more from the government sector would add to the overall growth, not only for construction chemicals but various other aspects. Another aspect is quality. It is often believed that international players offer better quality than Indian manufacturers. I disagree! In the past 11 years, we have been associated with German collaborators and have realised that given the technology, we can use Indian raw materials to offer products comparable to international ones. Hence, all of us as producers have a role to play in promoting what we, as a country, can produce.
Gautam Chand Jain Chairman and Managing Director, Pokarna Ltd We have been exporting our products for the past 20 years and initially when I went to market the product worldwide especially in the US - as I consider it equivalent to the whole world market - they did not expect much from Indians. I took it as a challenge and decided to change this opinion. Today, when we exhibit in the US, Germany, Italy, etc, customers watch for us. This means that Indians too can reach that level. However, one major problem in India is pricing. Also, drawing from my experience, in developed countries, world-renowned architects spend hours together to understand our product, but unfortunately, the Indian architectural community is not willing to listen and know the product, its use, installation and maintenance process, etc. So we do not sell in India because people are not willing to adopt it. Even when we talk of natural stone, the Indian consumer is willing to spend Rs 2,000 per sq ft for good quality marble but unwilling to spend Rs 50 for the right installation. Also, stone should not be installed with cement and water. But, 95 per cent of architects in India do not object to this. Unless the right ways are suggested, the end user is never going to do it. Maybe there is more education, communication and advertising required. We know that eventually the market is in India and as the world market is dying, we will have to operate here as well.
Sandeep Mathur Business Head, Fenesta Building Systems UPVC windows have a share of at least two-thirds in the housing segment in Europe and are referred to as energy-efficient windows. However, in India, we have not marketed these as energy efficient but sound barriers. At the end of the day, energy efficiency depends on the product's design. And every requirement or idea cannot be transported. UPVCs, a very popular product in Europe, were not designed considering India's monsoons, the dust storm in north India as well as for design elements like wide windows, high rises, etc. To be relevant and successful, the product had to be made in India. Hence, we started fresh from the drawing board and designed a new set of products for the Indian market. And when we talk of India global, it means both ways: India going global and bringing relevant global products here successfully. So we followed the curve to be more relevant to architectural styles, which are rapidly changing and evolving in India.
Shekhar Patki Principal Designer and Proprietor, PG Patki Architects International architects or consultants bring with them systematic drawings, construction techniques, high-quality presentations and standardisation. However, beyond the initial design, they lack innovation. The Indian client is still in awe of an international consultant as they implement what they have learnt, but cannot adapt to Indian conditions. Of the 100 architects that have come into India, there may be only two structural engineers and one MEP engineer. Be it a quantity survey or vertical transport company, traffic and environmental consultant, all of these as a basket need to come into India. Typically, internationally, there is a preamble to the property before you begin to design a building. But in India, these services are ignored. The Indian client comes in, hires an architect, and then services are used and misused. I am sure we can learn from international architects but on second thoughts, how many Indian architects are allowed to work abroad? Somewhere, this is not a fair playing field and it is for the architect community to take cognisance of this and figure out the best possible way to tackle this.
Digant L Kapadia Managing Director, BE Billimoria & Co Ltd On the positive side, we must accept that international companies have offered India a variety of innovations. Compared to 15 years ago, the industry has advanced today. Second, quality standards are not on paper and not practiced or implemented either. However, with international companies coming in, quality standards have been applied to products, construction, designs, etc. Nevertheless, I entirely agree that these players have eaten into the local talent growth pie. About 95 per cent of the employees within an international organisation situated in India consist of Indians. Also, we are not easily given opportunities in foreign countries. In the US and Europe, local companies are well protected and definitely the government, private bodies and local companies are preferred the most; they will never allow a foreign company to invade the local markets.
Piyush Gandhi National Director, Projects and Development Services West India, Jones Lang LaSalle International tie-ups, companies coming to India and even imports have improved quality standards and global competitiveness. While I don't agree that India is lagging behind, I am certain that international products have helped the country as well. Local companies continue to grow as they compete with world companies. When we talk of concepts, designing high-rise buildings and add-on design services like quantity survey, landscape architectural designs, lighting designs, etc, international companies have an edge. And this has really helped projects in India grow further. Also, it is all interwoven - international design firms partnering with local firms and offering detailed concept designing. For Indian architectural firms, I would rate them at par in terms of design. As for contracting services, international firms are making a mark. With advanced technologies that have been introduced, even services like structural glazing are shaping up in a much better way. The world is flat and, as said, it is taking shape in India. I have not seen any Indian company as a pioneer international project management company or property consultant. Few companies have emerged globally and several new companies are coming up. But the concept has been brought in by international companies. Accepting that they are more mature in development and growth, why not share practices and move faster on that platform!
Jayant Acharya Director (Commercial and Marketing) & Member of the Board, JSW Steel Ltd There is a need for community aesthetics, quality and at the same time competitive offering. This mantra is prevalent in India along with the need for an articulate quality standard. The architect and builder community has tremendous potential and we can leverage that with quality products and standards. As for steel-based construction, usually in developed countries, the ratio for cement to steel is 1:1, whereas, in India, its 3:1, with steel being 1. Moreover, to erect a building with steel, one floor can be built per week. For multi-storey structures in India, usually the projects are announced in a timeframe of three to four years and with steel, these can be completed within 50 per cent of the time. We will launch the concept of high-rise steel structures in India in a JV with UK-based Severfield-Rowen Plc. We have started some buildings and aim to increase steel-based construction in India.
Neeraj Sharma Managing Director, Kone Elevator India Pvt Ltd Today, while the key to success for multinationals is localising their products, for Kone it has been innovation. In Chennai, 500 Kone engineers are working on the concept of reverse innovation - producing products in India that can be used internationally. Reverse innovation has resulted in cheaper and affordable products. Seventy per cent of our market is residential. While you have high-end buildings in Mumbai with 8 and 10 metre per second elevators, this is a very small segment. There is an affordable and suburban housing segment that needs to be addressed. Can we offer an automatic low-energy consumption product at the same price as a manual product? Accepting this challenge, we continue to innovate. As innovation is being driven by urbanisation, India is 30 per cent urbanised, China is 50, and Europe 70. Also, according to the market outlook, in China, they sell 400,000 elevators today compared to 40,000 in India. Hence, globalisation needs to be localised."
Narendra Ajugia Managing Director, Shirish Patel and Associates Consultants Pvt Ltd As far as globalisation is concerned, Indian companies are capable of doing any kind of design; we are technically well-equipped. However, nowadays even government projects demand that an Indian firm should collaborate with a foreign consultant. In this way, Indian consulting firms will never grow. Also, our designs are often compared to foreign designs. But the environment in those countries is different from ours. Moreover, if you look at the concrete and steel grades available here, it is very different. At times, wrong materials like partitions made of brickwork, toilets and bathrooms with old fittings, etc, are used, but there has been an improvement. However, BMC bylaws for structural engineers need to be streamlined. We have to work with two sets of drawings: approval and misuse plans. Approval plans have all kinds of constraints like cantilevers, column placement, the floor level, requirements for FSI exemption, etc. Hence, if Indian and international consultants need to be on a par, this needs to be streamlined.
Sandeep Mittal Managing Director, Anutone Acoustics Ltd I don't consider India global. First, in the dry walls and ceilings business, there is a dearth of manufacturing facilities in India despite having the required raw materials, labour and brains. But we prefer importing! When building materials for walls and ceilings will be exported from India, I would agree that India is global. Even in international exhibitions, hardly any Indian companies showcase their products. We lack the determination to manufacture and create brands. Second, products are manufactured in India as per BIS standards, which are either a replication of international standards or outdated. As for dry wall technologies, globally, 80 per cent of partitions are made of dry walls, which are lighter, faster and sustainable to build, and 20 per cent of brick walls. But in India, we have more brick walls for partitions, which consume more time, water and other resources. Last, in the Middle East for instance, project standards remain very tight and you cannot substitute them for price. But in India, when the project goes into budgetary mode, the project management consultant is pressured to bring down the cost; design is then substituted and standardised for price. This does not make India global.
Amit Maitra Managing Director, Lerch Bates Pvt Ltd We came to India in 2006 realising that the country was shifting towards constructing taller buildings in urban areas but lacked consultants in this domain. However, initially, developers and to some extent even architects did not consider vertical transportation consultants; today this thought is changing. We have also introduced three out of four Japanese players - Hitachi, Toshiba and Fujitech - to India and today maintain an arm's length, transparent relationship with them. In terms of innovation, foreign architects can only provide the design. For specific details like local codes, Indian architects score higher. Hence, once the global architect reaches the schematic stage or concept design, the local person should take over. Also, quality standard has been our aim and we work with lift companies to customise products for better looking interior cabs, etc. Costs do play a role but this has to be worked out on a case-to-case basis. Hence, we are here wearing the other hat as we are a 'foreign consultant'. We have competitors who are local players as well. The market is huge and each can get a comfortable share of the pie.
Raj Menon Country Manager-India, Interface India Pvt Ltd We are a US-based company and when we came to India 10 years ago, the biggest challenge was to introduce the product here. There have been several apprehensions and within one month of coming here, I was pushed back to the study table to answer questions coming from the market. Indian architects have immense knowledge and, today, I understand their requirements; design is an important aspect of our business. Second, innovation is the key to success and the only thing constant at the moment. We have observed nature on a metre by metre square and every half square is slightly different; the struggle has been to make one identical to nature. And interestingly, we have introduced nature-based designed products. Third, when I was in Dubai, I thought it was the fastest in terms of construction. But in India, the speed at which people do their construction is amazing. From an international perspective, it has been a fabulous journey so far. Despite the current market scenario, the market is active and this place is going to come back soon.
Surajit Ray Managing Director, Ulma Formwork Systems India When we decided to do business in India around the end of 2008, quality and safety were not given topmost priority in the country. Hence, we decided to come and induce some of our 50-year old technologies that European countries also invest in and use for all their products as they are not standardised. But in India, before starting a project, 15 per cent of the total amount is kept with the company and the project is completed with the remaining 85 per cent. Then a back calculation is done to decide if conventional methods should be opted. Unless it is a critical project for which conventional methods cannot be applied, companies like ours are not approached. In 90 per cent of cases, we are told that we are 40 per cent more expensive. Hence, by customisation, we have brought down the cost without compromising on technical specifications. Also, many large projects in India have started adopting system formworks over conventional methods. Hence, India is open to importing technology but not the product because it is costly. However, if customised products are accepted, it would only improve the situation in the next four to five years.
Shimul Javeri Kadri Principal Architect, SJK Architects There are pros and cons of everything that happens on a global scale. Over the past 20 years, India has been witness to several international projects, management consultants, products and architectural firms. They have added to formats and standards; one sees far more of this than before. Also, with certain systems, checklists and safety standards coming into play, architectural contracts seem to be more comprehensive; clients know what they can expect in a contract. Unfortunately, though, there is a group that perceives international products and services as superior. In the case of services, it's really disappointing because intellectual standards in India are much higher, yet international consultants are paid more. Another area of concern, which I hope is purely transitional, is products. I prefer natural stone over Italian marble or ceramics. But there is no certified norm to stone. Where globally stone is venerated and expensive, local stone and craft continue to suffer in India. We lack a standardised catalogue and here is the opportunity to form a catalogue and update it regularly.
Indeed, innovation is the key to India's success. But as Kadri pointed out and most participants agreed, India needs to develop its own standards. With existing players as well as new entrants, there was also a collective wisdom about cost and government regulation being an issue, whether it is for an Indian contractor or a material supplier. A specification that would give Indian contractors and material providers their share of the pie, so to speak, is an area of concern. Again as pointed out, when international companies open their offices in India, 95 per cent of employees are Indians. Here, Patki spoke of Japan and China investing in construction in India, but Indian contractors execute the project here. Also, Jain has his unique experience - products are manufactured locally, exported and accepted internationally, but India is not willing to pay the price and adopt the right methods. Although some architects across the table had their own differences, Jain continued to be firm and suggested that the architects could promote the right methods and uses and bring about a change. Another concept unveiled was reverse innovation by Sharma, wherein he aims to produce products locally that can be used internationally as well.
However, with foreign players coming in and offering their products, there has been a concerted effort to custom¡se for the Indian market. And as Lester suggested, India can also be an importer of knowledge. Ultimately, cost systems, understanding and amalgamating international methods with what is available in India seem to be the way forward. If India benefits from international companies, why not share practices! And while India may not be an underachiever, to rise to its true potential and make 'India Global', it evidently requires a definite shift in mindset.