Southey Contracting has a long and proud history in South Africa and through training, development and the delivery of quality service, the company is preparing for a fruitful future. Managing Director, John Humby tells us more…
You can often tell a lot about a business by looking at its history – how long it’s been around for, how much it has achieved and whether it continues to perform well and shows the ability to cope with change. In South Africa, there are many companies involved in the mining business that have opened and closed very quickly, there’s many that have not stayed on top of technology, there’s many that have failed to keep employees happy and there’s many that have simply not evolved strategy over time and have been left behind. Because of the rapid change in the business and technology environment, it’s so important to constantly review all aspects and plan for every eventuality whether it’s a slowing economy, a natural disaster, an increase in competition etc, you have to be prepared. This is especially important when you operate a multi-discipline company that offers a large portfolio of services to customers across a range of industries. You must understand each sector that you work in, you must tailor your offerings and never become ignorant of the needs of customers.
Southey Contracting (Southey) was founded 77 years ago and throughout its history it has changed and adapted its strategy, bolstered its service offering, expanded the number of markets in which it operates and built strong relationships with customers and suppliers, and this has helped the business to become an industry leader.
Southey Contracting is part of Southey Holdings – the ‘investors in excellence’ – a multi-disciplinary business that owns a diverse range of companies, all focussed on servicing the mining, minerals, oil and gas, power generation and general industrial industries.
John Humby, Divisional Managing Director at Southey Contracting tells Enterprise Africa more about the journey from a small business started nearly 80 years ago, to a 3500 employee international organisation.
“The company was formed in 1939 to provide painting and insulation services to the mining industry throughout Southern Africa, particularly the northern regions of South Africa,” he says. “It grew with the development of the gold mining industry in the Free State; that was in the late 70s and early 80s at which point it had been bought by two trusts which decided to expand the field of influence from Johannesburg and branches were opened in Durban and Cape Town. It remained a primary supplier of scaffolding, painting and insulation services to mining and also sugar, paper and pulp, refineries, oil and gas, marine, general steel construction and power generation industries. In the late 90s, we then purchased a couple of other companies. One was IMAC, then there was Okapi and Rudnev. Okapi is an agricultural knife manufacturer, IMAC is a marine and ship repair company and Rudnev is a cold room manufacturer so they were all loosely related.
“In the early 00s, IMAC joined with Dorbyl Marine and made DORMAC of which we were a 50% shareholder and in 07/08 we purchased the remaining 50%. The company then also bought the Parkhome manufacturing business as well as a company called Concord who manufacture refrigeration cabinets for the retail industry and that’s the basis of the group as it stands today.
“The contracting division which started everything, has grown to provide a number of other services like scaffolding, high pressure water-jetting and cleaning as well as aluminium spraying. The services of the contracting division are provided throughout the country as well as into neighbouring countries in Southern Africa including Namibia, Angola, Zambia, DRC, Kenya, Mozambique, Botswana, Tanzania, Ghana, Cameroon, Guinea etc so we have quite the influence in Southern Africa and beyond. In 02/03, we bought a company called Tate & Nicholson which is a steel sheeting division who are one of the top companies in the country when it comes to roofing sheeting.
“The group is now quite big and prides itself on service delivery, fantastic safety records and superior training of staff,” explains Humby.
Southey’s main offerings come in the form of asbestos removal, corrosion protection and coating, fireproofing, floor coating and concrete repair, industrial cleaning, insulation, scaffolding and access, sheeting and cladding, surface preparation and thermal metal spray. These services can extend the lifecycle of assets in industrial applications. They are also hugely useful during the building of new assets, during maintenance, shut downs, modifications and decommissioning and return to service projects.
THE COST OF TRAINING
Obviously, all employees at every company around the world need training to ensure they are schooled in what is expected, what is safe and what needs to be done to satisfy the client. Even the most high profile jobs need training – Queen Elizabeth has been quoted as saying “It’s all to do with the training: you can do a lot if you’re properly trained.” American Entrepreneur, Nolan Bushnell said: “Hire for passion and intensity; there is training for everything else.”
Because of the nature of the Southey business, with some activities being dangerous, training is extremely important. Humby explains that effective training forms part of the company’s overall business strategy.
“We spend a significant amount of money on training; it’s vital to our business,” he says. “Without our training strategy, we would be stuck so we see it as a value-add. Without it we would not be successful. The HSE side is vital when ensuring competence in employees and the more competent they are, the less monitoring we have to do. We are IMS, ISO 9000, ISO 14000 and OHSAS 18000 rated so we have the basics intrinsically in our business but it’s about ensuring compliance in the long-term.”
And it’s not just the front-line that needs upskilling; people throughout the business need development in certain areas and this is an ongoing focus as staff turnover is something which is inevitable for a company like Southey.
“We have to train our staff at all levels. The upper management are typically degree-educated professionals but we have a big gap in project management skills, people coming into that area are not properly educated with relevant skills so we have to provide that. Lower down in the organisation, the artisans and semi-skilled workers often require extensive training and that’s because there isn’t always continuous work for people, it’s sporadic. We do a lot of training with people who are then let go at the end of a project and they then find themselves in other areas where they’re not working in related trades and we have to bring in new people and train them again,” explains Humby.
Interestingly, Humby explains that the needs of the business are not always the foremost factor when making a decision on training. Meeting the needs of the employees is also key to achieving certain outcomes.
“We have some excellent training facilities but you do have to be aware of the quality-level of training provided by external training companies – that’s always a challenge that needs to be managed. We do a lot of training internally and selecting our training providers very carefully so that we get good value for money and, most importantly, the employee gets the best training possible,” he says.
EXPERIENCED RIDING ECONOMIC WAVES
In the past 77 years, the SA economy has most certainly had its ups and downs and Southey has remained a constant throughout. Today, the economy is yet again covered by dark clouds but the experience and knowledge that the company has gained place it in a strong position to continue pushing for growth, despite the situation in other industries.
“I wouldn’t say we’ve been around long-enough to know what to do, I don’t think anyone can say that, but we know what is continuous, where the areas of growth are and we’ve positioned the business so that we can take advantage of growth,” explains Humby. “We’ve avoided areas of sporadic growth and contraction. At the moment, while Southey was founded on the mining industry, our exposure to that business is very small. Oil and gas and power generation is definitely a focus despite its short-term issues.
“We are well positioned under the current circumstances and that’s through planning and analysis of where we stand and what is out there. It’s all about risk management and ensuring that the risks are as low as possible while maintaining market share and profitability. You can never be entirely negative and you have to take opportunities when they come up,” he says.
Opportunities that the company has taken up are those in the oil and gas business. Sub-Saharan African nations, mainly Mozambique, Angola and Tanzania, have offshore reserves that have been described as ‘potential game changers’, South Africa is on the cusp of introducing a shale gas industry and Ernst & Young have named Africa as a whole part of the ‘new and emerging markets’ group in the oil and gas industry along with Russia, Mexico, the Arctic, the Middle East and Asia.
Southey Contracting’s offshore division provides services including corrosion protection, UHP water jet blasting, abrasive blasting, tank cleaning, scaffolding, thermal insulation, non-destructive testing, material inspection services, lifting gear certification, maintenance and engineering solutions, unique access solutions and marine crew assignments and this is a growing business for the group.
“In South Africa right now, we are working a lot in oil and gas and power generation. North of our borders, mining remains a primary focus. We are also targeting the power generation industry in those areas as Africa requires a lot of power as we move forward so there’s going to be a lot of development that we want to be a part of,” says Humby.
A MODEL FOR SUCCESS
Because of Southey’s unbridled focus on delivering quality service and its ability to adapt and meet the ever-changing needs of demanding clients, it has developed a model for success and this is something from which other could learn.
“Sometimes I say that we pride ourselves on the lack of length in our debtor’s book meaning that we don’t have many debtors. We have a small client base but they are clients that we have built relationships with over a very long period of time and they know they can trust us and they know they’ll get the service and quality that they require,” explains Humby. “For example, there’s a fuels company that we work with on maintenance projects and we know that we’re not the cheapest but they’re very happy with the level of quality, safety performance and on-time delivery. What we do is try and adapt our business to suit their needs so that we can understand them and talk their language. We provide inputs and deliverables that the client is looking for as opposed to imposing ours on them and I think that’s important.”
As the ever-increasing reach of the company continues to stretch further across South Africa, the African continent and even the Middle East, it looks like this business will go from strength to strength. As development on the continent speeds up and the need for energy and industrial services advances, there will be huge opportunities for Southey, and with its knowledgeable and experienced management team backing up its vast employee base and service portfolio, the future looks extremely bright. The next step is to continue developing people and nurturing relationships with existing clients but also remaining vigilant in the market and looking out for new opportunities and with new contracts expected to be announced in the near future, Southey’s position remains as solid as ever.