Southey Contracting - Enterprise Africa April 2024

Holistic, Integrated Growth Strategy Targets Increased Market Share SOUTHEY CONTRACTING

SOUTHEY CONTRACTING

Holistic, Integrated Growth Strategy Targets Increased Market Share

PRODUCTION: Jamie Waters

Southey Contracting is a longstanding partner to South Africa’s heavy industries. Providing scaffolding and access solutions, insulation, HVAC, corrosion protection, fireproofing, asbestos removal, and more, the company has become a go-to partner for mining, energy, chemical, and more. New Divisional Director Viloshini Pillay is tasked with building up market share. She tells Enterprise Africa more about growth through a fusion of technology and people.

INDUSTRY FOCUS: INDUSTRIAL & ENGINEERING

//In 2016, Southey Contracting – one of the country’s leading multi-disciplinary industrial engineering firms – was on a strong growth path, achieving results by investing in its people. This strategy positioned Southey as a true frontrunner because of a universal focus on quality.

Divisional Director at the time, John Humby, told Enterprise Africa: “The group prides itself on service delivery, fantastic safety records and superior training of staff.”

But the pandemic of 2020 and the resultant slowdown in site activity put a damper on aspirations. Some client projects were thrown out or put on hold, and the industry was forced to consolidate.

Southey Contracting has a long and enduring history, and effective management saw the business navigate through a challenging period with relative success. Today,

Pillay, Divisional Director

the company is home to around 1200 people and is active across access solutions and scaffolding, cold and hot insulation, corrosion protection and fireproofing, and asbestos removal.

As of December 2023, experienced industry veteran Viloshini Pillay took the reins as Divisional Managing Director following Humby’s retirement and a restructure of the organisation. She looks after operations in Gauteng, with longstanding company man Rob Ross taking care of Cape Town and KZN through the Coastal Division.

For both, the target is clear for the short and medium term: Growth through increased market share.

“We have a comprehensive offering and that is helpful,” says Pillay. “We are certainly looking to increase our market share, and we are exploring various means of doing so, but the industry we play in is quite difficult.

“We are very flexible,” she adds. “The management structure that we

// WE LOOK FOR MORE INNOVATIVE WAYS OF DOING THINGS AND WE TRY AND LOOK AT WHAT OUR CUSTOMER NEEDS AND HOW BEST TO DELIVER THAT //

work under allows for a lot of freedom to mould the business. We look for more innovative ways of doing things and we try and look at what our customer needs and how best to deliver that. That is the key to our business – the customer.”

EXPERIENCE & RANGE

Southey Contracting has a history in mining but is now operational across multiple industry sectors. Important contributors are petrochemical and power generation, and this is where the company sees future growth and opportunity for improved share.

The company is part of the wider Southey Holdings Group which boasts operations across subSaharan Africa. At the very deepest level, quality and safety are the key drivers of the business. Whether it’s high atop scaffolding towers, deep in mining HVAC systems, or covering large industrial infrastructure with protection, Southey has the capability. These tasks are not ‘standard industrial processes’ and cannot be carried out by anyone. Strict health and safety regulations are in place, and the industry is loaded with hoops to jump ensuring the job is done right.

With a limited number of companies able to handle the stringent regulations, Southey sees the potential to retake any market share that might have been lost over the past four years.

“We would like to see our industry become more technologically advanced,” says Pillay. “We are still an industry that is not at the cutting

Viloshini

edge when it comes to technology. We are proponents of technology doing things more efficiently, especially in the construction industry. In terms of the contracting we do, the way in which we become more profitable is to do things more efficiently and effectively. If we can find solutions to do that, we can provide a win-win for us and the client. This is a view around how to achieve growth and expanded market share that Rob and I share.

“I am passionate about growing the business,” she continues, adding that getting to the point where the company has a secure long term base workload would bring comfort in a time of operational challenge.

“That means increasing our market share, bringing on new clients, and making our contracts profitable.

ensure job security for their people. That is my goal at this stage and, ultimately, that is done by increasing return for shareholders. It is a tough industry at the moment so growth and security are number one priorities.”

PEOPLE POWERED

To deliver complex industrial engineering solutions to clients at international quality standards, people development and upskilling is essential. Pillay has a background in accountancy and HR having worked in the industry since for 18 years, operational across a number of national mega projects.

“I was operationally responsible for insulation and scaffolding contracts at Medupi. That was my main foray into operations and I’ve never been a typical accountant so I loved the

my preference for being operationally involved. The project exposure I got was great,” she remembers.

When she joined Southey in 2018, she headed up business development which included ongoing support around adherence to ISO standards.

“Managing labour is also important – we are a labour-intensive company and it is key for us to communicate well with labour.

“Previously, my role was around training and ISO accreditation,” she says. “I tried to marry those functions and internally we now have a continuous development programme. Where we see trends around certain shortcomings, we look at what developmental topics we can address with employees. We have our own internal trainers and we can provide short educational programmes with

INDUSTRY FOCUS: INDUSTRIAL & ENGINEERING

the team almost immediately.”

Across Southey Contracting’s core operations such as industrial coatings, scaffolding, asbestos removal, insulation, there is not always easy access to certified, accredited training programmes. “If you need a Quantity Surveyor, you can pick out of the universities and technikons. Scaffolding, painting, and insulation – it’s a different ballgame.”

Typically, it is the responsibility of the private sector to address any skills shortage, taking employees on a journey that they would otherwise not get on. “You have to take the guys from the ground up and train them,” says Pillay. “The training and development is modular and there are a lot of international qualifications which are not accredited. We need more accredited courses to upskill people, and that is always a challenge.”

A challenge that has been faced head on by Southey is maintenance of a sterling BBBEE certificate. A Level 1 contributor and a company that continues to invest in people to uplift, Southey Contracting regularly develops future leaders, supporting innovation and entrepreneurialism – a key focus for Southey at group level.

“It is something I am proud of,” says Pillay. “Our equity, management structures, skills development, and community programmes all come together under a strong, integrated BBBEE programme that has seen us successfully retain our Level 1 certification.

“Across all of our core divisions, we supply accreditation programmes and there are always beneficiaries on our programmes. We want to assist them with skills development and financial backing. The beneficiaries apply to

join that programme and we do a GAP analysis to understand which aspects of their growth they need assistance with.”

ALWAYS CHALLENGING

While Southey has been successful navigating challenges of all size, there are underlying macro issues that the company cannot escape and so Pillay and team are always working hard to steer the business in the right direction. Whether it’s economic shock, loadshedding, or investor confidence, the company has a stable base from which to make quick decisions.

“It’s the construction industry – it’s challenging overall,” says Pillay. “There has been a change in mindset,” she smiles.

“Clients have expectations but don’t do what they need to do, and you have to bridge that gap. There are shortages of skills and you

© Southey Contracting

have to be creative to plug that.”

Digitising is the obvious solution for many industries looking to improve efficiencies, but it’s not that simple for Southey Contracting. The heavily regulated industries in which the company plays values safety above all, and introducing digital takes longer.

“We work mainly in the petrochemical and power generation space,” she explains. “Those industries have a lot of red tape. This is obvious because they are dangerous sites with a lot of risks and challenges. We need to work within those limitations and simplistically trying to take a cell phone to site is not allowed. That limits digitisation at this stage. However, we are definitely looking at digitisation from a process and administrative point of view.”

In the supply chain, this is already in place, streamlining quality control and ensuring adherence to globally

recognised standards. With such a range of products and services required to carry out successful operations, the company is forced to be efficient and thorough.

“Insulation supply, steel coils, preformed insulation pieces etc – it’s all critical infrastructure and is expensive,” reminds Pillay. “We have a fair amount of our own scaffolding kit but we do hire in kit as well. We regularly refurbish our scaffolding and we look to credible and reliable refurbishment partners to carry out that vital task. We also rely on our supply chain for paint, grit, and sandblasting. In terms of the workforce, we have strong partnerships with PPE suppliers for obvious reasons. We must have rigorous tender processes and we are an ISO:9001 company with quality evaluation processes in place to ensure long-term success.”

This sustainable growth will come with careful management of

both costs and workforce. Expected to grow at around 3% between2024 and 2027, contributing around 3% of national GDP, the construction space has opportunities. Many are optimistic as promised infrastructure investments and renewable energy projects bring new chances for development.

For Pillay, the goal is clear: Grasp every opportunity, and claim market share to become the undisputed industry leader.

“We are trying to promote various services across divisions so that we can offer high quality service levels wherever we play.

“Our major focal point right now is growing our footprint. We want to grow through innovation, and we remain busy with that,” she concludes.

© Southey Contracting