WTW Group

WTW GROUP

WTW GROUP

Laying Foundations for Transformation PRODUCTION: Manelesi Dumasi

Bloemfontein-based road construction specialist, WTW, is expanding by adopting a strategy which surrounds transformation. Being inclusive, sharing knowledge, upskilling other people and companies, and contributing to an improved South Africa has helped WTW to become recognised as a true industry leader.

Director Mosebetsi Dhladhla talks to Enterprise Africa about WTW’s success.

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How many companies are there across all of South Africa that can claim to having truly embraced transformation since the country’s reformation in 1994? While many talk about being inclusive and transformative, few live by the values set out by the government to help change the economy.

Currently, the South African economic situation is bleak. GDP growth, for the past decade, has been weak. Unemployment continues to move in the wrong direction, and in contrast to its early years as a

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democratic economy, South Africa does not enjoy positive business sentiment.

But a new era is emerging. After May’s elections, positivity is returning to the market. Confidence is turning and, although most recognise a total turnaround will not happen overnight, people and businesses are more buoyant about what the future holds.

Perhaps it’s down to the business-friendly approach installed

by President Ramaphosa, perhaps it’s down to the anti-corruption stance he has taken, or perhaps it’s to do with policy clarity. Whatever

the case at national level, positivity and confidence is always fuelled by adherence to transformation strategies.

Nowhere is this more true than at the WTW Group. Headquartered in Bloemfontein, WTW is an industry leading, multi-disciplinary contracting company with vast expertise in delivering a range of infrastructure development projects.

Director, Mosebetsi Dhladhla tells Enterprise Africa that at WTW, transformation is at the heart of everything it does.

INDUSTRY FOCUS: INFRASTRUCTURE

TRANSFORM OR LOSE “We knew we must adapt and realised that if transformation is to be achieved, we must play by the rules and do things right. Often, businesses say they have transformed but in reality they are just paying lip-service and do not invest meaningful time and money into transformation.

“Transformation costs money as a business and it does impact on net profit margins and cost profit margins but it is a journey that, if done right, will help to create a sustainable business and a positive culture.”

WTW was founded in 1976 as Wasserman Teerwerke (Pty) Ltd. The company’s expertise has been developed in the construction, rehabilitation and maintenance of South Africa’s road network. Having completed numerous small, medium,

large and supersized contracts around the country, WTW is now recognised as one of the industry’s problem solvers.

But to get to the top has taken a lot of work; both successfully delivering quality projects as well as transforming the business to meet the expectations of a new socio-political business environment in South Africa.

“We are a totally different business today. We have operated in the apartheid era and in the new democratic dispensation. A lot of what we do had to change,” explains Dhladhla. “We’ve have undertaken a lot of acclimatisation and one of the biggest rules we have set is that every company we work with must be able to show us that they are engaging in transformation on their own. We are looking for like-minded partners and we know that when we do that, we begin to

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move things in a different direction.

“Some companies in our space have been around since before 1994 and they had a choice to embrace the changing socio-political landscape or continue operating in the same way. Many that did not embrace change are those that struggle. One of our key advantages is that we have embraced changes in our operating environment and we assist our partners in achieving their objectives – whether that is building infrastructure or providing inclusion to the previously disadvantaged members of the economy. You must focus on both and if you only focus on one, you may lose your partners.”

Transforming the business at the same time as keeping operations moving, while also diversifying and expanding has created a difficult road for WTW to navigate. But, thanks to its commitment to transformation, WTW has become a preferred supplier for those in control of contracts.

“One of the major challenges has been to maintain the engineering skills within the company while transforming it into an inclusive business, that works for everyone, and is something the country can be proud of. That is an ongoing part of what we do as a business.

One of the things that determines business in South Africa is your ability and willingness to transform. If you embody certain principles, that is taken into account by the institutions when deciding on tenders. If you are not able to adapt and acclimatise, you will have challenges,” says Dhladhla.

ROAD TO THE TOP WTW has completed a number of successful projects in recent months, and Dhladhla is now looking forward to beginning of a host of new projects in locations all over the country.

“The N2 project is complete, that was a R160 million project for resurfacing between Harding and Kokstad. We are now starting a new project on the R61 in the Eastern Cape between Cradock and Tarkastad. That

WTW GROUP

contract is a R150 million and we will be doing road expansion along with some resurfacing and resealing. That is an exciting project for us.

“We had six contracts in the Western Cape which were mainly reseal contracts. Two are already completed in Beaufort West and De Rust, and we are currently in Malmesbury, Pacaltsdorp and Bonnievale. We are also very excited about a contract on the R37 in Mpumalanga where we will be doing resurfacing and rehabilitation. It’s very exciting as it is a rural area and that comes with challenges but it is a very interesting project.”

Picking up this number of contracts demonstrates real success for the company, and the industry, where the last few years have been tough.

“SANRAL is still not giving out a lot of work but we are one of the companies that is picking up work with them so that shows how attractive we

have come as a partner,” says Dhladhla.

“The efficiencies we have put into our business, and the fact that we have always underpinned transformation as a key objective within our own business, has allowed us to build a successful operation. We have been able to succeed tremendously around bridging the gap between the different cultures within the company – if you look at our employee force, it represents the different racial groups and different ethnic groups of South Africa, and that gives us a competitive advantage with project planning and project execution.

“We have seen a huge slowdown in infrastructure spending,” he adds. “It has impacted heavily on our competitors.

The construction industry is facing big trouble and a number of the big companies are beginning to disappear.

There is now serious competition on pricing and most of the projects are now being operated around cost with

efficiencies being the only thing that keeps companies going. The industry is in a tight corner, we have seen a huge reduction in infrastructure spending from government and we have seen an increase in competition. As the economy transforms, you get a number of smaller players that enter the market. This means the bigger players do not get the same piece of the pie that they would have had previously. We have had to embrace that and find mechanisms to work around. It’s part of what we preempted in our strategic plan.”

Growing from family-owned business to national, multi-disciplinary firm, WTW has displayed its ability to grow whatever the conditions.

“Local and provincial government, as well as the private sector, recognise our efforts and that is why we are successful picking up contracts,” says Dhladhla.

“The new market in private development has been a growing

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INDUSTRY FOCUS: INFRASTRUCTURE

// WE HAVE CREATED A UNIQUE MODEL TO WORK IN THIS ENVIRONMENT, BASED ON TRANSFORMATION, INCLUSIVENESS AND QUALITY // market for us. It’s currently only around 2% of total infrastructure spend, but it is growing. Road infrastructure is run by government and most of our contracts come from SANRAL, provincial government and local government.”

COMMUNITY COMMITMENT South Africa’s road network extends across almost 750,000 km and management of the network is split between SANRAL, provincial government, metro councils and municipal government. The network is the tenth largest in the world and requires regular ongoing attention.

In the more rural and disconnected areas of the country, this becomes more difficult but offers the perfect

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opportunity for small enterprises to develop. WTW encourages this sort of entrepreneurialism and seeks to always partner with and develop local partners.

“Different cultures feed back to us different expectations and different approaches within the communities.

The way that we have been able to capture that is exactly what our company is all about,” explains Dhladhla.

“You need knowledge around communities and knowledge around how to work within certain cultural groups and, of course, engineering knowledge. We have developed this a lot as one unique value proposition as a company. We do great work with our partners, we are trying to move the country forward, and we are always fostering a single objective within the company, across all people that work here, alongside the communities where we work.

“We have a large spread of projects, we work with people from different backgrounds, and we can work anywhere in the country. That has been key to our success,” he adds.

By partnering with local entities – usually micro, small and medium sized enterprises – WTW imparts skill, knowledge and business acumen, truly acting out its commitment to transformation.

“On a project basis, wherever we go, we take around six or seven of our key people and we work with the local players,” says Dhaldhla. “We are a Level One company and that means that 90% of our procurement comes through companies in South Africa that are transformed - a big percentage of our spend is with local companies. That gives us leverage and positions us as a contractor that is acceptable in the communities that we operate. We are very keen on transferring skills to the local players and making an impact rather than bringing a large team in and out without legacy.”

The upcoming contract in Mpumalanga is the perfect example. A rural location, without easy connection to heavy plant or infrastructure, where WTW will go in, spread skills, transform the landscape, leaving a legacy for the area.

“Obviously South Africa has its own unique political climate and for us, managing that successfully has been key,” says Dhladhla.

SADC EXPANSION South Africa’s economic conditions have not encouraged strong growth in recent years, yet TTG has consistently delivered positivity. While the macro economic climate remains depressed

WTW GROUP

and business leaders hunt for certainty, Crisp admits that the market might not be growing. The solution here is to grow market share.

“We’re not seeing growth in the industry as a whole but we have seen growth in market share. What is benefitting us at Tarsus is a change in the business model from actual transactional hardware purchases through to the cloud. We had the big investment recently from Microsoft and no other competitors have effectively matched it. The growth we are seeing comes from that kind of niche. In the actual distribution business growth has been fairly flat and we don’t expect that to change in a big way in the short-term future. There is still a latency around government policy and momentum with the changes that have been promised,” he says.

Tarsus Distribution is already an industry leader; GAAP is the undisputed leader in its sector; Tarsus On Demand is rapidly growing its share; Printacom and Tarsus Dispose-IT are all smaller contributors to overall revenue but both are looking to claim further market share. To achieve this, Crisp says that customer service has to be the best it can be.

“We pride ourselves on our

customer service but we know our competitors also have impressive offerings,” he says.

“We are confident that we are doing a better job in the On Demandcloud space and the migration of customers and their end users. The assistance we can give to resellers to move their customers on to a cloud basis instead of buying their own licensing is an area where we have invested heavily in expertise.

“We are confident that we are also the leaders in third party logistics and retail specifically. We supply retailers and retail is around a quarter of our business. Our customer service is the best because we have the ability to integrate quickly and efficiently into our customer’s existing systems. The supply chain systems are integrated with the systems of our customer and that is seamless, without heavy documentation. In those categories, we are confident that our service levels are better and we are on top of our competition,” he adds.

This confidence positions TTG perfectly to help guide clients through the country’s migration into the Fourth Industrial Revolution. TTG has the hardware, it has the software, it has the expertise, it has the logistics, it has the

presence, and it has the reputation.

“The world must embrace the Fourth Industrial Revolution because it is a new way of doing business that will be with us for a foreseeable future, and as government and society we should collaborate in creating the enabling environment for entrepreneurs to adapt and adopt the 4IR technologies for the creation of a better life for all,” said the Department of Trade and Industry’s Deputy Director-General of Special Economic Transformation, Sipho Zikode at the opening of the South African Innovation Summit (SAIS) in Cape Town last year.

Entrepreneurs and business leaders will be forced to choose a technology partner, and TTG sits atop the industry with a positive outlook.

“We are happy that we are running efficiently. We will be watching our costs closely and trying to grow our top line quickly. Business success is all about efficiency, cost management, and managing the market, and that is what we do well,” Crisp concludes.

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