Since joining forces with a larger company, Stefanutti Stocks Marine (previously known as Civil & Coastal Construction) has continued to thrive, taking on bigger and more lucrative projects than ever before. Andrew Pelis talks to Simon Allen about the many benefits that have arisen from the change in ownership.
Becoming part of a big family in the corporate sense can be quite daunting; and it is essential that the benefits outweigh the challenges. Such was the thinking for one South African company back in 2007, at a time when it had reached a commercial crossroads.
Simon Allen, managing director at Cape Town-based Stefanutti Stocks Marine, takes up the story: “The original business, Civil & Coastal Construction, had reached a point where we were on the cusp of two major projects and realised that they were too big for a two-man business to take on. My colleague Greg Moore (who founded the business in 1992) and I needed more help on the financial side and it was time for us to bring a big brother on board, to help with our methodology, systems and technical and commercial infrastructure.”
It was JSE-listed Stefanutti Stocks, one of South Africa’s leading engineering and construction groups, that took up the challenge. With an annual turnover in excess of R7billion and the drive to operate as a multi-disciplinary leader in the construction economies of Africa and the Middle East, the Stefanutti Stocks Groupwas the perfect match for Civil & Coastal’s aspirations and by September 2007,the change inownership had taken place.
“Today we are essentially a specialised marine civil engineering division offering turnkey solutions to clients,” Allen explains. “We are a one-stop design and civil engineering constructioncontractor and have delivered successful solutions not just here in South Africa but also across the continent in locations such as Angola and Tanzania, working on technically challenging projects.”
The input from Stefanutti Stockshas led to major changes that Allen feels needed to happen, which have had a profound and beneficial effect. “Back in 1994 when I joined the company we were a very small business and a R50,000 project constituted significant work for us. Today, we are operating on projects valued atover R1.2 billion.
“Back then our workforce stretched to no more than ten people and today we employ hundreds,” he continues. “But the main change was in our approach to business—we now have the feel of a large entity and our outlook is much morestructured in areas such as the tendering of bids and financial reporting. We have also focused more attention on our systems, health and safety and methodology.”
Allen says that the safety aspect in particular has been an important development. “Within the group we have to hold our own financially; but equally, our safety record is essential to our success. Prior to the buyout we did not have a NOSA grading (foroccupational risk management) but the culture of the organisation has seen us increase the number of safety officerson each site and each tender includes safety methodology, while we carry out hazard mitigation every day. Another initiative has been to attain ISO9001:2008accreditation, a feat achieved last month and one which further enhances ourprospects.”
The buyout has also provided much-needed funds for new capital equipment and investment has been made in upgrades to cranes and specialist marine (floating) plantandmachinery. This, he says, gives the business an advantage once the client gets to hear of its capabilities, as such equipment is not always readily available in Africa. “The group realises that now is a good time to invest and upgrade and we will hopefully see the return over the next couple of years,” Allen suggests.
Stefanutti Stocks Marine became the new name for the division in March and Allen and his team are busy ensuring existing and prospective clients are aware of the team behind the new brand—crucial given the group’s excellent reputation—as it carries out its work.
“We have worked on a number of high-profile projects,” Allen states. “Perhaps our flagshipfully-completed project to datehas been what we call the Gravity Base Project in Simonstown, where we built a large block of concrete in the naval dry dock for Dresser Kellogg Energy Services. We then floated the 2,500 ton box out of the harbour and put a lid on it; the block was then towed offshore and successfully sunk to the seabed, 100 metres underwater.This was a world-first project and we were awarded with the SAFCEC President’sAward that year. We have also been building a large dock and jetty in Angola for the Cabinda Gulf Oil Company which is now nearing completion,” he adds.
Allen is hoping that opportunities to expand internationally will continue to increase. “We work closely with Transnet here in South Africa [the port operator for the country] and they know our capabilities, the quality we deliver, the safety aspects and our methodologies.
“However, the South African market constitutes around half of our business and the other half (overseas) is largely private sector at present. At the moment, there is a major focus across Africa to deepen, widen and upgrade existing ports and we have tendered bids in countries like Kenya and Tanzania, while there are also plans for development in Ghana and Sierra Leone. The key issue is going to be the availability of funds, in order to keep these projects going. Lots of ports are dependent on container volumes and that of course is determined by market forces and the state of the economy.”
That said, Allen feels the current lull in the marketplace has enhanced competition: “There is probably more rivalry out there today than three years ago,” he admits. “We have seen new entrants from the civil engineering sector competing to broaden their services as the economy has taken a downturn. We therefore guard our designs and methodologies carefully as we believe these are essential components of our bids.
“Times are quiet but this is the time to regroup and get ready for the upturn. Our parent company is engaged in the Middle East, but while these locations give us further hope for the future, our focus is to get into the rest of Africa first.”
