Husband and wife team defy the odds to set up an engineering firm
DESTINYCONNECT / 11 SEPTEMBER 2018 - 15.03 / PHATHU LUVHENGO
After spending his early career years as a semi-skilled artisan, David studied and acquired diplomas in project management, auditing and contract management.
The qualifications allowed him to secure a contract management position at packaging and paper giant Mondi. He left in 2009 to pursue his dream of owning his own engineering services company.
The Durban-born professional, whose dream of becoming an architect was thwarted by the modest financial position of his parents, convinced his wife Melanie to join him in his fledgling company.
The duo set up a Level 1 B-BBEE accredited project management consultancy.
David’s technical focus complements Melanie’s ability to manage and streamline office processes.
Operating from their rented home, they soon landed a project management contract with Trotech Engineering to help manage a tank maintenance contract at the Engen refinery.
When Trotech’s contract expired in 2014, the couple faced losing the contract and essential income. However, a chance discussion with an Engen representative at the refinery ended up in David Swartz Engineering Services (DSES) winning a tender for the complete Engen refinery tank project solution contract, along with 24 other companies.
When DSES was awarded a contract by Engen, David found himself hopelessly unprepared for the challenges of owning and operating an engineering services company. “We started out with no money and a critical need to employ people and invest in equipment,” recalls David.
“The banks were not prepared to back us and our payment term with Engen was 45 days.” DSES ended its first year, 2015, with a turnover of over R2,4 million, but barely surviving financially.
“Opportunity helps, but it is hard work that wins the day,” said David.
Despite DSES’s precarious financial position, Engen began to expand its scope of work. At the same time, Melanie negotiated the payment term down to 30 days, and eventually to 15 days.
This allowed DSES to pay its suppliers promptly and earn credibility with its growing value chain. Then in 2017, Engen’s procurement department engaged DSES with a development proposal.
With financial support from Engen’s Enterprise & Supplier Development Department, DSES focused on acquiring assets to reduce the financial burden of hiring equipment and transport.
The initiative also included post-funding development whereby leading enterprise and supplier development firm Edge Growth mentored DSES.
Following this initiative, DSES started taking on an increasing number of tank maintenance, tank repair and other complementary service projects at the Engen refinery.
This also expanded to include Engen’s storage facilities in East London and within the Island View precinct in Durban. DSES’s staff complement grew from 24 in 2016 to 120 within six months.
“Tankage is a rare skill and you need a development plan for your staff,” says David. “We have our people on American Petroleum Institute tank inspection courses, as well as safety management and professional project management programmes to develop skills to support our growth.”
David pays tribute to Engen for its commitment to DSES and providing opportunities to expand the business in areas of pressure piping, geo-dome roofing and tank design.
“Thanks to Engen for trusting us when we first started out and, with their growing backing, we will in all likelihood be employing 250 people before 2020,” he said.
Engen’s Convoy Fund is Engen’s Enterprise & Supplier Development Fund to promote B-BBEE with the objective of maximising socio-economic development through supporting sustainable supply chain transformation.
The fund supports SMMEs (companies with turnover of less than R50 million) within and outside of Engen’s database. The fund also provides access to finance for both capital and business development needs for entities that are at least 51% black-owned and/or black-female-owned.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER