INDUSTRY NEWS : IN BRIEF financial crash of 2008 . Looking pretty with a full order book , the crash quickly changed that , the orders were all cancelled leaving them staring the year 2009 with no work and a well-trained team with nothing to do .
It was Warren Buffett who preached when it comes to investing , go against the flow , if the masses are in equities , get out . Ginkel must definitely have come from the same mind set .
Instead of retrenching all his staff ( which I am sure you all know is a very expensive exercise ) and not having the cash to carry out the retrenchment he went to his bank to borrow money to build a new factory bay . Apart from calling him crazy , his bank did decide to support him .
Industry NEWS
SA ’ s construction sector faces a challenging year
“ 2015 has proved to be a tough year for most construction companies , with lower revenue and profit margins , and less new projects in the offing according to PwC ’ s ‘ SA Construction ’ study ,” says Andries Rossouw , PwC Assurance Partner .
IN BRIEF
And so his team did everything required – levelling ; foundations ; fabricate and erect the steel structure ; the cladding ; the brickwork – the lot . By the time the shop was nearing completion fresh orders started to roll in and USS has never looked back .
I was absolutely gob-smacked to visit his shop in a low key industrial area of Uitenhage and find a well-equipped modern workshop . Detailed drawings are produced using Tekla which when applicable talks directly to his NC machines . Yes , some of the machines are ‘ entry level NC equipment ’, but they are ideal for his size of shop and type of work . He bought some of them second hand from Scott Steel .
And yes , he did finish his plate girder contract using a single head submerged arc welding machine . But he was not satisfied with the productivity of the machine and has since invested in a state of the art plate girder fabrication line . All other finish welding is done using Mig / Mag process . They do have a quality system in place and are ISO 9000 certified , and it shows when you walk through their shops and see the overall high standard of marksmanship .
USS has their own special way of making steel elements . The part mark is scribed onto a small piece of plate which is in turn welded to the element . That way the riggers will always know where to look for the mark .
USS is a classic structural steel jobbing shop , they will tackle almost any work if they think they can make a profit , from industrial projects , commercial projects , through substation work but like many fabricators USS is quite nervous when it comes to shopping mall projects .
We wish Ginkel and his team continued success .
The study ’ s findings are based on the financial results of the leading construction companies listed on the Johannesburg Stock Exchange ( JSE ) for financial year ends to June 2015 .
The 2015 financial year saw a decline in market capitalisation and financial performance . Eight of the nine companies reflected a decrease in market capitalisation . In aggregate for the nine companies analysed , market capitalisation decreased by 38 % to R25.9bn as at 30 June 2015 and showed a further 9 % decline from 30 June to 31 October 2015 .
The South African Government ’ s ongoing National Development Plan and its continued commitment to public infrastructure investment of R810bn over the next few years are still positive signs for future growth in the industry albeit that this value has decreased from prior years . This decrease in anticipated expenditure underlines the challenges experienced by the industry . With the announcement that the Commonwealth Games of 2022 will be held in Durban , the public sector is bound to invest in infrastructure .
This is the first time in five years that the secured order book decreased ( 4 %) on the prior year . Total revenue decreased by 7 % to R129.3bn on the prior year . These decreases were largely as a result of the weaker economy , in particular for commodity markets with a notable decrease in revenue from oil and gas projects .
Total operating costs decreased by 5 % in response to lower revenue . Staff costs
ABOVE : Andries Rossouw , PwC Assurance Partner .
continue to represent a significant component of operating costs constituting 29 % of total operating costs ( 2014:28 %).
The construction industry adds significant value to South Africa and its people . Seven of the nine companies included in the construction industry analysis , comprise 69 % of the revenue earned by all companies considered .
The value received by heavy construction employees represented 83 % ( 2014:71 %). This is a significant contribution to the labour market . According to Stats SA , more than 1.4 million people are employed by the construction industry , either on a contract or permanent basis .
The state received 10 % ( 2014:19 %) of value created in the form of direct taxes . The reality is that the state receives significantly more if one takes into account the tax on employee income deducted from employees ’ salaries and net indirect taxes like VAT .
Rossouw concludes : “ The South African construction industry is well placed to cope with new growth requirements as well as take on large scale projects . But it will need to manage short-term liquidity requirements .”
Steel Construction Vol . 40 No . 1 2016 7