QUARTERLY MAGAZINE July 2022 Vol 10
QUARTERLY MAGAZINE July 2022 Vol 10
Corporate report
Viaduct and ballastless tracks, Kochi Metro Rail Project, Kerala
India’s infrastructure sector, especially the construction business, has been a critical driving force for the growth of the country’s economy. It is expected to grow steadily over the next few years, to become the world’s third-largest infra market by 2025.
Medium to long-term trends point to a rebound in demand and consumption, with a rapid increase in urbanisation. Significant investments are expected from the government and the private sector in areas such as urban transport, water management, construction of new industrial plants and housing units, setting up of large data centres and development of public spaces. All of this spells a promising outlook, and plenty of new growth opportunities for construction companies, including RPG Group’s flagship EPC company, KEC International.
KEC started its Civil business in 2017, with a vision to establish itself as a leading player in a vastly unorganised industry with very few prominent players. The company began with a focus on the industrial segment and built several iconic factories and process plants for established brands, across sectors such as auto and auto ancillaries, cement, metals and mining, FMCG, chemicals, and in the Flue Gas Desulphurisation space. This was followed by diversification into the residential segment, with construction of high-rise buildings across Bengaluru, Goa, Pune and Mumbai for a host of marquee developers. In a short span of five years, KEC has established a strong foothold in the industry and is currently executing over 45 projects in the urban infrastructure and water, industrial and hydrocarbons, residential and public spaces, and defence and data centre segments.
The company is currently delivering several nation-building projects. These include the water pipeline projects in Odisha under the government’s Jal Jeevan Mission, which will directly supply water to over four lakh rural households; the Tuticorin airport in Tamil Nadu, and the Srinagar high court in Jammu and Kashmir.
In the fast-growing urban infrastructure segment, KEC has completed a significant portion of the Kochi Metro Rail project, including a trial run from Petta to SN Junction stations — the company’s first elevated viaduct in operation. It is also building New Delhi’s first double-decker viaduct for the Delhi Metro Rail Corporation, which involves the construction of a viaduct over a flyover, in addition to a 560-metre-long balanced cantilever bridge over the Yamuna river bed. In all, KEC is executing nine Metro Rail and RRTS projects that comprise stations, viaducts and depot-cum-workshops in Kochi, Chennai, Delhi NCR and Madhya Pradesh, and is competing against some of the most prominent infra players such as L&T, Tata Projects and Afcons.
What sets the company apart from its competition is a relentless focus and ability to deliver projects ahead of or on schedule, in an industry fraught with severe and unexpected delays. “As a preferred contractor for ahead-of-schedule delivery of projects, we continue to undertake initiatives that strengthen our engineering capabilities and processes. Towards this, we have recently embarked on a high-intensity transformation programme, in collaboration with a global management consulting firm, to transform KEC from a traditional to a digital/ technology-enabled EPC organisation with world class engineering capabilities,” says Vimal Kejriwal, Managing Director & CEO, KEC.
The company is exploring new construction methods and technologies such as modular, precast and 3D printing construction.
In FY22, KEC’s Civil business had an all-time high order intake of over ₹ 5,800 crore across sectors, a staggering quadruple growth over the previous year. The company reinforced its presence in the industrial and residential segments with orders of over ₹ 1,200 crore from marquee clients, and strengthened its hold in the urban infra segment with two large orders — one from Chennai Metro Rail Limited and another for the Subhash Nagar depot for the Bhopal Metro Rail Project — together worth over ₹ 2,500 crore. KEC has also secured four orders aggregating over ₹ 1,200 crore in the water pipelines segment, while it has expanded its footprint in the data centres business, as well.
The ‘Civil Execution Excellence’ initiative, which forms an integral part of the transformation programme launched by KEC, is helping us build deep execution capabilities for consistently delivering Civil projects ahead of schedule and maintaining a tighter control on costs.”
Vimal Kejriwal, Managing Director & CEO, KEC International
One of the biggest differentiators for KEC has been the adoption of mechanisation and digitalisation to deliver excellence to its clients. On the company’s focus on bringing in best-in-class practices, Nagesh Veeturi, Executive Director of Civil SBU, says, “We continue to leverage digital technologies such as BIM, including 4D, to design and monitor projects, drones for topographical surveys and tracking real-time project progress, and Ground Penetrating Radar (GPR) for utility detection. These have enabled us to achieve faster and superior project execution, in line with our objective of delivering projects before or on time.”
While helping expedite execution, our mechanisation and digitalisation initiatives have significantly enhanced quality and safety at our project sites.”
Nagesh Veeturi, Executive Director, Civil SBU
The company’s dedicated efforts in implementing robust quality and EHS standards across its projects exemplify that it remains one of the few EPC companies to designate a Vice President for Safety. It’s no surprise then that KEC has achieved over 50 million safe person-hours across its projects since 2018, earning several prestigious awards and appreciation from clients and organisations.
With a robust order book and tender pipeline, the company is confident of unlocking several new opportunities in the coming years. Vimal adds, “The growing trajectory in our non-T&D businesses is a testament to our ability in identifying new businesses, developing capabilities and scaling them. Five years ago, the non-T&D share in the business was less than 20%; today, it is 50% of the overall revenue mix. Within five years of incubation, we have scaled the Civil business to around ₹ 2,000 crore and expect this number to grow by ~2x in this year. Going forward, we see Civil as a critical engine that will propel KEC’s growth in the years to come.” This unbeatable combination — a strong order book and L1 of over ₹ 8,000 crore, a healthy tenders pipeline and a thrust on quality and execution — positions KEC International stronger than ever in growing its Civil business multifold across all customer segments. This translates into projected revenues of ₹ 10,000 crore over the next five years, which could further unlock a new growth trajectory for RPG’s crown jewel.
