Damon@Sons Construction Proprietary Limited, a 100% black-owned construction company based in the Western Cape, has grown substantially since its establishment two years ago, thanks in part to the support of specialist industrial property developer and landlord, Equites Property Fund Limited.
As part of its enterprise development programme, Equites has provided administrative and capacity-building support to the family-run construction company, which is now able to accept and deliver on multi-million rand projects.
The relationship between the two companies predates their establishment. Andrea Taverna-Turisan, now Equites’ CEO, previously owned a private development company with its own small construction team. Munier Damon was the foreman of that construction team, and the two men formed a close relationship. When Equites listed its board decided, as part of Equites’ enterprise development programme, to assist Mr Damon to set up his own construction company.
Damon@Sons now comprises 17 permanent staff – one of whom is Mr Damon’s son – and hires as many as 50 temporary workers when necessary. Mr Damon describes the excitement he feels to be running a growing company: “When the Equites board decided to give me the opportunity to start Damon@Sons I grabbed it with both hands and it has been fantastic. We are small, but we have built places that much bigger guys could not have managed. I enjoy what I do and I have an absolute passion for it and it is very exciting. I thank God every day for this opportunity.”
The support provided by Equites to Damon@Sons is intended to enhance the latter’s administrative and logistical capabilities, as Bram Goossens, Equites’ Chief Financial Officer, explains. “Mr Damon is an experienced developer and builder, but he was experiencing many of the challenges that other small businesses in the industry do. SARS was unwilling to register the company for VAT, thereby raising its input costs and pricing. Contractors were unwilling to extend credit, which meant that cash-flow was a struggle. In addition, Mr Damon lacked some administrative skills, which was hampering the expansion of his business. We were able to lend a hand and allow Mr Damon and his team to focus on what they do best, and to gradually build up the capacity to go it alone.”
Damon@Sons has employed a financial administrator whom Equites are training in the specifics of Mr Damon’s business. Equites also intends to assist with training more of his staff over the next year or two.
Mr Goossens continues: “Of course the benefits accrue in both directions. Equites currently has access to a construction team that provides an efficient and cost effective alternative to other contractors, which is very useful to us as a business. But the initial reason we started this process is the belief Mr Taverna-Turisan had in Mr Damon’s abilities and potential. And it’s been very gratifying to see that potential begin to be realised. Mr Damon has built up an inventory, he has built up a team and he has completed some fantastic buildings, so it is not a pipe dream. It is very real and he is doing incredibly well. The idea is that in a year or two they’ll be completely autonomous and competitive, and at that stage they will contract with us on an arm’s-length basis.”
In addition to administrative support, Equites has granted a number of construction contracts to Damon@Sons. Though Damon@sons is given preferential support in view of their enterprise development status, they bid for each job. This not only ensures that they remain competitive in the short term, but equips them with the skills needed to tender for work on the wider market.
Initially the projects involved small maintenance contracts, or the construction of small improvements to existing properties. As Damon@Sons proved their effectiveness and ability to handle larger projects, Equites’ gave them an R8-million contract to extend an airport warehouse, and then their largest project to date: a R50-million distribution warehouse in Epping, Cape Town.
The Epping property is a modern 8,000m2 cross-docking distribution facility. It was built to institutional specifications, including 13m to underside of eaves, FM2 floor, 16 doors with dock levellers and 2 on-grade ramps. Damon@Sons completed the construction of the units on time and under budget, and the team is justifiably proud of their work on the project. “It looks fantastic!” Mr Damon enthuses. Due to high quality product, Equites was able let the property immediately on completion to a good tenant.
Damon@Sons and Equites start work shortly on two more large projects – a R60 million building in Atlantic Hills, and an extension to a warehouse in Bellville South. And beyond that, according to Mr Goossens, the future looks bright: “There is definitely a market out there for Damon@Sons. Because Damon@Sons is 100% black owned, they are a very cost-effective operation, and they have a track record of constructing buildings at the scale they have been, they should do very well in competitive tenders.”
Mr Damon agrees: “I am hoping that in the next year or two, my wings will spread wide and I will be able to take on any work anywhere and not just from Equites. We are getting our paperwork ready to start tendering for government projects. In the future I would like to have one of the best construction companies around – not necessarily the biggest, but definitely the best. I want to be in a position where clients would rather wait until I am available than go with another construction company.”
Mr Damon isn’t taking his success thus far for granted, and is committed to laying the foundations for future growth: “With the basics in place we’re free to make plans to expand. I’ve started to buy big machinery. I’ve employed a quantity surveyor and a health and safety specialist. With each project, we try and improve on the previous one and make sure that it gets more profitable for us as well. I am also trying to improve my people – I have put some of our labourers through training and now they have certificates. One of my guys is busy with his third year of electrical studies, and another has become a digger driver.”
In light of Damon@Sons’ success, Equites’ social and ethics committee is considering opportunities to replicate the model, this time in the field of property management, which is another area in which Equites has experience and expertise to share. They are also setting up a foundation that will drive a number of education and enterprise development projects.
“The sobering aspect of this process,” Mr Goossens continues, “has been the realisation that Mr Damon’s success might not have been possible without the support he’s received. There are tremendous barriers to entry for small businesses in this industry in terms of our economy and regulatory landscape.”
Mr Damon agrees: “Without Equites it would have been impossible to be where I am now. They have made all of this possible for me and I am very grateful. There are a lot of guys out there who are trying things, but without a proper backbone and some help, you can never achieve what I managed to do with the help of Equites. They haven’t just changed my work environment, they have changed my entire life, and the lives of all the guys working for me as well. Without them, none of this would have been possible. I know the ball is now in my court to make my business a success. I know that every day is a new day and a new opportunity.”