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ASCC is one of the major developers of India, with strong ties to Provincial and Central Government of India (NHAI- National Highway Authority of India) and World Bank funded projects. ASCC owns a total of three different companies which run into various fields, namely roads and highways, real estate and leasing/financing. The three companies offer combined revenues in the range of $7 million USD. ASCC's reputation is based on strong customer orientation, technological sophistication and an impressive record of achievement.
ASCC have some of the best architects, engineers and planners in its in-house consultancy division, with their long standing reputation for creative building and design coupled with professional expertise in art, architecture and town planning. ASCC professionals have been engaged in providing consulting and management services to various projects in India and have proven their competence and innovation. ASCC has made concrete contributions by designing and constructing roads, bridges, dams, highways, high-rise structures and power projects.
ASCC has executed various projects of national importance in India, including construction of national highways and a recent contract to complete a freeway connecting the city of Chandigarh to newly built Chandigarh International Airport.
Machinery and Equipment
To execute every project with utmost efficiency and speed, ASCC employs ultramodern and high performance machinery and equipment. The company owns an army of sophisticated construction equipment to handle a variety of heavy duty and specialized operations. In addition, the company also has a well equipped technical workshop, which looks after repairs and maintenance of the machinery, ensuring that they remain in good working condition at all times. There is a wide array of machines ranging from modern to simple for deployment at various sites to expedite the process of quality construction.
Many of the civil engineering projects executed by ASCC have set new benchmarks in terms of scale, sophistication and speed.
India’s Construction Industry
India has the fourth largest economy in the world, boasting a gross domestic product (GDP) of $1,242.8 billion USD in 2008. India has a stable political system and offers a favorable environment for business.
Construction is an important part of the industrial sector and one of the core sectors of India's economy, having grown 156% since 2000. Today, construction is the second largest industry in India after agriculture. According to IHS Global Insight, $175 billion USD was spent on construction in India in 2007, of which $140 billion USD was spent on non-residential projects, and the remaining US$35 billion was spent on residential construction.
Construction spending is expected to increase to $370 billion USD by the end of 2013, with residential totalling $63 billion USD and non-residential registering $307 billion USD. This means a compound annual growth rate (CAGR) of 13.3%.
Importance of Infrastructure in India
Infrastructure development and maintenance is a major input to economic development and sustained growth in an economy. As India continues down its path of development, infrastructure is no less important. Although the Indian government has been proactive in building necessary infrastructure in the energy, transportation, and urban sectors, additional investment is needed. Like many countries, private-sector involvement will be critical in escalating India's infrastructure beyond meeting basic needs and reaching an level that advances the efficiency with which India's economy operates.
The Five-Year Plan is a reflection of the economic philosophy and thinking set after the country's independence in 1947. This thinking recognizes a role of government in bringing about the changes in various fields of the economy to improve the standard of living and overall well-being of the society. The Five-Year Plans are designed, executed, and monitored by a central agency—the Planning
Commission. The prime minister of India serves as the chairman of the commission.
The country's first Five-Year Plan was from 1951-56. Currently, the 11th Five-Year Plan is on its way to setting forth the strategy from 2007-12. India is the fourth largest economy, with a GDP of US$1,242.8 billion in 20081. Between 2000 and 2008, India's GDP growth rate doubled from 5.7% in 2000 to 9.3% in 2007 before tapering to a robust 7.9% in 20082. The industrial sector has predominately fueled this growth. During 2000-07, contributions by the industrial sector to India's total value-added increased from 26.2% in 2000 to 29.4% in 20073. According to IHS Global Insight, India's GDP is expected to continue along a robust growth path, albeit slower than growth witnessed in recent years. Between 2008 and 2012, India's real GDP growth will range between 6.5% and 8.2%. During the same period, India's nominal GDP growth will range from 9.3% in 2008 to 13.5% in 2012, with a negative growth rate of 1.7% in 2009.
This recent economic growth is placing increasing strains on India's physical infrastructure, not only from population growth and expanding economic activities, but also structural changes in the economy. India's economy reflects a consistent decline of primary sectors, such as agriculture, forestry, and fishing, as well as rising importance of non-primary sectors, such as services and manufacturing.
This shift away from primary to non-primary sectors heightens the demand for infrastructure investment. This heightened demand is exacerbated by the fact that India had a substantial infrastructure deficit in terms of capacity and efficiency of delivery prior to recent structural changes. Additionally, according to IHS Global Insight estimates, the Indian service sector has witnessed a tremendous growth, contributing about 69% to overall GDP during 2003-07. The growth in tourism has created demand for recreational construction such as hotels and resorts. India's medical tourism is expected to grow from US$350 million (at current prices) in 2006 to US$2 billion in 2012—17.5% growth. Similarly, the growth in information technology and outsourcing has created strong demand for office space.
Total investment in India's infrastructure was estimated at approximately 5% of GDP in 2006- 07. Here, infrastructure is defined to include electricity (including non-conventional energy), telecommunications, roads and bridges, railways (including mass rapid-transport system—MRTS), ports, airports, irrigation (including watershed development), water supply and sanitation, storage, and gas-distribution sectors. To achieve a target GDP growth rate of 9% set by the Planning Commission, gross capital formation (GCF) in infrastructure should rise to 9% of GDP by the end of 2012. This equates to an increase of GCF from 2,598 billion rupees in 2007- 08 to 5,740 billion rupees in 2011-124. If achieved, the 11th Five-Year Plan period (2007-12) will result in an aggregate GCF of 20,115 billion rupees (US$447 billion at an exchange rate of 45 rupees/U.S. dollar). It should be noted that India's projection of their economic growth exceeds IHS Global Insight's projections for India's GDP. As a result, India's projected infrastructure investment levels may also be optimistic.
The role of the private sector is expected to rise gradually, but the public sector will continue to play a dominant role in financing for infrastructure projects.
Construction is an important part of the industrial sector and one of the core sectors of India's economy. According to IHS Global Insight, US$175 billion was spent on construction in India in 2007 after growing 156% since 20005. Out of US$175 billion, US$140 billion was spent on nonresidential, and the remaining US$35 billion was spent on residential construction.
Construction spending is expected to increase to US$370 billion by the end of 2013, with residential totaling US$63 billion and nonresidential registering US$307 billion. This represents a compound annual growth rate (CAGR) of 13.3%.
IHS Global Insight's nonresidential construction forecast for India, including major sub-categories—transportation, public health, energy, office, commercial, institutional, and industrial—is expected to rise at a CAGR of 13.9% during 2007-13.
The construction sector is also the second largest employer in the country following agriculture, employing 18 million people directly and 14 million indirectly. Exports constitute about 5% of the size of domestic market and include construction materials, services, and cheap labor. The country's main international trading partners in this sector are the Middle East, Africa, and Malaysia. Indian companies have very limited exposure to large markets such as the United States, Japan, and West Europe.
The construction sector has increased its share of India's total employment from 2.8% in 1983 to 5.4% in 2003-04. The sector accounts for about 38% of gross investment and about 45% of India's total infrastructure costs.
The Indian construction industry is highly fragmented. This is partially due to the fact that, for most projects, there are no long-term relationships between the contractors and clients. For example, government agencies such as the National Highway Authority of India (NHAI) do not provide any benefits to the long-term contractors that have worked with them in the past. Because the sector lacks economies of scale, smaller players may have better cost structures due to lower overhead costs. The industry can be broadly classified into two segments— organized and unorganized. The organized segment consists of firms and independent contractors who manage their business (design, financing, execution, etc.) on a professional basis. The organized segment operates on small, medium, and large scales. The unorganized segment primarily consists of standalone contractors that operate at a small scale. Construction activities of smaller firms in the organized segment and contractors in the unorganized segment are mainly focused on simple construction projects—building houses for individuals, repair, and maintenance for smaller buildings. Construction activities for larger firms involve complex logistics management of men, machinery, and materials.
Avtar Singh Walia, President
Harjinder Walia, Coo
Roxanne Rojas, Vice President, Secretary, CEO