In the pipeline

By Tristan Wiggill

Plumbing Africa chats to plumbers, merchants, and manufacturers about business in 2017 and the prospects for 2018.

PA2018 1Many in the industry are concerned about technical competencies.
Image credit: Pixabay

For many, the plumbing industry in South Africa has been tough for some time now. David Olivier, director and group franchisor at Drainmen Services Group, believes much of the reason for this is due to the poor way in which the economy has been run in recent years.

“This has affected all industries. High tax rates, inflation, and corruption are hurting the economy. Fewer people are paying for services, even critical ones. In a thriving economy, it is not even a thought as to whether services should be rendered at the price intended and demanded for,” he says.

ROCKY ROAD

Olivier recommends cutting back on unnecessary expenses and looking after staff, as he believes 2018 will be another tough year.

“Suppliers need to look after plumbing companies, especially those who have been around for many years. Plumbing companies need to look after their employees and their customers.

“Suppliers should get involved in company training. When new products come onto the market, they should be ‘individually company focused’ and give free half-day training.


Cut back on unnecessary expenses and look after staff.


“Individual company training assists with morale within plumbing companies. Both owners of such companies and their staff draw closer, knowing that it is something focused on them. By extension, trust and loyalty are developed towards that supplier as a result.”

He says suppliers should also consider having ‘mobile training centres’ and the need exists for more collaboration. “Platforms such as IOPSA offer the environment by which entities are able to freely put ideas together and implement strategies to work more collaboratively.”

SLOWDOWN

Gerard de Fine, owner of Independent Plumbing Suppliers, says the lack of infrastructure and government spending has had a big impact on the sector.

“Generally, most plumbing contractors and plumbers are undercapitalised and are battling to get finance from the banks to finance projects. This has a big effect on our industry and on us being paid.

“We believed that 2017 was going to be a lot better than 2016; yet, it has fallen way short of that. If we have a couple of changes in government, which leads to a bit more confidence, then projects can begin again.” 

He adds that housing is not as buoyant as it should be, especially with lower bonded residences. “We are not doing as many of those as we should. Margins are extremely tight and, unless guys are able to work to a proper business plan or business model that allows for sufficient profit, we are just going to see more inflation in 2018.

PA2018 2The construction sector is under-performing, creating a knock-on effect. 
Image credit: Pixabay

“At the end of 2017 and towards 2018 we are going to see a lot more company liquidations. Blue-chip companies have also been affected and the knock-on effect will hit the plumbing industry in the next three to six months.

“We must promote selling quality products at decent margins to support service and backup. We all trade far below where we should be, and this is affecting service levels to a degree.

“Industry corporates are in such a mess. If you look at the big supply and manufacturing players, they are going through some major turmoil. That is really where the stability needs to come from.

“The main thing is to have the same ethics. Products sold must comply with the latest standards — we should all work towards that. A lot of it is not quite at the right standard,” he says.

COST CUTTING

Phala Sanitary Engineers’ Doug Wade agrees that business is bad at the moment.

“People are cutting prices severely. Guys are working for labour only because they are so desperate. Everyone cuts each other’s throats. But all this is doing is making it worse. One guy does not have to take all the work, but must go in at a decent price.”

He says tenders are few and far between. “There is not much in the marketplace. I am a bit worried for the future; if the rand continues to depreciate, everything will shoot up and kill off a few guys.”

PA2018 3In general, the quality of workmanship must improve next year. 
Image credit: Pixabay

Evert Swanepoel of the Copper Development Association has a slightly more optimistic view. “Obviously it is tough, although it is a bit better than what it was. Business seems to be on the up, albeit slightly. The increase in the copper price caught some guys unaware, but it is easing off again.


We must promote selling quality products at decent margins to support service and backup.


“That bullish trend seems to be continuing. I think the general feeling is that, overall, the international copper price will increase again. Our biggest negative is the political leadership in South Africa.

“2018 looks better than things did at the beginning of this year. There is definitely an optimism that was not there nine months ago. The main reason for this is the unexpected increase in copper usage in China. The building boom in China is having a major effect on copper.

“It all depends on what is going to happen at the end of the year with the ANC and their elections. People are holding thumbs. If we have a change in leadership, there may be a change in attitude and a positive vibe,” he says.

RESTRICTIONS

Lawrence Benatar of Benatar Consulting says 2017 has been a busy year in Cape Town, with lots of projects on the go. “Work in the residential sector has been good, with many conversions from commercial buildings to residential areas taking place.

“We need to get the SABS back to full capacity and we need to see an improvement in the accreditation procedure. Many plumbers are untrained and the basics are not being done. The right materials are not being used and many guys are not meeting OHS levels or Jaswic standards. Everything needs to be approved and plumbers must have the right certifications,” he explains.

Benatar believes the industry needs more training workshops and factory visits. He says independent operators must be more transparent. “We are concentrating more on water management and conservation in the Western Cape. It is all about saving water and treating it properly.

PA2018 4Fluctuations in the global copper price have caught many unawares.
Image credit: Pixabay

“Infrastructure is a problem, as is the quality of water. Capetonians are restricted to using just 87 litres of water per day. The city’s gyms are struggling. So, there is a lot of water collecting going on and experimentation happening. The public needs advice on how to buy water tanks,” he adds.

SCRAP BOOK

“The copper scrap issue remains close to my heart. If the government comes out with new, positive scrap guidelines, it will put them [manufacturers] in a better frame of mind. If we slow the export of copper scrap, it will give manufacturing members an opportunity to get their hands on quality scrap at reasonable prices. This would make them more competitive in the export market,” says Benatar.

He says many businesspeople are holding back on their investments now. “The tighter the market is, the more the businesses fight for margin. Unless the economy strengthens, I do not think there will be much cooperation. There is a lot of competition in the market and I do not think that will stop in the short term.”

Uwe Putlitz of the Joint Building Contracts Committee (JBCC) says they have probably sold five or six per cent fewer contracts this year than last year. “And last year we sold five or six per cent fewer than the year before. Compared to three years ago, we are probably 25–30% worse off. Just because there are some snazzy buildings in Sandton does not mean the country is busy.

“Radical transformation is destroying the construction industry. We will have a problem doing that sort of work, and we have a whole lot of roadbuilding to do but Sanral has no money. So, the construction industry is not in a good place.”

“There is an awful lot of work that the state should be doing, but the state is its own worst enemy. They choose incompetent contractors, do not pay, and so people go out of business.”

Major state projects going ahead include the additional runway at Cape Town International Airport and Sanral projects through the Transkei. “Those projects alone are worth about R3-billion, not to mention the roadworks and all the other things,” he says.

PA2018 5Components used must meet strict quality standards.
Image credit: Pixabay

“Plumbing has changed considerably. New materials and technologies mean you do not have to be an artisan anymore. It has become easier to be a plumber, but many of the designs are not very good. People say they want to put a basin somewhere without knowing how they are going to get water to it or how they are going to drain it. 

“Working closer together starts at university level, where architects do not talk to engineers and engineers do not talk to the quantity surveyors. We must make an effort to work together as it is not second nature.

“The money all goes into the same pot, so why not share information? When things go wrong, it is a big problem. Next year we will run more training courses and get people to know how to use a contract document. People need to know how to use it correctly; how to use it as a management tool and how not to get into trouble.”

Consultant Howard Griffiths says there is work out there, but it is not enough. “The situation stems from politics and the state of the economy. Nobody wants to talk to each other and they keep information close to their chests.

“South Africa can take a leaf out of the American Plumbing Association’s book, which actively spreads knowledge through various publications, design cinemas and so on.

“Today, a six-month course can produce a qualified plumber — this needs serious thought. Several initiatives have also fallen apart and the industry is not unified,” he says.


Click below to read the November 2017 issue of Plumbing Africa

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