Managing
Our Material
Issues
Strategic maturity
Maintain reputation as an ethical and responsible multinational organisation
Respond effectively to local requirements
BUSINESS MODEL RESILIENCE
CONTEXT:
Variable cyclical
dynamics will
continue to
characterise core
and complementary
market sectors.
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Underground
Mining is
expected to
maintain profits at
current high levels
in the medium
term.
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Foundations are in place
for Oil & Gas profit
recovery from a low base:
in metals & minerals and
infrastructure markets in
the short term; and gas
& petrochemical markets
in the medium term.
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The sustainability of the
Power & Water business
model is dependent on
opportunities emerging
in target segments of
core and complementary
markets.
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The Group’s
financial position
is robust and
sufficient to fund
our organic and
acquisitive growth
plans.
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MATERIAL ISSUE
LEVERAGE MARKET POSITIONS TO DRIVE SHORT-TERM GROWTH
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GROUP
- Maximise growth potential in buoyant markets in Underground Mining.
- Harness competitive advantages in Oil & Gas to secure
work in metals & minerals and infrastructure.
- Secure projects in target market segments in
Power & Water.
- Integrate and grow new acquisitions by utilising Group
relationships and scale.
- Anticipate and respond to market shifts to tactically
position businesses for growth.
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OIL & GAS
- Increase presence in Australian infrastructure and
Australasian mining market sectors.
- Enhance skills and contracting expertise and leverage
reputation for complex project delivery in metals &
minerals and infrastructure markets.
- Maximise new EPC capability in the USA to secure
opportunities in this high-growth market:
- Complete the integration of Clough USA.
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UNDERGROUND MINING
- Improve project delivery efficiency and innovate to optimise
margins and grow market share.
- Cementation Canada & USA:
- Integrate TNT and develop new material handling
service offering.
- Murray & Roberts Cementation:
- Integrate Boipelo JV and develop new contract mining
service offering in the coal sector.
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POWER & WATER
- Accelerate revenue replacement by targeting
complementary market segments.
- Optimise OptiPower’s track record to win work from Eskom
in transmission, distribution and substation sectors.
- Secure opportunities in power plant repair and maintenance.
- Secure opportunities in renewable energy, including solar
and gas-to-power.
- Secure opportunities in resources and industrial, and paper
and pulp industries.
- Grow Aquamarine market share in chemicals and
components market.
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MATERIAL ISSUE
DIVERSIFY EARNINGS POTENTIAL THROUGH ORGANIC
AND ACQUISITIVE MEANS
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GROUP
- Pursue targeted geographic diversification and growth
opportunities.
- Optimise margins and balance of risk by exposure to
project life cycle phases, in particular operations and
maintenance.
- Enhance competitiveness through selective crossplatform
collaboration.
- Maintain strategic flexibility by leveraging positions in
complementary markets to ensure long-term
resilience.
- Drive organic growth through local partnerships.
- Access new sources of annuity-type income through
investment as project developer and operator.
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OIL & GAS
- Expand Clough USA’s service offering and market
presence by leveraging synergies across the
platform’s geographic footprint.
- Capitalise on track record to secure opportunities in
PNG’s LNG expansion.
- Target opportunities in the international oil and gas
market with global clients:
- Kazakhstan, Canada and Mozambique.
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UNDERGROUND MINING
- Increase commodities footprint where market outlook
is positive.
- Cementation Canada & USA:
- Increase North American market share.
- Access opportunities in South America and with
existing clients in Europe.
- Murray & Roberts Cementation:
- Develop local partnerships in Central and
West Africa, with a focus on raise boring
project opportunities.
- Grow annuity-type income by securing contract
mining projects.
- RUC Cementation Mining:
- Develop opportunities in Asia and other markets
with the Oil & Gas platform.
- Explore opportunities in opencast mining to increase
contract mining income and mitigate impact of project
investment cycles.
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POWER & WATER
- Expand project development, EPC, and operations
and maintenance service offering.
- Target transmission, distribution and substation
projects in sub-Saharan Africa.
- Target opportunities in the refined fuel storage sector
in South Africa and the LNG sector in Mozambique.
- Establish scale in water business:
- Pursue municipal wastewater opportunities based
on Organica demonstration plant results.
- Offer bespoke solutions for industrial water
treatment in mining and power sectors.
- Secure annuity income through chemical
supply contracts and operation of wastewater
treatment plants.
- Develop relationships with equity and funding
partners.
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MATERIAL ISSUE
MANAGE CAPITAL AND LIQUIDITY
EFFECTIVELY
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GROUP
- Ensure disciplined cost management to achieve overhead costs of about
5% of revenue through the cycle.
- Manage free cashflow in operations.
- Manage short-term liquidity facilities per platform.
- Target net debt to equity ratio of not more than 35%.
- Preserve liquidity by managing cyclical impacts on working capital due to:
- Project delays and deferrals in soft markets.
- Rapid upswings in activity as markets recover.
- Manage financial impact of close-outs and claims:
- Recover at least uncertified revenue recorded for Dubai Airport, power
programme and other claims.
- Manage costs associated with the closure of the business in the
Middle East.
- Conclude the Grayston temporary works collapse matter.
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OIL & GAS
- Monitor and manage costs incurred for business development and tenders
to secure new work.
- Negotiate advance payments on new projects to improve working capital.
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UNDERGROUND MINING
- Implement platform-wide procurement initiatives to drive savings through
economies of scale.
- Minimise idle assets by selling non-strategic assets or deploying them on
other projects.
- Negotiate advance payments on new projects to improve working capital.
- Manage project margins and cash flow to optimise working capital.
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POWER & WATER
- Reduce working capital by recovering uncertified revenues through
settlement of claims.
- Develop external funding solutions to drive project development opportunities.
- Expedite claims resolution:
- Manage CTFE project dispute.
- Manage the complicated claims process associated with the power
programme.
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CONTEXT:
Excellence in all areas of project
delivery underpins our aspiration to
be a contractor of choice. |
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Our ability to attract and
retain the best management
and technical expertise is
critical to this aspiration. |
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Local contracting and technology
partners are a requirement when
securing work, making it necessary to
ensure alignment of principles and
standards. |
MATERIAL ISSUE
DEEPEN ENGINEERED EXCELLENCE PHILOSOPHY
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GROUP
- Strive for Zero Harm:
- Maintain fatality-free operations across the Group.
- Focus on lag and lead indicators.
- Continue to develop, enhance and share effective interventions to maintain world-class safety performance.
- Assess effectiveness in managing critical controls using the MAP/CRM programme.
- Continue to innovate towards Zero Harm.
- Align with client safety systems, where appropriate.
- Minimise project losses:
- Competitive and correct pricing of projects, considering
project risk and minimum standards.
- Conclude contracts on reasonable commercial terms,
considering Group lessons learnt and contracting
standards.
- Effective resourcing and start-up of projects.
- Achieve predictable outcomes in line with tender
expectations through effective project and risk
management.
- Align contracting standards with changes in commercial
risk profile.
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OIL & GAS
- Maintain world-class safety performance
through real-time reporting and innovative
approaches to HSE leadership training.
- Continue to deepen client relationships and
business partnerships.
- Ensure commercial and operational discipline
to manage financial risk of fixed-price
contracts.
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UNDERGROUND MINING
- Maintain world-class safety performance through steady
reduction in LTIFR and sustained improvement in TRCR.
- Streamline safety and project management systems.
- Share best practices to support safety and efficiency
improvements.
- Provide ongoing commercial and project management
training.
- Apply technology to enhance project performance and
maintain leading market position:
- Update IT platforms to cloud-based infrastructure.
- Improve productivity and drive efficiency by investing in
automation and innovation.
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POWER & WATER
- Maintain world-class safety performance:
- Maintain LTIFR at record-low.
- Implement Neuroleadership programme to
deepen safety culture maturity.
- Ensure compliance with new contracting
standards, especially for cost-reimbursable
commercial arrangements on projects taken
over from other contractors.
- Maintain operational and commercial
discipline throughout tendering process.
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MATERIAL ISSUE
ACCELERATE THE
APPLICATION OF RELEVANT
TECHNOLOGY
GROUP
- Understand the potential of technology to enhance
competitiveness:
- Perform Group technology maturity assessment.
- Understand which technologies can enhance
productivity in specific sectors and service offerings.
- Develop leadership mindset and capacity to adapt to
technological advances.
- Accelerate technologically enabled operations to achieve
efficiency gains:
- Invest in and commercialise innovative technology.
- Establish appropriate technology partnerships.
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OIL & GAS
- Invest selectively in innovation and technology to support
transformation of supply chains.
- Develop a digital platform that focuses on scalable
technology that meets the demands of a global
EPC business.
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UNDERGROUND MINING
- Operationalise technology-enabled processes including
training applications, remote controlled and automated
production processes, and asset maintenance systems.
- Drive current innovations to commercial maturity and
monitor technological innovation.
- Cementation Canada & USA:
- Improve asset management, cost accounting and
project management systems to improve project
delivery.
- Murray & Roberts Cementation:
- Enhance systems, skills and processes to be a leading
mechanised mining contractor in Africa.
- RUC Cementation Mining:
- Leverage investment in Insig Technologies to drive
application of automation technology, to enhance
competitiveness.
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POWER & WATER
- Commercialise environmentally friendly class-leading
Organica wastewater treatment technology.
- Enable digitalisation in core and project support systems,
and increase productivity, flexibility, adaptability as well as
efficient asset management.
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CONTEXT:
Our aspiration to be an employer of
choice in all our markets supports the
recruitment, development and retention
of competent, high-performing and
ethical employees. |
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It underpins our ability to
resource effectively
according to the realities
of market and project
cycles. |
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A key driver of success is the
Group’s culture, which is centred
on our Values of Integrity,
Respect, Care, Accountability
and Commitment. |
MATERIAL ISSUE
ENSURE LEADERSHIP QUALITY
AND SUCCESSION DEPTH THROUGH
PROACTIVE DEVELOPMENT
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GROUP
- Continue to align leadership succession to diversity objectives in
all platforms.
- Emergency successors identified for all executive roles across all
platforms.
- Accelerate and support career progression of high-performing talent
identified for future leadership roles.
- Align performance contracts with Group strategic objectives across
platforms for middle management and above. Where formal
performance contracts are not in place, team-based targets clarify
performance requirements.
- Deliver leadership development programmes.
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OIL & GAS
- Coach and mentor high-potential employees to develop into future
leadership roles.
- Develop future leaders through Clough’s Construction Management
Academy, Project Management Academy and Young Professionals
Group for talented employees.
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UNDERGROUND MINING
- Deliver leadership training from supervisors to future leaders, and
maintain succession plans through training interventions:
- A new Management Training programme in Cementation
Canada & USA.
- Murray & Roberts Training Academy’s programmes for first-time
supervisors.
- RUC Cementation’s Leadership Development programme.
- Drive a learning culture in Cementation North America.
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POWER & WATER
- Develop and mentor a high-performing core group of leaders and
supervisors, with a focus on black talent.
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MATERIAL ISSUE
MAINTAIN BEST PEOPLE PRACTICES TO ATTRACT
AND RETAIN HIGH-CALIBRE TALENT
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GROUP
- Embrace international standards of social justice, decent
work and human rights, while also aligning policies and
procedures to the legislation and basic conditions of
employment of the counties we operate in.
- Maintain ISO 9001 accreditation in all platforms and the
associated audits.
- Safety first philosophy to achieve Zero Harm across
all platforms.
- Maintain effective employee wellness programmes.
- Offer career advancement through job experience on
high-profile projects and extensive skills development and
training, and coaching opportunities.
- Offer structured performance management and
development linked to market-related remuneration and
incentive schemes.
- Conduct new employee induction sessions with all
employees to communicate the Group’s Values, culture
and performance expectations.
- Ongoing communication and engagement initiatives
between Group leadership and employees.
- Address areas of improvement identified in the
employee engagement surveys undertaken in all
businesses.
- Ensure responsible resourcing despite market and
project cycles:
- Retain core skills through continuous engagement.
- Attract required skills timeously through effective
people planning to mobilise projects on time and
within budget.
- Responsible approach to retrenchments to right-size
operations during downturn and when demobilising
projects.
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OIL & GAS
- Strengthen capabilities to deliver excellent
project outcomes.
- Provide depth and variety of work experiences to
attract and retain the right talent.
- Implement process and workflow improvements
identified in employee engagement survey.
- Provide flexible employment options.
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UNDERGROUND MINING
- Regional training centres offer best practice
technical and supervisory training.
- Murray & Roberts Cementation:
- Offer innovative training solutions, including
virtual and augmented reality applications.
- Resource growth at the top of the cycle by
attracting scarce specialised skills and investing
in training.
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POWER & WATER
- Provide training and development interventions to
build a high-performing core group of artisans
and supervisors to meet strategic objectives.
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CONTEXT:
Stakeholder trust
and support is
critical to the
Group’s success
and sustainability. |
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Governance
frameworks and
reporting
structures ensure
visibility of and
compliance across
all platforms. |
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Businesses are
expected to align to the
Group’s frameworks,
standards and Values
as minimum best
practice, despite local
operating differences. |
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Managing the impact of
local dynamics on
project delivery to limit
contagion risk is
imperative for the
Group’s credibility with
multinational clients. |
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Recognition as a
responsible corporate
citizen that responds to
national objectives and
complies with local laws,
codes and standards is
critical to the Group’s
licence to operate. |
MATERIAL ISSUE
MAINTAIN REPUTATION
AS AN ETHICAL AND
RESPONSIBLE
MULTINATIONAL
ORGANISATION
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GROUP
- Embed and align Group frameworks, standards
and Values in acquired businesses.
- Ensure adherence to the Group diversity policy
across the platforms.
- Uphold reputation for responsible and ethical
conduct:
- Comply with laws, standards and codes in all
operations.
- Senior management declaration on ethical
behaviour every six months.
- Conduct ongoing compliance and ethics
training.
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OIL & GAS
- Embed Group frameworks, standards and Values
in Clough USA acquisition.
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UNDERGROUND MINING
- Embed Group frameworks, standards and Values
in TNT acquisition.
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POWER & WATER
- Embed Group framework, standards and Values
in OptiPower Projects acquisition.
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MATERIAL ISSUE
RESPOND EFFECTIVELY TO LOCAL REQUIREMENTS
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GROUP
- Accelerate diversity and localisation to remain
competitive.
- Respond to local requirements and norms within
the context of Group expectations.
- Effectively manage local factors pertinent to
safety, work culture, labour and community
relations, local procurement and community
development.
- Develop and implement industrial relations
strategy prior to starting any project.
- Invest in corporate social responsibility
programmes.
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OIL & GAS
- Improve workforce participation by indigenous
communities and women.
- Drive workplace equality through memberships
in the Diversity Council of Australia and the
Gender Equity Group.
- Develop community engagement management
plans for new projects to support project
delivery and benefit communities.
- Support organisations, communities and causes
that improve the lives of people living near
projects through the Clough Foundation.
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UNDERGROUND MINING
- Cementation Canada & USA:
- Respond to requirement for First Nation
business partnerships.
- Continue to partner with local companies in
South America and in Mexico.
- Address the results of diversity and inclusion
survey through the diversity and inclusion
working group.
- Leverage the New Miner programme to train
indigenous employees.
- Murray & Roberts Cementation:
- Continue to meet BBBEE targets, including
those contractually required by clients under
the revised Mining Charter.
- Employ and train local workers on projects.
- Procure from preferential suppliers.
- Invest in local community development.
- Apply employee relations framework,
especially in maintaining constructive union
relationships.
- Establish local partnerships on mining
projects in sub-Saharan Africa.
- RUC Cementation Mining:
- Implement diversity policy.
- Recruit locally on international projects.
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POWER & WATER
- Maintain strong BBBEE credentials to access
opportunities in South Africa:
- Build on improvement in black representation
in senior, middle and junior management
levels.
- Initiatives in place to achieve BBBEE Level 2
in FY2020.
- Establish BBBEE partnerships in power
maintenance, transmission and distribution
and water.
- Continue to work closely with clients, local
community forums and leaders to manage
expectations around economic and employment
investment.
- Develop local partnerships in East and West
Africa to access new markets and sectors to
deliver growth.
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