The proposed tolling of the N1 highway between Pretoria and Johannesburg will have a mixed impact on property values and the prioritisation of growth areas

Friday, 07 August 2009 02:00

A firm foundation

Stephen Pell has his job cut out. The head of Stefanutti Stocks building unit is at the centre of the majority of the activity around the recent corporate merger.

Stephen PellA large part of the R1,1bn merger between the construction groups Stefanutti & Bressan and Stocks is taking place in Pell’s unit. That is because Stocks was largely a building business with a small civil engineering operation. So the essence of the 2008 merger that created the R6,3bn Stefanutti Stocks is being experienced in the building business unit.

Pell entered Stefanutti Stocks from the former Stocks, whose building operations had spread across the Southern African region and the Middle East. Pell says the merger was attractive because it provided good synergistic operational and cultural blends. He says the old Stefanutti & Bressan had its roots and a strong building base in KwaZulu Natal, whereas the former Stocks was stronger in other regions. The combined operation has produced a geographically diversified and strong entity, he says.

The new building unit spans a number of sectors that include the residential and commercial markets. The unit recently concluded work on the prestigious One&Only, the luxurious new Cape Town hotel undertaken by hospitality mogul Sol Kerzner. The group was also in the joint venture that won the R1,4bn expansion of the Cape Town International Airport and the R500m extension at the OR Tambo International Airport.

The unit also contains a focused housing operation, which operates mainly in the affordable housing sector. A large portion of the housing development work is from mining and industrial linked developments, as well as some private developers. This operation does, however, have the ability to operate in the low-cost RDP arena.

The building market is going through a lull due to the global economic meltdown, but Pell is confident that his division is well positioned. He says the merger has retained the entrepreneurial vibe, backed by a bigger operation. “Size does matter,” says Pell. “We are beginning to see the benefit by being recognised more often in larger projects.” Stefanutti Stocks’ building unit is probably within the top four in terms of size in the Southern African region, he says.

Pell says the group has successfully dealt with integration issues and more specifically the people factor. “This was important to us as it speaks to the strategic objective of the company. We want to be the best in our market by delivering quality service, on time. The only way we can achieve this is to ensure that all our people exude enthusiasm and proactiveness towards all our clients and customers because that will be our critical differentiating factor.”

Though the local building market has gone quieter, Pell sees growth opportunities, which can be derived through offering clients extra value. He says in such a tight market, Stefanutti Stocks’ black economic empowerment (BEE) credentials will add to the competitive edge. Stefanutti Stocks boasts the best empowerment credentials in the construction sector of the JSE. It was recognised as a leading BEE player in the FM’s 2009 Top Empowerment Companies survey.

Pell also sees opportunities for growth in the Middle East, where his unit maintains a fair amount of exposure. “When we talk about the Middle East people focus on Dubai,” says Pell. The region is bigger than Dubai and offers opportunities in places like Abu Dhabi, Bahrain and Qatar, he says. “Our Middle East operations include interior fit-out and refurbishment business Al Tayer Stocks and the electromechanical business Zener Steward. We have also recently announced that we intend to start up a general construction operation focused on the infrastructure market in the Middle East, which will be an area of growth to us in the long term.”

Pell also expects work to flow in from the broader Southern African region. The group has satellite offices in Swaziland, Botswana, Zambia and Mozambique.

He says that though building margins remain tight, the group is expecting an increase in business. He says the order book is geared to remain solid into 2010 and beyond. The unit will rely on its geographical diversification to navigate the market.

The building unit derived 20% of its total 2009 financial year revenue of R2,7bn from foreign operations. This is projected to reach the 35% mark in the near future. The backing of an enlarged group also promises synergistic opportunities.

 

 

Wednesday, 11 February 2009 02:00

Regional cement sales down

Cement sales in January in southern Africa were down 4.7% year-on-year to 935,913 tons from 982,424 tons at the same time a year ago, data from the Cement and Concrete Institute showed on Tuesday.

Construction IndustryThe institute noted that January 2009 had one less sales day than January 2008.

"If the decrease in sales days is taken into account, total regional sales were only 0.2% lower than January 2008," it said.

Regional sales are down 4.7% at 935,913 million tons on a year-to-date basis in 2009.

The moving annual total in southern Africa was down 4.0% year-on-year in January to 14.7 million tons.

Exports to other countries excluding Swaziland, Botswana, Lesotho and Namibia rose by 376.5% to 31,986 tons – up 376.5% on a year-to-date basis.

 

Wednesday, 14 January 2009 02:00

Regional cement sales up

Cement sales in southern Africa were up 0.8% year-on-year (y/y) in December to 921,570 million tons, data from the Cement and Concrete Institute showed on Tuesday.

The institute noted that December 2008 had two more sales days than the same month last year, and if the increase is taken into account, total regional sales were 9.3% lower than in December 2007.

Regional sales are down 3.9% at 14.719 million tons on a year-to-date basis.

The moving annual total in southern Africa was down 3.9% y/y in December to 14.7 million tons.

Exports to other countries excluding Swaziland, Botswana, Lesotho and Namibia rose by 158.1% to 18,385 tons, bringing total exports sales since the beginning of the year to 153,065 tons - down 28.2% on a year-to-date basis                                                        

Construction Industry

Tuesday, 12 February 2008 02:00

SA cement sales up 5.8%

The moving annual total of cement sales in South Africa increased 5.8% year-on-year (y/y) in January 2008 from the 7.4% y/y increase reported in December, according to Cement and Concrete Institute (CNCI) data released on Monday.

At the end of January 2008, cement sales were reported up to 15.290 million tons from the 14.448 million tons reported a year earlier.

Construction IndustryTotal sales in January, however, amounted to 982,424 tons from 1.008 million tons in January 2007, a decrease of 2.5%.

Exports of cement in January decreased 79.7% to 6,713 tons from 33,430 tons a year earlier.

Sales to Botswana, Swaziland, Lesotho and Namibia amounted to 1.191 million tons of the total sales in January, up from 1.030 million tons a year earlier.

Cement sales in South Africa grew 6.6% in 2007 to a record 14.1 million tons. This followed an 11.0% rise in 2006, an 11.6% gain in 2005, a 17.4% surge in 2004 and a 7.0% climb in 2003.

The 2010 soccer World Cup stadia, some new dams and the Gautrain project have been adding to cement demand.

 

Wednesday, 22 August 2007 02:00

RMB looks north

RMB Properties’ property development division has initiated developments in some of SA’s neighbouring countries.

Thursday, 24 May 2007 02:00

SA firms ‘should target Africa’

Although property buying and development in SA remains the first choice for expansion-hungry listed property companies, there could also be opportunities in the rest of Africa — albeit with higher risk.

Botswana's diamond industry touched another milestone as SA’s two largest diamond manufacturers presented a unique theme-park plan for the country’s diamond industry.

Friday, 19 August 2005 02:00

Botswana Survey Sector Faces Challenges

The president of the United Kingdom based Royal Institute of Chartered Surveyors (RICS), Steven Williams visited the country on Monday on a fact-finding mission.

Tuesday, 03 May 2005 02:00

Demand triggers record cement sales

Domestic cement producers have benefited handsomely from the strong rise

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