Arabtec Constructions, best known for building the Burj Khalifa tower in Dubai, has now stepped into India through a joint venture with Raheja Developers, as part of its diversification strategy. Arabtec Commercial Director, Martin Pinder, in an interview with Dilasha Seth, talks about the company's India plans. Edited excerpts:
Burj Khalifa is a landmark building. Are you bringing any of the technologies used to build the structure to India?
Though Burj Khalifa is probably the most famous tower we have built, we have actually completed many landmark projects in the UAE. One of these projects, currently in the final phase of construction, is the Nation Towers in Abu Dhabi, which includes a connecting bridge that has made its way into the Guinness Book of Records as the highest bridge between buildings. It is almost 30 metres higher than the Petronas Towers Bridge in Kuala Lumpur. We are also building the Infinity Tower in the Dubai Marina, which is famous for its 90-degree twist! We would bring our established systems and procedures, which have a proven track record in the Gulf region. These would allow us to efficiently manage the talented pool of staff and labour available in India for the successful completion of projects.
Did you face any hurdles in entering the Indian market?
Business opportunities have to be assessed based on many factors. India is a growing, modern economy and its GDP (gross domestic product) has grown substantially over the last decade. This is because it has been able to attract foreign investment. Its investment rules are different from those in the UAE. However, the rules in other countries where we have established ourselves, such as Saudi Arabia, Kuwait, Qatar, Russia and Bahrain, are also different.
The Indian real estate sector is facing a number of concerns such as labour shortage and a rise in input costs. How do you plan to deal with these?
Some of these issues also apply to other markets we have operated in. Saudi Arabia, currently our biggest market, faces some of these concerns because of the surge in demand for our services in that market. Tackling these issues is critical for the timely delivery of the projects within the budget, and we have already established a task force in Delhi to identify, and eventually implement, the most suitable measures. By complementing Raheja's local knowledge and input with our experience in managing projects during times of high inflationary pressures, we are sure we would be able to overcome these challenges.
Would you tie up with other builders in the country?
We have joined forces with Raheja Developers, a reliable and experienced partner. We have no plans to tie up with any other builders in India.
The real estate market in Dubai has cooled. Is that the reason why you are venturing out and exploring new markets?
The board of directors of Arabtec Holding took the decision to diversify, both geographically and by sectors, in 2004. However, we were too busy in the UAE market till 2006 to be able to consider other markets. If we had moved to other locations before the end of 2006, we would have had to increase our capacity to a size that would have been difficult to manage. We started moving to Saudi Arabia, Qatar and many other markets in 2007. Our operations in Kuwait, Egypt and Bahrain started in 2011. The move to India is a part of that diversification strategy.
What are the challenges that the Dubai real estate sector faces?
Dubai is a leader in the region: Its developed infrastructure and quality of services are un-paralleled in the region, or anywhere else in the world. The services sector, including real estate, suffered because of the knock-on effect from the world economy. Dubai has built magnificent facilities in a very short period of time. Now is the time for consolidation, and Dubai seems to be sorting things out in a professional and transparent manner.
You are also present in Pakistan. How are your plans for Pakistan different from those for India?
India is a much bigger market, both according to population as well as market size. At the moment, the stability and prosperity of the Indian market would provide more attractive opportunities than those in Pakistan. As opposed to a real estate developer, Arabtec is a construction company which builds projects for clients as long as the project is approved, funded and technically feasible. Once all the commercial terms are clear, we execute the project.
What kind of investments are you making?
The investment is mainly in people and assets that can be relocated any time. We are very optimistic about the Indian market.
Is there any other Asian country you are planning to venture into?
We are always presented with ventures into Africa, Europe and Asia. So, if the opportunity is attractive enough, we would consider it, and move forward quickly. Earlier, we were presented with opportunities in India that we did not pursue.
