OPPORTUNITY ON THE HORIZON

In the previous issue of Robust, I explained how Murray & Roberts transformed itself from being predominantly a South African civil and building contractor, to a multinational engineering and construction group, providing services to its chosen primary market sectors of metals & minerals, oil & gas, and power & water.

The Group’s New Strategic Future plan defines the strategic direction of the Group. This plan was the outcome of a strategic planning process undertaken with the support of the Boston Consulting Group (“BCG”) during the second half of FY2014. Today, BCG is again assisting the Group with a strategic review, but this time to assess the strategy implementation progress and to test the plan against latest market dynamics, as the world is a very different place when compared to five years ago.

We are pleased to note the stabilisation in the crude oil price around US$70 per barrel and the general improvement in market outlook for LNG demand, which could bode well for the Oil & Gas platform in the medium to long term, whilst in the short term it will also focus on complementary growth markets in Australia, such as metals & minerals and infrastructure. The Underground Mining (metals & minerals) platform continues to deliver strong results across all three main geographic regions – Australasia, Africa and the Americas. Tendering departments are currently experiencing high levels of activity and we are excited about the growth potential in this sector.

The Power & Water platform’s efforts are focused on replenishing its order book, both in South Africa and the rest of sub-Saharan Africa, as the Medupi and Kusile projects are nearing completion. Given the delay of new investment in the local power sector, there is a particular focus on prospects in complementary markets such as mining, pulp and paper, chemicals and energy. There is also large opportunity for our water business to explore, considering the severe drought conditions and water crisis not only in the Western Cape, but also many other parts of South Africa.

The Group’s strategy and business model is clearly defined and is currently being reviewed in the context of ever changing market dynamics, whilst the focus remains on optimising business performance and growing shareholder value. The Group’s relatively strong financial position, after several years of difficult trading conditions, is evidence that the New Strategic Future plan served us well over the past few years, and this financial position provides good support for our organic and acquisitive growth plans.

In this edition, we share some insights into the projects the Group is currently working on and from an innovation point of view, provide an update on food chain reactor technology in wastewater treatment being demonstrated by our water business. The Group’s responsibility towards the communities in which we work is also highlighted by the number of organisations benefiting from our corporate citizenship programmes.

I hope you enjoy this edition of Robust Magazine.

HENRY LAAS
GROUP CHIEF EXECUTIVE