Tag Archives: David Singleton

Austin order book swells with mine truck body, bucket, water tank and chute contracts

Austin Engineering Ltd saw out 2021 with a bang, receiving over A$60 million ($43 million) of orders during November and December and ending the first half of its financial year with a strong order book, the company says.

At the end of November 2021, Austin’s order book was 19% higher than at the same time the previous year.

The new product orders are for over 100 truck bodies, excavator buckets, water tanks and mine chutes, in addition to repairs and maintenance works received across Austin’s operations in Asia Pacific, and North and South America.

Delivery of new products will be to Canada, the US, Mexico, Chile, New Zealand, Indonesia and both the West and East Coast of Australia.

The increased sales activity comes as Austin continues to progress a number of initiatives across its operating regions, it said.

Austin’s new facility at Fort McMurray in Alberta, Western Canada commenced operations on December 1, 2021. Four of seven truck bodies being manufactured on site have been completed and are ready for delivery to customers in the region. Alberta has one of the largest concentrations of heavy haul trucks in the world thanks to the nearby oil sands, and the new facility is ideally placed to provide a much enhanced local level of customer support to what was previously possible, according to Austin.

Austin will undertake a A$450,000 expansion of its La Negra facility in Chile to accommodate an anticipated increased workload in the second half of its 2022 financial year. The facility has been operating at high utilisation rates for some months now and a capacity expansion is deemed necessary. Austin expects the investment to be fully paid back in the second half of the financial year.

A recent expansion of truck body, final build and assembly locations in Eastern Australia and New Zealand has led to a competitively-won new order with global gold miner OceanaGold Corp in New Zealand with deliveries to commence shortly. The order for over 20 bodies uses Austin’s recently developed modularised truck body designs developed to overcome shipping logistics issues, with final build to be undertaken close to the mine site.

In addition, Austin’s previously announced partnership with Melter in Mexico has led to further orders for a large dragline bucket and other equipment, further reinforcing the strength of this regional relationship under Austin’s “hub and spoke” strategy being rolled out globally, the company said.

Austin CEO and Managing Director, David Singleton, said: “We are pleased to see increasing momentum in sales activity across the board for both new products and repairs, and the recent uptick in orders sets Austin up for a strong sales performance in the second half of financial year 2022. With a strong order book, and strong commodity prices, our facilities are operating at high levels of throughput as we start the new year. I am particularly pleased that our recent initiatives aimed at improving cost competitiveness and driving sales have so rapidly led to an increase in orders. It gives me confidence in our approach and forward strategy.

“In addition, we will be launching some updated products in the current half with improved efficiency and safety features which, we believe, will further cement our leading position in the mining products industry.”

Austin Engineering ramps up APAC truck body expansion plans

Austin Engineering has announced what it says is a major expansion of its APAC truck body, final build and assembly locations with the establishment of six new partnerships located in Queensland, New South Wales and New Zealand.

In addition, Austin is to invest in additional sales and product support personnel in eastern Australia and New Zealand to support its expanded network.

Austin expects this new focus will give it a significant advantage in securing new customer orders and increase revenue in key locations across the Asia-Pacific region.

The company said it had successfully implemented the first stage of its global strategy to reduce operating costs across all operations, with this partnership expansion being the key next step to increase revenue through developing market share.

The partnerships are a continuation of the “hub-and-spoke” strategy being rolled out by Austin globally whereby Austin establishes a network of accredited “spokes” to support its major manufacturing centres, it explained. The partner firms are located close to key mining areas and will undertake the final assembly and customer delivery of truck bodies that are designed and partially built in Austin’s major APAC manufacturing facilities in either Perth, Australia, or Batam, Indonesia.

Austin has already established similar style partnerships and operations in North America, including a wholly-owned final assembly facility in Western Canada and a partnership with equipment manufacturer Melter in Mexico, to support its major US manufacturing centre in Casper, Wyoming.

In Austin’s 2021 financial year, truck bodies accounted for 63% of revenue in the APAC region. Under its Advanced Manufacturing strategy, Austin has completed significant design upgrades to its main line of truck bodies for its APAC markets to improve operational performance and improve shipping logistics, it said. The new hub-and-spoke partnerships will see overall shipping costs and supply chain complexities reduced, improving the performance and economics of Austin’s core offering, according to the company.

Austin CEO and Managing Director, David Singleton, said: “The reduction in operating expenses is already paying significant dividends and now our focus is moving to revenue enhancement.

“In this new phase of Austin – Austin 2.0 – we are looking at the world’s major mining regions to see how we better service our customers with market-leading products and enhanced customer support at commercially competitive rates. It is natural that we are now focusing on one of the largest truck fleets in the world, right on our doorstep in eastern Australia and New Zealand.

“Our newly established Canadian operation is already building its first seven truck bodies from kits built in Casper, whilst our partnership in Mexico was an essential element in securing new truck body orders in that region. We look forward to similarly rapid success in Australia and New Zealand.”

Austin Engineering seals A$300 million contract with Rio Tinto

Austin Engineering Limited has signed a five-year mining products and service supply contract with Rio Tinto Services Ltd, less than a week after the two companies celebrated the manufacture of the 1,000th truck body for Rio’s iron ore division.

The contract is for the supply of dump bodies, lightweight trays for ore trucks, heavy machinery buckets, water bodies and other fabricated products. The contract also covers the provision of “Off Site Repairs” and other associated services for both Austin-supplied equipment and for other OEM supplied heavy machinery.

The contract, effective from December 16, covers supply from all of Austin’s major global facilities including those in Australia, Indonesia, North America and South America. It is an umbrella or call-off type agreement, allowing for the supply of equipment and services to multiple Rio Tinto operations around the world through individual purchase orders.

Austin estimates that the value of services under the contract over its life could be around A$300 million ($213 million), although it is dependent on individual purchase orders. The contract includes pre-agreed pricing for mining buckets and haul truck trays matching Rio’s global fleet, enabling rapid purchasing and order fulfilment. The contract also provides for annual price reviews to manage exchange rate, steel and labour rate variances and any other factors that the parties agree are relevant to pricing.

Under the contract, Austin will use its recently established “Innovation and Technology Hub” to continue to develop its products to help meet Rio Tinto’s objectives to optimise the safety, lifecycle and productivity of its global heavy machinery fleet.

Austin has supplied Rio Tinto Iron Ore (RTIO) operations with its heavy machinery consumable equipment, offsite repairs and other equipment for 33 years, initially servicing Robe River in the Pilbara. Austin delivered its first bucket to Rio Tinto 21 years ago and its first truck body 14 years ago. As mentioned, last week, the two companies held a ceremony in Perth to mark the manufacture of Austin’s 1,000th truck body for RTIO.

Austin CEO and Managing Director, David Singleton, said: “This contract extends our very successful and productive involvement with Rio Tinto for another five years. Rio Tinto is a key customer for Austin’s products and services, and I would like to thank the company for its support in helping to build a strong local manufacturing industry in Australia, and a leading business in this industry globally.

“As a result of this commitment by Rio Tinto, we have the confidence to invest in developing our Austin 2.0, strategy. As part of this, we recently announced a A$6.5 million investment in advanced manufacturing at our facilities initially in Western Australia and Indonesia that will bring new levels of quality, production capacity and flexibility. In addition, our Innovation and Technology Hub in Western Australia is focused on meeting the safety, mine site efficiency and decarbonisation goals of Rio Tinto and other customers in Australia and around the world.”

Austin’s milestone ULTIMA truck body delivered to Rio Tinto Iron Ore

Austin Engineering has announced the delivery of its 1,000th truck body to Rio Tinto Iron Ore in Western Australia.

The milestone was marked with a ceremony at Austin’s Kewdale-based manufacturing facility, attended by Western Australia Premier, Mark McGowan (right), Rio Tinto Iron Ore Chief Executive Officer, Simon Trott (centre), along with Austin’s Chairman, Jim Walker, and Chief Executive Officer, David Singleton (left).

The ULITMA truck body in question was unveiled on site today.

Over the past 30 years, Austin has supplied approximately A$300 million ($214 million) of its designed and engineered equipment to Rio Tinto’s iron ore operations. Austin also supplies equipment to Rio Tinto’s global operations from its manufacturing sites spread across four continents.

Austin and Rio Tinto’s partnership commenced in 1988 with Western Australia-based John’s Engineering and Cranes (JEC), which is now part of the Austin business, providing truck body components to Robe River, a Rio Tinto Group Company.

Austin’s Kewdale facility is one of two of the company’s major manufacturing sites in the Asia Pacific region. Austin is investing A$6.5 million to implement advanced manufacturing processes and capabilities at its Perth and Batam (Indonesia) sites, including increased automation and the use of custom jigs, fixtures, workstations and a standardised manufacturing approach to building products.

The Kewdale facility is currently receiving the first manufacturing upgrade, which will benefit major customers, such as Rio Tinto, and enhance the company’s supply of Western Australian-made dump truck bodies and other hauling and loading products, Austin said.

Singleton said: “In the dynamic and constantly evolving mining industry, it is becoming an increasing rarity to see a long-standing partnership, particularly one deeply rooted in the local community, going from strength-to-strength. This makes today’s milestone all the more extraordinary, and like the other 999 truck bodies we’ve made for Rio Tinto Iron Ore in Western Australia, it will be manufactured locally.

“Austin is proud of its role in helping Rio Tinto successfully deliver the iron ore that is the economic lynchpin of our great state.”

McGowan said: “Austin Engineering is one of WA’s key local manufacturers. It is providing mining companies like Rio Tinto with locally designed and manufactured equipment, but it is also creating an increasing number of local job opportunities here at its Kewdale facility.

“Rio Tinto’s commitment to purchasing Western Australian made truck bodies, that will be used right here in the state, reflects the WA State Government’s commitment to boost local manufacturing, local content, and local jobs, enabling our State to become more self-sufficient and prosperous into the future.”

Rio’s Trott said: “The manufacture of the 1,000th truck body for our iron ore operations here in Western Australia is a testament to the Austin-Rio Tinto relationship that spans three decades and covers the globe.

“The partnership is an example of our commitment to working with local business to create ongoing employment and to develop world-class products. We are committed to sourcing local content wherever possible to support our suppliers, our business and the communities in which we operate. I look forward to our longstanding partnership continuing to support the Western Australian economy.”

Austin Engineering, Melter celebrate new pact with Peñasquito truck bodies order

Austin Engineering has entered into an agreement with Mexico-based equipment manufacturer Melter to broaden its product delivery and service capabilities in the US and the northern region of South America.

This agreement has already delivered a significant new contract with a world-class miner, according to Austin, with Melter set to manufacture Austin-designed truck bodies for the initial supply of five lightweight Ultima bodies for Newmont’s Peñasquito gold operation in Mexico.

In addition to building truck bodies, Melter will also provide local support and maintenance assistance to Newmont, supported by Austin’s US-based teams in Casper, Wyoming.

“Newmont is the world’s largest gold miner and there is potential for further sales to this customer,” Austin said.

The Melter partnership is the latest iteration of Austin’s roll out of “hub-and-spoke” networks in the Americas to support Austin’s central US manufacturing hub in Casper.

Austin says it is establishing “spokes” closer to significant mining areas via new facilities or through partnerships and preferred supplier arrangements. The objective of this approach is to reduce the logistics cost and complexities of delivering truck bodies over large distances. As part of this strategy, in instances where transport costs are high, the Casper facility will provide designs and kits for local assembly to the end user facilities. This approach is intended to improve the competitiveness of Austin’s Casper facility and increase market share.

The hub-and-spoke initiative is part of an “advanced manufacturing strategy” being deployed by Austin following its strategic review of global operations completed in July, which identified several business optimisation and growth opportunities.

Austin’s Casper base has been further supported by the lease of a 23,000 sq.ft (2,137 sq.m) manufacturing site at Fort McMurray in Alberta from which Austin is able to better service its customers in the remote regions of western Canada though better product delivery logistics, shorter travel times, and local service and maintenance teams.

Austin CEO and Managing Director, David Singleton, said: “We are very pleased to have formed a partnership with Melter, which enables Austin to grow its service offering in a market where we don’t currently have manufacturing capabilities. Our partnership with Melter allows Austin to competitively deliver on its contract to supply Austin-designed truck bodies to Newmont’s Peñasquito operations and we look forward to growing our partnership in the future.

“We are continuing to review other potential spoke locations to support our Casper facility and delivering on our US strategy to improve our equipment delivery logistics and reduce overall transport costs, especially into remote areas, making our product offering more cost competitive.”

Melter Chief Executive Officer, Carlos Uribe, said: “We are pleased to develop our strong relationship with Austin Engineering, one of the leading OEMs in the global mining industry, as their regional supplier to build and support their truck bodies and other equipment on and off mine sites in Mexico including at Newmont.

“Over the last 30-plus years Melter has built a completely integrated manufacturing system for high-spec metal-mechanic components, as well as a highly committed and qualified 800 people strong team aimed at delivering the highest client satisfaction in the USMCA market; we are honoured to be able to use our capabilities to deliver Austin’s mining products both locally and potentially overseas.”

Austin expands service offering with Mader Group strategic support alliance

Austin Engineering Ltd has executed a strategic support alliance with Mader Group Ltd that will see Mader provide assistance as required on a flexible ‘tap-on tap-off’ basis, using its mine-based personnel and workshop facilities to bolster Austin’s existing support services.

The initial focus of the alliance will be Western Australia’s Pilbara and Goldfields regions, in addition to sites in Queensland and New South Wales.

Mader, Austin says, is the largest independent provider of equipment maintenance services in Australia and has a growing global presence. Its workforce is based in and around Australia’s key mining regions, allowing for faster deployment to site and overall response time.

Austin will continue to use its own service teams, which travel to site from Perth, Brisbane and Mackay, but will augment these as necessary to improve turnaround times and service efficiency when commercially appropriate.

Mader Group provides services for the inspection, maintenance and repair of heavy mobile equipment. Its technicians offer mechanical and electrical maintenance including fabrication and welding services.

Austin CEO and Managing Director, David Singleton, said: “Austin’s leading engineering and design capabilities see it produce mining truck bodies and buckets for customers across all commodities and global geographies. The agreement with Mader will support our existing services, initially in Australia, to ensure our customers are given the best quality support for our products.”

Austin kicks off plan to automate engineering facilities in Perth and Batam

Austin Engineering Ltd says it has commenced a A$6.5 million ($4.7 million) capital investment to transform and automate its design and manufacturing facilities at its major Asia Pacific centres in Perth and Indonesia.

The capital expenditure program will involve a new manufacturing flow approach with increased automation, custom jigs, fixtures, workstations and a standardised manufacturing approach to building product. Austin will still be able to provide customised engineering solutions and products to its customers while leveraging the benefits of a production flow line, it says. In particular, Austin sees major benefits to its truck body product offering, which comprises circa-70% of Austin’s annual revenues.

Critical outcomes to the investment will be to reduce the time to deliver customised solutions to clients, while maintaining or enhancing quality outcomes. Further targets include waste reduction and decreasing the workshop capacity required, lowering the overall product cost base, Austin says.

The program of works was outlined in the second phase of Austin’s recently communicated global strategic review results, which identified opportunities for future growth and ways to optimise the company’s cost base.

The expected payback period is 12 months, post-implementation, with the majority of benefits to be realised in the company’s 2023 financial year, although incremental benefits will be achieved during the latter months of its 2022 financial year. Funding will be available through operating cash flows and surplus asset sales, according to Austin.

The approach is expected to be scalable and transferable to other Austin manufacturing operations in the medium term and will support Phase 3 of the strategic review, which focuses on further product and service improvements through technology and innovation, it says.

Austin CEO and Managing Director, David Singleton, said: “Improvements being made in Austin’s manufacturing facilities in Perth and Batam in Indonesia will elevate an already market-leading service offering. We will be able to deliver products more quickly, in larger quantities, with less waste, and with improved quality, while still offering tailored design and engineering solutions to our customers. What is exciting about our manufacturing improvement project is its scalability at a relatively modest incremental cost. This made the decision to adopt a fast follow from Perth to Batam easy. The investments made also support longer term strategies around product and service innovation as outlined in our strategic review.”

Austin Engineering’s strategic review identifies innovation, technology opportunities

Austin Engineering Ltd has completed a previously announced strategic review of its global business, with the first two phases of this review funding a third that will fuel innovation and technology development.

Austin initiated the strategic review in May 2021 in parallel with the decision to relocate its headquarters from Brisbane to Perth, in Australia. This move was carried out to, Austin says, bring the company’s central management closer to Austin’s major mining customers and its largest APAC manufacturing centres in Perth and Indonesia.

The strategic review aimed to identify opportunities to improve business efficiency and to align with the future needs of Austin’s mining industry customers. Ultimately, the review identified what Austin needs to do and where it needs to invest to be at the forefront of the industry, to grow earnings and, thereby, unlock value for its shareholders, it said.

Austin’s loading and hauling products are designed to meet the specific needs of its mining industry customers around the world. Its products are designed to help mining companies increase operational efficiency, improve site safety and help meet their environmental and decarbonisation targets. This is crucial as the mining industry works towards dramatically reducing emissions in the coming years, Austin said.

The strategic review outcomes are structured in three phases, representing short-, medium- and longer-term measures to create company value across Austin’s operations in Australia, North America, Indonesia and South America.

As Phase 1, Austin has already rebased the indirect support structures throughout the business and enters the new 2022 financial year (to June 30, 2022) with a leaner structure. By the end of June, about 50% of the “people cost reductions” identified in the review were completed, with 85% due for completion by the end of August, it said.

In addition to the rapid closure of its previous head office in Brisbane, Queensland, Austin has consolidated its separate businesses located in Mackay, Queensland, into Austin’s wholly-owned subsidiary, AUSTBORE. The consolidation enables a stronger focus on new product delivery and support in Queensland and reduces the focus on general repair and maintenance services, which have not been delivering “adequate earnings”, Austin said.

Austin will continue to deliver its own product offerings to the east coast of Australia from its manufacturing facilities in Perth and Batam, while continuing to offer support directly in Mackay through its existing team, it said.

Phase 2 will see Austin develop its major manufacturing sites, commencing in Perth, Australia.

“Austin has identified significant manufacturing opportunities to reduce waste and improve production efficiency and product consistency through the adoption of flow production and automation,” Austin said. “This will provide significant benefits for Austin’s major product ranges, in particular truck bodies, while remaining agile in bespoke designs and delivering unique capabilities for its customers.”

It is likely that the production system will be adopted in Batam to build bodies faster, use less factory space and improve product quality, according to Austin.

Initial project investment for Perth is underway with a final investment decision by the Austin Board planned within the next quarter.

In the US, Austin is reviewing its delivery logistics to improve overall “cost competitiveness”, the company said.

It explained: “Large truck bodies are difficult and expensive to move around the disparate mining centres of Canada, USA and Central America. Further detail around the changes being considered for North America will be announced when sufficient certainty has been achieved in the current review. Under consideration is an increasing presence in western Canada to service the oil sands region more effectively.”

Phase 3 is looking at putting technology and innovation at the forefront of a significantly expanded Austin product range.

The company explained: “Out of the review, Austin has established a new customer-focused, innovation and technology group that reports directly to the CEO. The team will interface directly with Austin’s major customers and will use innovation- and technology-led solutions in an agile implementation environment to meet customers’ needs for product capability and performance. Austin has already reviewed its technology pipeline with some of its major customers, with new developments already underway. Further details on these developments will be made available at the appropriate time.”

In the longer term, Austin says it seeks to increase its product offering, through a mix of in-house design, partnering with aligned businesses and M&A activity.

Cost savings to the business generated in Phases 1 and 2 are expected to provide funding for innovation and technology development, as well as enhancing earnings, it said.

Austin CEO and Managing Director, David Singleton, said: “The strategic review process has provided a chance for Austin to make some big decisions about what we most need to focus on for organic and inorganic growth of the company. Through this process, we will cut significant costs from the business while increasing output through adopting more advanced manufacturing techniques. Importantly, we are firmly concentrating our efforts to meet the needs of our mining customers into the future. Austin’s products will support our clients as they target net zero emissions, improve productivity and ensure ever safer operations.”