EKK Infrastructure Ltd
There could be no space on the 300-Km Kochi to Kasargod National Highway stretch of Kerala that EKK Muhammed, the founder of EKK Infrastructure Ltd, never touched. Practically, he walked every foot of the stretch, as well as many other stretches, in various parts of India. Today, with the second generation led by his two sons, Sanju and Sachin, now on the
board, EKK has embraced a new corporate identity. The company has introduced professionalism, advanced technology, an emphasis on quality delivery, and a strong focus on competitiveness. Along with these, despite numerous challenges, the transformation from a PWD contractor to a diversified infrastructure company with futuristic diversification plans tells a
rare story of well-disciplined entrepreneurial success. Roads have no end, so are the opportunities it finds on the wayside. The talent combination of the EKK brothers, along with their highly mature and composed business approach, can bring amazing results.
EKK tells the transitional story of a typical PWD contractor firm into a mid-sized infrastructure company that builds safe roads and pursues safe business in its traditional areas, and gradually, in its other core areas of competence. Behind every action and new entry plan, there has been a philosophy that nothing remains perpetual. Even durable assets need upgradation and capacity enhancement as the load on them increases. Everything has an age, hence it needs a different approach according to the changing times. The new-age business thrives on the changing needs of the new age. This is the philosophy
that drives diversification, making entrepreneurship a meaningful term. It is here one can see the transformation of a PWD contracting firm of Kerala into a professional enterprise with diversified interests, says Sanju Muhammed, Managing Director of EKK Infrastructure Ltd and the eldest son of EKK Muhammed, the founder of EKK & Co. “Entrepreneurship is like a voyage, he says. “Ours is a long journey,” he adds as he reflects on EKK’s history, business philosophy, and his view on talent availability in India’s fast-growing
economy. In 1972, EKK Muhammed started a sole proprietorship firm named EKK & Co. During the transformation, many things fell into place, and many factors worked together harmoniously to create synergy between departments and verticals. However, that was not enough for an infrastructure company that needed to negotiate with wisdom and resolve under the ever-changing atmosphere where cutting-edge talent determines the survival and success. Sanju was aware of the fact and broadly aware of all the possible challenges which an average infrastructure company faced while growing. India saw new generation highways emerging at a fast pace, with endless streams of vehicles smoothly moving through, transforming the country’s landscape and reflecting all the features of a modern economy. India adopted a rapid pace in building magnificent new highways at the dawn of the present millennium. But, contrary to capitalising on the thriving new opportunities, EKK & Co., as a road contracting company, was about to close its activities after the founder suffered a stroke. The hard decision also sounded unnatural for a company with more than three decades of existence in the sector at that time. Sanju, then aged 20, had set a different goal. He dreamt of settling abroad after an MBA from the London School of Economics (LSE).
At home, life wasn’t luxurious, though there was no hardship, recalls Sanju. There was no compulsion to join his father’s business. “Initially, there was no plan to inherit my father’s mostly PWD contract business legacy, nor any business goal in mind beyond finding a well-paid executive job,” Sanju recalls at the prelude of his revisit to the beginning of his entrepreneurship. One day, EKK & Co. advertised the sales of its construction equipment and other assets. Seeing the advertisement, Rajesh Bai, a Gujarati friend of the EKK family, called up and asked, “When everyone is planning to drive on the new road and contractors are finding big opportunities, how can you drop out of the smooth highway?” That could be an imprudent idea and unacceptable. “Don’t turn your back on the opportunities,” the Gujarati friend suggested. He wanted EKK to withdraw the decision. Sanju had to rethink and redraw his career plan after Rajesh Bai said, “You can have no better MBA than using your skill to capitalise on the emerging opportunities in India.” Though inheriting a business from parents is incidental, the moment that made one reverse the decision to carry on the family legacy was accidental. The alert by a
man of good heart, whom Sanju calls his godfather, was irresistible. Rajesh Bai was the owner of the former Tikitar, a manufacturer of bitumen emulsion. Shell later acquired Tikitar and rebranded it as Tiki Tar and Shell India Pvt. Ltd. Rajesh Bai’s influence and judicious advice struck deep in his mind. Winding up a three-decade-old business at the very time the segment
that EKK toiled in was set for a take-off could be a bad idea, Sanju was convinced. Relinquishing the gains of over three decades, all of a sudden, spelt a self-imposed doom, Rajesh Bai warned again. India’s road segment was undergoing a massive change, he reminded, showing examples of massive road-building activities underway in Gujarat. Sanju also saw it directly on his occasional Gujarat visit.
That was the time the talks of the National Highways Development Project (NHDP) and the Golden Quadrilateral project, which started in 2001, were thick in the air. By the time Gujarat had begun to show massive changes. The other part of the country also would see a similar change, Raju bai opined. “Yes, that wasn’t an exaggeration. I was convinced about what was ensuing for the rest of the country,” Sanju, who ultimately joined the family business in 2004, recalled. Soon, new generation roads began to emerge in Kerala, reflecting the changes set in other parts of India. But for EKK & Co to move out of the legacy of PWD contracting and to be eligible to bid for highway projects, it required drastic changes within. The company then did not have the necessary engineering skills, machinery, capital and capacity to bid for new generation roads of futuristic specification. Qualification at the bidding round was a concern. In the early days, there were challenges in making EKK a qualified bidder for the government road project. Rajesh Bai promised all help in every way to arrange the necessary skills, technical expertise, and organised machinery, manpower and working capital. Subsequently, EKK secured the four-lane Thanjavur-Nagapattinam-Tiruvarur project worth ₹18 crore in Tamil Nadu, the first project out of the PWD circle. The next challenge was to find the working capital. That concern also vanished with the generous help of Rajesh Bai. Every time Sanju visited Gujarat, he used to carry spices from Kerala and return with a Gujarati special refilled in the baggage. In one of the trips, Rajsh Bai gave a “bag” of capital unsought and advisories about what was ensuing in India’s infrastructure segment and how to position EKK to capitalise on the opportunities. The amount was equivalent to the then turnover of EKK. That was enough to cover the working capital needs of one full year of work that EKK had in hand at that time. Sanju felt compelled to go by the words of his generous mentor and worked religiously with faith in himself. “I wouldn’t have been careful of disciplining myself had the capital come from my family source,” he said. No one else would have given such a large sum so generously without a guarantee. That showed the mentor’s trust in him and his capabilities. When Sanju asked him about what made him risk so much generosity, he retold his story of business success. Rajesh Bai said it was with someone’s help that he built his fortune, and he passed the generosity on to another one as a natural corollary; that’s all. The trust that Rajesh Bai had shown should be reciprocated, Sanju determined.
Rajesh Bai also left a message along with the financial support – “Help others also the same way.” Along with the financial support, he also sent an expert and trustworthy manager to support EKK at all operational levels.
Initially, he felt burdened with a big liability. He had no choice but to continue the contract business and earn money to repay his debts. “I thought I should not misuse others’ money and ride carelessly on others’ generosity. I must repay it and prove that the help was meaningful with a domino effect,” Sanju recalls. Sanju began to focus seriously on the business with the primary goal of repaying his debt. It demonstrated his honesty, an essential quality for anyone who borrows money. At his age, many people might have misused the funds. But Sanju was responsible for the money he borrowed, understanding that it represented a liability until fully repaid, along with any associated charges. He successfully repaid the loan as soon as he completed his first contract. EKK consistently ensured that they avoided excessive debt while maintaining cash liquidity, which facilitated smooth project progress and timely completion. This experience taught Sanju valuable lessons about debt management and the true meaning of running a business. Without greed, Sanju picked up speed and moved with the wind, but chose quality business and swallowed only what was digestible. That is the culture he inherited and maintained throughout his entrepreneurship, as having decent gruel three times a day to maintain a healthy life. “We have always been happy with it. Even now, we are healthy enough to have the gruel three times a day,” he points out metaphorically. In business, EKK also maintained the same philosophy – the philosophy of ‘swallow what is healthy and easily digestible.’ “That is the reason I am comfortable with my position in our core business now and capable of diversifying into other ventures. There is a big space for scalability and volume expansion in the infrastructure segment, but with equally big challenges,” he chips in. Pushing the current turnover of ₹1200 crore by as many folds as the management desires would no longer be a task in the current phase of infra growth in India. Yet EKK does not want to scale the business recklessly, but maintains checks and balances, and manages only the projects that can satisfy the client with quality and execution schedule. The liquidity management, keeping it well-capitalised through all phases of every project it implements, and manpower management help EKK maintain its position stronger. EKK has completed over 150 projects throughout its history. In the past five years, the company has finished 23 major projects valued at approximately ₹3900 crore. The completed project includes the Four-laning of Thalassery-Mahe Bypass project of ₹1024 crore, the single biggest infra project any company has implemented to date. Currently, the company is executing 13 projects worth an aggregate of ₹4270 crore, mostly of a larger size than it has completed, in various parts of the country. The sweat that the management gushed to achieve these edges cannot go unnoticed. But the challenges lie elsewhere. “We know even if funds are available with a good credit rating and internal accrual through efficient financial management, efficient manpower availability remains edgy,” Sanju says. Every contract work, especially government contracts, requires working capital and patience to wait for bills to be cleared, as they move from one table to another for approval before payments are made. Why pursue such work and become entangled in complexities like sufficient cash flow and suitable labour availability? This question once haunted Sanju. But for an entrepreneur with good common sense, a cool mind with a resolute and diplomatic approach, nothing is impossible, as Sanju himself could prove. He takes every decision by heart, not by mouth or words. He refrains from wrong bets and is cautious not to chase wild dreams without being overcautious to lose any deserving opportunity. Labour efficiency determines the feasibility of a construction project as importantly as the cost of materials. A fast-growing economy, as India’s, has this problem universally, especially in the labour-intensive infrastructure industry. In the Indian context, it is more acute. There is a vast difference between the usual factory labour force and the labour force on the construction site. The rate of attrition on construction sites is very high. Workers often leave after gaining experience by the end of a project, either returning to their hometowns to seek other employment opportunities or moving on to new job opportunities elsewhere. Moreover, most workers on construction sites are temporary and non- committed. Construction sites are stopgap work sites for farm workers during lean seasons. The concerns of efficiency are bound to not labourers alone. That is common across the cadres of white, blue and all collars. EKK takes care of its workers, and there are long-serving workers with payment on par with engineers. The company has a presence in Tamil Nadu, Andhra Pradesh, Puducherry, Nepal and Muscat. In 2012, EKK expanded into Muscat as part of its geographical diversification strategy. It revamped the Muscat operation three years ago. In 2015, EKK & Co., a proprietorship firm, was transformed into a private limited company, and three years later, it became a public limited entity. Today, EKK Infrastructure is a leading engineering, procurement, and construction (EPC) company in India with a base in Ernakulam, Kerala. It carried out Kerala’s largest road construction project – Thalassery-Mahe Bypass – at a cost of over ₹1000 crore, the biggest single project ever assigned to any construction company in the State. In addition to roads, the company has completed numerous bridges, airports, and water irrigation systems. While its primary focus is currently on construction, it also emphasises irrigation, solar energy, energy storage, and commercial building construction. EKK is executing the construction of Foxconn’s new manufacturing plant near Chennai. The company’s entry into the solar segment is part of its strategy to capitalise on the growing demand for carbon neutrality. Once the ongoing tariff war resolves, India is expected to witness a boom in the production of solar panels and storage batteries. Over the past decade, the company has made significant progress with a proven track record in constructing airports, bridges, reinforced earth walls for mining and industrial structures, water irrigation projects, factories, commercial buildings, solar energy installations, and more. Some of the major projects EKK has completed include Cochin Airport, Thalasseri-Mahe bypass (NHAI) project, Thodupuzha Pala Ponkunnam Road Project, Flood Mitigation Projects (Kuttanad Package), RICK Project (on an annuity basis), and others. EKK built the world’s longest man-made bund—the 13-KM stretch of the Kuttanad Bund—which regulates water levels and prevents saltwater intrusion due to the region’s below-sea-level farming system. This stands as the most successful irrigation project carried out as part of the Kuttanad package. Business growth in its core areas of highway construction occurs naturally. However, the management is exploring diversification into solar energy and battery energy management systems. Besides these, the company is also working on a waste recycling project with Shell and another with a Korean firm on Malaysian bridge technology, called Ultra-High Performance Concrete (UHPC). It is an advanced material used in bridge construction and repair for superior strength, durability, and resistance to environmental factors. This will make bridges three times stronger than those built with conventional methods. Infrastructure is a durable asset that can endure climate change and overwhelming public use. Quality is a critical concern, and EKK prioritises it highly. The management believes that an infrastructure company must operate professionally, with an efficient system in place to ensure it is a competitive firm. That is the only way to succeed in the stiffly competitive business. Sanju never favoured working on the PWD work standard, but on the global standard. Incidentally, most of the projects he procured were externally aided, including the World Bank-aided projects. In all these projects, there were international consultants also. Working with them gradually enabled EKK Infrastructure to acquire their operational and quality standard. For an average company based in Kerala, adopting the international standard and budget management was difficult in those days. The consultant sent by Rajesh Bai used to advise the need for hiring professionals who work honestly for the growth of the company, instead of resorting to filling in with kith and kin. It may be a family business, but in the long run, it will be professionalism that determines the success and value creation. Sanju got actionable advice. This way, EKK could build a name for a professional business house with guaranteed quality in every work. In many road projects in Kerala, the home state of EKK, these projects, which are proportionately larger compared to others in the region, are weather resilient and have displayed no impact from geological concerns. The company has brilliant engineers and workers who do not resort to shortcuts and never compromise on quality aspects. When climate change and floods proved to be a disaster for many road projects in Kerala, EKK had nothing to worry about. “Hitherto, our project faced no issue of quality. We take special care at vulnerable spots,” Sanju points out while mentioning a 150-meter bridge EKK constructed at Dharmadam on its prestigious Thalassery-Mahe bypass. The company submitted recommendations, along with a study report, to the Government of Kerala, stating that no construction work involving soil refilling should take place near rivers for any road project. The state government accepted this suggestion as a regulation. In light of recent disasters from projects executed by other parties in Kerala, EKK’s study report and recommendations have become a guiding principle. In business, rivalry and competition are common. In competition, one strives to be more efficient, and in rivalry, a proactive entrepreneur learns new lessons. When a rival company attempted to undermine EKK by trying to force it out of the business through various means, including false allegations, the management viewed this as a valuable learning experience. “Even at the time of near bankruptcy due to withholding of ₹200 crore when the turnover was ₹400 crore, that created a cash crunch and withholding of payments, we remained observant. He understood one important thing: no crisis lasts a lifetime. Crises are transient. “Moreover, I could learn valuable lessons in crisis management from rivalry,” Sanju reminisces. Sanju’s wife, Mirfath, focuses on managing allied products and HR management. Sachin’s wife, Sajna, runs a boutique. “Our success also owes greatly to the staunch support of families. We never felt family pressure for not having spent time with them. They have been extremely cooperative, even in my father’s experience,” Sanju remembers. The founder and Chairman of the company, EKK Muhmmed, continues to be the mentor and visionary of the group. Even now, he is active, in a way, as a responsible regulator of the overall functioning of EKK Infrastructure. Sanju has continued to uphold the message left by Rajesh Bai and has supported numerous small initiatives with seed capital and financial aid. Box Sanju invested in a financial technology start-up and exited it after Paytm acquired it. He has also invested in an early-stage edutech start-up, Ecctra, that utilises psychometric analysis to identify the talents of children at an early age, enabling them to receive better training in their areas of strength. Although there are more than 8,000 streams of professions available, an average person is aware of fewer than 10 job variants. The integrated platform has systems to identify one’s talent and suggest suitable jobs to secure an early position, as well as recommend the right training opportunities, etc. Quote 1: There are concerns of significant wastage of manpower in the Indian economy, especially when compared to the average man-hour productivity of larger economies. There is substantial scope for improvement in knowledge and skills across every industry. There is a significant difference in the quality of manpower between developed and developing economies. Quote 2: The presence of inadequately trained personnel in the industrial production process significantly impacts the quality of economic growth and the pursuit of innovation, especially as we experience exponential growth. Even with a high level of mechanisation, some level of labour intervention remains unavoidable. Box highlight Sanju is the owner of Calicut Globstars, a franchise league run by Kerala Cricket Association under BCCI. It is like an IPL. There are about 20 leagues in India, and the Kerala Cricket League is one of them. Calicut Globstars, which represents the Malabar region, is one of the cricket teams. Last year, in the first season, Globstars was the runner-up. Sanju came into it with funding, a realistic approach and superior ‘analytical’ support as a sponsor to encourage the sportsmen and sports lovers, says Achuthan, who is confident of Calicut Globstars coming out with flying colours in the coming season. As of now, 95 per cent of the judgments of Sanju have been right. Calicut Globstars has a strong team.
