N S Vijaya Kumar, CEO, Infrastructure Group, Khimji Ramdas is not worried about the year ahead, but strikes a cautionary note on 2016. An OER report.
The government has plans to give the Ghala Industrial Area a facelift from being an industrial township to an area comprising of swank commercial and residential complexes. While the plan is still at the drawing board, the Khimji Ramdas Infrastructure Group was the first off the block. In a seminal shift the Group unveiled its Khimji Ramdas (KR) Infra Campus in Ghala in April 2014. While the various businesses of the group were already integrated, this marked the physical integration of all its businesses except construction.
Says N S Vijaya Kumar, CEO, Infrastructure Group, Khimji Ramdas, “There are many reasons as to why we decided to have all our businesses under one roof. The commercial and probably the most important is that this property belongs to us and we might as well pay rent to ourselves rather than to others. Second, the government has been quite keen on changing Ghala’s outlook. One associates Ghala with a drab looking warehouses. But we believe that this is set to change. The way the city is growing, gives us the confidence that this place can become the commercial hub of the city. We said we will be the pioneers in showing people how a set of drab warehousing complex can be converted into a modern office campus.”
Kumar has a point, with the commercial hub of airports heights being in close proximity, the road connectivity with the Muscat Expressway and the under construction link road between Muscat Expressway and the Sultan Qaboos street, there is ample opportunity for Ghala to be transformed into a commercial hub.
The place was deliberately called a campus, as it went well with its vibrant complexion and ambience. The steel structure of the existing warehouse, which was more than 25 years old was retained but everything around it was transformed. The new 9,400 sq. mtrs building on a 18,000 sq. mtrs plot has been constructed by converting three of KR’s large warehouses in Gala into a state-of-the-art office complex. While the initial concept and design was the handiwork of external designers, the final detailing was done by the KR Group’s own people. The idea was to use everything that could be sourced from KR, making the campus a testament and showcase of the Group’s skill and expertise.
A good year
“We have had a very satisfactory year in 2014, as we had a few large projects, which fructified. Overall, it has been a good growth year,” says Kumar. The group is implementing a project called vehicle test lanes for a regulatory authority. As per government rules, every vehicle needs to be tested before it can be certified as road worthy and the regulatory authority has multiple locations where vehicles are tested. KR Infrastructure group is providing the authority with an integrated testing facility for brake testing, body testing, headlight testing etc. and all this will be done with minimal manual intervention. The data captured at a centre is simultaneously shared with all the testing lanes throughout Oman. “It involved a lot of integration, providing software, linking the database with the master database, sourcing the equipment from Maha, Germany, installing and training of people. This is an exercise which will probably go into 2015 as well, but it was a very novel exercise,” adds Kumar.
Multiple verticals
The group looks at constantly raising the bar. Kumar cites another first, “We are providing carpeting for an area exceeding 5,000 sq. mtrs to a large government organisation and this is the largest order for carpet tiles in Oman. There are ample such illustrations of our success and we have sailed through 2014 successfully riding on such projects.” The KR Infrastructure Group comprises of various business verticals like – construction, building materials, air conditioning, paints, electrical and related services, office furniture, home appliances, modular kitchens, engineering products and services – with each of the businesses having its own specialisation.
Says Kumar, “Our fortunes are closely linked to the investments being made in construction activities. While there has been demand in various areas, we focus on areas, where we can add value, by not merely supplying products but also doing something extra for customers. We have picked broad niche markets and deliberately kept out of some areas of business as a strategic decision. These are areas where the return on effort is low, or which are easily replicable in the market.”
The group manages a portfolio of products, and keeps constantly adding or dropping products from the list. For example, in gas cookers the KR group has a lion’s share of the market. The fact that it offers products at various price points, is an important reason for its success. It has products from Siemens positioned at the premium end; La Germania (a company which has been making cookers since the 1880s) gas cookers in the mid segment and Simfer from Turkey at a slightly lower end of the spectrum. Thus the company straddles all price points.
Says Kumar, “We have added products like stone textured paint from the Far East with Japanese raw materials, in the last couple of years. It is meant for building exteriors, has all coloured stones, lasts for five years and can withstand wear and tear. The entire outdoor surface of Avenue Mall next to Lulu, Bausher has been done by us.” While the company does not do market research in the traditional sense, its executives travel across the world, attending trade fairs, meeting principals and keeping their eyes and ears open to zero in on new products. Over the years, the company has developed a reasonably good understanding of market requirements.
Airport hangers, warehouses and other places where there are racking installations require Flat Floors. Sensing an opportunity, the group ventured into this business. “There is only one manufacturer of flat floors in the UK, but because of our new found links with Portugal (KR Infra has started sourcing home furniture from Portugal), we located a Portuguese manufacturer, who uses a laser levelling technique for flat floors and have got a large order from Salalah for the product,” avers Kumar.
Being a harbinger of new ideas presents its own set of challenges. The group has to educate and guide customers on where the world is moving. The group has recently won its largest ever order, for the construction of a government based centre in Sur. It is also exploring the idea of playing a bigger role in the medical sector and bringing new technology to the hospitality sector.
A mixed bag
“The year 2015 by itself does not cause me much concern as there are carry forward orders and projects which will go through, but newer projects will take a beating as people will go slow on expenditure. For me 2016 will be a very big challenge. Another challenge will be managing payments in the construction sector, if the ultimate customer starts delaying payments, then the entire chain will get affected. Oil prices is anyone’s guess as they are driven by sentiment and purposes that are not purely economic in nature so it is difficult to predict.” ends Kumar. While 2016 is in the distant future, the group has enough business to sail through 2015.