One of the pioneers of Pre- Engineered Buildings who have excelled in the sector over the last many years and have built a trusted base of customers and a reliable team that has helped them reach great heights. Interarch believes in quality and their journey says the same…
To speak about Interarch’s plans, we have the great mind behind the company Gautam Suri, Founder Director and Arvind Nanda, Managing Director, Interarch Building Products Pvt Ltd is here with us to speak to us…
Read on to know more
Q. Having founded Interarch in 1984 how has been your journey from then till now?
Gautam Suri: Well, it has been quite an interesting journey. When we started Interarch we did not where we were going. There was nothing in India. There were no architectural products, there were no high-quality products, we came up with an idea of metal false ceiling and became licencee of a Dutch company and we started from there with a smaller investment, smaller plants both Arvind and I use to go and manufacture the products ourselves and take the order.
From False Ceilings, we got into designer blinds because we felt there was a need for that in India as there was no good quality of blinds in India. From Blinds we went into metal roofing in the early 90s then we decided to spread upstream, and we got into Pre-Engineered Buildings. So, it’s been a very exciting journey and we have pioneered in almost everything. Metal ceilings we were the first, blinds we were the first. High-Quality roofing systems we were the first also in Pre-Engineered Buildings we were the first. We were the first ones to do Roofing in the early 90s.
So, it’s been a great learning, great excitement, and achievement. Unknown Markets, Unknown territories creating a market for our products. I had a good network with architects, my reputation and goodwill with architects helped us with breakthrough orders because they believed that we could deliver. Both of us have worked on consistently trying to deliver good quality products to our customers, keeping up to our promises, ensuring customer satisfaction. Even when we were selling our ceilings at such a high price our customers trusted us that we would deliver and not take their money and run away. It’s been a very satisfying and exciting journey to have come here, and we are very proud of what we have created.
Q. What is your take on the current state of Pre-Engineered Buildings in India?
Arvind Nanda: Pre-Engineered Buildings to my mind is at a very preliminary stage in India. If you want to look at it globally/ internationally how pre-engineered buildings have developed and what their scope it has been. I think we have been on the first stage for the last many years. Pre-Engineered Buildings came into India in the early 2000 and by 2008-10 we were getting well established in terms of manufacturing and industrial buildings using it. Suddenly the economic slowdown came and there was a big problem everyone stopped building capacities and they gradually again started moving up in 2014-15. Now I think we are at a stage where we would have been in 2010-11 if that thing wouldn’t happen in 2008.
The second stage I call is the utilization of pre-engineered buildings is very wide now. We are at the threshold of a stage or phase where pre-engineered steel buildings will be high rise, hospitals, hotels, residential, commercial, malls, Airports, Railway Stations, all big warehouses which are coming up. So, everything has happened globally. It starts moving into steel. Then the market suddenly goes up exponentially because the usage of steel is very high. Also, the one thing that we have done which includes not just Interarch but the other PEB companies too that we have managed to unlike other developed countries is to do very complicated and complex buildings. Most of the Pre-Engineered Buildings in the world are very simple buildings. simple warehouses, simple envelopes, simple malls. We have done hugely complex buildings. We have changed the whole pre-engineered buildings into a totally different concept. We can do paint plants, automobile paint shops that nobody has done anywhere else in the country except us and other few companies in India. We are doing process plants for Asian Paints, Hindustan Unilever which are not done in steel anywhere else in the world. High Rise and Malls etc are there but industrially we have taken pre-engineered buildings to another level which of course involves very complex teamwork in terms of engineering and production.
Production is very complex it is not simple beams and columns which we are running out in automatic welding machines. These are highly complex structures, if you want to look at some of our structural structures, they are highly complex. We have taken pre-engineered buildings to a totally different level in India for the industries and now we have opened the scope of using pre-engineered buildings in any kinds of buildings from houses, villas, schools, colleges, security cabins, to additional floors. So, it is across the board.
I think now we are at a threshold of the second phase because the economy is opening, development is very high level in India right now. I think in the next 10-15 years we will be at 2nd phase of pre-engineered buildings where the turnovers of the company like ours, of other existing companies which are been there, are well known, who have done good work can go up by 10-20 times as it happened in early 2000. There is going to be an exponential boom in construction in India and primarily with pre-engineered buildings. That is where I see pre-engineered buildings now going forward is phase 2 sectors which other countries have gone through. China has gone through it; Middle East has gone through and now it is our time to go through the second stage and we are ready for it.
Q. According to you how has design and construction of PEB evolved over past few years?
Gautam Suri: As Arvind just mentioned we have come much ahead, and we have gone beyond PEB. Today we are in pre-engineered construction, we have the tools and know-how and capability to convert any kind of structure into a pre-engineered steel structure. Pre-Engineered here applies to design it with bolted connections, so that the whole assembly at the site is Bolt-on. So, any structure is converted into a pre-engineered structure which we manufacture at our plants, offsite. Our capabilities have gone much beyond pre-engineered buildings.
So, the evolution in India of Pre-Engineered Construction has been phenomenal. Traditionally all over the world, pre-engineered buildings were considered light buildings. We have converted the whole thing into heavy structures, heavy buildings, complex buildings, tall buildings. So, any kind of building can be converted into a pre-engineered building with the capabilities at our disposal today.
Q. Could you please elaborate about your manufacturing facility and its production capacity?
Arvind Nanda: Currently we have three major manufacturing facilities two in Uttarakhand and one in Chennai. We are in process of setting up one in Central India which might take a year or year and a half. We are in process of looking at locations. Currently, our manufacturing facilities can produce over 120,000 Tonnes of steel buildings in a year. We have enough space in that to expand very fast we have been expanding over the last 2-3 years in anticipation of what is happening and what will happen, so we are constantly in a state of expansion for the last 2-3 years. We finished our Chennai factory expansion.
We have fully expanded our Pantnagar plant in Uttarakhand and we have another plant in Kichha where we still have a lot of lands to expand, and we have done so. So currently our facilities can produce 120,000 Tonnes of Buildings.
Q. Which are the grey areas that need to be addressed immediately by the industry?
Gautam Suri: I don’t see any grey areas in our industry as such, the commodity pricing and the steel pricing are always a worry because they keep fluctuating and have been going up in the recent past and earlier. The usage of the steel industry in many of the construction is still not widespread as it is worldwide, but it is catching up. People are getting more comfortable with steel specially with the cement shortage and labour issues, ban on the sand and pollution-control measures. Steel starts becoming a preferred choice because it is clean work, and with a small amount of manpower and materials, it can be delivered just in time to even a tight urban site. So, you don’t have to put a lot of materials, there is hardly any wet work except what happens below ground. Foundations are the only thing that still essentially requires concrete, everything else above ground can be done in steel and other prefabricated materials. So, the grey area to my mind is how fast the usage catches up. But I think it is happening rapidly and as Arvind said within a few years this will grow exponentially.
Arvind Nanda: The couple of grey areas that we can address in pre-engineered building vis-a-vis is Taxation. So, for all the capital goods that are allowed to an industry or to a warehouse the input credit is available to all industries on their GST paid, it is a standard. Right if I buy machinery, I will get input of credit and when I sell my goods, I will pay GST on that. But in a building whenever an industry or a warehouse is buying a building while they are paying GST on their product or rent but they are not getting input tax on a building. That is a big grey area because I feel that why should a chain of GST be stopped for small industry, medium industry and warehousing. GST on a building is a very large amount maybe a large plant of 3000 cores the buildings could be two-three hundred crores, civil work could be 500 crores maybe one fifth or one-sixth of total capital cost. But when you talk about warehouses it is literally 100 per cent of the cost. When you talk about the small industry it is literally 50- 70 per cent of the cost of the total set up of the project.
So, on one side the government professes that we want to promote MSMEs, we want to promote small industries on the other side they deny them a huge amount of input credit. Because these input credits are being denied, these industries are going to unorganized sector players who take cash and do not give you a bill and therefore do not charge you GST. They see a saving of 18 per cent GST as a huge saving. So, it’s high time that government sheds its invasion, puts at least the buildings of industry and warehouse in the chain of GST that is very critical number one.
Number two what I see as a grey area in the pre-engineered building is becoming an internet industry. Everybody wants to be called as internet industry. Now today every fabricator in the industry, every person having a small workshop, fabricating at the site wants to be called as PEB Player.
So, all the PEB Players need to sit down and make certain marks/ standards like ISI to signify who is a real PEB player who should the customer go to, just a person who says he is PEB Player or somebody who is marked by the industry. I think that is a great need of industry to get together immediately set up a sort of independent trademark/quality control mark give the PEB Mark and let that quality controller marker of some standard given to those who are considered a PEB Player. They must have the engineering scales, they must have the right software, they must have the right image, they must have some performance in the industry, they must do what the PEB Industry wants them to do that is very important because in India it is very easy to mislead people. Because anybody from a fabricator doing a 100 sqm building to 1000 sqm is considered the same except for the customer who realises the difference. So that is another very important grey area I think the industry needs to set up and the industry needs to be very strict in enforcing its standards otherwise we will lose out to all these people who will be calling and then PEB itself will get a bad name. There will be buildings which are made badly, and people will say I brought PEB and see how badly it is been done without realising that is not really a PEB in that sense. So, I think that is another grey area one is from the government side – Taxation is very critical with 18 per cent is a huge amount, they are driving people into cash market, they are driving people into unorganised sector and there is no reason to deny that credit. The building is as important as machinery. Machinery cannot be put in a factory to work without the building. Machinery you can carry on buying over years building has to be set up. So, land and building, whatever is subject to GST must get the input credit. This is the only product that breaks the chain and there is no reason why it should be!
Q. How different are the concerns of the Indian Construction Industry vis-à-vis some of the developed countries as far as PEB is concerned?
Arvind Nanda: Pre-Engineered Buildings in many ways is an open Industry. Open Industry means there are no secrets in it. There is no high-grade technology which is not available off the shelves. So, over a period, we’ve been into PEB now for 20 years plus. When a customer comes to be, he just gives me the parameter of the building, I must design the building for him, get the order for him then make shop drawings and manufacture for him and assemble for him at the site and give him a complete building on which his only role is to give his parameters and give me the order and give me the money. He has no other role like all other buildings, where he must hire a consultant, hire an architect, he will design then he will find a contractor who will bid as per the tender made by the consultant, who will then buy the material from the third party once he gets the order from the contractor and then install it. So, there are so many players. If something goes wrong then he will blame the contractor, blame the supplier of the material, blame the architect or the consultant. But in pre-engineered buildings, it’s all under one shop. So, you need to build that expertise and that is what we have done. We go to a brand because we trust them and suits my requirements, my image, my ecosystem, this is the kind of company where I want to deal with and who has the right credentials, and I am going to buy a building. Our USP is that we have got so much strength in that.
Our customers whom we got 30 years back had got blinds and false ceilings still today comes to us. He feels that Interarch has what it takes. Interarch will give me the product which they promise, and I can trust them who look after the quality and delivery and give me the product that I want which is our USP. We have gone to every customer in India, there are no large companies who have not used our product, every consultant, architect, and that’s the history which we have built up and is lately impossible to copy, nearly impossible to duplicate. New companies can take people from our companies. I can guarantee they can take all my people, but they cannot duplicate what I have got, I can do it with new people again. So, it’s not the machinery, not the license or technology but it’s what we have built up, that is what differentiates us. Today we have been considered us top 2 companies in India that every player in India, every company in India comes to us, whether their building is 100,000 sq. m or 200,000 sq. m, they all come to us. For the most complex buildings which their consultants cannot design, they come to us and that is our USP that is I think what we have built up. Many people who have started with us, they were as much pioneers as we were with far more deeper pockets, they have far better machineries, but they are no more in the site today. Even foreign countries approach us as an Indian company to deal with us rather than foreign companies. So, this is what we have built up and we will continue to build up. We don’t concentrate too much on anything else rather than building our reputation, building our capabilities, building our capacities, and making sure that the customer is delighted by what he gets. If he expects 100, we must give him 110, that is our USP.
Q. According to you what is the current construction scenario and the upcoming trends in India with respect to steel construction?
Gautam Suri: Steel Pre-Engineered construction has been adapted and adopted for almost all kinds of buildings and construction. So even in this covid phase, extensive work is happening in the warehousing sector, FMCG sector, pharma sector, solar, glass sector. There is a boom coming up again and if the infrastructure spending is going and steel infrastructure is readily being adopted in infrastructure works, it’s more readily accepted because people have accepted the advantages of working with steel.
Today, everybody understands the commitment and deadline of projects are supposed to mean something, the dates were announced, and projects were not bothered to be completed. Today, they announce a project and people are serious about meeting completion dates. For that, you need to work with steel and prefabricated materials as much as possible and don’t rely on the weather, labour issues, site issues and so on. I see a big market happening in steel and slowly, it is going to be used in tall and high-rise buildings too. Today it is used in commercial buildings but slowly, it will be started in residential buildings too. Use of steel is going to grow exponentially throughout the world. China was built so fast because of steel; Dubai’s excellent and fast expansion is because of steel. Steel must be used, and the usage of steel is growing exponentially.
Q. What are the various concerns of the Indian Construction Industry vis-à-vis some of the developed countries as far as PEB is concerned?
Arvind Nanda: Over a period, we must remember that a lot of the construction industry has to cater to foreign investment which comes in India. To foreign companies which are coming in, to foreign consultants which are come in and gradually even to our international standards etc. Then a lot of the companies which are come here who are even doing construction like JLL, Cushman & Wakefield where they are the PMCs; Eversendai, LOGOS, IndoSpace these are all builders which are come into India. A lot of Funds have been set up in India to finance construction, make buildings, warehouses. Airports are being built by companies like GMR, GVK, they all are very well-known international companies. While 15-20 years ago we could say that the segments that we deal in the concerns are very minimal, people were only bothered about the price, they were not really bothered about safety even about final quality and certainly not about deliveries – project of one year could go on for two-three years.
But, over a period we have been forced to adopt international standards. Today 50 per cent of our clients are foreign companies while the other 50 per cent Indian Companies are as good as any foreign company and their standards are high if not higher. We as Interarch thought that there is no point in providing world-class and international products if we don’t follow international practices. Even in the early 90s when we started with false ceilings and vanishing blinds we imported our machines, imported our raw materials because we could not get good, quoted aluminium or steel in India. When we started metal roofing, we imported everything from Australia, Thailand and Korea paying 200 per cent duty and selling the products at double – triple rates of the local product, without deviating from that standard. So combined with what has happened in this country, I think it has been very fortunate for us because we wanted to everything to international standards. Luckily, for us the country caught up with us, the customers caught up with us and today that is another reason why we are considered pioneers, International and safe players to work with. As we brought in the standards ourselves before the Indian Construction Industry brought in themselves. So foreign companies are very happy with us because we already got what they do in their country. Today all the Indian construction companies like L&T, Shapoorji whom we work with all follow the highest international standards. Safety is a major issue everybody is very concerned about, which was not exist ten years ago. Nobody bothered about safety, the same way high-quality delivery has become ultra-important. People want to finish their project before time and that becomes very critical.
So, I think in Vir Das’s word there are two India’s and India that we deal with has progressed a lot but yes small sheds and houses are being put up and we hear every day in the news, some building falling down and unfortunately, people being killed and that is not the part that we are dealing with. The part that we deal with is foreign standard driven the top one-third of companies and customers that we deal with are at par with international standards today.
Q. How do you think technology has or will transform steel construction?
Gautam Suri – The technology in our kind of product is not very complex. The essence is to make steel structures out of plates. Our industry doesn’t normally use standard hot rolled sections, so our entire technology is based on that which helps us achieve efficiency in weight, speed up manufacturing, and more economic steel buildings. We use the steel that we need rather than just manufacture steel in standard size and shapes. So, the technology in kind of our work is essentially simple, however, there are complex machines that help us do this work in a production line manner.
We use advanced software for the design and engineering of steel structures, for analyses of steel structures because we are responsible for the engineering, erection, and stability of the building. So, we go through a very rigorous process in terms of engineering and analysis and our manufacturing is tightly controlled in terms of welding because all our steel structures and structural members are assembled with welding. So welding is a very important aspect of our product line. The quality and control of welding are very critical; otherwise, there is no rocket science technology in our work. As Arvind has said, our work is heavily service-oriented we are in the service industry more than the manufacturing industry. We understand customers’ need, we engineer and design the building, we manufacture it, deliver it to the site, just-in-time, in a sequential manner, erect a building and ensure we give him a finished weatherproof building to last for a long time.
The service aspect in our industry and work is more critical than manufacturing and technology which is what gives us an edge because we firmly believe in service and customer satisfaction, and we take pride in the fact that we get repeat orders from all our customers. We get multiple orders from big companies again and again which is the testimony of the work we do and the customer satisfaction we deliver.
Arvind Nanda: My mind tells me that one day we could have 3D buildings being made in steel also instead of the way it is being made. I think every sector will be affected by technology and you must be ready. Even in our sector, we have seen from simple software, now complex software have come which help us design a lot of complex buildings faster and more economically. I am sure it will come with more and more methods maybe technology will change the strength of steel, maybe steel will become stronger, more flexible. So ultimately a Pre- Engineered Building offered to a client will be less tonnage of steel from standard fabrication.
So, technology is like everywhere else also in India in PEB we are at a low level of technology as production is concerned. Technology will play a very important role in production and design and new kinds of design are required for new kinds of buildings. We have recently completed Fujita Varanasi Convention Center inaugurated by the Honourable Prime Minister which was a complex structure not only to design but also to manufacture and erect. Again, tomorrow technology could come into design complex structures that take time today would be produced faster. I think we have a long way to go, and technology will touch everything. We must prepare that there will be total disruptions in every industry, and we must be ready for it.
Q. What is Interarch’s plan of action for the next 5 years for the warehousing industry in particular, and PEB in general?
Arvind Nanda: Our plan for the next 5 years is to take advantage of what we achieved in the last twenty years which we call our foundation. Stage one is like a foundation to us where we have built the foundation of what we want to do, and I think we got the strength, capabilities, reputation, we have got the customer base and a great team across the board and also customers that we consider a part of our team.
So whether it’s our customer, manufacturing, steel supplier, hardware, transporter, we have now reached a stage where we have built the foundation of our company and now we are waiting for the next 4 – 5 years and making it stronger to get into the second phase and we intend to take full advantage of the phase. Numbers I don’t know as it’s a very difficult game to play and the game we like to play is if you strengthen yourself, you improve yourself and team goes from everything right from worker to your customer and keep on working on that and try to create a great organization, a great team and be ready for every possibility that comes up. I think possibilities in the next five years is limitless because now we are at a stage where the economy is growing, and demand is booming, and we have not seen such demand since the early 2000s of course the figures were much smaller that time we were much smaller but the magnitude of demand compared to demand earlier is similar to what it is today. The kind of projects that we are getting, the kind of clients that we are getting, the kind of size, and Greenfield projects coming up, so we are fully prepared for it. We are lacking nothing; we have spent the last four-five years fully being prepared for the next phase of PEBs and turnover could certainly double or it could go even four-five times. This could happen to everybody across the industry, which player takes advantage of it is a separate matter, but the industry will be available for everybody, and we are well prepared for it.
Gautam Suri: I see this industry going places and the sky is the limit and I see our sector growing phenomenally.
Q. What message would you like to give our readers?
Arvind Nanda: I think your readers are very intelligent and educated and they understand the whole industry very well. The message I would like to give is to think of steel as flexible as the plastic thing that we use to play with children. Steel looks very hard, grey, and dull looks very difficult to even bend leave alone form shapes. But I would say that when you are looking at steel look at it as plasticity anything can be done. Your dreams can be converted into reality. Steel is a far better way than what we can think of concrete and bricks, and it can be done very professionally and in a very high-quality manner because it’s all produced in the factory. The main advantage of getting your building done from Interarch is everything is produced, design in a very controlled atmosphere. Steel can be used for anything. Don’t think of steel as a dull grey boxes kind of building. You can do anything you see buildings from the outside look like glass, marble but they are all steel structures. The structure is all steel outside we may think as a fancy thing. A lot of houses are being made; very big and famous architects are using them. So, think of steel as your solution to any of your buildings.
Gautam Suri: I would like to tell our readers is that India has great potential, we have great minds here and I think it’s possible to build world-class companies in India with the right ethics and purpose of customer satisfaction and values in place. We build this company from scratch and today are in competition with multinationals and we enjoy a very high reputation, and this is possible, and we are seeing it happen in other sectors too. So, if India keeps these values in mind, we will be one of the biggest countries in the world because we have a very dynamic young population, great brains, great minds, and great resources. I think steel will play an important part in India’s growth and building stories in years to come.