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Tanzania Report

Marcopolis presents the Tanzania Report focused on topics such as economy, investments and doing business, featuring interviews with Tanzania's leaders. The sectors under review in this issue are agriculture, banking, construction and real estate, energy, financial services, exports, industry, tourism, logistics and many more. 

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InterviewsDecember 16, 2020

Civil and Building Construction: Dhruv Jog Presents Tanzanian Construction Company Advent

Dhruv Jog, Managing Director of Advent Construction Ltd
Dhruv Jog, Managing Director of Advent Construction Ltd
Written by Sandra Francisco
Published: December 16, 2020

Interview with Dhruv Jog, Managing Director of Advent Construction Ltd

What is your scope of business?

Advent is a 25 year old Tanzanian construction company. It is still owned by a Tanzanian family. We specialize in civil and building construction. We have a head office in Dar es Salaam, and regional offices in Zanzibar, Mtwara, Tanga, and Moshi, which cover Tanzania. We also have a national office in Nairobi in Kenya, and one in Kampala in Uganda. Our primary activities are large scale civil and building construction. This includes any of the large scale civil works such as water works, airport works, marine engineering, a lot of industrial construction, building construction and residential construction. We employ just over 1000 people and are managed by a very experienced team of professionals, a lot of whom have been with the company for a long time.

What makes Advent Construction Ltd unique from other construction companies in Tanzania? What makes you stand out?

Advent has always taken the approach of putting quality first and adherence to global standards. We still remain the only construction company in Tanzania to be ISO certified. And in fact, we are not only the first company to be ISO certified, but we have continued to be ISO certified since we first achieved the certification, and we are compliant with the latest 2018 standards of certification. Our admin has always taken the approach of putting quality and international standards of compliance first, which is something that most other companies have not done. As a result, what we have found is that we are more compliant with global best practices and global compliance standards of construction, which allows us to work closely with international construction companies and international developers when they come into the country and they want to develop their projects to a standard that they are used to experiencing in their countries of origin. This includes practices in terms of construction management, in terms of the ERPs that we implemented the company, in terms of the software that we utilize to monitor to price and to estimate our projects, etc. Those things are what set us apart. We use the British Standard, which is further complemented by our ISO regulated internally. We have also recently been nominated by the London Stock Exchange to be a Company to Inspire Africa. And that is something that we are really proud of, and that sort of recognition comes from us striving for international standards of compliance and following through with delivery.

Do you have plans to make your future buildings green or do you have any that have accomplished this already?

For one of the design and build projects that we have done for National Housing Corporation, NHC, we are currently in the process of certifying that building with a LEED certification. And we are definitely one of the pioneers in terms of going green and trying to make our projects more environmentally friendly in terms of the design and the construction as well as in terms of the of the lifespan of these projects, in terms of the energy consumption, and in terms of the carbon footprint. So, we definitely do take that into account. We were trying to educate our clients and our end users as much as possible to make it happen on a regular basis. One of our design projects is currently under the approval state.

What are some of your success stories as Advent Construction?

One thing we are very proud of is the fact that we were chosen by the London Stock Exchange. And the London Stock Exchange has a publication that they do every year, where they do an initial selection of over 2000 companies and then they shrink it down to less than 100 companies across the entire African continent. The companies are chosen on the adherence to global best practices in terms of transparency, their revenue, their management methodology, the sort of business principles that they follow. These companies are then given an award, which is known as the Company to Inspire Africa, which is a good example of an African company, which the London Stock Exchange expects will do well in the future given the current performance. Advent is the only construction company from East Africa that has been chosen for this extremely respected award and we are very proud of that fact.

Have you received any other awards?

Besides the London Stock Exchange award, we have been ranked by KPMG as one of the top 100 companies for the last six years consistently. And then in 2019, or 2018, we graduated to the Club 120 which is basically 120 of the largest companies in the country. We graduated into that category for which we also got an award from KPMG. Besides this, we obviously have a lot of local recognition for our CSR activities and the support that we provide to the government. I also personally sit on the board of the Tanzania Private Sector Foundation representing the construction industry for the entire nation. So, in a personal capacity, I invest a lot of my time and energy into making the construction sector better in the country, not only for Advent, but for all construction companies.

What are some of your specific CSR activities that you are involved in?

Advent Construction Ltd's primary activities are large scale civil and building construction. This includes any of the large scale civil works such as water works, airport works, marine engineering, a lot of industrial construction, building construction and residential construction.

We do a lot of CSR work across healthcare and education. Even pre COVID, and pre all of this, we have always been supportive of education initiatives by the government and by non-government institutions as well. We have supported orphanages. We have supported Wimberley Medical Facility where they treat cancer patients, especially the Children's Cancer Ward. We have always had a lot of CSR programs. But in particular, after COVID, we joined forces with the Prime Minister's office to support them with their logistical needs. Being a construction company, we have access to a lot of resources and logistics in particular. So, we custom built some medical facilities like small clinics, containerized solutions for them. We put our fleet of trucks and semi-trailers at their disposal for about three months. We worked very closely with the National Crisis Response Committee during the time of COVID and that is something that we are very proud of. As a company, something that we have done that we believe is actually even more important than just outward facing CSR is that we diverted a part of our CSR budget to our staff, because we employ over 1000 people. We wanted to make sure that during 2020, when our staff were having the hardest time, we did not let go of anybody, we did not reduce anybody's compensation packages, we did not affect their lives in any way whatsoever. And by doing that, what we successfully managed to do is that at a time when most companies were laying off people and reducing their salaries by 50%, 30%, or delaying salaries, Advent managed to hold on to 100% of our workforce. We also managed to maintain 100% of the compensation package that our staff were getting. We also went over and above by making sure that any of our staff who needed any additional assistance at that time, if the family members got infected with COVID, and so on, we went out of our way and we set up a small committee within the company to take care of our staff. And as a result, now that the impact of COVID is over, we find that we are in a position where our staff are all there, we never let anybody go, which means that we can pick up projects and complete them and take them on much faster than any of the other companies can do. And we have also built a very, very strong sense of loyalty within Advent, because the company looked after our people during the worst time.

What is the vision of the company in the medium term, three years’ time? What would you like to have achieved?

What we would like to achieve is a wider geographical footprint with more projects being active in Uganda and in Kenya. That is our midterm goal. By 2025, we want to be fully active with multiple projects in all three countries. Besides that, we also have a few other projects that we are working on, which go upwards and downwards in the supply chain when it comes to construction. And we are working on that across the region. We already have quite an extensive real estate portfolio. So, we are looking at going further up the supply chain in terms of that. Also, in terms of the raw materials supply and manufacturing side of things, we are looking at doing a few more projects there as well.

The last time we spoke together four years ago, you said that most importantly, you wanted to be the preferred supplier for all the international companies and to build and develop the infrastructure. Are you still working on this goal?

Over 75% of the international construction industry players who have come into Tanzania have ended up working with us in one way or another. Anybody who has worked with a Tanzanian contractor will tell you that Advent is the preferred local company to work with. We are currently busy and working with Larsen & Toubro on water distribution projects. This is a very large company out of India. We are also engaged as a subcontractor on the Rufiji hydropower project, working with the Egyptians, Arab contractors Elsewedy. So, definitely we have managed to achieve that as an objective. But of course, this is a work in progress and it must continue. Having achieved that position, we have to keep working hard to retain that position. A good example of this is, at first, we were employed only as a subcontractor, for Arab contractors Elsewedy on the project that they already had in Tanzania, which is the Rufiji hydropower. But just over two months ago, we were also appointed as the contractor for Elsewedy’s own production facility that they are constructing in Tanzania. And that is a great example of when you start a relationship with an international company such as Elsewedy and Arab contractors, that they enjoy working with you to an extent where they say even when they want to build their own facilities in Tanzania, they chose Advent to build it for them. So that is something we are very proud of, and it is a testament to the fact that we are the preferred partners for international companies when they come into Tanzania.

Can you tell us the story behind your family business and your personal story? Why did you get into this field and why you have decided to stay in this family business? What is your motivation?

The business was not founded by me. It is a 25 year old business. It was founded by my father and he still sits on our Board as my Board Chairman. I took over as Managing Director in 2006. So, it has been about 14 years now. In this part of the world, at least, we grow up working within the family business. My earliest memories of school, for example, is my school used to be in the afternoon, but in the morning, I used to leave home with my father to go to the construction site. And then from there, I used to go to school. And during school holidays, I would be based on our site office, or in the yard, etc. That is where we learn from. So, by the time you are 20 or 21 you are very much business focused and you know the business in and out. And today, I do agree that 21 is quite young to take over a business. But it is admirable. In East African countries, you will find this to be very common in the business families that continue. That is one of the reasons why those families are able to maintain continuity over multiple generations. As the family grows, the business grows and that is how they manage. And the growth potential that Tanzania holds and East Africa holds as a whole for a homegrown construction company is phenomenal. That is definitely a key driver in terms of keeping me here. Also, construction as an industry is one that can grow into multiple different opportunities. Now, for example, from construction, we started doing real estate development, we started doing banking, we started doing a little bit of insurance, we started doing some FMB. It is the sort of industry that gives you access to a lot more. And as a result, in my personal capacity as Managing Director, it makes sense for me to continue to run not only Advent, but the other big companies that come. We have also taken an approach where although the ownership remains within the family, the operations of the company and the day to day execution of tasks is done by a team of professionals. This means that there is a gap between the ownership of the company and the executive function of the company that allows us to call upon talent, and the best talent that is available not only in Tanzania, but across the world, and allows us to expand. We have not brought onboard any private equity or any external sources of capital. It still remains 100% within the family. But we are still able to maintain this sort of growth and expansion because of the professionals that run the businesses for us.

What are your priorities are the moment, the ones that you have to finish before the end of the year, and maybe the beginning of 2021?

We have two projects that are at the tail end of completion. Both of them have to be finished by the 31st of January. These are projects that are both of specific importance to the government. Because these are both government projects, there are political pressures on them. We are very proud of the work that we have managed to achieve on both these projects in the short period of time that we have been on them. We are also very proud of the fact that, despite all the global turbulence that has occurred because of COVID, and the result on our suppliers who sit in Europe and in Asia and so on, even still, we have managed to deliver these projects with a very minimal impact to the performance of the project, which is something that was very difficult for us to achieve. It took a lot of pre-planning and a lot of resource allocation to make it happen. But we are very proud of the fact that we have managed to shield our clients from the worst impact of COVID on the completion of their projects.

What are the names of these two projects? Can you share more details?

One is the High Court for Zanzibar. This the replacement building for the High Court that was built by the colonials over 120 years ago. This is the first time there is a new High Court being built in Zanzibar and Advent was chosen to build it. It is a very important building for the government of Zanzibar. Obviously, because of that, it is also very time conscious in terms of the completion. The other building is for the Zanzibar Revenue Board. It is the regional head office for the Zanzibar Revenue Board in Pemba. Both of these projects are on a fast track for completion. And as you can imagine, COVID really interfered with the supply of the finishing materials for these projects. So, the tiles, the lights, the ceilings, all of those things that we input were really affected because of the factories shutting down and the shipping line not being able to deliver on time. But we are very proud of the fact that both these projects we have managed to deliver without any substantial delays on the completion date.

Do you have a specific message you want to share?

One thing that is definitely important for us to highlight is that there are several large projects that are coming into Tanzania and the region overall. And it is absolutely critical that we pay attention to local capacity development in each one of these projects to make sure that there is some sustainable growth that is achieved for Africa and for Tanzania, in particular, and for the local companies as a result. Local content is something that really needs to be focused on because there are companies like Advent, of course, but there are other companies in other sectors who can really grow into becoming international players. But without the right support from our government and from the client, it is difficult for us to achieve that. So, this is the time. Africa definitely has dealt with the 2020 pandemic better than most parts of the world. A lot of capital is flowing in the direction of Africa. And within Africa, East Africa is the preferred destination for capital to flow. As that happens, it is imperative for us to make sure that capital is utilized towards developing local capacity as much as possible. Because without that, sustainability is difficult. This is definitely something that needs to be done with much more effort than it has ever been done before.

Are there any current projects you are working on?

There is the East African Crude Oil Pipeline developed by Total. Total being a European giant multinational, it's a company that we are very optimistic will take local content much more seriously than some of the other projects have. We are really hopeful that Total will make it a point to use Tanzanian companies where possible and make sure that maximum learning and maximum capacity development actually happens in Tanzania, without compromising any of their objectives in terms of project development. We want to make sure that the pipeline is completed to the right quality within the right time, but with maximum Tanzanian and East African involvement in the project.

 

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