Group Five looks beyond Africa as SA market cools
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Mr Mike Upton

CONSTRUCTION company Group Five says its strategy is strongly focused on expansion in Africa, with selected projects in Russia and North America also possibly on the horizon.Outgoing chief executive officer Mike Upton says the South African construction industry was experiencing “a false dawn” with the market going through “quite a difficult period”.

He said the transport and infrastructure markets have weakened markedly, with margins under pressure and few significant tender awards.

“If we rely on the South African market, we would be going backwards,” notes Upton.

He believes there are opportunities for Group Five in Africa in the power and transport concessions and contracting environment.

The company is servicing a multi-million dollar tender project upgrading of the Plumtree-Mutare highway in Zimbabwe, which is nearing completion.

Some of the projects pursued include a R4 billion Ghana gas project as well as geo-thermal opportunities in Kenya.

It, however, said some mining projects were being delayed by the spread of Ebola in Western Africa.

The oil and gas opportunity pipeline is positive, especially in East Africa, with real estate development also expanding.

Upton also said where industrial developments outside South Africa were “at zero” for a long time, “there were green shoots in the cement and sugar industries”.

The JSE-listed group is focused on expanding into East, West, Southern and Central Africa, with local country representatives in Ghana and Mozambique already appointed.

Group Five is involved in more than ten countries, with active government and stakeholder engagement.

Africa has become a hotbed of competition, with Turkish, Chinese, European and Indian companies, among others, all active on the continent.

In Zimbabwe, less than ten of Group Five’s employee total of 1,500 people were South African.

The group, however, says one of the obstacles to expanding into Africa was access to funding and credit for the client countries.

Upton agrees, saying that Group Five could do more in Africa if funding access improved.

Group Five says it is cautiously looking at expanding its intertoll business into North America, along with some Eastern European partners.

The giant company’s total order book at the end of September stood at R15,2-billion, with 32 percent of work outside South Africa. – Business Reporter/Engineeringnews.com.

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