Raubex, a JSE-listed infrastructure development and construction materials supply group, has put measures in place for procuring bitumen from offshore to ensure the product quality meets its standards.
SA’s dwindling refining capacity has cut the domestic supply of bitumen, a key material used in paving of roads and airfields.
Nearly all SA’s surfaced roads have bituminous surfacing. The bitumen used in the country is obtained as an end product of the petroleum crude oil refining process.
Raubex said on Friday the closure of most SA refineries had caused a bitumen shortage.
“However, there is an oversupply of imported bitumen that has created a new risk relating to the quality of procured bitumen,” it said.
“The group owns and rents bitumen storage facilities, which are sufficient to ensure approximately six weeks’ supply to its operations depending on stock levels between import cargoes.”
To meet domestic supply of bitumen, Raubex said there were regular imports into Cape Town and Durban ports to address local supply constraints and to meet demand.
To mitigate against the risk of imported bitumen, Raubex said it had put a three-stage quality assurance process in place, with strict protocols “to ensure quality of bitumen that is procured from all sources that supply into SA”.
The country’s largest refinery, Sapref, which is in Durban, ceased operations in 2022 after floods damaged the 180,000-barrels-a-day facility.
Its joint owners, BP and Shell, have since sold the plant, which was contributing 35% of SA’s refinery capacity, to the state-owned Central Energy Fund for R1.
Raubex, which reported a R28.18bn order book in the year to end-February, said it would be selective over which government tenders it bids for.
It said due to the size of recent Sanral tenders and other awards, the group needed to be cautious and selective in tendering to manage the “potential realisation of overtrading consequences, resulting in cash flow and other resource constraints”.
The company, led by Felicia Msiza, was recently awarded a Sanral project to the value of R3.22bn. Other notable projects the group has secured and that are in progress include Western Cape provincial government contracts totalling R1bn.
It has also secured contracts from the KwaZulu-Natal transport department totalling R1.4bn, the Bakwena N4 Rustenburg Project at R1.3bn and the TRAC N4 Crocodile River projects worth R2.2bn.
The government has also entrusted Raubex with the tender to refurbish the parliament building, which was gutted by fire three years ago, forcing legislators to look for alternative venues to fulfil their constitutional obligations.
The company expects to conclude the project over 20 months, saying the contract serves as a “solid anchor” for its commercial building division.
The tender is worth about R2.3bn and involves the demolition of old structures and the enhancement of the 18,000m² facility, including upgrades to the information, communication and telecommunications systems.
Raubex operates across Southern Africa and Western Australia through its four divisions: materials handling and mining, construction materials, roads and earthworks, and infrastructure.
The company is also taking a measured approach in its stated objective to “selectively explore” growth and expansion into new markets, particularly in Western Australia.
“Entry into these territories increases the group’s risk due to the additional investment required, the risk associated with operating in new markets and within their regulatory compliance frameworks.”
While Raubex’s share price fell 0.31% to R44.65 on Friday, it is up about 6% over the past month.
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