Black-owned construction companies need to tap into manufacturing and supply of raw materials.
IN THE construction industry of South Africa, there are still very few black players in the manufacturing and supply of raw materials, with the market being over-saturated by so called “tenderprenuers” which is proving to be detrimental and limiting to growth.
For Limpopo-born entrepreneur and developmental activist, Rudzani Mamphanga, there is a greater need for more players to enter the supply side of the market in order to experience growth through diversifying one’s offerings.
Mamphanga started Bruzar consulting engineers in 2008 with the aim of addressing some of the challenges with unemployment. Through that, he established Tshedza Concrete Art as a small company as he saw an opportunity to do smart paving through manufacturing. He realised a gap in this market and says his business has grown from strength to strength.
He used the proceeds from his engineering business towards the establishment of this business. In 2016 he roped in Tshifhiwa Madula, who was the General Manager and later became the co-director of the company. Tshedza Concrete Art (Pty) Ltd manufactures concrete products such as smart paving bricks, stocks bricks, block bricks, quantum bricks, and interlock paving bricks.
He is also the founder of Bruzar Group which owns various entities and does business in Gauteng and Eastern Cape with the aim of doing construction activities for people at their homes in rural areas due to the high demand of bricks.
“People are constantly building their homes in rural areas. We have not tapped into other spaces in construction but we are looking at ways to diversify with the assistance of the Industrial Development Corporation.
“We used to employ 25 people but now we employ 15 permanent staff due to the difficult economic environment. One of the main barriers to entry in this business is that it is highly capital intensive. If there is no capital then you experience problems.”
“I was lucky that I had a bit of money from one of my businesses which helped us.
“The key issue is accessing capital, and coming from rural areas is that the business costs increase, especially when sourcing raw materials. The margins are also very small so you make more money by selling volume which means that you need to watch out for wastages.”
He further explains that there is a gap in the market with very few suppliers who are mostly white.
“That is why we need support from government to help us invest in our businesses…It will be ideal if there is a concerted effort to set aside money and capacitate black businesses to help us gain access in the market. It won’t happen overnight but we want to be a fully fledged supplier of business materials,” he added.
Highlighting some of the shortcomings he has experienced, he conceded that there are lot of programmes government has done, but people in rural areas are not aware of these programmes. People lack information, but programmes are there.
“Even if you get information there is a lack of efficiency, when you want to access support you go through a discouraging information requirement processes which is technically disqualifying people.
“There is a lot demand from people trying to access business opportunities.
Eventually, Tshedza Concrete Art received a grant to the value of R571 499.00 from the Technology Transfer Fund.
The funds were used for the purchase of machinery and equipment utilised during the production process.
“The workload increased to the point where the business employed three more people.
“Standard bricks, paving bricks and blocks were certified by SABS. Sales for the business increased and this resulted in the increase of turnover from an average of R108 000 to R158 000 per month, a 68 percent improvement.
The business secured formal markets at Africa Hardware, AA Hardware and Blouberg Municipality. Tshedza Concrete Art was the Gold Winner in the Annual National Productivity Awards for 2015.