Construction SMMEs encouraged to seek contracts from the private sector

Small construction businesses must start looking at the private sector for tenders. This was just one piece of guidance on offer at the 2011 Construction Indaba.

The two-day meeting, initiated by the eThekwini Municipality’s Business Support Tourism and Markets Unit, is aimed at assisting small businesses to become self-sustaining entities.

The construction industry has experienced an alarming increase in the number of people joining in and registering construction companies with the hope of accessing procurement opportunities.

According to Phillip Sithole, head of the unit, most of these companies have not even tendered for such opportunities. Those that tendered have not been able to access opportunities due to various reasons, including lack of technical skills.

Some of the topics included in the meeting were procedures for businesses to become BEE complaint, accessing tender opportunities and marketing and communication.

These subjects were covered in detail on Wednesday, with experts dishing out information and being on hand to answer questions.

The municipality is engaging with big cooperates to assist small businesses boost their profiles.

So far, construction giant Group Five is one company on board. They mentor smaller companies and also provide procurement opportunities. Five black women owned companies have now been submitted to Group Five through this endeavour.

Sithole said more companies are being pursued to also contribute to the growth and development of smaller organisations.

While bigger contracts are still being given to more established companies, smaller businesses must put themselves in a position to be sub-contracted, he added.

The unit will continue with training, facilitating access to finance and negotiating with bigger companies on behalf of smaller businesses.

During the keynote address, Deputy Mayor Logie Naidoo said South Africa must strive for one economy.

According to Naidoo, at the moment, South Africa has a first economy, which comprises more established companies with international presence and the second is smaller businesses in the process of making a name for themselves.

“We want to get people in a position to tender for work either from the private or public sector. We want to get them to become sub-contractors on bigger projects but building capacity and gaining experience… so that someday, they alone can tender for the big contracts,” said Naidoo.

Naidoo urged delegates to become more proactive when seeking out business opportunities.

“Information on tenders is not always available to everyone, so make sure you are on the eThekwini and provincial databases … There are lots of big projects coming up in KwaZulu-Natal in the next few years, make sure you know about this,” said Naidoo.

He also encouraged professionalism to help establish reputations. “Be wise about investing the money once you get the money for a tender. Make long-term decisions like buying vehicles needed for your business as opposed to buying luxury motor vehicles. That will come in time. Also be professional – see projects through completion, reputation is very important,” said Naidoo.

Since 2009, the unit have trained over 600 companies in KwaZulu-Natal in areas of project management, communication, marketing, SARS and BEE compliance. Practical training has also been offered in terms of tiling and plastering.

Another contribution by the municipality is provision of construction incubators that are being rolled out in Durban. Following the success of the incubator in central Durban, which acts as a central hub for emerging entrepreneurs, another one was launched in KwaMashu. The incubator offers office equipment and is also a solid knowledge resource.

Discussions on financial support and in other forms will be discussed on day two.

By Kemantha Govender, BuaNews


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