As an indicator of how statistics can create either joy or despair and be wrong either way, take the first three months of 2019 when, the record shows, South Africa’s economy shrank by 3.2% – the largest drop since the notorious 2008 market crash. But as a reliable gauge of whether our country’s economy is in a terminal state, that statistic is questionable.
Given the levels of uncertainty throughout 2018 about the succession of our political leaders, the first quarter of 2019 in South Africa was never going to be an economic recovery blockbuster. And there was the small matter, in the fourth month of the year, of a General Election, the outcome of which was unpredictable on several levels. We were a nation in a state of high anxiety.
We took comfort in an orderly election with few surprises and a generally unchallenged outcome. The difference in mood, at the end, came from the heightened expectation of improved trade, a stronger currency and all the good things that go with responsible governance.
And to be honest, there is cause for hope that the shrinking economy has reached its low point and that a strong hand on the wheel could steer us into better times. But internecine battles within the ruling party mean that there’s still some sorting out of reporting lines to do. And that’s the tipping point on which South Africa balances, and where the real test of moral strength lies.
What it means for us, in a country that has had to wait too long for a stable political platform, is realising that, as individuals and collectives representing the foundation of our healthy economy in vital industries, we have to set an example by taking responsibility for ensuring the maintenance of standards. This means that both in our work performance and business dealings, we have to be seen as leaders and standard-bearers for excellence and integrity.
When it comes to contractual matters, we must adhere strictly to agreed conditions and demand that those conditions are met by our clients, staff and sub-contractors. Particularly in the payment for work done, we must hold debtors accountable on due dates even if it means pursuing them more vigorously than we find comfortable, to ensure that our creditors are able to be paid timeously. The consequences of non-payment are dire, especially to the smaller contractors who live from hand to mouth to survive in these difficult circumstances.
Just how vital this is comes home to us in the continued evidence that non-payment on contracts has sent too many of our colleagues in the building and allied industries to the wall.
If those around us shirk their obligations to good business practice, it is our responsibility, as honest tradesmen and professionals to take over, and re-set the course by impeccable example.
It is tough when the foundations that one relies on are rocking, and recovery is slow, but it just means that our efforts have to be redoubled in areas over which we maintain some control, rather than allow disorder to become the new normal.
Franki pulls out all stops to unravel brewing challenges at Mozambican project
An ambitious project timeline for the construction of Cervejas de Mozambique’s new brewery, compounded by a late start to the project due to external constraints, saw geotechnical specialist Franki pull out all the stops to ensure partial handovers of the foundations and lateral support to allow the main contractor to carry on with the works.
Franki Africa is once again proving why it is the largest, oldest and most established specialist geotechnical contractor in sub-Saharan Africa. This time, the contractor is calling on its experience in this specialist field to get the better of an array of challenges at the construction of a new brewery in Mozambique. The project owner, Cervejas de Mozambique (CDM), which already owns three breweries in the country, is a subsidiary of the largest global beer brewer, AB InBev.
Having broken ground on the construction of a more than 2-million hectolitre a year brewery to be built at a total cost of US$180-million in Mozambique’s Marracuene district, about 30 km north of Maputo, CDM went on to lay the first stone for the construction of the new brewery in early December last year. The project is the largest investment by CDM and by the beer sector at large in Mozambique since CDM’s inception back in 1995.
The new brewery, scheduled to produce its first batch of beers by the end of this year, means that its construction has a very tight timeline. Franki has been entrusted to carry out geotechnical work on the project. Marta Botelho, Contracts Engineer at Franki Mozambique, explains that Franki is responsible for the installation of foundation and lateral support piling for different structures of the brewery, like the BBT Tanks and Unitanks, Raw Material Silos, Malt Intake and Mill House.
With an initial estimated duration of five weeks, Franki’s project duration has since been extended to 10 weeks. As a result, the contract value has increased from MZN79-million (about R21,5-million) to MZN129-million (about R35,1-million) due to additional works required. A late start to the project meant a major setback to the project’s stringent timeline.
Apart from the late start, Botelho says the tight nature of the timeline was just a big challenge from the start, adding that the programme is very tight, due to the client’s plans to start operations this year.
“After a late start, we managed to guarantee partial handovers of the different areas in order to allow the main contractor to carry on with the works,” says Botelho. “Our design team worked together with the client’s engineers (WSP) to get to the best solutions and overcome any arising challenges.”
Another key challenge the Franki team had to contend with was the short supply of readymix concrete. There is a long distance from an existing batch plant to the site. “We used different suppliers and our own concrete transit mixers to minimise this challenge. Due to the tight nature of the programme, we also had to resort to working extended hours,” says Botelho.
With a total of 60 people on site, including 18 subcontractors for steel fixing, Franki’s project scope encompasses different piling technologies, including the Continuous Flight Auger (CFA) piles and the Driven Cast-in-situ piles, also known as Franki Piles, with diameters ranging from 410 to 800 mm. Franki will install a total of 707 piles, comprising 142 no. CFA and 367 no. DCIS foundation piles, as well as 81 no. Grout Columns, 117 no. CFA piles and 243 m² of Gunite arches in lateral support.
Commenting on the choice of piles, Botelho says CFA piling is a fast system with no vibration and limited noise levels associated with it. Franki Piles, on the other hand, are the most economical and reliable piling system in southern Africa. Developed about 70 years ago, the Franki Pile’s main feature is the large base formed at the toe of the pile and, in forming it, the end-bearing area is considerably increased. Generally a very economical system, it has an extensive range of pile sizes.
To execute the project, Franki has a range of equipment for each of the setups. For the CFA setup, the geotechnical contractor has deployed the Casagrande CFA-26 auger rig and the Sany HBT-40 concrete pump. A Franki Rig SA83 and a 60t Ajax C60 are being utilised for DCIS setup. In terms of auxiliary equipment, Franki has deployed a Tadano TI mobile crane, the two Fiori transit mixers and two TLBs. “For lateral support equipment, we have on site a Comaachio Geo 305 drill rig and a single Mat Pump. Proper selection of equipment is very crucial to ensure timely delivery of the project,” concludes Botelho.
By Greg Steele, Executive Director of East Cape MBA
Master Builders South Africa President John Matthews, referred to the “Hard Times” in his opening comment in the April edition of SA Builder. In addition, our National Executive Director of Master Builders South Africa (MBSA), Roy Mnisi, has called on Government to “Save the Construction Industry (SA Builder, April 2019) and we seem to have become an industry beset with challenges and obstacles resulting in hardly any construction projection being free from some or other serious strife.
We are all aware that the Building Industry recorded negative growth for both the third and fourth quarters of last year thus entering a period of recession. Master Builders, East Cape (MBA) has felt the impact of this decline by virtue of a concerning 10 % decline in its membership over the past 12 months. This has been largely due to business closures, business rescue, liquidations and simply members who can no longer afford the annual subscriptions of the association.
Notwithstanding the difficult period that the industry finds itself in, associations like the Master Builders Association often become even more essential as contractors and subcontractors look for support and assistance with the various issues facing them many of which revolve around late payment or even non-payment as a result of client or principle contractor default. The MBA has again been reliably informed that there are some provincial government departments that have indicated a lack of funds to continue or complete certain projects.
Part of the MBA’s mission is to assist its members in these situations and this sometimes requires intervention at the highest level. Non- or late payment by government remains a major concern and a further survey will be conducted amongst members to ascertain exactly where the problems lie. The disruption of building sites by forums and SMME’s has almost become a norm in the industry and procurement and contractual provisions will need to be reviewed and adapted to suit the changing landscape and to ensure that contractors and subcontractor members are protected and risks shared with the employer where relevant.
The client’s responsibility in Health & Safety on site is well defined in the Construction Regulations but are clients aware of their obligations? This is another issue that MBSA is committed to addressing across the country with the support of the local MBA’s in each region.
On a local level MBA, East Cape has committed itself to the recruitment and support of Home Builders and subcontractors in 2019 and much of our strategic focus will be in this area. The promotion of the question “Is your builder a Master Builder?” is foremost in our minds and we are asking Client bodies, Housing & Golf estates and other developments throughout our region this question. This in an effort to market our members to clients on a wide scale based on the following benefits for the homeowner:
Status & Quality
Use members of this respected 120 year old contractor organisation
Values – Skill· Integrity· Responsibility· Ethics
Experienced and graded contractors
Good standing reference check
MBA Advice for home-owners on their Building Projects
Get the best from your building contractors
Advice and standard contract documentation
Advice on legislative Compliance and Home-owner responsibilities
Recourse to mediation
Our members have access to tailored and relevant services at discounted member rates
Contractual and Legal advice and assistance
Health and Safety Compliance support
Education and Training – Relevant and Accredited
Labour Relations support and representation
(All services at members discounted rates.)
Is your builder a Master Builder?
The MBA has held two golf days to date this year. The first in East London on 28 March and the second in Port Elizabeth on 11 April 2019. The East London day was held at Olivewood Golf Estate on the East Coast Resorts Road and hosted a smaller field of around 45 Golfers. The local Stutt Group was a major sponsors of the event and despite the smaller field a great day was had by all.
The PE Golf day enjoyed a bumper field with over 90 golfers on the day. The day was supported by some of the QACCS Golf Club members and proved to be a great start to the MBA’s social calendar in PE region.
The MBA holds and Annual General Meeting in each region or branch namely Port Elizabeth, Southern Cape and Border/Kei with the main objection of electing office bearers for the branches. Through the special efforts of the Executive Committee members in each branch the AGM’s were well attended throughout with almost 200 people in attendance overall. The following members were elected to serve as office bearers.
Chairman – Gregg Clarke – Techni Construction
Vice Chairman – Andrew Scott – William Scott Contracts
Chairman – Peter Jones – ABE Construction Chemicals
Vice Chairman – Dane Langhein – Dekon Projects
Chairman – Brett Holton – Tusker Construction, Knysna
Vice Chairman – Cameron Ward-Able – Cape Island Construction, Knysna
Mashaba Appeals To Private Construction Sector To Partner With The City Of Johannesburg To Rebuild The City
In his keynote address at the African Construction and Totally Concrete Expo 2019 held in Midrand in June– Gallagher Convention Centre in Midrand, Executive Mayor the City of Johannesburg, Cllr Herman Mashaba, called on the private construction sector to partner with the City of Johannesburg in ambitious R20 billion project to rebuild and rejuvenate the inner city.
Focusing on the central Johannesburg areas of Yeoville, Berea, Vrededorp, Fairview, Salisbury, Marshalltown, Wolhuter, Turffontein and City and Suburban, work on the above developments will begin in six to eight months.
“All in all, the properties awarded as part of 24 tenders hold an investment value of approximately R20 Billion”
“Johannesburg has certainly seen better days,” said Mashaba, “but, as the government of the day, we are determined to return this historic city back to its glory days of free enterprise as well as personal and collective success.
Unfortunately, this all-important expo takes place against a backdrop of massive jobs losses, particularly in the construction sector.”
Last month, Stats SA released jobs figures which showed that, in the first quarter of 2019, South Africa experienced an increase in the rate of unemployment arising out of a loss of 237 000 jobs.
The construction sector, for years one of the beacons of hope for our economy, was the biggest contributor, with 142 000 jobs lost in that short period.
Immediate as well as long-term and sustainable solutions are sought, which is why this expo could not have come at a more opportune moment.
“How do we get South Africa working again?”
“Presently almost 10 million people are without work.
It is absolutely unacceptable that, in a country like ours, with such a massive infrastructure backlog, we can afford to lose 142 000 jobs in the construction sector and do nothing meaningful about it.
Without critical infrastructure like roads, bridges, railway lines, water pipeline networks and electricity reticulation infrastructure, how do we hope to modernize South Africa’s economy and rescue the construction sector?
Above all, we have a massive demand for thousands of low-cost houses, rental units and student accommodation that could get your sector back on its feet.
Certainly, in the City of Jo’burg, we have room for the construction sector to play a meaningful role in this regard. When we took office almost 3 years ago, we discovered a shocking infrastructure backlog exceeding R170 billion.
A staggering housing backlog of over 300 000 units has led to a legacy of land desperation, backyard dwellings, and shack farming.
Far more housing is needed for those belonging to the missing middle and those in need of student accommodation.
Electricity outages produced from a R60 billion backlog in our electricity network produced over 170 000 power outages each year.
We had to contend with water stoppages resulting from a water network backlog of R18 billion which sprung over 45 000 leaks, losing 107 billion litres of this precious resource, each year.
That is why the City of Jo’burg has embarked on an ambitious Inner City Rejuvenation Programme, which seeks to turn Johannesburg into a construction site.
And this is why we recently awarded tenders for 24 developments, spanning 81 properties and pieces of land. Throughout their lifespan, these 24 developments are expected to create 11 000 direct jobs.
It must be noted that the developments will deliver mixed typologies consisting of one bedrooms and two bedroom units.
The tenders in question are intended to result in mixed use development with emphasis on affordable residential units, student accommodation and retail spaces for small businesses.
The City of Johannesburg is yet to come across a development of this size.
There is simply nothing comparable to it, especially if one takes into consideration similar projects that have been attempted in partnership with the private sector.
This is also shaping up to become the biggest volume of property that has been awarded for development, at one go, in the history of the City.
This project also lends itself to becoming the biggest mixed use development with a special focus on affordable residential units and student accommodation.
But this project is also important for one other reason; it will play a massive role in our efforts to bolster Johannesburg’s economy.
In September 2017, the City Council approved the Inner City Plan, which is a long-term development program that seeks to address spatial, social, and economic inclusion in our City – a project that will see more and more residents living, working, and enjoying life in the city.
In order to realize a minimum 5% economic growth within the City by 2021, we are ensuring that the Inner City boasts an enabling environment for small businesses to flourish and create permanent jobs.
In return, we intend to attract investment of between R16 Billion and R20 Billion annually into rebuilding our Inner City and converting it into a construction site.
But we know that without the private sector and external investment, we cannot succeed.
We operate off the clear understanding that our relationship with business requires government to pave the way for the private sector to unleash its potential and its balance sheet in our City, where profits can be made and jobs created.
We are eagerly awaiting the submission of tenders for a second batch of a further 70 properties that Council recently approved for offer to the private sector.
More will follow as we have already identified about 500 properties throughout the Inner City, and beyond, which have either been abandoned or hijacked. Thousands more jobs will be created during and after construction and tons of building material will be required to do the work.
We therefore call on the construction sector to partner with the City of Jo’burg to get this sector up and running again, and employing more people. And while we intend using the Inner City Rejuvenation Programme to bolster the economy of the City of Johannesburg, we also intend to make it inclusive.
As the City of Johannesburg, we are determined to build an inclusive economy and as such, genuinely Broad Based Black Economic Empowerment (BBBEE) will be our only yardstick in determining how we achieve this goal, particularly in relation to this project.
Therefore, we will give preference to companies with the best triple-BEE credentials.
This is an ambitious and historic project that we are undertaking and, as such, we want companies that will succeed based on know-how, and not know-who.
While on the subject of transformation, we also need to radically transform our skills base as a country.
Particular attention needs to be paid to our shrinking base of artisans. That is why we have taken it upon ourselves to train 100 young people as artisans, as a pilot project.
We may be a long way off but we intend to do everything in our power, including using as many of our projects as possible, to take as many people as possible off the City’s unemployment line, especially the youth who account for 40% of the City’s unemployed.
For this, we need a strong partnership with the private sector.
A multi-disciplinary fast-track committee is making inroads into producing an environment which is easier to do business in Johannesburg.
Times for approving building plans, rezoning applications, applying for service connections and the like are beginning to drop to record lows.
It is all about changing red-tape into red-carpet for our business community.
And part of making all of this a reality is to put in place City employees who are capable of discharging their duties efficiently and effectively.
I wish to say that the ongoing success of our Inner City Rejuvenation Programme continues to be a source of great pride for myself, officials of the City of Johannesburg and our government.
Although the project is still very much in its infancy, the overwhelming interest shown by investors and property players, indicates that we are onto something transformational.
Slowly but surely, we are restoring confidence in the Inner City as well as other important nodes and building it where none existed before.
Slowly but surely, we are fulfilling our promise of turning Johannesburg into a construction site that will create thousands of much-needed jobs.
As always, I invite you to partner with us, not only to extract value from these initiatives, but to put value back into the City.
What is most exciting about our Inner City Rejuvenation Programme is the ripple effect it will have on the construction sector, which has seen some of the biggest and reputable companies going under and losing jobs.
I often wonder how many jobs this sector could create if every major city around the country used Johannesburg’s blueprint for getting South Africans working again.
We may never know the answer to this question but I can assure you that, as far as the City of Jo’burg is concerned, we will do all that we can, through this project, to provide an economic stimulus to the construction sector.”
Carrot And Stick Approach To Cut Carbon Emissions
Carbon Tax has taken a long time to come to fruition, but it is here in South Africa from 1 June 2019.
The clay brick sector is committed to playing their part in meeting Government’s targets to reduce carbon emissions. The Clay Brick Association of South Africa (CBA), a member-based non-profit organisation, supports and builds capacity in the national clay brick supply chain,
“The CBA is driving several integrated sustainability initiatives to give stakeholders access to accurate, locally-relevant research,” explains Mariana Lamont, executive director of the CBA.
“We are engaging with both formal and informal brickmakers, the public sector and construction professional like architects, quantity surveyors and construction buyers. We keep the industry informed on legislation and opportunities for improved energy efficiency in both brick manufacturing and the built environment.
“We are proud to announce that over the last 5 years, the CBA’s programmes have resulted in a 10-15% reduction in the clay brick industry’s greenhouse gas emissions,” she concludes.
At the CBA’s recent annual conference, Lisa Reynolds of Green Building Design Group (GreenBDG) advised CBA members on Carbon Tax legislation.
Carbon Tax is for Scope 1 emissions – “polluter pays principle”. It calls for R120/tonne of Co2 equivalents, but with the allowances, the actual liability is between R6 to R48 per tonne of CO2e. A fuel levy of 9/10 cents will be imposed on petrol/diesel due to the Carbon Tax. Payment of the Tax will be done via the Customs and Excise Act. Misinformation submitted will result in substantial fines.
As part of its Switch Africa Green programme funded by the European Union, the CBA has established an online portal that will benchmark the industry and assist in calculating some Carbon Tax allowances. The consolidated, anonymous reporting identifies where real savings are being achieved by members, and provides accurate, local research for potential future mitigation projects.
SANS 10400-XA (Version 2) on energy-efficiency in buildings is on track for publication this year.
The construction industry professional will be pleased to hear that it is more user-friendly and there is no reference to SANS 204. The reference building route to compliance exists in the Regulation and will thus be scrapped from the standard, leaving only two routes to comply: The tables and the “recipe” route. An important change is the map revised by the CSIR. The new map reflects energy zones (rather than climatic zones) that consider the energy (and humidity) needed to achieve thermal comfort inside a building.
The energy efficiency performance requirements within this standard are being made slightly more stringent. While the regulations for non-masonry walling remain unchanged, there will be a higher thermal performance requirement for masonry walling. This means that concrete and brick walling will require some kind of thermal intervention – such as a cavity wall– which is more difficult to construct.
The thermal performance requirement for walling will further depend on the type of building and the hours of day the building is used.
“I believe the biggest impact of the revised SANS 10400-XA in the market will be in terms of masonry walling,” reports Lisa Reynolds.
“The previous standards were quite low. In poor communities cavity walls are a challenge, and developers will need to consider composite walling with insulation in order to comply.”
Energy Efficiency Tax Incentives
The tax rebates for energy efficient projects – Tax 12i and Tax 12L – were launched in 2013 as incentives to save energy and thereby reduce Carbon emissions. Tax 12L offers a rebate of 95 cents per verified kWh saved (confirmed by a SANAS accredited, independent body). The sunset clause for the Tax Incentives has been extended to 2022 in alignment with the Carbon Tax.
Hope for SA economy: Thinking ahead to Fourth Industrial Automation technologies
After years of slow grow, South Africa may be over the worst, and could start seeing growth by 2021/22. This is according to leading economist Mike Schüssler, who was addressing a VIP breakfast briefing in Johannesburg recently, ahead of Africa Automation Fair and the Connected Industries Conference.
Schüssler, owner of economic consultancy economists.co.za, said the 1st quarter would likely be a disaster, with corruption and SOEs taking some time longer to sort out. Eskom’s challenges would remain a growth inhibitor too, he said. In industries such as mining, Schüssler expected a continuing drop in employment figures for the next two years– partly due to automation, but mainly due to the fact that commodities markets had changed and Eskom was not preforming well at all.
He did not expect South Africa’s gold and platinum sectors to return to being the GDP contributor they were in the 1970s and 1980s.
However, he was cautiously optimistic about South Africa’s growth prospects: “I think we can expect to start seeing growth after a few quarters. We’re probably over the worst, and by 2021/22 we could be back at 3% GDP growth,” he said.
To help spur this growth, the country needed to be tougher on crime and labour protests, and ease tax and legislation that hampered small business growth. “A profit motive is what enables businesses to grow – if a business doesn’t make a profit it simply can’t create jobs. So the government needs to reduce the risks of business investment and reduce the red tape in the way of small business growth,” he said.
For industry, the hope of a return to growth means this is the time to start thinking ahead to Fourth Industrial Automation technologies and the broader ecosystem, he said.
Schüssler said the Fourth Industrial Revolution era extended far beyond technologies, and signalled a shift from commodities-based economies and manual labour, to services-driven economies. “The Fourth Industrial revolution is also mainly a services revolution,” he said. “It’s not just about industry, but also how you sell things, transport things and more – it’s a services thing.”
Changes wrought by this revolution included a significant increase in the number of people working in services and a drop in the number of people working in manual labour intensive industries. “In the past 27 years alone, the number of people employed in agriculture has dropped from 44% to 28% globally, yet agricultural output has increased. Meanwhile, the number of service workers has increased from 31% to 49%.”
“The Fourth Industrial Revolution is personalised, serviced-driven and even recycled, so the economic focus is no longer only on commodities,” he said.
The Fourth Industrial Revolution and associated services revolution presented significant scope for innovation and new business growth, delegates heard. Marius Smit, General Manager: Technology & Business Events at Africa Automation Fair organiser Reed Exhibitions, noted that there were clear signs of new opportunities for manufacturers and a range of other sectors in the Fourth Industrial Revolution.
Africa Automation Fair 2019 will showcase Industry 4.0 innovations to drive efficiency, productivity and cost benefits, he said, with leading sponsors such as Honeywell and Rockwell Automation highlighting their solutions to fast-track industry into the Industry 4.0 era.
The Africa Automation Fair 2019 exhibition held mi June in Johannesburg showcased technologies, solutions and models for next generation manufacturing. Running alongside the fair, the Connected Industries Conference at Africa Automation Fair 2019 focused on the economic impact of the Fourth Industrial Revolution (Industry 4.0 / IIoT) on South – and sub-Saharan Africa, and how to bring this technology shift to South Africa.
The Green Building Council of South Africa (GBCSA), the Association of South African Quantity Surveyors (ASAQS), and the University of Pretoria’s (UP) Faculty of Engineering, Built Environment and Information Technology recently launched the 2019 edition of Green Building in South Africa: Guide to Costs & Trends. It is the second publication following the 1st edition that was issued in 2016. The document provides interesting trends and valuable insights about the influence of green design and construction on both capital and operational costs.
“The guide is available in electronic format and it will be of great benefit to the built environment. The thorough, peer-reviewed research and presentation of the results make it a one-of-a-kind publication on an international level,” says Karl Trusler, Edutech Director at ASAQS.
Challenging the notion of the ‘green cost premium’
With increased awareness and education in the built environment regarding the green building movement, a perception that green building attracts a significant cost premium when compared to conventional construction emerged. To address this concern, The Cost of Green Building Study Committee was established in 2014. The 2019 edition includes the Committee’s convincing results regarding the business case for green building.
“The green cost premium appears to be progressively diminishing over time, largely because of growing maturity in the industry,” says Danie Hoffman, Senior Lecturer at the University of Pretoria’s Department of Construction Economics who is the lead researcher on the project.
The report also confirmed the 2016 finding of a strong negative correlation between green cost premium and construction size. The larger projects managed to achieve a Green Star certification at a much lower average green cost premium when compared to smaller projects.
The data however also confirmed that the cost premium for buildings smaller than 5 000 m2 has reduced significantly from 9,3% (2009/14 data) to 4,6% (2015/18 data).
“Office buildings that were developed for single corporate tenants had initially attracted much higher green cost premiums compared to buildings developed for a multi-tenant mix. Since 2015, this gap has been closed,” says Hoffman.
He adds that the business case for a comprehensive investment decision should include both the cost premium of constructing the building and the financial performance of the building in operation.
MSCI data confirmed that Green Star certified prime and A-grade offices produced a total return of 11,6% in 2017 versus 8,0% for non-green certified prime and A-grade offices. Better work environments and a lower impact on the environment have led many developers to achieve a significant return on their green building investments. “We hope the report will help guide future real estate decision making towards more sustainable, future-ready buildings in South Africa,” concludes Hoffman.
Build It Pinetown Makes Repeat FAW Purchases
Build It Pinetown, one of 350 retail stores in the SPAR Group Ltd South Africa stable, supplies and delivers construction materials to its clients. In addition the company mixes paint, cuts glass and boards and reads business plans.
These deliveries are currently being performed by two FAW trucks, each bought from the FAW Pinetown branch. Paul Nothnagel, sales executive at the full sales, service and parts dealership – one of two such facilities in KwaZulu-Natal – has been the driving force behind the deals.
Nothnagel proactively marketed the FAW brand by personally visiting Build It Pinetown, and leaving marketing brochures for the store’s management to mull over. This strategy worked, and he continues to pay the store visits, sometimes after-hours, to ensure complete customer satisfaction.
The first FAW the Build It Pinetown branch bought was a five-tonne 8.140FL, which was secured in October last year. This acquisition was quickly followed by another identical purchase, this time financed in-house by FAW Pinetown, a month later.
The popular FAW 8.140FL is a 4×2 heavy-duty truck with a body and payload allowance of 6 019kg and permissible gross combination mass (GCM) of 14-tonnes. It is powered by a 3.8-litre Cummins ISF engine.
Quintus van Rooyen, general manager at Build It Pinetown, explains that the busy home improvement store wanted to buy its own trucks as it had been outsourcing deliveries to sub-contractors – with mixed results. Ironically, a driver from one of these companies had also recommended FAW to Van Rooyen.
He adds that Build It Pinetown delivers a range of building materials up to 500 km away. “The FAW’s have impressed us and we are now preparing to buy a third FAW, most likely the larger 15.180FL, due to its 24-tonne GCM rating,” he explains.
With Build It Pinetown being so busy with home deliveries, some as far away as Nkandla, the two FAW trucks are already approaching their second visit to the fully-equipped FAW Pinetown workshop. “There hasn’t been anything that Paul and FAW Pinetown have not been able to sort out for us,” Van Rooyen continues.
“The low fuel consumption recorded by the FAW trucks and the superb after-sales service offered by FAW Pinetown and from Paul in particular, is the main reasons why we keep going back to them,” he concludes.
The Pinetown FAW branch is strategically based alongside the N3 to Johannesburg and is in the same vicinity as other leading truck OEM’s. It was established eight years ago, with dealer principal, Mike Williams, at the helm of the impressive facility since 2013.
Individually owned and managed, the Build It group have been supplying retail home improvement building materials across Southern Africa for more than 32 years.
Integrated Construction Business Software Is A Must-Have
By Kenny Ingram, Global Industry Director, Engineering, Construction & Infrastructure at IFS
The engineering, construction and infrastructure industry is facing huge disruptive changes. We are at a stress point and need wholesale change.
While global construction productivity has improved about a quarter of the rate of manufacturing productivity since 1995, a recent Research and Markets report states that South Africa’s construction industry suffered a downturn during the period 2017 – 2018. When we look at rich countries like Germany, France and the United States, things are not much better —there, construction productivity is also falling. The United States’ top contractors according to ENR have recently experienced a decline of 26 percent on their return on working capital. The top 10 contractors in the UK have increased their debt by 24 percent in 2018, and British contractors delivered an average operating margin of negative .5 percent in 2018.
Since global construction productivity has been atrocious for a long time, why must we act as soon as possible? Consider some of these facts:
· 55 percent of the top 100 construction companies are now in Asia – a huge increase from where it was 10 years ago – so for the rest of the world, foreign competition is intensifying;
· Modular and off-site construction, which can improve productivity, is forecast to grow by 6.9 percent per year;
· Demand will be high, with 2 billion new homes need to be built over the next 80 years according to the UN.
It is very clear that running a construction business successfully is becoming extremely hard and the complexity is increasing at a rapid pace.
The essentials for business growth
The need for tight project control and business governance is not optional but essential if you want to grow and prosper in the future. Those who do not have timely and accurate information about how their projects and businesses are performing will be unable to make the right decisions and risk being the next casualty in the industry.
Today, most construction businesses are running their companies using a patchwork quilt of non-integrated systems. In fact, the most common management information system in use, is Excel. A patchwork quilt solution does not support best practices and will not be capable of supporting this highly disrupted industry in the future.
Integrated business software
The term enterprise resource planning (ERP) is often talked about in the construction industry but it is usually interpreted as meaning the finance and maybe human resources systems. But ERP is meant to be an integrated enterprise wide system which is what it is in many industries such as manufacturing.
Interestingly productivity has increased by 760 percent over the last 50 years in manufacturing and yet construction has achieved a pathetic 6 percent increase over the same period. So maybe we could conclude that this is because the manufacturing industry has recognised and exploited the benefits of integrated processes and systems for many years.
Of course, the answer is more complex than that and I would agree that the construction industry is unique. Unlike manufacturing, construction contractors deliver large, long-term one-off projects rather than products. Construction-centric ERP systems have evolved and become mature solutions so there is no longer a good excuse for not implementing ERP properly other than a resistant culture. We are also seeing the construction industry converge with the manufacturing and service industries so there are even bigger reasons now to become more efficient and agile by implementing an integrated ERP system. This should also be viewed as the platform to integrate the emerging digital technologies such as BIM, 4D scheduling, robotics, augmented reality (AR) and IoT into the core ERP backbone.
Can we adapt and be an agile successful business if we continue to run our business using a patchwork of non-integrated business systems? I would argue that the huge pressure on businesses to deliver high quality projects on time and at lower cost can only be met by moving to more integrated and agile business processes and systems.