Corobrik bullish on sales growth

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The building industry looks set for a stronger year after difficult years post the recession in contrast to large engineering and construction groups whose forecasts are more subdued.

The likes of Aveng, WBHO and Group Five struggled to grow earnings over the second half of last year. These companies cited a lack of infrastructure spending on sizeable projects or too slow a rollout of tenders as some causes.

However, Corobrik MD, Dirk Meyer said infrastructure spending at local government level especially, and a recovery in the residential building market countrywide, were supporting the group. These factors led to a 15% increase in Corobrik's brick sales from May to December last year.

Corobrik is one of SA's largest brick manufacturers. It also develops clay pavers and associated allied building products.

"I am quite bullish. We could get overall sales growth of 5% this year and that would be a modest estimate. It isn't huge but it's a lot better than recent years," he said.

Corobrik's projects were worth up to R70m, he said. These included houses worth R500,000 and up, and schools and hospitals among other projects.

"We do not deal with the very large infrastructure that listed construction companies focus on and I appreciate that those firms may be going through a tough time in the current environment. We, however, are seeing strong demand especially from people looking to build new houses," Mr Meyer said. He said Corobrik's sales numbers had recovered after a difficult period which followed the 2010 Soccer World Cup.

Household and property sector strategist at FNB John Loos said: "Solid building activity and completions growth is expected to be the residential market highlight in 2015."

While demand is high in Gauteng and Free State, experts have noticed the Western Cape's residential market is booming.

The province has seen a large backlog of demand for housing across a wide price range, said Western Cape MEC for transport and public works Donald Grant. "The backlog built up for some years. We have been working to enable the private sector to work through it."