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Toronto-based LEA Group started a modest subsidiary in India with three employees in 1993, and it has experienced incredible growth.
Toronto-based LEA Group started a modest subsidiary in India with three employees in 1993, and it has experienced incredible growth.

Your Business Abroad

Mini-multinational springs from office in India Add to ...

When Toronto-based engineering consulting firm LEA Group Holdings Inc. opened a branch in India in 1993, with a staff of three, the country was barely into its third year as a reforming economy.

India was thinking big when it came to infrastructure but it was struggling with resource shortages and facing big question marks on how to move forward.

Today, LEA Associates South Asia (LASA) Pvt. Ltd., has 1,100 employees spread across 35 offices in India, while the Canadian head office employs 120. About 10 per cent of the staff in India are expatriates, including Britons, Americans, Sri Lankans and Africans. LASA has operations in Oman, Ethiopia, Uganda, Tanzania and Bangladesh, where about 400 more staffers are employed through sub-contracting work on more than 100 projects.

The Canadian parent is responsible for North America and Latin America, while the Indian subsidiary looks after Asia and Africa.

The medium-sized enterprise, which handles everything from inception and completion to maintenance of engineering projects, is now a mini-multinational, with India accounting for annual revenue of about 2 billion Indian rupees ($43.5 million Canadian) – half of LEA’s global revenue.

LEA stands out in three areas: an ability to work with both the Canadian and Indian governments to help expand into new areas that involve complex drafting of contracts and business procedures in state-led projects; a tendency to manage growth while shifting resources in line with changing costs; and the perk of employee ownership in management.

“(Everything) from getting a project to implementing to financial management is done from here,” says Pinaki Roy Choudhury, managing director at LASA.

In a culture that involves dealing with new laws and bureaucrats, and raising scarce funds, it’s not easy.

“Canadians are peaceful and law-abiding. And our board asks to be legally as perfect as possible,” says Mr. Roy Choudhury, a civil engineer from the prestigious Indian Institute of Technology, who has been with the company since 1994.

Given the complex requirements of building highways, railroads, ports, flyovers and urban transportation systems, LEA employs a mix of transport, legal, financial and logistical experts to back up its civil engineers.

“After 2000, things changed a lot. There are more Indians and less Canadians,” Mr. Roy Choudhury says of the company.

Local staff has picked up a great deal of expertise, and expatriates cost a lot more to employ. While high-tech expats cost about $150 to $200 an hour, Indian staff are a fifth of the cost. During competitive bidding for projects, LASA has to balance the expertise required with the associated costs.

But the Canadian role is critical on two counts – its high-tech expertise and ability to pull government support.

In Bangladesh, the company is building a 10-kilometre-long flyover in the capital city of Dhaka that is a lot like one near Toronto’s Pearson airport, and the Canadian parent has been a big help thanks to its rich knowledge base. “For others, we don’t need them and we can’t afford them,” Mr. Roy Choudhury says.

LEA is following in similar footsteps in Bangladesh as it did in the 1990s in India, when it helped local governments create contract templates to build highways. LEA was involved throughout in a pioneering 92-kilometre-long highway in the Indian state of Rajasthan.

LEA competes with Montreal-based engineering firm rival SNC-Lavalin Group Inc., in some segments, as well as big global consultancies such as PriceWaterhouseCoopers, Arthur Andersen and Ernst & Young.

The Canadian International Development Agency (CIDA) helped finance the training of Indian engineers earlier in the decade, and visits to Canada by government officials from India. Canadian authorities also offer “comfort letters” and provide access to local government officials through diplomatic support that opens doors, helping save time and costs for LEA.

“We have been using CIDA as a sensitive conduit,” Mr. Roy Choudhury says.

LEA is currently working on a clutch of townships being built under the Delhi-Mumbai Industrial Corridor plan and it is building a challenging highway link to the southern Kochi port, where land has to be reclaimed before roads and bridges can get started.

Special to the Globe and Mail

Narayanan Madhavan is associate editor of the business news pages of Hindustan Times, a leading Indian daily newspaper. He has previously worked for Reuters, the international news agency, as well as The Economic Times and Business Standard, India's leading business dailies. Though focused mainly on business and economic journalism with a strong focus on information technology and the Internet, he has also covered or written about issues including politics, diplomacy, cinema, culture, cricket and social issues. He has an honours degree in economics and a master's degree in political science from the University of Delhi.

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