IHCC chief discusses equipment acquisition tactics
Sultan Batterjee outlines when he's willing to try PMV newcomers
Sultan Batterjee, CEO of IHCC, tells James Morgan that although he’s willing to try equipment from PMV newcomers, when it comes to the big jobs, he sticks with the big boys
Sultan Batterjee, chief executive officer of IHCC, was in fine fettle when we met at Dubai’s Leaders in Construction UAE conference. He had just taken part in a panel discussion on the subject of social development within healthcare and education, and several members of the audience had lined up to pick his brains one on one.
Once Batterjee had fielded their questions, we sat down to discuss IHCC’s present activities across the region.
The contractor-come-consultancy has adopted an ambitious, but calculated, approach to growth in the Middle East during the past five years. As Batterjee explained, the success of this strategy has been due – in no small part – to his firm’s ever-growing ability to take projects from design through to completion, and beyond.
“IHCC is a design-and-build company that specialises in healthcare, education, and mixed-use projects,” he began.
“We are able to oversee developments from start to finish. We have the capacity to design, build, and equip a project. Of course, we can cater to customers’ individual needs. For example, we are able to offer design and construction services in isolation.
“However, at IHCC, we prefer to take on design-and-build projects. These arrangements enable us to tackle tasks with greater precision and efficiency.
“The associated continuity of vision results in fewer mistakes, problems, and delays. Moreover, the financial cycles of projects are much more likely to remain intact, and we retain full control over the quality of construction, design, and equipping,” explained Batterjee.
Whilst the firm’s abbreviated moniker stands for International Hospitals Construction Company, Batterjee has pioneered a broadening of the contractor’s scope during his tenure at the helm.
Throughout his five years as IHCC’s CEO, Batterjee and his colleagues have made fresh inroads within the education and mixed-use sectors.
“We have worked to reposition ourselves, using our track record in healthcare to unearth opportunities in other areas,” he said.
“Historically, IHCC focused exclusively on the construction of healthcare facilities. We then developed our abilities to design and to equip projects. We also took the decision to expand into the field of education.
“Today, IHCC is able to cater to healthcare, education, and combined projects. Early on, we realised that healthcare and education are interlinked. We also recognised the growing demand for facilities that incorporate both aspects,” said Batterjee.
The IHCC boss is confident that he and his team took the decision to expand at the right time. With preparatory work mostly complete, Batterjee believes the firm is now well placed to take advantage of a resurgent market.
“IHCC has developed significantly in terms of its professional strengths and competencies,” he explained.
“Our existing client base is robust, and we are now enjoying success in securing fresh business and projects. The whole team has been involved in achieving this shift. Together, we’ve bolstered our network of facilities and expanded into previously unexplored territories. IHCC is no longer just about healthcare; the company has redefined its scope,” Batterjee added.
Despite successfully broadening its remit, IHCC certainly hasn’t lost sight of its core strengths. The company has simply added to them, according to the CEO. The construction of healthcare facilities, for example, remains high on the contractor’s list of priorities. In turn, the acquisition of top-quality plant, machinery, and vehicles is also of the utmost importance.
“IHCC tends to acquire its equipment through lease-purchase arrangements,” explained Batterjee.
“We prefer to finance machines and vehicles with the option to buy at the end. There is so much equipment on the market nowadays. In the past, only the biggest Western manufacturers were active in the Middle East. Today, the region is awash with kit from China, South Korea, Malaysia, Turkey, and many other countries,” he said.
When it comes to the construction of hospitals, contractors cannot afford to cut corners in terms of quality. Modern healthcare facilities have to be designed and built according to stringent specifications, and contractors such as IHCC trade on their reputation and expertise to secure repeat business.
Of course, there are still plenty of opportunities for savvy shoppers. Greater choice is always good news for end users like IHCC. It is simply a matter of selecting applications that are appropriate for equipment newcomers.
“IHCC is open-minded when it comes to prospective equipment manufacturers, but we stick with the big boys for the biggest jobs” Batterjee explained.
“The largest equipment weighs heavy on the balance sheet. These machines represent cash-intensive investments, so it’s important to ensure that you acquire equipment that can be used over multiple projects; kit that will stand the test of time. When it comes to heavy-duty applications, IHCC opts for premium, tried-and-tested brands.
“For machines and vehicles that have shorter life cycles, however, we’re willing to give newcomers a chance.
Providing you do your research, it’s possible to source equipment that’s of a similar quality to that offered by regionally-established brands, but at more competitive prices,” he added.
Batterjee also pointed out that many of the younger manufacturers in the Middle East’s PMV market are affiliated with – and even owned by – established companies. As such, their financing and aftersales support capabilities are becoming more robust and flexible with each passing year.
In terms of hospital construction itself, however, IHCC has the ideal showpiece in the form of Dubai’s Saudi German Hospital. Batterjee and his colleagues designed, built, and even equipped the 90,000m2, five-storey facility.
“The Saudi German Hospital in Dubai, UAE, is one of the largest projects undertaken by IHCC to date,” he revealed.
“This is a 300-bed, $130mn project that we took from concept to completion. IHCC was involved at every stage of the build, from concept design all the way through to interior fit-outs.
“Not only were we responsible for the design and construction of the hospital, but we also created six towers of staff housing,” Batterjee explained.
Dubai’s Saudi German Hospital might not be the region’s largest, but it most certainly sits at the upper end of the spectrum. What makes this undertaking particularly impressive, of course, is the extent to which IHCC has been involved throughout the course of its development. Even today, the company continues to support activities at the site.
“IHCC is not a company that leaves the grounds once a facility is inaugurated,” explained Batterjee. “We remain present for maintenance and renovation activities. And this doesn’t just apply to the Saudi German Hospital. We are still supporting some of our first projects.
“We also have experience of renovating projects whilst they are in operation. Clients can call us back when the time comes to expand a particular department. A hospital has to expand according to demand. Whether this expansion takes place horizontally or vertically, the facility has no choice but to grow.
“This is a factor that you must consider from the stage of conception. It’s IHCC’s job to educate its clients from the outset; to outline the steps that might need to be taken years down the line.
For instance, we have to ensure that corridors are expandable, that floors can be added, that additional elevators can be integrated into the building, etc. Sometimes, we even provide clients with a plan of the hospital as it will look when it is built, and a master plan of how it can be developed over the course of five years,” he revealed.
In much the same way that IHCC is willing to give PMV newcomers a chance, Batterjee contends that his outfit has done much to shake off its historical image of a ‘healthcare-only’ contractor. To categorise IHCC as a niche operator is to do the company a disservice. If a firm possesses the competencies to design, build, and equip a hospital, other projects are sure to fall well within its capabilities.
As Batterjee explained: “People believe that building a healthcare facility is a speciality, and they are correct. However, from this, some go on to infer that if a contractor builds hospitals, it cannot build other facilities. This is simply not the case. Building a hospital is akin to constructing an extremely complicated hotel. You must create residential spaces, commercial areas, and educational zones.
“All the while, you have to accommodate complicated fittings such as gas and power supplies for operating theatres. Then, you must work in conjunction with a range of specialists, and cater to the individual needs of each department. Essentially, I would argue that if you can build a hospital, you can build anything,” he added.
Even so, Batterjee says that IHCC will continue to be selective in terms of the projects that it chooses to pursue.
He said: “It’s vital that we choose the right projects. We make sure that they’re financially sound. IHCC is not a company that pursues a project simply because it’s there. That’s never been our strategy.
“Some firms follow this philosophy, but it’s not for us. Before we take action, my colleagues and I ensure that a project is sound from an economic perspective.
“It’s better to take on 30 projects that are right for IHCC than 300 projects that are not,” warned Batterjee.
To this end, the firm plans to open an office in Riyadh before the end of 2014. This move forms part of IHCC’s strategy for sustainable growth in Saudi Arabia.
The additional facility will help the contractor to identify, and bid for, appropriate projects across the Kingdom.
“We have now completed most of the necessary legal and regulatory paperwork,” said Batterjee.
“We have been doing this for the past year. We’re now just a month to a month and a half away from being registered with all of the relevant ministries. We want to take things slowly and to do things properly; we don’t want to move aggressively,” he added.
The Riyadh facility will initially be used to strengthen IHCC’s existing presence in the KSA, and to compete for fresh business.
“We already have offices in Saudi Arabia and Egypt that are dedicated to design,” explained Batterjee.
“The Riyadh office, therefore, will initially be used for business development and tendering functions. I expect that we will open this facility within the next two months. We are planning to inaugurate the office before the end of 2014; we want to start 2015 with the Riyadh site up and running,” the IHCC CEO concluded.
Batterjee certainly appears to be succeeding in his aim of transforming IHCC from a healthcare-specific contractor. In the form of Dubai’s Saudi German Hospital – and other Saudi German facilities across the Middle East – the company has demonstrated its ability to take complicated projects from design to completion, and even beyond. With additional focuses on educational and mixed-use facilities, IHCC seems well placed to achieve significant growth during the coming years.
Even so, it is the measured approach that will ultimately help the contractor to achieve long-term, sustainable. With Batterjee at the helm, there seems to be no place for a smash-and-grab mentality. As with its policy towards plant, machinery, and equipment, the company appears prepared to take chances, but not at the expense of its wider prospects. IHCC looks set to reach a ripe old age through a time-honoured philosophy: everything in moderation.