As part of its coordinated international strategy, minerals processing specialist Multotec is establishing a joint venture in Belo Horizonte, in Brazil, which will enhance its presence in the South American region, says Multotec screening media VP Roy Roche.
He tells Mining Weekly that the company is engaged in negotiations with PUR to move from the current agent agreement to a formal joint venture and a contract will be in place by the end of July 2018.
Multotec expects to move into the PUR branch in Belo Horizonte – “which is right in the heartland of Brazil’s iron-ore mining” – by the third quarter of this year, Roche notes. The new facilities include a full scope of manufacturing capabilities for the targeted product range.
Multotec already has an established branch and manufacturing capability, as well as associated support structures, in Santiago, Chile, and plans to replicate this model in Brazil. Roche comments that Brazil is the largest iron-ore market in South America, with one of the largest iron-ore mines in the world – the Carajas mine, owned by mining major Vale – also located in Brazil.
Multotec’s associated support structures include installation capabilities and after-sales services, as well as product performance monitoring and technical support. “Having proper support structures and managing them correctly lead to gaining clients’ trust, which, in turn, leads to their ordering from the company repeatedly; subsequently, the business becomes self-sustaining,” Roche says.
Further, Multotec has agents in Peru, as well as affiliations in Bolivia, Colombia and Mexico. The company also operates in Panama, Suriname, French Guiana and Costa Rica.
Meanwhile, the company recently invested in a new injection moulding rubber machine for its branch in Santiago and is acquiring a new polyurethane injection moulding machine for the facility in 2018. This will increase their panel capacity to 120 000 units per annum. Additionally Multotec is expanding its premises in Santiago, with Roche’s stating that this entails a factory to support the manufacturing capability and accommodate storage.
He highlights that Multotec operates in all the mines in Chile, including State-owned copper mining company Codelco’s Chuquicamata and El Teniente copper mines, as well as in mining major BHP’s Escondida and Spence copper mines. The company continuously asquires new clients throughout South America, such as mining and metals company First Quantum Minerals’ Cobre Panama copper project.
Roche emphasises the importance of an international strategy, detailing how such a strategy has played a role in Multotec’s success in South America since 1992.
“Multotec has learned and implemented many lessons through its international strategy,” he states, explaining that, when doing business internationally, it is crucial to understand time zones, cultures and differences in cultures, as well as being able to operate in different areas and situations.
Further, when embarking on an international strategy, “it is pivotal to envisage what your company’s value proposition is”, Roche asserts, adding that Multotec has a strong value proposition. Implementing long-term, consistent strategies is also important, as they articulate, clarify and assist in executing the value proposition, he emphasises.
Multotec is following a five-product strategy focussed on screening media, cyclones, samplers, spirals and ceramic linings in its targeting of South America.
Another key consideration for an international strategy is speed to market. Roche explains that clients require responses within a maximum of 24 hours, but ideally within two to four hours. “These are some of the observations and lessons that Multotec has made and learned in pursuing an international strategy”.
The benefits of working with international clients include other business avenues opening for the clients through Multotec’s networks, and vice versa, says Roche.
“The collaboration in working with a network of international subsidiaries bears its own fruit – each participant has skills sets that are different from the other and when you combine those skills, the results are better ideas and, for example, better ways of manufacturing.”
He has observed manufacturing techniques in Brazil that he was not aware of and which Multotec can now use globally.
“An international strategy is a matter of going in with your eyes wide open, looking for opportunities, observing which are available and seizing them, together with clients.”
The company’s international strategy has led to Multotec challenging international operators and benchmarking itself “with the best in the world”, he adds.
The South American market, from a Multotec perspective and product offering, has a significant potential value, says Roche: “We’re talking about somewhere in the region of R300-million to R400-million – and we are confident that we can capture upwards of 30 % of this”.
Further, he advances that of all mining investment globally, South America attracts about 30% of foreign direct investment (FDI).
Roche suggests that FDI into South America will grow, owing to the global demand for copper and iron-ore. He notes that “enormous amounts” of investment will be directed towards Chile and Peru in terms of copper mines, and Brazil in terms of iron-ore and other commodities, underscoring that the country has excellent, high-grade iron-ore.
Moreover, he highlights unexplored gold deposits in South America, the increasing importance of minerals, such as lithium and molybdenum, for the battery sector, as well as the coal reserves in Colombia.
“These are strategic minerals, all located in South America, all of which are, and will continue to be required globally for a long time,” Roche concludes.