Facilitating the Growth of South Africa’s Infrastructure

UMSO Construction, a civil engineering construction company based in South Africa, has played an integral role over the past seventeen years in laying the foundation for the country’s infrastructure. Celebrated in the industry for its empowerment policies, UMSO’s expertise is in the construction of roads, bridges and general bulk infrastructure. Recently the company was recognized for its exceptional safety record.

“We received a significant rebate from our insurance premiums because for the past 12 months, our record was been outstanding,” says Tollo C. Nkosi, Director at UMSO. “The insurance company concluded that we had been overcharged based on our previous histories. This is interesting because we have improved so much that they decided we deserved a rebate.

“Everyone at UMSO buys into our safety and standard procedures. That rebate is simply proof that we are doing something right. It’s so huge that I can’t even example it. A person like myself, I can only really get involved with strategy and plans of how we should undertake our operation. But if it’s going to work, it depends on the buy-in on the ground from the management level to the project level. ”

With a name that means ‘future’ in Xhosa – a Bantu language, UMSO was founded in 1996 and it undertook an expansion strategy in 2000. The company is currently involved in many projects including road construction, water supply projects in the rural areas and is working on upgrading bridges and roads in urban areas. UMSO also supplies its own equipment to various construction projects.

Bus Rapid Transit

UMSO is proud to be a part of a “cutting edge project” that South Africa has undertaken in line with many emerging markets. The company is building infrastructure for the Bus Rapid Transit system which will provide a more dependable and suitable mode of public transportation.

“This is a new area that the government is focusing on to ensure that public transport between the townships and the main centres are reliable,” explains Nkosi. “What we see now is that the government spending has shifted to urban areas where the middle class is. There is a lot of infrastructure taking place in the old townships like Soweto and others…and that also provides opportunities for companies like us.”

UMSO is busy upgrading the existing road network to a suitable network for the BRT namely Rustenburg Rapid Transport in North West Province.

“You have to have a number of lanes going in one direction including bus stations,” he says. “So the infrastructure is in a way complex given the history of what we’ve been doing as a country and maybe as a company. As a company, your experiences can only be a part of what your country is interested in building.”

 

The Growth of Developmental Infrastructure

UMSO was able to successfully navigate around the 2008 Global recession because South Africa was booming with activity as the country prepared for the 2010 FIFA World Cup. It was only three years later that the effects of the economic downturn were felt.

“Because of the size of our company, we were positioned so that the global recession didn’t affect us too much,” explains Nkosi. “We at that time were still at 70 per cent of our portfolio which was still based on basic infrastructure and that is currently the primary need in South Africa as a developing country.

“Given the country’s history (apartheid), main areas were neglected. So the government has not really slowed down on spending since the inception of the new government in 1994 despite financial difficulties or global economic difficulties.

“The size of our business required us to be largely inclined to that category of work being developmental infrastructure. We were able to then have a hold on the market somewhat and ride through the recession.”

In the past 12 months, UMSO has become involved with renewable energy projects including wind and solar farms, through various joint ventures with European companies.

“We, the current executives, have big plans for the business. We intend to stay in the market for a very long time,” says Nkosi. “We have invested a lot of money into new equipment purely because we hold a view that South Africa still has a lot to offer in terms of the construction business.

“And we need to prepare ourselves for that. We are still expanding our growth plans and are ensuring that the growth is tightly controlled. We don’t want to grow out of proportion. South Africa is yet to see the best from us.”