Building industry is not out of the woods yet

Despite SA’s embattled construction sector gearing up to benefit from a pickup in state infrastructure spending, it could still take two years for margins to recover after years of pressure from the weak economy compounded by Covid-19 trauma, state-focused Enza Construction says. 

Many contractors have not survived, “so we are actually in an interesting stage, where there a few desperate contractors taking projects at low margins”, CEO Rowan Crowie told Business Day. 

A woman sits in a ward in the Chris Hani Baragwanath Hospital in Johannesburg. Picture: MARTIN RHODES

The question is whether they will survive the next 18 to 24 months, taking on these projects, Crowie said, and there may be further consolidation in the industry even as tender activity picks up. 

In recent years former construction Basil Read and Group Five collapsed, citing a lack of state infrastructure work after the 2010 World Cup. while many other have sought expansion offshore with mixed results. 

The outlook for the sector, has improved considerably, with the state eyeing infrastructure spending as a key economic prop for recovering from the devastating effect of the pandemic. High commodity prices also point to bumper business from that industry. 

The sentiment echoes that of Raubex CEO Rudolf Fourie, who said during the release of the group’s 2021 results earlier in May that though the group had a record order book, margins had not picked up as quickly. The outlook for the sector was the best in decades, Fourie said, adding the group still had an eye out for higher-margin opportunities. 

Roelof Botha, economic adviser to the Optimum Investment Group, said while margins were under severe strain from the trauma of Covid-19, momentum is growing, and SA’s economic recovery has been generally better than expected. 

Many operators are charging low to no margins to keep going, he said. “They have sunk costs. It is like owning an aeroplane, it is better to sell a seat for R10 than to leave it unfilled,” he said. 

Low interest rates that may continue until 2023, economic recovery, and high commodity prices are reasons for optimism he said. 

“There has been a 30% decline in the cost of capital since Covid-19. If that doesn’t help, I don’t know what will,” said Botha. “It’s just a question of time until people can start charging decent rates.” 

As a wholly owned subsidiary of Crowie Holdings, Enza Construction was established in 2000 by brothers Rowan and Clinton Crowie. It has grown to a mid-to-large tier player, directly employing about 900 people, though it extensively uses subcontractors. Between 75% and 80% of Enza’s work involves public infrastructure projects such as schools, hospitals and social housing. 

This follows a 2014 strategic shift by the group, away from construction such as shopping centres, as it sought to leverage a competitive advantage in terms of project planning, being able to provide complete solutions for projects rather than straightforward contracts. 

Crowie says despite margin pressure there is much to keep it busy, and it has opened a Western Cape office, having previously been focused on Mpumalanga and KwaZulu-Natal. 

The group was one of the few to keep building when SA’s lockdown was at its most severe — the Covid-19 hospital wing in the Chris Hani Baragwanath Hospital complex, with 500 beds. 

According to Crowie, the group may also expand its activity in the mining sector, where it has already participated in some smaller projects. The group is now looking to grow, but organically, rather than through acquisitions, he said. 

Though Enza is not planning to list in the next few years, citing among other things the loss of control and costs of raising capital, it has not ruled it out. 

Source: Business Live

Enza Construction's Project Pipeline Ramps Up

Enza Construction’s Project Pipeline Ramps Up

Dr Pixley ka Isaka Seme Hospital 86,000m2 KwaMashu hospital to open later this year 4 Enza Construction Dr Pixley ka Isaka Seme Hospital Enza Construction will, later in 2021, launch the most hightech, specialised medical facility yet built in KwaZuluNatal, the Dr Pixley ka Isaka Seme Hospital.



The 86,000m2 hospital will be located in KwaMashu, twelve kilometres north of Durban. Named after founder and President of the African National Congress, Pixley ka Isaka Seme, the flagship project for Enza has been long in the making. Initially conceived in January 2015, it is expected to open its doors in October this year. “There have been some delays along the way. The hospital remains a flagship project for us. Much of the province’s health infrastructure is aging and Enza wants to be at the forefront of regenerating public health in KwaZuluNatal,” Enza Construction CEO Rowan Crowie says. ; _ vit IT ,o101=1 The 500bed regional hospital is a part of Clinton Crowie, executive director of Enza Construction an the KwaZuluNatal Department of Health’s Enza Construction tx r hospital revitalisation programme. Once complete, it will provide 1.5 million people living in KwaMashu, Inanda, Ntuzuma and surrounding communities in the northern Durban catchment area with a complete spectrum of uptodate, worldclass medical services. Clinton Crowie, executive director of Enza Construction, says the project was exciting in that it would serve many people who have dreamt of having access to quality healthcare. “Being involved in the construction of the hospital is aligned with Enza Construction’s commitment of building spaces that bring dignity to underdeveloped communities by responding more meaningfully to the challenges of socioeconomic infrastructure development in the country.”



Enza’s KwaZuluNatal divisional director, Steve Poorter, says there are a number of features which will make the hospital stateoftheart when it opens later this year. id CEO Rowan Crowie Issue 92 Asset Magazine 91 Dr Pixley ka Isaka Seme Hospital Enza Construction To start with, it has a cuttingedge heating, ventilation, and air conditioning HVAC system. This system includes nine megawatts of cooling power, numerous dedicated air handling units, centrifugal water cooled chillers as well as closed circuit cooling towers. It also uses a rainwater harvesting system to supplement the cooling tower water and the flushing of toilets. The hospital includes five laminar theatres which are critical for orthopaedic surgery and 15 operating theatres. It also has a dedicated infectious diseases ward with pressure cascading and isolation rooms with room pressurisation monitoring. There are approximately 3km of piping, and the operating theatres have a camera linked to the lecture theatre which can be used for live feedback as well as for training surgeons. The hospital offers all Level Two medical requirements as defined by the state. It includes a fully inclusive radiology department. The department has MRI facilities, CT scanners, Xray bucky rooms, ultrasound, mammography and fluoroscopy capabilities. “The standard and quality of the radiology facilities will compete with the best within the private sector,” says Steve. Dr Pixley ka Isaka Seme Hospital Enza Construction E “. Rowan adds that the hospital will also meet many perceived National Health Insurance NHI requirements. “We don’t specifically know what the NHI requirements will be, however it is believed that details such as paperless technology, and many other aspects of the hospital, will likely place Dr Pixley as the flagship in compliance with or as leading the standards of NHI.” The Pixley ka Isaka Seme hospital is also integral to mass job creation in South Africa. It anticipates employing 2,000 permanent staff members, from nurses to doctors to cleaners and security. The project has already accommodated in excess of 6,000 people as workers through the site gate, as captured by the induction process. Rowan says Enza’s project pipeline is growing as confidence returns to the economy and as the state brings projects to tender.

“We are working on a few large infrastructure projects, construction of the Mpumalanga International Fresh Produce Market in Nelspruit, the Middelburg Hospital, the Kazerne Intermodal Transport Facility in Johannesburg Central and the Balfour Community Health Clinic. “We have recently been awarded the contract to refurbish the Durban High Court. In addition, we are focused on the delivery of essential infrastructure and are also keenly looking at the rehabilitation of the passenger rail infrastructure as well as the development of renewable power infrastructure to support the existing capacity in the country.”

Source: Issue 92 Asset Magazine

Enza Construction Completes Purchase Of Tractionel Enterprise

Leading SA based construction company, Enza Construction (Pty) Ltd recently completed the purchase of Tractionel Enterprise, one of the leading electrical construction companies in SA.

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Bara500 ICU Hospital Handed Over After Six Months of Construction

With the surge in hospital admissions brought about by the global Covid-19 pandemic, the Gauteng departments of Health and Infrastructure Development embarked on a project to increase its ICU capacity through a national refurbishment and additional build programme. Enza Construction was commissioned to complete the design and construction of the new Bara500 Covid-19 facility. Creamer Media contributing editor Donna Slater tells us more.

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Enza says it will take two years for construction industry to recover

Construction company expects public infrastructure projects to drive the industry

The construction industry, ravaged by lack of work in recent years, will take up to two years to find its feet again, says Enza Construction Group’s executive director Clinton Crowie.

In recent years former construction giants such as Basil Read and Group Five collapsed, citing a lack of state infrastructure work after the 2010 World Cup. These companies also ran off high cost bases as they did work in faraway places, with Group Five investing in road concessions work in Hungary and Basil Read’s airport project in St Helena.

As a wholly owned subsidiary of Crowie Holdings, Enza Construction was established in 2000 by brothers CEO Rowan Crowie and Clinton Crowie. The company built Council Chambers for the City of Johannesburg, Botshabelo Shopping Mall in the Free State, as well as the construction of a new railway station building within the Soccer City Nasrec Precinct.

“There is a lot of work coming from the state now. I think over the next 18-24 months companies will tender for and tackle these contracts. We need to get through these two years, amid the pandemic while government works out funding for its rollout,” Clinton Crowie said.

Rowan Crowie said though the state sometimes paid late, Enza always got its money.

“I think there have been negative perceptions around the delivery of state projects which has often been unfair. Many delays in infrastructure projects have come about because of the pandemic. We had the hard lockdowns and people have also been working remotely. However, our relationship with government has been good,” said Rowan Crowie.

Their comments come two weeks after Wolfgang Neff, CEO of listed construction group WBHO, said state infrastructure spending was returning to SA after years.

“It has taken time but we are finally seeing a turnaround in the availability of infrastructure work. We have seen a marked improvement in roads and civil work,” Neff said after the release of financial results for the six months to end-December.

“There is also a lot of tender activity in the mining sector as well as for renewable projects,” he said.

Rowan and Clinton Crowie spoke to Business Day during a tour of the new Bara500 Intensive Care Unit (ICU) facility, built as a separate support area for the Chris Hani Baragwanath Hospital during the Covid-19 pandemic.

The facility, which includes 500 beds, took six months to build, at a cost of R550m.

“This is the biggest game in town. The government has shown definite intent to develop infrastructure. It is something which the president has spoken about at length,” Rowan Crowie said.

Between 75% and 80% of Enza’s work involves public infrastructure projects such as schools, hospitals and social housing.

With the surge in hospital admissions brought about by the pandemic in 2020, the Gauteng health department and the Gauteng department of infrastructure development embarked on a project to increase its ICU capacity through a national refurbishment and additional build programme.

Enza was commissioned to complete the design and construction of the new Bara500 facility and started work on the project in July 2020. Using light steel frame construction to fast-track the project, Enza finished the project within eight months.

“Our approach to building is a collaborative one and we had a strong team on the Bara 500 project. The required design services were provided by Mace Project Solutions, MMQS Mace Consultancy, Ruben Reddy Architects, CKR Engineers and Gibb,” said Rowan Crowie.

The Bara500 facility has not held patients yet but was built in time for a third wave of the pandemic. SA has been at lockdown level 1 since the beginning of March.

Source: Business Live