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Over the years, the company -PSP Projects - has successfully executed a number of prestigious projects across Gujarat. Based in Ahmedabad, it has served the market by delivering projects in time with speed and quality. 'We have an enhanced repeated clientele in Ahmedabad who trust us to deliver the project in time with quality,' says PS Patel, Chairman and Managing Director and CEO, PSP Projects, as he shares more on the company's plans with SERAPHINA D'SOUZA.
Tell us about your diversified range of offering of construction and allied services across sectors in India. In which of these do you see most traction?
We have done 80 projects so far and most of them are for corporates. Our expertise lies in hospitals, educational institutes, pharmaceutical projects, etc.
We have done pharmaceutical plants for Intas, Torrent, Zydus, Cadila and Clarisetc, who are also our repeat clients. We will continue to be more focused on the private sector, institutional and government projects as we see huge scope.
Our current order book for 2017 includes a Rs 120 crore Vidhansabha project for the Gujarat Government, for which we are doing the renovation and interior works. We are one of the few companies in India that has organised working people for interior works.
The company's strategy is not focused solely on order book addition, but rather on adding quality projects with potentially higher margins or prestigious projects. How has this helped you grow in terms of bagging projects as well as delivering quality in time?
In the private-sector market, everyone is now worried about their projects' overall timeline and understands the capital investment for the interest cost. I am personally more focused on completing a project within the set timeline and in quality. Once you deliver a project in time, it works well for the client as well as the project, leading to a win-win situation. Further, you get repeat clients - a result of the big difference delivering the one or two projects in the market, which helps us get more work also. We have never said no to a challenge in terms of building - whether it is a high-rise or low-rise building, a complex hospital or any other project. We have a proven track record, which has given us the leverage to get more and more works.
Tell us about innovations in technology used in your projects. How have they helped to ensure faster execution and timely completion?
I observe markets world over - for instance, in Europe or the US- for the way of working and quality of work. In this journey, from a Rs 28 crore to a Rs 457-crore company, we believe we have contributed in a big way to the industry in Ahmedabad.
Contractors in the city have definitely learnt from us in terms of the quality of work we deliver, the shuttering we use, etc. For instance, we imported the first tower crane used in Ahmedabad from Germany by Liebherr in 2013. Also, we are major buyers of Peri shuttering materials. Recently, we used the Peri shuttering system for Hiranandani Tower in Gandhinagar in GIFT City, wherein we completed the whole RCC of the 16-storey building in six months. We also installed one of the best ERP software (SAP) from Germany in 2012 - this is rare for an unorganised industry like construction. With this software, the processes and operations are done through a computer. And from 2013, we have been 100 per cent online connected to each site, to each office, through this ERP software. This gives us more time to focus on the project's time and quality.
Tell us about your current projects or recently bagged work orders, and your procurement plans for these.
As on March 31, 2017, we have an order book of over Rs 729.17 crore. Currently, we are executing four projects in Gandhinagar's GIFT City, namely, the World Trade Centre by Viridian Group, Delhi; a commercial building project for Prestige Group; a commercial building project for Brigade Group; and IBIS Hotel. Buying equipment or materials is a continuous process for us. In the past few months, we have bought shuttering systems from Peri and three cranes from Potain. Depending on the requirement, this is an ongoing process for us.
Tell us about the company's own fleet of construction equipment and your fixed assets with regard to plant and machinery?
We are probably the only company in building construction with such a large fleet of machinery. We do not go in for rental machinery. We have seven RMC plants, about 24 transit mixers, 12 concrete pumps, 12 cranes and more than 1 lakh sq m (approximately) of shuttering. We spend about 4-5 per cent of our annual turnover on procuring new equipment.
Also, tell us about any key technology or method you have used in your projects along with its benefits.
Shuttering, RMC plants, tower cranes and vertical platforms for high-rise buildings are a few. One method I would mention is that instead of having a huge quantity of scaffolding outside the building for glazing, plaster or painting, we would rather opt for a working platform that stands on two pillars. With this, a person operating on the platform has a switch to operate for every floor he wants to work at and to move the platform to higher or lower height; around 20 people can work on this platform at a time. The output using such methods becomes unmatchable with the conventional methods being adopted in the market.
What is the importance given to labour training by the company?
We provide good quality housing for labourers. Also, in the past four to five years, we have invested over Rs 10-12 crore on labour colonies. We also have supervisors to maintain the quality of the labour colony. Further, out of our labour strength of 6,000 to 7,000, more than 1,000 of our labourers have gone through CREDAI skill training on different sites.
Also, PSP Projects recently launched its IPO and raised about `212 crore. How has this helped the company improve its financial strength, and what is the increase in the fund-based and non-fund based limit?
Out of the issue proceeds of Rs 151 crore (excluding OFS proceeds), the company proposes to procure plant and machineries to the extent of Rs 52 crore and to utilise Rs 63 crore for working capital requirements. At present, the major constraint for the growth of the company is the limited bank guarantee facility available. Hence, a portion of the IPO proceeds will be utilised to increase the non-fund based facilities especially bank guarantee facility.
The company's total order book has witnessed a growth of almost 2.5 times in the past one to one-and-a-half years. Tell us about the company's plans for 2017-18.
Our top-line is always impacted by the type of project we do. Last year, our turnover was Rs 400.75 crore. Of the Rs 729.17 crore order book, we will be able to complete Rs 600-650 crore turnover next year. We have already secured around Rs 175 crore of orders in the first quarter of the current fiscal.