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Africa Outlook

Civils
Dip

DIP CIVILS

Driving operational excellence



DipCivils (Pty) Ltd is a Civil Engineering contractor that specialises in the construction of roads and other services throughout South Africa. Procurement Manager Raymond Carter-Johnson tells us more.

Writer Ian Armitage
Project manager Stuart Shirra

DipCivils (Pty) Ltd is a Civil Engineering contractor that specialises in the construction of roads and other services throughout South Africa. It is in the unique position of being able to fulfil clients' needs on "comprehensive basis" by offering composite solutions involving not only the construction of services exclusively, but all the road and concrete works infrastructure as well. The company was formed in 1993 and to date has successfully completed over 1000 separate projects. Procurement Manager Raymond Carter-Johnson says that it is "constantly in the pursuit of excellence" in the production of high quality civil engineering works.

"We aim to provide superior returns to all relevant stakeholders whilst providing an employment environment conducive to transformation and the development of talent and skills," he says. "Our core values of commitment, responsibility, respect and communication influence how we act day to day, and is not what we merely aspire to. Translating this into reality means that we are keenly focused on providing a quality product to our customers, and strive to exceed their expectations."

DipCivils is registered with the CIDB as a 9CE Contractor and is a member of the South African Federation of Civil Engineering Contractors. Its key strengths? "Definitely the commitment, loyalty, responsibility and respect of our employees and the fact that we are all focused on providing a quality product to our customers, and strive to exceed their expectations," Carter-Johnson says.

Its order book is full, and a renewed focus has been placed on diversifying into new sectors in the industry. Recent contract awards include the Upgrade of National Road R24 from the N4 to Buiten Street at Rustenburg for SANRAL, valued at around R178 million. "We have several contracts we were lowest on which we are still awaiting award," Carter-Johnson adds.

DipCivils has been actively involved with Steyn City, the biggest development to hit Johannesburg in years. It is the brainchild of Douw Steyn, one of South Africa's most flamboyant tycoons, and the development – which is situated next to Dainfern in the northern suburbs of Johannesburg – was planned in 2008.

"We have been actively involved with Steyn City which it is a large upmarket privately owned township development with the first phase already completed," Carter-Johnson says. "We are currently busy with the next phases of this contract with Cedar Road upgrade still to be awarded.

"We have been very successful on the road construction side of the business, with several mine access projects with some of the leading mining houses in Sub-Saharan Africa as well as the award of the R24 upgrade project in Rustenburg," he adds. "In terms of improvements, we are always focused on quality and strive to deliver a quality product to our clients. We are in the process of becoming ISO accredited."

Life though isn't without its challenges. "The market has seen several contractors file for business rescue, which has put the market on edge. Tighter financial controls by creditors are also making the local market a very interesting and challenging place to be. One of the reasons for this trend seems to be a trend of debtors extending payments beyond their due dates which has definitely placed strain on the cash flows of these businesses. This being said, we have been really aggressive in our approach to obtain new work and we have noticed an increase in government tenders around the 8CE level. There has also been good investment by the private sector within Gauteng which we are pleased to say we have secured good contracts which has helped up maintain our order book whilst many companies have been less fortunate.

"Some of our success definitely lies with ensuring that our debtors pay on time so as to alleviate some of the stresses this imposes on our cash flow. This is critical to allow us to move into new markets."

All things considered, there are plenty of opportunities and a bright future is on the cards. "With the focus on expanding into new sectors, we are very upbeat about the prospects that are on the horizon," Carter-Johnson says. "We are looking forward to a great 2014; with a full order book we have been allowed the luxury of aggressively pursuing new markets within the civils sector."

DipCivils is aggressively looking to grow and strengthen its business model, much to the delight of its shareholders. It is currently targeting turnover in excess of R650 million per annum and Carter-Johnson feels that should be achieved "within a year".

"We would like to stay focussed on our mining sector client base whilst increasing our exposure to selected government contracts. We have for most part focused our energy on work within the borders of Gauteng. We have recently branched out to the Northern Cape, North West, Limpopo, KwaZulu-Natal and Mpumalanga. This has given us the confidence to adopt a "National" approach to our business model where this was never an option before.

"We have formed very strong relationships with our client base, along with loyalty, dedication and commitment from our workforce which has certainly been a contributing factor to our success over the years."

Diversification into the structural market has gone very well and has provided an alternative revenue stream, while mitigating risk.

"The business is continually evolving which involves continuous diversification," Carter- Johnson says.

With the acquisition by the PEU Group of a majority stake in the business, DipCivils is now black controlled. It is a level 4 BEE contributor and is working on moving up to level 3.

"We are committed to the philosophy and ideas of transformation. The transformation plan of the company is regarded as a fundamental driver of change, growth and sustainability. Accordingly, black economic empowerment is an integral part of the overall growth strategy of DipCivils and it is incumbent on the company to comply with the targets as specified in the construction charter.

"We have a rigorous enterprise development and mentorship programme which had been lacking in this past and we feel that this along with our preferential procurement policy in tact we will be able to reach our goal.
"Black ownership has been an important contributing factor to the overall success of the company. We transferred ownership to the PEU group, originally 58 percent back in 2007; their contributions have helped in key areas such as systems and processes, corporate governance and strategic input in terms of business growth."

Carter-Johnson is optimistic of seeing an increase in government spend, with a focus "on planning allocation of work from government on infrastructure developments."

To learn more visit www.dipcivils.com.