Our belief has always been about quality, timely completion and being cost conscious.
Shyam Milan Shrestha is the Founding Member and Director of Finance of CE Construction which was established in 1992 with the general contracting and construction as its core areas of operation. In almost three decades, CE has grown into a multidimensional organisation servicing sectors in construction, construction management, manufacturing, consultancy, education, finance, health, hospitality and hydro power.
Prior to embarking CE, Shyam Milan worked as Project Engineer for Lumbini Development Trust where he was involved in budgeting, supervising construction, updating project components and cording engineers, recourses and funds. Shrestha is also the Director of CD Developers, CP Interiors, CE Real Estate and CE Services.
In an interview with B360, Shyam Milan Shrestha discusses his career in the construction industry, future of CE and the construction industry in the changed context of Covid 19. Excerpts:
Having worked in the construction industry for over three decades, what are some of the notable changes you have seen in the construction field?
CE Construction was started in 1992, and in those initially years the construction business and contractors as a profession was not a very professional field. At times people had a slightly negative outlook about the industry. Although, we all had professional and a financially stable background, we wanted to start from the very scratch. We wanted to change the outlook of the construction industry.
Basically, we started out as D-Class contractors with the idea to take this profession to a different level. We wanted to develop this industry which fortunately we have been able to as is justified by our success and quality of work. In the last 28 years we have been able to establish our reputation, goodwill, credibility and brand name in the construction industry as well as the real estate sector.
CE Construction started from scratch as a D-Class construction company in 1992 to become one of the most recognised company’s in the country. How would you describe this journey?
There were lots of ups and downs and during the initial phases it was very difficult to convince our clients to bring in projects. We had to partake in various bidding processes to land a project.
However, our belief has always been about quality, timely completion and being cost conscious. We have opted to focus and work on projects in the private sector. Here we were able to give quality work, complete projects on time as well as be conscious about the cost of our projects. Focusing on these three criteria, we have been able to establish our name and continue to be market leaders.
The country has suffered through difficult times with months of uncertainty. CE has persevered with the support and team of diligent employees and eager executives. Our every action is guided by the value of what we call 3Ts which is trust, transparency and team spirit.
What are the areas that are most impacted by Covid 19 in the construction industry?
I believe the most impacted areas due to Covid 19 is in the man-power, raw material and the financial departments. When we talk about man-power; due to Covid 19 everyone was scared and hesitant, and rightfully so. The labourer were very scared and many decided to go back to their home towns and villages. After the lockdown, we had very difficult time bringing them back as well as those labourers who wanted to come back had difficulty returning due to firstly the fear itself and secondly because of the various travel restrictions. It was a very stressful and a sensitive issue, because if we are not following the norms of Covid, then it would have been a disaster as well. Due to the lack of man-power, our private projects were completely closed. We had to follow certain guidelines to stop and prevent the spread of the diseases and that was very challenging too.
But to a certain level we had managed to restart our projects while keeping in mind the safety protocols that would protect our staff from infections. For example, even during peak Covid 19 lockdown, we were able to continue our hydro projects at 30% capacity by following all the preventative guidelines. We were able to do this since hydro projects were out of valley. We built a camp there and conducted PCR test for our staffs on a regular basis and made sure everyone followed the guidelines.
About raw materials, the factories were all closed and even if they were available, we could not gain accesses to the materials because of the strict lockdown and travel restrictions. Raw materials that are imported from India could not come to Nepal due to the border closure.
And lastly, finically, since there was lengthy lockdown, it was very hard to arrange for funds and manage the cash flow. Because all the payments we had to recover from clients were delayed and the payments were deferred because no one was working and as a result the progress of the works were also slow. It was very challenging to manage the cash flow. But during this difficult period, I am happy to say that the banking sector was very helpful. They were a big help in assisting the construction industry.
Various media outlets have reported that the construction sector was already in pandemic stagnation and contractors still worry about resource shortages. Can you elaborate?
As previously mentioned, we have been continuously working on strategies. We have an executive team and every week we plan and we come up with strategies for the continuity of our work and managing of materials which is very important for us if we want to complete our projects in a timely manner because we do have deadlines to complete the projects.
As the Financial Director of the company what has been your major focus during this pandemic?
Our major focus has mainly been managing funds and of course cash flow and dealing with bankers as well and lastly, payment realisation and recovery from clients and projects. Plus we are alwaystesting and trying outnew financial strategiesto manage and enable growth and expansion.
How are these financial issues overcome?
Well, the development projects may not pick up pace this fiscal year. And I believe it is true to a certain extent. But we have been continuously calculating tangible and intangible, short term and long term, impacts of Covid 19. We have been taking into account that this is going to set a trend for the coming periods.
We have developed and are working on different strategies so that we give continuity to our work and are able to complete our projects. Key is in the balanced management of man-power, raw materials and finance as we move forward.
How do you forecast the coming months for your organisation?
The basic that we are focusing on is the continuity of our operations and projects. That’s our main focus. We do have management brainstorming for better strategies, and we are always ready to resume operations in full speed. We will be focusing on real estate projects because even with Covid 19, we feel that these real estate projects will boom. And to execute the strategies, we do have a highly professional and capable in-house team.
Our other focus is on recovery strategy. This basically means we have a strategy to recover deferred payments from clients and our projects. Plus, this year due to Covid, our deficit is almost one-third of our target turnover. To recover that deficit will take time.
How important is the relationship between companies such as yours and Banks and Financial Institutions?
It is very important. You have to be in close cooperation and participation with BFI’s. To execute big projects we do need the support of the consortiums. For example, to finance larger projects, 2-3 banks need to come together to form a consortium and get the loans approved.
We do have good relationship with BFIs. They have been a very big help during our journey and in this difficult time. Since the banks have high liquidity and are giving loans at decreased interest rates, we have been able to get loans for our projects. CE Construction as a company has a fantastic relationship with the banks and our reputation and credibility has helped us along the way.