SUPPLY WORX | Inyatsi Construction Group Holdings
By by Leigh Schaller
some sort of nongovernmental construction organisation. Rather, as its impressive growth proves, it is the type of company that we can all learn a lot from.
Lesson 1: Contracts can be Flexible
“Historically, we were very rigid in the way that we interpreted a construction contract,” says Pienaar. “If the contract said I would be paid on Day 30 and the client then paid on Day 31, I took legal action. If the contract said I must deliver this product by then and I received the design late, it was now a legal fight.”
However, he found that this hard-line approach did not lead to long-term success. “In Africa, going forward, contracting cannot work like that. None of us is perfect. So, why do we expect the clients to be perfect. Stuff happens,” he points out. “Are you part of the team creating solutions or are you in this for the short-term game?”
Inyatsi has found that, if clients see that you are prepared to work with them when they experience challenges, they will be more forgiving when your company runs into unexpected trouble. Pienaar recalls that this partner-type of relationship benefited Inyatsi when Southern Africa experienced a bitumen (also known as asphalt) shortage in 2012. “We were in breach of contract; we just couldn’t supply. There was no legal fight about that. Yes, the government didn’t do us any special favours, but it was realistic and was prepared to work with us as a team.”
This partnership approach has resulted in more business. Inyatsi recently won the tender for a R1.3-billion road construction project for the Zambian government, a client that it had previously worked with.
Lesson 2: Labour Unrest is Avoidable
“We must not forget that employees have no other way to get their point across than to say, ‘I will withhold my services,’ and, by the time it gets there, I think we have offended employees so much that it’s almost a losing battle,” Pienaar says.
Instead, he believes that the key is to communicate with employees honestly from day one of the relationship and to be willing to go the extra mile.
In 2004, Inyatsi had an absenteeism rate of around 14% and suffered 43 deaths inside the organisation. “We now have more than 3 000 employees and, last year, we had one HIV/AIDS-related death. That was an amazing achievement,” he emphasises. “Employees sacrifice a lot for an organisation, so an organisation must contribute and make a difference in the lives of its employees.”
The approach seems to have worked, as the company has not experienced a strike during the last 10 years.
Lesson 3: Don’t be Afraid to Take the Path Less Paved
When Inyatsi made its entry into the South African market during the mid-2000s, almost everything in the construction industry revolved round government spending ahead of the 2010 Soccer World Cup. But, instead of flocking into this highly competitive space, Inyatsi chose to focus rather on establishing itself in other African markets.
The decision paid off in the long term. By building relationships with clients and mastering nuanced local conditions, Inyatsi ensured that it gained a vital foothold on the continent.
“By 2011, we were established in those markets, and, when other competitors came back to those markets, they found it very difficult because they were now playing in our backyard,” notes Pienaar.
Lesson 4: Have a Comprehensive Plan to Deal with Skill Shortages
Inyatsi has a sophisticated approach when it comes to dealing with skill shortages. Firstly, it believes that it can attract and keep people with the best skills in the industry by becoming the employer of choice.
Secondly, not satisfied with simply attracting skills, Inyatsi constantly focuses on developing expertise. When undertaking a project in a new area, Inyatsi brings in its entire project management team and the team then immediately begins to train locals so that, after six months, it becomes possible to send half of the original team back, with skilled locals filling the vacant positions.
Employees within the company also benefit from Inyatsi’s constant drive to improve skills. Instead of performance evaluations being linked to salary increases, Inyatsi uses these evaluations to identify skill deficits that an employee may have and then considers how the company can help to improve the employee’s skills.
The approach of focusing on intensive in-house training is important for skills development, Ashleigh Raine-Botha, an industry analyst from KPMG, maintains. “Construction companies know what skills are required. The industry cannot rely solely on or wait for the education sector to produce the skilled resources required.”
Pienaar believes that this holistic philosophy will pay off in the long run. “Make yourself an employer of choice, treat your people right, make opportunities available to them and so create growth, and make other people excited about your business. When you do this, you should not struggle to find skills.”
Where Inyatsi is Headed
Doing business in Africa is only going to get tougher, with more competition expected. Around 44% of construction company leaders interviewed for KPMG’s 2013 Global Construction Survey said that they planned to move into new geographic areas, with the most popular market of choice being Africa for companies with a turnover of less than USD5 billion.
However, Pienaar is of the opinion that Inyatsi is well placed to continue its impressive growth. “Once again, I believe the secret in that fight is going to be relationships. If you have a well-entrenched relationship in your marketplace, and you provide your client with a good service at a fair price, you can become sustainable.”
Not Just Another Brick in the Wall
When a construction company founded in Swaziland successfully expands into the rest of Southern Africa and, in the process, manages to increase its revenue from R100 million in 2004 to R1.5 billion and counting, it should make any investor worthy of their corner office, stop and investigate.\
Inyatsi Construction Group Holdings attributes its success to a focus on long-term relationships and sustainable practices, according to Director of Inyatsi Construction Group Holdings Frans Pienaar.
The Inyatsi philosophy emphasises that clients are not simply there to grant tenders and hand over money. They are partners. In addition, employees do not just give of their time and effort in exchange for compensation. Instead, they are at the heart of the business. This does not mean that Inyatsi is