- Colossal Concrete expands into Eswatini through distribution agreement and potential manufacturing facility investment with NPC
17 April 2024
Colossal Concrete Products (‘Colossal’), with a 65 year track record as South Africa’s largest manufacturer of railway sleepers, is extending its footprint into Eswatini through a distribution agreement with local concrete construction products leader Nkonyeni Precast Limited (NPC).
The company is also signing a memorandum of understanding (MOU) with NPC, which will kick start a feasibility study into the two parties’ potential joint investment in a railway sleeper and concrete pole manufacturing facility in Eswatini.
While Colossal’s products have been available in that country previously, the formal distribution agreement marks the beginning of a phased move into Eswatini by Colossal. This will potentially be Colossal’s first permanent manufacturing operation outside South Africa. The proposed new facility is expected to create 20 to 30 jobs at the outset – and then scale up to a larger facility employing at least 150 people.
According to Executive Director Chris ‘CK’ Klagsbrun, following the legal conclusion of the distribution agreement, Colossal’s concrete poles, masts and railway sleepers will immediately be available in Eswatini from NPC. The proposed new plant will encompass world-class manufacturing technology used at Colossal’s Brakpan and De Aar facilities in South Africa, which produce the widest range of railway sleepers in Africa. The facility will furthermore allow both companies to benefit from the substantial trade incentives and export opportunities available to both foreign investors and local manufacturers in Eswatini.
“For Colossal, NPC is a perfect fit: we share the same organisational values and culture, and the same stringent approach to customer service, excellence and quality, safe manufacturing,” asserts Klagsbrun.
Marissa van Zuydam Kunene, Managing Director of NPC, adds that joining forces with Colossal is a natural progression from NPC’s listing on the Eswatini Stock Exchange in 2023.
“Our recent listing in November 2023 paved the way for further innovation and expansion, and for NPC to access capital for new projects, acquisitions and technological advancements, in line with our culture of continuous improvement.
Collaborating with a very well-established, credible and respected market leader such as Colossal Concrete Products is another important step in this growth journey,” van Zuydam Kunene points out.
NPC Board Chairman, Frans Pienaar, says the distribution agreement has come at a time when the Eswatini market in general – and for concrete products in particular – is ripe for growth: “The Eswatini government is very forward-thinking and committed to growing our national economy, positioning the country as a dynamic hub and springboard for foreign investments and exports into the rest of Africa and beyond.
As such, the Kingdom is positioning itself as a preferred and attractive destination for foreign direct investment – and is in the process of updating logistics and related infrastructure to facilitate this.”
A concrete start
The initial objective for Colossal and NPC is on growing the Eswatini market for concrete poles and masts. Accordingly, NPC intends to engage in a substantial product education campaign in the local target market – which has, until now, largely relied on treated timber poles for electrification, streetlights and telecommunications services.
“Switching over to concrete for these (and many other) applications will facilitate the roll-out of much local infrastructure: mobile telecommunications and fibre services, municipal upgrades of electrical reticulation and transmission infrastructure, and the replacement of poles which are vulnerable to fire damage in our extensive timber plantations,” Pienaar enthuses.
He adds that concrete poles represent a much better long-term investment, as they are more durable and robust – outlasting wooden poles by far. They also are not attractive targets for theft, as are those made from steel – and are also less prone to vandalism.
Future-focused
Van Zuydam Kunene believes that the local manufacturing of concrete poles, masts and railway sleepers is the logical next step.
“NPC is the largest concrete block and brick manufacturer locally in Eswatini, with a manufacturing capacity of approximately 90 to 100 000 pavers and 20 000 blocks per day. We are also the only concrete roof tile manufacturer in the country, and have been since 2007,” she advises.
A key contributor to the future viability of manufacturing concrete products such as poles and railway sleepers locally is NPC’s access to raw input materials. In addition to operating its own sand mine, NPC is finalising the acquisition of another strategic raw material source. This will secure the supply chain, as the bulk of aggregates required will be available in-house, and within close proximity to the site of NPC’s manufacturing facility.
Another plus is NPC’s access to transport infrastructure. The proposed new facility that will be the subject of the feasibility study, will be located at (or close to) NPC’s existing operations at Sidvokodvo, in close proximity to a railway line.
Cost-effective investment
According to Klagsbrun, all these factors combine to make the capital outlay required to establish a rail sleeper manufacturing facility substantially more cost-effective: “Ease of access to the requisite raw materials and transport channels means that the proposed facility will be extremely cost-competitive, and represent excellent value to NPC’s shareholders. This further supports our rationale for collaborating, leveraging existing elements to make it beneficial and very viable,” he says.
Colossal will contribute to this viability with its impressive concrete manufacturing experience, techniques and technology: “We can use the same pre-stressed long-line system we use to manufacture our concrete products in South Africa. We can start by producing poles and then use the same system for sleepers, beginning with smaller volumes during phase 1 – and then growing with the roll-out of local and pan-regional infrastructure projects,” he explains.
Klagsbrun also notes that Colossal has worked with Eswatini Rail for over two decades, and looks forward to supporting their potential rail upgrades in the future: “Our view is that there are already existing rail networks and lines which need to be upgraded, even before new ground is broken for the link to the border.”
The companies’ common vision extends beyond local rail infrastructure to exports, so concrete products produced in Eswatini can be exported via Maputo to the rest of Africa, the Middle East and South Africa.
“We are very enthusiastic about our collaboration with NPC. This is a strategic move for both parties, in anticipation of the growing domestic and export market in Eswatini. Our collaboration positions us for this imminent and exciting growth,” Klagsbrun concludes.