Current Issue 52
Backed by its reputation formed over five decades across a multitude of disciplines, Stefanutti Stocks is poised to capitalise on further large-scale mining and construction projects; leveraging its significant experience in creating support and project infrastructure, even in the harshest of environments
Bridging your Expectations
Writer: Emily Jarvis
Project Manager: Arron Rampling
With both the expertise and capacity to deliver a range of construction projects of any scale across a diverse range of industry and to a multitude of clients, the Stefanutti Stocks Group is among South Africa’s listed construction Group frontrunners. In January this year, the Group reported R12.7 billion of work in the pipeline, of which 40 percent was generated from outside its South African operations. Five decades of perfecting infrastructure projects and demonstrating a confident set of skills and understanding in the field, the Group now strives to entice more customers towards its end-to-end construction solutions, along with a concerted focus on projects in the mining industry in recent times.
“The Group as you see it today is a product of long-standing business relationships and the coming together of key business minds in a bid to combine their business knowhow and decades of continuous improvement, to develop a local understanding representative of Africa’s construction, mining and infrastructural needs,” highlights Steve Van der Walt, Contracts Director for Stefanutti Stocks Roads and Earthworks, a division of Stefanutti Stocks (Pty) Ltd.
From humble beginnings, starting with one truck, a concrete mixer and two dumpers, the Company began its life in 1971 under the name I. Bressan Construction; securing the Phala Rail Grade Separation contract near Amamzintoti two years later, for the then Natal Provincial Administration (NPA). In the early years, as a privately owned and under-capitalised Company, Bressan leveraged its relationship with the NPA, along with the founding trio’s enthusiasm to succeed, and this secured business in the Kwazulu-Natal region; building bridges and culverts and undertaking small industrial work for the sugar industry.
As its reputation for quality and commitment grew, so to did the order book and in 1978, the Company acquired its own plant, enabling Bressan to tender for much larger contracts in the provincial area. The resulting business from this expansion caused the Company to change its name to Stefanutti & Bressan (Pty) Ltd in the subsequent year.
In the decade that followed, business was booming, and the newly re-energised Company continued to set the bar high in terms of its bridge construction, permitting the business to broaden its field of operations into reservoir, pump station and sewage works contracts to complement the initial infrastructure offering. In line with this came a substantial increase in staff, plant turnover and two new divisions to add to the civil works: Stefanutti Construction (Pty) Ltd in 1981, and an earthworks division in 1998.
Stefanutti Construction’s first exploration across the border came in 1988 with the advent of the challenging task to build the prestigious palace for King Mswati III of Swaziland. On completion and after demonstrating its versatility to cater for specialist projects, the Company decided to put permanent roots down in the country and quickly built capabilities across construction, civil works, earthworks and roads. Today, Stefanutti is one of the biggest contractors in Swaziland.
During the 1990s, Stefanutti & Bressan experienced exponential growth, taking on larger scale and more technically challenging projects on a more regular basis; including the Tugela River Bridge, Majuba Power Station and Nchwaning Shaft Number three at Black Rock, Northern Cape. Additionally, the Company built the first ever concrete sugar conditioning silos in the world for Big Bend Sugar Mill in Swaziland in 1994, followed a decade later by the construction of the second largest concrete sugar conditioning silo for Mhlume Sugar Mill.
1993 marked its second foray into Southern Africa, undertaking major repairs to a group of silos in Maputo, Mozambique. Valued at in excess of US$1 billion, the money was enough to fund a second permanent office outside South Africa. With the civil war ending just one year earlier, Stefanutti managed to establish a base here against difficult odds; going on to complete many projects including the BP fuel depot, Maputo fishing port, the Japanese and EU Embassies, the Polano Casino and much more.
Up until 2004, the Group had grown organically by uniting common shareholdings with new management skills and forming new divisions. However, the Directors began to realise that in order to sustain the business for the long-term, the Group would benefit from a restructuring and stock exchange listing.
Following a very long period of strategic research and decision-making, Stefanutti & Bressan entered into discussions with ECMP in 2006 that were concluded in 2007; resulting in the Group’s listing on the Johannesburg Stock Exchange. This transaction saw the addition of mining business and dam construction to its repertoire that now covered close to the full spectrum of civil engineering and building contracting solutions.
Two subsequent transactions in 2007 – a controlling interest in Skelton & Plummer, a mechanical and electrical engineering Company, and a controlling stake in Civil & Coastal, a civil and marine specialist – completed the integrated service possibilities while opening new markets in the Western Cape and Angola.
21st century boom
Given the booming construction market in South Africa and the abundance of available skills in the late 2000s, several other Companies sought to also secure a stock exchange listing. When it became apparent that international construction Group, Stocks Limited, was planning entry into the listed environment, Stefanutti proposed the Group join them in pursuit of much bigger growth aspirations and a deal was agreed in 2008; resulting in the Company we know today; Stefanutti Stocks (Pty) Ltd.
Several acquisitions and mergers in the past five years have served to further enhance the Group’s comprehensive service offering, including the acquisition of Apollo electrical in 2010, Cycad Pipelines in 2012 and Energotec in 2013. This has allowed the Group to emerge almost unrivalled across all turnkey building and infrastructure solutions on the African continent.
Beyond this, Stefanutti Stocks now has a presence in the United Arab Emirates via Rabban Stefanutti Stocks Qatar, formed in 2011 to accelerate growth opportunities in new waters in conjunction with the local Rabban Group. Other associates in the Middle East region comprise AI Tayer Stocks, an interior fit-out and refurbishment business and Zener Steward LLC, an electro-mechanical contractor.
Throughout its history, there has been one salient factor that remains the same; and that is the uncompromising service backed by market understanding that the Group offers prospective clients. “Stefanutti Stocks promises a one-stop solution to your construction needs and this remains our focus. We can start from the first spade in the ground to final handover of an electrical or mechanical plant and we want more of our clients to utilise our full turnkey offering.
Moreover, on the mining side, our services can be implemented in the early design stages of the mine right through to running the mine commercially,” says Van der Walt.
Large scale growth
Due to an over-capacity post-2010 World Cup, Stefanutti has been working hard to increase its presence on the continent as a whole, while holding fast in the South African market, emerging this year with improved earnings from the construction side of the business to complete its integrated service offering.
Commenting on the last financial year’s “sound” set of results, Stefanutti Stocks CEO, Willie Meyburgh said: “Although tough market conditions in the Southern African construction industry prevailed during the past year, we have had a particularly successful year and achieved the targets set under our stated recovery plan for 2015. The recovery plan included the building business unit returning to profitability and the discontinuation of the non-performing power business, within the mechanical and electrical business unit.
“The overall impact of the plan has seen significant improvement in the Group’s financial performance compared to the previous year.”
While continuing to strengthen the South African operations organically, Stefanutti Stocks has shifted its focus in recent years to its other sub-Saharan markets which Van der Walt says has “plenty of potential to be further developed”.
He summarises: “The mining sector will be a key growth area for us in South Africa and Lesotho in particular as these are two countries which have strong growth prospects in coal and diamond mining respectively. We are looking into coal mines where the off-take agreements are being handled by Eskom in order to access long-term projects in this area.
“Moreover, we continue to remain competitive in the mining sector, perusing all works given out by Sasol in addition to accessing both private and public funded projects. Meanwhile, SANRAL remains a key client of ours when it comes to road construction, and we price these works accordingly whenever they come out for tender.”
Stefanutti Stocks proactively fosters a safe working environment by upholding its SHEQ (Safety, Health, Environment, Quality) policy, designed to enhance the wellbeing of its employees in turn, improving the workplace environment and quality of the final product. “We are very proud of our health and safety record and we are able to proudly show potential customers our safety stats, which are extremely good. This helps us to be more competitive and ensures there is no downtime so that we are always operating at full capacity and efficiency levels.
“Furthermore, our ISO accreditation carries a big punch when tendering for work. This global accreditation demonstrates our acute awareness of what is expected in terms of sustainability measures and mindfulness of the environment as well,” explains Van der Walt.
In line with this, the Group’s stringent commitment to improving safety standards can be seen in the lost time injury free rate (LTIFR) of which numerous awards from industry associations have further recognised the Group’s outstanding performance in this sphere.
In terms of maintaining a high level of efficiency and service, the Group continually invests in its plant, equipment and fleet to ensure cutting-edge technology can be deployed in all its projects; all the while conscious of the impact its operations have on the environment to minimise adverse effects and to allow for greener methodologies throughout the Group’s internal processes.
Staff form an integral part of Stefanutti Stocks’ continuous improvement strategy and safety enforcement, and in 2013 the South African operations achieved a level 2 B-BBEE rating, representative of the long journey it has undertaken in incorporating empowerment and individual development into its business culture.
Although affected by skills shortages outside of South Africa, Stefanutti Stocks is able to leverage its core South African employees and bring them across the border to train local people, with the eventual aim of achieving a higher percentage of local content outside South Africa as well.
“Our specialist construction capabilities and ability to seamlessly mobilise across the Group is one of our key assets, and we have to maintain this to stay ahead,” adds Van der Walt. “We are adamant that we need to employ the best person for the positions we have available, but first and foremost the requirement will be to source locally.
“We have always believed in ‘train for gain’, and that is why we send our employees on courses regularly and assess staff on an annual basis.”
Supporting its internal training policies for employees is an external corporate social responsibility programme that revolves around upskilling local communities to “build a better future for Africa”. Van der Walt continues: “This inevitably forms part of each project’s deliverables; where we bring in initiatives that benefit the communities in and around where we are working. Our community involvement varies from sponsoring t-shirts for a special occasion, to refurbishing an entire school. Needless to say we are very active in this space.”
In addition to this, the Group endeavours to extend its training in South Africa to include previously disadvantaged contractors via joint venture contracts, in order to maximise its BEE points while improving local capabilities. “The companies we chose to be part of our joint venture initiatives in South Africa are trained to our international standards. As well as learning new trades, they are able to transfer these skills to the next job,” emphasises Van der Walt.
Stefanutti Stocks is systematically widening its investment scope in order to access new market segments in new geographies. Backed by its reputation formed over five decades of enterprise and industry understanding across a multitude of disciplines, the Group is poised to capitalise on further large scale projects; leveraging its significant experience in creating a support and project infrastructure, even in the harshest of environments.
“Our strength lies in the diversity of our offering and the Group’s ability to strategically position itself in the construction, mining and civil industries. With an extensive project portfolio showcasing both our conventional and niche skillsets, we want customers to know that we are here to stay for the long-term.
“Our move into new countries, supported by a whole host of fruitful business partnerships that promise to bring long-term success to the brand, is testament to this and our plan to achieve sustainable growth across all business sectors,” concludes Van der Walt.