01 November 2019

Global engineering group Aurecon has announced that
it will demerge with the African business in early 2020.

The African shareholders of Aurecon initiated the
separation, with 98% of all shareholders having approved the demerger earlier
this year.

Aurecon Africa was established in 2009, when two
leading South African consulting engineering companies – Africon and Ninham
Shand – merged with one of Australiasia’s largest infrastructure advisory
companies Connell Wagner

Aurecon Africa MD Dr Gustav Rohde said this week that the African business
had not decided on a name yet and that a rebranding process was under way.

“While being part of a global engineering and
advisory firm had helped the company position for the future and maintain
success over the past decade, the landscape has now changed, requiring a more
agile and localised approach to business.

“In recent years, conditions in Africa have
changed. It became increasingly difficult to respond with Africa-centric
solutions within a company that is primarily operating in a developed-world
business environment,” explained Rohde.

The separation would position each business to
better focus on performance and growth, reduce the complexity of business
operations and provide greater financial security for both businesses.

Rohde said the standalone entity will maintain its
staff complement of about 2000, as well as its offices in every province in
South Africa, and several offices across sub-Saharan Africa.

Both businesses benefitted from the skills transfer
and exposure to international projects over the past ten years, said Rohde,
adding that the partnership between Aurecon and the African business will

“The dedicated Global Design Centres in Africa will
continue to export African design services. This will allow us to retain
critical skills in the African consulting industry despite the tough market
conditions we currently face,” noted Rohde.

The new company will continue to be management-owned,
with between 10% and 15% of staff participating in ownership.

The benefits of the demerger include more
fit-for-purpose systems and top leadership being more accessible to projects
and clients.

However, disadvantages include less exposure to
large international projects and less knowledge-sharing “Because we are
departing from Aurecon in an amicable manner and as friends, we will still
collaborate with them on projects and involve their expertise that is not
available on the African continent”, Rohde added.

Rohde further mentioned that the standalone African
company acknowledged the increasing focus of the full infrastructure lifecycle
in Africa; therefore, asset management would be a focus area for the company
going forward.

“We also see a space where renewables on the
continent will remain critical, as will water, in light of increasing pressure
due to climate change..”

Rohde believes partnerships across the continent will be key to achieving this goal.

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