Stefanutti, black owners link up

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Roy Cokayne

Stefanutti Stocks has embarked on an active drive to ensure a sizeable percentage of work it priced was in joint ventures with black-owned companies to grow and develop them into competent contractors.

Willie Meyburgh, the chief executive of the listed construction group, said last week that there were not many black-owned contracting companies in the country, but the group had relationships with some of them. “We are helping them to develop their businesses to be sustainable stand-alone businesses and even eventually become our competitors.”

He said these companies were at least 25 percent partners in joint venture projects with Stefanutti Stocks despite possibly being unable to contribute 25 percent of the work.

“By the time we complete the project we would like them to be competent contractors.”

Meyburgh said the group had identified black-owned companies it believed had potential and engaged with them about working closer going forward to help them with a number of facilities and resources.

He said Stefanutti Stocks’ key enterprise development objective was to build successful relationships with strategic partners it could make meaningful contributions with.

The group’s support focuses on assisting its enterprise development partners with procurement, offering lines of credit and demonstrating the highest standards of job execution. On-the-job training includes showing its enterprise development partners how to run an efficient and effective site; how to accurately measure productivity and outputs; how to establish and organise the right teams; and how to generate profitability.

The group’s focus also has an external element. It recently entered into an agreement to assist the Limpopo Public Works Department with graduate and diploma intern practical training, trainee artisan practical training and contractor development.

Meyburgh said the benefit black-owned contractors received from this relationship was that they could piggy-back on Stefanutti Stocks’ higher Construction Industry Development Board (CIDB) grading and the strength of the group’s balance sheet to work on much bigger and more valuable projects than these black-owned companies, with their CIDB grading, would ordinarily be able to work on.

This would enable these black-owned contractors to grow and obtain a higher grading and the ability to tender on their own for larger and more valuable projects.

Stefanutti Stocks last week reported that a joint venture comprising Stefanutti Stocks Marine and Axsys Infrastructure had secured a R760 million contract to reconstruct the sheet-pile quay walls at Maydon Wharf in Durban harbour.

It said the Stefanutti Stocks Axsys joint venture won the tender on the back of a strong local spend commitment and the joint venture having a 30 percent black woman-ownership structure.

Meyburgh added that Axsys was a strategic enterprise development partner to Stefanutti Stocks.

“We have already completed several projects successfully with Axsys and currently we have three projects in progress on which we are working together as partners,” he said.

Stefanutti Stocks last week reported a 28 percent decline in normalised headline earnings a share to 67.3c in the year to February from 93.5c in the previous year, with a number of loss-making contracts, particularly in the group’s building unit, hurting the group’s financial performance.

The group’s normalised headline earnings a share excluded the payment in the previous financial year of the R323m Competition Commission penalty for collusion contraventions.

The group’s order book grew to R12.8 billion last month from R8.5bn in February last year.

Shares rose 0.32 percent to close at R9.30 on Friday.


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