On a first-time visit to the offices of a construction giant like Grinaker-LTA, you expect to see displays of some complex engineering structures.
This is a multibillion rand multidisciplinary construction entity, which has delivered some of the best engineering structures in Africa. The group has several divisions including Building, Civil Engineering, Concessions, Mechanical & Electrical, Mining Contracting and Roads & Earthworks.
Having built the initial structure of SA's super soccer venue, the former FNB Stadium in the 1980s, the group won the contract to facelift the stadium to be used as an anchor for the 2010 soccer World Cup. So it's reasonable to expect a display of an engineering structure at the entrance.
Walk into Grinaker-LTA MD Neil Cloete's office and you come out with a different view. Cloete is a people's person. He places emphasis on the people factor.
Cloete (48) rose through the ranks to become Grinaker-LTA's MD in July last year. He's been with the company for 22 years. "This company has a significant role to play in the development of our country and its people," he says.
His passion for people makes sense. After all, he is in charge of a business that employs more than 15 000 people. As the largest construction group in Africa, it has churned out structures that have had a significant bearing on multitudes.
Grinaker-LTA, a subsidiary of listed entity Aveng Group, accounts for more than 30% of Aveng's total revenue, which was quoted at R22bn last year.
Aveng, which boasts market capitalisation of more than R20bn, was bundled out of Anglovaal Industries in 1998. It came out with established construction firm Grinaker. Under the stewardship of Carl Grim, Aveng wanted to establish a globally competitive construction group. This was realised when Anglo American decided to part with its controlling stake in another construction giant - LTA. Aveng pounced by acquiring LTA, and it then merged it with Grinaker in 2000.
Naturally there were problems because of the complex integration of two construction giants. With problematic offshore contracts, margins of the merged entity took heavy knocks. "Those issues are firmly behind us, and Grinaker-LTA has been accepted as a premier standalone brand by the market," says Cloete.
In its latest financial results, Aveng reported that margins from its construction operations improved to 5,2% at the end of December. Grinaker-LTA delivered a 35% increase in revenue for the same period. More improvements are expected as the effects of group efficiencies are spread to all business units.
So what has changed? "We are now less exposed to situations where our risk was higher; we have put in place much better risk procedures; and we have less exposure on issues that we cannot control like exchange rates," says Cloete. The group has dramatically trimmed down its offshore exposure, with about 80% of revenue now generated from local operations.
" We have a change in the management mindset, which translated into a fresh approach not burdened by the issues of the past," says Cloete. "The average experience - in the executive team - is 20 years and the youngest member of the team has 15 years' experience."
"We are bullish about prospects," says Cloete. That comes on the back of unprecedented infrastructure development expenditure led by the state. In addition, the commodities boom is delivering sizeable infrastructure development projects in the resources sector.
Grinaker-LTA is feeding off this boom. Its order book has ballooned over the past year to reach more than R15bn.
Cloete, however, is acutely aware of the challenges that face the country and by extension, the SA-based company. The shortage of skills ranks high on the list of challenges.
WHAT IT MEANS
 Accounts for 30% of Aveng income
Had 35% increase in revenue
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For its part, Grinaker-LTA has established an extensive skills development programme that runs from the lowest level to the top of the organisation. "Being a product of the company's skills development programme, I have a passion for training and skills development," says Cloete. "We have kept up a reasonable amount of training over the years and have improved our systems. We have achieved significant progress in the BEE arena over the past few years," he says.
"We were the first construction group on the JSE to conclude a BEE deal, which transferred 25% of the group's shares to black hands."
It is mainly that initiative that has enabled parent company Aveng to claim recognition for its BEE credentials. The group emerged as the most empowered construction entity on the JSE in the latest FM/Empowerdex Top Empowerment Companies survey.
"We are not resting on our laurels, we want to leave a lasting legacy that we can be proud of," says Cloete.
