Raubex seeks to grow its private customers base

• The Centurion-based company is looking to reduce its levels of exposure to provincial and municipal government customers in the year ahead

In a bid to improve the quality of its more than R20bn order book, Raubex is looking to reduce its levels of exposure to provincial and municipal government customers in 2024 while increasing its private and international customer base alongside contracts with toll concessionaires.

Raubex shares leapt 5% to R30 on Tuesday, with gains for the past five years now at 62%.

The Centurion-based group operates throughout SA with divisions including materials handling and mining, construction materials, roads and earthworks, and infrastructure. It also has operations in Australia and the rest of Africa.

Raubex has begun making headway in this strategy as its latest annual integrated report (IR) showed an uptick in private sector work from 27% in 2023 to 31% in the first half of its 2024 year. Municipal work decreased to 4% from 6% of the total order book. However, other areas are still work in progress as provincial contracts climbed from 3% to 6%. The market will be watching to see whether Raubex can gain more traction in its targeted segments.

In its latest IR, the R5.45bn JSE-listed company said it would go about its goals by jumping on high-margin work through selective tendering and implementing procedures to prevent overtrading.

Part of this includes Raubex’s plans to throw its hat into the ring for the government’s call for efficient upgrades and maintenance of at least one of SA’s six border posts.

Authorities, however, have clarified that while no single company would be awarded more than one port of entry to build, contending companies would have to design proposals that adhere to thresholds for ownership, job creation, local content and preferential procurement. The strategic shift comes against the backdrop of the slow rollout of state-funded projects for roads and renewable energy and delays in adjudication and awarding of tenders.

In recent years, the industries in which Raubex operates faced severe headwinds such as delays in awards, energy crises, supply chain disruptions and rising inflation.

However, Raubex CEO Felicia Msiza said its diversified business model coupled with activity on the SA National Road Agency (Sanral) projects in KwaZulu-Natal, the flagship project relating to the expansion, upgrading and improvement of the Beitbridge Border Post in Zimbabwe and the strong performance from the Western Australian operations supported a strong performance.

Highlighting that the group’s order book size had doubled since 2020, with private clients among the highest contributors mainly due to Bauba resources, the CEO said Raubex was well positioned to participate in more projects, especially in the renewable energy, transport, human settlements and water and sanitation categories.

When it comes to contracts outside SA, Raubex said it aims to maintain a conservative stance, having been awarded two projects in Namibia and Lesotho after the completion of the Zimbabwean Beitbridge border post.

The projects include a R1.2bn contract with Namdeb Diamond Corporation in Namibia for the provision of mining services; while the Senqu River Bridge Joint venture project in Lesotho

valued at R2.4bn is intended to substitute a portion of the Beitbridge Border Post profit.

The company has successfully executed the remainder of the Beitbridge project, and it now also has a 17-year associated maintenance contract.