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General Manager of Sedgman in South Africa Dirk Schenk tells Jane Bordenave about the company’s increasing presence in Southern Africa and how it is cementing its position as a market leader.

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edgman Limited is one of the foremost providers of engineering, project management and operations services in the world.

The company was founded in Australia in 1979 and opened an office in South Africa in February 2009. This branch carries out work not only in South Africa but also in neighbouring countries that constitute Southern Africa.

The driving force behind the establishment of the Johannesburg office was a contract designing and supplying a Coal Handling and Preparation Plant (CHPP)

for Xstrata’s ATCOM East Project near the city. From there is has grown and expanded quite rapidly, taking on responsibility for Riversdale Mining Limited’s Benga CHPP, located in Mozambique and, most recently, Discovery Metals’ Boseto Project in the ‘Kalahari copper belt’, Botswana. “It’s an exciting time for us,” says Dirk Schenk, the company’s general manager in South Africa.

“We are expanding not just outside of South Africa with these most recent projects, but also, through Boseto, moving beyond coal and into the metals market. For a start-up company we are growing very well.”

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However, everything hasn’t been smooth seas and plain sailing over the past 18 months. As with nearly every company, the downturn has had its impact and continues to do so. “The fluctuating economy isn’t helping anyone at the moment – there is talk of the potential for a doubledip recession and this is making investors nervous.

Fortunately for us, however, we have been largely focused on the coal market up until

now, which is still very active globally so while the financial crisis was a challenge, it hasn’t been the hurdle for us that it has been for other companies.” Indeed the firm has experienced some benefits arising from the downturn. One of the main problems for the industry is a shortage of skilled engineers however, with the downturn, there has been a greater talent pool available. “Currently we’re

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using the downturn in the economy and the minerals and metals markets to bring people onboard, so from that point of view we are capitalising on it,” explains Schenk.

But this situation will not last indefinitely – as the economy starts to pick up again, the skills market will once again shrink. To combat this situation, Sedgman has put in place a comprehensive training programme: “We are currently bringing young South African engineers onboard and rotating them between here and Australia, which gives them maximum exposure to all the different kinds of operations we are involved in globally,” explains Schenk. “This scheme has the two-

fold effect of allowing us to bring in younger people and establish a solid skills base within the organisation.”

The company also supports engineering students at Universities of Technologies, also known as Technikons, with the current single sponsorship intended to be extended in the coming years. “By offering this kind of financial support we are helping to alleviate the skills shortage in the long-term, which will benefit us and the industry as a whole.”

Sedgman has targeted differentiation depending on the market it is working in. “On the coal side of our operations, we have positioned ourselves as leaders

We are expanding not just outside of South Africa with these most recent projects, but also, through Boseto, moving beyond coal and into the metals market

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in the field of technology, particularly in the large cyclone machinery we use. By orienting ourselves this way, we are able to design large through-put and large capacity plants, which is an advantage both for us and for our clients,” explains Schenk. “Minerals processing is somewhat different, as there isn’t much available in terms of differentiating technology, so we have focussed our energy here on innovative project management techniques.”

Traditionally, the organisation has taken on projects on a procurement and construction, or ‘lump sum’, basis. However, it is finding increasingly that clients prefer a target cost estimate approach, where the firm establishes a target price for a project and shares in and savings or overruns associated with it. To enable it to come in on budget or below, the company utilises the project management skills and systems it has built up over many years of managing risks. “We are very skilled at risk management on our projects and cost managements is closely associated with that. We take ownership of the programme together with the client and manage it as if it is our own asset. It’s an approach that has been very beneficial to our clients and so has enormous benefits for us too in the long-term.”

As Sedgman is a global company, its South African arm operates a global supply chain. “We have a very good working relationship with our office in China and they help us to purchase a lot of equipment from that market. Of course, if we wanted to purchase from elsewhere we are able to do that through the other offices worldwide.

This offers cost advantages for our clients and puts us in a very competitive position, particularly as a start-up,” says Schenk.

While the company takes a global view on procurement, it takes a local view when it comes to subcontracting, preferring to use southern African companies. “This has multiple benefits: From a practical point of 10

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view, it makes more sense logistically and administratively to use these businesses, who have experience constructing plant and working in these countries. Additionally, this approach benefits the local economy, which benefits us all.”

For the future, the range of opportunities is wide. “We are a new company in South Africa and as such there is much room to grow and improve,” says Schenk. “On the coal front, we are looking to move from our current position as a mid-sized player to a leader in the African environment within the next five years – there is still a big market for coal in thermal energy and steel production and this is not something that will be fading away soon. Over the same period, we hope to grow our metals and minerals operation from the fairly small presence we have at the moment to become a strong player in the southern countries of the continent.” Bold plans for a young company, but the Sedgman pedigree and the knowledge that brings, success is never far away. END

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