Finance: Built Environment Launches Export Council
Recent Gauteng Business News
The newly created Built Environment Export Council (BEPEC) was introduced to industry role players at a function recently held in Gauteng, Johannesburg. Roelof van Tonder the newly appointed CEO of BEPEC plans to officially launch the council early in the new year. Partners in BEPEC include the Association of South African Quantity Surveyors (ASAQS); the South African Institution of Architects (SAIA) and Consulting Engineers South Africa (CESA) formerly known as the South African Association of Consulting Engineers (SAACE). This grouping of built environment professionals (BEP) provides a strategic advantage in marketing and accessing projects in Africa as BEPEC will be able to offer the full spectrum of BEP services to clients internationally.
The creation of BEPEC marks the achievement of a major milestone for these 3 organizations as it will allow their members to form Public Private Partnerships with government in order to pursue projects in Africa and beyond.
Members forming BEPEC are voluntary organizations that provide business support to their respective members. In South Africa, they actively promote the business interests of their members by directly engaging with client entities. This industry level engagement covers many issues that have a bearing on the cost and the risk of doing business. They already work in partnership for the local market through the BEP Group governed by a Memorandum of Understanding. Through this they deal with issues of common interest and act as a collective. The establishment of BEPEC enables these organizations to do the same in the international arena by supporting member firms in their endeavors to export their services in the fields of engineering, architecture, quantity survey and project management.
In his speech at the function, Felix Fongoqa, CESA President states that, "Selling the services offered by the built environment professionals internationally is a difficult task, due to the cost and the risk related to accessing projects and opportunities internationally, and in Africa in particular. By being involved in a Public Private Partnership with the Department of Trade and Industry (DTI), BEPEC will enhance its status, ability and resources available to provide access to opportunities, and reduce the cost and risk of working internationally."
The services offered by BEPEC provide the opportunity for members to ensure that they diversify their income, thereby reducing the risk associated with being too dependent on work from South Africa alone, while contributing to the country’s export earnings which are very important for a developing economy.
Fongoqa believes, "The fact that the export of consulting engineering services has averaged at about 8% of annual turnover of CESA member firms over the last 5 years is significant. Export figures for our members averaged at about R1 billion in 2006 and 2007."
Fongoqa noted that approximately 80% of these exports go to Africa, with the rest going to various other parts of the world. This figure is made more significant by the high influence the built environment has in determining the level of SA content, especially value added capital goods, structural steel, pipes tubing etc, in many large projects, especially on the rest of the African continent.
As has been extensively reported the prospect of high levels of investment in infrastructure by the public sector in Africa are looking good for the foreseeable future, there are risks associated with the economic climate if the current conditions were to continue unmitigated well into the future. The launch of BEPEC offers an opportunity for members to re-assess their risk management and growth strategies to ensure business sustainability, taking advantage of other buoyant markets in rest of Africa.
It is a well known fact that at the end of 2007, countries in the Southern African region continued to sustain high growth rates recording an overall real GDP growth rate of about 5.7%. Only one country – Zimbabwe - recorded a negative growth rate during this period. Zambia has been a strong contributor to the region’s growth rate at 5.9%. Angola remains the fastest growing economy in Southern Africa at 17.6% followed by Mozambique at 7.9%, and then Malawi at 6.9%. Positive regional growth rates are projected for both East Africa at 6.0% and Southern Africa at 5.4%, providing a sound reason for built environment professionals to look at the opportunities in Sub Saharan Africa.
Fongoqa stated that while 2008 has brought new economic challenges to bear, sustained demand for commodities by India and China will continue to support these economic growth rates for the region, and therefore opportunities for member firms. In the recent past member firms were exposed to infrastructure work valued fin the region of US $ 2 billion to be executed by the Millennium Challenge Corporation. Earlier in the year, members visited the African Development Bank and were told that the current multibillion dollar spending program for the Bank will be increased significantly in the years to come.
Fongoqa concluded his speech by thanking the DTI for creating an enabling environment allowing effective participation in the processes associated with exporting built environment services throughout the world.
More About BEPEC
BEPEC activities are divided into securing market access and funding access as well as generating increased business opportunities by adding value to member firms’ international business development activities.
BEPEC has a cross-sectional and lateral thinking approach to developing new markets via an in-house database system to facilitate JV’s, alliances and partnerships among consulting engineering firms and other industry role players. This results in reduced risk, increased market access, and assists members to gain maximum advantage and economies of scale when working internationally.
One of the objectives for BEPEC is to facilitate market access at public and private sector levels through the establishment of various export groupings in a Public Private Partnership with the South African Department of Trade and Industry. Market Access is also ensured through active participation in the African Associations of select built environments.
BEPEC will also facilitate access to International Development funding as well as other Funding Institutions. The primary objective is to create sources of funding in South Africa for the execution of projects in Africa. International Funding Institutions include the World Bank, the African Development Bank and related funding agencies. The overall objective in this regard is to provide a clear pathway that firms can follow to access funding, including the South African Consultants Trust Funds at these institutions. BEPEC will also ensure access to South African funding institutions including commercial banks; DBSA, IDC and the Department of Trade and Industry based Capital Projects Feasibility Programme.
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