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Construction : On Contract | October 2015 | Source : CW-India

We expect to continue to grow at 20-25 per cent every year

- Sanjay Shah, Chairman and Managing Director, Cube Construction Engineering Ltd

Based in Gujarat, Cube Construction Engineering Ltd (CCEL) is a fast growing construction company with rich and varied experience in civil construction. Engaged in this business for over a decade, it focuses on the infrastructure construction segment, and has built a strong reputation, executing landmark projects across the region. With ongoing projects for the Gujarat Health & Family Welfare Department, Gujarat Housing Board, Roads & Buildings Department of Gujarat, and municipal corporations, CCEL utilises its experience in using modern equipment for better and reliable civil construction. Sanjay Shah, Chairman and Managing Director, Cube Construction Engineering Ltd, shares more with CW.

CCEL´s vision is to provide innovative architecture at affordable prices with international quality.
We have regular brainstorming sessions, where possible ideas and improvements are considered, and thereafter, adopted as good practices. We have been successful in our vision in affordable housing schemes and PPP projects and have implemented these in our designs. Even in other projects, we advise our clients to improve their designs and incorporate these in their projects.

How do you adhere to quality, safety and environment friendliness in your projects?
We have separate teams with experienced and qualified persons for these roles and to ensure such sub-teams are at all our project sites. We support these with whatever additional equipment or safety implements for project site and workmen required. We train our personnel and keep updating their skills.

What is your strategy to move ahead in this industry?
We operate in all parts of Gujarat. We are focusing more on PPP projects and are taking up projects in new areas as well. Also, we are now venturing into real estate development.

Introduce us to some of the building materials you use and how do they benefit.
We use fly-ash in our projects. Under the CCEL group, we have a unit, Iolite Cube Inframaterials Ltd (ICIML), which manufactures autoclaved aerated concrete (AAC) blocks and paver blocks, which use fly-ash as one of the input materials. These AAC blocks are used in place of conventional bricks and are lightweight, give better insulation and finish. The use of AAC blocks reduces the weight of the buildings considerably, and thereby, owing to change in load requirements, reduces steel and concrete consumption as well. ICIML also manufactures other chemicals, such as jointing material for AAC blocks, and related chemicals.

From a civil contractor to an infrastructure development and construction company, what are the parameters you consider before taking up a project?
We have to keep up to date with developments happening in the world in these areas, expose and develop our teams to these new ideas and incorporate them wherever feasible. We have to develop our own expertise in other infrastructure activities as well. We must have in-house expertise for various sub-activities, to do full justice to the projects undertaken. We should have the capacity to develop the project in the optimal cost and time.

How do you view the concept of smart cities and urbanisation?
We are already in this area for the past few years and are doing projects for the Gujarat Housing Board (GHB) and Surat, Vadodara and Rajkot Municipal Corporations. We have undertaken projects for the Surat Municipal Corporation under JNNURM-BSUP at KOSAD and VADOD under the Urban Poor Housing Scheme. Some projects we had earlier undertaken for the Surat Municipal Corporation are already completed, some for GHB at Surat and Vadodara are at the completion stage, and other for GHB and the municipal corporations have started recently.

To what extent do you implement new technologies in your projects? What are the advantages in using them?
We are using flat slab technology to reduce time and costs; this can also reduce the cost of plastering of ceilings. Use of AAC blocks has helped in increased utilisation of fly-ash, which improves wall finish, gives better insulation and reduces air-conditioning loads. It also reduces total steel and cement consumption for a building, if considered at the design stage owing to reduction in building weight. Besides, we also use exfoliated vermiculite cement concrete on terraces, in order to reduce thermal load inside the building. Being a light weight material, it marginally increases the load on the terrace, but substantially reduces the heat transfer from the top slab to the rooms below.

How much does the company invest in construction equipment? Do you have an equipment fleet?
We use a sensor (power) paver for laying wide concrete roads. We use RMC plants at most of our project sites. The company invests in equipment considering the requirements of concurrent projects at a point of time. CCEL has its own fleet of equipment for project requirements; this includes four excavators, 15 RMC plants, 34 transit mixers, 14 concrete pumps, seven mobile tower cranes, five backhoe loaders, one sensor paver, two hydras, six rollers and 10 tippers. We prefer buying equipment for our requirements.

How much do you invest in construction equipment annually and what is your requirement?
We have about Rs 50 crore of construction equipment and shuttering material at purchase value. Annual requirements are as per new projects undertaken and old construction equipment phased out.

How are you carrying out the mission of affordable housing?
Do you plan to take on government projects?

We have been in construction and related engineering activity, and have now also entered real estate development. We have a few ongoing projects, including housing construction, for the Gujarat Housing Board and municipal corporations. We will now be building houses for direct offer to the public. We are participating in the development of integrated group housing facility for slum rehabilitation for the Gujarat Government on PPP or turnkey basis, where existing slums are redeveloped on the same land in multi-storeyed buildings, and the land left after the slum redevelopment is used for building for free sale by the developer to the public.

As a building contractor, what are the execution challenges faced by the company?
Change in government brings in abrupt changes in rules and regulations. It is difficult to foresee these; hence, there are cost implications and it is difficult to convince clients to share such additional costs. There are certain other sudden changes, such as revision in minimum wages other than owing to CPI change, charge of service tax on ongoing government projects and charge of ESI for construction workers. The list of permissions and time taken from various authorities for a project is cumbersome and time-consuming; these should be accorded in a time-bound manner. At times, permission is taken at the start of a project and the rules change midway, which can impact the projects viability.

How has the company´s financial performance been in the last fiscal? What are your expectations for the next?
The company has achieved a CAG of over 20 per cent in the past three years. There are new infrastructure projects being planned by governments and we plan to participate in some of these, in addition to the projects being done now. We expect to continue to grow at 20 to 25 per cent every year.

FACT SHEET
Year of establishment: Started in 1996 as a partnership firm and converted in 2006 as a limited company.
Top management: Sanjay Shah, Chairman and Managing Director.
Areas of operation: Infrastructure, institutional, educational, industrial, commercial and residential buildings and roads construction.
No. of employees: Over 400 direct employees. Labour subcontractors hired as per project requirement.
Centre of operation: Registered office and HO at Vadodara. Projects mainly all over Gujarat. Projects in other states include Maharashtra, Rajasthan and Jammu & Kashmir.
Completed projects: Over 50
Ongoing projects: Over 12
Turnover: 2014-15: Rs.565 crore.

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