The South African energy market continues to feel the pressure of supply and demand with a deteriorating network in need of maintenance. At the same time this crucial sector is going through transition and it is essential for affiliated companies to embrace these changes.
That has most certainly been the case for Ompetha Power Projects, a company which is still in transition following a complete change in focus last October. The Midrand-based company is making smooth progress following its decision to move from being an equipment provider to a construction business, as Sy Gourrah, Deputy CEO explains:
“We are basically involved in construction and we build transmission lines, substations and lattice towers. But we also design transmission lines and have become involved in optic fibre installation on existing and new lines, which is something Eskom has big focus on right now,” she confirms.
Ompetha was formed around 4 years ago and made its name initially as a supplier of equipment – but evolution within this challenging market place saw the management team take the decision to change tack and concentrate on construction, as Gourrah explains:
“Last October we completely changed around our strategy and got into construction, designing overhead lines and transmission lines. The main reason for the change in focus is the current market trend in South Africa; there is a huge backlog of maintenance work that we felt provides opportunity and at the same time the Government has earmarked huge investment in infrastructure, with power supply and renewable energy important areas they have highlighted. We changed direction to have a better chunk of the present market in construction.”
Today the company provides a range of services including: design of transmission and distribution lines; design of overhead line structures including lattice towers; design and execution of turnkey solutions; design of optic fibre solutions on overhead lines; construction of 33kV-275kV overhead lines; construction of substations 33kV-275kV; the installation of overhead optic fibre – OPGW & ADSS and the maintenance and refurbishment of electrical plant and equipment.
Additionally Ompetha supplies energy-saving street lighting, optic fibre cable – OPGW, ADSS, DUCT, solar water geysers, mini substations and Skywrap installation.
To change focus so dramatically of course, took courage but also a carefully thought out strategy and significant investment, running into millions of Rand.
“We started the construction company in June of 2013 and we effectively set up a brand new team and invested heavily in brand new equipment. We also had to introduce a set of policies and procedures starting from scratch and we started to work on these documents around last June and they were operational by October.
“The next phase will be to attain ISO 9001 accreditation and we are working towards that now, providing staff training on quality management,” affirms Gourrah.
“We are already starting to see improved revenue but we do not expect to realise a return on our investment until the middle of next year,” she adds.
However, the company is also still very much in the process of head-hunting talent to broaden the scope of its services.
“We are very busy tendering for new projects and also training employees and getting people off to the sites. But we are also still looking to bring on board people who can add new ideas and skills to Ompetha and we are hoping to recruit an expert with experience of wind farms imminently.
“Our training is a combination of in-house and external courses and we try to provide in-house training for our quality systems as we work towards ISO accreditation. For issues such as health and safety we cast our net a little further but our training is aimed at developing the individual. We have implemented a skills development plan to help identify areas of shortfall for each person and we also look at career development.
“I would say that we have a completely new culture that we are trying to create and adapt and we want to nurture a uniformed culture. It helps to add a lot of new blood and we have increased the size of our workforce since the changes and now have a substantial number of full-time employees” Gourrah describes.
The challenges that Eskom faces in South Africa have been well documented as the country faces up to the risks of power cuts and Gourrah is well placed to give her own opinions:
“I think that the lack of generation capacity, planning and infrastructure backlogs have been key contributors and Eskom simply does not have all the generation plants it needs in place. There is a lack of market competition when it comes to the unbundling of retail and distribution sales while renewable energy is building up only slowly but there are no regulatory requirements setting compulsory percentage targets for its customers in South Africa as yet,” she states.
Currently,for Ompetha the challenge is often the sheer vastness of South Africa, as Gourrah explains:
“We are working all over the country and we have one project in East London, in the Eastern Cape and another one simultaneously in the Western Cape. Getting the materials and equipment to different geographical sites can be a logistical challenge as we are working to strict deadlines.
“From a supply chain perspective we are using a lot more local suppliers now. Each project we undertake is client-based and suppliers are identified during the tender process. Much of our supplier base is therefore new and we are gradually integrating this into our new software systems which were also upgraded last year. Because we don’t carry inventory ourselves, the delivery of materials is usually staggered directly to each site.
“Our other operational challenge is simply that we are very new and still getting acquainted and forming new teams.; On the commercial side Gourrah says that every project attracts a huge array of contractors, while Ompetha is competing with as many as 10 major construction companies.
“Part of the issue is everyone bids on the same projects because financing projects has remained a challenge – so when the funding is in place everyone wants the work.
“I think that people are recognising our work now and have acknowledged us as an up and coming company for the future. We still have lots of marketing work to do over the coming years as we build our brand and reputation and there are some exciting opportunities in Africa.
“We are looking to expand our operations in some African countries and we are particularly excited at the prospects of working on some solar projects in Angola and hope to have news on that front over the coming months.
“We are still head-hunting for the right personnel to take the company forward and we have received lots of positive response to projects which will lead to exponential growth. That in turn will increase our need for more staff and to invest in new equipment but with each step we will carefully weigh-up the returns.
“We have a succession plan in place and we have identified staff who can fill existing roles in time with the right training and nurturing. We are also still looking for people with skills who can fill gaps we have identified in the company’s knowledge and services.
“Five years from now I believe we will have grown substantially into a company to be reckoned with,” she concludes.