Stefanutti Stocks Marine: Harbouring exciting growth prospects

Across the African continent and beyond, into the Middle East, one cannot fail to have noticed the activity to build and further develop ports. The economic and social impact of these often mammoth projects have a positive impact on thousands of lives, creating jobs and infrastructure where none previously existed.

Perhaps less noticeable, is the effort and expertise that go into developing these ports – and in South Africa and increasingly across the whole region, one name has become a byword for quality – Stefanutti Stocks Marine.

Stefanutti Stocks Marine is a division of the Stefanutti Stocks Structures Business Unit, itself a part of Stefanutti Stocks (Pty) Ltd.  The holding company, Stefanutti Stocks Holdings Limited is listed on the Johannesburg Stock Exchange. The division really came to fruition off the back of a seminal year in 2007, as Simon Allen, Managing Director, recalls.

“At that time I was a co-owner and director of a marine projects company called Civil and Coastal Construction, which had developed an excellent industry reputation for quality, on-time project completion. In 2000 we were awarded the prestigious R13.4 million design and construction of a control buoy reinforced concrete gravity base for the Mossgas EM Gas Field Development in Mossel Bay. Projects like this, winning both SAFCEC and SAICE awards cemented the reputation for the business and by 2007 we realised that we needed a “big brother” and were acquired by Stefanutti & Bressan Holdings Limited, in a move which helped to define the shape of our future.”

Stefanutti & Bressan (originally founded in 1971)  listed in August 2007 and then acquired Stocks Africa Limited in 2008 becoming Stefanutti Stocks in the same year.

It was a future which saw Allen become Managing Director of the new marine venture. This purchase, together with the access to capital, funded the division’s current day impressive portfolio of business.

“We sold the Civil and Coastal business as we needed to put in place systems and capital to help the company to grow”,  Allen remembers, “we are fortunate that we now have access to capital markets and are able to purchase large pieces of plant and equipment such as floating vessels and cranes.”

“The caveat is that we annually have to have a business plan in place covering the medium term  future and of course there are several business processes in place before any  large investment  is approved.”

To date, Allen says that the Marine Division has spent in the region of R150 million on new equipment – the trick is maintaining continuity to make full use of plant and equipment in a notoriously cyclical industry.

“Items like cranes have to be seen to add value and as each one needs replacing every 6 to 7 years, therefore it is imperative to make a quick return on the investment”, he states.

Having secured the funding and purchased the equipment necessary to grow its business, Stefanutti Stocks Marine has gone from strength to strength.

“We are responsible for procuring and executing marine construction work for the Structures Business Unit. We provide work in all aspects of marine business, including the deepening and widening of docks, rehabilitation of slipways, quay wall construction, jetty construction, ship lifts, breakwaters and pre-cast solutions including EPC work.”

“Our larger scale projects can be upwards of $300 million although the typical size is closer to the $50 million mark.”

Today South Africa remains an important concern for the business, with Allen suggesting that approximately 40 percent of revenues are derived from within the country. Increasingly however, the Stefanutti Stocks name is seen on projects around the continent and even as far afield as the Middle East, as Allen explains.

“Within South Africa, probably 90 percent of our projects are for Transnet, the state-run entity which controls the nation’s ports.”

“We are currently working on the widening and deepening of the Ben Schoeman Dock in Cape Town. This is a massive R1.37 billion project, scheduled to last 62 months and will enable larger container vessels to enter the port. We are also very busy at the moment with work in Durban, where we are widening several berths.”

Whilst Transnet projects are open to international bids, Allen says that Stefanutti Stocks has an edge when it comes to selection, because of its reputation for expertise and experience, but also because of its unique standing within South Africa’s civil engineering sector.

“The company has been involved in civil marine work since 1993 and is one of the only South African companies, with a public listing, that has a dedicated marine division.”

“However, the work is cyclical and demand can be very high at one moment and then very quiet a few months on, so we are increasingly working beyond South Africa’s borders on a wide variety of projects.”

“Whilst the infrastructure may be in place in South Africa, very often we have to call on other divisions within the group to co-operate when we are working in other countries. Stefanutti Stocks have a wide range of skills and of course other divisions can be a way to access new business across the continent”, he explains.

And business has certainly benefitted from an expanding footprint, as Allen acknowledges that growth remains “on a major upward trajectory” which has seen the marine division turnover increase tenfold from six years ago.

Among the division’s current projects is a joint venture with BAM International in Sierra Leone, where we are building an iron ore offloading jetty. The project is typical of the type of customer that the division can potentially service – a R100 million project within the mining sector.

Right now the division is also involved in Kenya (on a R80 million mining project), in Mozambique and Tanzania, working with gas companies – and has recently completed a FEED study for a major marine project in Guinea.

Allen admits that it has been a challenge to change his own mindset from “small company” to “big company” but says that the 2007 transition has created the platform for today’s success.

“Previously at Civil and Coastal Construction we just did not have the systems in place for growth; now with Stefanutti Stocks we have introduced a number of processes which have enhanced operations. We are ISO 9001 certified and currently applying for the ISO 14001 (environmental) certification, whilst we have also implemented a high quality safety management system and very rigid, systematic governance and financial systems.”

“Communication and IT systems are very important to us and we operate a purpose-built, in-house system which links all aspects of our business from buying to HR control to our financial reporting.”

However, despite the vast investment and the many changes that have boosted Stefanutti Stocks Marine, Allen says that perhaps the biggest asset to the business is the one constant that hasn’t changed – its people.

Whilst the parent company has some 12,500 employees, the marine division currently employs a relatively small portion of them and Allen and his team are committed to quality and experience rather than just large numbers, therefore most of the staff have invaluable knowledge and marine skills that simply aren’t available elsewhere.

“Our company thrives because it is all about the people. One of our main operational challenges is to make sure that everything we do is safe. Everything is risk assessed and evaluated and we aim for zero harm to employees and the environment.”

Allen’s own role has become much less hands-on:  “Every project we take on is well planned and is run by people who are authoritative but who also have the expertise to run the day to day operations without supervision. It is a question of acquiring the right people.”

Stefanutti Stocks Marine and its ambitious Managing Director have enjoyed an exhilarating ascent in the last 6 years, so what does Allen see as the future?

“As engineers we keep a close eye on potential new business partners and projects, whether it is a port, a mining company or an energy provider. We have high aspirations for growth and we will be increasing our plant fleet over the next couple of years.”

“We have lots of irons in the fire across Africa and into the Middle East and I am extremely enthusiastic about our future.”