South African construction group Group Five on Monday reported a 45% rise in fully diluted headline earnings per share to 145c for the six months ended December from 100c a year ago.

An interim dividend of 45c per share was declared, up from 30c a year earlier. Revenue grew 12% to R4.495 billion from R4.004 billion before, while operating profit – at R279.6 million - was up 103% from a year earlier.

The group also generated R360 million in cash in the six months under review. Operating performance improved at all group segments except Manufacturing, it said.

It added that the focus on improving the quality of the order book, improving contract execution and improving cash collections has delivered a robust performance, with the majority of the group's businesses showing an improvement.

The core business of Construction posted an improvement in returns and Construction Materials performed well in line with expectations and delivered margin enhancing returns to the group's results.

Manufacturing activities were affected by slow first quarter sales and pricing pressures from imports.

Group Five formed a new joint venture in August 2007 with the Barnes Group of Companies - Barnes Reinforcing Industries - supplying rebar, weld mesh, brick force and binding wire.

This operation has expanded and strengthened the group's manufacturing portfolio and supported the Construction operations' drive to improve margins, it said.

The group further expanded its Construction Materials portfolio by acquiring 100% of plaster firm Sky Sands for R124 million, with effect from 1 July 2007.

Sky Sands, which is involved in the supply of plaster and washed sand products to building materials merchants, the building industry and the pre-cast concrete products industry, has exploitable sand reserves estimated to be in excess of 25 years of production, together with further mining opportunities on the Sky Sands properties.

The acquisition complements the group's expansion and growth strategy in the infrastructure sector and assists in mitigating the risk of future materials shortages with respect to key building and infrastructure contracts, especially in the Gauteng market.

In addition, Bernoberg, a small niche manufacturer of cement extender, was acquired for R32 million.

Bernoberg further diversifies the business portfolio in the construction materials supply sector and complements the existing product range. The Bernoberg acquisition was effective from 1 October 2007, it said.

Looking ahead, the group said the recent power outages have not materially affected Group Five's construction operations, as measures had already been put in place to address such an occurrence.

Short term risks to performance are primarily related to the effect on suppliers and the group's Manufacturing operations, should the number of power outages worsen.

A detailed investigative risk review of all of the group's operations and construction sites has been completed and steps taken to mitigate the effect of outages.

The group continues to receive a number of attractive opportunities in local fixed investment spending. Mining, power and oil and gas activity in Africa also continues to offer high growth potential.

Group Five's total secured construction order book as at end December 2007 is R14.1 billion (60% local) and the secured one year order book for F2008 is R7 billion ( 62% local).

Management is satisfied that the group has access to sufficient resources to successfully execute the higher levels of activity ahead.

"The group is therefore well placed to achieve another year of solid earnings growth, while delivering improving value to its shareholders," it said.

The 2010 Soccer World Cup stadia, some new dams and the Gautrain project should add to cement demand in the current year

Nedbank Corporate Property Finance’s Gauteng division has acquired an effective one-third interest in a proposed multibillion-rand mixed-use development in Irene

Nedbank Corporate Property Finance today announced that its Gauteng division has acquired a 49% equity stake in Odyssey Developments (Pty) Ltd

Heavy building materials supplier Buildworks Group, which seeks to list on the JSE's AltX on Wednesday November 28, plans to raise 50 million rand via private placing of as many shares at one rand each, it said on Monday.

The Gauteng-based company will list 470 million shares on the AltX's building materials and fixtures sector.

Buildworks is a supplier of heavy building materials to the construction industry, which are used in the construction of houses, roads, stadiums, shopping centres, railways, schools, offices and other infrastructure.

The cash raised from private placing is expected to fund the group's 28 million rand construction of a concrete roof tile plant, which is expected to start early next year. The cash is also expected to help the group to upgrade its maker of crushed sand and stone Drift Supersand, which will cost eight million rand.

Gauteng is currently the company's principal market, but the group intends to expand into other markets within South Africa through acquisitions and distribution agreements.

The group said that after the listing, its black empowerment partner Phatsima Brick Clay will own 21.5%, and Buildworks expects the total empowerment shareholding after the listing to be 26%.

Civil engineering and construction group Sanyati Holdings on Tuesday said government contracts and extending operations beyond KwaZulu-Natal had boosted its order book, positioning the black economic empowerment company to achieve its forecast net profit of R53 million for the 2007-08 financial year.

The order book included a R25 million contract for civil infrastructure work in Polokwane, a R75 million road rehabilitation contract in Gamtoos, Eastern Cape, and a R1,9 billion contract for civil works on the new King Shaka International Airport in Durban.

Releasing the company’s results for the six months ended August, CEO Rick Jackson said the buoyant growth in the construction industry boded well for the firm. He said though 66% of Sanyati’s contracts came from KwaZulu-Natal, he was pleased at the inroads the company had made in Gauteng.

“The Gauteng operations are up and running with (the group’s piling subsidiary) Mega Pile’s first R2 million contract ,” said Jackson.

Gauteng accounted for 22% of Sanyati’s contracts, with the balance split among Mpumalanga, Eastern Cape and Zambia.

In an effort to grow the business , Sanyati said, it had acquired Gauteng-based Ruthcon Civil Contractors and GEM Earthworks, which has operations in Eastern Cape and Mpumalanga.

Net profit for the period under review doubled to R22,9 million on a 105% increase in revenue to R396,2 million — up from R192,5 million.

Cash generated from operations surged to R10,9 million from a loss of R4,5 million. Headline earnings per share increased to 8,74c from 5,73c.

Of Sanyati’s four business units, Civils Coastal was the biggest contributor to overall performance.

Revenue accumulated by C ivils C oastal was R215 million. Its performance was boosted by large-scale projects such as the R117 million tender to construct roads in Barberton, and the R52 million contract to construct a water pipeline in Umgeni, on the south coast.

The unit also stood to gain R190 million over the next 19 months after the Ilembe Consortium was awarded a R1,9 billion contract to build the R6,8bn King Shaka International Airport.

Civil engineering and construction group Sanyati Holdings on Tuesday said government contracts and extending operations beyond KwaZulu-Natal had boosted its order book, positioning the black economic empowerment company to achieve its forecast net profit of R53 million for the 2007-08 financial year.

The order book included a R25 million contract for civil infrastructure work in Polokwane, a R75 million road rehabilitation contract in Gamtoos, Eastern Cape, and a R1,9 billion contract for civil works on the new King Shaka International Airport in Durban.

Releasing the company’s results for the six months ended August, CEO Rick Jackson said the buoyant growth in the construction industry boded well for the firm. He said though 66% of Sanyati’s contracts came from KwaZulu-Natal, he was pleased at the inroads the company had made in Gauteng.

“The Gauteng operations are up and running with (the group’s piling subsidiary) Mega Pile’s first R2 million contract ,” said Jackson.

Gauteng accounted for 22% of Sanyati’s contracts, with the balance split among Mpumalanga, Eastern Cape and Zambia.

In an effort to grow the business , Sanyati said, it had acquired Gauteng-based Ruthcon Civil Contractors and GEM Earthworks, which has operations in Eastern Cape and Mpumalanga.

Net profit for the period under review doubled to R22,9 million on a 105% increase in revenue to R396,2 million — up from R192,5 million.

Cash generated from operations surged to R10,9 million from a loss of R4,5 million. Headline earnings per share increased to 8,74c from 5,73c.

Of Sanyati’s four business units, Civils Coastal was the biggest contributor to overall performance.

Revenue accumulated by C ivils C oastal was R215 million. Its performance was boosted by large-scale projects such as the R117 million tender to construct roads in Barberton, and the R52 million contract to construct a water pipeline in Umgeni, on the south coast.

The unit also stood to gain R190 million over the next 19 months after the Ilembe Consortium was awarded a R1,9 billion contract to build the R6,8bn King Shaka International Airport.

“The upsurge in Public-Private Partnerships (PPPs) and the current “building boom” rippling through our country is providing huge opportunities for the Facilities Management (FM) industry and companies need to capitalise on the expert services of this 11 years young industry”

So says Bonang Mohale, CEO of Drake & Scull Facilities Management (DSFM) and key participant in this year’s SAFMA Facilities Management Expo. The FM industry’s services and products will be showcased at the SAFMA Facilities Management Expo, taking place on 22 and 23 August 2007 at the Sandton Convention Centre.

“Outsourcing in general and Facilities Management in particular is recognised as the emerging area for high business impact and increasing shareholder value; commands increasingly high levels of interest at all organizational levels in all industries and in all market segments; senior management is becoming more involved in the Facilities Management outsourcing decisions; etc. Success in the leading FM companies  of today has been achieved through delivering on Customer fundamentals such as predictable and falling unit costs; added value without additional costs; zero risks or surprises; guaranteed results; minimum fixed and maximum variable costs; etc. and the good FM companies have responded by demonstrating through deeds not just an intellectual understanding of issues, among others, that quality and cost reduction are fundamental; asset and risk transfer have a price that must be understood; innovation is a prerequisite; seamless ‘one team’ integration is required; best in class customer service is a must; no performance, no pay, no future; etc.” adds Mohale.
 
The local construction industry is expected to grow at an average rate of 6.41% between 2007 and 2010. According to Statistics SA, the Gauteng province (including Johannesburg and Pretoria) accounts for 38.8% of the value of recorded building plans, with the Western Cape following close behind with 29.8%.

“The demand for facilities management is increasing as the FIFA 2010 World Cup draws nearer, during and long after”, says Mohale. “With new stadiums being built and existing ones being upgraded there are great opportunities for South African companies and especially FM professionals as these “construction marvels” will need to be appropriately designed, professionally project managed and efficiently maintained in a sustainable manner in the way of mechanical engineering equipment, security, cleaning and other services to ensure they robustly stand long after the Soccer World Cup. “

The Government has set aside an estimated R846 billion for infrastructure developments over the period 2006/07 to 2011/12 and the value of the construction industry is forecast to reach R633 billion in 2010 contributing 2.74% to the gross domestic product (GDP). “With the understanding we have gained, we can identify a significant role for facilities management in developing best in class infrastructure”, concludes Mohale.

SAFMA Facilities Management is an exhibition for suppliers and service providers offering assistance in the effective planning, integration and operation of the many different elements which make up the work environment. Now in its second year, the event aims to be the definitive meeting place for all those involved in facilities management, workplace management, occupational health and safety, energy management, security, etc. 

SAFMA Conference
As part of the SAFMA Facilities Management Expo, the SA Facilities Management Association (SAFMA) will host a two-day Conference on “Facilities Management – a strategic enabler”. The Conference will consider issues such as the impact of:
• Accommodation policy and practices on your bottom line
• Planned Preventative Maintenance (PPM) scheduling on your asset value and productivity
• The workplace and environment on staff and equipment productivity
• Energy and utilities management on your profitability
• Property and facilities management decisions on your balance sheet
• Facilities Management on your image and branding
• Statutory compliance and associated risks on your business

For more information on the conference contact Heidi Gouws at SAFMA on 086 516 3821 or e-mail This email address is being protected from spambots. You need JavaScript enabled to view it. or visit www.safma.org.za.

For more information on the SAFMA Facilities Management Expo 2007, please contact Bette McNaughton of Fair Consultants SA on (021) 713 3360 or This email address is being protected from spambots. You need JavaScript enabled to view it. or contact Catherine Larkin for any media queries on (011) 789-7327 or This email address is being protected from spambots. You need JavaScript enabled to view it..

Women's empowerment group Wiphold and a Cape Town-based construction company, Coessa, say they will start to import cement from China at "competitive prices" in coming months.

Wiphold finance director Tryphosa Ramano says it is not possible to calculate a stable price for the cement because it is exposed to the rand-dollar exchange rate. It is currently possible to land cement in Durban for US$40/t. "But this doubles with handling and bringing the cement up to Gauteng," Ramano says.

Wiphold has formed a joint venture with Tangshan Jidong Cement (Jidong) to import a cement called Dunshi.

Coessa director Adam Essa says since news broke of his company's supply deal with Singapore-based Evermont International, he has taken at least a dozen orders totalling tens of thousands of tons.

He will not divulge the landed cost of the product but says he expects to sell it for about $93/t. At the present rate of R7,13, a 50 kg bag of this cement will sell for R33,50. Local building suppliers are charging R50-R60. A year ago the price was R36.

Evermont MD Lim Hong Siang has "conservatively calculated" SA's annual cement shortage to be over 5 Mt. "The four big companies in SA are currently producing 13 Mt-14 Mt annually. According to statistics, total usage is set to be around 20 Mt this year."

Independent industry analyst Mark Kingham disputes these numbers. "I don't know where they get them," he says. "The SA cement market is broadly in balance. The supply situation is tight, I agree, but we are nowhere near a 5 Mt shortage."

Kingham says new capacity which will start to come on stream in the next nine months will gradually reduce the need for imports. Already it appears that Pretoria Portland Cement (PPC) will need to import only half the cement it previously predicted. Kingham adds: "If you're importing cement, you're transporting a dead weight. These container ships also leak like colanders, so even if the bags don't break there is a good chance there is going to be spoilage."

Lafarge SA CEO Albert Corcos says a previous attempt by his company to import Chinese cement "translated into a loss". Lafarge's experience shows that if it had managed to get all its logistics right, even cement supplied to coastal regions would have been cost-neutral. "As soon as you start hauling it, you start losing money. Transport is not cost-effective."

JP Morgan analyst Marc ter Mors says it is possible to make money on Chinese cement imports but doubts it can be achieved consistently. A rise in shipping rates from China or a dip in the rand's strength would wipe out profits. "It's a low-margin business and it is likely that they will make margin only in the coastal areas," Ter Mors says.

He agrees with Corcos that once cement is moved to Gauteng, where demand is strongest, transport and handling costs are too high.

"It is possible that at a certain point in time you will be able to make money on the imports but it is questionable whether that can be done sustainably."

He adds that companies have gone bust in Namibia after underestimating the complexity and cost of importing cement. "I think it would be quite difficult to build a sustainable business out of this." However, he adds that if local companies continue to push up prices - some have risen by as much as 20% this year - importers will have a better chance of profit.

Wiphold appears to be aware of some of the challenges. "SA is not geared for the importing of cement," admits Ramano, but she says that because Wiphold has no overhead costs associated with importing the product, there is less pressure on margins.

She admits Wiphold has not yet found any customers. "You don't get commitments until you can guarantee continuity of supply," she says.

Wiphold expects to take delivery of a first shipment in October. It hopes customers will make their own collection and transport arrangements. If not, it hopes to get Grindrod or Spoornet to offer bulk services.

Lack of customers is not the only problem facing Wiphold. Ramano says the Durban port's warehouse facilities are limited and can handle only 25 000 t/ month of cement.

Importing cement from China is Wiphold's first step to cash in on the rapid acceleration in infrastructure investment. Ramano says it is investigating the possibility of building a cement-making plant with Jidong.

Until then, the partners will have their work cut out bringing in the cement. Kingham says: "If it was easy to make money by importing cement, the big guys would have done it ages ago. "

The massive new Fairland office complex – a new landmark at the intersection of Gauteng’s Beyers Naude Drive and the N1 Western Bypass – is taking shape, and construction is on track for completion in early March 2008, building contractor Grinaker-LTA has announced. The firm is undertaking the R715-million construction contract for this 120 000 m2 development in a joint venture with Wilson Bayly Holmes Ovcon.

“The concrete structure and structural steel roofs are complete,” notes Grinaker-LTA Building managing director Neil Cloete. “"The brickwork is nearing completion, and the windows and glazed screens
are being installed. Construction of the unusually shaped fire stair pods - which are designed to display signage – is in progress.”

Inside the buildings the contractors are currently installing access flooring and ceilings. The finishing trades, such as tiling, have just started, Cloete adds.

”The roadworks for the paved parking areas and access roads has also started and we are trying to make as much progress as possible before the next rainy season,” he concludes.

This office complex is being developed by RMB Properties for tenants FNB Homeloans and Wesbank.