Shalini Gangaramani Dosaj, Al Fara’a Group director, and Al Sabbah Electro-Mechanical Contracting’s (SEMCO) vice president Subhash Pritmani, explain how the pair plan to make the contractor an industry heavyweight
We’re all feeling very positive,” says Shalini Gangaramani Dosaj of the vibe at Al Sabbah Electro-Mechanical (SEMCO) and its parent company Al Fara’a Group, of which she is a director and daughter of its founder. “We’re feeling quite charged up this year as we’re seeing some really interesting projects come onboard.”
Flanked by SEMCO vice-president Subhash Pritmani, Gangaramani Dosaj sits down in the VP’s hub at Al Fara’a’s corporate office in Abu Dhabi to lay out the contractor’s vision for the coming years. It is one of ambitious growth, but not without basis.
“We’ve already met the targets for this quarter,” she says. “We’ve decided to look at various other areas of expansion and we’re exploring these at this point. We want to widen the net for SEMCO and also focus on key clientele. One conscious effort we want to make in the coming years is to focus on projects, not only in Abu Dhabi, but in other emirates as well.
We’re strengthening our business development teams. We’re excited about the market this year and in the years to come because we see it picking up and the enquiries coming through have gradually increased. It’s an exciting time.”
Gangaramani Dosaj’s positivity is obviously infectious. Pritmani, at the helm of SEMCO’s assault on the market since October 2013, echoes her sentiments with a bullish forecast of where the company is headed.
“I was talking to the board the other day and they said they wanted to make this company one of the largest MEP companies in the UAE, and then the region,” the former Voltas regional director says.
“In the next three to five years we need to be in the top two or three [MEP contractors] in the UAE and in another five years plus we want to be top in the industry. That’s the dream. It’s not a pipe dream – we will achieve that.”
Since Pritmani’s arrival, he and Gangaramani Dosaj have worked closely together to plot the company’s course to reaching such unprecedented heights. At the core of their thinking is a rigid aversion to targeting high turnover for high turnover’s sake (the contractor turned over around $80mn (AED 300mn) in the UAE last year).
For both, if the company is to achieve the growth necessary to place it among the top MEP contractors in the UAE, it will be off the back of running a stable and profitable enterprise. This is, of course, easier said than done, but the SEMCO pair say they have already taken steps to maximise take-home pay from the work in which the company is engaged.
“Profitability often withers away from how a project is handled and how a client behaves,” says Pritmani. “We’ve decided on two or three actions to address this. We have to be very selective about clients. We have to do due diligence and, if we are comfortable, we will go with them. That’s why we are more engaged with government customers like Musanada and Masdar.
“Secondly, our processes have to be more efficient. Sometimes the client asks for more bodies on the site. If I don’t have work for those people on the site, then I will not put those people on the site.
Everything should be on time, not in time. We are trying to increase the efficiencies with systems measuring the productivity of workmen. Thirdly and finally, we must keep the morale of the team high to ensure productivity is maintained.”
Gangaramani Dosaj adds that a more thorough approach to the study of projects’ material costs prior to bidding has also been implemented in order to “be clear what we are getting ourselves into from day one”.
“The key is labour and productivity. It is important to incentivise your people on projects,” she says.
“For our new projects we are incentivising all our project staff, down to the foremen and labour. We’ve focussed a lot on in-house subcontracting targets to make sure that labourers are giving their level best and also, in turn, making good money. There has to be something in it for everyone and this is how we keep afloat and meet our targets.”
Further efficiencies have been sought by streamlining some of SEMCO’s operations, with Pritmani deciding to relocate its procurement, accounts and other support services from Al Ain to Abu Dhabi.
The VP’s brief time there has also seen the pair target growth by furthering the company’s interests in related sectors such as maintenance, facilities management, and liquefied petroleum gas (LPG) installations.
For Pritmani, the culture of decisiveness at SEMCO and Al Fara’a generally has been refreshing. “A very important thing in SEMCO is that the decision process is very fast,” he says. “Here, if I find something should be done, I just give a call to Madame Shalini and the decision is made in a day’s time. There’s a nimbleness here, whereas in other places it is too hierarchical.”
Gangaramani Dosaj has been similarly impressed with Pritmani since his arrival. “He’s very hands-on, likes to get into the details, and I really appreciate the way he connects with people,” she says. “When a change of management is involved and there’s a new person coming onboard, people tend to be very skeptical and not sure what to expect. I believe that phase with Subhash was very short-lived.”
With SEMCO currently having plenty of work on its hands, the smoothness of this transition was welcome. Beyond a variety of LPG and maintenance jobs, the company’s 1,800 UAE workforce is in the process of tackling the Chinese School and Petroleum Institute projects in Abu Dhabi, a clinic facility in Al Ain, and hospital projects in Dubai, Al Sila and Mafraq.
While some of these contracts have been won from group partner, Al Fara’a General Contracting (with which the company is also working on some projects in Saudi Arabia) Pritmani is quick to clarify that “we win these jobs against the competition – it is no walkover for us”.
He adds that, while the ratio fluctuates, currently the split between work secured from outside the group and work secured from its sister company stands at around 70:30.
Notwithstanding the minor issue of having to forgo advances when working with Al Fara’a, the one thing SEMCO does not have to worry about in such circumstances is delayed payment – a problem which Pritmani says is rife in the industry. “Some of the payments are not coming for months – three months or sometimes five months. This is a serious problem,” he says.
As for the undercutting issue faced by the contracting industry in recent years, Pritmani says that the situation has improved slightly of late and that some of the guilty parties seem to have exited the Abu Dhabi market for work closer to home.
“You’re always going to find some contractors in the market doing this,” adds Gangaramani Dosaj. “We’ll continue to see that this year as well until things really pick up and there’s something for everyone. We’re not interested in those kinds of projects where the client is willing to compromise on quality and safety because there is no way the project is going to get delivered at that price-point.”
When things do “really pick up,” Gangaramani Dosaj and Pritmani say that SEMCO will be ready to pounce. The UAE market is first on its hit-list, but plans to follow some of the group’s companies into Qatar are also “on the horizon”.
SEMCO’s ambitions certainly seem grand, but with Gangaramani Dosaj’s successful family background in business and Pritmani’s wealth of regional experience, it should perhaps not come as too much of a surprise to anyone if they are achieved.