Kwikspace is the largest and most diverse manufacturer and supplier of factory-built instant accommodation in Africa. The company has a history of more than three decades in building and exporting a wide variety of units to many regions of Africa, South America and the Middle East, providing its services to customers in the private, commercial, government and industrial sectors. The company has factories in Cape Town and Johannesburg, and sales offices throughout South Africa. 

 

A diverse portfolio

 

Mr Coulthard outlined the history of Kwikspace: “We grew quite early on by acquiring a number of local businesses, including McCarthy’s, Zozo, Parkhome, Portacamp, Ribco, Wadekor and Bokkie. We are an equity company owned by ABSA Capital and Vantage Capital. Our head office is in Johannesburg, with sales offices in four South African regions, and three manufacturing sites. We also have an export group in Johannesburg. The business has three main divisions: panelised units (Portacamp); mobile units (CI Parkhomes and Zozo); and rentals (Kwikspace Rentals). We sell our products through agents in 15 African countries. We offer the following products: modular buildings, mobile assemblies, panelised buildings, insulated panels, light steel frame (LSF) panels and roof structures (for assembly only), and roof panels. Our principal manufacturing facility is based in Kliprivier, South of Johannesburg. This site is easily accessible from the R59 Highway, and is located in part of the ever-expanding R59 industrial corridor. This facility consists of more than 30,000m2 of manufacturing space. Our Cape Town facility consists of a 4,000m2 manufacturing capability, and, in addition, there is a facility of 3,000m2 at the Kwa Zulu Natal factory, as well as a similar-sized facility in Port Elizabeth, where a substantial amount of manufacturing space is devoted to the production of Mobile and panelised (Portacamp) type modular buildings.” 

Standardisation and customisation

 

Mr Coulthard proceeds to outline the company's products: “Kwikspace is involved in manufacturing medium to large lengths of steel from 3.450m to 18,000m for unit chassis construction, although longer ones can be made, if required, in 'Kwikspan' format by joining individual units together to form large set-ups. Other components for mobile homes are manufactured in-house. These items include burglar-proof bars, safety gates, work benches, beds and bunks. We also make steel roof trusses by undertaking light steel construction work, and undertake as roof manufacturing and general sheet metal work. This involves galvanised sheeting uniquely worked into and formed to a roof shape according to customer specifications. In addition, we manufacture insulated panels made of polyurethane and polystyrene. We also have industrial-type wood-working machinery to work and form timber to our specifications, using imported timber materials from various overseas companies as well as from local wood mills. 

 

“Our major suppliers of materials and equipment include: TATA, Macsteel, Industrial Urethanes, Arcelor Mittal, Hammon Fasteners, ABE, Den Braven, Uniply and Robor.” A typical unit, at around R2,500 per m2, costs about a third less than the equivalent-sized conventionally- built structure. 

 

Mr Coulthard continues, “We have a large fleet of 3,000 units of various configurations for rental. These comprise mobile units to accommodate and house various entities and operations on a temporary or semi permanent basis. Among these units are the following ranges: Zozo (supplied as a flat pack); CI Parkhome (mobile single-width and double-width); Kwikspan (modular or sliced) and Portacamp (panelised). Our major customers for rental are: Sasol, Roshcon, the South African Government, Westside Trading, Rotek, Rustenburg Platinum mines, Lonmin, Zimbabwe Platinum Mines and Minopex. 

 

Logistical solutions

 

“We have several major ongoing projects for customers including: Eskom, Murray and Roberts, Anglo, Xstrata, BHP Billiton, Roshcon, Sasol, Anglo Gold Ashanti, Bechtel LNG, SAB Miller, EPC and Rio Doce. We have a rental contract that we are particularly pleased about. This was a project which involved us in assisting Sappi Ngodwana to accommodate approximately 800 people for their shutdown requirement at one of its mills. The accommodation units included facilities for sleeping and ablution. The units were rented for one month, although the transport logistics started some 20 days in advance in order to be ready on the day. Another recent contract, that was of particular significance, was the supply of two MCC control units for Xstrata. This project was a first for us and a first for the whole pre-fabrication industry in South Africa. The units had to be built and transported as a whole, as no work was allowed on site. They were 15m long by six 6m wide and weighed roughly 25 tonnes. They were also four metres high, which presented both a structural problem and a logistical challenge for us in transporting the unit to the site, which was 150km away. We have also supplied units to several other customers, including: Kusile, Medupi MEI, Bechtel LNG (a training centre), Lumwana (for 220 houses), Bombardier, and for the South African Department of Education (for school buildings). The last of these contracts is still ongoing.” 

Durability 

 

One of the key strengths of the company has been its consistent focus on delivering quality in what is perceived as a low cost industry. “We believe in whole life-cycle costing (to estimate the total cost of ownership) and fortunately, so do our customers,” explains Mr Coulthard, adding: “Gone are the days when our industry product should be viewed as a cheap alternative to conventional buildings, it should rather be cost-efficient. The units we build are typically made to have a thirty year lifespan at least. We firmly believe that re-investment in the company is imperative. We invest continually in ensuring that the good reputation and name of Kwikspace endures. For example, we are currently spending US$1 million per annum on improving our products and processes, a level of investment that is unusually high for a company operating in Africa. We also include our key suppliers in our improvement programmes. We are members of several professional bodies, including the MPBA (Modular and Portable Building Association, UK), as well as the Modular Building Institute (MBI, USA). These affiliations assist us in expanding our knowledge, as well as keeping abreast of new developments – in other words, they help us to stay ahead of the pack.” 

 

Quality

 

Mr Coulthard turns to quality issues, noting: “As we function throughout the African continent, we do not have the luxury of a single approach to health, safety and environmental issues. So, we generally have to adapt our quality control processes to those of our clients. We spend a lot of time in compiling a broad range of risk assessments, to ensure that all risks are identified and properly managed when on site. We pride ourselves in the fact that we prevent injury to our workforce and extended staff in all environments. We are a listed ISO9001:2000 company. The ISO standard mark is widely recognised and is used to assure the quality of our products and services on-site as well as during manufacturing. The ISO system is used to optimise continuous improvement and learning, ultimately to provide peace of mind to our customers. We comply with strict regulations that necessitate the implementation of careful control measures regarding the chemicals used in our raw materials, taking into account the fact that the materials used in our buildings consist of 70 percent steel.” 

 

Mr Coulthard tells us, “We have export departments in Africa, and we have a business development division that is currently seeking new markets and regions for sales. These activities are integrated into project implementation systems, and we have qualified and knowledgeable sales teams. However, it is early days as far as geographical expansion is concerned, and South America has only yielded a couple of small projects so far, and isolated, small projects have been completed in the Middle East. Further expansion is definitely on the cards. 

Certification

 

“Some of the new products that we develop are actually just modifications of standard items that are not perfectly suited to our building system. A good example is the new plastic electrical plug and light-housings that we are looking to develop. Existing fittings are incompatible with our our wall panel as the depth of the housing is deeper than the thickness of our panel. So, by manufacturing our own light switches and wall plugs, we can recess them into the wall to give our buildings a neater look. Greater cost control is the other bonus that derives from manufacturing our own equipment. Thus, it is cheaper to manufacture our own boxes than it would be for us to buy-out the existing manufacturer. However, when we do manufacture a new product, like our light steel frame buildings, many processes are involved, not the least of which is gaining certification from the British Board of Agrément (a body that specialises in approving construction products, systems and installers), as this is a costly and time-consuming exercise, which can take months to achieve. New products and suppliers have to be established and approved, and their products have to be tested to make sure they will be in line with Agrément standards. Also, moving machines around within the factory, to accommodate production, needs to be considered and implemented.”

 

Customers come to Kwikspace for solutions to problems and the company also develops new solutions based on market research. Each and every project is evaluated separately. Some applications require straight-forward fits for standard mobile or modular buildings, with a small degree of customisation. Others are purposely-designed for providing accommodation in the form of camps, centres or standalone buildings. The company has a research and development department whose responsibility is to seek out and source new materials, components or applications for existing products. Most products are renewable by adapting the modifications made to satisfy earlier project requirements. 

 

Short-term rentals

 

Mr Coulthard explains, “We are seeing an increase in the market for rapid rentals, particularly by companies hosting events, for which they need a short-term rental agreement usually with specific requirements. In addition, the construction industry is increasingly in need of basic accommodation that can be used for working at a remote site. In view of the large transportation distances that are involved, we are investigated the use of supplying units in the form of flatpacks. A further trend is for customers to want a full service package involving design, supply, and installation, and we are undertaking an increasing number of 'turnkey' projects. We are also being requested to provide all the infrastructure for entire sites and camps, including the furniture and accessory equipment, in addition to buildings. However, we are budgeting for a severe reduction in the number of projects for Africa, forcing us to seek alternative markets. African markets are currently slower than international markets, but we shall need to comply with all the regulatory requirements of foreign contractors and clients. Contracts have already been concluded with companies in countries such as Angola, Congo, Mozambique and Zambia.”

 

A good future

 

Mr Coulthard adds, “Our future plans include putting a lot of effort into marketing our Zozo mobile units as an alternative to any permanent unit that does not match clients' requirements. We shall also be focusing on building stronger relationships with our current customers and broadening our product range. We intend to grow our market share by setting up branches in further strategic areas in Africa and South Africa. There are a few major upcoming projects such as the provision of accommodation on the site of two new power stations, the Sasol 4 planned new coal-to-liquid plant costing R129 million and due for completion in 2016, as well as new mines and various other expansion projects in the mining industry. Over the next few years, I expect us to retain our current status as the market leader in our field, and we shall have expanded into greater Africa, as we have already identified our market there. We are also seeking to establish more distribution and assembly plants and shall be implementing more up-to-date technology, in terms of materials, processes and equipment. In addition, we shall be considering the possibility of opening new manufacturing facilities further north in South Africa. 

 

Kwikspace announced its annual financial results in September last year, and these showed that revenue had increased by 49.1 percent, and gross profit had increased by 51.1 percent. In addition, the company's operating profit grew by 32.4 percent to R96.3 million. These figures confirm that the company has enjoyed a phenomenal annual growth rate of 57.5 percent over the past four years. Despite the global recession, there is every reason to be confident that the company's impressive level of success will continue.