Local contractors need more projects

Harshini Perera

With specialized skill in constructing swimming pools and waste water management systems, AKK Engineers has set an example for high quality construction in the country. The company is headed by a professional and well experienced person with a professional staff to provide the very best to their customers. AKK Engineers Chairman Dr Rohan Karunaratne was interviewed for the Emerging Entrepreneurs column for this week.

Excerpts of the interview

Q: How did you come up with your enterprise?

A: I passed out as a young engineer from the university in 1981 and worked three years in Government and private organizations. In 1984, I thought of starting my own construction company. I joined one of my batch mates and we initiated the company, AKK Engineers (Pvt) Ltd. We specialize in civil construction and mainly we are concentrating on swimming pools, water proofing chemicals and waste water treatment.

Q: What were the challenges you faced?

A: At the time we started the business, the construction of a swimming pool was very expensive and at times expenditure for a swimming pool was high that people could not think about having a swimming pool. As engineers we came out with our own design to make it affordable.

We received awards for designing low cost swimming pools in Sri Lanka. It was well accepted by people making our way clear in the future. It was very difficult for us to go for bigger construction projects due to financial constraints. We did not have good bank facilities at the initial stage. We started with a limited capital and the financial difficulties were blocking us in taking over many contracts and going for tenders.

People recognized our capacity gradually due to our professional qualifications as engineers. I would say we had a slow growth at the starting point due to financial difficulties.

Three years ago the entire country had to face a critical problem of not having enough work but we had to maintain our staff even during the economic downturn. During the last two years, we really had to suffer paying salaries but not having enough work to maintain the companies. One of the main challenges from this economic situation was that contractors started quoting low rates for projects more than what they could do.

Those who take the low quotation put themselves in trouble as well as other contractors. We could not do the construction work for low quotations.

We have seen improvement in the industry at present but it has not yet fully recovered. We expect it to recover gradually in the future.

Q: What are the strengths of the company?

A: A highly professional staff is working for us. We are into both designing and building the projects. A client can save a lot of money in coming to us. We have structural engineers and architects in-house along with civil engineers. We therefore can set a competitive price and I believe this is the success of our company.

We have engaged in constructing a housing project in Galle for Government employees. We have been involved in lot of hotel projects.

We are currently engaged in new projects at new hotels such as Deer Park in Giritale.

We are specialized in swimming pools, water and waste water treatments. The competition in this area is less compared to civil construction. As we are in a specialized field, we could get more projects.

We have also diversified to the manufacturing sector such as manufacturing plywood doors and we have been agents for certain electrical items. We have also shown our presence in specialized paint.

Q: How do you manage the company?

A: Each sector of the company is looked after by top managers of the company. We have six top managers who take the responsibility of a sector. Even in our new diversification to hotels, each hotel has a management staff to manage separately while we promote team work among our employees.

Q: How did you supply with capital initially?

A: Even today we have certain constraints in finances compared to the biddings of international contractors and major construction firms in the country.

The capital we invest at that time was very low. The investment was Rs 200,000 but today our capital has gone up to Rs 200 million during the last twenty years.

Q: What are your aspirations?

A: It was my education which led me to flourish in this industry. I had to either work as a civil engineer or run our own firm. I came out with the idea of starting my own company. I have today become a person who can diversify into different sectors in engineering.

We are promoting sustainable construction industry in Sri Lanka. Contractors using these sustainable measures can save energy, water, protection of environment and maintain easy building. It may not be easy to promote sustainable construction industry in Sri Lanka initially.

Q: What are the strategies you adapt to enhance employee efficiency?

A: We encourage employees by engaging them in projects in a competitive way. At the same time we give them a free hand to manage the projects.

We will be monitoring the finances but giving them the necessary authority to work on their own. They are happy with the flexible method. It encourages them immensely.

Q: What is your future plan?

A: We have diversified into various fields such as manufacturing, engineering research and development. We have recently diversified into the hotel sector. We own three hotels in Kataragama, Habarana and Passikudah. We are expanding the facilities in the Passikudah hotel with an additional 50 rooms. It will be an over Rs 150 million investment project. We will take more interest in developing the hotel sector in the future.

Q: What is your goal in business?

A: We need to be a high quality product providing construction company specialized in waste water and swimming pool sector in the future. Our main purpose is to be a high quality construction company while setting our standards towards customer satisfaction.

Q: What is the support you get from your family members?

A: My father was the Chairman of the company and my wife shoulders a big responsibility in the diversified sectors of the company. My mother too has been helping me in developing the company.

Q: What is the support you expect from the Government?

A: We expect the Government to distribute a reasonable amount of work among local constructors while involving foreign parties. International construction companies have become the competitor for us. We expect the Government to control it to a certain level. There is a restriction in going out of the country for construction work.

A local company cannot cater to the international market alone without the support of the Government. Many of our contractors have shown capability in the construction industry and the Government can help them by identifying them.

That is one of the major expectations we have from the Government.