He studied medicine but chose to join the construction business his father initiated back in the 1960s building culverts, bridges and then dams. Dr Sitaram Shetty’s embrace of change seems to have stood his company Shankaranarayana Constructions (SNC) Pvt Ltd, in good stead, particularly as the country moves away from building new dams and thermal power plants – the sectors it traditionally thrived on. Today, SNC counts itself as one of the largest infrastructure companies in Karnataka, with a turnover of Rs 3,000 crore. Speaking to DH’s Sanchita Das, the SNC chairman discusses how the company reoriented itself moving with the times and now has a completely different focus.
Edited excerpts from that conversation:
As an unlisted family-run business how was it to be pitted against major corporate entities, in the sectors you operated in?
One thing my father instilled in me and my brother was that we should visit every construction site at least once a month. This discipline and hard work gave us first-hand understanding of the issues at the sites, enabling quick decision taking. Time is of essence in our business to rein in cost overruns. The processes are far more elaborate in bigger corporate entities. Today, we see only Larsen and Toubro left in the fray. We can claim to have completed at least 90% of our projects on time and even earned bonuses for early completion in a couple of projects.
Many big family businesses have professionalised their management, do you see wisdom in this?
Check our company, my son (Vybhav Shetty, managing director of SNC) is the only relative on board. My other two sons have established themselves as independent professionals. One is an architect and the other is a lawyer. Of course, they do handle our projects and issues in their professional capacity.
All our general managers and senior managers are professionals. Our attrition levels are pretty low as we’ve taken care of our 2,900 employees’ welfare in different ways, be it health check-ups, children’s education or even housing.
Can you go over the trajectory of SNC and the road ahead?
When I took over in 1987 our business was 90% in the power sector (both thermal and hydel) and only 10% in making small roads. In fact, at the time we were working on only one project and had an annual turnover of Rs 1 crore. Today, we’re working on 19 projects, across irrigation, highways, metro rail, tunnels and bridges and our thermal power projects account for less than 10% of our work orders.
We see our future in highways and rail connectivity. We’re associated with the Bengaluru metro rail working on the elevated portion of the viaduct in the 9km stretch between KR Puram and Kadubeesenahalli, including 7 stations. We’re looking at doing the embankments for some of the upcoming super-speed train tracks. We’re also working with NHAI on some highway projects.
What about the realty sector?
In commercial realty– the Shankaranarayana Building on MG Road was iconic. It initially housed Kudremukh Iron Ore Company Ltd, Karnataka State Finance Corporation, the passport office and also Canara Bank. Later Siemens had rented one of the three buildings we built on the land. My father had leased the land for 50 years back in 1973 and the lease got over at the end of May this year. We handed over the land to the original owners with the three buildings of 3 lakh square feet emptied, without any litigation or fuss. That investment already yielded a lot to us.
Today we have a land bank of 8-10 properties. We’re moving into the ‘build-to-suit’ space in commercial realty. We see a definite future in data centres. We’ve also entered the hospitality sector with two hotels in Bengaluru and looking at setting up three more in Karnataka.
Are you at the end of the road as far as the power sector is concerned?
No. We are looking at renewable energy, particularly solar and wind, where we will also generate power for the grid.