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Taking a risk pays off handsomely for East London businessman

Aug 6, 2019
Taking a risk pays off handsomely for East London businessman

East London - It is a risk that has paid off handsomely for Vumile Mtyobele of Avumile Business Investments, who has accumulated projects valued at R86.8 million in the last 12 years after ditching his sales job in 2007 for a career in the construction business.

It has been a long, demanding yet rewarding journey since Avumile was awarded a modest R300 000 contract in 2007 to install air-conditioning units at the Department of Social Development in Idutywa.

Last year he was awarded one of his most treasured projects - the R14 million construction of Mgwali Clinic in Stutterheim as well as the R4,1 million Thombo Primary School in Port St Johns.

In 2018, the East London-based company secured contracts worth R22 million including new building contracts in Swaziland, Lesotho, Zambia and Mozambique.

Joining the SEDA Construction Incubator at the East London IDZ in 2016, has also unlocked value for the company and growth opportunities.

“The SEDA Construction Incubator’s focus on the improvement of the systems and processes of our business has ensured that Avumile Business Investments moves into a space of productivity and sustainability.

"The incubator also pushed us to diversify our business which now includes a plant hire business. The plant hire business employs five people and the construction side has 11 permanent staff. In addition, in 2018 we had 40 to 50 project-based employees," says Avumile founder Mtyobele.

"We also benefit immensely from the incubator in that they open up access to markets which helps us secure business and as well as form their marketing support. We are excited with the inroads we have made into the African market. In Swaziland we built a clinic for the US Embassy at Emanzini and we also received a sub-contract to renovate a school as well as refurbishments on houses for tetraplegics.

"We are also putting in disability friendly bathrooms for these houses on behalf of Anglo Gold Ashanti. Anglo Gold Ashanti has contracted us to build 20 houses in South Africa and Swaziland, three in Lesotho and one in Mozambique.” 

Mtyobele, who had his first taste of the construction business at the age of 18 when his father allowed him to manage on his own a low-cost housing project in Dimbaza, says the company currently has a 6GB6CE grade on the Construction Industry Development Board (CIDB) which allows the company to tender for jobs up to R13 million.

However, the company is in the process of upgrading to Grade 7GB which will enable Avumile to tender for jobs up to R40 million.

Eastern Cape Development Corporation (ECDC) senior manager for enterprise development Mpumi Fundam says businesses incubated at the SEDA Construction Incubator generated a combined revenue of R69,9 million in the 2018/9 financial year.

“In 2018/19 FY ECDC provided financial support of R2,25 million  and in-kind support to SCI so as strengthen its support to emerging contractors who currently participate in the programme. ECDC promotes the incubation of SMME’s and has since prioritised support to contractors.

The return on investment for ECDC is when there are success stories such as Avumile Business Investments. Part of the ECDC’s mandate is to support entrepreneurs in different economic sectors by improving their productivity and competitiveness. Within the broader enterprise development ecosystem, incubators are one of the vehicles we use to reach out to small businesses.

"The incubator helps incubated businesses such as Avumile with access to markets, assistance with the structuring of tender proposals as well as with monitoring and project implementation,” says Fundam.

SEDA Construction Incubator area manager Terrence Mtola says Avumile Business Investments is one of the companies that has assisted SCI to test its mentorship model and it is convinced of its success in support of emerging contractors.

“SCI provides technical and business development support to emerging contractors registered with the Construction Industry Development Board (CIDB). The incubator also monitors the growth of these companies and it ensures their compliance with regulatory bodies, says Mtola.

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