STEFANUTTI & BRESSAN – THE HISTORY

A truck, a concrete mixer and two dumpers

From a young age Gino Stefanutti was fascinated by bridges, referring to them as monuments and landmarks on the landscape of the country. As a child, in Italy and later in Zululand, South Africa, he would spend hours visualizing and building intricate structures with whatever materials he could lay his hands on. After finishing school he studied civil engineering in Natal and, once qualified, tried his hand at employed life.

After 16 months in permanent employment, Gino’s father convinced him to join the family building business, based in Empangeni, Zululand. However, Gino’s heart was not in building and ten months later he packed all his belongings into his Alfa Romeo and headed for Durban to fulfil his dreams of engineering an empire. In Durban Gino met up with Ivo Bressan and Vico Gollino, two friends who, by pure coincidence, stemmed from the little town of Pioverno in northern Italy, only six km from Gemona, Gino’s birthplace.

Ivo, a carpenter by trade, had registered a company called I. Bressan Construction (Pty) Ltd in 1971. From 1971–1972 he worked on the Vryheid to Richards Bay railway coal-line as a labour-only subcontractor for Mattioda Construction, the main contractor on this project. Vico at this time was also working on the same project, as a carpenter for Carbonari Construction, another subcontractor
to Mattioda Construction.

In 1973 they both left their respective employers in Zululand and teamed up to build a major culvert at Esperanza on the South Coast Freeway for Sangro Construction. The company assets at the time included a truck, a concrete mixer and two dumpers. In mid 1973, after leaving his father’s business, Gino joined Ivo & Vico, completing the trio that would be responsible for laying the foundation of the Stefanutti group. In 1973, on completion of the Esperanza culvert, the founding trio decided to be masters of their own destiny and embarked on securing their own projects directly for the client. In 1974 they were awarded their first contract, the Phala Rail Grade Separation near Amamzintoti, for the then Natal Provincial Administration (NPA). The contract value was R185 000 and this project was successfully completed by mid 1975. Armed with more resolve than resources the journey of Stefanutti & Bressan had begun.

The early years

In 1975 accounts clerk Sunny Singh joined Stefanutti & Bressan – starting a career with the company that would span three decades. At first his main function was to manage salaries, wages and the cash book. In later years his sharp negotiating skills ensured that the relatively small contractor enjoyed the highest early settlement discounts and discount pricing structures with many large suppliers in Durban.

The company was enjoying its first spurts of growth. However, being privately owned and under-capitalised and having a sole main client, namely the NPA, it was still in a vulnerable position. Many small contractors were tendering for a lot of work, but more often than not the small players would only secure contracts once the big companies had filled their order books. What set Stefanutti & Bressan apart from the other multiple small-time contractors at the time was their relationship with the NPA, Gino’s engineering skills and vision, as well as his ample energy, passion and unwavering resolve to succeed. During this decade the company confined its operations to the KwaZulu region, building bridges and culverts and undertaking small industrial work for the sugar industry. Their reputation for quality and commitment grew, and with a growing order book, Stefanutti & Bressan was at last able to acquire their own plant, enabling them to start tendering for larger contracts in the province.

1978 was an eventful year during which Stefanutti & Bressan purchased their first major piece of plant – a bright red Poclain excavator, with a price tag of R25 000. In the same year the company bought a 4 000m² plot of land in Westmead for the purpose of erecting company offices and a plant workshop. General foreman, Custodia Caloba, also joined in 1978 and became the third shareholder in the company. On 30 August 1979 the company name was changed to Stefanutti & Bressan (Pty) Ltd.

The booming eighties

The company had cut its teeth on building bridges and the eighties kicked off with the R3 million award of the Tongaat and Verulam Bridges for the NPA. Stefanutti & Bressan went on to build many more bridges and culverts in Natal during this decade, soon becoming one of the most prominent and respected bridge builders in the province. On the company payroll at the time were Gino, supported by Ivo and Sunny, with the backbone of the operations consisting of a group of loyal Portuguese foremen. In order to support further growth, Gino recognised that he required financial expertise and set about recruiting old school friend, Glynn Williams, a chartered accountant.

Glynn was brought in as financial director and tasked with introducing systems and managing the finances in order to enable growth. It was during this period that Stefanutti & Bressan was granted their first overdraft of R100 000 from Volkskas Bank – the bank that would play a critical role in the future growth of the company within the province.

The company broadened its field of operations and reservoir, pump station and sewerage works contracts complemented the traditional bridge and culvert work, resulting in substantially increased staffing, plant and turnover. In 1984 two bridges that had been destroyed by Cyclone Demoina were rebuilt within a record six months, restoring access across the Umfolozi. More concrete structures followed, including silos for Nestlé, using the concrete sliding technique and the remotely located Mtamvuna low lift and high lift pump stations.
By the late eighties further growth aspirations set Gino’s sights on diversifying from civils and buildings into earthworks and in 1988 he recruited Deryck White. Together they established an earthworks company, based on a 50% partnership. With the earthworks company established, Gino then focused on increasing the specialist skills base within the civil company, which would allow Stefanutti & Bressan to take on more technically challenging projects. He set about wooing John Jackson, at the time employed by the largest construction company in the province and, in 1989, John joined the civils division as a director and shareholder. Stefanutti & Bressan started to move into another league – and with Deryck and John joining the small Italian contractor, notice was served on the market that this was indeed an organisation to be taken seriously.

The booming eighties - Building

In 1981 a building division was established at Stefanutti & Bressan and in 1982 Harry Reed joined to head up Stefanutti Construction (Pty) Ltd. The division started off with a bang working on major extensions to Barclays Bank in Durban North and soon thereafter on a 2 000m² Prestige Lingerie factory at Phoenix Industrial Park. During this period, the conversion of a warehouse at 58 Moor Road, Durban into a showroom and workshops for Imperial Motors (Pty) Ltd marked the beginning of a long-standing relationship with the motor industry in general. Over the next 26 years, countless motor dealerships and showrooms across South Africa were built and now form part of the Stefanutti & Bressan portfolio.

The first company venture outside South African borders came in 1988 when the particularly prestigious and challenging project to build a palace for King Mswati III of Swaziland “in true James Bond style” was successfully negotiated. On completion of the new home for King Mswati III and his wives, Stefanutti & Bressan decided to put roots down in Swaziland. The company with capabilities of building,
civils, earthworks and roads very soon became the biggest contractor in the country.

The booming eighties – Earthworks

Stefanutti & Bressan’s time operating as a subcontractor was drawing to a close. In a strategic move Gino decided to establish an earthworks company and in 1998 he managed to talk Deryck White, director of a large construction company, into establishing an earthworks company, based on an equal partnership with Gino. The company operated as a private company, working together with Stefanutti & Bressan’s civils and construction divisions, but also as an earthworks contractor in its own right. This move paved the way for the group to participate successfully at all levels of projects that were underway in KwaZulu, including freeways, bridges, silos, pipelines, residential and industrial buildings.

Coming from a large structured company with capex, guarantees and established service departments, to the relatively small Stefanutti group, was quite a culture shock for Deryck. However, the timing was perfect as Cyclone Demoina had recently swept through the province leaving a trail of devastation to railway lines, roads and general infrastructure. After three short months the earthworks company was in a cash positive situation – a position it has remained in for the past 20 years. In 2005 Deryck and his team were incorporated into the Stefanutti & Bressan group of companies – with some of the initial team, including Mike du Plessis, Russell Crawford and Anton Salzgeber still remaining with the company in 2008.

The nineties – A decade of growth

During the 1990s the company experienced exponential growth – and took on technically challenging projects, including the Tugela River Bridge in 1992, the Majuba power station in 1996 and the Nchwaning Shaft No. 3 at Black Rock in the Northern Cape.

Glynn Williams left the company in early 1990 and after several unsuccessful replacements Dermot Quinn joined Stefanutti & Bressan in 1992 as financial manager. Coming from a listed environment he was surprised to find a company being run by a group of engineers who felt safer test-driving new plant in the yard than test-driving the new computer equipment in the office. At the time the company owned one XT computer and the director’s secretary was still using a trusty IBM typewriter to type up all correspondence and tenders. In terms of engineering the spirit of the company had always been entrepreneurial and the nineties would prove to be both ambitious and adventurous for the group.

With the recruitment of John Jackson (who was faced with the same initial culture shock as Deryck White), the company now had in-house expertise in the incremental launching of bridges. When a tender was put out for the construction of a four-lane divided carriageway with two alternative bridge decks, Stefanutti & Bressan (Pty) Ltd submitted a proposal for a bold single deck with an overall width of 20.75m accommodating a four-lane undivided freeway. The Tugela Bridge project was awarded to the company and construction of the largest incrementally launched bridge in the country was completed in 1993, winning the prestigious Fulton Award in 1994 for excellence in the use of concrete.

In 1994 Stefanutti & Bressan built the first concrete sugar conditioning silos in the world for Big Bend Sugar Mill in Swaziland. The cylinder is 30m in diameter and 60m high! The company also built the second concrete sugar conditioning silo in the world for Mhlume Sugar Mill in Swaziland in 2004.

The move to Mozambique

In 1993 the second foray into Southern Africa occurred when Stefanutti & Bressan undertook major repairs to a group of cylindrical silos in Maputo, Mozambique. The project was in excess of US$1 million and upon completion a Mozambique office was established.

The civil war was officially over. However, the country was still littered with landmines, materials were a commodity and resources scarce with the majority of the locals never having been exposed to any construction work due to the long civil war. The pioneering team included Martin du Rand (who had just joined Stefanutti), Louis Pereira (the only Portuguese speaker in the group), Anthony Pillay and a core team of six skilled staff members. Once on site 95 local people were employed and, against difficult odds, the team managed to find a place to stay; train the local workforce; find usable scaffolding in the old  Maputo building yards; get all the relevant materials to site; and complete the project to the German client’s satisfaction. The Mozambique office went on to work on many projects, including the BP fuel depot, MIPS container terminal Chicumbane, Maputo fishing port, Tshai Tshai (a joint venture), a sugar terminal for the Sugar Association, the Japanese Embassy, Encell offices, the EU Embassy, the rehabilitation of Ximavane and the Polano Casino.

1996 – Exponential growth

During the mid-90s Gino recognised that the KwaZulu-Natal construction market could not satisfy the company’s expansion needs and set his sights on the bigger market of Gauteng. Through Martin du Rand he approached Willie Meyburgh to start up a civils operation in Gauteng and, in April 1996, Willie left the major listed construction group he had been working for to establish Stefanutti & Bressan Civils (Pty) Limited.

The company initially operated from a humble 100m² of prefab offices in Kempton Park, but the promising prospects in the province would bear much fruit in the years to come. Willie brought with him a good knowledge of the market conditions in Gauteng and the adjoining provinces. He also brought a vast number of new clients with him and introduced a “wishing well” concept whereby it became a company tradition to place a silver coin into the first structural concrete placed on site – to date a ritual that has stood the company in good stead! The first major project of the Gauteng office was to construct the Majuba cooling towers near Standerton for Eskom. Client DB Thermal awarded the contract to a Stefanutti & Bressan joint venture, valued at R149 million.

At the time the project value was R50 million more than the combined group turnover of R89 million for the financial year ending February 1996. The four-year project was completed one year ahead of schedule and the company was catapulted into another dimension. Clients and competitors in the province started paying attention to the new entrant into the Gauteng market and fierce competition ensued as Stefanutti & Bressan began to muscle in amongst the bigger contractors.

The pioneering group successfully priced and completed technical projects such as the Nchwaning decline shaft near Black Rock and the AAA plant for Sasol, using a precast method. A number of other projects with blue chip companies followed soon and, by the turn of the century, Stefanutti & Bressan was established and recognised as a worthy competitor in the civil construction market in Southern Africa.

The Majuba cooling towers and Nchwaning decline shaft both received the Fulton Award for excellence in the use of concrete.

The twenty-first century

It had always been part of the Stefanutti & Bressan vision to start operations on the international front. During the period 2001 to 2004 efforts were made to expand the business into the United Kingdom and Australia and, although this was not accomplished, international expansion remained on the radar screen. Whilst international efforts had proven unsuccessful, new South African operations, a piling operation (headed up by Shaun Nell) and the new Gauteng-based earthworks company spawned from the civils company in Gauteng. Expansion followed into Botswana, Zambia and Angola in 2003.

The building operations became more prominent and Howard Schwegmann joined the group in KwaZulu-Natal to boost this discipline. The building boom gripping South Africa from around 2004 further motivated the opening of a Gauteng building operation in 2005 which was rapidly followed by a Cape Town operation in 2006, headed up by Peter Leppan. In 2004, due to ill health, Garth Perry, who had been with the company since 1995, stepped down and sold his shares back to the company.

In 2005 the group’s annual turnover had increased to R652 million and market indicators showed that positive growth lay ahead. The group, at this stage, consisted of 10 private companies, all with various degrees of shareholding by management. (Part of Stefanutti & Bressan’s success and growth was due to the principle of giving equity to management whenever a new company was established.) In order to raise capital for further growth, other than by means of internal funding, listing on the JSE was a serious consideration.

Up until 2004 the group had grown amorphously by uniting certain common shareholdings with new management skills and forming new companies. The directors of the group realised that, in order to meet their long-term objectives, the group would have to be restructured into a formal group structure. This process was completed by Dermot in October 2005 as a pre-requisite to the listing and, in February 2006, the first consolidated results were presented, reflecting a group turnover of over R1 billion. In late 2005 a BEE deal was entered into with partner Mowana Investments acquiring 11.3% in the group. Over the last three decades company growth had been via organic means – and growth by means of acquisitions now presented a new and challenging concept to shareholders.

Following a very long internal process and much soul searching, Stefanutti & Bressan entered into discussions with ECMP in early 2006. The transaction with the civil engineering company (specialising in the design, construction and maintenance of tailings dams and open pit contract mining for the mining groups), was concluded in early 2007. In August 2007, after 34 memorable years and four months of intense work and negotiation as a private company, Stefanutti & Bressan listed on the JSE. To afford employees the opportunity to also ‘own a piece of Stefanutti & Bressan’, an employee share trust was established, using some of the shares that Garth Perry had sold back to the company on his departure in 2004.

A listed company

By the time of its listing the group almost covered the full spectrum of civil engineering and building contracting. Two further acquisitions followed in 2007 – a controlling interest in Skelton & Plummer, a mechanical and electrical engineering company and a controlling stake in Civil & Coastal, civil & marine specialists. The acquisition of Civil & Coastal afforded the group entry into the marine works market, as well as an opportunity to increase the group’s footprint in the Western Cape and Angola.

Post listing, Schalk Ackerman and six other directors joined the civil company in Gauteng to boost operations. However, with the construction market increasingly buoyant, skills at all levels were at a premium.

When it became known that that international construction group Stocks Limited was planning entry into the listed environment, negotiations were entered into whereby it was proposed that Stocks joined the Stefanutti group. A few days before Christmas in 2007, overlooking the Atlantic Ocean from the terrace of the Radisson Hotel in Cape Town, Gino Stefanutti, Willie Meyburgh and Dermot Quinn from Stefanutti and Stephen Pell, Rob King and Willie Erasmus from Stocks agreed that there was indeed synergy and merit for Stocks to join the Stefanutti group of companies. The transaction was concluded on 23 July 2008.