As public infrastructure spending stalls and tender delays persist, construction group Raubex is navigating a tough domestic environment through strategic diversification and international expansion.
With about 20% of its operating profit now generated in Western Australia and increased exposure to energy and mining infrastructure, Raubex has reduced its reliance on SA’s volatile public sector. This shift has proved critical as tender flow from major public entities such as Sanral has slowed, raising concerns over future project pipelines.
Raubex recently reported strong results, with its rest of the African division leading the way, delivering a 44.8% profit increase and a 21.8% margin. Construction materials surged 147.1%, driven by strong road demand, while infrastructure and Western Australia posted steady growth.
Roads and earthworks also outperformed with a 77.1% rise in profit. However, materials handling and mining disappointed, with profit down 86.2% due to weak chrome prices.
Despite this, Raubex’s order book grew 10% to R28.18bn by the end of February, narrowing the gap with larger rival WBHO, which reported a 7% increase to R32.6bn. Despite sectoral headwinds, both firms have remained resilient.
“The order books and earnings outlooks of WBHO and Raubex suggest solid growth. There’s an encouraging uptick in activity, supported by early signs of recovery in public infrastructure spend and rising private sector investment, particularly in energy,” Foord Asset Management portfolio manager Nancy Hossack said.
The government has pledged more than R1-trillion in public infrastructure spend over the next three years, a critical commitment after a decade of underfunding that contributed to the collapse of other constructions firms such as Murray & Roberts, Group Five, Basil Read and Aveng.
While Raubex remains exposed to government contracts — at 81% of its portfolio — the group has displayed unexpected resilience. CEO Felicia Msiza said the consistency of the SA National Roads Agency (Sanral) linked projects, which comprise 26% of the order book, were often held up by procedural delays and legal bottlenecks that continue to hinder timely awards.
“There has been a noticeable slowdown in awards, particularly at provincial and municipal levels, often due to budget uncertainty and administrative issues. Sanral has made progress, but adjudication delays and legal challenges are causing lulls in the pipeline,” Msiza said.
Raubex’s order book remained strong, backed by active projects in roads, materials supply, mining infrastructure and energy. Strategic project selection and international operations in Western Australia and the Southern African Development Community region help mitigate the effect of local delays.
There has been a noticeable slowdown in awards, particularly at provincial and municipal levels, often due to budget uncertainty and administrative issues ...
— Felicia Msiza, Raubex CEO
She said the construction sector’s problems were not just about funding as money is often allocated but unspent due to planning delays, procurement issues and limited implementation capacity. Addressing these bottlenecks could boost infrastructure delivery without major new funding. With better co-ordination, the sector could regain momentum and support economic growth.
Industry Insight’s April report showed just a 0.4% rise in 2024 construction investment, driven by weaker residential activity and greater reliance on public projects. Despite wins such as Mpumalanga’s R3.7bn Sanral contract, tender activity fell 37%, with high cancellations in KwaZulu-Natal signalling future risks.
Despite this, Raubex’s ability to adapt — by tapping global markets and pivoting towards energy and mining infrastructure — has been key to its durability.
Economist Roelof Botha said: “It’s remarkable that both Raubex and WBHO have not only survived but remained competitive, despite a decade of limited capital formation in the sector. Over the past two years, fixed capital formation has fallen 23%, driven by record high interest rates hitting a 15-year peak.”
Msiza said the industry had faced structural contraction, rising competition, and tighter funding since the 2010 Fifa World Cup construction boom. Survival now depended on strategic diversification, operational discipline and finding growth beyond traditional markets.
“We’ve deliberately expanded into sectors like energy, materials supply and mining infrastructure, while also growing our footprint beyond SA, including a solid base in Western Australia. That broader platform helps cushion us from local volatility,” she said.
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