Monday, September 6, 2010

Efficient, accountable and profitable construction is possible

The construction industry in South Africa does not have a sterling reputation. Whether it is shoddy workmanship, not working according to accepted standards, poorly trained employees, poor health and safety precautions or overcharging, there is no shortage of complaints within the industry.
David Dworcan, MD of The Sandpit (Pty) Ltd believes that the whole industry is not rotten to the core as some may perceive, but suffers from bad behaviour amongst certain fraternities. “It is, in my view, a small section of companies that deny the rest of the reliable, honest and conscientious builders and developers a good name.”
He also notes that the industry itself can not take all the blame for its perceived unprofessionalism.
“On the other side of the coin is the lack of professionalism and structure from government,” says Dworcan. “I have seen, on many occasions that government ensures that entrepreneurship is stimulated through the tender process it has instituted over the past few years, from RDP housing through to road infrastructure.”
David adds that, “To give credit where due, employment is created through these processes, but the structures and processes are onerous when it comes to payment for work done. This results in many entrepreneurs failing soon after starting due to a lack of funding from government, and in some instances, no funding at all.”
This situation sees employment opportunities drying up almost as soon as they start. Moreover, the structures created have a knock on effect for those that manage to survive as they can only continue by taking many shortcuts in the building processes, and then both quality and pride take a knock.
“The result is structures that need to be broken down, costing the taxpayers as much as R1 billion,” Dworcan adds. “I personally feel these failures occur due to the fact that jobs are not monitored correctly and therefore processes only reach 50% and then laziness sets in.”
“A similar thing happens in the private sector where builders pitch for tender on jobs and have to cut prices to the bone in order to get the work, only to find out three-quarters of the way through that they have run through their profit and have still not finished the project. They then abscond and leave the client with an unfinished product and little recourse.”

Potential solutions

There are various boards at work at the moment, presiding over the quality of work undertaken in the industry. These are mere guidelines, however, and have no power to enforce certain standards or take action to support or reprimand poor performers.
Dworcan feels these organisations are unproductive and ineffective. In addition, the skills of board members are generally low, while business processes are virtually nonexistent.
There is no silver bullet for solving the problems the construction industry faces, but Dworcan believes there is a starting point to changing the industry for the better.
“Training, training and training! I think that companies have forgotten what it means to train and invest in their staff,” he states. “Too often companies complain that the skills development fund does not pay out or simply pays out too slowly.”
David states that “What we have all forgotten is that we have a responsibility toward our own staff which does not include blaming others for not getting the job done. Construction training is universal and we can all contribute to improving the results of our business operations by investing in good training.”
He adds that effective training will result in improved efficiencies and productivity across the board. More importantly, training must also include health and safety education, which will result in an improvement in the safety record of the industry.

Changing the industry

Dworcan believes clients can also play a role in changing the industry by only working with companies that meet certain criteria and are registered with local associations. Before signing a contract, he suggests customers ask the following questions:
·         What credentials do you have?
·         Are you a member of any construction association? Phone the association and verify membership.
·         What are the requirements and mission statement of this association?
·         Can I have references from your last three clients including telephone numbers?
·         Are you willing to allow me to meet with these clients without you being there?
·         Are you willing to sign a contract with penalty and bonus clauses?

The answers to these questions can be more revealing than an in-depth background check. They can also save the customer time, hassles and money in the end.
Changing the construction industry into a business sector that operates according to efficient processes and procedures and delivers results that meet or exceed standards is possible. It takes commitment from the majority of the industries players who already operate along ethical principles, as well as cooperation in establishing meaningful associations that have the authority to enforce rules and regulations.
“There will always be cowboys looking to take someone for a ride,” says Dworcan, “but with the right associations, resources and business practices in place they do not have to create a poor image for an entire industry.”


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The Sandpit

One building block at a time

How exactly did companies manage to survive and grow during the recession?  With a low entrepreneurial success rate in good times, it seems almost impossible to survive, let alone grow in bad times.  How do you turn a local hardware store in Malvern into an industry leader with massive growth potential? And what are the ingredients that go into a solid business foundation that can survive even the toughest storms that the global economic recession casts its way?

Since entrepreneur David Dworcan started the building and supplies company - The Sandpit - in 1993, the company has gone from employing 12 people to just over 100. With plans in the pipeline to grow into a much larger retail outlet, David’s aiming to double that figure in the next two years.

For starters, says Dworcan, one must have passion. “What has been a motivational tool in running this business is passion – I enjoy coming to work, I enjoy what I do and I enjoy the people that are around me.”

While Dworcan initially planned to pursue a career in law after he completed his BCom Law degree, the construction industry got under his skin from a very young age and an opportunity came his way that was too good to pass up. “My father has always been in the construction industry and, as a kid, I used to go to work with him every Saturday and work in the tool shed,” he reminisces.

It has been far from easy, especially coming through the global economic recession, but the growth of The Sandpit over the last decade speaks for itself as far as reaping the rewards of hard work are concerned.

“When I first started, I aimed for increased productivity and the effectiveness of the people around us to maximise returns,” Dworcan states whilst explaining his initial plan of action for The Sandpit. “It was very tough, and we grew slowly in the beginning, but today we’ve turned the company into a large competitor in the industry.”

As any business owner will tell you, there aren’t any shortcuts, and there are no ‘tricks’ to speak of, but there are some basic business fundamentals which Dworcan has embraced that all businesses can benefit from, especially in these tough economic times.

“I believe that, if you haven’t been affected by the recession, you haven’t learnt,” Dworcan says adamantly. “Being able to change in a changing environment is crucial. A lot of businesses, from what we’ve seen, have been stifled because they refuse to change. Change is pain, but if you don’t change in a changing environment, you’re going to get left behind.”

“So change in IT infrastructure, change in people, change in processes; it’s a continuous process all businesses have to go through. It is the only way to realise that things can be done differently and better than before. If you’re not willing to try, massive potential goes to waste.”

Another key point is approaching a problem from all angles and thinking beyond the obvious. That’s what Dworcan and his team did when they realised they were going to have to think out of the box to get some new clients. “There’s a big thing in our industry called loyalty,” he explains. “People deal with and carry on dealing with people that they know and trust, and that they’ve dealt with in the past. So we had to be extremely creative to build new relationships.”

“One of the things I do believe in is always to treat others as I would like to be treated. Having that level of value or ethic has put me in good stead in business, and built a lot of good, strong relationships. Communication is almost as critical as honour, integrity and trust.”

“We had never supplied roads infrastructure, but we had contacts in the game where people knew people who were doing a lot of infrastructure in certain of the township areas. We were introduced, and we started building relationships with these people, who turned into very good clients along the way. We really had to use networks that we had created to access those sorts of clients – clients we’d never experienced before.”

On the subject of building relationships, Dworcan cannot say enough about surrounding oneself with efficient, loyal partners and employees. “It’s critical to have good people around you. You can have a class A opportunity and a class B team, and you will fall; or a class B opportunity and a class A team and you will succeed and fly.”

An inspiration to many businesses that are buckling under the financial pressure of the after effects of the collapse of the US economy in 2008, Dworcan is humble but positive about running a business in the middle of a recession.

“It’s been hard to stay afloat, but the fact that we are still here and trading makes us proud,” he concedes. “Generally speaking, the construction industry is the first to feel bad times, and also the first to feel good times. We’ve been something of a barometer of what the economy does hold, and the good times haven’t hit yet.”

“What we’re seeing is that anything can happen. We’re seeing one phenomenally good day, and then the next day can be very quiet, but as long as at the end of the month you’re up on the last year, and you’re in the profitable stage, you’re smiling.”

The Sandpit prides itself on having both short and long term goals at all times, and even if the goal posts have to be shifted from time to time, the focus and determination that those goals provide cannot but drive a business and its employees forward. While Dworcan describes the challenges ahead as “huge”, he feels that the long terms goals set for 2012, 2015 and 2020 are nonetheless realistic. This, combined with his admirable personal business philosophy, is probably as close as one will ever get to a winning formula.

David Dworcan


Long term investment

David Dworcan on inner city renewal and putting the sparkle back into the City of Gold

Decentralisation of the city, and the resulting inner city decay that arises from this, is certainly not unique to Johannesburg. Like many affluent cities around the world, the City of Gold is following the global trend of trying to breathe new life into the CBD.

David Dworcan, a member of the Gauteng Master Builders Association , has been in the construction industry for over 15 years. He says that the future of the revival of the inner city lies in low cost housing. “Over the last two decades or so, the whole of Joburg has actually decentralised to Sandton, leaving a sort of a ghost town,” he explains.

“I love the architecture in town; it’s Georgian, Colonial, Victorian and Roman architecture from a bygone era,” says David passionately. “It’s unbelievable that people had that level of artisan to go and do the things that they did out of concrete. And now, what we’re left with is a massive and beautiful infrastructure, and in essence all we need to do is reclassify it. We’ve seen people taking the buildings that exist, like office buildings, and turning them into residential spaces. With the huge demand for low cost housing, it’s the obvious choice.” From housing comes logical opportunities in commerce, schooling, transport, etc. and hence a revitalisation of an urban inner centre.

So are these new residential spaces a success? Success, according to Dworcan, is a double-edged sword.

“There are many success stories, among them Afco Properties, Angus Properties and Jozi Housing, all of whom we supply to, but there have also been failures. People have had tenants who didn’t pay the rent and the owners couldn’t get them out and they couldn’t pay their rates and taxes. It all comes down to how well one can actually control it.”

There is risk involved in every investment, and Dworcan says that investing in property in town should most definitely be seen, and treated as, a long-term investment.

“I reckon that with the prices that are still available in town, you haven’t missed the boat yet,” he explains. “In terms of buying buildings, if you have a level investment that you can put into a building, it’s a good time to put it in now, but it’s more of a waiting game. You’re not going to put it in now and sell it straight away.”

A large factor to consider when investing in property in town is crime, but this is something that Dworcan points out has to change.

“If it doesn’t change, then where are we?” he asks. “Where are we as individuals and as supporters of Joburg? The government and the tenants have to put more effort into the crime situation. They’ve done it with Big Brother, inserting security cameras all over town, and the amount of crime they’ve prevented has been phenomenal but not enough.

“Now they need to focus on their policing. They’ve put in a brilliant IT infrastructure, but if you haven’t got the means to support it, then what are you actually achieving? And if that infrastructure does come into place, they are actually assisting you in increasing the value of your property, which is a win-win situation, because the better the increase in value on your property, the better they make on rates and taxes. So it all spirals upwards.”

Commitment from the government’s side to see the inner city being revived is evident in the tax relief measures they have offered inner city property owners. In 2003 the then Minister of Finance Trevor Manuel announced the Urban Renewal Tax Incentive, offering tax cuts to owners refurbishing existing buildings or constructing new ones in the inner city. This incentive was extended in 2006 to part or sectional title building owners.

This is most definitely a step in the right direction, and Dworcan is confident that the potential to turn the inner city around is there.

“We have an infrastructure called town that has decayed, but it can be revitalised in a matter of years, as long as people put the flowers and the seeds in, and start sprouting them up,” he explains. “Whether it’s going to happen to the extent that it should, I’m not sure. But what I do know is that it’s definitely not happening enough at the moment.”

Everything you need to know about building materials, from buying to applying

The Sandpit – July “Building materials” article

Another brick in the wall?

Using the right building materials for the job might sound like a simple concept, yet stories such as the collapse of the roof in Pretoria’s Brooklyn Mall and a similar incident happening in the Kolonnade Shopping Centre a few years ago indicate that it’s a subject matter not to be taken for granted.

According to Henry Dworcan, MD of the leading building supplier The Sandpit, looking at the subject matter of building materials warrants discussion in two keys areas: firstly the correct and incorrect building materials for a certain job, and secondly, using the materials correctly to ensure longevity and stability.

He gives the example of the first step in almost any construction project, namely laying a cement foundation. The cement can be of a high quality and not past its shelf life, but the product will only perform at its optimum if it is mixed and applied correctly.

“The correct way to mix cement is five parts sand and stone to one part cement,” he explains. “But if you have guys using a wheelbarrow as your gauge, mixing five wheelbarrows of sand with one bag of cement, in the assumption that a bag of cement is the same quantity as a wheelbarrow, then the mix is going to be flawed. It’s no use having good cement, good sand and good bricks, and then a poor quality mortar between those bricks.”

It’s all part of the bigger picture. A job well done entails using the correct building materials in the correct way and only for the product’s intended functions. In the building industry, a brick isn’t just a brick. Depending on its function, it could be a face brick, cement brick or plaster brick that is best suited for the job. And even then, the right brick for the job is only as strong as the mortar that bonds it. 

One also has to be on the lookout for shortcuts being deliberately taken to up the profits, cautions Dworcan. “You sometimes have people taking shortcuts for the sole purpose of profiteering,” he explains. “Often this is when the owners have squeezed the building contractor to the point where there is little profit involved in the job for him, so he endeavours to do whatever he can to maximise his profit. At the end of the day, the building looks good but it is inferior, and someone is going to be the loser.”

Citing the example of concrete needing time not just to dry but very importantly to also set, Dworcan says that he has been in the industry long enough to have seen more than a few examples of jobs being pushed to finish quickly, and the result of proceeding too fast sometimes being pillars and support structures collapsing.

So at the end of the day, what can the consumer be on the lookout for?

“There are a lot of suppliers taking shortcuts,” Dworcan states. “We’ve seen it in the sand game, the cement game and the lintel game. As suppliers, we try to only support structures and products that have to adhere to industry standards, because not all of them do. You’ve got to be careful, and know the industry you’re in; you have to know your suppliers and products. At the end of the day, the name The Sandpit is based on the product we supply.

“We’re not producers, but we’re the first place people go to complain. Recently we supplied a specific type of metal doorframes that failed on site. Now, technically, we’re not liable for any damages, because we’re not producers, but our goodwill is our name, and everything we supply we back up. That’s imperative to our ethics and integrity in our game,” Dworcan asserts.

Friday, November 6, 2009


Sunday, October 4, 2009

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