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Africa Outlook

Stefanutti Stocks
construction
Southern Africa
UAE

STEFANUTTI STOCKS SOUTH AFRICA

Standing Strong 

By staying true to its vision and values, Stefanutti Stocks continues to defy a challenging industry backdrop and deliver excellence in execution across multiple construction disciplines and geographies    

Writer: Tom Wadlow | Project Manager: Eddie Clinton 

 

Innovation, adaptability and flawless delivery are a must for South African construction companies operating in today’s environment.   

A sector enduring a period of contraction which has forced many private and public-owned firms into administration, the backdrop facing those which have survived is set to remain a challenging one until at least 2020, when the industry is set to enter a phase of what Fitch Solutions describes as a tepid recovery.   

The recent elections, won by the ANC, could herald the introduction of a new infrastructure fund which could, if enacted, add some much-needed momentum.   

However, for now South African construction companies are having to operate in what Russell Crawford describes as survival mode.   

As the new CEO of Stefanutti Stocks, one of the country’s largest multidisciplinary construction groups and still standing today, he is hopeful of the upturn in fortunes which the likes of Fitch are forecasting for 2020.   

“I have been in the industry for 36 years and work with people who have been involved even longer, and we all think that this is the most challenging period that Southern Africa’s construction sector has ever faced,” he says.    

“Every year we believe it will improve, but margins are tightening. Do I think the picture will improve? I certainly am hopeful, but the government has a difficult job to service the debt of state-owned enterprises and make room to invest in infrastructure.”  

Indeed, Crawford cites statistics which show that around 140,000 jobs in the sector were lost in the first quarter of this year, a trend which could lead to a skills drain out of South Africa and even the region, if the forecasted recovery in 2020 does not materialise.   

But, while the years since the landmark hosting of the 2010 FIFA World Cup have failed to deliver the anticipated construction boom, Zambian-born Crawford is cautiously optimistic about the longer-term future, an outlook based on vast experience in the sector that stretches back more than 30 years.   

“Through my upbringing and school years I was always a very outdoors orientated person, so couldn’t see myself locked up in an office for the rest of my life, so I wanted to do something outside, and civil engineering ticked that box for me,” he recalls.    

“I managed to get a bursary from a company called CMGM, which helped me to complete a four-year diploma. This was in the early 1980s, and after completing my period of national service I joined Stefanutti & Bressan in 1990, so I’ve been with the organisation for nearly 30 years.”  

This period has involved working up through the ranks, Crawford starting out as a site agent and then a contract manager before moving to Swaziland where he ran the earthworks division. At the end of 2003 he returned to South Africa, the company listing in 2007 and renaming itself as Stefanutti Stocks in 2008. After being promoted to a divisional MD and then head of a business unit, Crawford now serves as group CEO.  

“The experience has been extremely valuable,” he adds, “especially the period working outside of South Africa, as I became responsible for growing the business outside of the home country.   

“Through my career with Stefanutti I have spent time in Botswana, Zimbabwe, Swaziland and Zambia, all countries where we have completed projects. It has taught me the value of patience, and I have had the privilege of meeting ministers and working with governments, as well as meeting locals on the ground. I would say it has been a humbling experience also.”  

The Stefanutti Stocks Way  

That Stefanutti Stocks is still in rude health is testament to the company’s multidisciplined capabilities and geographic reach. Asked how the company has emerged through challenging times, Crawford elaborates on these two key facets of the business.   

“There are several reasons why I believe Stefanutti has been able to survive this period,” he answers. “First of all, we are operating over a wide geographical footprint, something which some of our competitors have not had. This includes our reach into Africa and also the UAE, and allows us to absorb downturns in some markets as we can balance it out with our activity elsewhere.  

Indeed, this footprint covers many Sub-Saharan African nations, including Benin, Botswana, Guinea, Kenya, Mozambique, Namibia, Nigeria, Sierra Leone, Swaziland, Tanzania and Zambia. In the UAE, the group has established businesses in Dubai and Abu Dhabi.  

“We are also multidisciplinary and cover a huge array of expertise,” Crawford continues.   

“This further allows us to weather the storm, as does the fact that we operate in many African countries as a general contractor, meaning we have the ability to take on civils, roadworks, buildings, earthworks, mechanical and electrical work. Marine construction is another area we have capabilities in, and the company has worked on many African ports.”  

Surviving a difficult period is not simply down to Stefanutti Stock’s wide net of capabilities and spread of risk over multiple countries, however. An unwavering commitment to a clearly defined vision and adherence to a set of core values has also placed the company in good stead as it looks to emerge strongly from South Africa’s construction downturn.    

Its vision, ‘if you can dream it, we can construct it’, is supplemented by six values which formed the acronym CAPPED: Candour, Accountability, People relations, Professionalism, Excellence and Dynamic.   

These combine with a mission to deliver excellence in execution to define what Stefanutti Stocks stands for.   

Having set up as Stefanutti & Bressan in the early 1970s, the firm has spent the best part of half a century successfully delivering projects, its first being awarded in 1974 and involving the Phala Rail Grade Separation near Amanzimtoti, for the then Natal Provincial Administration.   

Having completed the R185,000 contract in 1975, the company went on to enjoy a prolonged spurt of growth, momentum which has carried it to this day and now sees 12,000 workers on its books.   

Crawford thus introduces what is known as the Stefanutti Stocks Way, the company’s approach which enables it to continue delivering on its promise of excellence in execution, something which he is determined to preserve while he serves as CEO.  

“I wouldn’t say this is about a grand vision of mine,” he explains. “We all buy the same machines and we all buy the same concrete – what will set us apart is having the best employees. This centres around our organisational culture. I am very much a people’s person, so I am driving us to have engaged and energised employees.   

“We need to be customer-focused, because I believe the relationship between the contractor, professionals and client is going to change, especially in Africa where I think the future is about a collaborative approach to contracting. The contractor will play a much more influential and strategic role with their clients, so I see that being a big focus for us.   

“This will enable us to succeed in the next part, which is to execute flawlessly and get it right first time, all the time.”    

Project prowess  

Stefanutti Stocks certainly backs up these statements when considering the array of projects the firm currently has on its books, the company entrusted by clients to tackle numerous construction developments catering to many use cases.   

For example, in Eswatini (formerly known as Swaziland), it is engaged in the building of the country’s new international convention centre.   

Delivered by a joint venture known as KISS – made up of Kukhanya Civil Engineering Contractors (20 percent), Inyatsi Construction (30 percent), Stefanutti Stocks (50 percent) – the project is a multifaceted facility valued at R2.5 billion.   

The 40,000 square metre development is on track to be completed in time to host the 2020 African Union Summit, and will house an 1,800-seat theatre, an exhibition centre, conferencing chambers, a restaurant and a multi-purpose hall across its two basements, ground floor and first floor. In terms of materials, this equates to more than 26,000 cubic metres of concrete and 730 tonnes of structural steel.   

The convention centre will be joined by a five-star hotel, valued at R2.5 billion and set to become the largest in the whole of Eswatini, as well as one of the most luxurious in the Southern Africa region.   

Slated for a 2020 completion date, it will comprise 299 hotel rooms of varying size, with 283 concrete shell prefabricated bathrooms imported from Italy being installed in the standard rooms and junior suites. The facility will also come complete with an on-site gym, restaurants, bars, swimming pool and tennis courts.   

“Our Dubai office has also just refurbished the world-famous Atlantis Hotel on The Palm to the value of AED 240 million,” adds Crawford, outlining that hospitality forms a key line of business for Stefanutti.   

“The project consists of striping out and refurbishing 1,532 guest rooms, suites and corridors over a period of 33 months, set for completion in November 2019. This has been taking place in an operational hotel, and our initial cycle of 55 rooms in 44 days has been reduced to 55 rooms in 35 days, achieving a significant saving on time.”   

Crawford also cites an important ongoing project closer to home in the form of the Kusile Power Station in Mpumalanga. On target for handing over in 2021, it is an R11.5 billion civil works contract for Eskom involving 700,000 cubic metres of concrete which, once assembled, will support the 4,800 MW coal-fired facility.   

Track record   

The above represent just a handful of ongoing projects being undertaken by Stefanutti, not forgetting the hundreds of successfully completed developments handed over to clients down the years.   

Crawford is quick to praise the important role of suppliers in building up this impressive track record, companies which form what he describes as a sense of family.   

“Suppliers and subcontractors are absolutely key to our success,” he says. “If we are to be successful, we can only be so together with these partner organisations. This is especially the case when working throughout different parts of Africa, as it is not always easy to acquire the materials you need.   

“Stefanutti Stocks has in its roots the Italian term meaning ‘a door to our family’, which you will find in our offices around the world – our employees are family, our customers are family and our suppliers are family.”  

Having been at the firm for three decades, the CEO has witnessed a tremendous number of these projects reach completion, too many to state in a single interview. However, one recently completed build does instil a strong sense of pride.   

“The Horizon project in Maputo, Mozambique which we finished in October 2015, showcases many of our capabilities and is a 75,000 square metre space that houses a wide range of functions such as apartments, hospitality, retail and offices,” Crawford says.   

Taking just over two years to build, Horizon began life as a piece of swamp land behind a Radisson hotel and has been transformed into one of the most iconic sights in Maputo’s skyline. Stefanutti faced many geotechnical challenges in preparing the ground for construction, and utilised sophisticated prefabrication techniques for several key components of the building.    

Treat the company like you own it  

Such flawless execution of projects is made possible by energised and engaged employees, a key priority for Crawford being the continued recruitment of the best possible talent in the industry.   

“One of our philosophies revolves around the view that all of our employees, from myself as CEO to labourers on a construction site, should treat the company like they own it,” he explains.   

“How do we try to achieve that? It is a case of keeping everybody involved in the project, to the extent that every day the team is brought together and discusses what is happening and what is expected in terms of output. We also show our workers what they are building, which helps to add a real sense of purpose to their roles, and they are informed on how they perform on a daily basis.   

“To add a further sense of personalisation, we add nicknames (or whatever name someone wants to be known by) onto each employee’s hardhat, and that includes my own. I want people to call me Russell, I want to have conversations with our employees, and I want to have people who want to work here.”  

In terms of recruitment, Stefanutti is making use of a predictive index tool, which helps it to hire people who are most likely to fit the required position profile, including adhering to the high safety standards that clients across Africa require. The tool allows the company to calculate, amongst other key attributes, whether a candidate is risk averse or risk tolerant, and such information is combined with learning ability battery tests and a medical to ensure it recruits the brightest people who are also fit to work.  

Once a part of the company, their development is encouraged via a system of training that is ongoing and structured to purpose, an initiative which receives in excess of R20 million in investment annually.   

Crawford admits that, while there is a degree of skills being drained from South Africa, there is a wealth of talent that Stefanutti Stocks is still able to hire from.   

Looking ahead, this will form a key focus for the CEO, who concludes by outlining his priorities for the next year, a period which could be a defining one as the sector looks to enter a phase of recovery.  

“Our focus is on having the right people and ensuring we continue to execute flawlessly,” he says. “Simplifying and standardising processes will also help towards this end, because process can bog you down when you are part of a large company like ours. Against tough economic times, it is vital to create a lean culture as well.   “All of this will enable us to build on the fruitful relations we have established with clients around Africa and the UAE.”