COMPANY PROFILE
2013
SUPERWAY CONSTRUCTION
All roads lead to success
COMPANY REPORT
All roads lead to success Editorial – Joe Forshaw Production – Hal Hutchison Superway Construction Director, Richard Bengtson, tells IndustrySA that the company has a full order book and huge projects on the horizon. Although the construction industry has seen difficulties, this is one company that is definitely on the up.
In his 2013 budget speech, Finance Minister Pravin Gordhan announced that R827 billion would be spent on upgrading and improving the country’s infrastructure. From 2013/14, the government will spend three years spending the money on everything from schools and hospitals to roads and railways. The purpose of this investment is to aid the country’s economic growth and to continue creating jobs and improving the delivery of basic services. In May,IndustrySA found out more about the country’s roads and how vital they are for growth; so much so that they are sometimes referred to as the ‘economic arteries’ of South Africa. The government’s investment into infrastructure is clearly welcomed by the transport sector and one of the companies operating at the centre of the movement towards an improved road network is Superway Construction.
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The company is experienced in road construction, road and civil infrastructure, building and civil structures and routine road maintenance. Richard Bengtson tells IndustrySA more about the company’s history and its list of prominent clients. “Superway started in 1988 on the Kroonvaal Routine Road Maintenance project for the Department of Roads, now SANRAL. “Superway Construction was formed in 1995 when the company started to target the building discipline. It was only in 1997 when the company was awarded this type of work. “We’ve now increased our scope of work to include road construction, building construction, building maintenance and heavy civil work. “Our main customers include SANRAL, the National
Superway Construction
Department of Public Works and various municipalities and private companies. “We have done work in the telecommunications industry. Our clients include Huawei Technologies, Telkom, and Dark Fibre Africa,” says Bengtson.
DIFFICULT TIMES? We have heard on many different occasions, from many different companies, small and large, that the past few years have produced mixed fortunes for business. The global financial meltdown, the rising cost of raw materials and the construction industry slowdown after the 2010 FIFA World Cup have all played their part in creating uncertainty in the South African construction industry. Since 2010, some companies have thrived while others have struggled or even folded completely.
Superway is one of the companies that has blossomed, picking up a host of large contracts. However, Bengtson suggests that there have been challenges. “There has definitely been a slowdown in the last few years,” he says. “It didn’t affect us immediately after 2010 but from the latter part of 2011 we were definitely affected. However, I must say that right now our order book is fairly full but it is full with work that has been obtained at marginal rates so there is no significant growth right now. “Our order book is the best that it has been in many years but that’s just the order book, it doesn’t necessarily mean that it’s good on the bottom line.” Interestingly, even though the construction industry has been surrounded by doubt and concern since the World Cup, the demand for cement has continued
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COMPANY REPORT
to rise, possibly down, in part, to the governments infrastructure development plan. Sales of cement jumped up by 3% in 2012 but the problem is that this rising demand has forced up prices and that is a concern for Superway. “There has been a big jump in the price of concrete, bitumen and petroleum related products,” says Bengtson. “We are somewhat compensated as most of our contracts our covered with CPA (Contract Price Adjustment) and the Rise and Fall for the fluctuations in prices of special materials. “The bigger problem is the availability of products, especially bitumen, in South Africa. There are only two main oil refineries in the country and bitumen is a byproduct of oil production so we buy from the refineries and often they have issues such as plant shutdowns and this causes a problem for us as our customers will be upset if their roads are not surfaced in time.”
CURRENT PROJECTS With the drive towards countrywide infrastructure improvement underway, Superway has a number of multi-million Rand contracts in-motion right now as Bengtson explains: “The government’s investments into infrastructure has definitely helped us and given a boost to the industry. “We have been awarded “As and When” contracts by various municipalities which include The City of Tshwane, Ekurhuleni Metropolitan Municipality and Steve Tshwete Local Municipality. This type of contract is for works required by the client on an as and when (emergency) basis. The term of the contracts range from one to three years. “For SANRAL, we also have a project in Lydenberg, that’s 36 kilometres of road that we are rehabilitating. “We have a number of Routine Road maintenance projects for SANRAL. These are throughout the country. We work nationally, in all the provinces.” Away from the road business, Superway is also active in the markets of building and civil structures and one of the company’s most significant projects is underway now in the Western Cape as Bengtson explains: “Our largest project is for the National Department of Public Works, where we are refurbishing and upgrading the 2-Military Hospital in Wynberg, Cape Town. This will be a flagship project for the company.” This project, when complete in 2017, will be one of the biggest the company has ever undertaken and will act as the newest demonstration of Superway’s ability in a broad portfolio of successfully completed projects.
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“The most significant project we have completed was with what was called the Rea Vaya, Bus Rapid Transit (BRT) system,” says Bengtson. “We did a full turnkey project, design and construction for the City of Johannesburg of the BRT. This is one of the largest projects we have worked on to date.”
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COMMUNITY TIES Superway has a large and strong workforce and Bengtson suggests that the company invests heavily in obtaining the best people available and developing them throughout their careers. “We have around 900 employees,” he says. “We have our own HR department who handle all the recruitment. They will advertise directly as well as work with employment agencies to ensure we get the best people. We outsource our training to accredited training companies. “The majority of our workforce does come from local communities. We would employ suitable people from the communities for any vacant position in the company. We have done this many times in the past, taken professionals from the local community and bought them on-board.” Bengtson recalls personal experience when explaining the opportunities available for promotion and development, suggesting that any employee could work their way up as long as they work hard. “I would like to believe that anyone here could move
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“Our order book is currently full and the best that it has been in many years” up from the bottom of the company right through to the top. I started out at Superway as just one of the workers and I have worked myself up to become a director and shareholder in the company,” he says. These kinds of opportunities, combined with the training and development which is sourced by Superway, mean that the company fosters a loyal and fruitful staff and this creates a competitive advantage. As the amount of projects in the pipeline grows for Superway, the amount of employees will inevitably grow with it. This type of organic expansion is the favourable method of growth for the company right now and they are not currently looking to expand into new markets on the continent, although they have been approached to do so. “Many companies, especially the larger companies,
COMPANY REPORT
the public sector companies, have been working across the borders for a number of years now,” says Bengtson. “We have been approached but we are smaller than some of the multi-nationals and we are not looking to those markets at this time, we have enough work in South Africa right now.” Going back to the point made at the start of this article, Superway are demonstrating that they are truly an industry leader when it comes to road, civil and building work. The company’s schedule is full of work in South Africa, allowing them to focus on work at home before looking further afield to build up a pipeline. Some companies look, all too quickly, to neighbouring markets before getting things right in their domestic market and this can be counterproductive. With the push towards infrastructure development set to continue for years to come, it seems that Superway is perfectly positioned to continue making in-roads towards its aim: becoming the preferred construction partner for all stakeholders while fostering the principles of equal opportunities and growing sustainably in the future.
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“I would like to believe that anyone here could move up from the bottom of the company right through to the top”
Established in 1966, Installair is one of the oldest air conditioning and ventilation companies in the Western Cape
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