Businesswomen pair buy Mott MacDonald Africa
• Aim is to help change face of male-dominated industry that will play leading part in future-proofing economy
Two black businesswomen are unfazed by the dire situation the country’s construction sector is in, and have opted to buy a 100% stake in engineering consultancy firm Mott MacDonald Africa for an undisclosed amount. Mott MacDonald Africa is a local division of the Mott MacDonald group, which describes itself as a $2bn (R35.28bn) engineering, management and development consultancy firm on its website. It has played a crucial role in big-ticket infrastructure development projects such as the construction of Soccer City (Johannesburg) and the Moses Mabhida (Durban) and Mbombela (Nelspruit) stadiums.
Two black businesswomen are unfazed by the dire situation the country’s construction sector is in, and have opted to buy a 100% stake in engineering consultancy firm Mott MacDonald Africa for an undisclosed amount.
Mott MacDonald Africa is a local division of the Mott MacDonald group, which describes itself on its website as a $2bn (R35.28bn) engineering, management and development consultancy firm.
It has played a crucial role in big-ticket infrastructure development projects such as the construction of Soccer City (Johannesburg), and the Moses Mabhida (Durban) and Mbombela (Nelspruit) stadiums, which hosted the 2010 Fifa World Cup games. It was also involved in the construction of the Nelson Mandela Bridge in the Johannesburg CBD.
Now owned by Malani Padayachee-Saman, CEO of Malani Padayachee & Associates (MPA), and Ipeleng Mkhari, founder and CEO of diversified investment firm Motseng Investment Holdings, the company says it is ready to face the turbulence in the depressed sector where even the big firms are closing due to government infrastructure projects drying up.
The construction services sector last saw growth in the years leading up to the Soccer World Cup. Since then it has been on a sustained downward spiral due to subdued activity.
Since the beginning of 2010, the JSE construction and materials index has fallen 69.54%, while the all share index has risen 110.43%.
In 2019 Group Five, a key player in the sector, filed for business rescue after it could not obtain additional funding from a consortium of lenders, and suspended its trading on the JSE. The cash-strapped firm, which helped construct the N1, N2 and N4 highways, among other landmark projects, entered into binding agreements for the sale of some of its assets to help generate R709m to reduce debt.
Basil Read and Esor also had to file for business rescue due to a cash crunch brought about by subdued activity in the sector. In March, Wilson Bayly HolmesOvcon (WBHO), SA’s largest construction company by market value, withheld dividends worth R48m to keep itself financially flexible amid the coronavirus pandemic.
Economist Duma Gqubule said there is no prospect of an infrastructure boom unless the state restructures its balance sheet and mobilises resources to drive it.
All this has not deterred the two businesswomen from making the acquisition, which they announced last Monday. It will lead to MPA being rebranded to MPAMOT, with Padayachee-Saman as CEO and Mkhari as chair of the board.
“There has been a slowdown in infrastructure spend but postCovid-19 SA has to be futureproofed. Business and the government have to work together to execute on renewable energy projects and to create infrastructure which is made sustainably and can last for a new generation,” Padayachee-Saman said.
There are signs that this might happen. In his supplementary budget speech in June, finance minister Tito Mboweni said infrastructure will be the “flywheel by which we grow the economy”.
“Building a bridge to a postlockdown future will require that we build high-quality physical bridges, roads, railways, ports and other infrastructures,” Mboweni said.
President Cyril Ramaphosa has called for women-owned businesses to be supported as the country prepares for the reconstruction of the economy after Covid-19. “We must build a fundamentally different economy which … substantially improves the material position of women,” the president said in his weekly newsletter published on Monday.
“This means that our investment in infrastructure must support not only the development of local industry, but also women-owned businesses. It must deliberately create employment opportunities for women in all stages of planning, financing, building and maintaining infrastructure.”
The government has already committed R100bn over the next 10 years towards the infrastructure fund.
Mkhari told Business Day the acquisition is strategic. The fact that the firm is women-owned is aimed at changing the face of the male-dominated industry, which she says is also “not kind to black people”. While they acknowledge that the industry has been “decimated” and the closures have been “devastating”, they have to look past them and consolidate to contribute towards economic recovery through job creation.
“While others are walking away from the sector, we are walking towards it. Yes, it has been decimated because of the shrinking economy,” Mkhari said. “We are happy that we are well positioned. The timing is impeccable and we regard this as a watershed moment for us as businesswomen and leaders, in forging this partnership.
“SA requires a team like ourselves to add to that recovery plan and to contribute to our infrastructure build. It’s incumbent upon us to ensure we are part and parcel of that journey,” Mkhari said.