HIGH PROFILE
New frontiers for mining services
In a landmark new white paper, Dan Allan, Senior VP at global mining tyre services and management company Kal Tire Mining Tire Group, speaks to the challenges and opportunities that small- and mid-sized service firms face in establishing businesses overseas and especially in remote, politically sensitive or socio-economically complex jurisdictions. IM Editorial Director Paul Moore recently had the chance to sit down with Managing Director and Vice President, Australia, at Kal Tire Mining Tire Group, Miles Rigney, at the inaugural Global OTR Conference in Antwerp, to talk through some of the issues raised in the white paper plus some of the ways in which Kal Tire itself approaches these emerging markets.
Q: How does Kal Tire usually enter a new emerging country and market with its mining tyre services?
We have two ways in which we enter markets for Kal Tire’ s Mining Tire Group – the first is through our internal review and strategy process where we look at what type of mining is taking place in which countries and might identify a particular country where we are not already present as being one that has customers that are a good fit with us and we think would get value from our offering. The other route is where we get asked by an existing mining customer somewhere else, usually an established international mining company, to go and support them in a new country where they might have a new project or current project. The latter scenario is much more frequent as we’ ll already be working closely with them at one or more operations and they appreciate the support we provide at that location or locations – and they want that replicated. In some cases they may have looked for local options for high quality tyre management services without success.
One of Kal Tire’ s AIMS concerns its responsibility to ensure team members are provided with quality leadership and training
Q: In a new country, new project situation are there typically parts of your offering they want to start with, or the complete Kal Tire solution?
In a customer-led situation, generally they are looking for as much help from the outset as we can give them. And that’ s because they want to derisk their tyre situation as quickly as possible. And today, a lot of it is about the technology, not the cost of labour. What they have had in Canada or Chile or Australia they want in the new location. While some of these new countries may have very low labour costs by comparison, the technologies and approaches are still economic for them to bring in with us because of the benefits – particularly over the life of mine. Particularly in emerging markets we’ re seeing a high affinity for advanced technologies, such as our KalPRO™ TireSight, our autonomous tyre inspection solution, which helps ensure oversight of safety while the local mining skills get up to speed.
Q: At what point do you hand over key responsibility roles to local people?
I worked in Indonesia for 12 years – and was transferring skills and knowledge to the local workforce throughout that time. In the end we‘ finished the job’ on that front to the point where many of those Indonesian workers went on to become the managers, and in fact a number of them are now expats themselves, working in management positions at locations outside of Indonesia. In terms of how we manage the expat versus local mix at the start in a new country, of course there is an initial discussion with our customer; and I would say today the consensus at mining operations seems to be that we start with a larger number of expats for the initial training period; which might take 24-36 months typically to get all of the local workforce trained to the highest standard. The expats during that period assist with the training and with the frontline leadership. Both us and the customer in our partnership arrangement are looking for not just the most efficient but also the safest outcomes possible – to mitigate the risk of harm to anyone as much as we possibly can. And end up, maybe after four or five years to have certainly a majority local workforce and possibly, depending on the operation type and location, to have an all local workforce with expat input via regular visits.
Q: Once you are operating in the new country with the existing partner customer that has requested you be there – do you then look to other opportunities in that country or region as you have a footprint already established?
When we have moved into a new territory, and we have an established arrangement with the primary customer – of course we will look at other opportunities but they will be assessed on their merits just like anywhere else on a case by case basis. If it makes sense and if that potential new customer can see the value that Kal Tire can bring – it is an option. But it would never be at the expense of our seven company AIMS which guide us wherever we are. There is never and will never be any dilution on that.
Q: Do you or would you ever consider working through a local authorised partner?
While we of course leverage any contacts we have locally, especially in the initial scoping period and particularly through our initial customer, to help us understand the new country culture and processes better – such as in areas like contracts, hiring and regulations. Today we do not use a dealer or agency model, though that is not to say it is something we would never consider in the future and it may have potential in certain cases. And it is something we have looked at and discussed. But as things stand today, we bring our whole owned entity wherever we go. If we did go down that road, whoever was representing us would have to adhere to the same principles and AIMS that all Kal Tire locations do. Upholding these would always be more important than just getting new business using this kind of model.
Q: Do you also look to what you can bring to the region and community where you will be operating?
There are always three parties taken into consideration in any new location where we are going to set up operations – first of course is the customer, then secondly ourselves as Kal Tire, including the Kal Tire board and the founding family. The third is the local community in the new location, and we always put a lot of thought into what our presence will offer and what long term benefits can we bring. We want there to be a positive legacy from our operations for communities wherever we are, whether its in Canada or in Accra. Our seventh AIM is to continually improve every aspect of our company, recognising our responsibility to our customers, each other, our communities and the environment. Again from my first
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