profile
RG : As a relatively young company , though it does come from established companies , what would you say is the secret to Afrimat ’ s success ? AvH : I think there are three main things that set Afrimat apart and contribute to our success as a company : our values , our culture and our ability to execute . And all of these areas are related – you couldn ’ t choose just one or two and get the kind of consistent results we have achieved .
I personally feel very strongly about the values that we as a company operate by , and I think that this has become a real anchor in our business , making sure that we adhere to a very strong set of values . In terms of our company culture , we have a very entrepreneurial , action-oriented culture , with a ‘ can-do ’ attitude . So , our values and culture determine the way in which we operate and are the starting points for everything we do .
The third element , our ability to execute , translates these two into action and ensures that we get results . One thing I appreciate about my colleagues is that they don ’ t come up with excuses for why they missed a target or a deadline – they rather make a plan and deliver on it . This includes delivering on financial expectations ; whenever we do a project we make sure that we actually achieve the predicted returns , and we make it work .
RG : What are your thoughts on the new BEE regulations in South Africa ? How much impact do you think they will have ? AvH : I think that BEE , including the new regulations , is one of the strategic realities in our environment , and no matter when or where you operate , you have to take cognisance of the strategic environment and work out your specific strategy in such a way as to remain competitive , making sure you ’ re operating according to the same rules as your competitors . I know it ’ s a very theoretical answer , but that ’ s the kind of situation it is .
While my personal view is that the new regulations are very restrictive , it is still a reality that we must work with . So , we will make sure that we understand the rules and find the most applicable strategy to deal with it and to operate successfully within this environment . We want to do business in South Africa , so we ’ ll have to make sure that we play according to the rules .
RG : What is your outlook for the South African infrastructure sector over the next five years ? AvH : I ’ ve been quoted a couple of times as saying that I believe the infrastructure is currently at a high , based on the total amount of money being spent on roads , on water infrastructure , on low-cost housing , and so on . In fact , in rand terms , it is the highest it ’ s ever been . And I don ’ t think that is going to change any time soon . Infrastructure spend stimulates the economy , and we need all the stimulation we can get , so I don ’ t see government slowing down on this .
One of the biggest changes we ’ ve seen over the past five years is that there ’ s been a swing away from big construction companies working on a few large projects towards smaller construction companies working on more , albeit smaller , projects . I ’ m watching to see how the new pact between government and the larger construction companies to stimulate black empowerment and support black-owned companies will play out . It ’ s not clear exactly how this will work out , but I believe that , while it might have an impact on government ’ s spending on infrastructure , overall the current levels are likely to be sustained and possibly even grow slightly .
RG : What are your thoughts on the state of the ready-mix market in South Africa and Africa as a whole ? AvH : While I can ’ t speak for the rest of Africa , as far as the countries Afrimat is operating in , ready-mix is not really a big market – site-mixing is far more common . I ’ m just not equipped to know what is going on in all African countries , but in South Africa readymix is an overtraded space . The industry is used by cement companies as a marketing conduit for cement , and they are subsidising it . So it ’ s an industry with very low barriers to entry , and also an extremely difficult space to operate in if you ’ re not a cement player . That ’ s why it has become a very small part of Afrimat ’ s business – while we ’ re still sticking to it in areas where it makes sense for us , we ’ re definitely not expanding .
RG : Do you think they will institute standards to try and remove the low barriers to entry any time soon , or not really ? AvH : The industry has been trying to do exactly that for the past 25 years , and it ’ s not an easy task . I know there are people who are trying , but it ’ s not a natural barrier to entry as is the case with resource mining , where if you don ’ t have a proper iron ore deposit , for example , you cannot play . The problem with the ready-mix market is that it has an inherently low barrier to entry . If you can convince a bank to lend you some money , you can buy yourself a batch plant and get a subcontractor with two ready-mix trucks , and then you ’ re in business . So while you can try to introduce regulation , I don ’ t think that in a free market economy you ’ ll be able to monetise that low barrier to entry .
RG : LafargeHolcim has partnered with a French company to work on 3D concrete printing , do you see this as a viable area of development in the short to medium term ? AvH : I definitely think that 3D printing is going to be an area to watch . I recently read the book The Fourth Industrial Revolution by Klaus Schwab which looks at how advancing technology is going to fundamentally change the world we live in , and I think 3D printing is definitely one of those technologies that is going to have a huge impact . Moore ’ s Law basically states that the body of knowledge of any specific technology tends to double every 18 months . If you think about the progress that we ’ ve made in the field of 3D printing over the past 18 months and you extrapolate that over the next five years , I don ’ t think we can understand just how much this is going to change our world . There are already companies that are 3D-printing entire buildings , and there ’ s a Chinese company that has successfully printed a 3D five-storey apartment building .
So I definitely think that we as an industry need to ensure that we understand where technology is going , and even embrace it in certain areas . It ’ s a very interesting strategic question for a company like Afrimat , to decide when we actually want to get involved with a specific technology . Do you want to be on the bleeding edge , or do you want to be the second guy ? Personally , I ’ ve always believed in being the second guy – let the first guy make the mistakes and then we come in and perfect the technology . The short answer is that we can expect this ‘ disruptive ’ technology , whether it ’ s 3D printing or something else , to disrupt our environment quite dramatically .
Another disruptive technology that I think could have a significant effect on the aggregates industry is drones – not only the small ones that most people are familiar with , but large weight-carrying drones that can transport passengers or cargo . Large autonomous drones controlled by a supercomputer could practically eliminate the need for road aggregates . Why build new roads when you can have multiple lanes of traffic travelling in three dimensions ? And the computer can ensure the vehicles all remain on course and prevent collisions . And this is not as far off as you might think . Earlier this year there was an article on Dubai ’ s plans to launch an autonomous , passenger-carrying
QUARRY SA | MAY 2017 _ 35