In the recent years, construction industry has started embracing digital technology into its workflow.

- S Paramasivan

Managing Director, Afcons Infrastructure

What specific factors are aiding in your success in the international market?

Afcons executes projects overseas with a global mindset. Key principles to the global mindset are excellent project delivery and an inclusive approach. One of our experiences of operating in international markets is that irrespective of any delays, even on account of the client, the contractor is expected to deliver a project on the original contract schedule. We have to periodically re-strategise our operations so that the final delivery of the project is ahead, or, on schedule, irrespective of delays.

Our knowledge management practices play a crucial role in delivering projects on time. We follow 'Learn Before, Learn During and Learn After' model for knowledge management. A dedicated team - Knowledge Services Group (KSG) is responsible for managing knowledge within the organisation. Afcons is the only Indian infrastructure organisation globally to win the Most Innovative Knowledge Enterprise (MIKE) Award at India, Asia-Pacific and global levels for the past five years.

Our knowledge management practices have helped in improving overall productivity and minimising lead times, which in turn helps our project teams in completing projects ahead of schedule. Based on our project delivery track record, we have won repeat projects from private clients. The organisation has benefited because of its passion for delivering projects ahead of schedule while adhering to international safety norms.

Another significant factor for international success is our inclusive approach. We engage with local communities and work towards community development in every country, especially in Africa. Locals form a key part of our workforce at international projects, and we also extend skill-building sessions for local communities.

How has the Covid-19 pandemic impacted your international business opportunities?

At Afcons, last year, our operations in various geographies like Africa, Middle East and neighbouring countries like Bhutan and Bangladesh were impacted with varied degrees. Though several economies are opening up and slowly lifting restrictions, infrastructure projects still face many challenges. Over past few months, logistics cost have substantially increased which is adversely impacting the cost of raw material transportation at our international projects. Even with increased logistic costs, availability of cargo ships for transportation of materials & equipment, and delays in obtaining necessary clearances from port authorities due to pandemic-related shutdowns are a major challenge. These bottlenecks have increased procurement lead time and landed cost for key materials and equipment thereby putting pressure on our project timelines. Also, as various countries have imposed varied levels of restrictions on movement of people and changing quarantine rules, deployment of skilled manpower to international sites is also impacted.

 As the world is bracing for more Covid-19 waves, it becomes imperative for us to look beyond our existing network to strengthen our supply chains. This includes finding more partners for material sourcing, global vendors, and logistic partners. This can help us in ensuring availability of key resources for our international operations. As the Covid related uncertainties are here to stay in the foreseeable future, it is necessary that project schedules should factor in new realistic lead time of supply of raw materials and equipment.

Going forward, importance of health and safety of the project workforce will be even more pronounced and vaccinating complete workforce will become everyone's top priority. At Afcons, we have undertaken proactive Covid-19 vaccination drives at all our international as well as domestic projects. We have ensured apart from manpower movement that all our workforce gets vaccinated at the earliest.

What do you think is affecting the international construction industry?

In recent times, globally, cost of key raw materials such as steel has substantially increased. To add to the woes, cost of logistics has also increased manifold, thus further increasing the landed prices of raw materials. While some international contracts have price escalation clause, by and large, this increase in material cost will put pressure on contractor's project profitability. As economies are slowly opening up amidst Covid-19 induced restrictions, governments across the globe are expected to invest in infrastructure to stimulate and revive respective economies. The construction industry will benefit from such investments.

Another emerging trend that we have observed of late is that many good opportunities do not see the light of the day as clients fail to arrange necessary funding for the projects. These projects never take-off and remain on paper. Contractors can build network and develop necessary skillsets to help connect these clients with funding agencies who are interested in funding such projects.

On the technology front, in the recent years, construction industry has started embracing digital technology into its workflow. The ongoing pandemic further catalysed the adoption of digital technology by the industry. Reports by PWC indicates that engineering and construction industry is increasingly using digital tools for better design, planning, scheduling and project monitoring.

Additionally, industry players are leveraging technology and using digital applications to simplify various processes and have an efficient remote monitoring system. At Afcons, we have made good investment in technology, and we are at the forefront of adoption of digital technology in the sector.

Which geographies, according to you, are favourable internationally?

Africa has definitely emerged as a bright spot for Afcons. At present, we have footprint in 13 African countries and we foresee a good project visibility in the continent in the near future.

 With its size equivalent to US, Europe, China, and India combined, Africa presents huge opportunities for infrastructure development. However, there are few African countries that do not offer a conducive business environment because of political instabilities and civil unrests. Success in one African country doesn't necessarily ensure success in another one.

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