Voltas chief Shaukat Ali Mir oversees $1.4bn worth of projects
Part of the $70billion Tata Group, Voltas has been providing turnkey electro-mechanical solutions in the Middle East for three decades.
Recent high-profile projects completed successfully are the Formula One race track on Yas Island, a $122million, 18-month project, and Ferrari World, a $150million, 34-month project.
Ongoing projects include Central Market in Abu Dhabi, a $177million MEP works contract scheduled for completion in 2012, Etihad Towers in Abu Dhabi, a $128million MEP works (build only) contract scheduled for handover in June this year, and the Sidra Medical Research Centre in Doha, Qatar, a $214.2million JV MEP works (design and build) contract due for completion in 2013.
Construction Week speaks to Mir in the company’s Abu Dhabi office, he reflects that Voltas is reaping the benefits of a strategic focus fine-tuned over the past four years. He is quick to add, however, that “we still believe it is only the beginning. That is important, as markets are changing fast. Where we are at now is a transformational stage.”
An important part of the company’s success is due to its affiliation with Tata.
“The name itself is respected; the whole world knows about the group. More than 60% of its revenue comes from its international business, so it is truly global. We are proud to be part of the group,” says Mir.
This is of particular benefit when entering new markets, as “the name speaks of integrity, trust, reliability, ethical values. That has really helped us to move forward, especially in the current climate.”
Tata is much more than brand value though, as its way of doing things is based on the well-known Malcolm Baldridge business excellence model of the US.
“Voltas is obviously one of the key members within the Tata group competing in terms of business excellence. In fact, the Dubai Quality Awards is based on EFQM [the European Foundation for Quality Management Business Excellence Model], which is similar to Malcolm Baldridge.”
This simply means that “whatever you do, excel at it, and have a way of measuring, monitoring and comparing with the best in the industry, as well as coming up with innovations and focusing on sustainability and health and safety.” Mir says the latter two are key concerns that are starting to have a major impact on the construction industry globally.
“In my view, sustainability and green building are key when it comes to construction. Where we are today in the Middle East, I think I would say good steps have been taken. You can clearly see that the Dubai, Abu Dhabi and Qatar governments, as well as Saudi Arabia now, are giving significant emphasis to green buildings and sustainability.
“Now if the industry and the regulators would work together, I see a huge shift in construction business when it comes to sustainability and green buildings. I think it is a question of understanding lifecycle costs. The traditional model has been the initial costs, but people are realising that lifecycle costs are much more important in the long term.
Whilst it might appear that building green in terms of MEP is expensive, the major players in the region are realising this is the better route.
“Are we ready for the industry as a whole going green? I would say not all of us are ready, but most companies, starting with consultants and contractors, are getting their staff trained in LEED applications.”
Mir says that initiatives such as Masdar City in Abu Dhabi is a major impetus for going green, and the impact of this is being felt as far afield as Dubai, where such ratings are beginning to be applied.
“In India, which is our home market, we have done several projects rated LEED Silver and Gold. A recent one completed last year was the Hyderbarad Airport project in south India. So yes, this is the way forward. Will it happen quickly? I think the economic dynamics might not allow it to happen at the pace it should,” says Mir.
Linked to this is the critical issue of health and safety. “Like anything else, there is huge improvement one can expect in the near future in this area,” says Mir. Voltas itself is anticipating OSHAS18000 accreditation in March or April this year, while it is aiming to embrace ISO14000 Environmental Management accreditation in 2012.
The plan is to develop a comprehensive strategy that integrates occupational health and safety issues with environmental stewardship, says Mir. Mir’s take on the current business environment is based on a good understanding of the immediate past.
“I would say 2009 was a period when people were really recovering from the shock of the economic downturn in late 2008, while 2010 was a year of consolidation in the industry.
Many companies really came to the stage of closure because they had not really adapted to, nor understood, the new environment. Many companies have restructured themselves; they have moved to where the volumes actually exist.
From our perspective, we were mainly focusing on the built environment until 2009. In 2010, we came up with a strategy for a new vertical, which is industrial and oil and gas, where we will have a major focus on infrastructure, such as district cooling, external networks, rail and metros and some of the industrial plants where MEP becomes vital, especially in areas like Saudi Arabia and the UAE where there are a number of industrial projects planned,” says Mir.
Integral to the company’s success has been the fact that it has never relied on the UAE solely as a core market.
“With the downturn in business, especially in Dubai, and the Kingdom of Saudi Arabia having announced major projects for the last year or so, it has become important for us to move to new territories.
We have already set up joint ventures in Saudi and also in Oman, with recognised, respected local partners, so we will have revenues coming from these two territories starting from 2011.
“We will continue to have a major focus in our traditional markets of Abu Dhabi and Qatar. We are well-placed in Qatar because we have been there for the last nine years, and have done very well amongst the international companies there.”
Mir says Voltas has been active in the Saudi market since the early 1980s, but turned its focus to the UAE and thereafter Qatar following a downturn in the Kingdom.
“We are going back to Saudi now, the people know us, and the experience we have gained in managing major projects in the UAE and Qatar will go a long way in helping us take on major work in Saudi.
Whilst the dynamics of the construction market in Saudi have changed, we still foresee significant volumes coming from there in the coming years.”
Voltas is even focusing on high-speed rail and infrastructure projects in Singapore and Hong Kong.
“We see Egypt as having potential, and we see Iraq as having potential in the medium term. Our international business commenced in Iraq in the mid-1970s. Due to the war, we had to withdraw from this market, but it is a very familiar territory for us, and we are hoping that the political situation will stabilise there, and we are waiting to go back.
I am sure there are significant volumes coming in that country because it has to be rebuilt all over again really. If required we will form joint ventures, but we are open for various business models really,” says Mir.
In terms of challenges and opportunities facing contractors, Mir says “operational efficiencies and the ability to manage fast-track projects in the downturn have become critical.
I think the single most important attribute that will allow a company to succeed is to have operational efficiencies in place.
That has been an area of concern in the past because Dubai and Abu Dhabi saw huge volumes in mid-2000, and operational efficiencies did not take a priority, but with the downturn and real estate taking a big hit, it is only the fittest who will survive now.
The market has become focused on Saudi Arabia and Qatar specifically, and Abu Dhabi. Dubai contractors who have gained experience and have a lot of resources are all focusing on these markets now.”
This poses the challenge of “significant competition” in these new growth areas, says Mir.
“The other challenge would be to resource new territories like Saudi Arabia. We are doing this by using a mix of existing key staff who have worked in the UAE and Qatar, and shifting some of them to Saudi because they provide stability and a track record on major projects.
The fact that we have India as a home base means the advantage of having access to very qualified and skilled manpower from there.”
However, with its growth rate of between 9% and 9.5% only second to that of China at 10%, Mir says India has its own resourcing challenges to contend with.
“We have evolved a model of training young technical staff in colleges, be it at the supervisory or engineering level. At company expense we train batches of people every six months in these colleges, monitored by our HR department, and then give them exposure on our existing projects in India, whereafter they are deployed abroad.”
Mir cites this as “a massive competitive differentiator”, as any investment in skills will ultimately reap rich rewards.
“The question is being able to retain these people, and that is a challenge. The other challenge I see in the region is that whilst projects are announced, awards take their own sweet time. Being able to manage your own overheads during the uncertainty is another challenge.
It is critical for companies like us with a significant overhead base that you have a spread of businesses in the adjacent territories so you are able to share resources.”
Voltas has managed its overheads through such initiatives as its Global Engineering Excellence Centre in India, “where we have close to 150 designers and engineers, whose only job is to assist the company in its overseas projects, because a number of our projects are design and build. They also carry out value engineering,” says Mir.
“We have derived massive benefit from this as it provides a great engineering resource for meeting the requirements of all our projects.
Another key cost-reduction strategy has been “centralising the entire procurement in the Middle East. This has arisen out of our experience over the years in partnering with various suppliers, and it has been successful in consolidating the various requirements of our projects.
Suppliers are happy to deal with us on a Middle East level. We also have a relationship with the parents of various distributors and joint ventures of these manufacturers in the region,” says Mir.
Looking at future growth sectors, Mir says healthcare is booming. “Abu
Dhabi is already building Cleveland Clinic, and has plans for three more major hospitals in the near future, and possibly next year the expansion of the Sheikh Khalifa Medical Centre.”
Rail and metro projects are also kicking off, with Qatar, Abu Dhabi and Saudi Arabia all announcing major efforts in this regard.
“The challenge has been that in the last four years internationally we have grown at 30% to 35%. It is astonishing. The key thing for us is managing growth and sustaining it.”
SHAUKAT ALI MIR
Shaukat Ali Mir graduated as a mechanical engineer from the Birla Institute of Technology & Science (BITS), Pilani, India in 1981. “I joined Voltas in 1982, which is why I have not had to draw up a CV yet. Looking back over nearly 29 years now, it has been a great experience.”
Mir moved to Saudi Arabia at 26 as project manager on a major housing development for the Royal Commission of Jubail and Yanbu. Thereafter he focused on business development in Jeddah from 1987 to 1989.
“I then moved to the UAE to head up one of our joint venture companies here called Universal Voltas. I was head of that company from 1989 to 1992. In 1992 we secured Sheikh Khalifa Medical Centre in Abu Dhabi.”
From 1996 to 2000 Mir took over the business development activities of Voltas in the UAE. “We took on a number of projects in Abu Dhabi. We were not so active in Dubai.” During this period Mir looked to Europe as well.
“In joint venture with an Italian company and ABB, the marine side, we took on the Queen Mary II. At that time it was the biggest-ever cruise vessel being built in France.
We were responsible for the entire air-con design-and-build.” This project lasted from 1999 to 2003, during which Mir journeyed from the Middle East to the project site in Saint-Nazaire once every fortnight.
In 2002, Voltas made a splash in the Dubai market with Mall of the Emirates and the Jumeirah Beach Hotel, as well as winning the contract for Emirates Palace in Abu Dhabi.
“During this period we built relationships with key customers like Aldar and Majid Al Futtaim. The latter awarded us the Bahrain City Centre.” This project lasted from 2005 to 2008, during which Mir travelled to Bahrain once every fortnight.
“During this period I was promoted as regional manager in 1996, and I looked after the UAE right the way through to 2003, when I took over as regional director. In 2006 I was promoted to senior VP and deputy COO.” Mir’s latest appointment as executive VP and COO took place in January 2010.
Client: Aldar PJSC
Management contractor: Aldar-Besix
Project type: Design-and-build
Project value: $150million
Ferrari World is one of the world’s largest themed entertainment parks, and is the centerpiece of the $40billion Yas Island development. It features a domed structure in the familiar Ferrari red, with a 330m diameter and a peak of 45m at the crown of the structure.
Three sides of the building extend from the roof top to the ground in the form of 275m tri-forms that give the structure its iconic ‘octopus’ shape.
The MEP works undertaken by Voltas included services for all landlord areas, tenant fit-outs, food-and-beverage outlets, retail, roller-coaster buildings and process cooling for the roller-coasters.
Major electro-mechanical systems supplied, installed and commissioned included air-handling units, chilled water pumps, cold and hot water systems, soil and waste drainage, 2,000kVa transformers, 22kV HV switchgear, a building management system, stormwater drainage, a roof-cleaning system, a natural gas system, façade, funnel, gutter and aviation lighting system, central emergency battery system and firefighting system.
Voltas designed all the systems in close coordination with the client. Accurate cooling load parameters and construction details such as U factors and shading were derived at by using the actual technical elements.
Thermal modelling allowed the actual cooling load to be reduced from 14,000TR to 10,000TR. The builder’s works were coordinated very accurately, which resulted in no coring having to be used in the slabs.
Since the dome is 33m high in the occupied zone, stratification was taken into account at 13.5m in order to reduce the cooling load.
This is equivalent to saving 850kW. The stratified air above the 13.5m level is returned to the lower level and used for cooling the open-ride area, thus recovering 140kW in terms of the overall cooling load.