Founded in 1982, today Energotec Mechanical & Electrical operates as a division of the First Tech Group. We speak to CEO, Leon Kapp, to examine the benefits this merger has brought the firm
Written by Jennifer Denby & Produced by Tom Lloyd
Innovation-led firm, Energotec, addresses all aspects of Mechanical, Electrical, Instrumentation and Piping project construction works through an extensive and comprehensive range of products and services. These include fabrication, supply and installation of light poles, brackets and cable trays, cable support systems, including the supply of various types of cables, instrument stands, maintenance work, shutdowns, turnarounds, control rooms, rack rooms and substation work.
Throughout its 27-year history the company has been focused on the petrochemical and mining industries and has successfully completed numerous small and major projects and contracts. However, in recent years, the company has experienced remarkable growth. Such success can be attributed to pertinent structural changes that have worked to advance the firm’s position in a sometimes challenging South African marketplace.
Kapp, who has over 20 years’ experience in the construction industry, outlines what sets his company apart from competing firms in the field: “I would say the big difference is our people, who truly feel that they belong, and then obviously the very strong values that we have in the company,” he says, explaining that the firm’s values are divided into five specific categories. “They are entrepreneurial, recognition, professional, success driven and teamwork.”
Energotec actively promotes these values through a variety of efforts. Entrepreneurial spirit, for example, is encouraged within the firm by providing innovative solutions and business opportunities across all levels of the organisation; for the business to gain recognition, it constantly pursues service excellence throughout the organisation; professionalism is reached through providing an excellent service level and conducting business with pride and integrity; and in striving to achieve a superior return for its shareholders, the company has naturally become success-driven; and, finally, teamwork is gained by creating an environment whereby companies and individuals are motivated to contribute towards a common goal.
“Most of these values are around people and people’s skills. We always maintain that if we look after the people, the people will look after the business and that’s what is making the difference,” he adds. Values as strong and focused as these not only benefit staff, but client satisfaction also. “Due to our diligence, pride and experience, we have always produced above average quality and satisfied our customers.”
RESTRUCTURING
Johannesburg-based First Tech Group is a leading manufacturer and distributor of electrical and infrastructural products. Its major clients include the likes of CBI, Schneider, Osram, Crabtree, Lumex and CCG. Having merged with the R1.5 billion-turnover group over two years ago, Energotec has since undergone major restructuring and significant improvements.
The external growth has enabled the company to benefit from numerous positive aspects of the group’s business. “The obvious support is that the group has a better infrastructure logistically, which opens up doors for us into the whole market in South Africa. The other benefit is the financial backing we get from a bigger company; it makes it a lot easier if you share the suppliers and the client base for bigger projects,” explains Kapp.
In speaking with Kapp, it is clear that the business is able to benefit from the pros associated with larger organisations. The result of sharing these resources is that improved geographical reach and business contacts significantly affect growth, as Kapp confirms: “The most significant reason why we attached to the First Tech Group, however, was to grow the company. Since we merged two years ago, the company has grown over 300 percent.” These are extremely impressive results, especially given the economic environment which has negatively impacted the majority of firms in one way or another. “We are very lucky in the sense that over the last two years we’ve maintained a growth of over 100 percent. So the economic crisis has not affected us.”
When asking Kapp to highlight any significant structural developments with the company, he quickly draws attention to the acquisition of Celik: “Recently we acquired a mechanical and piping division called Celik. The firm is involved with the supply, fabrication and erection of all types of industrial piping and fittings as well as related mechanical works. This move has provided us with further capabilities to offer our existing client base and has also opened doors to new clients.”
By bringing in the knowledge and experience of Celik’s skilled workforce, and extending its capabilities, resources and client base even further, this strategic acquisition has given Energotec a leading edge over numerous competitors in the industry.
ETHICAL AND ENVIRONMENTAL STANDARDS
Continuing, Kapp stresses Energotec’s drive towards ensuring that ethical standards are maintained in all business agreements and transactions. Furthermore, Kapp tells us that the firm strives to comply with the current Construction Sector Broad Based Black Economic Empowerment (BBBEE) Charter and is currently a Level 3 contributor.
“We have a lot of development around previously disadvantaged groups, we as a company also spend a lot of money and time training these people. The major emphasis is on the training and currently we have a certificate that says we are 75-85 percent compliant towards the requirements around the BBBEE drive that’s laid down by the Government. 87 percent of our labour force are ‘Previous Disadvantaged People’,” he explains.
It seems the firm attaches equal importance to the conservation of the environment, as well as the wellbeing of the community and its employees. Conservation has become an implemented practice both from an individual and a group perspective.
“We’ve got environmental policies in place that we work strictly to. We are in line with ISO 14001:2008 and have several processes in place that make sure that we are 100 percent in line with South Africa’s legislation.”
Such processes that Kapp refers to include, for example, disposing of waste in larger bins supplied by the client and the company and falling in line with clients’ waste management programmes.
FUTURE
Kapp says the company’s future strategy involves improving many aspects of the business, which have been identified through substantial market research, but outlines Energotec’s main target as establishing itself as one of the major players in sub-Saharan Africa.
“We’re targeting all the major work that’s planned for Southern Africa and there are a lot of opportunities coming up from 2010 that will run through to 2020. The majority of the projects are specifically nuclear power generation projects that are planned for Southern Africa,” he adds.
As Kapp highlights new patented designs that the company has developed - specifically a Lighting Pole Hinge Bracket - and a clear focus on safety and innovation, the future looks full of opportunity for this pioneering firm with an entrepreneurial CEO leading the way.
FACTS AT A GLANCE
COMPANY NAME: Energotec Mechanical & Electrical
CEO: Leon Kapp
OPERATIONS: Mechanical, Electrical, Instrumentation and Piping project construction works
ESTABLISHED: 1982
REVENUE: R150 million
www.energotec.co.za