Construction on the King Shaka International Airport, which will replace the existing Durban International Airport, will continue full-steam ahead

Plans are being drawn up for the biggest housing development in the province, including homes, schools, social and work facilities, as well as an agriculture hub.

Port Elizabeth has stepped up the construction pace of its World Cup stadium – to the extent that the project is now on schedule

“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..

Sales to foreign investors of free market properties can influence top end property prices, but have no effect on the affordable end of the market

Government and private sector infrastructure investments are expected to secure the boom in the construction and building industries until well after the 2010 soccer World Cup, according to industry leaders.

They said the government's decision to go ahead with a R400-billion infrastructure programme, an even bigger commitment by the private sector and economic growth rates well above 5% a year would buoy the industries and drive the economy.

Brian Bruce, chief executive of Murray & Roberts, predicted the boom would continue long after 2010 and well "into the teens of the 21st century".

He cautioned, however, that there might be some ups and downs in the industry during this period.

But, despite this caution, construction companies are flocking to list on the JSE's alternate exchange, which facilitates listing of small companies.

Since AltX was established almost three years ago, 14 of the 50 companies listed are related to the building and construction sector with interests in home improvements, heavy construction and building materials and fixtures.

Among the bigger groups are Esor, Sanyati Holdings, Afrimat and the Raubex Group. The total market capitalisation of these companies this week was R20.6-billion, according to an AltX spokesman.

And Stefanutti & Bressan, with annual turnover of R1.7-billion, plans to list on the JSEs' main board on Friday after raising up to R465-million by placing 35 million shares. A limited offer of a further 11.5 million shares will be offered to vendors.

The company believes that revenues will grow to R2.5-billion in 2008. In the year to February, the group earned a net profit of R67.2-million, after the cost of BEE involvement, and expects this to grow to R115-million in 2008.

The group has a 15% BEE involvement through Mowana Investments.

Chairman and co-founder of Stefanutti & Bressan, Gino Stefanutti, said the construction industry was experiencing unprecedented growth and that there was "a positive picture of long-term growth for the industry".

Last month, the FNB Civil Construction Confidence Index, compiled by the Bureau for Economic Research recorded another increase.

Cees Bruggemans, chief economist at First National Bank, said that the figure reflected "very favourable business conditions". It is reported that the industry had grown by 13% a year since 2003.

The SA Federation of Civil Engineering Contractors noted that the number of people in the construction industry had risen to 114 000 in the first quarter of this year .

But, the FNB Index found , a shortage of skilled labour was affecting construction activities and impinging on completion times. Training would have to be accelerated to contain construction costs as a result of higher wages .

Power generation, with Eskom looking at another nuclear power station, will also help keep activity high. Power generation infrastructure development will begin in earnest next year and this is a 25-year project.

Transport, water and sanitation, schools and hospitals will need to keep pace with the macro- economic growth, said Bruce.

The attractiveness of the building and construction sector has attracted an unsolicited bid for building materials supplier Iliad Africa from a consortium led by Absa Capital. Talks are continuing.

Last week Iliad said it had acquired the Gauteng-based, R220-million-a-year Thorpe Timbers . Recently, the group bought USM Building Supplies and Lumber City in Lephalale (Ellisras). The combined acquisitions should add R350-million to revenues.

South Ocean, the Johannesburg-based manufacturer of building wires, has spent R10-million on the first phase of its expansion plans by purchasing new machinery that will increase its capacity by 10%.

The company, which was listed in February, has begun the second phase of expansion at a cost of R30-million for new machinery, buildings and working capital, which will add 15% to capacity.

The company recently acquired Radiant Lighting for R485-million, which expands its operations into decorative lighting, lamps and bulbs and electrical products.

Black empowerment group Afrimat announced two weeks ago that it had purchased two quarries and a concrete block-and-brick factory in KwaZulu-Natal, its second acquisition since listing in November. This brings its number of quarries to 22 and brick factories to nine.

Building confidence in SA rose back to near a record peak in the second quarter of this year, reflecting a boom spurred by public spending and pent-up demand for affordable housing, an independent survey showed yesterday.

The FNB building confidence index rose to 88 points from 87 in the first quarter of this year, edging back towards a historic high of 89 posted in the fourth quarter of last year.

FNB chief economist Cees Bruggemans said improved confidence in the building industry reflected higher overall economic growth, which quickened to an average annual rate of 5% over the past three years from 3% earlier in the decade.

"We have barely started. It looks like we are in an extended growth cycle which is likely to last another 7-8 years," he said.

Release of the survey coincided with official data yesterday showing that capital spending by the government rose by 25,4% to R71,8bn in the financial year which ended in March, with expenditure on land and buildings soaring by 149% and construction up by 23,1%.

A slowdown in public sector capital expenditure is expected this year, before the pace picks up again in 2008, the figures from Statistics SA showed.

Construction is playing an increasing role in the economy, with the sector expanding a blistering 21,3% in the first quarter of this year a 17-year record.

At the same time, the government's R416bn infrastructure spending drive is having positive spin-offs, although it focuses on ports, roads, railways and soccer stadiums.

The FNB building survey showed that confidence in the nonresidential sector, which covers commercial buildings, was steady at 94 points but fell in the residential sector to 82 points from 86 in the first quarter.

This suggested business conditions there had been hit by the cumulative two percentage point increase in lending rates last year, Bruggemans said.

The Reserve Bank raised its key repo rate by half a percentage point to 9,5% again in June, and many analysts expect another hike at its meeting next month. But the residential slowdown is unlikely to last, the survey carried out by the Bureau for Economic Research showed.

"Regarding the business outlook for the third quarter, residential contractors said they expected business conditions to remain more or less stable, but an improvement in the tempo of building activity is expected," FNB said.

Bruggemans said there was "enormous pent-up demand" for affordable housing units worth R170000-R250000 from the expanding black middle class.

FNB commercial property strategist John Loos said builders in the nonresidential sector were "very optimistic" and "upbeat" about short-term prospects but they also indicated that shortages of skilled labour and inadequate supplies of materials were "seriously constraining" operations.

Eighteen months ago few industry commentators believed that South Africa's banks would be able to deliver on their R42bn affordable housing promise by end-2008

Alcan and the government have agreed that only 5,5% of the 720000 tons of aluminium to be produced by Alcan’s planned R21bn smelter at Coega in Eastern Cape will be earmarked for use in the domestic market

The shortage of skills and other challenges facing the construction industry are up for discussion this week at the second built environment conference, currently on the go in Port Elizabeth.