The South Africa-based division of Hatch, the global consulting engineers and project management and implementation group, Hatch Goba (previously Hatch Africa), is targetting opportunities in the mining sector in the rest of Africa and beyond. “We’ve moved a lot of our business out of South Africa [into the rest of Africa], where a lot of midtier [mining] companies are active,” reports Hatch Goba MD Rory Kirk. “This situation has resulted in the rightsizing of our metals sector by about 20%.” (Hatch Goba refers to its mining-sector work as its metals business.)
The company now has a permanent presence in Madagascar and is active in Botswana, the Democratic Republic of Congo (DRC), Kenya, Mauretania, Mozambique, Namibia, Zambia and Zimbabwe. “We’ve now started a project with Exxaro in West Africa,” he adds.
Most projects are operated out of South Africa, with no permanent staff in most of the other African countries the company is active in. However, it is establishing a legal presence in a number of African countries.
Hatch Goba, which was formed by the merger of Hatch Africa with local company Goba, operates in the mining (‘metals’), infrastructure and, more recently, energy sectors. In the future, the company hopes that 50% of its income will come from mining, 33% from infrastructure and 17% from energy and other activities.
“As resources are discovered and are starting to be exploited [across Africa], you find there’s no infrastructure,” points out Kirk. “Now only about one-third of the investment [is in] the mine and plant, and two-thirds in railways, roads and ports. “In this area, we believe we hold an advantage because we have knowledge of the metals sector and now also of infrastructure.
“Zimbabwe is interesting,” he affirms. “There is some metals work, but it’s mainly energy. “There’s a lot of energy work there – upgrading the power system. Over the past three years, we’ve found we can work there and we get paid. “The Zambian Copperbelt, going into the DRC, is also attracting a lot of investment.”
The Hatch group has a decentralised structure and has divided the world into regions, based mainly on common or adjacent time zones. Thus Hatch Goba covers Africa, Europe, Russia and the Middle East. “We think there’s tremendous potential in Russia,” he highlights. “Our office in Russia could double – there are 80 people there now. “The Middle East has lots of potential projects: they want to reduce their dependence on oil.”
In sharp contrast, in South Africa, at “the moment the metals market is really moribund”. “It’s a tough market out there. Our mining clients are finding it very difficult, are trying to consolidate and use their existing assets very well. There’s not a lot of investment going on.”
Hatch Africa and Goba merged (the deal became effective on April 2) because the two entities both saw themselves as complementary businesses with compatible ethos and structures. Hatch was strong and well known in the mining sector, and had started working in infrastructure, while Goba was strong and well known in the public infrastructure sector.
“We decided to merge with Goba to strengthen and consolidate the infrastructure side [of our business],” explains Kirk.
“We have worked well together. It’s a merger, not an acquisition, because Goba is a huge brand in South Africa. “For Goba’s clients, the merger gives them access to critical mass. For Goba itself, it gives access to global markets and global expertise.
“But there’s more to it than that,” he elucidates. “In today’s environment, for service companies, whether accounting or legal or professional engineers like us, size will be important. “You’ll be big or niche. Midtier consulting firms are finding it difficult to maintain their viability.”
The merger took the form of a share swap. Goba shareholders now hold shares in the global Hatch holding company. Hatch originated in Canada and then expanded to South Africa some 17 years ago, and then to Australia, and later to Chile, Brazil, Russia and China.