Tag Archives: David Singleton

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.”