Fri, 29/04/2016 - 12:50
Current Issue 58
Having traded for just six months, Motheo Group’s new subsidiary, Motheo Infrastructure Contractors, is already showing huge potential as a welcome complement to its existing construction offering
Leaving a Legacy
Writer: Emily Jarvis
Project Manager: Arron Rampling
Known in South Africa for its focus on empowerment, gender equality and quality construction, Motheo Construction Group continues to be driven by the significant national need to fulfil basic housing requirements, while remaining an agile, sustainable and adaptable market player.
With almost two decades of experience working in the affordable housing sector, Motheo is often the first selection to win Government contracts as a solid choice capable of meeting construction timelines with the help of local subcontractors throughout the various stages of any given project.
“Today, we have more than 80,000 houses in our portfolio; with a total order book in excess of R5.5 billion. Each project sees us go above and beyond Government requirements for use of local subcontractors, initiating skills transfer with local businesses,” says Tim Potter, part-Owner and Director of Motheo Construction Group.
The recent shift in Government funding towards South Africa’s infrastructure development - particularly in the transport, communication, road and energy sectors – has seen Motheo bolster this already extensive reputation for Government housing projects with activities in the private sector in order to remain competitive in an increasingly saturated market.
A tick in the box
Last year, Motheo Infrastructure Contractors was borne from blue-sky thinking with the aim of generating additional revenue for its shareholders. “Six months into operation and I am pleased to say that we have a significant number of potential orders on the table that could change the face of our business,” says Potter. “Led by likeminded entrepreneur and experienced businessman, Archie Rutherford, the Company is generating a totally new stream of income that has ticked the private sector box so to speak.”
From this diversification into civil engineering, Motheo is expecting an extra R50 million worth of work in the pipeline by June with the long-term goal to double the size of the business within three years; countering the current slowdown felt in the affordable housing sector.
“Working in the private sector has many advantages; including the growing amount of working capital, timely payment for work and a streamlined process from start to finish in most cases. Given that Government spending patterns have had a knock-on effect that has limited affordable housing projects, public funding is now being given to a number of priority infrastructure projects, and we want to be a big part of this,” he explains.
As the Government is South Africa’s biggest client, Motheo see this market shift as an opportunity to grow staff numbers once again and capitalise on the infrastructural needs of municipalities, provincial and national Government.
“The Government remains keen to spend with us based on decades of experience and a proven track-record for projects all over South Africa, bar the Western Cape. A good example of one of our most recent ventures was the R254 million Reeston Project for the Buffalo City Municipality, providing more than 4,000 South Africans with their own home,” explains Potter.
Supporting this notion, Motheo was accredited as a social housing institution (SHI) in 2015 which, combined with recent managerial changes at the Social Housing Regulatory Authority (SHRA), promises to streamline the housing grant process and create increased opportunities on a more continual basis for the Company.
“We are in a good position overall,” says Potter. “Furthermore, for every project we complete, we leverage the support of local SMEs. By disseminating opportunities to others in the market around us, we can empower and engage more people; this is what Motheo is proud to be known for.”
Motheo’s strong position as a level 2 B-BBEE Company serves to further solidify this centralised notion of empowerment, with the Group’s Chief Executive known locally for her devotion to a better standard of healthcare and living conditions for South Africans.
“The Group CEO, Dr Thandi Ndlovu, is still very much involved in the day-to-day running of the business, particularly when it comes to community projects and breeding a Company culture of gender equality,” says Potter.
Amongst its activities to engage with training those of all ages, Motheo is regularly engaged in internships in line with the wider industry trend to increase the number of young people interested in a career in the construction sector. “This is in addition to the comprehensive training conducted by external practitioners that we organise on a regular basis,” he adds.
Meeting a national need
Since humble beginnings as one woman’s ambition to empower South African people through the provision of better living conditions – providing ordinary people with a means to escape poverty – Motheo Construction Group is now looking at ways to pass the reins onto a new, younger management team who will embody that same Company culture.
“The business has come a long way since its initial aims and goals. Now, as the Company’s directors begin to reach ‘the afternoon of their careers’, they must engage in passing on their skills to the younger generation. We must not lose the Motheo identity in the process,” Potter emphasises.
He concludes: “Our core business going forward will remain the same and continue to answer the significant national need for affordable housing. However, our diversification into civil engineering through Motheo Infrastructure Contractors is already showing huge potential and highlights the promise that the private sector holds for us.”