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MOTHEO CONSTRUCTION GROUP

FEATURE


Success BUILT

It began as one remarkable woman’s hobby and in 14 years has grown to become a notable player in the construction industry and an empowerment success story. Director Tim Potter talks to South Africa Magazine about the rise and vision of the Motheo Construction Group. By Colin Chinery 2

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F O R

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n the Rainbow Nation, Black Empowerment projects can be a façade, a blowout, or more often a scoreboard pass across a line from scrape-by to outstanding. With the Motheo Construction Group empowerment finds towering achievement and a role model. The inspiration of Soweto-born and former political exile Dr. Thandi Ndlovu, what began as a hobby saw her create Motheo Construction in 1996. Since then as developers, contractors and project managers Motheo has delivered over 34,000 serviced sites and 60,000 affordable housing units, translating into over R3 billion worth of affordable national housing stock.


Motheo Construction Group FEATURE

Other projects include the R70 million Orlando rail station close to the World Cup training stadium, and consortium partner for the new head office for the Department of International Relations in Pretoria, valued at R1.35 billion, with Motheo holding a 12.7 percent construction stake “Our history is wrapped up in the delivery of low income housing and we’ve diversified out of that background into what I would call lowtech building and civil structures,” says MCG Director Tim Potter. “In terms of recognition as a player in the sector we are very well known, particularly in government circles where ninety per cent of our work is done. “In terms of empowerment, Dr Thandi’s objectives are empowering not only Blacks but also females. We are 54 percent Black owned and 52 percent Black female owned. Currently we have nine shareholders, of whom six are Black female and we have two black female directors who are both executive in the business. In terms of senior, middle, and junior management we are meeting all the requirements to score full points on the Black Enterprise Empowerment scorecard. We are employing a workforce of around 1,000, and of these 20 are Whites. So Motheo is predominantly a Black company.” Potter puts the national housing backlog at around two and a half million, and says part of the issue is straightforward but in human terms complex in its resolution. “If people are staying in traditional areas should they continue to live there if the world is urbanising? “Obviously they need to live near their employment opportunities, so you end up with a scenario where those moving to work

opportunities end up congregating on the outskirts of major cities. The Government is trying as fast as it can go to accommodate this incoming mass but the required bulk infrastructure continues to lag. “On the other hand you have those who are resistant to move, and instead try to eke out an existence where they have lived traditionally. Should municipalities in those areas be doing housing infrastructure development, or looking down the track and facing the inevitable and allowing people to move on? “That’s the debate, but what is inescapable is that there are a lot of people to house. We are currently building four to five thousand houses a year, and could do a lot more if the Government had the delivery capacity to release the projects.” Potter, a professional engineer with an extensive civil engineering background -including 18 years with Murray and Roberts – has been with the Motheo Construction Group since 1998. “We secure work in many ways - tendering for municipality property projects for example, as well as in the open market. We also negotiate contracts with clients who see us as a preferred contractor, and typically this occurs both in the private sector and with Government on the low income side. Work in this area is allocated rather than tendered on price because it is based on fixed revenue - you advocate what product you will provide for the given amount of money.” If construction figures are impressive, on-site subsidiary benefits can be incalculable. Collaboration and training involvement with local suppliers is one such area. “It’s a mindset and a process. We’ve probably worked with in excess of over 300 smaller

We are very well known, particularly in government circles

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Motheo Construction Group FEATURE

ALERT STEEL builders, and hopefully we have left them construction and entrepreneurial skills that have helped them embrace new projects after we’ve moved on.” New community cohesion is another. “Before starting a project we set aside two or three months, sit down with a local representative steering committee and agree what the processes and outcomes will be. We form a document, a social compact which says effectively, ‘this is how we’ve agreed to behave and this is the likely outcome’. If everybody plays to that piece of paper the project runs smoothly. If not you can guarantee that you will have a hiatus. “This is probably a hallmark of why our projects have run so well. If you didn’t do this you would be foolish to start implementing them; you’d end up with endless debates about minor issues and everything coming to a halt.” Success and a growing reputation for excellence and delivery can turn out to be a challenge however. “Having done quite a lot of work in a number of provinces, there’s always the sense that if you have had a lot of work you should make way for others. So yes, success can be an impediment to your future, and this is one of the things we are having to deal with. “Regionalism is another – if you are not based and fully active in a particular province, preference is given to those that are. And as you grow a business you tend to centralise, in our case Johannesburg, with satellites operating in those provinces where we have significant work. “Another challenge is the corruption issues that have become a trend over the past three or four years. You face the fact that if you take a moral stance then certain projects for which you are eminently suited will just not come your way. It’s like anything where you are dealing with government as a client. So you step back and look for other opportunities, and some of our movement into the private sector is as a result of this.” 4

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Established over 30 years ago, AltX listed Alert Steel provides various steel, steel-related products and services to the building industry. With 19 operations in South Africa and Zimbabwe and a growing list of AlertExpress containers, the group is well equipped to meet the needs of its growing customer base.


Potter sees the private sector as one area of potential growth. “While Government housing projects should continue to provide a base load, our technical capacity is growing and this gives us the opportunity to work in other centres, particularly with parastatal and larger private sector entities.” He is impressed by what he describes as the maturity with which the Group’s founder and Executive Chairman Dr. Thandi has approached the development of this business. “She’s been in the firing line in regards to Empowerment and the ‘Is-it-Black-enough?’ and similar sorts of debates. Her approach has always been to blend empowerment with capacity. And in growing the business over these 14 years Motheo has demonstrated empowerment while at the same time delivering on projects and giving a quality product. “Other models have said in effect ‘Go 100% Black’ to demonstrate ownership of the business. In some cases this has meant tokenism, with traditional White businesses

posing as Black businesses, or in other cases 100 percent Black businesses with inadequate skills and capacities. And that has resulted in failure. So since inception Dr Thandi has tried to walk the middle road, and over time I think it’s proved to be a successful model. “As we transition from where we are now to a company that from an ownership perspective reflects South Africa’s demographics - and that’s the intention - I think her strategy will prove to be correct. By then this will be a business doing R1 billion a year, capable of tackling projects of considerable size, and a force to be reckoned with in the construction industry. “Already the mark we have left in the country’s residential sector is that here is a fully Black empowered entity that delivers consistently on quality and deadlines. If governments are looking for innovative thinking, pilot projects and consistent performance, Motheo Construction Group has a lot to offer.” END


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MOTHEO CONSTRUCTION FEATURE