Financial respect for staff and suppliers crucial to rebuilding the economy, says Databuild

With the struggle against Covid-19 far from over, South Africa faces a long and tough road ahead as it strives to mitigate the devastating economic impact of the global pandemic.

The construction industry, which was already in a negative growth phase prior to the outbreak of the virus, has been particularly hard hit and many companies are struggling to stay afloat.

Despite these challenging times, Databuild CEO Morag Evans says it is encouraging to note that many organisations have heeded President Cyril Ramaphosa’s appeal to continue paying their staff and suppliers during lockdown, to the extent that they can.

“It’s the best way to ensure the survival of our industry, especially small and micro enterprises, which are the lifeblood of our economy.”

Providing payment relief can also go a long way towards helping businesses stay operational during the crisis, but Evans says this should not be done at the expense of delivering quality products and services.

“Additionally, many businesses may be tempted to offer giveaways during lockdown in the hopes that acquiring new customers will see them through their current financial crunch, but this only serves to undermine long-standing loyal clients and does not lead to long-term business success.

“Businesses should instead focus on rethinking their sales strategies and restructuring their products and services so that they can continue to add value to the supply chain.

Evans cites various ways companies can honour existing agreements with clients, contractors and suppliers. “Continue to pay for monthly services received and where necessary, agree to adjust the scope of work so that at least partial payments can be made if that is all your organisation can afford.

“Another option is to reschedule work, delay delivery or consider alternative methods for the work to be completed. Whatever is decided, as far as it depends on you, don’t delay payments to suppliers and only use your Force Majeure right as a last resort. Rather engage in consultation and try to work out a win-win solution for all parties involved.

 
Reflect on rebuilding

Managers’ time would be well spent reflecting on how their company can contribute to rebuilding the construction industry post lockdown so that it’s better off going forward, Evans continues.

“Covid-19 has afforded us the opportunity to press the reset button, as it were, which we can use to plan and implement change we may never have been able to put into effect prior to the outbreak of the virus.

“Furthermore, local manufacturers should not hesitate to reclaim the supply chain of locally manufactured materials and products from their international counterparts. Our cement-producing plants, for example, are more than capable of keeping up with local demand and now is an opportune time for them to capitalise on transport restrictions imposed by the lockdown and regain their competitive edge over inferior, cheap Asian imports.

“Not only will this go a long way towards helping vulnerable businesses stay operational and survive the current crisis, but it will also provide much-need stimulus to our ailing economy.

“The Coronavirus pandemic will pass eventually, but there can be no doubt that it has irrevocably changed the way we work and do business,” Evans concludes. “Time will tell how we weather the aftermath, but the sooner we start to plan for the new future that awaits us, the more strongly we will be positioned to press forward with confidence.”