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2011 Seminar 5

Sustainable Engineering and Exporting Services

Dempsey Naidoo

Wednesday, 05 October 2011, 10.45 – 12.15

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Seminar 5 – Sustainable Engineering through Exporting Services

Presented by:

Mr PD Naidoo Pr. Eng., MICE, FSAICE

Executive ChairmanP D Naidoo & Associates (PDNA) -GroupSouth Africa & Africawww.pdna.co.za

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2011 Africa - Investment Portfolio by Sector

Power, $916, 25%

Transportation, $1,142, 31%

Capacity Building, $25, 1%

Health, $79, 2%FPD, $162, 4%

Environ., $256, 7%

Agriculture, $280, 8%

Water Res., $352, 10%

ICT, $437, 12%

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In Africa where there is one qualified and registered engineer to approximately every 6 000 inhabitants, it is challenging to find local indigenous companies of appropriate skill and capacity to serve as a role model, and partner to manufacture complicated infrastructure and industrial projects. In Asia by comparison there is one engineer to every 200 inhabitants. No wonder China is growing at 10% and can sustain it.

Since democracy in 1994, there has been a concerted campaign in South Africa to grow local engineering capacity amongst the indigenous population with some success. The development of such a sustainable model will be discussed alongside some pitfalls on this journey. The relevance of this model to Africa for its indigenous development will be presented, including challenges from structure, culture to physical delivery.

This paper serves to marry the excellence and experience of global participants, who have embarked on this path working with local capacity, to create a lasting legacy of skilled engineering and management for South Africa and Africa. A local South African company’s experience from startup to excellence will be used to illustrate the key steps required to establish and maintain local talent to benefit long term strategy of exporting services to Africa.

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2011 Presentation Structure

IntroductionAfrican Statistics

• Economy• Engineering

Africa Status QuoThe African Model

• Sustainable• Unsustainable

The PDNA Model• Early years to Successful Delivery

Recommendations for Building Capacity

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2011 African Economic Summary

Population - 819.3 MillionGDP per capita - $624GDP growth - 5.1%Life Expectancy - 52Resource-based exporter of :-

o minerals/metals (oil & gas, gold, coal, iron ore & ferro-alloys, bauxite/aluminium, copper, diamonds, etc.);

o agri & agri-based commodities (cocoa, cotton, fruit & juices, sugar, grains, wood & paper/pulp, wool, meat, fish, etc.);

Very weak skill base - except for a few niche competenciesHigh Growth Economic – Tanzania, Angola, Nigeria,etc

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2011 Engineers Status in Africa

130 157 227 311

3166

59306373

0

1000

2000

3000

4000

5000

6000

7000

Popu

lation

 per Engineer

Registered Engineer to Population Ratio (2004)

Registered Engineer to Population Ratio (2004)

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Source – Lawless 2005

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2011 The Unsustainable Model

Business into Africa Country supported systems and companies – Money flows back to Aid CountriesWorld Bank and African Development Bank funded programmes – Procurement RequirementsRent a local Engineer vs Empower a local Engineer (no Capacity Building)RSA Companies Operating in Africa

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2011 Sustainable Lessons

Business into Africa post - 1994Empower the indigenous African Engineer – Ex-Pat CompaniesBursaries, Training, Development and Mentoring ProgrammesDevelopment of Client ConfidenceBusiness Model – Indigenous OwnershipProcurement Practices – Fostering capacity buildingEstablish Design Offices Locally Establish Niche Engineering Competencies –Appropriate Technology / labour intensive

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2011 The PDNA Model

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SCHOOL TERTIARY

UNIVERSITY

INDUSTRY EXPOSURE

CAREER ADVANCEMENT

BRIDGING

TRAINING & DEVELOPMENT

STRONG INSTITUTIONS

ACADEMY (CDP)

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2011 The PDNA Model

PDNA Mozambqiue / Botswana growth path (training and development fund start up)Creative Institutions and contributions -University courses and techniciansHave exchange programmes and embedded engineersPreferred Procurements - Concept of Aid Studies & Training for indigenous engineer/s working with International Companies.

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2011 The PDNA Experience – Early Years

25 years – Township background (low income) – Status of Black EngineersPolitical EnvironmentTraining of Young Engineers –Especially BlackAccelerated Development (technical/management/parallel development)

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2011 The Middle and Mature Stage

Procurement – EPC, EPCMStrategic Partnerships / JV’sFinancial model of Re-investmentRapid Financial and Technical GrowthDiversification of Engineering ServicesDevelopment of International Business RelationshipsTechnology & Skill Transfer with International Business Partners

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2011 Projects - PDNA History

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2011 Challenges on this Journey

Political EnvironmentImpact RecessionGovernment LawsLocal Procurement requirementsCulture and LanguagesLogistics Commercial RequirementsBusiness practicesPhysical delivery

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2011 Recommendations

Empowering Joint VenturesWorld wide specialist skills ThyssenKrupp, NIRAS, AECOM, AURECON, COWI, SchlaichBergermann & Partners, General Electric (GE), etc - The joint venture on large projects.Operation and maintenance depends on local capacityIndia, Chinese model following old western model of in and out engineeringAcquisition of ex-pat companies in Zimbabwe and Zambia / indigenize and grow.

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2011 Bridging the Gap

The passion must be to leave a legacy in Africa so that they can do it 

for themselves some day –otherwise resentment / corruption

=Sustainable Export Services

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2011 THANK YOU

HEAD OFFICE25 Scott Street

WaverleyJohnnesburg

2190Tel: 011 566 8300Fax: 011 566 8600

Email: johannesburg@pdna.co.zanaidoopd@pdna.co.za

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