It was an unusual task even for executives at pipeline giant Punj Lloyd. They were laying a pipeline in Indonesia and a lakeful of crocodiles was in the way.
What did they do about the crocodiles? They had them moved to a temporary home and then moved back when the construction work had finished.
But Indonesia was nothing compared to the blistering heat and freezing cold of Kazakhstan. In Kazakhstan they had to work round the clock in the most inhospitable terrain, in temperatures that crashed to -40 degrees Celsius and then occasionally jumped to 40 degrees Celsius.
Laying pipelines can be a hazardous business at the best of times. Ask Punj Lloyd's chief engineer who narrowly escaped being trampled underfoot when he was chased by wild elephants near Mangalore.
Punj Lloyd is laying pipelines in all corners of the globe from Kazakhstan to the Godavari Delta and executives say they've faced every situation possible. It might sound incredible.
But for Atul Punj, chairman of the over Rs 773-crore (Rs 7.73 billion) Punj Lloyd, this is all business as usual. The gas and pipeline construction king has sewed up over 50 per cent of the orders, which have been won by local companies in the Indian market.
And he's now aggressively plotting moves to become a large international player with projects in countries ranging from Qatar, Russia, Iraq, Indonesia, Kazakhstan and Turkey just to name a few.
Certainly, the company's order books are bulging: it has over Rs 3,200 crore (Rs 32 billion) worth of orders in the pipeline. And the company expects its revenues to grow by over 50 per cent in the next one year that will take its turnover to well over Rs 1,000 crore (Rs 10 billion).
Says the soft-spoken Punj: "In the next two to three years we hope as much as 75 per cent of our revenues will come from the international market up from 55 per cent now."
That isn't wishful thinking. The company is already moving in double-quick time.
For instance, in Qatar it is readying to bid for the $4 billion Dolphin project, a medley of gas pipelines connecting the country to various parts of the Middle East. It hopes to get $200 million to $300 million worth of projects from the country in the next two years.
Punj is also making an entry into Russia were negotiations are on with a local partner for a joint venture.
Punj says that the market for oil pipelines (the country exports oil to the US), terminals and processing plants could well be to the tune of $5 billion annually. And it will be happy with $300 million worth of orders in the next three years.
That is not all. Punj Lloyd is also focusing on deepening its relationship with the three major international oil companies -- British Petroleum, Total and Shell -- for which it does contracting work.
For instance, at the moment it is building the Turkish stretch of the Azerbaijan Pipeline for BP. The 335 km stretch of pipeline will cost over $100 million.
Says Punj: "The three companies put together invest over $10 billion annually for new pipelines, storage tanks and the like. We are aiming at a 5 per cent to 10 per cent share in this pie. Today our share is minuscule and we have about $240 million of projects in hand."
But all this doesn't mean that the company is abandoning the Indian market completely. It has just won a Rs 413-crore (Rs 4.13 billion) order to build the Vijaipur-Dahej pipeline project for GAIL. The pipeline has to be completed in seven months.
But the company has turned its eyes to foreign shores in a big way and there are several reasons for this.
Firstly, the volumes of business are obviously higher; two, in India projects get delayed and in some years there are no new projects, so order books drop dramatically.
Three, in India, price is the only consideration and parameters like quality, delivery on time are given the go by.
As a result, margins are very low. Says a senior company executive: "International business helps us in flattening the dips in domestic orders which are inconsistent."
But Punj won't abandon the domestic market. The company will bid for pipeline projects with clients who give value to quality and timely delivery. That means it will bid for Reliance's pipeline network and for projects from GAIL and ONGC.
Says Punj: "We will only bid for projects where we know we can make money." Translated in simple terms that means it must make net margins of around 6 per cent.
Besides that, it is focusing on other areas of the construction business -- the strategy is to get enough experience in the domestic arena in these areas so that it can bid internationally (as pre-qualification experience is essential) within the next two years.
Highway construction is one growth area and Punj is racing into it.
The company is already executing large highway projects for the National Highway Authority of India and hopes to bid for some of the corridors in the north to east sectors when they are opened.
Punj Lloyd is also taking the first tentative steps in metro rail construction (it has won one corridor of the Delhi metro) and is making an aggressive pitch to build power and refinery projects.
In two years it hopes that only 30 per cent of its revenues in the domestic market will come from pipelines. It expects that highway construction will grow swiftly and will form 50 per cent of its business.
Will the aggressive international thrust and the move to diversify its domestic portfolio succeed? Says a senior executive of a rival company: "It has no special expertise in new areas like metros or highways. And their competition will be from international majors when they go abroad.
In the international arena of pipeline construction it is getting work primarily because of low price or in terrain were international companies don't want to work. " The company, for instance, did bid for a highway project in Kyrgystan but was unsuccessful."
Punj doesn't accept this criticism. The company has already invested over $100 million on its own equipment -- and that is a large base by any standards to leverage for large projects.
Secondly, it is leveraging on its timely record for delivery with the oil majors to grab more work.
One example: five years ago it used to have orders in hand for about $5 million in Indonesia. Now, that's climbed to $120 million. Says Punj: "In Turkey we have been rated as the best contractor by BP. We have become preferred contractors to the big oil companies so volumes will come."
Thirdly, it can offer cheaper rates -- about 5 per cent to 7 per cent -- than international construction companies which is still an important -- but not clinching -- consideration.
Fourthly, Punj Lloyd is also taking the first tentative steps to bid for international projects in areas, which are not in oil and gas.
One example: it is bidding to build a power plant in Indonesia. The construction value: Rs 200 crore (Rs million). The company is aiming to get orders of around $300 million from the power sector itself.
Atul Punj and his team are undoubtedly taking a big gamble and they are hoping to pull off an ambitious diversification.
The question is whether he will be able to repeat his success, to become India's version of Bechtel.
