Home > Surviving the downturn, a guide for small to medium enterprises - Part 2

Surviving the downturn, a guide for small to medium enterprises - Part 2

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Family owned, Hunter Valley based mining manufacturer and engineering company Tefol is one company that is having to contend with these issues.
 
Tefol general manager Simon Montgomery told Australian Mining that the company has been one of the lucky ones, after having to make the decision to lay off 20 workers in its labour hire division the company set about diversifying its capabilities.
 
At the peak the company had nine line boring systems, competition went through the roof, and a wage war broke out as mining companies employed many of the local skilled tradespeople.
 
Competition pushed up wages, making it difficult for the smaller mining service companies, but now with an estimated 9000 jobs gone from Queensland and New South Wales coal sectors in the last 15 months the wage issue is now not as big a deal, Montgomery explained.
 
The focus now is on keeping employees working and managing the company through tougher times.
 
“We’re trying hard to work with industry to save mining costs,” Montgomery said.
 
“One Hunter Valley miner came to us and said ‘we need to cut costs, how can you help?’ We cut our costs as much as we could without going broke.”
 
He explained that with lower commodity prices the coal sector is parking up machines, and stretching out service intervals.
 
But with a full transport service offering, components division, line boring trucks, and equipment manufacturing Montgomery said “not all our eggs are in one basket”.
 
“We built this business on the coal sector and we’ve now had to diversify,” he said.
 
“Transport has been our cushion.”
 
Montgomery explained that this has been the biggest hit since 2004, but the company is mindful that with hard work and focussed plays it will be around for a while to come.
 
“There’s a lot of rumours about mines and companies, we want to focus on ourselves and move ahead on our own steam,” he said.
 
It is that very ethos that is seeing Tefol prepare to launch into South America with its Australian made hydraulic access ladder systems.
 
Looking to Latin America is becoming an increasingly popular move for Australia’s mining suppliers.
 
Austin Engineering was in 2011 awarded a lucrative contract supplying dump truck bodies in Chile, and since then has expanded into Bolivia.
 
Austin managing director Michael Buckland at the time said "these contracts are another important step in the positioning of Austin into the South American mining market”,
 
The company also saw an opportunity to diversify its offering, a move which would see its workshops continue to buzz, keeping employees working.
 
“Instead of putting people off we’ve come up with a project to keep people onsite,” he said.
 
According to Austrade, South America is now providing increased opportunities for Australian miners and mining services firms.
 
“Australians are recognised as being great at bulk mining and transportation, as well as supplying remote mines, due to their experience in the harsh Australian mining industry,” Dan Sullivan, the trade commissioner at the Australian embassy in Peru, told Australian Mining.
 
“Our engineers are so used to doing bulk mining projects for demanding clients in rough conditions that they often bring their own technology and innovations with them.”
 
Mining equipment built in Australia, while not the cheapest in the market, has a reputation as hard wearing and reliable, he added.
 
“There’s a lot of potential for suppliers to take advantage of this reputation and the growing market, in fact mining equipment companies are actually ahead of the miners in moving into the region, with around 70 to 80 suppliers already set up in Chile, so there is already a small Australian support base,” Sullivan said.
 
Investing capital and capturing in-house engineering talent Tefol has developed two new products, telemetric trailers and portable high wall lighting.
 
The low voltage LED light plants are designed and built onsite by the company’s engineers and are safe and environmentally friendly for operation on open-cut sites.
 
The TefLites are generator powered and come on a swivel base rather than being rigid mounted, they can run on low light mode and also have individual circuit breakers for each light to increase electrical protection.
 
Tefol has also geared up its operations to roll out 25 to 30 telescopic trailers a year.
 
Solar powered, the trailers can be utilised as mobile repeater stations, dust and air monitoring hubs, or remote surveillance systems.
 
It’s the relaxed but determinate culture that has seen Tefol continue to grow sustainably.
 
“Times are tough, but let’s focus on the efficiencies we can implement to move forward and recession or downproof businesses,” Cade said.

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