Dubai-headquartered specialist engineering contracting group Butec is upbeat about expanding its footprint in SA’s construction industry and allied services while it gears up to offer its services in Botswana, Mozambique, Eswatini and Zambia too.
Established more than 60 years ago, Butec operates in 21 countries across the Middle East and Africa through its business units, which are focused on engineering and contracting, electromechanical solutions, as well as facility and utility services.
After the integration and rebranding of its SA acquisitions of Thermaire Investments and Ampair, the group has affirmed its intention to be a major player amid Southern Africa’s construction and multitechnical businesses.
Business Day spoke with company chair Ziad Younes, who says the group has earmarked as much as $10m (R183m) to invest in its Southern African businesses over the next few years, amid green shoots in the commercial buildings and data centre development sectors.
What was the rationale behind Butec’s Southern African expansion?
Historically Butec has operated in the Middle East and the Gulf, with all countries there having good budgets. But with them all being concentrated in one region it poses a risk management concern as all their economies are linked to the oil markets.
Our ambition was to invest in a market whose economy is not linked to oil, that has real assets and has developed enough to need and be able to consume services, especially those we can provide. We don’t want to go to places where we would be replacing anybody; we just want to integrate into the economic framework and add what we can.
This is why we have focused on Africa, with emphasis on countries whose economies are the most mature. SA is a continent by itself with strengths and potential in its economy. And that there are things that are not working perfectly means there is a need for our services and we can have a role. We aim to blend with what exists and bring value.
Tell us more about what the growth plan entails.
Our focus in SA is mainly on the electromechanical solutions business line and the facility services where we are already present and strong. We want to expand on those to offer the full spectrum of Butec capabilities that we are offering in other countries.
We have the ambition to expand into utility service because we think to better serve the communities and countries we are in, this is where we can have an effect on the environment. In utility services your main mission may be the management of public services but the bottom line is the reduction of losses on electrical and water networks.
The cheapest electricity is that which you don’t lose, and the cheapest water is the one that does not seep into the ground. We think we have the know-how for that.
How do your acquisitions of Thermaire and Ampair fit into the Southern African expansion bid?
For some reason, French conglomerate Engie decided to divest from services in Africa and we acquired those businesses from it in 2022. We found the companies interesting as they fit into our existing business lines.
Thermaire is one of the leaders in heating, ventilation and air-conditioning solutions in SA. So, through that acquisition, we are complementing our full electrical and mechanical services offering, using their infrastructure and reach. Ampair has been a long-term provider of maintenance that is focused on heating, ventilation and air-conditioning, so it is a nice addition too.
Since the acquisition we have invested millions of dollar into the operations of these companies to grow them and we will continue to do that. We have a budget of $5m-$10m that will be invested over the next few years.
Where are your targeted growth areas?
We are first focusing on commercial building and data centre developers that need our installation and maintenance services; and the industrial sector, which includes mining.
Our fourth area of interest is the public sector, but we are still observing the transformation that the country is going through. We are usually very involved in the public sector where we operate, but we want to ensure that we can participate in an efficient, transparent and ethical way. We are confident that many decisions are going in the right direction and we can play a role.
What is your take on the government of national unity and its effect on business?
In my most recent visit to SA, I was surprised by how much optimism there is on all sides of the political spectrum. As a foreign investor, we always love governments of unity because we think those are stable instruments and that plurality gives stability, which builds confidence and gives growth.
• This article has been edited for brevity and clarity.
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