Aveng Limited: Building a new South Africa

South Africa’s need for improved infrastructure is good news for civil engineering. As the country grapples with its need to upgrade transport, water and communication networks Aveng Limited has been busy helping to deliver the changes necessary to dramatically enhance the nation’s economy.

aveng_logoWith corporate headquarters located in Morningside, Gauteng, the JSE-listed group is regarded as a leader in infrastructure development through its numerous divisions covering public infrastructure, power, mining, water management, commercial and industrial, materials and rail services. In total it has interests in over 30 countries around the world with a strong focus in southern and east Africa.

The group’s African business operates under the Aveng (Africa) Limited name and is a multi-discipline construction and engineering group based in South Africa. Its primary focus is on infrastructure, energy and mining across the continent.

Overall the group has in the region of 18,000 employees and annual turnover of R12 billion. Aveng (Africa) Limited operates four companies: Aveng Manufacturing, E+PC Engineering and Projects Company, Grinaker-LTA and Moolmans.

Aveng Manufacturing manufactures and supplies steel and concrete products and services to heavy industry with a special focus on mining, construction, water, power and rail sectors. Comprising of four business units scattered around South Africa, the group employs over 3,700 people who manufacture not just for the domestic market but increasingly for clients located in Europe, North America and Australasia.

Aveng E+PC Engineering & Projects Company provides engineering, design and project delivery services as well as the operation and maintenance of metallurgical processing plants. Strategically the company has focussed operations on servicing three sectors: minerals processing, power and energy and operations.

The business has evolved over a period of thirty years, having originated from LTA Process Engineering, a result of the rationalization of LTS Birtley, Jacobs LTA Engineering and Spencer Melksham between 1976 and 1982. The company has existed in its present form since 2001 when LTA was purchased by Grinaker.

A variety of IT systems enables the company to work on all areas of the development cycle for a project; from initial scoping studies through to establishing feasibility and implementation.

The business employs approximately 550 staff and works on projects spread across the continent. Most contracts are based around the typical engineering, procurement and construction management services approach (EPCM) and lump sum turnkey (LSTK) or EPC type contracts.

Recent success included the $198 million Moma Sands project aimed at increasing the existing plant capacity by 50 per cent and including the construction of an additional floating separation plant, complete with dredge and increased plant and infrastructure. Aveng E+PC operated as the EPC contractor responsible for full project management and controls, the engineering design and procurement management which utilised its international experience.

Aveng Grinaker-LTA is a multi-disciplinary construction and engineering group that can trace it roots back to 1889 when James Thompson, a future mayor of Johannesburg, set up a building and carpentry business in Durban. The modern company was established in 2000 and serves a variety of market sectors that includes: power, mining, infrastructure, commercial and industrial, oil and gas.

It has an annual turnover of over R10 billion and a workforce in excess of 16,000 people who specialise in building roads and freeways, bridges, dams, airports, power stations and hydro-electric schemes, marine and harbour works, water and sewerage construction, oil and gas and commercial and industrial property.

South Africa’s mining sector in recent years has gone through significant change and growth; Aveng Moolmans owns and operates heavy mining equipment and delivers major surface mining contractor solutions throughout the continent.

The Moolmans name has been synonymous with open pit mining since the late 1970’s. Today the company is a major force in surface mining in Africa, delivering a variety of services to clients, from short term waste mining and bulk earthmoving to a complete and long-term mining solution.

Aveng Moolmans currently works on thirteen projects in eight African countries, moving more than 20 million tonnes of material monthly.  To enable such scope the company owns a vast and diverse fleet of mining equipment including 631 scrapers and 100 tonne dump trucks. The business also operates its own 170/270 tonne excavators with 200 tonne trucks and 500 tonne shovels used as loading tools. With such a large fleet maintenance is paramount and Moolmans has developed in-house systems that meet ISO 9002 standards and cover crucial issues such as safety, preventative maintenance, life cycle costing and a number of other measures.

In addition to the above companies Aveng Water has a focus on advanced water solutions in southern Africa and Australia, with a dedicated team of civil engineers implementing custom designed innovative water treatment solutions. Having launched in July 2001, the company has seen increasing demand for mine water treatment plants and has specialised in the treatment of acid mine drainage through large projects like the current upgrade of the eMalahleni treatment plant in Mpumalanga province.

Aveng Trident Steel not supplies products to the nation’s steel industry but has a bustling export business built around a series of steel yards, modern and comprehensive steel processing service centres and a speciality steel division and tube manufacturing plant.

Of course the South African political environment has invested much effort in developing greater opportunities for disadvantaged groups within society and Aveng has done much to comply with Broad Based Black Economic Empowerment (BBBEE). Aveng (Africa) is 75 per cent owned by Aveng with the remaining quarter owned by Qakazana Investment Holdings (Pty) Limited, a Black Empowerment Company.

From its public comments Aveng (Africa) is a firm believer in the need for economic transformation in South Africa in order to create sustainable development and feels that empowerment has an important role to play within that remit and as such works closely with a large number of black business partners.

Despite the challenging economic environment, in March the Group announced its interim report for the period ending December 2011 and the figures indicated a robust financial balance sheet with net cash of R4.8 billion.

Commenting on the results, Aveng Group CEO, Roger Jardine said; “These results have been achieved against challenging market conditions and indicate the resilience of Aveng’s strategy of maintaining a strong balance sheet, a geographically diversified footprint with strong positioning in key growth markets, and a strong cash position. We are particularly pleased with the growth in our two-year order book, which increased by 24% from June 2011 to R46 billion. Aveng Moolmans and Aveng Manufacturing and Processing improved profitability and partially offset the impact of the lower margins and project losses in the Construction and Engineering segments.”

The Group also recently created a new division; Aveng Mining will create a R6 billion operating entity working across nine countries. The new consolidated mining division combines the Aveng Group’s open cut, shaft sinking, incline development and underground mining capabilities, allowing it to better pursue local and international opportunities.

With the South African government also acknowledging the importance of infrastructure as a key factor to maximising returns on its natural reserves, the future looks bright indeed for Aveng.