Saturday, 29 September 2018 14:11

Fixing the Leakage in Infrastructure Investment

President Cyril Ramaphosa announced Government's eagerly awaited economic stimulus package at a briefing in Pretoria on Friday aimed at driving economic growth.

The Middle East is weak. Europe, Hong Kong, Macau and Canada continue to experience strong price rises. But China, Russia, Japan, and most of the Middle East are experiencing either house price falls - or a sharp deceleration of house price rises

Consulting Engineers South Africa (CESA) welcomes the recently announced changes to the cabinet and executive of President Cyril Ramaphosa.

National Budget geared to instill confidence

The Royal Institution of Chartered Surveyors (RICS) has announced the appointment of Benjamin Manu as the new regional manager for West Africa.

Monday, 30 July 2007 02:00

Boom time builds up to beyond 2010

Government and private sector infrastructure investments are expected to secure the boom in the construction and building industries until well after the 2010 soccer World Cup, according to industry leaders.

Brian BruceThey said the government's decision to go ahead with a R400-billion infrastructure programme, an even bigger commitment by the private sector and economic growth rates well above 5% a year would buoy the industries and drive the economy.

Brian Bruce, chief executive of Murray & Roberts, predicted the boom would continue long after 2010 and well "into the teens of the 21st century".

He cautioned, however, that there might be some ups and downs in the industry during this period.

But, despite this caution, construction companies are flocking to list on the JSE's alternate exchange, which facilitates listing of small companies.

Since AltX was established almost three years ago, 14 of the 50 companies listed are related to the building and construction sector with interests in home improvements, heavy construction and building materials and fixtures.

Among the bigger groups are Esor, Sanyati Holdings, Afrimat and the Raubex Group. The total market capitalisation of these companies this week was R20.6-billion, according to an AltX spokesman.

And Stefanutti & Bressan, with annual turnover of R1.7-billion, plans to list on the JSEs' main board on Friday after raising up to R465-million by placing 35 million shares. A limited offer of a further 11.5 million shares will be offered to vendors.

The company believes that revenues will grow to R2.5-billion in 2008. In the year to February, the group earned a net profit of R67.2-million, after the cost of BEE involvement, and expects this to grow to R115-million in 2008.

The group has a 15% BEE involvement through Mowana Investments.

Chairman and co-founder of Stefanutti & Bressan, Gino Stefanutti, said the construction industry was experiencing unprecedented growth and that there was "a positive picture of long-term growth for the industry".

Last month, the FNB Civil Construction Confidence Index, compiled by the Bureau for Economic Research recorded another increase.

Cees Bruggemans, chief economist at First National Bank, said that the figure reflected "very favourable business conditions". It is reported that the industry had grown by 13% a year since 2003.

The SA Federation of Civil Engineering Contractors noted that the number of people in the construction industry had risen to 114 000 in the first quarter of this year .

But, the FNB Index found , a shortage of skilled labour was affecting construction activities and impinging on completion times. Training would have to be accelerated to contain construction costs as a result of higher wages .

Power generation, with Eskom looking at another nuclear power station, will also help keep activity high. Power generation infrastructure development will begin in earnest next year and this is a 25-year project.

Transport, water and sanitation, schools and hospitals will need to keep pace with the macro- economic growth, said Bruce.

The attractiveness of the building and construction sector has attracted an unsolicited bid for building materials supplier Iliad Africa from a consortium led by Absa Capital. Talks are continuing.

Last week Iliad said it had acquired the Gauteng-based, R220-million-a-year Thorpe Timbers . Recently, the group bought USM Building Supplies and Lumber City in Lephalale (Ellisras). The combined acquisitions should add R350-million to revenues.


South Ocean, the Johannesburg-based manufacturer of building wires, has spent R10-million on the first phase of its expansion plans by purchasing new machinery that will increase its capacity by 10%.

The company, which was listed in February, has begun the second phase of expansion at a cost of R30-million for new machinery, buildings and working capital, which will add 15% to capacity.

The company recently acquired Radiant Lighting for R485-million, which expands its operations into decorative lighting, lamps and bulbs and electrical products.

Black empowerment group Afrimat announced two weeks ago that it had purchased two quarries and a concrete block-and-brick factory in KwaZulu-Natal, its second acquisition since listing in November. This brings its number of quarries to 22 and brick factories to nine.

Monday, 11 December 2006 02:00

Just don't drop those bricks

Large projects are driving up share prices. But will they all be completed? The construction industry has spawned more listings this year than any other sector

Monday, 16 August 2004 02:00

Three-year power shock for Jo'burg

SA's economic powerhouse faces R2bn electricity grid upkeep bill

Thursday, 08 April 2004 02:00

Building sector should be more black'

Construction industry will need to double its output in next 10 years

Thursday, 08 April 2004 02:00

Construction industry report launched

South African Minister of Public Works Stella Sigcau this week launched the South African Construction Industry Status Report.

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