Superway Construction: A Super Way to Build a Business

If one were to chart the growth of Superway Construction, one could form an interesting comparison with the South African Government’s efforts to upgrade the nation’s infrastructure.

The Pretoria-based company was launched back in 1995 and ever since has been hugely successful in acquiring road construction, road maintenance, building construction and telecommunications work across the whole country.

Superway

The past 12 years has also seen the progression of Richard Bengtson, who joined the company as a foreman and has gradually ascended to the position of shareholder and Director.

Bengtson has over the subsequent years seen numerous changes as the company has undergone transformation and developed into a highly reliable partner on many public sector projects.

Today we do road construction work and rehabilitation, road maintenance, construction and maintenance on buildings and also some telecommunications work on the construction side.

Roughly 95 per cent of our work is for the public sector and we have tended to stay away from the private sector side due to the risk of non-payment. There is approximately a 50/50 split between our road work and buildings work with telecommunications making up a small fraction of our activity at the moment,” he describes.

Originally we started out as a road maintenance company, working on contracts from the Department of Transport (which later became the South African National Roads Agency – SANRAL). The company grew and around the time I joined we started to take on road construction contracts, while the building side of the business also began around the same time.”

Of course Government contracts are often hard won in a hugely competitive environment with a good Black Economic Empowerment score card an essential element to a successful bid.

Superway’s BEEE focus has evolved and when I joined the company was white-owned – but over time both myself and another black director came on board and today the company is a Level 2 business.

Of course our focus also filters down to our supply chain and sub-contractors and when relevant, we provide training to ensure that they can deliver what we need for each project.”

Every project is different and has its own idiosyncrasies but Superway has built up an impressive portfolio of projects, as Bengtson explains:

We were the first contractor to carry out contracted road maintenance work for the Department of Transport. In addition we have worked on a Bus Rapid Transport (BRT) project for the city of Johannesburg and we are currently working on a similar one for the city of Tshwane.

At the moment we are engaged in a few projects around Cape Town – including the revamping of 2 military hospitals with a project value of R600 million, which could yet rise to R800 million. We are also working at the Iziko Museum – a R200 million project and another at the Pollsmoor Prison.

On the Eastern Cape we are currently involved in 2 routine road maintenance contracts and in Middleburg we are engaged in a road construction project for the municipality.

In Tshwane we are working on another BRT project and we are also upgrading roads in a township area of Durban at present.”

Bengtson suggests that a number of these projects tend to last approximately 3 years, but Superway Construction has also entered into an agreement with Ekurhuleni Municipality, to carry out work on an “as an when” basis, meaning that work commences once funding has been provided.

We have carried out similar “as and when projects” in Johannesburg over the past 9 years and again these contracts tend to last for 3 years at a time”.

Whilst a good many construction-related businesses have found the last few years challenging, Superway has continued to enjoy robust growth figures, while the work force has swelled to in excess of 1,000 people. Wherever possible, Bengtson suggests that the company looks to employ local people and is committed to training staff, although there are times – particularly given the nature of “as and when projects”, when the company looks to hire skilled talent.

Generally our policy is to promote staff internally and I am a good example of just that,” he affirms.

As regards business, we have seen many of our competitors tighten their belts over the past few years but whilst we anticipated a sharp decline after the 2010 World Cup, we did not feel the pinch in reality.

In fact, our order book is close to R2 billion now and a couple of years ago it was just R500 million. We are currently running around 15 projects. On average our growth over the last 5 years has been in the region of 20 per cent annually and I think that our good track record, combined with the amount of Government funding for infrastructure projects, have played a big part in this success.

One of the biggest challenges that Superway faces is undoubtedly the complex planning that goes around inner city works. Bengtson says that engineers and principle agents sometimes take up the slack and ensure that any work does not impact on the public’s transportation, but most of the time the planning around disruption is left to the company.

The company relies on technology to assist in such planning, deploying the Microsoft Projects system – and similarly all procurement is conducted through a centralised system.

As the business grew, the decision was taken a couple of years ago to purchase its own equipment, rather than relying on leasing contracts.

We subsequently invested around R25 million in new equipment including a R6 million outlay in a recycler from Wirtgen in Germany. This is the second recycler that we have bought and Wirtgen sent some technicians over to South Africa to help train our machinists and mechanics.

Previously we could not effectively carry out road rehabilitation projects when these involved recycling existing road layers – but with the new recycler we now have those capabilities to do so quickly and efficiently.

We also purchased trucks from UD, light delivery vehicles were supplied by Toyota, our graders came from Cat and TLBs from JCB. With all of this new equipment we have expanded our workshops and taken on more maintenance technicians.”

It has been a hugely successful last few years for Superway Construction and Bengtson indicates that the company will be happy to progress at its present rate for the foreseeable future:

At the moment we are happy to stay in South Africa. We have in the past been approached by the Government of Malawi but we are not ready yet. That said, we have plenty of opportunity still in South Africa.”