News

By Bijoy Ghosh
(News taken from The Hindu Business Line: Saturday, 24 July, 2004)

The domestic hotel industry seems to be ready to increase its dependence on outsourcing as Sinar Jernih, a Malaysian company in the business, plans to expand its range of services. Engineering maintenance services are to follow its current portfolio of cleaning and maintenance services.

Cleaning and maintenance make up a large portion of a hotel’s operating expense, and the Sinar Jernih (India) Executive Director, Mr. J.S. Shekar, said outsourcing could reduce costs by 5-10 per cent.

Sinar currently has 40 projects, of which 19 relate to Taj group properties, and two to the Oberoi group.

Mr. Shekar said Sinar did not have domestic competitors. Property management companies come close to being competitors, but their activity range is greater. He estimated the Indian market in outsourcing to be about Rs 200 crore.

Engineering services in hotels seem to hold greater revenue potential. Mr Shekar said about 60 per cent of Sinar’s revenue could come from them.

The client-base is set to expand as Sinar now plans to tap opportunities among corporates. Mr. Shekar said that contracts from corporates gave better returns than those of hotels. However, the company had to build a client roster filled with hotels to develop the right image, he added.

With its current range of services, Sinar’s turnover grew from Rs 4 lakh in 2001-2002 to Rs 6.54 crore in the last financial year. Mr Shekar said the current financial year’s target is about Rs 9 crore. The company’s press release said it broke even in its second year.

Sinar also plans to set up a training school for hotel cleaning and maintenance services shortly in Chennai.

Sinar Jernih (India) was floated by its Malaysia-based parent company, Sinar Jernih SDN. The parent invested Rs 1.2 crore initially, plans to bring another Rs 1 crore to fund expansion plans