Form Two Companies and There Profile and Compiteters and Segmentation

Form two companiesReally and seriouslyReally was launched in 2009 amd seriously in 2010. They have not gone public yet.1.deals in construction of building both corporate and private and the other deal in pre fab material. Competition is intense, revenue streams are drying up and cost pressure is mounting . the only way to exit the industry is bankrupts. With new industries entering the industry with advanced technologies today is an important day. The agenda for todays meeting 1. Introspect who we are(prepare a company profile) assumptions are acceptable but only within Indian industry context). 2. Potential of the industry(find out the leading players and why they are on the top, is it possible to survive what should we do to survive. What do to survive .what potential pro and cons do you think are of such probabilitites.

Company ProfileName Really Developers

Really developers, one of maharashtras most prestigious construction firm, is a mumbai based group, and has been in real estate development for more than 5 years have earned a reputation of being reliable and trustworthy people known for quality construction and on time possession. Our residential and commercial projects have always set a new trend by catering to the changing need of our client.When it comes to the best Residential or Commercial project in town, Really developers are always on the front row. Giving shape to the various prestigious projects at the prominent places in the town, our name symbolizes quality, commitment and timely Services. When every project bears the brand name "Really we always give it our best. So, those who are looking for a prime business place or a luxurious residence, we have the project catering to every need. One of the recent projects taken up and completed by the company is Skyline Tripoli Oasis housing Society in Ghatkopar. We follow strict construction quality norms and keep strict supervision to achieve the best quality and construct building which are known for their superior construction quality. The vision of the group is to continuously strive to achieve better quality, build buildings of superior quality and be fair in the dealings. We have a big family of satisfied customers who have been our inspirational source; we have executed several projects in Mumbai.

MissionTo provide high quality infrastructure to corporates and private

To build cost efficient and trend setting infrastructure

To develop into one of the best managed company and to set benchmark in the construction industry.VisionThe vision of Really Developers is to achieve the highest possible standards of the real estate industry and be sustainable by safeguarding the environment. We pursue clearly defined strategies to advance our market leadership.Core valuesNo compromise in quality with excellence and finesse.GoalsCreating Green Buildings (Carbon neutral buildings), extending to eco-sensitive projects.Financial considerationsThe companys operating budget is around 80 crores with 10 partners20% partnership 1.year 12 13 14 15 P&L account2.type of company3. critical Location (where and why,RBI guidelines, ppl buying lands or not)Time of Completion (beginning to end), when do u sell?Cost (industry avg of mark up, how much do we paty for each sq feet)Quality (Overrun (cost & Time)Municipal Laws (road layout ,plans, construction material(time overrun, where to store )l)

4. 3 crores in inventory includes cements purchased, materials on-site10 crores includes vehicles and machineries 2 crores includes leased out equipments we have69 crore includes the value of the land (pre construction) We have 50 crores in Bank loanAnd 1 crore to be paid to the suppliers Tell about yourself (Roles)

Industry size and Growth of Construction IndustryIndia's Construction industry has grown at a Compounded Annual Growth Rate (CAGR) of about 11.1% over the last eight years on the back of massive infrastructure investment and rapid rise in housing demand.Figure 1: Industry size and growth of Construction GDP at constant prices (Rs. billion)

2,5002,263

2,00011.1%

1,500

1,084

1,000

500

-

20052006200720082009201020112013

Source: Economic Survey 2005-13 and IMaCS analysisIndustry SegmentationConstruction sector can be broadly classified into 2 sub-segments:

1) Real estate (Residential, Commercial/Corporate, Industrial and Special Economic Zones (SEZs))

2) Infrastructure (Transportation, Urban development, Utilities)

Figure 2: Indian Construction Industry Landscape

Construction Industry

Real EstateInfrastructure

ResidentialUtilitiesUrban InfrastructureTransportation

Commercial

PowerRailways

SpecialIrrigationCivil Aviation

Economic

Zones

Roadways

Ports

Source: IMaCS analysisThe Real Estate segment contributes around 24% to the Construction GDP of India while Infrastructure segment contributes around 76%.

Figure 3: Share of Real Estate and Construction by GDP contribution

Rs 504

Billion

Rs 1,59624%

Billion

76%

Real EstateInfrastructure

Source: Economic Survey 2005-13, IMaCS analysis

1.3. Real Estate Sector

In terms of GDP contribution, Real Estate sector is estimated at around Rs. 504 billion in 2007-08. The market size of the Indian real estate sector is estimated to be around Rs. 2,643 billion in 2007-08. The sector has been growing at a CAGR of 12%. It is constituted of the Residential, Commercial and real estate activities of Special Economic Zones.

Figure 4: Real Estate Segments

Commercial

/ RetailSEZ

9%

9%

Residential

82%

Source: I-Sec Research, Ministry of Commerce and Industry, IMaCS analysis

1.3.1. Residential

At around Rs. 2,171 billion, the housing sector is estimated to grow at 12% in the long term. Demand for housing is estimated to be around 4.8 million houses per year over the Eleventh Five Year Plan period. In addition to the need for new housing tenements, the demand is also likely to be fuelled by the housing shortages already prevalent in several states. The shortage of housing across several states, as illustrated in the graph below, amounts to about 25 million houses in the period of the 12Th Five Year Plan.

Figure 5: Housing Shortage by State over the Eleventh Five Year Plan (million houses (% of share of various states)

Andhara

Pradesh Gujarat

1.951.66

8%7%Karnataka

Other States

Delhi5.111.63

21%7%

1.13Madhya

4%

Pradesh

West BengalMaharastra1.29

3.725%

2.04

15%

8%

Uttar PradeshTamil Nadu Rajasthan

2.382.821

10%11%4%

Source: Planning Commission Working Group on Urban Housing, 2012

. Commercial/Retail Construction

The rapid growth of the Indian economy has had a significant impact on the demand for commercial property to meet the needs of business, by way of offices, warehouses, hotels and retail shopping centres. Growth in commercial office space requirement is led by the burgeoning outsourcing and information technology (IT) industry and organised retail. For example, IT and ITES alone is estimated to require 150 million square feet across urban India by 2013. Similarly, the organised retail industry is likely to require an additional 220 million square feet by 20134.

Figure 6: Size of Commercial/Retail Construction

RetailOffice

Rs 113 billion

Rs 126 billion

47%

53%

Source: I-Sec Research, Ministry of Commerce and Industry, IMaCS Analysis

1.4. Infrastructure

With the government's focus on infrastructure development along with the active participation of the private sector, this segment is growing rapidly. The Power, Irrigation, Transportation including Roadways, Railways, Airports and Ports, Urban Development and Communications sectors have witnessed investments of Rs. 6.9 trillion over 2013 and will witness around Rs. 14.8 trillion in2015 Distribution of Outlay in Infrastructure Segments in 2014and 2015 YearPlans

1,600,000Rs 953 billion

1,400,000

1,200,000

1,000,000Rs 5.7 trillionCommunications

Transportation

800,000Rs 1.2 trillionUrban Development

600,000Rs 989 billionRs 2.1 trillionIrrigation

Power

Rs 2.2 trillion

400,000Rs 382 billion

200,000Rs 1.03 trillionRs 4.8 trillion

Rs 2.3 trillion

-

14th FYP15th FYP

Source: Economic Survey 20012-13

Major Players

The first professional consultancy company, National Industrial Development Corporation (NIDC), was set up in the public sector in 1954. Subsequently, many architectural, design engineering and construction companies were set up in the public sectorIndian Railways Construction Limited (IRCON) National Buildings Construction Corporation (NBCC), Rail India Transportation and Engineering Services (RITES), Engineers India Limited (EIL), etc.) private sector (M N Dastur and Co., Hindustan Construction Company (HCC) etc.).

The Indian Construction industry comprises of about 200 firms in the corporate sector. In addition to these firms, there are about 1,20,000 class-A contractors registered with various government construction bodies. There are thousands of small contractors, which compete for small jobs or work as sub-contractors of prime or other contractors.The major players in the construction industry are:

Companies such as L&T, Unitech, GMR Infrastructure, HCC, Gammon, Jaypee group, Jaiprakash associates, BL Kashyap etc. which undertake large infrastructure projects. Companies such as IVRCL, Nagarjuna, L&T, DLF, Omaxe etc. involved in the construction of flyovers, pipelines, apartments and housing/office spaces.

Companies such as DLF, Purvankara, Raheja and others are engaged in the construction of residential and office space.

Skill requirements and skill gaps common to the Building, Construction and Real Estate Sector

LevelSkills requiredSkill gaps

Ability to manage costs, quality and ensureInadequate knowledge of

on-time delivery of projectplanning and scheduling

Ability to highlight issues, if any, to thesoftware

senior management and ensure their

resolution so as not to compromise on cost,Inadequate project

quality and timemanagement skills

Sufficient knowledge of the local language to

Projectbe able to communicate with contractors and

Manager (oflabourersDifficulty in controlling time

3 to 4 yearsAbility to maintain project site documentsoverrun and cost overrun

experience)Basic understanding of hydraulics electrical

knowledge and pipingPoor project management

Ability to effectively manage contractors andand resource estimation skills

ensure that contract specifications are being

metInsufficient orientation

Ability to understand technical drawings andtowards project costing,

thus the project designefficient inventory

Ability to ensure compliance to constructionmanagement and adhering to

approvals and laws and understand legaldeadlines


issues associated with the industry

Basic knowledge of construction equipmentLack of communication and

Strong task orientation, trouble shooting toteam building skills

resolve issues, high integrity and energy

levelsInsufficient ability to manage

Basic computer skills and ability to work onmultiple contractors and

MS Excelresolve conflicts

Strong networking and liasoning skills

Ability to manage inventory and ensure

appropriate usage

Ability to plan and effectively deploy the

available resources (man, machine, material)

Ability to ensure that safety and health norms

are adhered to

Strong oral and written communication skills

to be able to communicate effectively with

Head Office, contractors, architects, laborers

etc.

Ability to control the finances of the project,

including expenditure monitoring and

reporting

Advanced knowledge on project costing and

project management tools like PERT and

CPM includes good computer skills

Ability to articulate project objectives to

team members, coordinate and motivate the

site team

Ability to communicate and implement safeCivil engineers hired for this

practices, such as ensuring that a net is laidrole usually do not have

Engineers /while working in a pit with loose soilsufficient ability to develop

Ability to ensure minimal machine downtimeand comply to a Preventive

Supervisors

and avoid breakdowns say, for batchingMaintenance schedule

plants, transit mixers, etc.

Ability to appropriately allocate work toInadequate orientation to

semi-skilled and unskilled workmendevelop and adhere to safety


Ability to effectively communicate withnorms at construction site

semi-skilled and unskilled workmen and

articulate project objectives to allLack of communication and

Ability to understand and take instructionsteam management skills

from project managers

Ability to supervise and ensure quality ofIncomplete knowledge of

worktendering processes

Ability to maintain a high level of integrity

Ability to manage skilled and unskilledInsufficient writing skills in

workmen and resolve disputes as and whenEnglish and documentation

they ariseskills

Ability to create a sense of trust among the

semi-skilled and unskilled workmen so thatIncomplete understanding of

they approach the engineer / supervisor inrisks associated with a

case of any issuesproject such as time/cost

Ability to understand, speak, and know theover-runs as well as legal

local language and also understand itsaspects

nuances

Knowledge of construction equipment andLack of coordination skills

their functions and the ability to ensure that

the equipment is maintained as per standardsPoor time management skills

Good written and oral communication skills

Understanding of legal issues associated withPoor planning and

the industryscheduling skills, including

Ability to manage conflicts and stressskills for estimating

Overall execution and management of themanpower and material

project allottedInsufficient orientation

Ability to schedule preventive maintenancetowards project costing,

activities and undertake breakdownfunctionality of equipment

maintenanceand their maintenance

Insufficient ability to resolve

conflicts

Few students willingly take

up Civil Engineering courses

at the diploma and degree


levels and it is thus difficult

to fill up these seats with

good students many

students who take up this

course do so because they do

not get admission to other

preferred courses hence the

quality of students who pass

out from the degree and

diploma courses has room for

improvement

Engineers are required to be

on-site there is resistance to

travelling and staying in

remote locations

Many do not know /

understand the native

language of skilled /

unskilled workmen need to

be deputed on a project based

on language skills

Inadequate planning skills

Inadequate practical industry

exposure

Ability to coordinate with unskilled workmenInadequate knowledge of

Ability to operate key equipment such asconstruction specific areas -

cranes, especially tower crane operations,such as lining, leveling, and

and also mechanisms for loading andfinishing skills in carpentry

Skilledunloading of cranesAvailability of these

workmenAbility to work at heights (for high risepersonnel is an issue - it

buildings, especially in the case of cranemay be necessary to import

operators)people with relevant skills

Ability to deliver quality outputfrom Middle East/South East

Need to be adept in their own trades e.g.Asian countries/ China, etc.

plastering, painting, plumbing, etc.Lack of knowledge of basic


Knowledge of construction specific areas machine operation

such as while carpentry is a generic courseappropriate operation of

which is taught, there is a need for carpenterscranes lifting and placing

engaged in the Construction industry to be

aware of lining, leveling, and finishing skillsInadequate ability to

Need to understand machine operations andunderstand instructions of

basic machine troubleshootingsupervisors/engineers.

Ability to comply with safety and quality

measures

Need to have basic knowledge of

construction engineering

Ability to perform the operations ofVery little safety orientation

excavation, carrying, cutting, helping of

mason, mixing, spreading of stones, packingInadequate workplace skills

Ability to be involved in and perform manual discipline, cleanliness, etc.

labour intensive work thus need to be

medically fitInability to follow simple

UnskilledNeed to have an orientation towards safetyinstructions

requirements and basic workplace practices

workmen

(reporting to work on time, etc.)Low job loyalty - very prone

Need to be able to move material as requiredto leaving one construction

using carts / manually, and thus also needcompany and joining another

to be physically strong

Ability to take instructions from skilled

workmen / supervisors / engineers and

execute them appropriately

Material preparation / Concrete mixing

Source: Primaryresearch and IMaCS analysis

Skill requirements and gaps specific to individual segments over and above what is common across these two segments are detailed below:

2.4.2. Skill gaps common to the Real Estate

Table 7: Skill gaps specific to the Real Estate segment

FunctionLevelSkills requiredSkill gaps

LandExperiencedAbility to liaison with land owners,Civil engineers hired

acquisition andpersonnelgovernment bodies, villagefor this role usually

land bankauthorities, property dealers, etc. tolack knowledge about

creationidentify sources of landrelevant government

Ability to study legal papers andprocedures and

check the property accordinglyclearances

Ability to understand and comply

with local Government proceduresLack of aptitude to

related to land procurementwrite good basic

Strong liaisoning and negotiationinvestment proposals

skills i.e. the ability to maintainin English language

good relations with local and

controlling authoritiesPersonnel are not very

Strong written and oralarticulate while

communication skills to be able toliaisoning .

interact with different land owners

(private/Government)

Ability to understand overall

dimensions of land, the

topography, etc. including aspects

like requirement for

roads/pathways, pavements,

resulting wastage etc

Purchase of land after rate

negotiation

Entry LevelBasic legal knowledgeInadequate legal

personnelBasic ability to understandknowledge

contracts and agreements

Ability to understand suitability ofInadequate networking

land for construction purposes, i.e.skills

the ability to assess the land on

technical parameters such as


available supply of water,

electricity, access by road for

delivering construction material,

etc.

Ability to maintain good relations

with local and controlling

authorities

Basic understanding of the real

estate market in terms of drivers of

land prices, means of acquisition,

etc.

ProjectExperiencedAbility to define the project themeInadequate ability to

conceptualisati-personneland key features, narrow in on theplan out large scale

on, design,target set of customers,projects including

planning andunderstand/perceive theirhigh rises, large

marketingrequirements, design the layouthousing complexes,

(includingaccordingly keeping in mindinfrastructure projects.

seekingfunctionality, architectural and

approvals)aesthetic aspects and frame the

marketing and sales strategy

Appropriate selection of land from

the land bank for the project under

consideration for example, a land

closer to the main centre of a city

may be selected for a mall

Ability to liaison with architects

(in case architects are sub-

contracted by the company)

Ability to undertake the detailed

design and engineering and

shortlist and select vendors for

borewells, earth filling,

construction, development works,

landscaping, horticulture, etc.

Ability to correctly estimate the


module-wise/function-wise costs

and hence correctly estimate the

total project cost

Ability to estimate correct project

timelines

Ability to decide strategic

parameters such as whether the

property will be leased/whether it

will be an outright sale, what the

optimum mix of lease v/s sale will

be for commercial properties

Ability to market the property with

future owners/tenants through ads,

hoardings, tie-ups with property

dealers, corporate tie-ups, etc.

Knowledge of property markets

and relevant government

procedures and clearances

Ability to initiate technical and

legal formalities with statutory

authorities for sanctions so as to

ensure uninterrupted progress of

work when project execution

starts, i.e., coordinate and seek

clearances/ approvals from the

required urban development

authorities, Government bodies,

Pollution Control Board, and other

stakeholders as deemed necessary

Ability to understand legal

contracts and sign deals with

contractors

Entry Level In-depth architecturalInadequate knowledge

personnelknowledgeof Project Management

In-depth civil / constructionskills and Project

Human Resource and Skill Requirements in Building, Construction Industry and Real Estate Services


knowledgeManagement software

Project management skills,like MS Project /

including the use of projectPrima Vera, etc.

management software

Knowledge of costingLack of practical

Knowledge of commercials knowledge of

taxes, duties etc.construction

Ability to understand surveytechnologies /

techniquesmethodologies e.g.

Ability to prepare workingplastering, piling,

drawings,water proofing, use of

Knowledge of lab testingmachines,

understanding of pre-

methodologies, safety procedures

fab structures and dos

and ISO requirements for Health,

and dont of

Safety & Environment

construction

Lack of exposure to

survey techniques, Lab

testing methodologies,

Quality Control and

Quality Assurance

Lack of knowledge of

safety procedures and

ISO requirements for

Health, Safety &

Environment

FacilityExperiencedGeneral administration andIncomplete

Managementpersonnellogistics, after the facility has beenunderstanding of

occupied, including house keeping,maintenance services

security, front office, power back

up, etcInadequate customer

Ability to conduct regularorientation and

preventive maintenance and as-interaction skills


required breakdown maintenance

of civil, electrical and mechanicalInadequate

installationsunderstanding of AMC

Knowledge and proficiency in

handling maintenance of servicesInadequate

like plumbing, elevators,documentation skills

auditorium services, fire fighting

and associated servicesInsufficient of

Ensuring availability of utilitiesmanaging people

such as water, electricity, etc.involved in delivering

Ability to negotiate with andservices

manage vendors and contractors,

including ensuring their payments

Ability to have an orientation

towards customer service

Entry LevelAbility to undertake operations andInadequate orientation

personnelmaintenance activitiestowards customer

Coordination with multipleservice

agencies and vendors

Ability to mobilize resources asInadequate ability to

and when requiredmultitask and

Ability to handle complaints fromcoordinate with

inhabitants and ensure timelymultiple agencies and

resolutionvendors

Ability to keep track of complaints

received

Ability to have an orientation

towards customer service

2.4.3. Skill gaps specific to Infrastructure

Table 8: Skill gaps specific to the Infrastructure segment


ExperiencedIdentification of tendering

personnelopportunities for infrastructure

creation, i.e. the ability to

identify potential business

opportunities

Ability to prepare technical

proposals to suitably cover

requirements indicated in the

bid document

Ability to estimate man-hours

needed for the project, numberInadequate techno-

of sub-contracted personnelcommercial orientation

required, number of labourers

required, etc.Insufficient knowledge of

Ability to estimatelegal issues

Tenderingtechnological requirements

capital equipment needed,Not very articulate while

cranes requiredpresenting or liasoning

Ability to understand the

tendering process and techno-Poor communication skills,

commercial analysis of projects,oral as well as written

including potential commercial

pitfalls, if any

Ability to prepare appropriate

cost estimates when bidding for

projects - project costing skills

Ability to understand technical

specifications of a bid and

convert the same into material

requirements

Ability to network with

colleagues outside the company


so as to be appraised of leads as

they come up

Entry levelAbility to understand the

personneltendering process and techno-

commercial analysis of projectsInadequate understanding of

Ability to maintain a strong

detailed planning of projects

network

Ability to undertake basicInadequate knowledge of

costing of projects

costing

Ability to coordinate with

various departments forInadequate ability to

detailing tenders accurately

maintain a strong network

Broad understanding of

construction techniques andInadequate understanding of

projects in construction

legal and contractual aspects

Ability to undertake basic

resource estimation of projectsInadequate tender-writing

Ability to understand tender

skills

documents bidding

requirements

Basic understanding of legal

and contractual aspects