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Synopsis

“To satisfy the public and private sector growth targets by 2014, the expanding construction industry would want to treble its present production of R100 billion yearly.”

“This, in a nutshell, is the (broad) problem,” said Thoko Didiza, Minister of Public Works, addressing participants at the 2006 Construction Conference held at the International Convention Centre in Durban on Monday, October 30, 2006. The government stated that R372 billion will be spent on infrastructure upgrading over the next several years as part of the Accelerated and Shared Growth Initiative of South Africa (Asgisa).

Contractors, like other industry stakeholders, are confronted with the challenge of significantly improving their performance and emerging as more aggressive in delivering superior products within agreed-upon budgets and timelines. Contractors have additional problems in adhering to rigorous security and environmental rules while maintaining high-profit margins. Among these contractors is Mzintlava Quarry, a tiny yet innovative construction and stone crushing plant – agency situated in Lusikisiki.

Mzintlava Quarry was founded in 2007 by its founders with a defined aim and dedication to give customers a flexible civil construction and crush stone supplier that is focused on achieving excellent outcomes in accordance with the clients’ goals. This firm has developed an exceptional reputation for great service, problem-solving, and timely delivery of assignments to its customers on a stand-alone basis. Customers who have seen firsthand service from the company have inclined to place larger orders, which have been handled efficiently with readily available resources. The Department of Minerals and Energy’s change consignment has underlined the significant contribution to Public Participation in Mining Services. This company is particularly active in the supply of such services. From 2013 through 2038, a 25-year license was given. The employer has been assigned a task due to the non-operation of the Crushing Plant, and as a result, maps this commercial business graph to a budget for acquiring a new Stone Crushing Plant and an Excavator, as shown in area 3 below, in order to retain 95 percent of its consumers and partners.

The financial accounts of the company show a net worth of R5 503 321 and a profit of R8 606 at the end of the 0.33 fiscal year. Mzintlava makes its services available to government agencies, municipalities, private businesses, and non-public persons. There is a clear record of such a provision. The company wants to expand its operations to all regions that affect its services, and it needs R11 192 425 to do so.

Milestones

Contracts proposed

Civil Engineers and Road Builders

Internal resources include

Blue Circle has recruited a Plant Manager with 6 years of experience.

The staff consists of seasoned operators and drivers that have been with the organization since its inception.

Mzintlava Quarry is planned to generate an annual turnover of R8 606 000 in the first financial year (of expansion) at a monthly rate of R265 543akeven, and an annual turnover of R10 413 260 by the end of the third year with a 10% turnover increase.

Plant

Mzintlava Quarry owns the following plant,

One Jaw Crusher with conveyor belts                                 +- R2 m

1 x Tipper Truck(2007 Mitsubish Fusso 10m3)                   +- R850 000

1×2007 Isuzu bakkie           +- R150 000   

1x Electric Generator                                                           +- R8 000

1x22m Weighbridge scale           +- R600 000

One x Open End Loader                                                      +- R575 000

3x fully furnished containers with computers                       +- R135 888 

Fenced area of operation with lockable gate                       +- R120 000

1x 3 Phase Electricity Installation +- R20 000 Total Assets   R4 458 888

 Total Assets   R4 458 888

Service Overview

Mzintlava Quarry is a one-stop-shop for crushed stone, dust, and civil engineering and foundation services. The business has uncovered the possibility to resume a quarry mining operation that was begun by Ramdel Construction in the Port St John’s location while constructing R61. The community is helping to feed the Stone Crusher and load stones into trucks, making the crushing process go more smoothly.

  • The stone piles are loaded and brought closer to the Stone Crushing Plant.
  • Operators feed stones into the Stone-Crusher.
  • Based on their size, various sorts of stones are manufactured and moved to different heaps.
  • By delivering crushed stones and dust, the firm collaborates with road contractors, municipalities, and government subcontractors, surveyors, and specialist civil engineers to fit and service fixed projects within their given locations, communities, and topography.

On-site health and safety procedures are taken in compliance with the DMR license and the Act. The act’s requirements for continuing activity inspection and auditing are satisfied.

Ms. Agnes Mzobotshi conducts highly professional operations by receiving all available government aid, including:

  • Seek out licensed Blasters in the quarry.
  • Engage geologists to look into the area and kind of stone being mined at the quarry mine. According to the study’s reports and conclusions, Dolerite Rock is abundant on the surface of 15.7 hectares of land, resulting in the granting of a 25-year license.
  • A well-known Environmental Impact Assessment was completed by Sandy Muller’s Coastal and Resource Management, situated in East London.
  • The firm employed AMG Global Chartered Accountants to assist it on how to effectively utilise the R5 million loan it got for the project. Their study is now out, and it has sparked a debate over long-term licensing.

Funding is needed

Mzintlava Quarry wants financial aid to continue operations and expand in order to keep its customers and stay competitive in the restricted local market

Mission

Mzintlava Quarry aspires to achieve a dominant market share in particular industrial categories via a combination of market expansion and selective acquisition. ‘Our commitment to the individuals we serve is and will hopefully continue to be our top priority. A personal relationship with our customers is important to us, and we wish to stay in touch with them until our contracts are completed successfully. Our main goal is to provide our customers with a high-quality end-product in a timely way. We continue to prioritize our own employees as well as public participation in the effort.

Objectives

  • To continue to produce and sustain new employment, existing infrastructure and facilities are being used to improve efficiency, safety, and productivity.
  • To increase our market share while retaining 95% of the engineers and customers with whom we have worked.
  • Continue to exploit the weaknesses of our primary regional competitors to gain public and community support in the local market.
  • We plan to increase our turnover to double digits in three years of growth.

Summary of the Business

Important Business Data

Owl Eye Trading 92 is the name of the company.

Mzintlava Quarry is the company’s trading name.

2002/020770/07 is the registration number for this company.

Quarry mining and construction is the kind of business.

The OR Tambo District Municipality manages Mzintlava Quarry, which feeds the settlements of Lusikisiki, Port St John’s, Bizana, Flagstaff, Tabankulu, and Mount Ayliff, among others. Its headquarters are located at Mzintlava Village, Ward 13, Port St John’s, about 10 kilometers from Lusikisiki on the R61. The pit is around 15,7 hectares in size and is situated in the same area.

Ownership

Mzintlava Quarry is a one-member Limited Liability Company. Ms. Agnes Mzobotshi, a capable woman entrepreneur from Lusikisiki, is the company’s primary shareholder, holding 80% of the shares and 10% of the Chieftainship, with the other 10% held in trust for the local community. This ownership structure was put in place to secure local jobs, firm continuity, and the use of local resources to promote quality of life.

Management

The company is run with the help of its members. She has successfully managed the introduction of Women in Mining in the Eastern Cape, as advocated by the then Minister of the Department of Mineral and Energy, Ms. Phumzile Mlambo-Ngcuka. CRSIMA Women in Mining Registration Number 2005/017973/07 was established for the purpose of forming a partnership to decorate corroboration with engaged mining girls.

Ms. Agnes Mzobotshi is in charge of financial administration, which involves invoicing, banking, payroll, and purchasing, among other things, as well as regular office administration tasks, which she is aided by hired clerks in the company.

Mr. L. Sithamela is a Plant Manager who is always stationed on project sites where flowers are working, where he supervises groups of workers in manufacturing approaches as required by clients/partners, and where he plays a key role in maintaining equipment to ensure that it is being used optimally for the advancement of operations.

Ms. Agnes Mzobotshi, the General Manager, will be solely responsible for negotiating new contracts.

Staffing strategy

Mzintlava Quarry will hire two management personnel as well as direct employees. Personnel and wages are shown in the following diagram

Governmental Structure

Implications for Development

Empowering Black People

Mzintlava Quarry supports and promotes the concepts of Black Economic Empowerment. The enterprise is owned entirely by a woman and formerly underprivileged Transkei residents. People who have been trained in various aspects of quarry mining on recognized courses by Mineral and Qualifying Authorities, such as Minerals Technology of South Africa, are engaged and their capacity is increased.

Growth of the Local Economy

The development industry is an important predictor and driver of economic activity and wealth creation. The company will collaborate with local contractors and businesses to provide services that will help to enhance the area’s infrastructure. Mzintlava Quarry’s goal is to use its substantial expertise and experience to help local contractors succeed faster, resulting in more jobs being created and more revenues being realized by local residents.

  • A letter from the Port St John’s Local Municipality states that the firm is working on the building of a community hall.
  • A crèche was erected in the area, and it is now used to educate children.
  • Local students have received bursaries, and proof of this may be found.

Developing Your Skills

The construction industry has to think more creatively about skill development and job justice and come up with a multi-pronged strategy to solve these concerns. Mzintlava Quarry believes that importing high-cost talent is a short-term solution, thus it seeks to empower and promote locals as a method of accelerating skill development.

Swot Analysis is a technique for determining the strengths and weaknesses

Strengths

The company’s owner has mining and construction experience.

The company is still relatively young in the industry, but it already has references that may be willing to market it on a variety of levels.

The firm owner has cultivated acceptable working family members in order to have a powerful management competence.

The entity’s activities are normally cushioned by the government’s constant backing and that of its industry partners.

The business enterprise is a criminal organization that is registered as a Private Company Limited and has a 25-year quarry mining license that has been renewed.

As of the 24th of May, 2014, Joint Venture Prospects were at an advanced stage of discussion.

The company will provide a high-quality supplier.

Weaknesses

The business does not have sufficient funds to purchase the new plant.

Due to a shortage of resources, project planning is tough.

Counter-action

(The company will seek financial assistance from banking institutions to help them purchase the plants they need.) The purchase of such equipment will change the company into a more effective and competent organization.)

Opportunities

Increased public works spending and infrastructure improvements around the province are being promoted.

Andre du Toit of Pietermaritzburg was commissioned to design a shopping center for Lusikisiki.

The carrier of the company is required in government housing projects.

The project to divert the N2 National Road from Mthatha to KwaZulu Natal would take a long time.

Labor assistance is offered by the community.

Limited plants in the area have had their licenses revoked, resulting in mostly uncontrolled competition.

Threats

In the neighborhood, more quarry mining companies are sprouting up.

Counter-action:

Unlicensed contractors in the region will be reported to the authorities on a regular basis.

Success Hints

Keeping a commitment to the individuals that work for the firm.

The need of maintaining personal contact with customers is emphasized, and this relationship is maintained until contracts are completed successfully.

The owner of Mzintlava Quarry should constantly value his or her employees by offering the greatest available training in all aspects of the business.

In order to perform a job that satisfies everyone’s expectations, Mzintlava Quarry should aim to reach the highest potential standards in its work.

The building and construction business generates billions of dollars in revenue and employs millions of people throughout the globe. The construction business typically generates between 10% and 15% of a country’s gross national product, and it has a significant influence on our everyday lives. The structures we live and work in, the roads and bridges we travel on, the utility distribution structures we utilize, the railroads, airports, and harbors we travel to and from are all products of this important sector. The construction sector is an important indicator and driver of economic activity and wealth generation. In order to be competitive, the company must continue to advance on the commercial, technical, and environmental front. It should also make uncooked ingredients accessible near the venues to cut down on transportation expenses.

Overview of the Industry

The building and construction business generates billions of dollars in revenue and employs millions of people throughout the globe. The construction business typically generates between 10% and 15% of a country’s gross national product, and it has a significant influence on our everyday lives. The structures we live and work in, the roads and bridges we travel on, the utility distribution structures we utilize, the railroads, airports, and harbors we travel to and from are all products of this important sector. The construction sector is an important indicator and driver of economic activity and wealth generation. In order to be competitive, the company must continue to advance on the commercial, technical, and environmental front. It should also make uncooked ingredients accessible near the venues to cut down on transportation expenses.

Review of the Market and Marketing

Overview of the Market

According to the Construction Industry Development Board, there are 698 contractors registered in the Eastern Cape, with 542 of them being Grade one, accounting for more than 77 percent. Because they are young, have little construction experience, have limited equipment, and may only be given work up to the value of R200 000, these companies are categorized as grade one. Only one is in Grade 9, implying that they have no limitations on the kind of job they can do. The remaining 22%, with varying levels of expertise and ability, sit somewhere in between these two categories.

The construction industry in the Eastern Cape is growing more competitive, notably in the OR Tambo District Municipality. Despite lacking the essential expertise, facilities, and equipment, the majority of individuals start construction companies. The bulk of these companies was formed only for the purpose of bidding on government-issued construction contracts, severely limiting their scope of operations. Many firms struggle to get bids because they lack the requisite equipment and knowledge. As a consequence of the new equipment, Mzintlava Quarry will acquire more strength, enhancing its chances of getting bigger contracts.

Market Research

For the building of streets and driveways, crushed stone is necessary. Every year, a large number of roads and driveways need to be repaved. There is currently just one asphalt supply in the immediate neighborhood. Their exclusivity is reflected in the exorbitant costs they charge. As a result, there is a large gap in the market that has to be addressed.

The use of stone and rock-related products is essential in the construction of roads in the region. Every year, a disproportionately large number of roads need to be re-tarred. Furthermore, a sizable portion of the population has “retired” to the region and is upgrading and making their new houses more accessible.

Also important are the previously mentioned “window of opportunity” and opponents’ sensitivity to a customer-oriented business. The typical customer is more interested in the vendor than in the pricing.

Segmentation of the Market

Mzintlava Quarry divides its target market into three categories:

Construction Companies for Buildings

These are professional contractors that specialize in the construction of structures such as shopping malls, halls, and leisure facilities. As a consequence of their reputation, they are able to receive significant government structural development tenders. They use quarry and cartage companies as subcontractors to execute their projects.

Civil Engineers 

These are companies that specialize in the construction of roads, railways, and other large structural upgrades. They work with the government on a regular basis. They use quarry and cartage companies as subcontractors to execute their projects.

Customers who are typical

These are unlicensed construction contractors who work on small projects. They mostly cater to those who want services such as driveways, small to medium-sized homes, and so on. This category also includes hardware businesses and brickyards.

Diagram of Market Segmentation

Marketing Combination

Service
  • Mzintlava Quarry is a company that provides several kinds of crushed stone, as well as general civil engineering and plant hire services.
  • Civil engineers and construction businesses will work closely with Mzintlava Quarry.
  • Mzintlava Quarry specializes in stone and crushed stone-related products, such as, but not limited to:
  • Crusher Dust 
  • G5 
  • G7 
  • 6.7mm 
  • 13mm 
  • 19mm

Pricing

The firm uses a flexible pricing strategy to negotiate contracts and fees with customers and partners.

Quality materials, appropriate labor procedures, and timely completion are all considerations considered when negotiating a price with a client.

Mzintlava Quarry also employs tender specification price determinants.

Distribution

In Mzintlava, all business administration will take place in the company offices. Contracts, tenders, plant maintenance plans, and financial management are all tactics used by this office.

The website’s administration handles all production operations (located at the undertaking site). This is where one-of-a-kind customer requirements are planned and realized. The site office, along with the administrative office, is where machinery and plants are housed and maintained.

Promotion

Mzintlava Quarry’s proprietors will work together to contact new clients and market the company’s current services.

Mzintlava Quarry’s owners will seek out new customers and advertise the firm’s services collectively in order to get supplier contracts.

Apart from that, the firm will pursue the following promotional strategy:

The following promotion strategy will be used by the company:

The company’s name, contact information, and office location are prominently displayed on a large notice board near Mzintlava Quarry. This board is placed where it will give services until it is completed. This provides crucial contact information to all passersby and prospective customers.

The commercial name of Mzintlava Quarry is written on the plant, as well as contact information.

Mzintlava Quarry is listed in all District and Local Municipality Service Providers Databases, and it will remain so as it grows.

In the future years, the construction sector is expected to be active. The prospects of producing large yearly turnovers are substantial depending on Mzintlava Quarry’s capabilities (in terms of physical resources, which determines the obtaining of more profitable projects). Positive market factors that support Mzintlava Quarry’s potential for high turnover include:

Over the following five years, the state’s extended public works program (EPWP) would inject between R15 billion and R20 billion into the economy, with the goal of employing 3 million people by 2014.

Over the next five years, the EPWP will spend at least R15 billion on labor-intensive projects, according to EPWP coordinator Shaun Phillips. This would include the construction of 37 000 kilometers of roads, 31 000 kilometers of pipelines, 1500 kilometers of storm-water drains, and 150 kilometers of urban walkways, according to him.

In the future years, the construction industry is expected to be quite active. The prospects of producing large yearly turnovers are significant depending on Mzintlava Quarry’s capabilities (in terms of physical assets, which affects securing more lucrative projects). The following are important market variables that support Mzintlava Quarry’s ability to sustain high turnover:

Over the next five years, the state’s Expanded public works program (EPWP) would inject between R15 billion and R20 billion into South Africa’s economy, with the goal of employing 3 million people by 2014.

Over the next five years, the EPWP, according to coordinator Shaun Phillips, would spend at least R15 billion on labor-intensive jobs. This would include the construction of 37 000 kilometers of roads, 31 000 kilometers of pipelines, 1500 kilometers of storm-water drains, and 150 kilometers of city walkways, according to him.

After the World Cup, Manuel declared that R5 billion will be invested over the following several years on dedicated infrastructure. The majority of it had already been spent on the building.

Over the next three years, the national housing finances will get an additional R9.5 billion, an almost 40% increase.

The government has invested around R8 billion in the Coega challenge (Eastern Cape), including R3.1 billion for the new port, R2 billion for IDZ infrastructure, and R2.1 billion for power supply upgrades via the national electrical energy agency Eskom. Spoornet, the state-owned railway company, has spent R500 million on rail upgrades.

Overall, infrastructure investment is expected to increase from R112.5 billion in 2011/12 to R125.4 billion in 2012/13 and R133.8 billion in 2013/14. This shows that governments’ infrastructure investment is increasing year after year.

Advantage in the Market

Skilled personnel will handle Mzintlava Quarry and Construction. Because of its project management and labor-intensive project expertise, the firm enjoys an advantage over its rivals.

Mzintlava Quarry will invest in extra plants and equipment and, as a consequence, will never outsource any of its projects.

Mzintlava Quarry will also lease its machinery to small construction businesses, giving the enterprise a competitive edge.

(TLB, Excavators, Trucks)

Unlike rivals that import extremely costly individuals, Mzintlava Quarry will nurture and develop its employees.

Review of the Technical

Facilities and Location

Mzintlava Quarry will be operated by the OR Tambo District Municipalities. It will have its headquarters at Mzintlava Village, Port St John’s. Mzintlava Quarry wants to buy a one-of-a-kind facility that will deliver the high-quality crushed stone to all of its clients.

Labour

Mzintlava Quarry is working on a new project.

Mzintlava Quarry must follow the Basic Conditions of Employment Act, Labour Relations Act, and Health Occupation and Safety Act in all labor problems.

In all labor matters, adhere to the Basic Conditions of Employment Act, Labour Relations Act, and Health Occupation and Safety Act.

Insurance

All machinery, equipment, and the building will be covered by relevant insurance carriers. The corporation must adhere to all health and safety rules for its employees.

Financial Analysis

Purchasing and disbursement

Mzintlava Quarry needs R11 192 425 to purchase the plant. The following institutions will be approached for funding:

The Department of Environment Affairs and Tourism has given a grant of R3 million.

The owner of the business will contribute 10% of the cost of the new facility.

SEFA and IDC will be asked for an 80 percent indemnity for the cost of the new plant.

Banking institutions will cover the remaining ten percent.

Other development groups, such as Business Partners and the Eastern Cape Development Corporation, as well as governmental institutions, will be approached for financial assistance.

A financial forecast

The following forecasts for the next three years are attached:

Turnover

Expenses

Flow of Cash

Statements of Income

Statements of Financial Position

Ratios

Appendices

Appendices

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