FILCON PROJECTS
feature
CAPE FAMILY OF
HIGH
RISE FLYERS
A Trade is Still a Craft is a guiding light of Filcon Projects. So too is a recession-defying dynamic business strategy. Colin Chinery talks to Commercial Manager Danny Cinti on the rise and rise of a Cape family firm. 2
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W
hile ninety per cent of South Africa’s construction industry remains battened down by severe recessionary pressures, one high-flying company is bucking the trend - Cape Town based Filcon Projects. Fifteen years after it was started by ItalianSouth African Filippo Cinti and Italian-born Marcello Palumbo, Filcon has soared from modest construction projects to some of Cape Town’s biggest.
Filcon Projects FEATURE
downturn in the construction sector. Diversification is another reason for the family-run company’s impressive ascent, with vigorous expansion into residential, commercial and industrial. “We had established a very good name in the luxury home field, and when we were asked to do a larger scale luxury residential apartment block in Cape Town it effectively doubled our order book over night,” says Commercial Manager, Fil’s 31 year old son Danny. This was to be the springboard to jobs in the R100m range, and from which Filcon has moved on into the public sector and R280m of work. “A very different sector for us to work in – not least the procurement procedures - but the City of Cape Town was very happy to give us the job.”
We have gone for the best and not allowed ourselves to be diverted
The Rockwell, a luxury block of apartments near the Waterkant was completed in 2007 and The Metropole Hotel in Long Street three years earlier. Canal Quays – part of a wider re-development of the Roggebaai district - opened recently while another luxury apartment block, The Orangerie is also complete. With major projects secured as the global financial crisis broke, Filcon was largely sheltered from the impact and subsequent
“We had to learn very quickly how to adjust, but we’ve done so and been successful. Our core sector - the luxury residential market - has completely dried up, so we responded creatively, being a little bit aggressive but not reckless in the market, to make sure we get through this period comfortably with the quality still great and the customer happy.” And this is key to an expanding order book. “While other big companies are retrenching we are currently recruiting staff - in effect we are picking up their human capital and bringing them on board. And in procuring the work we’ve had to have the right people in place.” Filcon employs around 50 permanent salaried staff and between 200 and 300 on projects. “Our biggest assets in this company - besides all the tower cranes and everything else - are our people.” www.southafricamag.com
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Skills shortages are a major issue in South Africa as elsewhere. “We went through a very bad period when we had the ‘brain drain’. A lot of our skilled people in all sectors including construction, left for the UK, Australia, New Zealand, Canada, the US and the Middle East. “But with the recession many have come back, and this has worked for us quite well. At the same time we’ve retained our skilled force, putting forward some serious packages. We offer all our staff skills training and development programmes suited to the needs of the individual. So if we have a general labourer whose shifting bricks and you see he has the potential, we may train him up to become a bricklayer.” 4
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In time Filcon’s diversification could also be geographical. “To spread the risk you want to be competing in as many economies as possible. We’ve recently finished some projects in Mauritius, but at this stage we’ve put this overseas expansion on the back burner. World markets and financial risks are volatile, but given the right opportunity and a feasible project and we would definitely go.” Meantime as demand in the residential sector contracts, more lower to middle sector housing is coming into place, with Filcon winning a ground breaking contract with the City Council. This is a major upgrading and refurbishing project for thousands of rental properties, starting in the Kewtown and
Filcon Projects FEATURE
Scottsdene districts. “We are the first in South Africa to do this and after two months on site I can say things are going very well.” ‘Green’ is another emerging area, one with massive potential. Environmentalism, re-cycling and energy-saving will feature prominently in the company’s new headquarters, and Filcon is closely involved in a major ‘Green’ upgrading of campus facilities at UNISA in Parow. “There’s definitely a potential market. We’ve not really been exposed to this much in South Africa and it’s really nice to be involved in projects like this where we can really make a difference.” Excellence of design and work, linked to a progressive strategy are drivers in Filcon’s rise. Danny Cinti adds another. “First and foremost we are a family run business, very hands-on, with decisions made on the go by the directors and stakeholders, as opposed to the bigger corporations that have a lot of red tape. With those organisations you very rarely get a director or chairman coming on to site and dealing with any matter that might arise.” Looking forward he says the energy issue is the paramount problem for the national economy. “And I think its going to be very tough over the next 12 months. A number of challenges have been building up over the last few years which are not just going away. “I don’t think we are 100% out of the recession but we should be by the end of this year and then we ought to be seeing proper growth and project margins returning to normality.” Massive public funding injections into infrastructure he says, might give the impression that the construction industry is doing well. “But if you are unable to adapt in this industry you will fall by the wayside.” And says joint founder and Managing Director, Fil Cinti, “once the World Cup is over, the civil sector will feel the economy pinch in a big way.
“In terms of 2010 World Cup, the government has gone to extraordinary lengths to prepare South Africa for the international stage, improving roads, rails and bus routes. However not much in expenditure has been held back and the state of the industry sector post-World Cup will prove interesting. A small decline would not be a surprise, an anti-climax to the event where time will tell what kind of offshoot there is and if it will be positive or negative.” Filippo Cinti was an electrical specialist who had worked his way up to the position of contracts manager for a large Johannesburg construction company when he co-founded Filcon. Fifteen years on and with record of remarkable expansion he says; “We have gone for the best and not allowed ourselves to be diverted.”END
First and foremost we are a family run business, very hands-on
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