December 16-22, 2013 1

VOLUME 2 l Issue No. 50 l December 16-22, 2013 l Price : Rs. 100An MMR, Braj Binani Group Publication

Consolidation of cement industry forecast Cement demand is likely to firm

up in the long run post-elections May 2014, with a thrust on infrastructure spending and stability expected in the interest rate. Although the oversupply situation still exists in the sector, improvement in demand from next year onwards can upgrade capacity utilizations marginally.

However, the industry is at a tricky point in its development. Capacity is way ahead of actual consumption. Nevertheless, cement producers are keen to maintain their market share and expand to secure future demand.

An impressive CAGR of 8.6 per cent in cement consumption during FY04-12, the current moderation in demand, is evolving towards a new normal CAGR of around 6 per cent over FY13-16E.

As per research by Emkay Global Financial Services, slower consumption growth, sustenance of a large surplus (55-60mtpa, which is around 23 per cent of demand) and low consolidation (top-2 groups controlling just 30 per cent of capacity) would restrict any meaningful recovery in pricing power for cement manufacturers in the medium term. Also, low-cost cement producers, with a strong focus on logistic efficiencies and a low share of vintage plants, are likely to emerge as winners.

The demand has failed to improve in line with expectations, but dealers indicate that improved momentum is expected post state elections. In near to medium term, the sector may get impacted by lower than expected demand and higher costs.

However, upswing in cement prices is likely to improve profitability in coming quarters. Along with this, good monsoon during the year bodes well for boosting rural cement demand as per report analysis by Kotak Securities. Also, demand growth remains weak.

The cement demand in the current fiscal has been impacted by a range of issues such as sand mining ban, non-availability of bricks, lack of infrastructure project awards as well as slowdown in the real estate sector.

Cumulative growth of cement production during Apri l to Oct, 2013 was 4 per cent as compared to April to Oct, 2012 but a report by Kotak Securities expects demand to grow by 5 per cent during FY14 and improve to 6.5 per cent in FY15. Emkay Global Financial Services estimates poor corporate capex indicators (industry turnover ratio >1 and RoCE of 12-14 per cent) do not point towards any early revival in investment cycle. Low tax elasticity to mean a slower pace of government spending, weaker corporate capex parameters to mean a delayed recovery in investment spend and

UltraTech Cement wil l invest Rs 5,000 crore in Uttarakhand. Additional Chief Secretary Rakesh Sharma said, “An investment of this scale is being made for the first time in the state and it is likely to boost the revenues, besides creating job opportunities for the local people,” and added that the

UltraTech to invest `5,000 cr in U’khandcompany will not be allowed to violate any environment norms.

The Industr ia l Development Department has issued a letter of intent (LoI) to the company asking it to set up its cement plants worth Rs 5,000 crore at Tuni in Dehradun district, and at Someshwar in Almora district, according to an official release.

Kotak Securities outlook

The prices may come under pressure by end-December 2013 on inventory clearances by large cement companies like ACC, Ambuja Cements, etc. The demand is likely to firm up with improvement in rural spending and commencement of work on stalled projects.

The near term challenges related to higher costs, low capacity utilizations are likely to impact the sector, but Q3FY14 results for most of the companies are likely to witness an improvement sequentially in revenues and margins on cement pr ice hikes. Thus current weakness should be used to buy attractively valued stocks.

It is foreseeable that the Indian cement industry will see consolidation over coming years. Producers that can differentiate their cement from others or can make savings on production costs by, for example, using alternative fuels, wil l be able to take advantage o f inc reas ing demand wh i le remain ing ahead of their competitors.

Southern region (Rs/bag)

Western region (Rs/bag)

Apr

-06

Jun-

06

Aug

-06

Oct

-06

Dec

-06

Feb

-07

Apr

-07

Jun-

07

Aug

-07

Oct

-07

Dec

-07

Feb

-08

Apr

-08

Jun

-08

Aug

-08

Oct

-08

Dec

-08

Feb

-09

Apr

-09

Jun-

09

Aug

-09

Oct

-09

Dec

-09

Feb

-10

Apr

-10

June

-10

Aug

-10

Oct

-10

Dec

-10

Feb

-11

Apr

-11

Jun

e-11

Aug

-11

Oct

-11

Dec

-11

Feb

-12

Apr

-12

Jun

-12

Aug

-12

Oct

-12

Dec

-12

Feb-

13

Apr

-13

Jun-

13

Aug

-13

Oct

-13

Source: Dealer Feedback195

220

245

270

295

320

Apr

-06

Jun-

06

Aug

-06

Oct

-06

Dec

-06

Feb

-07

Apr

-07

Jun-

07

Aug

-07

Oct

-07

Dec

-07

Feb

-08

Apr

-08

Jun

-08

Aug

-08

Oct

-08

Dec

-08

Feb

-09

Apr

-09

Jun-

09

Aug

-09

Oct

-09

Dec

-09

Feb

-10

Apr

-10

June

-10

Aug

-10

Oct

-10

Dec

-10

Feb

-11

Apr

-11

Jun

e-11

Aug

-11

Oct

-11

Dec

-11

Feb

-12

Apr

-12

Jun

-12

Aug

-12

Oct

-12

Dec

-12

Feb-

13

Apr

-13

Jun-

13

Aug

-13

Oct

-13

Source: Dealer Feedback185

205

225

245

265

285

305

325

345

the top-2 groups now controlling a mere 30 per cent of the capacity compared to peak levels of 42 per cent. With surplus at 3x the demand growth and further weakening of consolidation with the new entrants enter ing/expanding, we expect pricing power to remain vulnerable.

In the absence of any structural uptrend in cement prices, we prefer the cost leader in the industry, rather than pricing leverage plays, since we believe cost leadership remains critical for sustaining margins and enhancing market coverage, thereby helping superior volume growth profile, reports Emkay.

In the northern region cement prices had started recovering from Sep-end wherein players had hiked prices by Rs 20-25 per bag. Further increase of Rs 15-20 per bag was witnessed during October 2013 while prices remained largely flat during November 2013. Construction activity in the region was impacted by festive season as well as sand mining ban.

The plant at Tuni wil l have a capacity to produce 3.5 million tons of cement per year, while the one at Someshwar will have a capacity to produce 2 million tons of cement per year. An MoU in this regard will be signed after the company fulfils the formalities that follow issuance of the letter of intent.

Northern Region Table (Rs /bag)

190

210

230

250

270

290

310

Apr

-06

Jun-

06

Aug

-06

Oct

-06

Dec

-06

Feb

-07

Apr

-07

Jun-

07

Aug

-07

Oct

-07

Dec

-07

Feb

-08

Apr

-08

Jun

-08

Aug

-08

Oct

-08

Dec

-08

Feb

-09

Apr

-09

Jun-

09

Aug

-09

Oct

-09

Dec

-09

Feb

-10

Apr

-10

June

-10

Aug

-10

Oct

-10

Dec

-10

Feb

-11

Apr

-11

Jun

e-11

Aug

-11

Oct

-11

Dec

-11

Feb

-12

Apr

-12

Jun

-12

Aug

-12

Oct

-12

Dec

-12

Feb-

13

Apr

-13

Jun-

13

Aug

-13

Oct

-13

Source: Dealer Feedback

Northern region: Cement prices had started recovering from Sep-end in northern India wherein players had hiked prices by Rs 20-25 per bag. Further increase of Rs 15-20 per bag was witnessed during Oct, 13 while prices remained largely flat during Nov,13. Construction activity in the region was impacted by festive season as well as sand mining ban.

Western region: Prices increased by Rs 25-30 per bag in western India during Oct, 13 and witnessed further increase of Rs 5-10 per bag during Nov, 13 in anticipation of demand revival from infrastructure segment.

Southern Region: Prices recovered by nearly Rs 30 per bag during Sep-Oct, 13 in southern region and witnessed declines during Nov, 13 due to lack of demand and impact of cyclones.

slower wage increments amidst high inflation means a decisive downward shift in cement demand growth trajectory. Hence, normal cement demand CAGR of 6.3 per cent over FY13-16E, as compared to 8.6 per cent CAGR in FY04-12 period.

Pr ic ing power is unl ike ly to recover mean ing fu l l y desp i te receding capacity additions (67mt to be add over the next 4 years), and incremental supply would largely meet incremental demand, leading to sustenance of the current high surplus (55-60mtpa).

Moreover, the consolidation in the industry has been declining with

December 16-22, 2013 2DOMESTIC

House prices to rise at slower pace in 2014

Abu Dhabi to invest $250 m

in Hines India REHouse price rises in major Indian

cities are expected to slow to just fewer than 8 per cent next year as a cooling economy and rising interest rates deter new buyers, a poll showed. The survey of 11 property market analysts conducted over the past three weeks was for house prices in Asia’s third-largest economy to rise 7.8 per cent next year, well below the current rate of consumer inflation of around 10 per cent.

The main problem, in a country where almost one-quarter of the population earns less than 50 cents a day, is the price. “In some of the key markets in the country property prices is sky high,” said Sachin Sandhir, MD, RICS South Asia. “Due to uncertainty about the economy, high interest rates and rising inflation,

developers are holding on to their pr ices, making some locations unaffordable.”

Indeed, a 2,000 sq. (185.8 sq mt) apartment in the posh South Mumbai neighborhood of Malabar Hill costs more than $2 million. The majority of homes in Indian cities are nowhere near that expensive, it shows how far real estate values in India’s financial capital have risen. And dwindling incomes have put low-cost homes out of reach for many people.

Most of the urban price rises are expected to take place in the southern coastal city of Chennai, followed by New Delhi and its suburbs and Bangalore, while already high prices in Mumbai will likely stagnate. The RBI hiked its benchmark repo rate twice in September and November as it tries to rein in soaring prices and there is

an outside chance it could tighten again at a meeting next week. It even nudged hesitant commercial banks to pass on the increases to borrowers.

Buying a house in India has traditionally been a sentimental decision, not for investment. But soaring prices in recent years has led a growing middle class to turn to real estate as a means of generating wealth.

Unsold inventory of development properties aimed at that new type of buyer is now a cause for concern, say analysts. Inventory pressure on developers in Mumbai and Delhi is actually going up. “New launches in the city plummeted over 40 per cent compared to peak levels in 2010 as developers focused on selling current inventories, “according to their recent report.

Ashiana Homes & Landcraft raises `180 cr

from Indiareit & IIFLRealty f i rms Ashiana Homes

and Landcraft Projects said they have raised Rs 100 crore from Pirmal Group’s private equity firm Indiareit and another Rs 80 crore from financial institution India Infoline to fund their upcoming housing project in Gurgaon.

Ashiana Homes and Landcraft have formed a 50:50 joint venture firm to develop a housing project in Gurgaon. The project, located on Dwarka Expressway, would have 750 flats. “We have bought 14 acre of land in Gurgaon from Vatika group. The joint venture will be investing Rs 600 crore to develop a housing project,” said Ashiana Landcraft Realty, the JV firm, Director Rohit Raj Modi.

The investment would be funded through internal accruals, debt and equity, he added. “We have raised

Rs 100 crore from Indiareit Domestic Fund and Rs 80 crore from IIFL,” said Ashiana Landcraft Realty Director Manu Garg.

The joint venture company would launch this project at around Rs 7,000 per sq ft in February 2014 and construction would start from April onwards, Garg added. The project ‘Center Court’ is expected to be completed by June 2017.

The JV would undertake the construction work in-house, but has tied up with Singapore-based Belt Collins International for landscape architect. Delhi-based Ashiana Homes is developing projects in the national capital region, Jaipur and Bhubaneshwar, while Landcraft Projects is bui ld ing a 90-acre township and group housing projects in Ghaziabad.

Property markets of Mumbai, Bengaluru slip

Centre allows Dubai firm to exit JV with DLF

Major Indian property markets of Mumbai and Bengaluru have s l ipped fur ther as real estate investment dest inat ions in the Asia-Pacific region, according to a PricewaterhouseCoopers (PwC) report. Mumbai and Bengaluru have slipped to the 23rd and 20th positions

The government has allowed Dubai-based Limitless to exit its joint venture with realty major DLF and repatriate capital of about Rs 200 crore as the partners were not able to acquire land to develop a project in Karnataka.

The Foreign Investment Promotion Board (FIPB) has approved the proposal of DLF Limitless Developers

in the 2014 rankings from 20th and 19th positions, respectively in 2013 survey.

While Delhi property market has maintained its ranking at 21st position from last year, Chennai has made an entry for the first time at 22nd position. The report - Emerging Trends in Real Estate Asia Pacific 2014 Report - is

Pvt Ltd, the 50:50 joint venture between DLF and Limitless, an official statement said.

The proposal was related to exit of foreign investors and the repatriation of capital as the construction sector project could not even acquire land, it added. Sources said Limitless, a part of Dubai World, had invested around

Abu Dhabi Investment Authority is investing $250 million ( Rs 1,500 crore) in Hines India Real Estate, the Indian arm of American property development and management firm Hines, amid a rise in overseas interest in the sector.

“The sovereign wealth fund has formed a strategic alliance with Hines to invest across the residential segment in metros across India. This is the first direct real estate venture with a developer in India for the fund,” said one of the people with direct knowledge of the investment.

It’s not known how much equity it will have in the venture. The sovereign wealth fund owned by the emirate of Abu Dhabi recently invested $300 million (Rs 1,800 crore) in the offshore fund of Kotak Realty Funds run by Kotak Mahindra Bank. The cash-rich sovereign wealth fund has so far invested more than $500 million in India, largely through realty or private equity funds.

Abu Dhabi has been scouting for opportunities to invest directly in the Indian real estate sector. It is now backing Hines to foray into the residential market and is targeting mid-market and upper mid-market residential development. The company will first enter Mumbai and then the Delhi-National Capital Region.

The move by the Abu Dhabi fund follows increased overseas investment in the sector. Qatar Inves tment Author i t y recent l y invested $300 million or Rs 1,800 crore in Bengaluru-based real estate developer RMZ Corp to acquire commercial space in Bengaluru, Hyderabad, Chennai and Pune. Canada Pension Plan Investment Board has committed $200 million for an 80 per cent stake in a joint venture company. The partners will jointly acquire foreign direct investment compliant office buildings in India’s biggest cities.

based on responses from more than 250 people including real estate developers, investors, brokers and advisers. The survey conducted jointly by PwC and Urban Land Institute for Asia Pacific has been topped by Tokyo, Shanghai, Jakarta, Manila and Sydney.

Rs 200 crore in the joint venture.Country’s largest realty firm DLF

and Limitless had formed the JV in 2007 to develop a township spread over 9,178 acre at Bidadi in Karnataka, but the project did not take off as the state government could not initiate land acquisition.

The Karnataka government had returned Rs 400 crore to the joint venture in April, 2009. After that, DLF Limitless Developers had approached FIPB to allow transfer of shares held by Limitless to DLF subsidiary, DLF Home Developers.

Motilal Oswal plans second realty fund

Moti lal Oswal Real Estate is planning to raise Rs 300 crore from Indian investors, via a real estate fund with a greenshoe option of Rs 200 crore. The proposed India Realty Excellence Fund II LLP, with a total tenure of four years, including two extensions, will be the second fund of Motilal Oswal Private Equity’s real estate arm.

The company’s financial arm, Motilal Oswal Financial Services has committed 20 per cent of the proposed fund as seed capital. The current environment provides interesting counter-cyclical investment opportunities in the next 12-18 months,” said Sharad Mittal, Director and head of real estate investments at Motilal Oswal Real Estate.

December 16-22, 2013 3BUILDING MATERIALS

Developers in dilemma

The hike in steel and cement prices has led

to delays in project execution and high cost of construction. It would impact the overall real

estate market and lead to increase in

property prices

The real estate sector is a critical sector for any economy. It is the second-largest employment-generating sector after agriculture, and contributes about 5-6 per cent to India’s GDP. Growing at a rate of about 20 per cent per annum, it generates a high level of direct employment and stimulates demand in over 250 ancillary industries such as cement, steel, paint, brick, and building materials, consumer durables and so on.

Highs and lowsTherefore, the rise in the prices

of any of these ancillary industries affects the real estate market and economy as a whole. The real estate market witnessed a boom following the government’s policy to allow Foreign Direct Investment (FDI).

Lured by the high returns on investments, many new domestic and foreign realty investors entered this sector, but they have witnessed

many highs and lows since then. The Indian realtors’ body Credai has said that cement prices across India had gone up by $0.95-1.12 per bag in the week to September 23, 2013. A spokesperson of Credai said that cement prices in Maharashtra had risen by 31 per cent in just a week.

The origins of the Indian cement industry can be traced back to 1914 when the first unit was set up at Porbandar with a capacity of 1,000 tons. At present the Indian cement industry comprises 140 large cement plants and more than 365 mini cement plants, and it is the second largest in the world. The industry occupies an important place in national economy because of its strong linkages to other sectors such as construction, transportation, coal and power.

The market hitThe cement manufac tu r ing

companies increased Rs 30-35 for a bag of 50kg. The price of steel bars was also recently increased from Rs 43 to Rs 50 per kg. The recent hike in cement and steel prices has badly hit the market.

This hike has led to delays in project execution and high cost of construction. If this situation continues, it would impact the overall real estate market and lead to delay in delivery of projects and increase in real estate prices.

From a developer’s perspective,

with interest rates going up, there will be additional increase and it will certainly affect demand. This will have an adverse effect on economy as a whole.

Labour shortageThere are several reasons for this

hike. One of those is Bihar’s recent economic growth which has created a peculiar problem for real estate and infrastructure firms in other parts of the country.

Migrant labour from the state constitutes around 50 per cent of the unskilled workers employed in these sectors nationally, but increased government expenditure and private investment has caused rural migration from Bihar to fall by a third in recent years, resulting in labour shortages and 35-50 per cent higher wage bills for real estate firms.

Another factor that will definitely lead to further hike is the Railway Board’s decision to increase the Busy Season Surcharge (BSS) from 12 per cent to 15 per cent, effective from

October 1 to June 30, 2014. This will drill deep holes into the profits of bulk commodity manufacturers like cement and steel.

BSS new regulationSteel manufacturers who use the

railway network extensively will also

for a bag which will lead to a 10 per cent increase in construction cost. An average of 450-500 bags of cement is required for constructing a 1,250 sq ft two-bedroom flat.

Which means that such a hike along with recent increase in labour charges and rate of steel bars will lead

NCDEX re-launch of Steel Long Contract

India’s leading online exchange, NCDEX is continuously striving to offer the widest range of benchmark p roduc ts ac ross ag r i cu l t u re , metals and precious metals in the international commodity market. NCDEX brings buyers and sellers together through its electronic trading platform. It enjoys the distinction of being the only exchange in the country promoted by national level institutions.

Recently, it has re-launched its Steel Long Contract based on the BIS 2830 grade, as is mandated by the Government of India. NCDEX is the only exchange which offered Steel Long Futures, which had become a benchmark price reference for the long products segment in the Indian steel industry.

T h e e a r l i e r c o n t r a c t w a s discontinued after the BIS norms were mandated by the government in September 2012. The objective is to migrate the entire steel sector towards implementation of the BIS norms and thereby provide quality steel products to consumers.

Samir Shah, MD-in-Charge, NCDEX, speaking at the launch said, “Steel is the second most traded physical commodity after energy. In fact, as consumers of steel products, it is an integral part of our daily lives. With the relaunch of NCDEX Steel Long Contract, we expect it to add tremendous value to the existing steel business entities and stakeholders”

The new Steel Long Contract is based on BIS 2830 grade. With the production of billets and ingots expected to converge to the BIS 2830 grade in the main and secondary steel sectors, this contract will aid the price discovery and facilitate hedging amongst the entire steel production chain.

It will also facilitate the migration of the secondary steel sector towards early adoption and production of BIS 2830 grade, thereby aiding in the objective of the GoI. Deliverable at seven key steel production/consumption centres across India, the contract would help the producers and consumers to lock into a forward price with the added benefit of the

counter party risk mitigation provided by the exchange. NCDEX would also facilitate the physical delivery of steel at exchange approved warehouses. It has empanelled an approved warehouse at the base centre viz Mandi Gobindgarh.

A perfect risk management tool, the futures contract gives steel producers an opportunity to hedge their production and also give physical delivery on the exchange platform. Consumers of steel products can lock in the purchase price for a forward month, thereby insulating them from the fluctuation in prices.

“The much awaited re-launch of the NCDEX Steel Long Contract provides

steel producers and consumers the most comprehensive and cost-effective risk management solution in the international commodity market.” added Vijay Kumar, Chief Business Officer, NCDEX.

NCDEX has a two-pronged strategy to promote the contract amongst SME and regional market and the secondary steel market. One, we intend to spread the awareness of the need to hedge their steel prices on an on-going basis in view of the volatility seen in the steel prices. Secondly, we would also promote the usage of our steel long contracts by such consumers to use them as a benchmark to mark their

conversion margins and in turn offer long term forward sell contracts to their consumers, said Ramesh Iyer, VP-Business Development, NCDEX.

With the inclusion of BIS 2830 grade as the base qual i ty, the contracts would address the needs of the entire steel market ie primary and secondary. Hence, it will not have any negative impact on primary producers with respect to their bargaining power and neither it is posing competition for primary producers.

This is because in the long products segment, the main producers are seen as following the price trends in the secondary steel market, after a lag period of one month. As our steel long contracts are expected to capture the real time dynamics of the markets, it would help main and secondary producers alike in its vital function of price discovery and a hedging platform, he added further.

Iyer also said that there are a multitude of factors involved in the price discovery process of steel long. Some of the key variables are: Demand supply dynamics; Prices of key steel making raw materials viz iron ore; Melting scrap; Coal; Local freight; The exchange rate dynamics of rupee vis-a-vis international currencies; Electricity tariff , and Fiscal and monetary policies of the government.

Harsh Bhutani Managing Director, Hydrobaths Pvt Ltd

feel the impact of BSS’ new regulation with an estimated hike of Rs 400 per ton of steel. Steel manufacturers move raw materials such as iron ore and coal on railway wagons and also finished products like steel through rail.

Steel manufacturers are surely going to pass on some of this burden on consumers which means a hike in the price of finished products, including real estate projects. The increase in freight rates has come at a time when the economic slowdown is impacting the fortunes of several companies across the manufacturing sector.

As a developer directly related to these industries, the move by the Railways to increase surcharge will be detrimental to both businesses and consumers as prices are bound to move up. The cement and steel makers may hold the price line for now, but it will soon affect us and consumers.

Construction costThus, with the hike, the cement

price has already touched Rs 365-380

to an overall increase of 15 per cent in that construction cost. The overall impact of the price rise will be on the common man who will have to shell out more for all their basic commodities. From a real estate developer’s point of view, housing is one of the most basic needs for a family and with the rise in its price; the citizens will be highly pressurized.

Moreover, the price is expected to go up further as cement manufacturing companies are planning yet another hike. The Centre must take immediate steps to control the increasing prices of cement and steel, implement more effective measure in the form of taxation policies or BSS regulation needs to be taken to control further hike.

December 16-22, 2013 4

EMS-Chemie moves to Aveva Everything3D software

Aveva has announced that EMS-Chemie has moved to the new Aveva Everything3D (AvevaE3D) software for the design of its chemical facilities. The EMS-Services business unit of EMS-Chemie has successfully used Aveva PDMS since 2004.

N o w i t w i l l b e n e f i t f r o m the advanced functionali ty and improved design efficiency provided by Aveva E3D; for example, the integrated drawing production that is exceptionally easy to use and

INFRASTRUCTURE

Infra, banking need `10.4 tn bond funding: Crisil

India’s infrastructure and banking sectors will require Rs 10.4 trillion from the bond market over the next five years, CRISIL said at its second annual bond market seminar held today. To facilitate this, greater regulatory focus is required in three areas – deepening of the bond market, developing innovative credit-enhancement mechanisms for infrastructure projects, and building investor appetite for banks’ non-equity capital.

CRISIL also released its first ‘Yearbook on the Indian Debt Market – 2013’, a comprehensive, one-of-its-kind publication, at the seminar. According to the yearbook, the Indian bond market has witnessed sizeable growth in issuances and increasing participation by issuers and investors. Encouragingly, there have been several innovations in the bond market during 2013, including the first 50-year rupee bond and the first inflation-indexed

debentures by Indian companies, five Basel III compliant issues by banks, and the launch of two infrastructure debt funds.

It is imperative to build on this foundation of growth and innovation to meet the sizeable funding requirements of the country’s infrastructure and banking sectors.

Roopa Kudva, Managing Director & CEO, Crisil, said, “The Rs 10.4 trillion bond funding required for these two sectors translates to an average issuance of Rs 2.1 trillion annually in each of the next five years.

“This is nearly 60 per cent higher than the average annual issuances made by these sectors in the past three years. This calls for steps to deepen the bond market by encouraging greater foreign participation, and by liberalising investment norms for long-term investors.”

The Indian infrastructure sector alone will need Rs 7 trillion from the bond market over the next five years. Currently, bond market finances the infrastructure sector indirectly through specialized institutions.

Pawan Agrawal, Senior Director, Crisil Ratings, said, “In 2012-13,

just five financial institutions issued nearly 60 per cent of the (Rs 1.3 trillion) bonds raised to fund infrastructure. Therefore, encouraging direct access of infrastructure projects to bond market is a key priority.”

This can be achieved by a strong regulatory and policy focus on developing innovative credit-enhanced structures, allowing banks to provide credit enhancement and facilitating the scale-up of infrastructure debt funds (IDFs). Crisil has recently rated the two IDFs set up as non-banking financial companies.

Indian banks also seek Rs 3.4 trillion non-equity capital under the Basel III regulations till March 2018. A good beginning is already visible, as five banks have raised Rs 60 billion by issuing Tier II bonds, all rated by Crisil.

Agrawa l added, “The key challenge lies in raising tier-1 non-equity instruments, due to their riskier features of coupon discretion and principal loss absorption at specified capital thresholds.” For building investor appetite for such instruments, guidelines for long-term investors will need to include eligibility for tier-1 instruments.

Regulatory support critical to meet this

challenge in the next 5 years

Swiss chemicals company chooses Aveva software to increase design

efficiency

Railways may borrow to fund projects

Months be fo re t he Un i t ed P r o g r e s s i v e A l l i a n c e ( U PA ) government is to table a vote-on-account for interim funding of railway expenses, a high-powered panel formed under the directions of the Prime Minister’s Office (PMO) has suggested borrowing from the market for projects in electrical, signalling and railway construction.

According to officials, the report of the panel chaired by Planning Commission member B K Chaturvedi suggests ‘innovative methods of financing’ be explored. The panel is expected to give its report to the PMO by year-end. “There is a limit to which the railway can rely on increasing freight and fares to meet financing needs,” said an official.

Traditionally, the Railways do market borrowings only for its rolling stock through its financing arm the Indian Railway Finance Corporation (IRFC). Recently, IRFC expressed its intention to raise Rs 10,000 crore through tax-free bonds in the current financial year (2013-14). The bonds would be issued in one or more tranches subject to the shelf limit for FY14, said IRFC in its draft shelf prospectus. Earlier, the government had floated the idea of IRFC getting into project financing, but the latter was not very comfortable with the idea owing to construction risks, and time and cost overruns.

“Apart from market borrowings for projects, the committee has also

suggested that Railways should increasingly look at projects under the public-private partnership (PPP) mode to fund its financing requirements,” said the official.

The Planning Commission has estimated that Railways could raise around Rs 100,000 crore through the PPP mode in the 12th Five-Year Plan (2012-13 to 2016-17), but according to 2013-14 Budget, it had targeted to raise just Rs 6,000 crore. Apart from the Planning Commission member, the high-powered committee includes chairman of the Railway Board, secretary in the department of expenditure, executive chairman of IDFC, among others.

The Railways’ Plan expenditure is financed through gross budgetary support (GBS), internal accruals ( freight and fares) and market borrowings. In 2013-14, the Railways had pegged a Plan investment of Rs 63,363 crore of which GBS and road safety fund will contribute Rs 28,000 crore, internal resources Rs 14,260 crore, market borrowing Rs 15,103 crore and mobilization through PPP Rs 6,000 crore.

Overall, in the 12th Plan period, the Indian Railways’ Plan expenditure has been estimated at Rs 5.19 lakh crore, of which GBS is expected to contribute Rs 1.94 lakh crore, internal resources Rs 1.05 lakh crore, market borrowings Rs 1.20 lakh crore and another Rs 1 lakh crore is expected to be raised through the PPP mode.

IFC to raise funds for infra projects

their money in the offshore bond programme were institutions, pension funds and insurance companies. These bonds, of three-year tenor, offered 7.75 per cent interest. IFC said that the exchange rate risk arising out of such instruments will be borne by investors. The next tranche of the offshore rupee bond, Devieux said, will probably be of a longer tenure. IFC hopes to raise $4-5 billion by issuing bonds of different tenors.

produces deliverables much more quickly. This was just one of the drivers behind EMS-Chemie’s decision to move to the next-generation Aveva design software.

“We switched over right in the middle of an ongoing project,” said Marco Derungs, Aveva E3D Admin is t ra to r, EMS -Serv ices . “Thanks to its intuitive functionality, Aveva E3D can be mastered quickly and the migration to productive operation took place rapidly. This smooth transition was due to the fact that Aveva E3D and Aveva PDMS are fully compatible and can be used simultaneously across the same project.”

“The abi l i ty to automatical ly generate design drawings directly from the 3D model is a crit ical del iverable for EMS-Services,” explained Helmut Schuller, Executive Vice President EMEA, Aveva. “For other customers it may be the direct integration of as-built information in the form of 3D laser scans. We are seeing a wide variety of reasons why

both EPCs and Owner Operators are deciding in favour of Aveva E3D for their design departments. We have been very pleased by the number of customers in EMEA who have already made the decision to adopt or move to Aveva E3D. It is very clear proof of the value that the new Aveva E3D technology is bringing to their businesses.”

Aveva Everything3D (Aveva E3D) is Aveva’s top-of-the-range, multi-discipline, 3D plant design solution. It combines the latest 3D graphics and user interface technologies with state-of-the-art data management to deliver the most comprehensive, productive and tightly integrated 3D plant design solution available.

The EMS Group, headquartered in Domat/Ems, Switzerland, is active worldwide in high-performance polymers and speciality chemicals. It has 26 production sites in 16 count r ies and is represented throughout the world.

T h e I n t e r n a t i o n a l F i n a n c e Corporation (IFC), a World Bank Group member, said it will raise money from domestic investors by issuing rupee bonds in India shortly. The money raised by issuing such bonds will be used to lend to infrastructure projects in the country. The issue size will be decided by IFC after discussions with government officials.

Serge Devieux, Director (South-Asia), IFC, said, “We are looking at what we can do to raise local currency to raise money for infrastructure.” The local bonds will be long-term in nature and would have maturity periods ranging from 8-15 years, he said.

“For the local rupee bonds, we will meet Government officials in Delhi on Friday. It will take some time. It will be issued in the first quarter of 2014 if market conditions are apt,”

Devieux said. Recently, IFC raised Rs 1,000 crore (about $170 million) through offshore rupee bonds as part of its $1 billion offshore rupee bond programme.

Most of the investors who put

December 16-22, 2013 5MANAGEMENT

Facilities management – an evolving fieldThe maintenance and upkeep demands of

increasingly complex structures needed a

specialized approach

Do you love to keep your car well primed for peak performance? Do you have a yen for keeping stuff working? Do you count the times when you get things working again among your ‘aha’ moments? Well then a career in facility management might be just the right choice for you.

Facil ity Management (FM) or facilities management is a relatively new field and traces its origin to sometime during the 80s when it became clear to professionals in several construction related fields that the maintenance and upkeep demands of increasingly complex structures needed a specialized approach.

Whole new fieldIndeed it was time to say ‘goodbye’

to the traditional ‘nuts and bolts’ approach and say ‘hello’ to a whole new interdisciplinary field that dealt not only with the maintenance inputs but additionally to value management, change management, strategic asset management and beyond.

Indeed, over the years FM has evolved into a highly competitive, rapidly developing field geared to reducing costs and adding value to the core business of the client organization.

A range of dutiesAs per the definition of the European

Committee for Standardization, a major organization evolving European Standards and technical specifications faci l i t ies management is, “ the integration of processes within an organization to maintain and develop the agreed services which support and improve the effectiveness of its primary activities”. Facilities managers are therefore, called upon to perform a range of duties in order to maintain and develop these agreed services.

Along with the developments in facility management as a discipline, the role of the facility manager is also evolving and many facility managers are now expected to operate at two distinct levels: strategic-tactical and operational.

Potential impactThe strategic-tactical operational

tasks include assessing the potential impact of management decisions on the facility, while the other aspect mostly involves regulatory compliance in addition to proper operation of all systems in a building to create an optimal, safe and cost effective env i ronment that would a l low occupants to carry out their work and perform other activities.

Facility managers are expected to provide necessary inputs across the following fields:

Health and safetyOne of the primary tasks of the

facility management department in an organization concerns the effective and efficient management of many safety related issues.

With their professional expertise in the field facility managers are expected to evolve and implement procedures, protocols and processes to prevent injury, loss of life, loss of business and such untoward events that might negatively impact the organization and its stakeholders.

The serv ices of the fac i l i ty management professional help prevent/control events that might lead to injury, loss of business, prosecution and insurance claims from those involved in any untoward incident at the work place.

But there may be other aggrieved parties not directly involved with the adverse events at the work place, these would mostly include customers and investors in the business whose interests might be impacted by the negative publicity from any incident.

Management of strategic assets

Fire safety: The risk of fire is something that no safety or facility management professional can afford to underestimate. Fires can be extremely destructive and could so severely impact a business as to shut it down.

T h e f a c i l i t i e s m a n a g e m e n t department is expected t o h a v e e f f e c t i v e systems in place to ensure that the risk of fire to a facility is minimized.

Further in the event of a fire the facility management function would need to have in place systems, processes and other measures to limit the fire from spreading through the facility and cause minimal loss to human life, property and other assets of the business/organization.

Security matrixThe fac i l i t i es management

department is also often tasked with responsibility of ensuring security. Provision of security often translates into protection which extends over employees, the facility and other assets.

Closely interlinked with this security matrix is the maintenance of hardware which is a key security input that the function provides.

An import task of the facil ity management function is to draw up ma in tenance, tes t ing and inspection schedules, to ensure peak performance and safe operation of all equipment in the facility and to optimize

Statutory obligationsM a i n t e n a n c e , t e s t i n g a n d

inspection schedules are required to ensure that equipment in the facility is operating safely and efficiently,

to maximize the life of equipment and reduce the risk of failure. There are also statutory obligations to be met. The work has to be planned, often using a computer-aided facility management system.

Cleaning operations are often undertaken out of business hours, but provision may be made during times of occupation for the cleaning of conveniences, replenishing consumables (soaps, handwash, etc). Cleaning is best performed on periodic basis, daily, weekly, monthly, etc as warranted.

Negotiate with clientsOne of the responsibilities of facility

managers is to negotiate a variety of contracts with clients and vendors who work on the organization’s property. Typically these may involve services like lawn care, catering, transport, security, etc.

Before agreeing to contract services

facilities manager to ensure that the business is budgeted effectively and the expenditure incurred leads to the creation of a more efficient work environment.

FM department The Fac i l i t ies Management

department is responsible for the facilitating the day to day operations that the building supports.

Whether these tasks are outsourced or carried out by employed staff is a policy matter, but with the growing complexity of services that modern facilities demand the trend is definitely towards increased outsourcing.

Though outsourcing has i ts advantages, it throws up its own challenges which facility mangers will

be increasingly confronted with.Facility management is a

wide field with a diverse range of responsibilities,

but the nature of job responsibilities may differ from one organization to another depending on the structure and size of the organization.

Strategic planningA s a f a c i l i t i e s

professional you should be prepared to be involved in both

strategic planning and day-to-day operations, particularly in relation to buildings and premises.

So what exactly does one need to become a successful facilities manager? Facilities managers are mainly involved in ensuring the continuity of services that a facility provides and other direct and indirect inputs that support the operations of an organization.

Obviously therefore at the top of the list of essential pre-requisites is the ‘my lookout’ spirit which means the ability to take ownership of issues.

Wear many hatsTypically facilities managers are

‘hands on’ people, who are more interested in getting the job done rather than getting into who messed up. Next on the list is the ability to wear many hats. The nature of the facility professional’s job requires him to be a kind of ‘jack of many trades’ rather than a ‘silo professional’ working in a specialized field.

This person oversees many different aspects of a company’s operations from managing vendors and contractors to arranging for maintenance and looking for new ways

to lower costs. Being able to multitask is essential for achieving success as a facility manager.

Desirable qualityFurther, facilities professionals

need to be ‘open’, that is readily approachable and easily accessible to all. This quality is particularly desirable as issues can crop up with any of the varied services they are supposed to manage.

Facilities managers must be able to prioritize their workload in view of the tasks and duties that are delegated to them. The ability to prioritize becomes especially critical in view of their busy schedule.

Lastly, facilities managers need to be ‘30 hours a day managers’ meaning they have to be able to put in long hours when the situation demands.

Transferable experienceWhile facilities managers are mostly

find employment in construction and related fields, the their expertise and experience is highly transferable across sectors and industries, which is reflected in different job titles like operations manager, estates manager, technical services manager, asset or property manager, etc.

With the phenomenal growth in the infrastructure and real estate sectors and the increasing focus on quality of life the built environment in cities, towns and even hitherto mofussil and rural areas is in the midst of radical change.

Resident ia l and commercial property buyers are now demanding facilities like landscaped gardens, health spas, swimming pools and parking spaces which call for quality maintenance and upkeep that only professional facility managers can provide.

Demand on riseNaturally therefore the demand for

facility managers and professionals is on the rise not only in India but across the world.

Given the range of faci l i t ies developers are now asked to provide in residential complexes, commercial buildings, shopping malls and educational institutions, facilities management companies are striking lucrative deals in prime growth markets.

For faci l i t ies managers th is translates into expanding opportunities at all levels, both at home and abroad. As a facilities manager you will be required to perform varied tasks, but if you have the right attitude coupled with commitment and the some management skills, it can be a very rewarding career choice.

The scope and reach of the facilities management function is set to grow at a steady pace opening up greater opportunities for the right professionals.

Vivek DevCivil engineer and freelance writer

from a vendor, facility managers obtain bids for the service from different providers to make sure the facility is getting the right value for the money that is being spent.

After an agreement is reached on the price facility managers are responsible for drafting and reviewing the necessary contracts as also for preparing documentation.

Once work gets under way, facilities managers need to ensure that the work proceeds in line with the contracted agreement and is completed on time.

A major part of the facility manager’s responsibility is to manage operational costs. The facilities professional has to find ways of cutting costs while adequately maintaining the business premises.

Creating budgetThis involves creating a budget

for all departmental expenses and work through the year to keep costs within the amount budgeted and making adjustments on an emergency basis.

It is the responsibil i ty of the

December 16-22, 2013 6PROJECTS UPDATE

WB GIF structure for infra finance to be finalized by April

allowed Infrastructure Debt Funds (IDF) as a new category of financial intermediaries to refinance loans.

Currently, there are six IDFs -- four from NBFCs and two in the mutual fund space.

To fas t- t rack in f ras t ruc tu re development, the government set up a Cabinet Committee on Investment, which has approved 209 projects worth Rs 3.84 lakh crore since January 1.

The government has been making efforts to develop roads, ports, airports, railways and so on, and half of the $1 trillion needed for the entire

sector is expected to come from the private sector. In order to promote long-term and low-cost funding for the sector, the government has

India expects the World Bank to finalize by April the contours of the proposed Global Infrastructure Facility (GIF) that will finance core projects in emerging economies.

“The Spring Meeting of World Bank in April will discuss the design of the GIF. The facil ity will help finance needs of infrastructure deficit nations,” said a senior Finance Ministry official.

T h e W o r l d B a n k m a d e a presentation to Finance Minister P Chidambaram in October on the proposed GIF. “By October 2014 the final proposal of GIF would be prepared which will be considered by the board of the multi lateral institution in its Annual Meeting,” said the official.

Ind ia had ear l i e r th is year approached the World Bank to set up the GIF to help finance about $1 trillion investment needed for infrastructure projects during the 12th Five-Year Plan (2012-17). The World Bank is working on GIF as it feels that the development of the infrastructure sector in emerging nations is critically important, said the official.

The GIF would be set up with contributions from India, the World Bank, sovereign wealth funds and pension funds.

“The facility would benefit the SWFs and PFs as they would get higher returns by investing through GIF as compared to direct investment into projects,” said the official.

Kerala sets up high-power panel on infra projects

NHAI to award over 1,600 km road projects on EPC

Paradip port seeks private investment

for expansion

4 JVs qualify for Eastern freight corridor project

A high-power committee has been set up by the Kerala government to scrutinize and grant approval to 10 major infrastructure development project proposals, release funds, ensure timely implementation of the projects, and check the lapse of Rs 846.03 crore provided in the budget.

The government has issued guidelines for the release of funds for the 10 projects, which include the Capi ta l C i ty Deve lopment Programme, monorail in Kozhikode a n d T h i r u v a n a n t h a p u r a m , High-Speed Rail Corridor, ICTT

The National Highways Authority of India (NHAI) is set to award road projects of over 1,600 km under the engineering, procurement and contract (EPC) route in the next few months, an indication that momentum is picking up in the sector that has been under pressure in recent times. This is part of the 2,500 km of projects earmarked by the authority for awards this year.

“We have already received bids for five projects covering 502 km and the response is good. The number of bids these projects have received range from as low as 4 to 12. We are satisfied with the response under the EPC,” said a senior NHAI official.

In addition, the NHAI has also called bids for another 225 km and are preparing bids for projects covering 800 km.

Paradip, one of the major ports on the eastern coast and the only major port in Odisha, is on an expansion mode. It plans to invite firms to invest in erection and commissioning of facilities to handle liquid bulk cargoes such as mineral oils and vegetable oils. The port will allot five acres of land to each private investor to erect storage tanks and associated infrastructure for cargo handling and provide the necessary ‘right of way’ to lay pipelines from the oil jetty to tanks.

S S Mishra, Chairman, the Paradip Port Trust, recently said the decision to invite private investment was aimed at maximizing the capacity utilization and to meet the growing demand for liquid bulk cargoes in the

Vizhinjam, Kochi Metro, and Kochi-Palakkad National Investment and Manufacturing Zone.

The Additional Chief Secretary (Finance) will head the committee, which will have the State Planning Board Secretary and the Industries, Transport, Sports and Youth Affairs, and Ports Secretaries as members. The Sec re ta r y, P lann ing and Economic Affairs, will be the member coordinator of the committee, and the heads of the departments concerned will be the special invitees.

The setting up of the committee comes in the wake of the finding that

The official added that these projects will act as a booster for the slowdown-hit infrastructure companies, who are not showing interest in projects under public-private partnership (PPP).

The NHAI had to shift its focus from awarding under EPC after projects offered under PPP mode failed to attract takers. The authority did not find any takers for 20 ‘viable’ projects put up for bids during the current fiscal.

Projects under EPC are virtually risk-free for the contractor, as the government funds the construction. Under this mechanism, the contractor has to quote the cost of constructing or upgrading the road section, and if the bid is accepted, the government funds the project.

The of f ic ia l added that the authority has enough cash to fund

vast hinterland. Although the port has a 6 million tons per annum (mmtpa) capacity in the northern oil jetty, the current usage is only a third — about 2 mmtpa of PoL (petroleum, oil and lubricants) — handled by oil majors such as IOC, HPCL and BPCL.

“We are keen to provide the requisite infrastructure facilities to port users for storage and handling of all kinds of liquid bulk cargoes including PoL, non-PoL cargoes such as benzene, naphtha, ethanol, CBFS and so on, as also various edible and non-edible vegetable oils,” Mishra said, adding that the berth is being dredged to create a draft of 16 metres (14 m at present) to handle vessels of 125,000 dwt size.

there are several bottlenecks in the timely utilization of funds provided for major projects, especially in the initial stage, official sources informed. The funds provided either lapse or are utilized for other schemes by re-appropriation.

The outlay of Rs 846.03 crore will be controlled and operated by the Secretary, Planning and Economic Affairs Department. The amount was provided under a single head in the 2013-14 budget with flexibility to utilize against any of the 10 projects, depending on requirement.

these projects under EPC during the current fiscal.

“Money is not an issue during the current fiscal, as these projects would require only 15 per cent of the total project cost during the year. Also, we do not have to acquire a large amount of land because these projects are to be built on the existing alignment and land required will already be in place,” said the official.

With the award of 2,500 km under EPC, the NHAI would be able to able to improve its award tally for the current fiscal. The authority managed to award only 800 km of projects in 2012-13. During the current fiscal, the NHAI has awarded projects covering 859 km so far -- a substantial portion under EPC. The road transport ministry has awarded projects covering 463 km.

Four joint venture firms have qualified for the Eastern freight corridor project. These are the Inanensa-Ansaldo-EME-BCEPL venture, KEC-Elecnor-Kyosan, the Siemens consortium and the Alstom consortium. The project value is estimated at Rs 1,300-1,400 crore, a senior government official said.

Six international companies, in joint ventures with leading Indian companies, had participated in the pre-qualification bid for system works (electr ical and signal & telecommunication works) of the Bhaupur- Khurja segment (343 km) of the Eastern Dedicated Freight Corridor project, said an official release.

It may be recalled that the World

Bank has agreed in principle to part-finance the project from Mughalsarai to Ludhiana, which has been divided into three phases. The total in-principle loan commitment is $2.725 billion, of which the loan for the first phase of $975 million was sanctioned in May 2011. The loan agreement was signed in October 2011. The loan for the second phase is expected to be around $1,100 million.

Dedicated Fre ight Cor r idor Corporation of India Ltd, a special purpose vehicle, is engaged in the planning, construction, operation and maintenance of dedicated freight corridors and, in the first phase, two corridors are being constructed.

December 16-22, 2013 7REGION FOCUS

Ceramic, porcelain tiles market boom in GCC

Vast market for Led lighting in ME

Stricter laws stimulate fire and safety market

The tiles market in the GCC is

expected to witness a positive trend and manufacturers are

expected to give equal attention to exports

and local market

The mushrooming of infrastructure projects is steadily driving the

market for energy-efficient and intelligent

lighting in Middle Eastern countries

Fire and life safety equipment are becoming mandatory in commercial and industrial buildings

Significant rise in construction activities in the Gulf Cooperation Council (GCC) countries has led to substantial expansion of the ceramic and porcelain tiles market. Amongst the GCC countries, the Kingdom of Saudi Arabia (KSA) and Qatar are experiencing an increase in demand from the building materials industry due to their long term growth plans and World Cup related projects. This growth has witnessed increased participation of foreign players who in turn have contributed to the overall market maturity.

As per Frost & Sullivan estimates, Chinese and European brands supply to more than 50 per cent of the ceramic tiles demand in the GCC, followed by local manufacturers along with small portions from other countries such as Malaysia, India and Egypt.

The heavy inflow of infrastructure investments into the Middle East, especially the Gulf Cooperation Council (GCC), due to a swelling population and upcoming mega events such as the 2022 FIFA World Cup, is creating a vast market opportunity for light emitting diode (Led) lighting.

The region’s gross domestic product is expected to reach 6 per cent in 2013-2014 due to increased oil production, and the government is pulling out all stops to develop infrastructure to support this growth, in turn, spawning more projects that demand advanced l ighting products.

Ideal set-up for LedNew analysis from Frost & Sullivan,

analysis of Led Lighting Market in the Middle East (GCC), finds that the market earned revenues of $115.7 million in 2012 and estimates this to reach $349.8 million in 2017.

The mushrooming of infrastructure projects is steadily driving the market for energy-efficient and intelligent lighting, as several Middle Eastern countries have banned incandescent light bulbs due to their low efficiency. This is an ideal set up for Led lighting to become the fastest growing lighting technology in the region.

“The GCC government’s legislation

The growing economy as well as an expanding construction sector provides a strong platform for investments in the Indian fire and safety market. The increasing number of fire accidents across the country is also highlighting the need for better safety standards and equipment across end-user sectors, especially in government offices, schools, colleges, and public places such as railway stations and airports.

As reported recently, there were about 22,000 fire related incidents across India. In Mumbai, about 300-odd high-rise buildings have been issued notices for not adhering to fire safety norms. Gross violation of fire safety norms enshrined in the National Building Code by builders is a significant reason for the increasing number of fire accidents, as such non-compliance does not entail severe or major penalty.

Rising market revenuesAs a result, market revenues for fire

and gas detection and suppression systems are expected to rise from Rs 13.54 billion in 2012 to Rs 25.32 billion in 2016, according to the new study from Frost & Sullivan titled Analysis of Fire & Safety Market in India. Fire and life safety equipment are becoming mandatory in commercial and industrial buildings, and high-rise apartments too are paying close attention to the safety of property and life.

“The fire and life safety market is a code-driven one, and although building and safety codes have not been enforced strictly in the past, they will become stringent as awareness rises across India,” said Frost & Sullivan’s Environment & Building Technologies Research Analyst. “Demand will continue to go up as local governments and insurance firms take steps to enforce safety regulations and educate end-users on the need for safety compliance.”

Consolidation inevitableUnfortunately, many Indian end-

users still view fire and safety equipment as a non-productive investment. Very

High demandMore than 25 per cent of the

total production in the GCC is currently being exported to non-GCC countries. It has been observed that demand for ceramic tiles is as high 70 per cent compared to a much lower 30 per cent demand for porcelain tiles. The UAE dominates demand for porcelain tiles, as there is high market penetration due to higher customer preferences and affordability. Furthermore, only 12 per

mandating the use of energy-efficient lighting technologies such as Leds in public sector outfits, common public spaces, utility services, and commercial buildings has been a shot in the arm for lighting vendors,” observed Kumar Ramesh, Industry Manager, Environmental & Building Technologies Practice, Middle east and North Africa, Frost & Sullivan.

F u r t h e r m o r e , t h e r i s i n g environment conscious all over the world has boded well for sustainable and energy-efficient lighting such as organic Leds (OLEDs), which is the next generation of Leds. By switching to Led lighting, the GCC governments are also looking to reduce their carbon footprint drastically.

Curbed potentialA l l t h e s e m e a s u r e s

notwithstanding, the high initial costs of Led lighting has curbed their potential to some extent. Unless the governments of every country establish international standards, LED lighting will have to strive hard to

cent of the porcelain tiles produced in the GCC are currently exported to non-GCC countries as the remainder is consumed in the GCC itself.

The major challenges for the tiles market in the GCC markets are high degree of price sensitivity and emphasis on high quality. Additionally, availability of alternate products such as vitrified tiles is the key threat challenging the growth of ceramic and porcelain tiles market in the GCC.

According to Frost & Sullivan

estimates, as high as 60 per cent of new buildings in the UAE opt for vitrified tiles as these are more durable and long lasting compared to ceramic tiles. However, the influx of Chinese products has forced many

break through customer resistance. Additionally, due to the highly

c a p i t a l i n t e n s i v e p r o d u c t i o n process using raw materials such as semi-conductors, Led lighting manufacturers are hard pressed to obtain funding from either the government or private investors, which hampers market growth.

Acknowledging these issues, market participants are educating customers about the long-term cost benefits of Led solutions as well as investing in R&D and technology upgrades to lower the installation costs.

While these efforts will bring down costs, it will also open up a wider range of options and applications of Led lighting technology available at competitive price.

“Providing high-standard lighting solution will guarantee growth in demand and despite its high initial costs, consumers will increasingly prefer Leds to conventional lighting technologies for i ts long-term benefits,” noted Ramesh.

often, basic standards are not met, and even in places where equipment is installed, only a few number of occupants are trained to use fire and safety devices.

Moreover, intense competition, price-sensitive end-users, and the lack of product differentiation act as barriers to the development of this highly fragmented market.

Consolidation is inevitable as companies look to adopt the inorganic model for growth to stay competitive. Presently, big companies are securing the market share through acquisitions and expansions, and by gaining access to tier-3 cities.

“Competitive pricing, superior product performance, after-sales support, efficient technology, reliability, and strong contractor and customer relationships will play a vital role in helping companies establish a foothold in the Indian market,” revealed the analyst.

Maximum opportunities“Although business is coming in from

new projects in the construction sector, focus on retrofit segment will open up immense opportunities over the next few years. Critical infrastructure including mass transportation like railways, Metro rail, intelligent transportation systems and airport security will offer the maximum opportunities for the fire and life safety systems.”

From a technology perspective, mass notification services, integration of voice evacuation systems, and use of addressable systems to find the exact location of the fire, etc are expected to gain grounds in India.

Integrat ion of f i re detect ion systems, surveillance systems with building management systems will continue along with increased use of IP and wireless technologies replacing traditional telephone lines which is the primary alarm communication method now. The Indian market is also witnessing the usage of multi-sensor detectors combining up to four detectors: regular photo sensor, a light sensor, a heat sensor, and a carbon monoxide sensor.

GCC manufacturers to target only the high-end market, as Chinese products dominate the low-end market.

“Augmenting local production, aggressive marketing, and leveraging the existing distribution structure will bring down imports, which is currently one of the major challenges being faced by the tiles market. Product customization, increasing product availability through prudent sales channel and applying innovation in manufacturing to cut down cost should be short term focus for the industry,” said an Environment and Building Technologies analyst from Frost & Sullivan.

Better profit marginsMost of companies present in the

GCC are planning to enter porcelain supply, as distributors fetch better profit margins for imports from China. Frost & Sullivan analysis forecasts that $4.30 trillion would be spent on the construction sector in the GCC over the next 10 years.

Hence, the tiles market in the GCC is expected to witness a positive trend and manufacturers are expected to give equal attention to exports and local market. Similarly, despite a low demand for porcelain owing to cost-consciousness, as the market progresses in its life cycle, penetration of porcelain is likely to increase.

December 16-22, 2013 8REAL ESTATE

Pune’s Gen Z opulence

Pune is drawing a lot of interest from luxury home seekers, both from within the city and from Mumbai and beyond. The reasons are not hard to find:

Price points for Pune luxury homes are lower than for comparable options in over-heated cities like Mumbai.

Luxury homes in Pune are more spacious and have superior individual specifications as well as common-use luxury amenities.

Pune’s pleasant climate provides the ideal setting for luxury homes – unlike in Mumbai, there is no need for wasteful year-round air conditioning.

The investment value of luxury homes is very high, as there is constant demand for them.

The Pune luxury homes market is

Luxury home locations provide scenic natural splendour as well as

excellent connectivity to Pune’s economic nerve

centres

Definition of luxury apartment

Given that developers continue to call every project luxurious, it is important for buyers

to understand the definition, context and

meaning of luxury

In Indian real estate, ‘luxury’ is by far the most-abused word by residential project developers. Any project offering basic amenities is classified as ‘luxury’ in marketing materials, advertisements and pitches. We have actually seen projects wherein 1 BHKs are being offered along with 2 and 3 BHK units being touted under the luxury tag. What is wrong with this picture?

In the first place, luxury living in any context must necessarily involve generous living spaces. Going by that alone, a 1 BHK cannot qualify as ‘luxury’ by any stretch of imagination. Secondly, the interpretation of luxury in the Indian context also includes an element of exclusiveness.

In other words, the buyer of

a luxury apartment -- apart from superior amenities and facilities -- also expects to live in a project which offers a certain socio-economic standard as a neighbourhood. Therefore, when a project offers one-bedroom apartments, it automatically disqualifies itself from the ‘luxury’ classification.

Understand definitionGiven that developers will continue

to call every project luxurious, it is important for buyers to understand the definition, context and meaning of luxury in Indian residential real estate. But before this, let us first examine the investment dynamics of genuine luxury homes. Buying a luxury apartment for self-use already involves the need for multiple checks and validations in any case. However, when it comes to buying such an apartment for investment, the need for 360-degree due diligence is even higher.

After all, the final objective is returns on investment. If one is considering investing in a luxury apartment, one must understand what the hallmarks of genuine luxury in residential real estate are:

Om Ahuja CEO, Residential Services, Jones Lang LaSalle India

LocationThis is one of the most crucial

parameters. Though central location is certainly an important qualifier for the luxury tag in India, a project that stands at a central city junction beset with traffic congestion does not provide a luxurious experience. No matter if a project is ‘normal’ or ‘luxurious’, it is not home if one cannot reach it or get out of it. Investors need to look at many location parameters, such whether the project benefits from approach roads that allow for convenient vehicular egress and ingress.

Also, very few people buy luxury homes and then hide them from the rest of the world. Most owners of such a home want others to see and admire their properties, and to entertain people there. Noise and air pollution apart, this purpose is not achieved if the project lies in a chronic traffic gridlock zone.

ViewFinally, the owners themselves

must have ready access to markets, schools, colleges, hospitals and their offices. And before we forget -- the most spectacular edifice of

luxurious living falls flat on its face as an investment bet if it is located in a crime-ridden area. The view available to the project’s occupants is also very pertinent. A project may be genuinely luxurious in its internal specifications and amenities. However, if it overlooks a slum or congestion-prone highway, a graveyard or a hospital, both rental and resale potential take a beating. The availability of a rooftop swimming pool and a jacuzzi in every bathroom will not make a difference - a very basic ingredient of the luxury experience is unavailable.

Floor-to-ceiling heightThis is one of the most important

parameter to evaluate a project’s true ‘luxury’ value. If the floor-to-ceiling height is less than 12 feet, the luxury feel is severely compromised. Moreover, apartments with low ceilings do not lend themselves optimally for tasteful interior decoration.

This means the number of people living in the project. There is no ideal thumb-rule for this parameter -- however, it is generally understood that a one-acre project should not house more than 60 families. Anything

city, commuting from various parts of the city is easier. As in Mumbai, the demand for luxury residential units in Pune is highest in areas that provide ready access to the central business district and employment nodes. However, unlike Mumbai, these focal

points are quickly accessible from various points of the city.

This factor has played an important role in boosting the demand for luxury housing even in non-central areas. While traditional luxury home locations such as Sahakarnagar, Boat Club Road and Kalyaninagar continue to see a lot of demand, areas like Baner, Aundh and Ambegaon are also very successful hotspots for luxury projects.

These locations provide scenic natural splendour as well as excellent connectivity to the city’s economic nerve centres. This aspect has proved to be a major draw for Pune’s Generation Z luxury home seekers. Again, there are valid reasons for this:

The unique advantages of these locations allow them to provide a lavish lifestyle to the elders in their families in serene, convivial surroundings without compromising on their need to be connected to their workplaces.

The i r ch i l d ren g row up i n neighbourhoods that have been specifically tailored to a certain economic profile.

Future growthIn Pune, luxury homes projects

do not co-exist with unsafe, high-density tenement developments and are invariably close to major international schools and top-of-the-line hospitals.

Thanks to these factors, the premium housing segment in Pune has continued to thrive even as the market for luxury homes in Mumbai declined steadily. In short – both from an ownership as well as investment perspective, luxury housing in Pune will thrive and grow in the future.

Kishor Pate CMD, Amit Enterprises Housing Ltd

not restricted to ugly, polluted, over-developed and overcrowded ‘prime’ locations.

Compact cityThe last factor is probably the

ultimate selling point for luxury homes in Pune. Since it is a relatively compact

more means that the project does not qualify as ‘luxury’. This is because the available amenities are shared by too many people, destroying the project’s ambience, exclusiveness, convenience and charm.

ParkingAgain , there is no spec i f ic

yardstick by which to measure parking sufficiency. The commonly followed norm is that the number of bedrooms in a project should equal the number of available car parks. A 3 bedroom apartment should therefore have three parking spaces within the project. Though many luxury projects in the larger cities now offer puzzle-type mechanized parking, the fact is that HNI buyers and tenants actually prefer normal or stack parking.

ElevatorsThe mere provision of branded

elevators does not suffice in a luxury project. The project must also have service elevators with separate entries, to ensure that domestic help and external suppliers do not populate the elevators and lobby being used by residents. Investors must also ensure that the elevators are spacious enough to accommodate a stretcher.

SecurityInhabitants of a luxury project

do not expect to have to install ugly security grilles over their front doors and windows. They expect to have the assurance that their families and property are safe in all respects. A genuine luxury project has uncompromising human security as well as electronic surveillance and safety measures firmly in place.

As is evident, it takes more than a mere word like ‘luxury’ to place a project head and shoulders above the rest -- and thereby make it a worthwhile investment option. While one cannot stop developers from misusing the luxury tag, it is certainly possible to understand what true luxury -- even in the Indian context -- really is.

Representation only

December 16-22, 2013 9EqUIPMENT

SDLG launches Reliable G9190 motor grader

SDLG’s range of wheel loaders offers maximum

performance

Leading Chinese construction equipment manufacturer, Shandong Lingong Machinery Co Ltd launched the 148kw powered by Deutz Tier III engine with highly productive G9190 motor grader at Excon India 2013 last month.

The new machine – from the brand renowned for its excellent value – features a hydraulically-controlled movable blade for ultimate precision and performance.

If you’re looking for a motor grader

Leading Chinese construction equipment manufacturer, Shandong Lingong Machinery Co., Ltd., showed four models from its range of robust and reliable wheel loaders at Excon 2013. The company’s range, which starts from 7 t — 27 t, are renowned for their excellent value and SDLG is currently one of the world’s largest manufacturers of wheel loaders.

China’s leading wheel loader manufac tu re r, SDLG, p roud ly displayed its range of powerful and reliable machines at Excon 2013India. The four units shown on the company’s booth ranged from the 11 ton LG936L to the 23.5 ton LG979.

LG936L – optimal operator comfort (ARAI Approved)

The 11 t LG936L features a single-lever hydraulic control system for simplicity and ease of operation. The cab’s shock-absorbent seat, wrap-around glass for increased visibility, air-conditioning and heating systems ensure that operators have a comfortable ride on any terrain, in any weather. The machine also features an advanced Deutz TIER III engine which offers lower fuel consumption and noise with ultimate power.

The in house axles and most efficient disc brakes bring better safety in operation. Also it has the maximum dump height in his class.

LG938L – full loads every time (ARAI Approved)

The 11 t L938L wheel loader is designed for optimum break-out force to ensure a full bucket load every cycle

that offers high productivity, reliability and precision grading, look no further than SDLG’s new G9190, which was launched at Excon India 2013 in Bengaluru.

The 148 kW motor grader is powered by the German-designed

– improving productivity and efficiency. The machine’s long wheelbase and high tipping load mean it stays stable — even on rough terrain. The machine also features the powerful Deutz Tier III engine, which is perfectly matched to the hydraulic pump for further enhanced performance.

But it’s not just bucket work where this wheel loader excels – there are a range of optional attachments including a log grapple, quick coupler and pallet fork for increased versatility while additional buckets, including rock buckets and side-dumping buckets give more flexibility on loading duties.

LG958L – reliability in action (ARAI Approved)

The 17 t L958L wheel loader features Deutz Tier III Engine with ZF power shift transmission. Configured to allow four forward, and three reverse settings, this single-lever control transmission makes the machine easy to operate. The structural components are specially adapted for job site conditions and put through rigorous strength tests to ensure the durability of parts.

As wi th al l SDLG products, customers can rest assured that parts and service support are available throughout the machine’s lifetime. SDLG partners with its customers to maximize machine uptime and offer fast, effective maintenance throughout India and across the world. We have showcased our aftermarket on site parts and service support for fleet owner.

Deutz Dalian electronic injection Tier III engine and offers premium performance on any terrain – from highways and airports to construction and agricultural applications.

SDLG is renowned for its robust and reliable machines and is one of the world’s leading manufacturers

of wheel loaders, excavators and road machinery. The

company has a global support a n d p a r t s d i s t r i b u t i o n

network that is growing at a fast pace.

The G9190 motor grader offers customers a 13ft (3,962mm) moldboard as standard for wider grade coverage with several other optional attachments like ripper, scarifier & dozer blade.

The turbocharged Deutz Stage III engine not only saves energy but maximizes performance. The low-noise engine is perfectly matched to the grader’s ZF transmission control system, allowing the operator to select the correct gear depending on load, for optimum efficiency and power.

The new motor grader offers enhanced grading performance. With optimized weight distribution, the machine has an impressive 82 kN tractive force while its blade is operated via the unit’s Moveable Blade Control System (MBCS) for ultimate grading precision. The blade can rotate through a full 360° and incline up to a 90° gradient.

A motor grader’s productivity is

Model specifications - G9190

Operating weight 15,800 kg

Tractive force 82 kN

Maximum blade inclination 90°

Blade rotation angle 360°

Engine rated power 148 kW

Engine rated speed 2,400 rpm

SDLG launches high performance wheel loader LG979

Leading Chinese construction equipment manufacturer, Shandong L ingong Mach inery Co. , L td . , launched the 226kw powered by SDLG Tier III engine with highly productive LG979 wheel loader at Excon India 2013. The new machine – from the brand renowned for its excellent value – features an electronically-controlled engine & transmission ultimate productivity and performance.

If you’re looking for a wheel loader that offers high productivity, reliability and excellent aftermarket support, look no further than SDLG’s new LG979, which was launched at Excon India 2013.

The 226 kW wheel loader is powered by the SDLG electronic injection Tier III engine and offers premium per formance on any application like truck, wagon, hopper,

wood & barge loading in all type of minerals.

SDLG is renowned for its robust and reliable machines and is one of the world’s leading manufacturers of wheel loaders, excavators and road machinery. The company has a global support and parts distribution network that is growing at a fast pace. The LG979 wheel loader offers customers a various size of buckets 3.5 cum – 6 cum and several other attachments like wood grappler, side dump, fork etc.

The turbocharged SDLG Stage III engine not only saves energy but maximizes performance. The low-noise engine is perfectly matched to the loader’s HT200 transmission control system, allowing the operator to select the correct gear depending on load, for optimum efficiency and power.

The new wheel loader enhanced the load ing per fo rmance and reliability. The wheel loader has

Model specifications - G979

Operating weight 15,800 kg

Tractive force 82 kN

Maximum blade inclination 90°

Blade rotation angle 360°

Engine rated power 148 kW

Engine rated speed 2,400 rpm

Model specifications

LG936L LG938L LG958L

Operating weight 10,700 kg 10,700 kg 16,600 kg

Maximum tractive force ≥105 kN ≥105 kN ≥150 kN

Minimum turning radius （outside of rear tire（ 5381mm 5381mm 6036mm

Maximum breakout force ≥96 kN ≥96 kN ≥180 kN

Maximum gradeability 30° 30° 30°

Engine rated power 97 kW 97 kW 162 kW

Engine rated speed 2,200 rpm 2,200 rpm 2,200 rpm

determined through the blade down force and draw bar pull. SDLG’s G9190 boasts a world-class down force of 8,386kg to maximize the cut depth without front-end drift.

The G9190 motor grader’s cab features the latest generation of operator comforts, with a new falling-object and roll-over protection structure (FOPS/ROPS) and wrap-around glass for enhanced visibility. The new cab design incorporates a more ergonomic control layout to improve precision. And the operator can work in comfort with the new shock-absorbent seat that minimizes vibration during operation.

proven ZF wet brake axles which enhance the stability and high torque during operation.

The G9190 motor grader’s cab features the latest generation of operator comforts, wi th a new falling-object and roll-over protection structure (FOPS/ROPS) and wrap-around glass for enhanced visibility. The new cab design incorporates a more ergonomic control layout to improve precision. And the operator can work in comfort with the new shock-absorbent seat that minimizes vibration during operation.

December 16-22, 2013 10EqUIPMENT

New solutions meet demand for more machine efficiency

SKF launched advanced products and technology solutions for India’s construction industry. The company is focused on supporting Indian original equipment manufacturers (OEM) in their domestic and global growth and to meet increasing demands for greater productivity, reliability and safety in construction machines.

SKF is taking a more holistic approach that includes and considers the needs of both equipment builders and the users of the equipment.

By taking what we call the SKF Lifecycle Management approach, we utilize the knowledge of both our design teams and our field application specialists to create next-generation designs that reflect real world conditions, and to recommend maintenance practices that maximize the equipment’s life and reliability.

By looking at Tota l Cost of Ownership (TCO), we can show both the OE and end-user customer how to maximize the value of the equipment and deliver the lowest possible lifecycle cost.

A strong global expert engineering team and knowledge of construction machine markets is coupled with key products that can deliver specialized solutions for the industry. Complete wheel end units for driven wheels, patented sealing products and novel lubrication solutions for hydraulic hammers are just three examples of the extensive range of products and solutions that are offered by SKF.

Wheel-end solutionsFor driven wheels, SKF has a range

of standard and customized hub solutions that are pre-set in the factory and incorporate bearings and heavy-duty seals for harsh environments. In fact, SKF has pioneered every major advance in wheel-end technology since the invention of the automobile and this has been also used in the construction sector.

With expertise in not only bearings but seals, lubrication, and electronics integrated into mechanical parts to

ExxonMobil Lubricant Portfolio

control machine agility, SKF is able to look at wheel-end technology from a systems viewpoint. The result is improved functionality, reliability, efficiency, and safety. Plus, our virtual testing capability shortens the time to market.

Sealing solutionsSeal ing solut ions f rom SKF

incorporate a wide range of sealing offer ings. SKF Mudblock, SKF Trackstar and SKF Hydraulic Cylinder

compound used in the SKF Mudblock seals that differentiates them in the market as they are compatible with most transmission oils and greases and also enables low friction with the same sealing performance. This is combined with good wear and ageing resistance.

Trackstar SealsSKF Trackstar seals are a patented

design for track pins in undercarriage applications in tracked typed tractors

Hydraulic Seals SKF has launched a range of

hydraulic seals to meet the hydraulic cylinders industry’s needs for improved performance. By consolidating the product offerings from SKF and the acquired companies Economos and Polyseal, SKF can now present a fully consistent range and catalogue of hydraulic seals, for both OEMs and the aftermarket. • Available in metric and imperial units • Supports a complete system solution• Range inc ludes the “S1S” polyurethane U-cup for heavy-duty rod sealing systems and an additional three styles of polyurethane piston seals • Updated grade of SKF ECOPUR polyurethane features improvements for seal function in heavy-duty appl icat ions wi th h igh system pressure and temperature• Range now includes thousands of standard articles from more than 40 different designs of rod seals, piston seals, wipers, static seals and guide rings• Broad range of design and material choices for tailor-made solutions also available • Provides a complete sealing and guiding system to develop a wide variety of hydraulic cylinders

Lubrication solutionsSKF will present a wide range

of lubrication solut ions for the construction machinery industry: from application-specific lubricating oils and greases to automatic lubrication systems.

The extensive know-how of SKF in bearings and motion technology forms the basis for its highly efficient lubrication systems. Having acquired the American company Lincoln Industrial, a leading supplier of lubr icat ion systems, tools and equipment, SKF now offers one of the biggest lines of products and services on the market; tailor-made

solutions for customers in a variety of industries and for a wide range of tasks.

With this broad foundation, SKF offers solutions for manually operated grease guns, lubricating oils and greases of all kinds, as well as a complete range of automatic lubrication systems. It even has solutions for special applications like hydraulic hammers and teeth in open gears.

SKF Hydraulic Driven Lubricator

SKF Hydraulic Driven Lubricator offers end-users t ime and cost savings by cutting re-lubrication intervals and extending the lifetime of the chisel and bushings. For the OEMs, the SKF Hydraulic Driven Lubricator delivers the benefits of automated lubrication to end users in a cost-effective way that is simple to integrate into new and current machine designs.

The lubricator is mounted directly onto the tool and connected to the machine’s existing hydraulic system. It is equipped with a standard-thread cartr idge that is very easy and convenient for operators to replace.

I t a v o i d s t h e c o m p l e x i t y a s s o c i a t e d w i t h c e n t r a l i s e d lubrication systems while delivering time and cost savings by eliminating the frequent stops required for manual lubrication; it supports the extension of maintenance intervals, and contributes to a safer operating environment by reducing operator interventions on the machine.

The lubricator’s technical highlight is its patented, sophisticated drive system. Mounting on a hydraulic hammer places very high demands on the lubrication unit. Aside from dirt and dust encountered during operation, the unit must also withstand hard jolts and vibrations. When designing the HS04, a purely hydraulic solution whose reliability has been proven in numerous field tests was selected instead of a mechanical power transmission.

The lubricator can be used for more than just hydraulic hammers. Many attachments and additional tools for construction machinery, such as demolition grapples and screening buckets do not have their own power supply, are hydraulically driven, and have points that require lubrication.

ExxonMobil Lubricants PVT LTD featured the advanced lubricant technology of the ExxonMobil Fuels, Lubricants and Specialties Marketing Company, a division of Exxon Mobil Corporation at Excon 2013.

ExxonMob i l showcased i t s advanced Mobil DTE 10 Excel Series of hydraulic oils that can help companies in the construction and mining industry enhance equipment performance and maximize productivity.The event also showcased how Mobil SHC gear lubricants offer valuable energy efficiency benefits across a wide range

of industrial gearbox applications“Every day, ExxonMobil’s family

of premium oils and maintenance solutions help enable successful companies boost their productivity, reduce their energy consumption and increase profitability,” said Shankar Karnik, Asia Pacific Mobil SHC Brand Manager, ExxonMobil Lubricants Pvt Ltd. “It has advanced technology behind our Mobil SHC-branded synthetic lubricants and Mobil DTE-branded turbine oils.”

“Today, as the construct ion equipment industry grows increasingly more competitive, companies are

looking for new and innovative ways to operate more efficiently

and cost effectively, by leveraging ExxonMobil’s

unique application e x p e r t i s e a n d range of premium-p e r f o r m a n c e p roduc ts , l i ke the Mobil DTE 10 Excel Series of hydraulic fluids, c o m p a n i e s i n the construction

and mining sector can help enhance

their ability to reach their operation goals

and gain a unique advantage in the marketplace,” he added.

ExxonMob i l l ub r i can t s a re expertly formulated to help reduce maintenance costs, extend oil drain intervals and deliver exceptional protection for key components, even under the extreme weather and load conditions.

T h e c o m p a n y ’ s a d v a n c e d t echno logy o f f e r i ngs fo r t he construct ion equipment sector include:

Mobil SHC Gear™: Next-generation supreme performance gear lubricants reengineered for optimum equipment oil life in gearboxes, even under extreme conditions. In statistically validated laboratory tests and field trials, Mobil SHC Gear fluids exhibited energy savings of up to 3.6 percent compared with conventional oils.

Mobil DTE 10 Excel: Developed through extensive research and testing with leading original equipment manufacturers, Mobil DTE 10 Excel Series oils are engineered to better address the lubrication demands of high-pressure industrial and mobile equipment. This award-winning series of hydraulic oils not only exceeds current standards of hydraulic oil performance but can also help to deliver energy savings

versus ExxonMobil's conventional hydraulic oils, leading to improved mach ine r y pe r fo rmance w i t h increased productivity and cost savings.In controlled laboratory efficiency testing, Mobil DTE 10 Excel was shown to provide up to a six percent improvement in hydraulic pump efficiency compared to a reference fluid when operating in standard hydraulic applications.

Mobilgrease XHP: Multipurpose lithium complex greases that are designed to deliver exceptional performance for a wide range of applications and operating conditions, including high temperatures, water contamination and shock loading and extended re-lubrication.

*Mobil DTE 10 Excel was awarded 2010 “Product of the Year” from a

Seals are just three of the seal types within SKF’s extensive range of sealing products.

Mudblock Seals SKF Mudblock seals are widely

used in wheel-end applications in the front and rear axles where the requirements are to provide increased life under harsh conditions and to ensure the exclusion of external contamination.

SKF Mudblock seals integrate both seals and wear sleeves. This feature reduces the need for costly shaft machining. These seals incorporate a multi-lip sealing design to keep out contaminants.

SKF has developed a nitr i le

and have the function of retaining oil internally in the track pin and helping avoid the entrance of external contaminants. These seals build on SKF’s long experience of designing with the key sealing materials such as polyurethane and rubber molded into metallic reinforcement. Polyurethane, used in this seal, reduces the wear and increases service life.

SKF has many patented designs and has successfully solved sealing problems associated with track pins for several global OEM producers. As well as offering protection against external contamination, SKF Trackstar seals improve track operations and reduce maintenance costs.

top industry magazine in Poland. In addition, the product achieved a bronze award in the maintenance category for Plant Engineering Magazine's "Product of the Year" Awards in the United States.

*The energy efficiency design is a trademark of Exxon Mobil Corporation or one of its subsidiaries. Energy efficiency relates solely to the fluid performance when compared with conventional reference oils of the same viscosity grade in gear applications. The technology used allows up to 3.6 percent efficiency compared with the reference when tested in circulating and gear applications under controlled conditions. Efficiency improvements will vary based on operating conditions and applications.

December 16-22, 2013 11INTERNATIONAL

Balfour Beatty sells Scandinavian rail business

Contractor Balfour Beatty has sold its Scandinavian rail business to Strukton Rail for £4 million ( 4.8 million) in cash. The company said the deal equated broadly to net asset value and was expected to complete in January 2014. Balfour Beatty is seeking to sell all of its mainland

European rail operations – part of its construction services business – as part of a streamlining strategy.

It sold the Spanish side of the business to its local management in March, and said it was in discussion with potential buyers for the German business and has started preliminary

discussions for the Italian business. Other businesses sold by Balfour Beatty this year include its UK facilities management operation, Balfour Beatty WorkPlace, which was bought by DGF Suez Energy for £190 million ( 221 million).

Volvo CE buys Terex hauler business

African infra projects worth $223 bn underway

ADB funds Pakistan coal energy plant

JCB in €180 million UK expansion

UK outlines €451 billion infra plan

Terex has agreed to sell its rigid and articulated hauler business to Volvo Construction Equipment for $160 million. The deal, which is subject to regulatory approvals, includes the Terex plant in Motherwell, UK, and a 25.2 per cent share of Inner Mongolia North Hauler Joint Stock Co, which produces and sells rigid haulers under the Terex brand in China.

The acquisition will give Volvo CE a range of rigid haulers from 32 to 91 tons capacity, extending its coverage in the quarrying and light mining sectors. The Motherwell plant also makes three articulated hauler models. Volvo already has competitor machines in its range, but says the Terex models would give it opportunities for growth in emerging economies.

There are currently 322 infrastructure projects underway in Africa with an individual project value of over $50 million and a combined value of $223 billion.

These projects – all of which had broken ground by, but not yet been commissioned at, 1 June 2013 – highlight the continent’s huge potential in terms of development. The top sectors by investment value are energy and power, transport, mining, real estate and water, followed by oil and gas. According to research by Deloitte, 36 per cent of the total number of large projects under construction at June 1, 2013, fell into the energy and power sector, and 25 per cent were in transport.

In terms of geography, development is strongly concentrated in Southern and East Africa, with projects in Southern Africa representing 38 per cent of the total, followed by East Africa with 29 per cent. West Africa has 21 per cent of the total number of projects while North Africa and Central Africa lag at 7 per cent and 5 per cent respectively.

Deloitte said 56 per cent of the projects it identified were owned by governments, while 4 per cent of total projects collected were jointly owned

Terex, which has been manufacturing trucks at Motherwell for more than 30 years, said the business no longer fitted with its lifting and material handling business, predominantly cranes and aerial platforms. Regulatory approvals are required, but a spoksman for Volvo CE told IRN that the company does not anticipate significant anti-trust issues.

The business being sold reported revenues of $370 million in 2012 with operating profits of $33 million, although profit levels have fallen this year, with the first nine months of 2013 seeing sales of $172 million and operating profits of $5.5 million.

Volvo CE President, Pat Olney said, “This is a strategic acquisition that offers Volvo CE considerable

The Asian Development Bank (ADB) has approved a $900 million loan for a new supercritical coal power generation unit in Pakistan. Pakistan currently has only one coal-fired power plant in operation generat ing 0.7 per cent of the generation mix.

The new unit will generate an additional 600 mw of electricity for the national energy grid. The coal-fired generation unit will be built at an existing power plant in the town of Jamshoro in Sindh province, about 150 km east of the Karachi.

It will use the latest emission control equipment to ensure cleaner

C o n s t r u c t i o n e q u i p m e n t manufacturer JCB plans to invest £150 mill ion ( 180 mill ion) over five years to expand its operations in Staffordshire, UK. The funds wi l l support construct ion of a new 32,516m2 factory for JCB Cab Systems in Beamhurst, near Uttoxeter, to replace the current smaller facility in Rugeley.

JCB said the new building would enable it to in-source production of cabs currently made by third party suppliers in Europe. In addition, the investment will support expansion of JCB’s production operations in Rocester with an additional 11,706m2 of manufacturing space to increase hydraulic cylinder production.

Furthermore, a new 20,439m2 factory will be built on the Harewood Indus t r ia l Es ta te in Chead le , Staffordshire. This facility will expand

scope for growth. The addition of a well-respected range of rigid haulers extends the earthmoving options for customers involved in light mining applications at a time of renewed confidence in the sector.

”The addition of TEL’s articulated hauler range will enhance our position in this segment, particularly in high-growth markets. We believe that the Motherwell facility and its global team members, as well as the current distribution partners, are valuable to the success of the business in the future.” The transaction is expected to be finalised during the second quarter of 2014. The transaction includes the use of the Terex brand for a transitional period.

emissions than the existing heavy fuel oil-fired generators and subcritical boi ler technology that is more commonly used. The new plant will also generate electricity at a lower cost, saving $535 million per year on Pakistan’s fuel import bill compared with oil-fired generation.

The development is part of broader government efforts to decrease electricity tariffs. Coal-fired power plants, using cleaner technology, provide an environmentally sound and cost-effective medium-term energy solution at a time when the country’s natural gas reserves are dwindling.

JCB’s existing earthmoving and compact products operations, and allow utility products to relocate to this site from the current smaller factory elsewhere in the town. JCB’s exist ing f inance and insurance offices in Rocester wil l also be relocated to new purpose-designed office accommodation at nearby Harper Meadow in Denstone.

JCB said the growth plans were part of a wider, global strategy to expand sales and increase market share. It said projected growth in machine output from the Staffordshire factories would be supported by an increase in production of components from factories elsewhere in the UK, including engines from JCB Power Systems in Foston, Derbyshire, and axles and gearboxes from JCB Transmissions in Wrexham, North Wales.

by governments and public private partnerships, while private investors owned 39 per cent of the projects.

As far as private investors are concerned, 17 per cent were European and US investors, while private domestic ownership represented 10 per cent. Private companies from Brazil, Russia, India and China represented 2 per cent of the ownership.

Deloitte also found that development finance institutions such as the World Bank and the African Development Bank (AfDB) funded 36 per cent of the projects.

Indeed, the AfDB and Made in Africa Foundation (MIAF) this year launched an infrastructure fund for the continent

that aims to raise up to $500 million by the first half of 2014. The AfDB has reported that investment of U$ 93 billion a year was needed to 2020 to close Africa’s infrastructure deficit. Meanwhile, Deloitte said domestic governments funded 8 per cent of projects in Africa, while European and US-based investors funded a further 15 per cent, and Chinese investors funded 10 per cent of projects.

Private domestic investors funded 11 per cent of the projects collected and 7 per cent of projects were funded by foreign institutional investors. Across the continent, European and US contractors are building 37 per cent of projects and Chinese construction corporations are building 12 per cent. The balance of contracting parties came from private domestic companies and contractors from countries such as Japan, South Korea, Brazil, Australia and South Africa.

Editor : Bina VermaEditorial Team: Dilip Phansalkar, Paresh Parmar, Remona Divekar Designer: Rajen Mistry

Business Team: Milind Joglekar (9833357005), Shantanu Baraskar (9820904795), Seema Kohli (9820904931)Email: contact@konstructionreview.com, editor@mmronline.com

No part of the contents of Construction Industry Review, in abridged or unabridged form, can be reproduced without the written permission of the Editor. CIR does not accept any

responsibility for statements and opinions expressed by the authors.

The UK government has outlined a new national infrastructure plan that now proposes over £375 billion ( 451 billion) of public and private investment. The plan sets out investments in energy, transport, flood defense, waste, and water and communications infrastructure up to 2030 and beyond.

It includes the development of a new nuclear power station in North Wales, a further £50 million ( 60 million) for the redevelopment of the railway station at Gatwick Airport and improvements to the country’s road network.

In addition, the government said a UK guarantee had now been agreed for the £1 billion ( 1.2 billion) London Underground Northern Line rail extension, while a new long-term plan for flood defences was also being developed. The UK government also plans to scale up the sale of public assets and said it was considering selling its shareholding in Eurostar, the rail service connecting the UK to France via the Channel Tunnel. Insurance companies also announced plans to invest £25 billion ( 30.1 billion) over the next five years in national infrastructure projects.

December 16-22, 2013 12

EVENTS

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NEwS

Smart 3D 2014 at Rolta & Intergraph Technology Conference 2013

Printed & published by Bina Verma on behalf of Asian Industry & Information Services Pvt. Ltd., and printed at Amruta Print Arts, 205, Tantia Industrial Estate, J. R. Boricha Marg, Opp. Kastruba Hospital, Mahalaxmi, Mumbai 400 011 and published at 1st Floor, Feltham House, 10, J. N. Heredia Marg, Ballard Estate, Mumbai 400 001. Tel.: 022-2266 0623. Editor: Bina Verma Annual Subscription : Rs. 5,000/-

I n t e r g r a p h E x e c u t i v e V i c e President EMIA Philippe Marceau, during his presentation at the Rolta & Intergraph Technology Conference 2013 in Mumbai this month, presented Intergraph Smart 3D 2014, which boasts hundreds of enhancements

December 20-22, 2013Building Materials ExpoChennai Trade Centre, ChennaiA platform for the development of building and construction industry where this expo will help to improve the performances of the professionals, satisfy the needs and demands of their clients and customers. Contact: Manoj Kumar, Prompt Tradefairs(India) Pvt. Ltd. 621, 3rd Floor, SIRE Mansion Thousand Lights, Chennai Tel: 044-42323362/42142438 Fax: 044-42142438

January 03-05, 2014Infratech YMCA Club, Ahmedabad This exhibition will give a unique opportunity to technical experts, professionals related to steel, cement, power and mining industries to become aware of modern market trends and latest business opportunities and strategies associated with these sectors which will help in the overall betterment of these sectors. Contact: Event Manager, 33 New Yourk trade Center, Nr. Thaltej Circle, SG-Highway, Ahmedabad Tel: +91-9099909825 Mob: +91-9227688026

February 13-16, 2014Constro 2014International Exhibition on Construction Machinery, Material Methods and Projects, Pune Contact : Sharad Bavadekar, Chairman, Constro-2014, Pune Construction Engineering Research Foundation (PCERF), 6 Shriniwas Building, Patwardhan Baug, Erandwane Co-Op Hsg. Society, Pune 411 004 Telefax: 91-20-2544 7356 / 2544 7748 infoconstro@gmail.com www.constroindia.org

February 21-23, 2014 PlumbexIndiaBombay Convention & Exhibition Centre, Mumbai This show will be an ideal platform for participants to showcase their latest products and services related to the building and construction sector. Contact: AIM Expositions Pvt. Ltd. AIM House, 78 Pankaj Society, Near Anjali Cross Roads, Bhatta Ahmedabad Tel: +(91)-(79)-40269999 Fax: +(91)-(79)-26620020 Contact person: Pooja Patel Tel: +91-79-26620020

February 26-28, 2014iBART EXPOGujarat University Exhibition Hall, AhmedabadOne of the leading trade fairs for the building construction industry in India, which will showcase the latest products and equipment in brick, roof and tile category. Contact: Gattaca Communications Communications House, 26 York Street, London, United Kingdom Tel: 044-2032-395572 Fax: 044-1538-398987

March 13-15, 2014Concrete Show – 2014Concrete Material & Machinery, Mumbai Contact: UBM India, Unit No. 1&2, B-Wing 5th floor, Times Square, Andheri-Kurla Rd, Marol, Andheri (E), Mumbai - 59. Phone: +91-22-61727272 Fax: +91-22-61727273 info.india@ubm.com www.ubmindia.in

March 20-22, 2014International Elevator & Escalator ExpoBombay Convention & Exhibition Centre, Mumbai The event provides an exclusive platform to get an insight into the market, trends and technologies that drive the elevator and escalator industry. The forum, apart from fostering thought leading insights from the stalwarts of the industry, also dwells extensively on leading edge technological advancements to the most contemporary design trends, safety standards, environment compliance codes and regulations. Contact: Virgo Communications & Exhibitions Pvt Ltd Virgo House, 250 Amarjyoti Layout, Domlur Extension, Bengaluru Tel: +(91)-(80)-25357028/41493996/41493997 Fax: +(91)-(80)-25357028 Contact person : G. Raghu Mob: +91-9845095803

and several innovative capabilities to further enhance user productivity.

Intergraph and Rol ta teams demonstrated how the market-leading design solutions, SmartPlant 3D, SmartMarine 3D and SmartPlant 3D Materials Handling Edition, have

pointed out Shirguppi. Intergraph’s vision is to support the full life cycle of plant, ships

and platforms, focusing on knowledge management,

integration and reuse when transitioning from one phase to the other without re-entering the same data. “Our vision is built on a technology shift we have identified in the market. The majority of plant design projects

today are using the same technology that was used

30 years ago. Intergraph is now providing the solution

for the onshore, offshore and chemical markets to use into the next 30 years,” Marceau concluded.

Smart 3D 2014 is the world’s f i rs t and only next-generat ion 3D design solut ion specif ical ly tailored for plant, offshore and onshore, shipbuilding, metals and mining industries, employing a breakthrough engineering approach that leverages real-time concurrent design, rules, relationships and automation. It is the most advanced and productive 3D design solution that effectively enables optimized design, increasing safety, quality and productivity, while shortening project schedules. Companies in these industries typically report a 30 per cent improvement in overall engineering design productivity.

The ARC Advisory Group, a leading industry analyst firm, ranked Intergraph as the No. 1 overall worldwide provider of engineering des ign so lu t ions fo r indus t ry according to its “Engineering Design Tools for Industry and Infrastructure Worldwide Outlook Market Analysis and Forecast Through 2016.”

PHILIPPE MARCEAU

been consolidated into a single solution that will help oil, gas, power, process and chemical companies model complex onshore and offshore structures, design intelligent plants and vessels, and create automated engineering deliverables.

Marceau explained how customers wil l benefit from the rule-based concept of Smart 3D 2014, which enables more efficient design, with better quality and design integrity than ever. In addition, upgraded Model Data Reuse (MDR) capabilities enable efficient reuse of design that is not possible in any other 3D CAD application.

Users can reuse FEED or old designs with different catalogs and specifications by leveraging Smart 3D 2014 unique rule re-use, tag renaming and specif ication interchange. Rolta’s Senior Vice President S K Shirguppi mentioned how the enhanced 3D interoperability capabilities enable the use of 3D data from multiple foreign CAD systems in conjunction with native Smart 3D 2014 models. Smart 3D 2014 is the only system in the world that allows interoperability with both graphics and data of foreign CAD models, making it an ideal solution for revamp and joint venture projects.

I n t e r g r a p h ’ s 2 5 - yea r w e l l -established position in India and its long-term partner Rolta will deliver the newly consolidated solution to the market, which allows customers to further increase productivity. “It is Intergraph’s main goal to provide our customers with the next-generation, best-in-class solutions to meet safety, quality and productivity needs. The

only way we are able to do this, is in a dialogue with our customers.

“Smart 3D 2014 boasts hundreds of user-requested enhancements and several innovative capabilities to further enhance user productivity. We know that the projects in oil and gas, and the chemical industry are getting more complex and handle ever-increasing amounts of data, with shorter schedules an increasing number of overseas stakeholders. The solution to these challenges is to rely on the most advanced technology opportunities, based on the latest innovations and research,” said Marceau.

The new Intergraph Smart 3D 2014 includes multiple essential enhancements for the marine and offshore industr ies. “Renewed detection and change management in the Common Parts Engine combined with the sophisticated plate-splitting and weld generation capabilities continue to strengthen Smart 3D’s position as the most comprehensive 3D solution today,”