Sujata Agrawal

Specialising in mega electro-mechanical project contracts, the International Operations Business Group of Voltas has become a preferred engineering, procurement and construction (EPC) contractor in the Gulf region

Dubai and Abu Dhabi have a breathtaking skyline. Office complexes, malls and residential apartment complexes in unique and contemporary designs stand tall in the sands — sheer poetry in glass and steel.

The International Operations Business Group (IOBG) of Voltas has played a vital role in the creation of some of these buildings. The company has executed contracts in more than 30 countries and has succeeded in positioning itself as a preferred engineering, procurement and construction (EPC) contractor in the electro-mechanical field.

"Our strategy has been to increase the scope of our offerings, followed by scaling up project sizes and widening the geographies," says Pradeep Dhume, executive VP and COO, IOBG, Voltas. "This has helped us build an enviable track record in the entire West Asian region." The company operates from offices in Dubai and Abu Dhabi in the United Arab Emirates (UAE) and from Doha in Qatar.

The company has leveraged its strength and capabilities in the area of design, planning, supply, installation and commissioning to successfully execute demanding projects under tight deadlines for a variety of built environments. These include airports, hotels, hospitals, shopping malls, convention centres, defence and security facilities, embassies, as well as research and training centres. 

In 1975, Voltas made its first foray into the Middle East, offering its skills and strengths in the air-conditioning business that it had developed in India. Its first project was air-conditioning the new palace that the Sultan of Oman was building in Muscat. "The Sultan's principal advisor was an Indian then. He strongly recommended Voltas for the air-conditioning," says Mr Dhume.

The next project was for a newly built township at Tabuk in Saudi Arabia. It was the company's first totally integrated contract, involving a captive power station, a telecom network, a water supply system and landscaping, apart from the entire gamut of electro-mechanical services. "It was a turning point for the company and helped us make a quantum leap from being an heating ventilating and air-conditioning services provider to a mechanical, electrical and plumbing (MEP) contractor," says Mr Dhume. It opened a window of opportunity in the region.

Since then, Voltas has worked on providing complete solutions for unique customer requirements. It has built a reputation for trust and reliability, and for being ethical in its dealings. Over the 30 years of its West Asian operations, the company has developed excellent design and project management capabilities, assimilated additional skills in the area of electrical systems and mechanical services, and gained an understanding of international specifications and the very latest technologies. Being responsive, quality conscious and achieving on-time delivery schedules, it has become the contractor of choice for electro-mechanical EPC projects, especially in the UAE.

Voltas looks at every project as a learning experience to enhance its capability. "Working in diverse geographies with different consultants and contractors, has gained us invaluable learnings in the areas of planning and organising multi-disciplinary fast track projects. It has taught us to adapt to different formats of contracts as well as identify, evaluate and mitigate risk at every level," says Mr Dhume.

The company has to manage a multinational and multicultural workforce in different geographies — a considerable challenge. At any time, there are more than 200 employees working on a single project. While the majority of the staff deployed by Voltas is Indian, the company does have a fair mix of nationalities on its rolls — project managers from Europe and Australia, engineers and draughtsmen from the Philippines, operatives from Nepal, Bangladesh and Sri Lanka, etc.

Voltas deploys a number of initiatives to retain its key staff, as the demand for capable and experienced people in the Middle East is far in excess of their availability. The company employs its people on time-bound contracts to take care of the cyclical nature of the business, but ensures job satisfaction and appropriate empowerment, apart from providing an appropriate compensation package and incentives. "We spend a lot of time and effort in aligning our employees with the company ethos, values and best practices," explains Mr Dhume. "Our engineers and technocrats have the freedom to learn, experiment and be innovative, which has helped us build intellectual capital."

Voltas has set up some joint ventures (JVs) and associates in the region which help it bid for projects and track opportunities. "By their very structure and capitalisation, JVs are mandated for projects up to a certain size. Beyond that, the Voltas office bids or secures the project. That way, the two entities complement each other, which widens business opportunities," says Mr Dhume. JVs also handle work parcels of large projects and warranty maintenance obligations.

Voltas is perceived to be more international in its business compared to other companies. It commands respect for its strong engineering acumen, project management skills and responsiveness. The company has executed major MEP projects such as the Etisalat Telecommunication and Administrative Building in Sharjah, the Conference Palace Hotel in Abu Dhabi, the Jumeirah beach residence in Dubai, Bahrain International and Al Ain International Airports, the Villaggio Shopping Mall in Doha and the Burj Tower in Dubai.

Four months into the project, it was faced with unexpected additional responsibilities, when one of the key subcontractors had to withdraw. Voltas also took on the civil works, and had to manage a major civil construction company as a subcontractor. The documentation and engineering requirements set down by the project manager and the engineering consultants required meticulous compliance, down to the last detail. Tight timelines as compared to conventional projects of this magnitude and an onerous penalty clause for delays added to the challenge. "But we completed the project on schedule," says Mr Dhume proudly.

The challenges are escalating. Increasing scale with correspondingly shorter timelines has meant that the company must be highly skilled in planning and co-ordination between different entities like the client, consultant, project manager, vendors, sub-contractors and other agencies. The compressed time frame also limits mobilisation of the right resources and negotiating for better prices. On-schedule completion is very critical, as there are hefty penalties for delays.

Voltas also needs to look at factors like governmental regulations for visa quotas, prices of critical raw materials like steel and copper, etc. These require constant monitoring, as they may result in extra recruitment expenses or increased costs. In a fixed price contract, factoring in such escalations can make a huge difference.

Mr Dhume finds that governments in the region offer a lot of support. Their monetary and fiscal policies are pro-business. Ease of investment and repatriation, as well as relative freedom in importing expatriate staff, adds to the convenience of doing business. The region has an excellent infrastructure and the well-developed banking system offers competitively priced project financing.

The West Asian region is in the grip of an economic boom, and there is major activity in construction. For Voltas, the UAE — Dubai and Abu Dhabi in particular — offers strong and sustained opportunities. Real estate development in these Emirates is dramatic. Their governments are vying for leadership in tourism, to become international financial centres and the regional hub of global companies. This naturally gives rise to large construction projects, which will continue to offer Voltas excellent business opportunities.

In Saudi Arabia, Voltas operates through a JV and here, too, there are exciting opportunities. Kuwait is one country that it has not yet entered, but it is keeping a close watch on emerging opportunities there.

Most international airports in these states are planning for upgradation, extension and expansion. Some countries plan to create mass transit railway systems. Qatar, Bahrain and Oman are closely following the Dubai pattern of planned infrastructure development. "These states have been our traditional markets, and give us opportunities to expand our presence and increase our share of business," says Mr Dhume. With current orders worth Rs 8,000 million ($197 million) and future opportunities aplenty, his optimism is well-founded.

Uploaded on March 29, 2006