FEATURES
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He adds that housing is not as buoyant as it should be, especially with lower
bonded residences. “We are not doing as many of those as we should.
Margins are extremely tight and, unless guys are able to work to a proper
business plan or business model that allows for sufficient profit, we are just
going to see more inflation in 2018.
“At the end of 2017 and towards 2018 we are going to see a lot more
company liquidations. Blue-chip companies have also been affected and the
knock-on effect will hit the plumbing industry in the next three to six months.
“We must promote selling quality products at decent margins to support
service and backup. We all trade far below where we should be, and this is
affecting service levels to a degree.
“Industry corporates are in such a mess. If you look at the big supply and
manufacturing players, they are going through some major turmoil. That is
really where the stability needs to come from.
“The main thing is to have the same ethics. Products sold must comply with
the latest standards — we should all work towards that. A lot of it is not
quite at the right standard,” he says.
COST CUTTING
Phala Sanitary Engineers’ Doug Wade agrees that business is bad at the
moment. “People are cutting prices severely. Guys are working for labour
only because they are so desperate. Everyone cuts each other’s throats. But
all this is doing is making it worse. One guy does not have to take all the
work, but must go in at a decent price.”
He says tenders are few and far between. “There is not much in the
marketplace. I am a bit worried for the future; if the rand continues to
depreciate, everything will shoot up and kill off a few guys.”
Evert Swanepoel of the Copper Development Association has a slightly more
optimistic view. “Obviously it is tough, although it is a bit better than what
it was. Business seems to be on the up, albeit slightly. The increase in the
copper price caught some guys unaware, but it is easing off again.
“That bullish trend seems to be continuing. I think the general feeling is
that, overall, the international copper price will increase again. Our biggest
negative is the political leadership in South Africa.
“2018 looks better than things did at the beginning of this year. There is
definitely an optimism that was not there nine months ago. The main reason
for this is the unexpected increase in copper usage in China. The building
boom in China is having a major effect on copper.
“It all depends on what is going to happen at the end of the year with the
ANC and their elections. People are holding thumbs. If we have a change in
leadership, there may be a change in attitude and a positive vibe,” he says.
RESTRICTIONS
Lawrence Benatar of Benatar Consulting says 2017 has been a busy year
in Cape Town, with lots of projects on the go. “Work in the residential sector
Continued on page 53 >>
November 2017 Volume 23 I Number 9