Welcome to the exciting world of NPC Limited, a company with a vision to redefine the construction industry. Today, we dive deep into the journey of this remarkable company and its forthcoming Initial Public Offering (IPO). But, this isn’t just about business; it’s a story of leadership and transformation, led by Marissa van Zuydam Kunene, the Managing Director of NPC Limited.
The Visionaries Behind NPC Limited
NPC Limited was founded in 2007 with a mission to set new industry standards, not just for consistency in products but also for public safety. At the heart of NPC’s operations, there is a commitment to providing safe and top-quality products.
The company operates under the certifications of SWASA and is registered with CIC, and BMSA. These affiliations assure customers that when NPC claims a certain standard of product, they are held accountable for delivering on that promise.
Diversification and Growth
Since its inception, NPC Limited has diversified into six divisions, each contributing to its success:
- Nkonyeni Pre-cast: The manufacturing division, founded in 2007, produces blocks, bricks, pavers, and retaining blocks.
- Hardware Solutions: In 2017, NPC expanded into the hardware business, offering general hardware and building materials.
- Swazi Tiles: A concrete roof tile manufacturing company joined the group, bringing innovation and SWASA certification.
- Construction Solutions: The construction division, added in 2017, focuses on building houses, renovating existing structures, and constructing retail shopping centers.
- Printing Solutions: In 2018, NPC ventured into the world of printing, branding, and marketing, supplying various companies with marketing and promotional materials and services.
- Chemical Solutions: Amidst the challenges posed by the COVID-19 pandemic in 2020, NPC started Chemical Solutions, supplying water treatment chemicals, equipment, and services.
Leadership and Expertise
NPC Limited’s Board of Directors, comprising five members, of which four are non-executive independent directors, were strategically appointed in 2019 as part of a turnaround strategy. This board boasts over 110 years of combined experience in construction, mining, and the built environment. The executive team, also appointed in 2019, has over 100 years of experience in their respective sectors.
Meet some of the key members of the executive team:
- Philile Mawelela: Head of Shared Services
- Musa Kunene: Technical Manager, Chemical Solutions
- Cleo Sithole: Hardware Solutions Manager
- Nondumiso Mdluli: Finance Manager, NPC Group
- Jacobus Pienaar: Operations Manager
- Gladys Dlamini: Alternate Director, Sales and Logistics
- Hannah Pinar: Group Systems Administrator
Transforming Through a Turnaround Strategy
In 2019, NPC Limited embarked on a transformative journey through a turnaround strategy. The three years of financial data highlight remarkable changes within the group. Assets and retained profits increased, while liabilities decreased.
NPC’s historical growth is a testament to its commitment. The company grew from E4.2 million in 2007 to E55.5 million in 2022, resulting in an average compounded growth rate of 27%.
Uncovering Opportunities and Industry Analysis
NPC Limited operates in the construction industry and is regulated by the CIC. As of June 2023, 670 million emalangeni worth of projects were registered, indicating a thriving construction industry. Interestingly, the CIC contracted a company to develop industry regulations, demonstrating the potential for even more projects.
Facing the Competition
NPC Limited’s competition can be categorized into three sectors: Brickon, Yang Group, and smaller roadside block yards compete in manufacturing, while Cash Build, Build It, and independent local hardware stores are rivals in the hardware sector. For Chemical Solutions, competition includes Buckman, Improchem, Hydrospec, and Biogas from South Africa.
Diversified Market Approach
To mitigate risks, NPC Limited diversified its product offerings across multiple markets and clients. They initially catered to the construction industry but expanded into various markets, differentiating themselves through quality, innovative solutions, and customer-centric focus. As a result, NPC Limited now supplies more than one product to multiple markets and clients.
Sales Distribution Breakdown:
- Individual clients: Major revenue contributor
- Corporate clients: 32% of sales
- Retail industry: 18% of sales
- Construction: 12% of sales
- Chemical Solutions: 60% of sales from sugar, food, and beverage, 40% from forestry, pulp, and paper
Growth Strategy and Potential
NPC Limited’s strategy for growth involves listing equity and debt bonds on the Eswatini Stock Exchange to raise capital ranging from E150 million to E250 million. These funds will be reinvested to increase revenue from E55.5 million in 2022 to E144 million by the end of year five, representing an average compounded growth of 21.23%. This growth will lead to a 25-30% increase in employment and create 1600 informal employment opportunities.
Expansive Footprint
NPC Limited is based in Nkonyeni in Sidvokodvo and supplies 32 retail stores and six resellers. The company has strategically positioned itself for growth in an area with approved projects, including the Sidvokodvo Industrial Park, Railway projects, Eswatini Railway Houses and government-approved initiatives like Police Stations, Police accommodation and Clinics.
Utilization of IPO Proceeds
The use of proceeds from the IPO will involve significant investments in various aspects of NPC Limited’s operations:
- Nkonyeni Precast: E9.7 million for increased stock, shelter over the yard, and electric forklifts.
- Hardware Solutions: E9.7 million for increased stock, roof over the yard, and a truck and forklift.
- Transactional Fees: Settling short and medium-term debt to reduce interest costs.
- Working Capital: Ensuring a smooth transition and ongoing operations.
- Employee Retention: To retain valuable talent and ensure business continuity.
- Consignment Stock: Implementation of a consignment stock model to increase annual revenue by E1.2 million.
Solar Energy and Environmental Impact
NPC Limited is committed to environmental responsibility and plans to implement solar energy solutions to reduce costs. The introduction of a blending plant at Chemical Solutions will further enhance efficiency and reduce environmental impact.
A Bright Future Ahead
NPC Limited is poised for growth, and the company’s IPO represents a milestone in its journey. By executing its growth strategy and harnessing its diversified product offerings, NPC Limited is positioned for a remarkable future. With a focus on sustainability and social impact, NPC stands at the forefront of positive change in the construction industry.
As Marissa van Zuydam Kunene puts it, “We’re not just building structures; we’re building a better future for Emaswati.”
