Murray & Roberts drops guerrilla tactics in Africa

If commerce was war, the announcement made by construction giant Murray & Roberts (M&R) this week will be seen as a pullback of ‘guerrilla tactics’ used by the company to do business across the African continent.

The JSE listed group, M&R, announced that it will add Mozambique to the list of African countries where it has a permanent presence. This follows operations opened in Ghana and Zambia in the last two years.

Like many of its peers from the south, M&R was on a ‘hit and run’ mode in engaging the continental market. That approach has not really been effective and in some cases has actually proved suicidal. It can account for a string of problematic contracts that have punched major holes in the balance sheets of South African contractors. It must be difficult to manage a major construction job in Djibouti by remote from Sandton.

M&R said although it has worked on projects across the continent for many years, permanent operations in Ghana, Zambia and Mozambique will allow it to serve countries in central, east and west Africa in a more sustainable way.

“Our intention is not to dip in and out of projects but to establish sustainable, long-term operations in these countries, that will see Murray & Roberts become a valuable partner in the design, construction and maintenance of large scale projects in these countries,” said M&R CE Henry Laas.

M&R said this round of expansion across the continent forms part of its long-term growth plan. You can say the company is regularising its business presence in key centres.

The group said it is putting this strategy to work by consolidating its operations to take advantage of core global and African growth areas, which include mining, energy (power, oil and gas) and infrastructure and building.

M&R CEO Henry Laas said “We see enormous opportunity for the Group in the mining and energy sectors across the continent and we are already gaining substantial traction in these markets.  We are using the innovation, skills and expertise gained in other countries to position us as market leaders on the African continent.”

The company says its move to acquire the balance of share it does not own in Australian construction company Clough as part of the strategy it is rolling out in Africa. The company said raising its stake in Clough from 61.6% to 100% allow it to further leverage its experience in the oil and gas sectors. The oil and gas sector present enormous growth opportunities for the Group on the continent.

This explains the Mozambican move. Mozambique is set to become a major gas player following recent gas finds in that country.

M&R said the new strategy is already paying off. It has has been granted a steady stream of high profile projects in Zambia and the surrounding region since becoming a permanent corporate resident in Zambia.  These projects include a number of shaft sinking and underground mine infrastructure contracts in Zambia and the DRC.

“It is the same for Ghana.  The Group’s permanent operation, based in Accra, allows it to serve companies and contracts in West Africa and it is ideally positioned to take advantage of opportunities in the mining, infrastructure, water treatment and oil & gas industries”.

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