Monday, 16 February 2009 02:00

Durban’s 2010 stadium reaches milestone

Fireworks were the order of the night when the lighting of the arch above the Moses Mabhida Stadium was celebrated in Durban on Saturday.

Construction IndustryThe who’s who in the political and soccer fraternity were present at the ceremony on Saturday. Local Organising Committee chairman Irvin Khoza, Sports Minister Makhenkesi Stofile, Premier S’bu Ndebele, and MEC Zweli Mkhize were among the dignitaries at the glittering event.

Ndebele said the completion of the arch symbolised unity.

“It is a celebration of teams working together to create not only an architectural and engineering masterpiece, but to physically create an icon that symbolises and spans years of history, hope and work, to let all South Africans feel the pulse of unification,” he said.

“South Africa is ready to host the 2010 Fifa World Cup. KwaZulu- Natal and Durban are ready to host the 2010 Fifa World Cup.”

Ndebele said South Africa was poised to make the 2010 World Cup an African event – one that will help spread confidence and prosperity across the entire continent.

“As hosts of the 2010 Fifa World Cup, South Africa stands not as a country alone – but as a representative of Africa, and as part of an African family of nations,” he said.

The stadium is named after one of the country’s most iconic struggle leaders, Moses Mabhida.

In 2006 the provincial government went to Mozambique and brought back the remains of Mabhida. He was laid to rest outside Pietermaritzburg.

Ndebele hailed the eThekwini municipality, saying the city was on track to complete the iconic stadium that will serve as a symbol of pride.

“We celebrate the completion of the stadium arch, which is a proudly South African architectural, engineering and construction milestone. ”

 

Record order books are expected to help construction stocks maintain decent earnings growth in the new year, but beyond that the future is uncertain as the global credit crisis eats up future work opportunities.

Construction IndustrySouth Africa‘s big-four construction firms boast a combined R120 billion order book, thanks to the phenomenal sector growth in the lead-up to the 2010 Fifa World Cup, as well as developments in other markets.

While these order books will certainly build up construction groups‘ coffers, the global economic slowdown – which is expected to deepen next year – may open floodgates of project cancellations and delays.

So, while “the outlook for next year is pretty decent, future work opportunities have been reduced”, says one analyst, who declined to be named.

Already Murray & Roberts, the country‘s largest construction firm, has had to adjust its books after its Trump Tower joint venture in Dubai was suspended, wiping R3,2-billion off its R61-billion order book, although the firm landed a R6-billion contract to build a terminal at Dubai International Airport shortly after this.

Underscoring predictions of the tough trading conditions ahead are union claims that Murray & Roberts is planning to axe workers as the rough trading environment restricts its ability to expand.

Group Five disclosed in an interview that there “had been a small and immaterial reduction” in the number of projects in the African mining sector and that “one small housing project” for a mining firm had been cancelled.

Eskom has also terminated the procurement processes for the proposed multi-billion-rand Nuclear-1 power plant project.

Aveng and Murray & Roberts were in two separate consortiums bidding to build the power plant, with Aveng saying the termination was “understandable” and that it had confidence in the continued infrastructure roll-out in the markets in which it operated.

“I don‘t think we have seen the last of these project cancellations and delays,” the construction analyst said.

Project flow from the mining sector is expected to worsen in the new year, with Group Five having already seen a slowdown in African copper mining.

Mining companies across the world are cutting back on production as weakening commodity prices bite into earnings, with Anglo American and Anglo Platinum expected to slash capital expenditure in half when they announce revised spending plans next week.

Together with public sector spending, construction companies also based their original rosy 2009 outlooks on “continuing demand for commodities”, which was expected to spur expansions in the mining sector, although many miners are now cutting back.

Aveng has downplayed the impact of the global crisis, saying its project pipeline remained strong, but it is “taking longer for clients to finalise projects”.

For the next few years the sector is banking on South Africa‘s multibillion-rand infrastructure spending, but if the national treasury is unable to raise funds offshore to counter shrinking foreign capital inflows it may need to reprioritise its spending plans.

South Africa is spending R600-billion over the next three years to upgrade and build new roads, power generation and transmission, rail, ports, pipelines, hospitals, prisons and schools.

Another analyst said the fact that Eskom – which accounts for the bulk of the infrastructure package – had to shelve its nuclear project suggested that even governments, albeit to a lesser extent, were feeling the pinch of tighter credit lending.

“Those with no exposure to public sector spending are in for a rough time,” the analyst said.

But all big-four construction companies are comprehensively exposed to this multi-billion-rand package, with Murray & Roberts saying it will drive annual growth of 15% to 25% through to at least 2014.

 

Monday, 10 November 2008 02:00

Raubex interim earnings up 80.5%

South African road construction group Raubex Group on Monday reported 80.5% rise to 144.6 cents in headline earnings per share for the interim period ended August compared with the same time a year ago.

An interim dividend of 30 cents was declared.

Francois DiedrechsenRevenue swelled 131.7% to R2.23 billion, operating profit jumped 108.1% to R398 million and order book grew 113% to R4.9 billion.

Francois Diedrechsen, Financial and Commercial Director of Raubex Group, said the performance was in-line with our expectations.

"During the period we also successfully bedded down a number of acquisitions, the financial effects of which are included in this set of results," he said.

He added that the acquisitions were value-enhancing and performing well.

"Importantly, the depth and breadth of skills and capacity that they've brought to the Group positioned us well to continue taking full advantage of the spend driven by the government and private sector," said Diedrechsen.

Looking ahead, the group expects to deliver a strong performance in the second half as road upgrades gather momentum in the lead up the 2010 Fifa World Cup.

"With the Gauteng Freeway Improvement Project now underway, we expect the South African National Roads Agency Limited (SANRAL) to be announcing a number of reasonably sized contracts to be released for tender in the coming months," Raubex said.

SANRAL remains Raubex largest client, accounting for some 40% of its revenues.

 

NIGERIA's leading cement and building materials firm, Dangote Cement, and Sephaku Cement, have signed a shareholders agreement paving the way for the start of a R3bn project to build a cement plant in North West.

Construction IndustryThe agreement, announced on Friday, is the second leg of Dangote’s strategy to enter the highly lucrative South African market, following its acquisition of a 19,8% stake through a private placement in Sephaku Cement in April. The Nigerian firm hopes to increase its stake to 45% eventually.

The partners said they now had the operational framework to kick-start the project, which they billed as the first black-owned cement plant in SA. It would have an annual capacity of

2,2-million tons. They said talks were being held with technical partners before construction started.

Sephaku Cement is a subsidiary of black economic empowerment- controlled Sephaku Holdings, which has interests in the mineral sector. Dangote Cement is part of Nigeria’s largest diversified group, Dangote Industries, and also has operations in Benin, Ghana, Senegal and SA. The company said it aimed to be a multinational corporation and was eyeing at least 10 more African countries.

The two partners said the South African plant would be the largest single-line cement plant in the country.

Construction would begin in January and the first cement should be ready for delivery by the end of 2010.

Sephaku Holdings, as the majority shareholder in Sephaku Cement with a 55% stake, would provide the majority of the management team, and was finalising debt funding needed to finance the project.

Demand for cement in SA is set to continue to rise due to a slew of billion rand construction projects, among them the government's road-building programme, privately owned shopping complexes, and infrastructure and stadiums to meet the influx of visitors for the 2010 Soccer World Cup.

Analysts say despite the lull in housing construction in response to tightening credit conditions and waning demand as cash-strapped consumers prefer to rent, construction firms such as Group 5 and Murrary & Roberts have full order books that should keep them busy beyond 2010.

Dangote Cement CEO Tony Hadley said the joint venture was a key part of his group's pan-African expansion programme and provided direct access to the large South African market.

“We are delighted to be announcing that the joint venture is moving ahead smoothly and look forward to beginning the construction process,” he said.

“Dangote Cement is set to achieve 26-million tons of production capacity in Nigeria by 2010 and 50-million tons of production capacity overall by 2012.”

Sephaku Holdings chairman Lelau Mohuba said his group had a broader vision to become a major player in the local economy and across Africa.

He said the new plant was the first black-owned plant in SA and marked a “critical milestone (for the group) which was growing from exploration to development".

Sephaku Cement CEO Pieter Fourie said despite a slowdown in demand for cement since record levels achieved last year, the medium- to long-term forecast showed significant growth opportunities in the local market.

 

Transport Minister Jeff Radebe has brushed off concerns about the effect of a power shortage on SA’s readiness for the Soccer World Cup, saying that transport preparations were progressing well.

Friday, 11 January 2008 02:00

Gautrain leaves black contractors behind

Black-owned construction companies are spoiling for a fight with the government over the Gautrain project

Monday, 03 December 2007 02:00

Nelspruit 2010 stadium strike continues

The strike by construction workers at the Mbombela 2010 soccer stadium in Nelspruit has entered its fifth day

Tuesday, 27 November 2007 02:00

Crucial to plan for post-2010

These are issues that face all host cities, but traditionally not many have been proactive enough to address them in advance

Monday, 05 November 2007 02:00

FNB Stadium construction on track

The FNB Stadium which is under construction, will host the first and final game of the 2010 Fifa World Cup, is ahead of schedule according to senior site manager Corne Esterhuizen of Grinaker Ltd

Thursday, 01 November 2007 02:00

World Cup host cities score R2,6 billion

The host cities of Fifa World Cup matches in 2010 will receive a major boost in the two years before the tournament

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