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Owners of $1BILLION collapsed construction company Condev in tears

The owners of collapsed construction giant Condev have broken down in tears as they described the devastation of losing the business they built from the ground up. 

Steve and Tracey Marais spoke at the builders Gold Coast headquarters on Wednesday saying the ‘ink isn’t yet dry’ but the company is formally in liquidation. 

‘We advised our staff there was no need to come to work today but there’s so many here. It’s like being at a funeral,’ a tearful Ms Marais told the press conference. 

She said the company had an excellent relationship with developers and were disappointed they could not ‘come to the party’ when it pleaded for a $25million bailout deal on Monday that would’ve kept the builder afloat.

Steve Marais (left) and Tracey Marais (right) have tearfully explained the collapse of the $1billion construction company Condev was due to the ‘perfect storm’ of issues

Soaring material prices, torrential rain, and Covid disruptions have plagued the industry and builders who have quoted projects with thin profit margins have been financially slammed

Soaring material prices, torrential rain, and Covid disruptions have plagued the industry and builders who have quoted projects with thin profit margins have been financially slammed 

‘We believe that if people stand together the impossible is possible… we still believe that they [the developers] don’t understand what they’re doing [by not providing the bailout],’ Ms Marais said.

‘We really do believe that they don’t understand the market enough.’

She said the builder had been battered by a ‘perfect storm’ of surging commodity prices, labour shortages, and work disruptions caused by Covid and torrential rains. 

When asked if she considered other big builders to also be struggling, Ms Marais said this was definitely the case.

‘I don’t think potentially, I think for sure,’ she said.

Developers on the firms projects have agreed to finish them and pay any outstanding subcontractor fees. 

Ms Marais (pictured) said other builders in the industry were also struggling

Ms Marais (pictured) said other builders in the industry were also struggling 

While large companies are managing with big orders, small to medium businesses are really struggling - with extended waiting periods for materials impacting jobs

While large companies are managing with big orders, small to medium businesses are really struggling – with extended waiting periods for materials impacting jobs

Prices of materials have been rising steadily since the start of the pandemic, but exploded in April and May last year (average prices of commodities - Arcardis statistics)

Prices of materials have been rising steadily since the start of the pandemic, but exploded in April and May last year (average prices of commodities – Arcardis statistics)

Ms Marais said the builder had enough cash to pay workers and suppliers for the next three months but, with the entire industry feeling the squeeze, it took the drastic step of going into liquidation to not ‘hurt people more’. 

A tearful Mr Marais added he had been in the building industry for more than four decades and ‘loved every moment except the last 15 months’. 

He added he ‘hopes everything works out’ for others in the construction sector. 

Condev currently has 18 projects across southeast Queensland and northern NSW, with 14 in the Gold Coast where the builder is based.

They include the Cannes Waterfront in Surfers Paradise, The Brookes Residences in Varsity Lakes, Natura and Brake Street both in Burleigh, and the Jindi Apartments in Palm Beach. 

Just a few weeks ago another Australian constructions giant Probuild was placed into voluntary administration after falling into tens of millions of dollars of debt, leaving hundreds unemployed and dozens of projects unfinished nationwide.  

ProBuild owed 786 employees across 19 projects $14million, and even more to its 2300 creditors (pictured, a construction site in Darling Harbour)

ProBuild owed 786 employees across 19 projects $14million, and even more to its 2300 creditors (pictured, a construction site in Darling Harbour)

ProBuild and several other construction businesses under the WBHO Australia Group umbrella went into administration after the parent company, WBHO South Africa, withdrew further financial support for them.

Probuild reportedly lost as much as $120million on a bungled 264 high-quality residential apartment project on Brisbane’s Queen Street.

After Monday’s bailout plea, two key developers for scrapped their contracts with Condev pushing the company into liquidation. 

‘It’s heart breaking to advise that there is no requirement for you to come to work tomorrow,’ Ms Marais told staff in an email on Tuesday night.

‘We never dreamed the world would be affected by a coronovirus and price hikes that would put us out of business,’ she said.

One subcontractor working with the company said he was owed about $1million but felt for the business because they had previously been good with payments. 

The subcontractor claimed the company had quoted extremely competitive prices for some projects. 

He said these thin margins combined with disruptions to the industry in the last two years, which include labour shortages, floods and soaring material costs, were responsible for company’s problems.

Industry insiders have said skyrocketing prices of commodities are causing tradies to struggle across the sector, with hundreds of businesses at risk of going bust.

Staff and contractors for Condev Constructions, based in Brisbane and the Gold Coast, were emailed by co-founder Tracey Marais on Tuesday night

Staff and contractors for Condev Constructions, based in Brisbane and the Gold Coast, were emailed by co-founder Tracey Marais on Tuesday night

Supply chain issues and lack of stock from national and international sources led to a spike in demand and prices for materials, with tradies bearing the brunt.

Costs of metal ores, plastics, and timber have been consistently rising for years, but particularly through the pandemic as factories were forced to shut down for extended periods.

The trickle-down effect of these surging costs mean Australian workers are forced to cover the difference, with the country on the verge of a major crisis.

‘I don’t think a lot of companies are taking the cost increases seriously,’ Matthew Mackey, executive director of engineering company Arcadis, said.

‘Smaller businesses don’t have the cash flow, they don’t have the same safety net. They’re going to feel the pain a lot sooner and a lot more harshly.’  

Materials, including steel and timber, are having the most significant price surge due to international demand and lack of supply. Electrical products, PVC, and roofing materials are also getting more expensive.

Queensland construction giant Condev has been smashed by back-to-back issues, including labour shortages, rising material costs, and floods

Queensland construction giant Condev has been smashed by back-to-back issues, including labour shortages, rising material costs, and floods 

While large companies manage big orders, small to medium businesses are struggling – with extended waiting periods for materials impacting jobs.

Margins are also significantly decreasing, with the construction industry generally only earning profits between two and four per cent.

‘The market is trying to respond to the volatility. It’s less now about supply availability, but energy costs are going through the roof, commodity prices continue to rise, material costs are still increasing.

‘Contractors, particularly trades, are going to be struggling. If they’ve already signed a contract that doesn’t allow for fluctuations in materials, they’re going to be stuck with those prices.

‘If costs have gone up in six months, they’re going to have to wear those costs, and that’s the issue.’

CONDEV PROJECTS ACROSS SOUTHEAST QUEENSLAND

  • Cannes Waterfront, Surfers Paradise
  • Zupps Commercial Building, Ormeau
  • The Brooke Residences, Varsity Lakes
  • Natura, Burleigh
  • Brake St, Burleigh
  • Jindi Apartments, Palm Beach
  • 15 Ward St, Southport
  • 41 Ward St, Southport
  • Allure, Chevron Island
  • St Hilda’s, Southport 

 

  •  One Cannes, Surfers Paradise
  •  Alegria, Palm Beach
  • Capital Court, Varsity Lakes
  • BMW, Southport
  • Minnippi Quarters, Carina
  • -Riviere, Kangaroo Point
  • Stanford and Oxford, Dutton Park
  • Shoreline Queens Beach, Scarborough

 

 

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