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Africa Outlook

Filcon
Projects

FILCON PROJECTS

Building for the future



South Africa's phoenix in the construction industry

Writer Matt Bone
Project manager James Mitchell

Filcon Projects is a construction and engineering firm based in South Africa, who implement passionate ideas and excellence through a team of driven professionals who have acquired invaluable experience and skills over many years in the business.

It was only three years ago that the company was on the brink of failure. Uncertainty and market forces had pushed the company to the edge and it was only Saul Loggenberg, the new Executive Chairman, whose timely intervention and recapitalisation program, turned the company around and set it on the path to becoming the force it is today. A new democratic management system, an emphasis on hiring the best staff, and a heavy emphasis on training and development has made the company a very different place to work.

Progression
Mr Loggenberg mentions that although the company is now on more solid foundation, it will still be a while before it is where he wants it to be: "We continue to transform and implement new strategies in order to make Filcon the type of company that we want it to be. It will be at least another 2-3 years before I feel we are near that stage."

Moving into its 18th year, the company has expanded into all sectors of construction, including residential, commercial and industrial projects. Filcon is also growing geographically with plans to move beyond the borders of South Africa into the sub- Saharan region of Africa as well as the Middle East.

Filcon offers its clients a range of services encompassing all aspects of construction. It has in its employ the services of contract managers, site agents, office personnel, quantity surveyors and buyers. The team strives for the best results with excellent workmanship and comprehensive customer care. Having this integration within a company affords clients to enjoy piece of mind that all problems and queries will be dealt with in a centralised way.

Expansion and growth
Filcon has grown in both stature and reputation over the last 3 years and have seen the size and range of their projects expand. The company's contract services include housing and apartment development, commercial developments, luxury homes, hotels and retirement villages. Loggenberg sees this upward trend as a big step in the right direction and is pleased with the current level of activity his company is seeing: "We are heading towards the end of our current projects, our aim is to finish these projects successfully this year on time and on budget. We have three new tenders that we have won, which we are finalising adjudication on and then we will be moving into the right space. The big thing is that we have managed to negotiate two new projects this year based on our previous work and that is a big step forward for us."

Filcon's sights are set firmly on using this strong growth as a springboard for wider expansion. The company is committed to expanding its projects and foothold into more of Sub- Saharan Africa.

This growth would not have been possible without Filcon's dedicated approach to ensuring its workers and professional teams are happy throughout the projects. unrest amongst workers has been something of a talking point amongst South Africa's labour unions. Labour unrest has plagued the construction and several other manual labour industries in recent years. walkouts and standoff s cost companies millions of Rand in lost revenue and potential setbacks and Mr Loggenberg is doing all he can to ensure his workforce continues to work: "Fostering a good relationship with our teams from the outset is the most important thing we can do in this industry. Without happy workers you have no projects and as you know this will have a huge knock on effect."

Achieving this is no mean feat as Filcon directly and indirectly employ over 3000 people in the western cape, but with an Executive Chairman who understands the needs and wants of his workforce, those contractors can be safe in the knowledge they will be valued and rewarded for their loyalty.

BBBEE and Filcon
Filcon's BBBEE status is well on its way to exceeding the requirements set out by the Government. The Verification Report indicates that Filcon have met most of the following elements of BBBEE at the qualifying levels on the obligatory scorecard: Equity Ownership, Management Control, Employment Equity, Skills Development, Enterprise Development, Preferential Procurement and Social Development. Loggenberg is pleased that Filcon has met and improved on Government standards: "We are always looking to hire from our local area workforce. They have local knowledge and a good understanding of procedures that enable us to confidently and proudly show off our workforce. We are a national company with a strong local standing."

Future Plans
All of Filcon's current projects have been helped by improvements to the industry and local markets in South Africa. Mr Loggenberg explains how this is both a positive and negative change: "Africa is still booming, in the last four months there has been a huge capital outflow, which has enabled us to push forward in the market. However with all these increased services, change has comes at a price; expansion and market forces have pushed the price of the fuel inputs to a record high. Coupled with an average 13 per cent pay increase in worker wages, our margins have become tighter and thus our need to make every cent count has doubled." Filcon have begun to move into the housing construction market in the last 18 months and have seen a positive response from this. Although this market is very different from construction of structures as Loggenberg discusses: "We are moving more and more into the housing space market, but this is not as simple as just saying yes we will start to build houses. We need to get the production and manufacturing of the actual building right; it is very difficult to just start building away. It is not the same as building a structure, it is much more akin to a manufacturing environment and we need to explore this area carefully and allow ourselves time to properly understand and develop our practices for this unique market."