Cape Business News - 10 May 2004

CAPE-based Neil Muller Construction (NMC), one of South Africa’s leading private construction companies, has signed a rare empowerment deal with Infinity Inc (Pty) Ltd, a black economic empowerment company that is wholly owned by black women.

The agreement with Infinity Inc includes the active participation of one of the Infinity Inc directors, Milase Mzamo, who will serve as an executive director responsible for new market development on the NMC board. The company is looking at totally familiarising Mzamo and the other new partners with the intricate issues surrounding the construction industry and NMC’s business.

Announcing the deal at a well attended function at Rondebosch last month, NMC managing director Shaun Webber said that while the construction industry was currently in the process of developing a black economic empower-ment policy, NMC was leaping ahead with a deal that puts 26% of NMC equity into black hands, of which Infinity Inc owns 58%. "Not only does this new partnership beef up NMC’s empowerment credentials, it will also help facilitate growth and further raise our potential," Webber said.

"Infinity’s shareholders will play an active role in the company, helping us secure contracts in new business terrain, and providing fresh insights into how we can keep improving our offering."

The Infinity Inc deal follows an earlier move towards transformation when in

2002 NMC first issued a 5% shareholding to Charles Adonis, one of its current black directors. NMC’s employees have also been included in their empower-ment plans through the formation of an employee share trust, to which 10% of the company equity has been allocated. Sixty percent of the people participating in the employee share trust are black. The agreement with Infinity Inc, Webber said, was preceded by several months of research and negotiations before NMC decided to go ahead with the partnership. "We had to evaluate expressions of interest from various other BEE suitors before we decided to sign with Infinity Inc. We are very pleased to have concluded an agreement with a company of such high standard and quality."

The BEE deal also opens a new chapter for NMC, which introduced a new corporate identity at the function. The name Neil Muller Construction will in future be used only in the abbreviated NMC format which transcends language and cultural barriers. Orange, its unique corporate colour and the strongest component of the previous identity, has been retained but deepened to create a more mature, truly African colour. Strong use of black and silver communicate smartness and strength.

Neil Muller Construction was well known for delivering its contracts on time and within budget, and was particularly noted for its design and construct turnkey packages and solutions, Webber said. In the past it had perhaps been best known for its work on industrial projects, but in recent years had branched out considerably into commercial buildings and shopping centres in particular.

"With hindsight, our decision to become stronger players in the commercial and retail sectors as a hedge against the cyclical nature of industrial construction contracting - once our primary niche - has been timely," he said. Milase Mzamo, managing director of Infinity Inc, said her company was excited about the deal, as it would allow Infinity Inc to gain a foothold in the construction business. The company also has interests in property development, efficient use of energy resources, wine farming and tourism.

"We were keen to associate ourselves with a company that fits our vision, one of which is the requirement for active participation, as we are looking to add value to the business, and not to just ‘make up the numbers," she said.

"NMC will now effectively have black representation of 25% on its executive management. We also looked at preferential procurement to see if the company was meeting its balanced score card targets, and are happy that NMC currently scores 62% on the balanced score card," she said.

Further to this, both parties agreed to explore enterprise development, in an effort to create more opportunities and business for emerging black owned companies.