CASIAN DENDERE The sector remains under pressure, with margins remaining tight amid a generally low market performance
Although the civil engineering and construction sector is the backbone of the economy and contributes significantly to employment and growth in the country, it continues to experience a slump, says engineering procurement and construction (EPC) firm COENG founder and CEO Casian Dendere.
“The sector remains under pressure, with margins remaining tight amid a generally low market performance.”
This has forced companies in the sector to start “thinking out of the box” in terms of their service delivery to distinguish themselves from other players, he explains.
Moreover, certain companies having “monopolised” the sector previously provided no space for smaller engineering and construction firms to enter the market, adds Dendere.
However, he explains that, with the introduction of certain requirements and legislation, government is trying to “level the playing field to allow for fair competition between companies”.
Examples include the introduction of broad-based black economic empowerment (BBBEE), which provides a classification of companies in different categories such as exempt micro enterprises (EMEs), qualifying small enterprises (QSEs) and generic enterprises (GENs) based on their yearly turnover.
Under BBBEE, EMEs are the smallest entities, with a yearly turnover of R10-million or less; QSEs have a yearly turnover of between R10-million and R50-million; and GENs are the largest entities, with a yearly turnover above R50-million.
These categories will ensure that companies tender for projects according to their turnover and BBBEE status, resulting in similar companies competing against one another instead of all companies in the industry.
Another example is the Construction Industry Development Board (CIDB), which is a national body established through the Construction Industry Development Board Act, No 38 of 2000 to oversee the sustainability and growth of construction enterprises across the country.
The CIDB sets national standards for construction delivery and contracts through a Code of Conduct and by standardising construction procurement based on best practice.
Meanwhile, to ensure market sustainability, COENG operates an integrated management system composed of ISO 9001, ISO 14001 and ISO 45001.
The system combines and manages all related components of a business – quality, environmental, and health and safety management systems – into one system for easier management and operations.
“By integrating the three major elements of our integrated management system, we have successfully gathered data that has helped us to gain an in-depth understanding of our EPC markets, as well as the environmental, health and safety performances on all our projects.
“We strongly believe in building structured databases from our project records as a basis for the application of artificial intelligence, which will differentiate us from others in the marketplace as we approach the Fourth Industrial Revolution.”
COENG successfully delivered the Spent Grain Upgrade Project for beverage company AB InBev at the South African Breweries Alrode depot by providing full EPC services.
This entailed the structural integrity and remaining life extension studies on the existing tank farm, as well as engineering design, procurement, fabrication, installation, testing and commissioning of new silos, including auxiliary systems. The project ran for six months and was completed in April last year.
Other on-going projects include the owner’s engineer services for the construction of a 3MTPA platinum concentrator, which will produce three-million tons of ore concentrate, in Rustenburg. The plant optimisation studies and detail design started last year.
COENG is also involved in projects in Zimbabwe, where it is assisting a Southern Africa telecommunications company to investigate possible alternative hybrid power solutions for mobile base stations.
COENG aspires to be South African’s leading black-owned EPC service provider in the resources and energy industry environments through the integration of engineered and sustainable technologies.
“Our outlook for the decade is to increase our national footprint by establishing regional offices to better serve our clients. Our long-term goal is to expand our market share beyond South African borders,” concludes Dendere.