Brick manufacturer Corobrik is upbeat on prospects for 2015 following an increase in government infrastructural spending since the May general election.
Corobrik managing director Dirk Meyer says that added to infrastructural spending there has been a 15% increase in sales due to a modest recovery in the residential market. In the first three months of the current financial year, the group has sold more bricks into dwellings than in the past few years.
“While growth is slow, it is steady and we are confident there is sufficient building activity in the market for Corobrik to successfully gain an improved shareholding in the walling and paving arenas. A key to 2015 will be growing organically as the group implements internal capital projects aimed at competing for more market share,” he says.
Meyer’s comments come as the industry recovers from some of the worst years experienced; particularly after the 2010 World Cup Soccer tournament once the infrastructure demanded for that event had been completed.
While experiencing a slow resurgence in residential and building activity, the Western Cape has picked up significantly. Meyer says several projects that had been suspended, were back on track and developer activity in this area, which had halted following the economic slump and a resultant glut of residential stock, was also showing recovery.
“Many of those properties were built as second homes or as speculative ventures and, when this money dried up, the stock had to be slowly absorbed into the market. The uptick in residential demand has seen this supply accommodated and now developers that survived the slump are robustly building units,” he says.
Despite the economic downturn, Meyer says the group has secured market share in the past few years on the strength of the Corobrik brand; experience and expertise on products, quality and services. A national distribution network has also worked in their favour as it meant architects; specifiers and developers could work with a single client.
Corobrik is currently working on a project where the architect is in Pretoria, the developer in Stellenbosch and the building in the Eastern Cape – a dynamic Meyer says is best-suited to a national supplier.
The group currently has a small share of the walling market and is actively seeking to grow its presence in that arena. Meyer comments Corobrik did not view itself as “being in the brick market,” but in the walling and paving market, meaning if there was a wall with various other building materials, there were opportunities for the group to supply bricks.
In July last year Corobrik appointed Musa Shangase as national commercial manager and he became commercial director in January 2014. Shangase is specifically tasked with extending Corobrik’s reputation and influence in the public sector to achieve preferred status as a reliable supplier of superior quality clay and concrete masonry materials.
Corobrik has identified four entities, namely government, the building material suppliers, contractors and end-users or beneficiaries, as being the significant players in them being able to achieve their goal for greater influence in the public sector. Government facilitates building and construction of schools, hospitals, clinics, houses and roads; building material suppliers supplies the materials to contractors building facilities on the government’s behalf and communities receiving quality houses and schools.
“Each entity has a role to support one another so the chain will not break,” Shangase says.
Meyer says in the past year Shangase has played a significant role in taking Corobrik’s sustainable argument to decision-makers, particularly in securing government contracting work.
In 2013 a further two Corobrik factories received ISO 9001 accreditation with another three receiving the accreditation this year, bringing to 11 the number of factories with certification. Meyer says the remaining three factories were expected to secure accreditation in 2015.
The ISO 14001 accreditation is an environmental management system to assist companies maximise their environmental impact. Last year one factory received the accreditation, with the total number of factories with this accreditation five. A further five factories will receive accreditation in 2015 and the balance in 2016.
Meyer concludes his optimism for the future success of the company, now in its 112th year of operating. “We manufacture quality clay bricks and pavers, offering a sustainable value product which will help to drive growth of market share in the walling market.