SOUTHEY CONTRACTING: Holistic, Integrated Growth Strategy Targets Increased Market Share

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 Managing 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. With several projects being cancelled 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, the company employs people across the country and provides access solutions and scaffolding, cold and hot insulation, corrosion protection and fireproofing, high pressure cleaning and asbestos removal services within several industries.

As of December 2023, Viloshini Pillay took over the reins as Divisional Managing Director. She looks after operations in Gauteng, with experienced industry veteran  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 places us in a very strong competitive position,” 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 challenging.

“We have a very robust approach to solving our client’s needs,” she adds. “The Southey management structure allows us the freedom to exercise our entrepreneurial creativity and encourages us to expand our service offerings through technological advancements and diversification. We are continuously looking for more innovative ways of doing things as we strive to exceed our customer needs. That is the key to our business – a satisfied customer.”

EXPERIENCE & RANGE

Southey Contracting is operational across multiple industry sectors. Important contributors are petrochemical, power generation, mining, and paper and pulp industries. The company intends to increase its footprint within these industries as well as diversify into other related industries.

The company is part of the wider Southey Holdings Group which boasts operations across sub-Saharan Africa. At the very deepest level, quality and safety are the key drivers of the business. Whether it’s high atop scaffolding towers, inside boilers, or covering large industrial infrastructure with corrosion 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 has stringent compliance requirements to ensure the job is done safely and to the highest quality standards.

With a limited number of companies able to handle the stringent regulations, Southey sees the potential to recover 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 still operate in an industry that is not at cutting 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, “and that means increasing our market share, bringing on new clients, and diversifying our service offerings. Anyone in my position should want to ensure job security for their people. That is my goal at this stage and, ultimately, that is achieved by increasing our shareholders’ returns. 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 is a seasoned qualified chartered accountant having worked in the industry since for 18 years, with operational experience on national mega projects.

“I was operationally responsible for insulation and scaffolding contracts at the Medupi Power Station. That was my introduction to operations. I’ve never been a typical accountant so I jumped at the opportunity and have not looked back since. That experience cemented my preference for being operationally involved. The project exposure I got was invaluable,” she recalls.

When she joined Southey in 2018, she headed up business development which included overseeing the company’s integrated management systems (IMS), B-BBEE compliance, training and development and operational support.

“Effective industrial relations is critical to a company’s operational success – being a labour-intensive company and it is key for us to ensure that we maintain well-structured labour systems and processes.

“In my previous role, managing both the IMS and training and development functions,” she says. “I tried to marry those functions and internally we now have a Continuous Development Programme for our employees. Developmental topics and training material is identified through our IMS statistics and trends as well as external audit findings. We have our own internal trainers and we can provide short educational programmes with 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 other higher education institutions. Scaffolding, painting, and insulation – it’s a different ballgame.

“Typically, it is the responsibility of the private sector to find ways of addressing skills shortages within its industry, and in most instances upskilling employees from an unskilled base,” says Pillay. “The training and development is generally modular and there are several international qualifications which are not accredited in South Africa by the relevant training authorities. This means that we are unable to get crucial SETA funding to carry out the required skills training which in turn severely limits the number of employees that we can train. We need more accredited courses to upskill people, and that is always a challenge.”

Another hurdle faced head on by Southey is maintenance of a sterling B-BBEE certificate. A Level 1 B-BBEE 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 Contracting divisions, we carry out a well-structured Supplier Development program. Supplier beneficiaries meeting the required criteria are identified within our existing supply chain. These beneficiaries are then invited to apply to join the development program. A detailed GAP analysis is undertaken with each beneficiary and key interventions are identified to assist in ensuring that these small businesses are equipped with the necessary tools and resources to improve their sustainability.”

ALWAYS CHALLENGING

While Southey has been successful navigating the challenges it encounters, 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.

“It’s the construction industry – it’s challenging overall,” says Pillay. “But our team is resilient and dedicated.”

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 solutions takes longer.

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

“Our major focal point right now is growing our footprint. We want to grow through innovation, and this remains our main focus,” she concludes.