Global engineering group Aurecon has announced that it will demerge with the African business in early 2020.
The African shareholders of Aurecon initiated the separation, with 98% of all shareholders having approved the demerger earlier this year.
Aurecon Africa was established in 2009, when two leading South African consulting engineering companies – Africon and Ninham Shand – merged with one of Australiasia’s largest infrastructure advisory companies Connell Wagner
Aurecon Africa MD Dr Gustav Rohde told Engineering News Online this week that the African business had not decided on a name yet and that a rebranding process was under way.
“While being part of a global engineering and advisory firm had helped the company position for the future and maintain success over the past decade, the landscape has now changed, requiring a more agile and localised approach to business.
“In recent years, conditions in Africa have changed. It became increasingly difficult to respond with Africa-centric solutions within a company that is primarily operating in a developed-world business environment,” explained Rohde.
The separation would position each business to better focus on performance and growth, reduce the complexity of business operations and provide greater financial security for both businesses.
Rohde said the standalone entity will maintain its staff complement of about 2000, as well as its offices in every province in South Africa, and several offices across sub-Saharan Africa.
Both businesses benefitted from the skills transfer and exposure to international projects over the past ten years, said Rohde, adding that the partnership between Aurecon and the African business will continue.
“The dedicated Global Design Centres in Africa will continue to export African design services. This will allow us to retain critical skills in the African consulting industry despite the tough market conditions we currently face,” noted Rohde.
The new company will continue to be management-owned, with between 10% and 15% of staff participating in ownership.
The benefits of the demerger include more fit-for-purpose systems and top leadership being more accessible to projects and clients.
However, some disadvantages include less exposure to large international projects and less knowledge-sharing “Because we are departing from Aurecon in an amicable manner and as friends, we will still collaborate with them on projects and involve their expertise that is not available on the African continent”, Rohde added.
Rohde further mentioned that the standalone African company acknowledged the increasing focus of the full infrastructure lifecycle in Africa; therefore, asset management would be a focus area for the company going forward.
“We also see a space where renewables on the continent will remain critical, as will water, in light of increasing pressure due to climate change..”
The African business sees the separation as an opportunity to re-engineer itself in a way that enables it to respond better to Africa’s market opportunities.
Rohde believes partnerships across the continent will be key to achieving this goal.