Murray & Roberts backed for Middle East bid
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Trade and Industry Correspondent
MURRAY & Roberts has been named a preferred bidder to build a project in the Middle East that could boost the group's ailing order book by as much as 30% in one fell swoop.
"We've been recommended for a pretty major project," said Murray & Roberts CE Brian Bruce presenting first-half results to analysts yesterday. "It will have a material, if not substantial, effect on the order book."
The project would also change the mix between local and international work substantially.
Murray & Roberts has had substantial success in the Middle East after it built the internationally recognised sail-shaped Burj Al Arab hotel in Dubai about five years ago.
Bruce said his company was experiencing problems such as delays in payment at some of its current Middle East contracts at the moment. He said the region was challenging, but offered many opportunities.
A new management team had been installed to handle group activities in the Middle East.
Meanwhile, China has become an important focus in Murray & Roberts' growth strategy.
Citing a series of statistics illustrating China's growth, Bruce said SA could not ignore that country as a major driver of the global economy over the next 10- 15 years. "By 2025, China will be the world's second-largest economy. About 50% of all construction cranes in the world are in China at the moment."
He suggested that South African companies did not need to become active directly in China. "We can do it through the rest of the world," said Bruce. Murray & Roberts was active in Australia.
The value of the group's order book had dropped R800m to R4bn over the six months to December. About R300m worth of contracts were cancelled during this period in the mining sector, where capital projects had slowed down.
The group's share price fell 50c or 3,45% to R14 on the JSE Securities Exchange SA yesterday after it reported a 20% drop in revenue and 28% drop in operating profit.
Feb 27 2004 07:37:37:000AM Carli Lourens Business Day 1st Edition
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