Tarcon africa-const-may13-bro-s


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Tarcon africa-const-may13-bro-s

  1. 1. www.tarconafrica.comTarconAfricaModels of development
  2. 2. ModelsofdevelopmentAs Zimbabwe emerges from a challenging decade TarconPrivate Limited is finding inventive ways to keep itsbusiness, and the country’s economy, in growthTarconAfricawritten by: John O’Hanlonresearch by: Abi Abagun
  3. 3. Tarcon is a private Harare-based company with operationsthroughout southern Africa,active in Mozambique andZambia as well as its homemarket in Zimbabwe. It employs over 800people. Although the company formallybegan operations in its present form in 2001,its foundations go back to 1981 and Tarconwas the result of the merger of a numberof earthmoving, plant hire and later, civilcontracting companies.Over the years Tarcon has built animpressive portfolio of civil engineeringprojects in the region including many roads,dams, sewers, water reticulation systemsand bridges. A separate division focuses onmining activities. “We do not own mines,but we have been very successful in contractmining,” says CEO Lawrence Gudo. “We offerspecialised services to the mining companies.Between 2009 and 2012, the mining sectorhas been a very significant contributor toZimbabwe’s GDP accounting for around 17percent, with sector-average growth of 30percent over the period.” The mining divisiongenerates around 20 percent of Tarcon’sannual turnover, he adds.The work Tarcon does for mining majormining houses, is typified by its long-standingengagement with Rio Tinto, which contractsout the heavy earth works at its Murowadiamond mine located near Zvishavane inSouth Central Zimbabwe. “Tarcon does alot of work for RT particularly where thescope of work involves excavation, loadingand hauling,” Gudo explains. The companyhas been involved since 2004. Tarcon’sTarcon Grader at workat Ngezi MineTarconAfrica
  4. 4. input includes extractionof kimberlite, removingoverburden, and hauling theore and waste from the pits.In addition it maintains accessroads, dumps, access ramps,haul roads, ore stockpilesand waste dumps. Since theresource has the potential tobe expanded to six or seventimes its current productionlevel, this is work that couldgo on for a very long time.Tarcon has just completedits most recent infrastructureand roads project for platinumminer Zimplats at its mine onthe Zimbabwean Great Dyke approximately150 kilometres south-west of Harare.Currently it is involved in putting upinfrastructure for the mine housing projectat Anglo American’s Unki mine, also on theGreat Dyke.However the activity that has underpinnedTarcon throughout its life, and is certain to doso in the future, is infrastructure development.Apart from the need for publicly funded roads,dams, water pipelines and reticulation andsewerage infrastructure in central southernAfrica, these services are greatly demandedTarcon workers in front of a ReclaimerTarconAfricaBELL PTASince the mid 1980’s, TARCON Africa have been associatedwith the ‘yellow metal’ business, initially in the ‘plant-hire’ sector, then diversifying into ‘civil engineering’ and‘contract mining’.TARCON’s fleet of equipment grew steadily with theirsuccesses throughout the Southern African regionundertaking major projects in Mozambique, Zambia andZimbabwe. BELL Equipment’s ‘regional support network’set the platform in the formation of BELL equipment beingthe backbone of their fleet. Today TARCON Africa currentlyoperates 38 units, supplied and serviced by BELL PTA. The‘partnership’ continues to grow today.BELL PTA congratulates TARCON Africa for their‘excellence in Africa’.www.bellequipment.com$450millionEstimated FDI in Zimbabwe in 2012
  5. 5. “We are trying to reorganise, andcreate a very lean structure thatis cost conscious and operationallyviable for us”by the mining sector as these tend to formfully fledged communities in the proximityof their operations, he points out. Miningprojects always need some level of accessinfrastructure and in remote areas, this couldbe considerable. Civil roads account for 50percent of Tarcon’s turnover, though this is achallenging and highly competitive market.The region is in dire need of road, waterand energy infrastructure, says LawrenceGudo. “Like Zimbabwe, Zambia andMozambique provide huge opportunitiesbecause historically these countrieshave lagged behind in implementingdevelopmental projects due to political andeconomic reasons.” The struggles of theseeconomies, Zimbabwe’s in particular, arewell documented. At this moment there’spressure to find ways to upgrade roadnetworks as fast as possible in order tocater for industry and social developmentaldemands. Infrastructure plays a criticalrole in attracting investor into the market:it allows easy of access and movement ofproducts. Zambia’s Road Development Agencyrecently launched its Link Zambia 8000road project, also known as the AcceleratedNational Roads Construction Programme.A total of 8,201 kilometres of roads will bebuilt or upgraded over a period of five years.conscious and operationallyviable for us. We are focusingon improving customerexperience through servicedelivery enhancement aswe continue to build theright levels of capacity.”Zimbabwe in particularhas been a very difficultenvironment to sustainbusinesses over the last ten years, given thehyperinflationary conditions. Companiesthat survived had resources and ingenuityto sustain them, otherwise many fell by thewayside. “Unfortunately our government didnot have the financial muscle and resourcesto undertake major public infrastructureprojects over that period.”“Zambia has been on a fast growth path,”comments Gudo. Its $750 million euro bondwas oversubscribed signifying indications ofinvestor trust on the economy. This presentsexciting opportunities.”Under his leadership, however, Tarconhas adopted a cautious policy, not wantingto get its fingers burnt by taking on everyopportunity. “We are trying to reorganise,and create a very lean structure that is costIsland dam core trench excavationTarconAfricaBut on the positive side,the lean years did createmajor opportunities, hecontinues. “Now that thecountry is coming out of thewoods major projects aregetting unlocked and soonopportunities to revampand build our roads,dams,water facilities among otherswill open up.” But the greatest challenge stillremains that of funding. An essential part ofany new infrastructure project is how it willbe financed. The way forward, he suggestsis the PPP model, where the financial risk isshared between the public and private sector.This model works well for road constructionas exemplified by a recent domestic highway20%Of Tarcon’s turnovercomes from themining sector
  6. 6. “Now that the country is comingout of the woods major projectsare getting unlocked”project the government has partnered theprivate sector (local and foreign) to fund andimplement road rehabilitation projects such asthe Plumtree-Harare-Mutare Highway. Wouldthe road users accept having to pay toll fees?“Road users are already paying toll fees, butthe tolling system has very basic infrastructureand is inefficient. Major concerns from roadusers have been the lack of improvement inthe state of the roads despite the toll feesgeneral such projects will have a pay-backperiod of about 15 years, depending withthe level of investment and thereafterthey continue to generate funds formaintenance and repairs.Disrepair in the road network is mirroredin the water supply, sewage and energyinfrastructure. The opportunities for civilengineering companies like Tarcon arelimitless. But foreign direct investment (FDI)is an essential ingredient to get these projectsmoving. Though levels of FDI are currentlylow, indications of potential growth are thereand will most likely happen in the next fewyears to come if certainty is created aroundthe political environment and our economicpolicies.. Despite its political instabilityZimbabwe succeeded in increasing FDI nearlybeing collected. They have paid their moneybut witness no improvements or even repairs– rather they continue to experience potholeson the roads. In fact the roads are deplorable.Road users want to see new and improvedroads – and they will be happy to pay tollfees!” says Gudo with confidence.PPP and BOT (build, operate, transfer)models have worked well elsewhere, evenin neighbouring South Africa, he says. Ineightfold over four years from just $51.6million in 2008 to $387 million in 2011. In2012 it is estimated that FDI continued togrow, reaching $450 million.China does present some options for theeconomic recovery suggests Gudo. “Wehave gone into strategic alliances withChinese equipment manufactures in orderto address challenges faced in accessingequipment to resource major projects. Accessto meaningful credit lines in Zimbabwe islimited at the moment.Another opportunity he sees, heavilydisguised as a problem, is Zimbabwe’sbrain drain. More than four million highlyqualified people, accountants, engineers andmanagers among them, have been lost toneighbouring countries or departed for theIsland dand trenchVibrator at workTarconAfrica
  7. 7. “Our own staff and the communitiesaround us, have sustained usthrough the difficult times”UK. “We want to target those people in thediaspora and bring them back.” Most willcome back better equipped with enhancedskills sets, he adds, from his experience ofworking in first world organisations.This approach has given Tarcon the chanceto re-evaluate its skill base, plan futurerequirements and reorganise its operations.Tarcon depends very much on its people,and as an organisation, we value ourcommunities which are otherwise totallyexcluded from any form of media coverageand have no access to formal education.”Tarcon employees give their time afterhours to talk about HIV and how to preventit as well as demystifying the myth andstigma that goes with it. The recipients ofthese programmes are really appreciative,he says, since these programmes impacttheir lives positively. “These socialintegration programmes are very close toour heart and we will continue with them,especially in the remote areas we operate in.Further still, the local community memberswe employ are integrated into our Tarcon‘on the job training’ programmes whichimpart formal skills.”Lawrence Gudo has other plans for theemployees, Lawrence Gudo emphasises.“Our own staff and the communitiesaround us, have sustained us through thedifficult times,” he says. “We have operatedin some hash and remote environments,where we interact with some of the mostdisadvantaged members of society. As a wayof giving back and empowering communitieswe have embarked on very successful HIVand Aids campaign programmes to educatecompany once the restructuring is complete.Among the entities that made it up originallywas a property development enterprise.Though this remained dormant over recentyears, Tarcon land banked packages suitablefor commercial, industrial and residentialdevelopment. The group has immediateplans to embark on property developmentwhich will commence during the course of2013.The first phase will be targeting highincome residential housing market. It’s allpart of the green shoots of a recovery thatZimbabweans truly deserve.Unki WorksTarconAfricaFor more information aboutTarcon Africa visit:www.tarconafrica.com
  8. 8. Produced by:www.bus-ex.comTarcon AfricaT +263-4- 486501www.tarconafrica.com