COMPANY OF THE MONTH // ERGON ENERGY
www.businessreviewaustralia.com | October 2015
TOP 10 INFLUENTIAL INNOVATORS CEO TRAVIS KALANICK
THE GLOBAL IMPACT OF RETAIL–BASED CIOs BONUS: A look at
Woolworths
EDITOR’S COMMENT
Ah yes, October; when the weather warms and the flowers bloom during the middle of spring. As we jump into this month’s issue, I would like to open by congratulating new Prime Minister Malcolm Turnbull, who has ignited a spark of hope among the nation’s technology sector. By encouraging innovation within Australia, tech entrepreneurs across the country have welcomed the change. “Mr. Turnbull’s business acumen along with his knowledge of, and wellknown support for, the Australian technology sector will provide him with unique insights into the barriers facing Australian startups, particularly in terms of accessing venture capital and talent,” said Peter Bradd, CEO of StartupAUS. “As Australia enters a new era of growth, technology-based startups have the potential to transform the economy and create the jobs of the future.” With the nation’s new focus on technology, Business Review Australia’s October issue features the top 10 influential innovators from around the world. Uber CEO Travis Kalanick graces our cover as one member of the list, but can you guess who’s included in the other nine? Next, we dissect Google’s recent corporate restructuring under its new holding company, Alphabet, and why this could be beneficial for the tech giant. Furthermore, is this a maneuver that would be good for your growing business? In this issue, we’ll also examine the global impact of retail-based CIOs, while taking a look at Woolworths’ new CIO Clive Whincup, and what made this former Westpac CIO transition into retail. Finally, this month’s edition highlights Ergon Energy as our Company of the Month, while we also feature other top companies such as Lynas Corporation, Tag Oil, First Solar, Jetcrete and UGL Limited.
ERIC HARDING Editor eric.harding@businessreviewaustralia.com
3
CONTENTS FEATURES
14 TECHNOLOGY
CIOs: The new drivers of tech-based innovation
6 LEADERSHIP
Alphabetic order
COMPANY PROFILES
30
62
84
118
UGL
Ergon Energy
Tag Oil
96
Lynas Corporation
4
October 2015
First Solar
22
TOP 10
Tech-based innovations
COMPANY OF THE MONTH
ENERGY
30 Ergon Energy
Association of New
76 Sustainable Energy Zealand [Association]
SUPPLY CHAIN
84 TAG Oil
62 UGL Limited
MINING 96 Lynas Corporation 108 Jetcrete
CONSTRUCTION 118 First Solar
5
LEADERSHIP
ALPHABET
TAKING A DEEPER DIVE INTO THE BENEFITS OF THE LAUNCH OF
W R I T T E N B Y: E
TIC ORDER
F GOOGLE’S CORPORATE RESTRUCTURING AND ALPHABET, INC.
ERIC HARDING
LEADERSHIP GOOGLE WAS FOUNDED as a company that specialized in Internet search. Over time, it has broadened into other areas from drones, pharmaceuticals and venture capital to advertising, hardware, and even artificial intelligence. Today, Alphabet Inc., formerly known as just plain old Google, has arms that reach far beyond just the worldwide web. The tech giant is separating its moneymaking search and advertising businesses from the other “moonshot” subsidiaries. Alphabet is now the parent entity, and houses several companies, with Google the biggest among them. Under Alphabet, subsidiaries such as Google (the search engine) will be run autonomously, with each being able to focus on its own particular business. This would be a significant shift from the original setup, which had Google as the parent company in charge of a number of diverse verticals. Now, the various businesses will operate independently and be folded into Alphabet, while Google’s stock will also convert into Alphabet stock. Reasons for the change Google co-founder and Alphabet 8 October 2015
Upon announcing the creation of Alphabet, Sundar Pichai was announced as the next CEO of Google (Photo courtesy of Google)
CEO Larry Page claims that the move will allow for cleaner operations and more accountability. Still, some suspect the restructuring was an attempt to please investors annoyed by Google’s wild investments. The split would allow the founders more time to pursue new game-changing technology, while also increasing operational independence between businesses that are unrelated to each other. This will improve focus and
accountability, and create a house of brands as a catalyst for innovation. Only a few Alphabet businesses — namely Nest and Fiber — currently generate significant revenue. Some estimate those units will bring in about $500 million in total revenue in 2016, with about $100 million to $150 million in gross profit. The rest of the Alphabet businesses, many of which are still in early stages — such as the self-driving cars that are part of Google’s X lab
— consistently operate in the red. Alphabet’s non-Internet-related businesses could be hemorrhaging up to $4 billion a year, risking having a negative value when they are spun out into separate businesses under the Alphabet holding company. Perks to the shake up One overlooked aspect is how the new structure stops forcing subsidiaries to work dependently. 9
LEADERSHIP
The new Google logo accompanied the launch of Alphabet. (Photo credit: Nito / Shutterstock.com) Since everything doesn’t have to report through corporate, Alphabet’s businesses may begin competing against each other or overlap in ways that may have once seemed like conflicts of interest. This has happened even before the recent shakeup. When Google was working on a ride-sharing app, finance experts pointed out the competition with Uber, notable because Google Ventures had invested roughly $250 million in Uber back in 2013. Today, a situation like that 10
October 2015
wouldn’t have to face the same criticism. Sidewalk Labs, Alphabet’s subsidiary project to improve cities, could potentially find ways to foster connectivity without being obligated to partnering with Google Fiber, the super-fast internet subsidiary. Alphabet companies may even be able to seek investments from other outside sources, such as other corporations or financial entities, to jump-start projects that don’t fit with Alphabet’s corporate priorities or strategic interests. The rules will
SMART BUILDINGS COMBINE TECHNOLOGY WITH HUMANS
be completely different than in the old days under Google, and that could have a big impact across the technology industry. Who’s afraid of the big bad data collector? The new separation could also reduce some of the suspicions people have about what Alphabet plans to do with all the data it collects and stores from its various services. Look at how Nest, most known for its smart thermostat, has expanded
into other gadgets. Although the company insists it doesn’t share information with Alphabet, people still worry about it. After the change, there’s a much clearer divide between those two companies, and it gives Alphabet a little more cover from some of the criticism. Putting stock in it Investors are hopeful this move will mark a new era of transparency at Alphabet, which has kept a tight lid on the financials of YouTube, 11
LEADERSHIP
Eric E. Schmidt, Sergey Brin and Larry Page believe that innovation is key to the company’s continued success. (Photo credit: Flickr)
ALPHABETIC ORDER
Android, and other properties. Calico, Alphabet’s research company dedicated toward increasing lifespan, has quickly acknowledged new collaborations with scientists and institutions; however, it has disclosed almost nothing in the way of financial details. In fact, much of Calico’s operation is being kept under wraps. Analysts at Macquarie Securities said this new structure will give investors a better understanding of key metrics driving core Alphabet, but how much of a better understanding is still unknown. Alphabet continues to trade below its all-time high, even after the restructuring announcement. A new set of divisions, broken out more visibly, will not mitigate the slowing growth of its main business. As Wall Street picks apart the new Alphabet figures, it still will look primarily at the search division. Aside from decelerating revenue growth, the issue of rapid employee additions will be part of the calculation. Investors have been wary of Google’s habit of adding thousands of employees a year without saying what these people will do. Alphabet shares had lagged behind other technology companies for most
of the year, until the company reported better-than-expected second-quarter results and signaled plans to rein in spending on ancillary projects. The decision may not be enough to move the stock much higher. That will depend on the company’s slowing revenue, and whether Alphabet can milk that revenue for more profits. On average Alphabet is trading on average moderately below its all-time high, at $634 against its top of $678. Road mapping the future Restructuring and renaming the company so far have not produced a tangible, compelling strategy for the overall enterprise. On the other hand, if this move helps inspire corporate flexibility, the reasons for owning the stock would dramatically improve and increase. For years analysts and investors have scratched their heads at the company’s collection of businesses and ventures because they couldn’t see how these reflected or comprised a coherent strategy. Perhaps now the master plan is beginning to unfold.
13
T ETCE H C NN OO L OL GO Í AG Y
CIOs The new drivers of tech-based innovation
Why today’s CIOs are required to take a larger role in business growth and customer engagement WRIT TEN BY: GIN A RUBELLO
14
October 2015
INTELIGENCIAS EMPRESARIALES
15
TECHNOLOGY A STUDY BY Tata Consultancy Services (TCS) shows that retail CIOs are primed to lead the innovation agenda. In an era of digital Darwinism and evolving consumer behavior, there is a critical need for retail CIOs to transition from a focus on the ‘back office’ to driving innovation as C-level strategists, according to the findings from the study titled ‘The Global Agenda Of Retail CIOs.’ In today’s rapidly changing, consumer-centric retail landscape, CIOs must take a larger role in their company’s technological advancement, according to a study released today by TCS, (BSE: 532540, NSE: TCS) a leading IT services, consulting and business solutions organization. TCS commissioned Forrester Consulting to conduct the December 2013 study, “The Global Agenda of Retail CIOs,” to evaluate the state of IT within the global retail industry and CIOs’ attitudes and plans toward key trends and ever-more disruptive, challenging technologies. In-depth interviews with senior business and IT executives at global retailers found that the potential 16
October 2015
for CIOs to embrace disruptive technologies are far too often hampered by a lack of key resources and business alignment. This is illustrated through the fact that almost two thirds (64 percent) of global retailers consider cost reduction as a major focus over the next few years, compared to only two-fifths (38 per cent) citing innovation. “Retail CIOs are uniquely positioned with an enterprise-wide perspective to overcome operational silos and become
In today’s rapidly changing, consumer-centric retail landscape, CIOs must take a larger role in their company’s technological advancement
true change-agents, critical to future cross-channel customer engagements and business growth,” said Pratik Pal, President of Retail, CPG, Travel, Transportation and Hospitality for TCS. “They are primed to expand their leadership role in the dynamic new world of retail by spearheading the digital and innovation agenda.” Retail business executives’ core priorities remain revenue growth — with 87 per cent listing it as a top priority — underpinned by
multichannel integration and digital customer engagement. Retail CIOs believe that the disruptive technologies of mobility, social media, cloud, and big data will continue to radically transform the retail industry status quo, yet they are not staffed or structured adequately to take full advantage. Mobile – At the forefront of innovation that will continue to disrupt retail over the next years • CIOs plan to rapidly implement 17
TECHNOLOGY There is a critical need for retail CIOs to transition from a focus on the ‘back office’ to driving innovation as C-level strategists.
an array of mobile technologies, with context-aware tech (32 per cent), mobile payments (28 per cent), digital signage (24 per cent), and mobile POS (22 per cent) leading the way. • Retail CIOs in the United Kingdom are global leaders in implementing forms of mobile payments (73 per cent), while German retailers interestingly buck the global trend, with 60 per cent having no mobile plans at all. • Perhaps with an eye toward further improving customer service and logistics, six out of 10 (59 per cent) retailers plan to invest in mobileenabling their partners and vendors over the next three to five years. 18
October 2015
Cloud – Frees up IT teams from traditional core functions to allow greater innovation • While 41 percent of retail CIOs currently use SaaS (software-asservice) for back-office functions such as supply chain and product life cycle management or ERP, more than half (52 percent) intend to do so over the next five years. Big Data – Not yet being used to its full potential to drive actionable insights • Almost seven out of 10 (68 percent) retail CIOs report that they collect data, but agree they are not maximizing its full value. • Only 47 percent have invested in
CIOs plan to rapidly implement an array of mobile technologies, with context-aware tech, mobile payments, digital signage and mobile POS leading the way.
cross-channel analytics, a critical enabling technology for deriving multichannel insights and enhancing the company’s ability to reach consumers effectively through their channel of choice. • Additionally, only a fourth (25 percent) of retailers have plans to invest in big data analytics to support customer service. Social – Looking to expand the reach and application of social media intelligence • Not surprisingly, eight out of 10 (80 percent) retail CIOs leverage social media for sales and marketing, with customer service and recruitment the next most common functions.
• However, almost half (46 percent) of retailers plan to link social insights to research and development (R&D) and product design during the next three to five years — unlocking customercentric product designs. • Canadian firms are far ahead of other countries and regions, with 67 percent already leveraging social media for R&D. Talent Shortage – Lack of technical skills a key obstacle in implementing critical technology strategies • Almost seven out of 10 (67 percent) retailers surveyed consider attracting and retaining talent a critically important challenge over the next three to five years. 19
TECHNOLOGY
The potential for CIOs to embrace disruptive technologies are far too often hampered by a lack of key resources and business alignment.
• In the specific area of mobility, onethird (34 percent) report struggling to obtain the necessary talent. • Similarly, four out 10 CIOs turn to SaaS solutions (39 percent) and are compelled to leverage external partners with emerging mobile expertise (equally 39 percent) to support internal teams as they build mobile strategies and applications. “Savvy CIOs will continue to drive cost savings while accessing the latest technology innovations and leveraging partners to provide not only commodity services, but high value and hard to find capabilities like mobile development, architecture and business requirement definition,” added TCS’ Pratik Pal. “In doing so, CIOs can concentrate their internal resources on strategy, business alignment and partner governance, while partners concentrate on 20
October 2015
technical excellence.”
Bonus:
Spotlight on Woolworths Former Westpac CIO Clive Whincup resigned from the bank to join Woolworths as the retailer’s new chief information officer. An accomplished senior executive with a strong track record of delivering large scale transformation programs, Whincup drives strategic business outcomes, delivers technology innovation and initiates new ways of working and doing business. Whincup and his team are focused on improving business value and performance through rapid technology innovation and customer centric IT solutions. His recent success includes implementing a customer centred design framework, improving the availability of critical IT resources and
T E C H - B A S E D I N N O V AT I O N
driving benefits realisation for the recent Google Chrome implementation that includes embedding a new level of productivity, capability and flexibility across all brands. Woolworths planned all along to secure a tech expert, as it has previously been seen as a technology leader in the retail space. In addition, a Woolworths spokesperson said Whincup’s previous IT experiences will be invaluable to the company’s future technology plans. While the gap has narrowed in recent times, Woolworths’ success in implementing industry-leading supply chain systems as part of its Project Refresh in the latter part of the last ¬decade had been seen as giving it a huge competitive advantage. Last year, Woolies announced it was becoming one of Australia’s highestprofile corporations to migrate internal office staff to the Google Apps platform. Woolworths spokeswoman Claire Kimball confirmed the appointment and said Whincup would formulate plans for tech changes at the company. “Clive’s experience of retail in a banking context and his leadership of large-scale IT programs will be of great value to us in shaping the next phase of
development of our technology journey. We look forward to welcoming Clive to our team in coming months,” she said. Woolworths has already reported that improved online operations have helped the company achieve AU$1 billion in online sales for the 2013 calendar year — ahead of its 2014 financial year target. Woolworths’ success in implementing industry-leading supply chain systems as part of its Project Refresh in the latter part of the last ¬decade had been seen as giving it a huge competitive advantage. “Online sales from continuing operations increased more than 40 percent for the half year and second quarter, and featured strong growth within our food and liquor businesses as well as over the Christmas period,” said Woolworths CEO Grant O’Brien at the company’s 2014 half-year sales results. Prior to joining Woolworths, Whincup worked in a number of senior leadership positions in the financial services industry with Westpac Banking Corporation, Lloyds Banking Group, Banca Popolare di Milano, Bank of Scotland and CariVerona Banking Group (Italy). 21
TOP 10
TOP 10 Influencial Innovators
It can often take more than a good idea to succeed in the competitive world of technology yet these innovative entrepreneurs are prime examples of how to do it right.
Written by: Cutter Slagle
23
TOP 10 In business, there are never any guarantees, and it often takes more than just a good idea and a can-do attitude to achieve that high level of success; in fact, for an entrepreneur to thrive in the increasingly competitive environment of global business, he or she will more than likely need to stray from the traditional approach and be willing to take risks that could radically change the “norm.” The following innovations, created by industry-leading entrepreneurs, are prime examples of what can result from taking these risks. Ranked alphabetically, these are our top 10 industry-leading innovations and the innovators behind each.
recognition service. Barton originally founded the company in the UK, but was quick to expand to other territories including the U.S., Germany, Japan and Australia. In Europe, he was able to use new technology—Premium SMS—to get the design launched, proving that with a little resourcefulness goes a long way for making a good idea a reality. Understanding that the world changes fast and that mobile is a large part of how society interacts, Shazam now has 100 million monthly active users and has been used on more than 500 million mobile devices.
10
Clef has proven to be quite popular among bitcoin, as well as gaming
Chris Barton— Shazam
09
Brennen Byrne Clef
Barton and his co-founders successfully created Shazam by turning a concept into groundbreaking pattern recognition technology, resulting in the world’s first mobile music Brennen Byrne –Photo Cred Clef 24 October 2015
T O P 1 0 I N F L U E N C I A L I N N O VAT O R S
and developer tool sites, because it offers a safer and easier way to log into a website without the hassle of entering a password. Clef currently powers logins for more than 40,000 sites across the web and is continues to grow steadily. Though co-founder and CEO Byrne originally came from the development side of mobile apps, he’s proven that expanding skill sets and being able to wear many different hats is essential in the world of business. Bryne has now moved on to the strategy, distribution and business development side of Clef.
08
Joel Gibbard – Open Bionics
Gibbard didn’t just set out to create an innovating product that people would want, but one that people would actually need—not to mention be able to afford. Gibbard dramatically reduces cost to manufacture prosthetics by taking advantage of 3D printing technology. With an early experience in robotics, Gibbard has explored
Joel Gibbard –photo Cred TEDxExeter
other alternatives as well, including off-the-shelf components. This strategy reduces the cost of production to just under $1,000, a significant savings compared to traditional models that can cost upwards of $100,000.
07
Travis Kalanick – Uber
Uber, an American international transportation company, is a classic case of a good idea striking at the least expected time. Inspiration for Uber came when Kalanick found himself stranded on the streets of San Francisco; from there, he and his co-founder Garrett Camp set out to solve the 25
TOP 10
Jan Koum – Photo Cred catwalker
Travis Kalanick– Photo Cred JD Lasica
taxi problem in the busy city. With a little bit of innovation, Kalanick was able to take a traditional but flawed model and improve upon it. Though the company hasn’t been without controversy and criticism, it has still managed to become a $50 billion company in just six years.
06
Jan Koum – WhatsApp
A dropout of San Jose State University, Koum is the Internet entrepreneur and computer engineer who founded WhatsApp, a mobile messaging application. 26 October 2015
WhatsApp was acquired by Facebook in 2014 for $19 billion. Koum wanted a product that allowed the exchanging of messages without having to pay for SMS. Knowing the market and the need to be diversified, Koum launched his app in 2009. WhatsApp Messenger is available for iPhone, BlackBerry, Android, Windows Phone and Nokia and reached 900 million users in September 2015, justifying Koum’s argument for the need for diversity.
05
John Lewis— JLAB
It was less than one year ago that John Lewis officially revealed JLABS—a technology incubator that will reward a winning start-up
T O P 1 0 I N F L U E N C I A L I N N O VAT O R S
with a large investment in return for an equity stake. Already an innovator in retail, Lewis recognized the need to support tech start ups from inception to completion. Ultimately, Lewis has the business mind to risk venturing into a new area in order to stay relevant and compete with the competition, a key characteristic for anyone that wants to make a name as an innovator.
04
Evan Spiegel— Snapchat
A video messaging application, Snapchat allows users to take photos, record videos, add text and drawings and then send them to a restricted list of friends or recipients. These messages are known as “snaps” and users can
Spiegel – Photo Cred TechCrunch
determine how long a person is able to view these snaps before they disappear (from one to 10 seconds). Spiegel originally proposed Snapchat as a class project while studying design at Stanford. Then, in 2012, he left school before graduating to completely focus on the venture. Facebook offered to acquire the company for an easy $3 billion, but Spiegel turned down the offer, allowing himself the liberty to remain a creative free agent.
03
Kevin Systrom— Instagram
A graduate of Stanford University, Systrom and his co-founders came up with the online mobile photosharing, video-sharing and social networking service Instagram
Systrom – Photo Cred JD Lasica 27
TOP 10
(derived from the words “instant” and “telegram”) in an attempt to create a new form of communication that was a perfect fit for a society that is constantly on its smartphone. Following the popular trend of “sharing,” Instagram allows the development of web profiles, connecting accounts to Facebook, Twitter, Tumblr and Flickr. Instagram has set many trends that are now common terms, including Throwback Thursday and the selfie, which in 2013 was the Oxford English Dictionary’s “word of the year.”
02
William Zhou— Chalk.com
Chalk.com, developed to assist teachers is currently used in over 20,000 schools worldwide. This collection of productivity apps for K-12 educators aids with lesson planning, assessments, collaboration, attendance and more. William Zhou, co-founder and CEO of Chalk.com, has credited the idea to visiting his high school 28 October 2015
teachers and seeing their struggle with overwhelming amounts of work. Returning to his roots proved to be sound business strategy, as the company has over 100,000 educators as users.
Zhou – Photo Cred Chalk.com
01
Mark Zuckerberg—
A household name thanks to the ongoing popularity of social media and the blockbuster film The Social Network, Zuckerberg is an American computer programmer
T O P 1 0 I N F L U E N C I A L I N N O VAT O R S
and Internet entrepreneur. Due to Facebook’s success, he became a billionaire at the age of 23. Now 31, he remains CEO of arguably one of those most
successful companies worldwide, proving that you don’t always need a college degree to flourish in the business world, just plenty of determination and a viable idea.
Zuckerberg – Photo Cred Frederic Legrand - COMEO
29
Ergon E Regional Queenslan
Executive General Manager Peter Billing initiatives on the hori Written by: Robert Spence
Energy nd’s energy supplier
g discusses innovation and reveals upcoming izon for Queensland. Produced by: Glen White 31
C O M PA N Y N A M E
E
rgon Energy is more than just your average energy company. Founded in 1999, the government-owned corporation is a forward-thinking electricity provider. It services more than 720,000 customers across Queensland by supplying electricity and alternative solutions to residents and businesses from the coastal population to the rural and remote communities throughout the region.
Ian McLeod, CEO 32
October 2015
SECTOR
Anatomy of Ergon Energy The Queensland company is comprised of two sides: one that builds and maintains the electricity distribution network, and one that sells electricity to residential and business customers. Ergon Retail is the customer facing part of the company, assisting customers in everything from opening new accounts, arranging location moves and managing electricity use to locating convenient ways to pay accounts, support systems and
“Innovation is huge for us. It’s an important part of our business and we’re always looking at new ways to apply new innovation throughout the company.” –Peter Billing, Executive General Manager, customer service.
w w w. e r g o n . c o m . a u
33
Nexans Olex is Australia's trusted electricity industry partner; providing electrical cable products and solutions for over 75 years. From project design through to decommissioning, our local technical design and support team are there when you need us to keep your assets running and to let you focus on your business. Our comprehesive product range includes solutions for:
Head Office 207 Sunshine Road Tottenham Victoria 3012 Australia Phone: 1300 CABLES
www.olex.com.au
SUPPLIER PROFILE
Employees: 350 Australia, over 20000 Worldwide Established: 1940 (Australia) Industry: Power Transmission and Distribution, Transport Networks and Infrastructure, Resources (mining, oil and gas, renewables), Building Construction Products and Services: We are manufacturers and suppliers of a full range of electrical and data cables and electrical system solutions. Our products have been designed with local industry by our Australian technical team and best in class global research centres. Ongoing Projects: APLNG Gas Field Electrification and Wells Online, Ichthys Gas Field Downstream Processing Facilities, Ergon Energy Power Utility Network, Key to success: Our approach is to partner with our customers. We are involved in your success and provide solutions which help you achieve your goals. This is backed by a commitment to best quality manufactured products designed for your specific application and operating environment. Future developments: LoSAG™ Covered Conductor is an exciting new product for power distribution networks which greatly reduces the risk of bush fires while also remaining compatible with existing systems for the lowest cost SWER replacement line option. Company Mission: Nexans Olex aspires to be the first choice supplier of cable solutions in Australia. With a rich history at our core, we aim to draw on our global parentage to lead the electrical industry through technical innovation, quality and industry stewardship. Management: • Tony Dunstan, Managing Director • Greg Stack, General Manager Sales • Tony Jones, National Manager Utilities & Contestables Website: www.olex.com.au
ERGON ENERGY
ENERGY
government rebates. The distribution side of the business, Ergon Energy, provides energy services to residents and businesses while maintaining an electrical network that stretches roughly 160,000 kilometers of power lines across Queensland. Within the network operates 33 stand-alone power stations that provide energy to isolated communities within the region. Additional services include accommodating connections for new technologies such as solar, as well as a small manufacturing group to handle the construction of module substations. Unlike your typical energy provider, Ergon Energy is driven by innovation. “Innovation is huge for us. It’s an important part of our business and we’re always looking at new ways to apply new innovation throughout the company,” said Peter Billing, executive general manager of customer service at Ergon Energy. According to Billing, the company continuously seeks out new ways of improving service – whether through infrastructure or alternative energy sources – to better position themselves for the future.
“We recognised back in 2007 that the price of energy would become an issue and that we would need to adapt.” Peter Billing, Executive General Manager, customer service. w w w. e r g o n . c o m . a u
37
ADVANCED DIESEL FUEL WITH SOPHISTICATED ENGINE CLEANING TECHNOLOGY Caltex Active TecD is a high-performance diesel fuel specifically designed to clean-up performance degrading deposits from heavy-duty diesel-fuelled engines, such as buses, trucks, mining equipment and power generators, and keep them clean. Caltex Active TecD works to help improve injector cleanliness, and consequently enhance fuel flow through the injectors and restore engine power.
ERGON ENERGY
ENERGY
“We recognized back in 2007 that the price of energy would become an issue and that we would need to adapt,” Billing revealed. “It got us thinking differently and we realized if we keep doing things the way we’ve always done them, the world will change and we’ll become obsolete. “We may not be Apple or Google but we’re striving for innovation.” To ensure creativity is alive and well within the organization, Ergon Energy strives to cultivate an atmosphere that empowers people to speak up and bring their ideas to the table. “We encourage everyone in our organization from the top to the bottom to read and learn new things happening in the world. We encourage them to think of new ways of doing things and ways to apply those innovative ideas to our type
SUPPLIER PROFILE
ACTIVE TECD: THE FUEL OF THE FUTURE
Internal diesel injector deposits are of increasing concern in modern high pressure common rail fuel injection systems, which are manufactured to meet precise tolerances and operate with tiny clearances (down to 2-6 micron). These deposits can affect the response of the fuel injector, causing sticking of moving internal parts and loss of control of injection event timing, as well as the quantity of fuel delivered. By cleaning up performance degrading deposits from an engine – and keeping it clean – Caltex Active TecD works to restore power, improve injector cleanliness and ensure better fuel flow through the injectors. It is formulated with a high treat rate of Caltex’s advanced, proprietary additive system which also inhibits the formation of rust and corrosion. The anti-foaming agent in Active TecD reduces foaming to zero in industry standard tests, which in practice lessens both splashback and odours commonly associated with regular diesel, allowing for faster and cleaner fill ups. Website: www. caltex.com.au/tecd
w w w. e r g o n . c o m . a u
39
EDITORIAL
C
altex and Ergon Energy’s Isolated Systems have formed an interdependent relationship based on collaboration, trust and shared values. Caltex’s central role is to supply diesel
fuel and lubricants to all of Ergon Energy’s 33 remote power stations, which provide dependable and stable electricity to remote parts of Queensland, including the Torres Strait. The relationship
between the two organisations is critical to ensure consistency of the power supply and to make sure that fuel is transported and delivered safely and effectively with minimal risk to the environment. Caltex has proven to be a trusted supplier and a key partner in Ergon operations. In one of many dialogues between both companies to review operational efficiencies and improvement initiatives, Caltex proposed an opportunity for Ergon to reduce fuel consumption. ActiveTecD fuel, one of three Caltex value-added fuel products, was suggested as being a good fit with existing infrastructure and logistics. The fuel was claimed to offer a potential 2 per cent improvement in thermal efficiency (reduced consumption), by removing deposits in the fuel system and preventing further build-up. In prolonged operation this should help restore and maintain ‘new engine’ like performance for longer. Caltex was able to demonstrate
the claimed effectiveness of ActiveTecD in the transport market, which established a performance test in the power station at Boulia, Queensland. Boulia was proposed to demonstrate the effectiveness of the fuel as it had a good mix of old and new engines, giving a credible trial at a load that was typical of the rest of Ergon’s fleet. Based on before and after thermal efficiency measurements, the data collected showed average fuel efficiency to be slightly better than the purported figure. This level of performance was sustained after many months of successful operation. Caltex’s support has been with Ergon all the way, and its strong technical capabilities and experience is something on which Ergon Energy places a high value. From a supplier management perspective, the Caltex relationship sets the benchmark against which all other Isolated System suppliers are compared.
“Work Safe, Home Safe”. Established in 2007, Geiger Group is an infrastructure business providing electrical, civil, telecommunications and ancillary works in Queensland and Victoria from our Toowoomba, Brisbane and Melbourne offices, with capability nationally. Manage and deliver: • High and low voltage distribution works including overhead and underground • Underground reticulation • Commercial and industrial electrical works including new builds and refurbishments • Earthworks, excavation and civil works including remediation and new works • Communication and data installation • Project management works Geiger Group has a proven track record of delivery in our key markets which include mining, oil and gas, civil, commercial and industrial construction, rail and energy sectors. The Geiger Group vision for all staff is ‘Work Safe, Home Safe’.
Queensland: 5 Tait Street, Toowoomba Qld 4350 | PO Box 7009 Toowoomba South Qld 4350 | 07 4614 4300 Brisbane: PO Box 2017 Graceville Qld 4075 Victoria: 7 Kearney Street, Bayswater VIC 3153 | PO Box 888, Lilydale VIC 3140 | 03 9720 3289 info@geigergroup.com.au | geigergroup.com.au
ERGON ENERGY
SUPPLIER PROFILE
ENERGY
GEIGER GROUP
Employees: 150 Established: 2007 in Toowoomba, QLD Industry: Geiger Group provides Electrical, Civil, Telecommunications and Ancillary works with works being completed across Australia for some of Australia’s leading electrical, gas and civil suppliers. Services: Works from high and low voltage and underground works, earth works and civil works to data installation. Project management and technical advice. Ongoing Projects: Geiger Group are industry leaders in contracting services for overhead and underground electrical distribution network assets. Our key markets are Queensland and Victoria with National capabilities Website: www.geigergroup.com.au
w w w. e r g o n . c o m . a u
43
We spend all our energy forging Greg Sewell Forgings are honoured to be included as part of the nuts and bolts make-up behind Ergon Energy’s streamlined supply chain and are proud of the strong and lasting relationship that we have forged together. For over 30 years now, Greg Sewell Forgings has been manufacturing and supplying quality steel forged & fabricated products to the Australasian market. For all of your fastener and line hardware accessory requirements or to find out more about Greg Sewell Forgings, please contact our National Sales Manager – Mr Robert Borg on (02) 8814 5990 or email: rborg@gsforgings.com
‘Experience in forging’ www.gsforgings.com
ERGON ENERGY of business,” said Billing. “When everyone is bringing something to the table, one idea might spur another. We encourage that.” Putting innovation into action For Ergon Energy, company-
SUPPLIER PROFILE
ENERGY
wide collaboration is a key component behind one strategic focus: exploring new possibilities for collecting, consuming and conserving energy. One example of this is the utilization of batteries. “We’re seeing that batteries are
GREG SEWELL FORGINGS
Greg Sewell Forgings Pty Ltd is a major manufacturer and supplier of specialty, high and low volume components with a diverse range of capabilities. We have produced thousands of different components from low grade carbon through to high end stainless steel to meet the high requirements from the Power Industry, Mining, Rail, Agricultural, Automotive and the Fastener industry. Our flexibility allows us to offer single run low-volume to high-volume production at competitive prices. A cornerstone of our business practice is to build mutually beneficial partnerships with our customers and suppliers, and to continually seek improvements for us and our customers through innovation and excellence. To this end Greg Sewell Forgings Pty Ltd has adopted the AS/NZS ISO 9001:2008 Quality Management System. Website: www.gsforgings.com
w w w. e r g o n . c o m . a u
45
Driving Fleet Innovation
SG Fleet’s industry leadership and strong business performance is built on the company’s major competitive assets: exceptional relationships with customers through outstanding service quality, the ability to develop our offering through innovation, and the skills and experience of our people.
Whether you run a fleet of 5 or 10,000 vehicles, sgfleet is the answer. Corporate fleets Government fleets Small to medium enterprise Salary packaging Passenger and light commercials Heavy commercials Mobile equipment Fleet management sgfleet will tailor the right package for you with flexible finance arrangements.
Visit our website: www.sgfleet.com
Call us on: 1300 138 235
SUPPLIER PROFILE
SG FLEET GROUP LIMITED SG Fleet Group Limited is one of Australia’s leading specialist providers of fleet management, vehicle leasing and salary packaging services. SG Fleet has a presence across Australia, as well as in the United Kingdom and New Zealand. The company employs over 400 staff and has more than 90,000 vehicles under management. SG Fleet listed on the Australian Securities Exchange in March 2014. SG Fleet offers an extensive range of fleet management, leasing and salary packaging solutions to corporate and government customers, as well as heavy commercial fleet management and leasing services. Salary packaging solutions provided by the company include novated leases and associated vehicle management services for customers’ employees, as well as a range of other employee benefits. The company has a unique position in the marketplace, built on the experience, product expertise and commitment of its team. SG Fleet prides itself on the strength of its relationships with blue chip corporate and government customers. These relationships have been built on a customer-centric approach to service delivery and the development of bespoke but scalable solutions to meet the needs of individual customers. Constant innovation allows SG Fleet to provide its customers with an industryleading proprietary technology platform that enables highly advanced fleet management capabilities. The company continually upgrades its solutions and introduces additional products and services to its range. Management: • Robbie Blau, Chief Executive Officer • Kevin Wundram, Chief Financial Officer • Andy Mulcaster, Managing Director, Australia Website: www.sgfleet.com
THE TRANSFORMER PEOPLE
Power Transformers (≤550MVA) Distribution Transformers (≤5,000kVA)
Special Transformers
Compact MV Substations
Special Applications
Monitoring and Control Solutions
For more information about our products and services, please visit www.wtc.com.au
BUILT SMART
FOR LIFE
ERGON ENERGY part of our future,” said Billing when explaining the company’s ongoing partnership with Mitsubishi. In 2012, the company purchased six Mitsubishi electric vehicles (EVs) and ran trials in Townsville over an 18-month period to understand customer acceptance of EVs and the eco system that supports them. “We were able to examine how these vehicles were used, including how and when they charge, in order to better understand their impact on our network,” Billing said. Ergon Energy recently secured another deal with Mitsubishi to integrate eight Mitsubishi Outlander
SUPPLIER PROFILE
ENERGY
plug-in hybrid electric vehicles (PHEVs) into their fleet, as well as finalizing a lease offer to employees that could see up to an additional 100 EVs provided for use later in the year. “From an electricity perspective, the use of EVs is a natural synergy,” Billing said. “It’s the beginning of a new role of technology in the energy sector: Why wouldn’t we be on the ground floor running?” While the partnership with Mitsubishi is a great starting point, it’s only the tip of the iceberg for Ergon Energy. In July, Ergon Energy announced it was working with the government
WILSON TRANSFORMER COMPANY
Established in 1933 with a proud history, Wilson Transformer Company is a leading specialist in the delivery of transformer solutions. From our manufacturing base in Australia, we deliver solutions to a wide variety of industries and customers around the world including electricity generators, transmission and distribution organisations as well as variety of heavy and light industrial users. Within our product range, our state of the art facilities are equal to the best the world has to offer. By using the latest design software, analytics and manufacturing technology, we engineer and manufacture our products in clean work environments incorporating strict quality control measures. We also have a dedicated team of people for field operations and support services. Through our world-class capabilities, specialist knowledge and proven reliability, our customers can be assured of a quality outcome. We are building smart for life solutions and this means performance you can rely on. Website: www.wtc.com.au
w w w. e r g o n . c o m . a u
49
PERFORMANCE SOLUTIONS FOR ELECTRICITY GAS WATER UASG is Australia’s leading provider of retail meter reading and installation services in the electricity, gas and water sectors, and of end-to-end essential maintenance and inspection services in electricity distribution. Our speciality brands, Skilltech and UAM, partner with customers to offer safe, compliant and reliable services. This commitment is evidenced by our 95% client renewal rate and outstanding safety record. Our essential services support Ergon Energy every day by: ●
Inspecting and maintaining 250,000 poles and 50,000+ street lights a year in urban and remote areas
●
Conducting an Annual Road Patrol Program of 30,000+ street lights
●
Supplying quality field metering services, including reading, special reads, disconnections and reconnections to 2.4+ million accounts each year
Contact us today: 1300 377 170 enquiries@uasg.com.au www.uasg.com.au
ERGON ENERGY
SUPPLIER PROFILE
ENERGY
UASG
UASG provides performance solutions for electricity, gas and water networks. With 1,500+ employees, 900+ vehicles and more than 24 years experience, we deliver quality specialist services covering: • Meter reading, installation and Advanced Metering Infrastructure (AMI) • Energy and water efficiencies • Asset inspection/monitoring • Data capture • Electrical overhead construction/maintenance • Pole reinforcement services • Vegetation management • Lighting efficiency programs • LIDAR • Survey, design and drafting Website: enquiries@uasg.com.au
w w w. e r g o n . c o m . a u
51
Brisbane | Sydney | Melbourne | Adeleide | Perth
Elevated Work Platform Specialists Latest in EWP Technology Reliable Equipment From 12m to 103m Back Up Service Australia Wide Our Fleet Includes Live Line & Under Bridge Inspection Units
P: 1300 LINCON
E: hire@lincon.com.au
www.lincon.com.au
Tel: +61 7 4061 6426 Transportation and Logistics, container movement, general freight deliveries with the inclusion of crane trucks and truck mounted forklifts and oversize loads. Meeting Australian Safety Standards, Our Trucks are equipped with Tracking Systems and Cameras.
www.innisfailcarrying.com.au
ERGON ENERGY to create an EV highway with Australia’s first solar-powered fastcharging station. “This is an opportunity to create a need in the market,” said Billing. “If you wait for everyone to get electric vehicles, it won’t work—it will be too late. We needed to be similar in our thinking of leading by example and getting the ball rolling.” Billing also revealed the company
ENERGY
is about to purchase three Battery Packs for their hydraulic elevated work platform field trucks. “For us, the payback is reducing our diesel consumption while also eliminating the noise these machines make.” Not stopping there, Ergon Energy is also seeking to utilize alternative energy solutions in other areas of its businesses. “We’re actually putting batteries on
w w w. e r g o n . c o m . a u
53
The world’s first shear-bolt action mid-span splice
MTRS from Sicame Australia - the new mechanical tension repair splice has been developed to overcome many of the issues effecting poor jointing of bare overhead conductors with either compression, helical or spring type splices. High-torque, shear-head bolts apply pressure points on the conductor via an internal pressure plate in a unique wave-like pattern along its length, thus ensuring superior and reliable mechanical and electrical performance.
sales@sicame.com.au | www.sicame.com.au
SICAME AUSTRALIA HQ
SICAME AUSTRALIA NSW
23-25 Union Circuit Yatala, QLD, Australia (+61) 7 3807 7022 (+61) 7 3807 7522
4/36 Holbeche Road Arndell Park, NSW, Australia (+61) 2 9621 3155 (+61) 2 9622 7120
STIRLING HELICOPTERS Central Queenslands leading helicopter company operating a broad range of helicopter fleet and offering a vast range of professional helicopter services with very experienced and professional pilots.
We offer extensive helicopter charter services to the following industries: • Mining, Gas and Power • Corporate and Tourism • Defence and Government • Agriculture
EXPERIENCED PILOTS AND AN IMPECCABLY MAINTAINED FLEET
CONTACT:
Servicing Central Queensland and South West Queensland Email: admin@stirlinghelicopters.com.au Phone: 07 4937 1180 Web: www.stirlinghelicopters.com.au Mobile: 0429 371 180
ERGON ENERGY the end of remote and rural sections of the electricity network and using them as support in times of high load,” said Billing. “The benefits are immense because they don’t need to be augmented and they store energy in the off-peak times and then feed back into the network during highpeak times.” According to Billing, the company is in the process of working with
ENERGY
some developers to implement batteries in subdivisions as well. “The outcome could potentially build a type of distributed generation network in a housing subdivision, which would provide an array of benefits to customers.” Ergon Energy is also building its retail business to reflect more opportunities for solar technology. In August, Ergon Energy forged
w w w. e r g o n . c o m . a u
55
ERGON ENERGY an alliance with Californian electricity storage developer Sunverge Energy to launch a limited commercial rollout of its power systems in Queensland homes. The partnership involves installing SunPower solar panels and Sunverge energy storage systems in 33 homes in Toowoomba, Townsville and Cannonvale in a program that will receive $400,000 of funding by the Australian Renewable Energy Agency. The power system is comprised
of back-up power, a six-kilowatt inverter with 11.6 kilowatt-hours of energy and communications, and control capability that allows the company to collectively manage the system to increase the efficiency of power supply on its grid. “This partnership will help us better understand the technology and where we stand in terms of our network. It’s helping us model what our future network could look like,” Billing explained.
Maintaining today’s assets, creating tomorrow’s power solutions UGL provides whole of life asset solutions for large and complex power systems across Australia, New Zealand and Asia, from electrical substations and transmission lines to advanced power stations. Throughout Queensland, UGL has been a proud supporter of Ergon Energy for 8 years working together to deliver 62 substations and associated infrastructure to provide electricity to 734,000 customers in homes and businesses across regional Queensland. The key elements to UGL’s success are our close working partnerships and decades of experience in delivering engineering construction and O&M solutions to our clients.
www.ugllimited.com
ENERGY
Thinking forward A major initiative Ergon Energy has undertaken is in the form of disaster relief. The company is currently running a series of scenarios to better understand the network in the event of natural disasters, as well as learning how it could improve. “Right now we’re doing two things, the first of which is running a series of exercises to test the readiness of our network and whether we need to reconfigure it or change critical aspects to make it more resilient in the future,” said Billing. “The second thing is technology. We’re looking to interact with a number of technologies such as crowdsourcing and social media to find out if these are applicable for us.” The company is also holding workshops to better understand response perspectives from people and companies with actual experience dealing with these disasters. “Input from Rod West from Entergy in the United States has been paramount for us,” Billing. “His experience from Katrina and lessons learned were really insightful and important for us to consider with our network.” “All of these workshops, exercises and reports are better preparing us for the future,” said Billing. “We’re thinking ahead and about where we want to be in 2020.” With Ergon Energy at the helm, the people of Queensland are in good hands—today and in the future.
Company Information INDUSTRY
Utilities; government agency HEADQUARTERS
420 Flinders St Townsville, Queensland, Australia FOUNDED
1999 EMPLOYEES
4,500 PRODUCTS/ SERVICES
Utilities; government agency
w w w. e r g o n . c o m . a u
57
ERGON ENERGY EXECUTIVE SPOTLIGHT
59
CH T OE M PA W HNOY’ SN W AM HE O OF ERGON ENERGY Australia and is Chairman of Ergon Energy Queensland Pty Ltd, SPARQ Solutions Pty Ltd and Ergon Energy Telecommunications Pty Ltd.
IAN MCLEOD
Chief Executive Officer Ian McLeod is responsible for the business’ overall direction and, ultimately, for meeting the service delivery expectations and requirements of Ergon Energy’s customers, the community and regulators, as well as the business and financial objectives of shareholders. Ian brings extensive electricity industry experience to Ergon Energy; experience gained through management roles in the private contracting industry, in Powercor Australia and the State Electricity Commission of Victoria and Ergon Energy. Ian is a director of Energy Supply Association of 60
M cotnotbh e2r 021041 5 O
DAVID EDMUNDS
Executive General Manager, Network Optimization David Edmunds is responsible for the safe, efficient and effective utilization of Ergon Energy’s electricity distribution and associated communications networks and, where necessary, the delivery of new major infrastructure projects or other non-traditional solutions. He brings experience in both the corporate and public sector, to the executive including executive management, engineering, operations, and contracting, as well as proven leadership capabilities.
E X E C U T I V E S P OSTELCI G TO HR T
David has held senior roles in the electricity and gas industries of New Zealand, as well as in local government.
involved in the deregulation of the electricity industry in South Australia in the 1990s. He is on the board of Energy Skills Queensland.
PETER BILLING
MIKE HUTCHENS
Peter Billing is responsible for the operational effectiveness of the distribution business and for the safe, efficient operation and maintenance of Ergon Energy’s network. He is also responsible for supply to Ergon’s isolated communities and the commercial delivery of modular infrastructure and generation solutions. He brings a wealth of industry, leadership and change management experience to the executive, from trade roles to management. Peter was directly
Mike Hutchens is responsible for managing the financial and commercial aspects of Ergon Energy’s business, including strategic procurements, as well as the business’ legal counsel and risk and assurance program. Mike has significant accomplishments in financial and general management and has worked for a diverse range of businesses, including publicly listed multinational corporations, predominantly in the mining industry, as well as large professional services firms.
Executive General Manager, Customer Service
Chief Financial Officer, Finance and Corporate Services
ww ww. ww co . emr p g aonny. u c rolm . c.oam u
61
UGL Adapting its
supply chain
The diversified services firm, which specialises in the delivery of critical assets within Australia, has been in the process of switching its supply chain methodology for the benefit of its end users. Written by: Sam Jermy
Produced by: Vince Kielty 63
UGL
UGL’s ultimate objective is a dynamic supply chain that is responsive to its customers.
U
GL Limited has been on a journey to fundamentally change its operations, in order to get ahead of the industry curve and continue to see the $2.3 billion business grow. The company, which trades on the Australian Securities Exchange, is a leading provider of end-to-end outsourced engineering, asset management and maintenance services with a diversified endmarket exposure across the core sectors of Rail, technology systems, power, resources, water and defence. With over 8,000 employees 64
October 2015
(including subcontractors) across Australia and South East Asia, the company partners with some of the world’s largest blue-chip companies, government agencies, and private enterprise/public institutions. It is not an easy task to revise the supply chain strategy of any company, as it is intrinsically linked to daily operations. Dean Newman, Head of Supply Chain for Rail Freight at UGL, explained the Rail Freight business’ journey in detail. He said: “Our underlying fundamental principle is the maintenance and construction of assets; that’s the
S U P P LY C H A I N
UGL’s Rail division falls under the Rail, Defence and International (RDI) umbrella.
same regardless of sector. With regard to Rail, the building of assets has changed; there’s not the mining boom that there once was and the construction of heavy rolling stock has declined as a result.” “Importantly, UGL currently remains the only builder of locomotives in Australia. In the build space, we are General Electric’s representative in-country. We build locomotives either as a coOEM (Original Equipment Manufacturer) product or as a GE product under licence supervision. We have a co-OEM product that we build with them; the C-44 locomotive. As the landscape changed, where we were a large prolific builder of locos and wagons, now there is far greater emphasis on the maintenance of assets.”
“Importantly, UGL Rail currently remains the only builder of locomotives in Australia. In the build space, we are General Electric’s representative incountry.”
w w w. u g l l i m i t e d . c o m
65
C&J SHEETMETAL FABRICATIONS
One-Stop Shop Approach C & J Sheetmetal Fabrications started in 1990 and over the past 25 years our Company has grown due to providing Excellent Customer Service, Quality Products and On Time Delivery. We service the Rail, Mining, Defence, Industrial and Engineering sectors in Australia. We currently have an Australia wide client base, which generates repeat business. Quality Management System – ISO 9001:2008
WE ARE SPECIALISTS IN:
• Laser and Water Jet Cutting • CNC Pressing, Punching & Folding • Stainless Steel, Aluminium and Mild Steel Fabrication, by Certified Welders • CNC Machining / CNC Milling • Sandblasting • Spray Painting to Automotive Quality
Ph: +61 2 4904 0000 Fax: +61 2 4947 1166 Email: sales@candjsheetmetal.com.au
1 Waterloo Street Bennetts Green NSW 2290 www.candjsheetmetal.com.au
UGL
S U P P LY C H A I N
Strategic shift As such, the supply chain that underpins the Rail freight business has had to shift radically. The primary shift has been moving away from an inventory push methodology associated with materials pushed into the supply chain, to support the build of locos and wagons: UGL now has to be far more dynamic, adaptive and aligned to what the customers expect from the firm. Newman said: “We hold a unique position now. Most of the locomotive manufacturers exited in the last 12 to 18 months because of the low demand. So in today’s world we’re adopting an inventory pull methodology. Over the last 12 months UGL has been driving the implementation of a really robust sales and operations planning (S&OP) process, where we endeavour to get
SUPPLIER PROFILE
Dean Newman - Head of Supply Chain for Rail Freight at UGL
C&J SHEETMETAL FABRICATIONS
Established in 1990 C & J Sheetmetal Fabrications enjoys a reputation as one of most respected names in our field. We are a family owned Company that has been running for over 25years. Our vast industry knowledge, highly experienced tradesmen and state of the art equipment allows us to offer our customers options not normally available from one location. We carry a wide range of sheet and plate in stock and can respond to your urgent requirements. C&J Sheetmetal are committed to offering a quality product and better service at very competitive prices. We conform to a Quality Management System ISO 9001:2008. Website: www.candjsheetmetal.com.au
w w w. u g l l i m i t e d . c o m
67
UGL is a leading provider of end-to-end outsourced engineering, asset management and maintenance services
UGL
S U P P LY C H A I N
marketing information from customers (internal/ external), look at historical consumption and insert a predictable variability factor, because in the maintenance business you’re always going to have emerging type work. It’s all about trying to build the right forecast model.” “Our ultimate objective is a dynamic supply chain that is responsive to our customers. But more importantly it will become a fundamental enabler for the reduction of inventory held within the business and will improve the ROCE (return on capital employed), making sure inventory is not on shelves being lazy; it is actually working for us.” “Two years ago we were very much in the build space and now that shift has seen the supply chain change to the maintenance of assets instead. Historically we had a business referred to as the National Freight Parts Sales, which had rendered supply chain capability.” UGL has now implemented a more robust supply chain focusing on operational efficiency, core competency, and total quality management across its Rail division. Inventory management has also improved, with sales and operational
Dean Newman
“The outlook is positive in that we’ll continue to diversify and serve our customers with exceptional service, and as we migrate from a push to pull inventory strategy it will help us to help them.” w w w. u g l l i m i t e d . c o m
69
End-to-End Mobile Communication Solutions base2 is an original equipment manufacturer (OEM) of communications and control room hardware and software. From product inception, electronic design, mechanical design, testing, rmware and software, through to production, all engineering and manufacturing services are performed in-house. • The base2 ICE, In-Cab Communications Equipment is a modular communications device speciically designed for the rail industry. • The base2 VCS is a control room system for integrating voice and data communications systems into a touchscreen operator console. • The base2 National Train Communications System (NTCS) is used for all train control communications on the Australian Deened Interstate Rail network and selected regional areas.
28 Pritchard Road, Virginia, Queensland 4014, Australia Ph: +61 7 3637 5444 | Fax: +61 7 3637 5445 | Email: admin@base2.com.au
www.base2.com.au
UGL
S U P P LY C H A I N
planning helping to move from the uptake. the push to pull methodology in Newman suggests the Rail response to changing market needs. industry in Australia is now also awakening to this pull methodology Implementation in Australia though. He said: “It’s been a tough The Australian engineering and Rail road at times because it has been a sectors spent a lot of time where a paradigm shift from the way in which push supply chain strategy was the the business operates, and the best option according to Newman, entire mindset has to change. We’re because it was simply more moving from buying ‘just in case’ important to keep customers’ rolling and trying to push that to a market stock moving in industries such as where we move to a strategy that mining. Compared with the FMCG says ‘no, let’s understand what we (fast moving consumer goods) will need and when we will need it.”’ world, which has a far more mature “Implementation of pull advancement of pull strategies, methodology on inventory stocking mining and Rail have been slower on is a key focus for the supply chain
SUPPLIER PROFILE
BASE2
Established in 1987, base2 has been responsible for design, manufacture and software for numerous control room systems worldwide. Products are developed primarily for the Transport and Life Safety industries. Engineering and manufacturing are performed at base2 facilities in Australia. This includes mechanicalmanufacturingviaComputerNumericControlled(CNC)equipment through to electronic assembly via an automated surface mount Printed Circuit Board (PCB) production line. Current ongoing projects include the National Train Communications System (NTCS), the Victoria Regional Rail Communications Network (RRCN) and ICE integration with Sydney GSM-R Digital Train Radio System (DTRS). Website: www.base2.com.au
w w w. u g l l i m i t e d . c o m
71
C O M PA N Y N A M E
Xxxxxxxxxx
function, as has been the ‘rights’ of the customer, be that internal or external. An internal customer is where we are facilitating movement of materials for one of our maintenance or build facilities that maintain or build locomotives all over Australia. Externally, some customers maintain their own assets, so they would procure their own materials from us to facilitate their asset management.” At the same time, UGL has been incredibly focused to ensure this operational shift does not result in a decline in its customer service
72
October 2015
offering. This has been an absolute deliverable for the firm as it has transformed the supply chain over the last year. “Competition is no longer between companies, it’s between supply chains.” added Newman. “It is difficult to compete on price, brand loyalty is diminishing, there are low-cost economies all over the world; but a supply chain that delivers the right product, in the right place at the right time, and for the right customer in the right quantity and quality … well, you can’t beat that.”
SECTOR
Key differentiators UGL’s Rail division, which falls under the Rail, Defence and International (RDI) umbrella, has a strong philosophy of being an employer of choice not circumstance. Despite the reduction in the manufacturing space, the company has continued to evolve its maintenance division though diversification of services. This has resulted in a new component overhaul division (COD), which is able to leverage its large manufacturing and workshop facilities for wider use. Split into mechanical and electrical, the new division also utilises the strong
partnerships it has built in mining and Rail with the likes of GE, Pacific National, Aurizon, Rio Tinto and several other similar organisations. Newman said: “Many of our customers have some ability to do their own in-house maintenance in their own right. That’s why we sell parts to them as our external customers. But with the (COD) division we service, repair, refurbish and overhaul equipment as new.” “One of the greatest technology advancements UGL has managed to achieve in the last two years and successfully rolled out over the last six months has been our mobility w w w. u g l l i m i t e d . c o m
73
UGL
solutions. We have invested heavily into Service and Asset Management Mobility (SAM) to ensure work execution efficiency and quality is maximised.” SAM Mobility is a direct user interface for workshop employees to UGL’s quality and material resource planning. Mobility provides portability via an iPad (in a rugged case) so that technicians can perform routine tasks, recognise and create ‘on condition’ tasks, conduct and record ‘strip and quote’ tasks, review and enter 74
October 2015
measurement points, and record serialised equipment changeovers. UGL is now able to see all open work for rolling stock while out in the field, complemented by 24 hour support crew. “It has changed the world of our service technicians, they’re now able to create service orders, and give real-time updates. It drastically reduces the risk of errors, has improved stakeholder engagement and provides excellent supply chain visibility. Giving technicians access to our systems and engagement of
S U P P LY C H A I N
communication tools, like having email accounts and internet access has had a positive employee engagement spinoff which is truly wonderful,” added Newman. If this wasn’t impressive enough, UGL has also brought its own unique industry product to the market. The FlexiCurve™ bogie is UGL’s premium locomotive bogie, providing significant benefits in locomotive performance, reliability and maintainability. FlexiCurve™ is a family of bogies for applications ranging from 90t, 1 metre Narrow Gauge through to 160t, 1.7 metre Broad Gauge. UGL won the Regional (Newcastle) Engineering Excellence Award for this earlier in 2015. Developed in Australia by UGL Limited, the FlexiCurve™ has become GE’s bogie of preference when selling locomotives out of North America, something the company is incredibly proud of. Asked about what the future holds for UGL, Newman concluded: “The outlook is positive in that we’ll continue to diversify and serve our customers with exceptional customer service, and as we migrate from a push to pull inventory strategy it will help us to help them. We’ll also be able to take a far greater level of proactive, pragmatic deliverables as we move forward with our technological solutions, so we’re in a very strong position in that regard.” When the world and its industries change once more, UGL beyond all others will be very well positioned to maximise the upturn potential.
Company Information INDUSTRY
Supply Chain HEADQUARTERS
Level 5, 40 Miller St North Sydney NSW, Australia, 2060 FOUNDED
UGL originated as a small engineering business in Western Australia in the late 1960s EMPLOYEES
8,000 REVENUE
$2.3 billion
w w w. u g l l i m i t e d . c o m
75
SEA
ANZ 77
SEANZ
S
EANZ develops industry capability and capacity through advocacy, policy, industry standards, events, connecting industry professionals and collaborating with electricity industry stakeholders. SEANZ is an independent entity representing organisations from SME’s to global corporations, from those in the lab, to those in the supply chain from manufacturers to system integrators to finance organisations as well as some utilities and system operators, who understand and have embraced the distributed generation (DG) business 78 October 2015
model - represented by solar PV, wind turbines and mini hydro. SEANZ represents the interests of all members in the industry and works collaboratively with many organisations to achieve positive and sustainable outcomes. Mission Statement • Drive the growth of onsite renewable electricity generation in New Zealand by developing capacity and capability of the industry • Keep abreast with the technological change in the industry to include smart grid and associated
ENERGY
Brendan Winitana, Chairman
Rebecca George, Administrator/Board Secretary
technology and services
On the changes happening As is the case around the world, The NZ Scenario consumers are moving to solar Starting from a low base, the because it offers specific values that number of solar power systems many traditional power companies across the country has more than cannot and that will continue unless tripled in the last 18 months, a 220 those power companies respond to percent increase. consumer demand. This growth has is creating Regulatory and legislative reviews challenges for the electricity are underway in New Zealand of industry. SEANZ is committed to the rules that govern distributed working collaboratively across generation, pricing, and the role of the industry to ensure that a 21st distribution companies. SEANZ is Century grid is affordable, fit for actively involved in this conversation purpose, and benefits consumers and submits its position on all of and all those involved in the industry. these reviews. Many fear that consumers with w w w. s e a n z . o r g . n z
79
C O M PA N Y N A M E
solar and batteries will defect from the grid, however at SEANZ, we are advocate for a market design which accepts consumers have the right to interconnect and operate smallscale generation-plus-batteries under a fair, transparent charging regime. In particular this relates to the ability to sell surplus distributed generation energy locally and not be forced to sell to a wholesale market. There are benefits to keeping solar customers grid-connected 80 October 2015
but the network and the services it offers will have to change. At SEANZ we believe that pricing structures will have to change to reflect the changing nature of the distribution network but this can be a win-win for consumers and the companies that connect us to the grid. But these companies will need to change their business models rather than just increase prices if they are to remain competitive and prevent consumers with their new found storage ability defecting from the grid.
SECTOR
As self-managing micro grids become possible, distributors could re-enter the electricity market at a local level, providing them a replacement revenue stream. Distributed generation and storage provides an opportunity to strengthen the electricity network and provide a flexible yet resilient grid. Fair pricing can recognise and reflect both the costs of grid upkeep and the value of distributed generation. SEANZ SolarSMART is the Solar
PV and Storage Conference in New Zealand The SEANZ SolarSMART Conference is scheduled for November 13-14t at the Novatel in Rotorua. These two informationand event-packed days are not to be missed! SEANZ SolarSMART is about building a smart industry – using smart technology, smart strategies and smart planning for smarter and better outcomes for you - think smart inverters, smart data, smart w w w. s e a n z . o r g . n z
81
SEANZ
access to data, data IP, energy services, smart ways to assist industry, empowering your business and clients. The electricity landscape is changing more than ever. SEANZ members have significantly contributed to that change and are also impacted by it. Consumer led technologies are changing business models for all players where nobody is immune. Record growth is shaking up the market and more parties are taking note – utilities, 82 October 2015
regulators, the finance industry and others looking to participate and respond. Regulatory reform over the forthcoming years will impact the industry and your business more than ever before. Your voice through SEANZ, is absolutely critical in this discussion. Join us and participate in the industry forum that is SEANZ SolarSMART. SEANZ SolarSMART includes the Suppliers Expo for manufacturers,
ENERGY
importers and wholesalers to allow installers and other parties understand new technologies and offerings. SEANZ SolarSMART features five Conference Streams with keynotes and local speakers on: • The Industry Today – the SEANZ view, the global view, the government view, the utilities view and the non-solar PV believers view. • Keynotes include an internationally renowned visionary leader in the solar industry and a luminary leader and founder of a leading manufacturer • Changes 1 – the regulatory situation in NZ, impacts, the outcomes and results of changes in other countries, the range of possible scenarios • Changes 2 – what Changes 1 means for utilities and you, the SEANZ plan • Personal and Business Development – hear from leaders about how you can create more success for your business, value selling and marketing in the industry, exporting potential and finding your niche for your business • Developments that are a must know about – the new Stored Energy Association, new and upcoming industry standards workshop for SSR’s and batteries Plus industry events and network functions such as: • The Industry Gala Dinner with a special guest speaker • The Industry Awards – celebrating the successes in the industry
Company Information • Personal and Business Development – hear from leaders about how you can create more success for your business, value selling and marketing in the industry, exporting potential and finding your niche for your business • Developments that are a must know about – the new Stored Energy Association, new and upcoming industry standards workshop for SSR’s and batteries
w w w. s e a n z . o r g . n z
83
Tag Oil
Acquiring success
With an established presence throughout New Zealand, TA growth. TAG Oil CEO Toby Pierce discusses how the comp through smart operations and strategic acquisitions. Written by: Robert Spence Produced by: Vince Kielty
AG Oil is poised for pany plans to do so
Photo credits: Rob Tucker and Robert Earnest 85
C O M PA N Y N A M E
V
ancouver-based TAG Oil continues to thrive in New Zealand as a major gas and oil operator. With a strong production foundation and cashpositive assets, the company has positioned itself—financially and operationally—to deliver shareholder value despite the tough market conditions of the sector. 86 October 2015
With an established presence in New Zealand, TAG Oil is primed to continue its growth trend and begin exploring new possibilities in other territories. Poised for growth The company’s success is clearly defined through its portfolio of assets in the region.
SECTOR
TAG owns 16 exploration and production permits in the Taranaki Basin, currently operating 10 of those, including its 40 percent interest in shallow water offshore Taranaki, and interests in the East Coast and Canterbury Basins. “TAG’s East Coast prospects are in the early exploration stages, with vast potential once oil prices recover and
it makes sense to continue there,” said Toby Pierce, chief executive officer and director of TAG Oil. Undergoing more immediate activity is the company’s producing acreage in the main Taranaki production fairway. Assets include the 100 per cent-owned Cheal and Sidewinder oil and gas fields in the onshore Taranaki Basin, the Cardiff w w w. t a g o i l . c o m
87
www.ajg.com.au
“Founded in 1927, Arthur J. Gallagher is a global leader in insurance broking and risk management services, offering specialist expertise in the oil and gas sector both for Operators and Contractors alike.�
Specialist Insurance Brokers for the Oil and Gas Industry
Ryan Mansom National Practice Leader Australia / New Zealand
+61 417 348 091 ryan_mansom@ajg.com
TA G O I L
ENERGY
Deep gas discovery, and the Kaheru Offshore JV. Earlier this year, TAG underwent an extensive geotechnical and engineering review over the Taranaki development and exploration acreage to review the next round of drilling on the Company’s operated Cheal and Sidewinder Exploration and Development acreage. “We’re still in the primary phase of production in Cheal,“ said Pierce, “despite producing a net daily average of 1,689 barrels of oil equivalent—73 per cent oil—this last quarter. We’re still finding new pockets of oil and gas, and there are many different aspects to implement, from optimizing recovery to infill drilling along known trends, and exploring through multiple producing formations. There are opportunities for oil there and potential upside.”
SUPPLIER PROFILE
Alex Guidi Founder and Chairman
ARTHUR J. GALLAGHER (AJG)
Arthur J. Gallagher (AJG) is one of the world’s largest insurance brokers. Founded in the United States in 1927, it now employs over 23,000 people and is listed on the New York Stock Exchange. Globally, our insurance broking operation has a presence in over 140 countries. In Australia and New Zealand, AJG has specialists in the Oil and Gas industry based in Perth providing a high level of expertise in this speciality field. Clients benefit from our ability to draw on international centres of excellence in London, Tokyo, Houston, Calgary and Singapore to access markets and enable us to meet the full range of client needs. Through our global reach and technical specialisation, our specialist team have access to bespoke and exclusive insurance solutions to assist clients. Website: www.ajg.com.au w w w. t a g o i l . c o m
89
The original Sidewinder gas and oil discovery well drilled in the Taranaki Basin, targeting the Miocene-aged, Mt. Messenger formation. The well is located adjacent to the 60-million barrel Ngatoro/ Kaimiro oil field.
TA G O I L According to Pierce, a particularly prospective project is Cardiff—a deeper gas exploitation with potential to be a very large deposit. “It will likely take some time to approach while we’re being conservative with cash flow, but we could possibly consider bringing in a partner if the conditions were right,” he said. Along with strong assets, TAG owns and operates a modern production infrastructure and associated pipeline network, linking the gas it produces to the main high capacity pipeline, ensuring direct access to thriving markets in the Taranaki region. In what other ways can TAG Oil grow? “We have nice footprint in New Zealand, but it’s a relatively small place and we’d like to expand,” said Pierce. And in a market plagued by high production costs coupled with low commodity prices, TAG Oil is well positioned to take advantage. If the deal is right Unlike most junior oil and gas companies at the moment, TAG’s model for growth isn’t all through development, but rather through acquisitions as well.
ENERGY
Toby Pierce, Chief Executive Officer & Director
Max Murray, New Zealand Country Manager
“The benefit of growing through acquisitions is a larger and more diverse portfolio. It also provides more access to financing, giving us a wider range of deals to look at.” – CEO Toby Pierce w w w. t a g o i l . c o m
91
Working in partnership with our customers providing safe, efficient and cost effective crane and transport solutions Ian Roebuck Crane Hire Limited are proud to be associated with Tag Oil and Webster Drilling, supplying their crane & trucking requirements for the Drilling Programme throughout New Zealand.
24 HOURS 7 DAYS Office: (06) 758 7259 Fax: (06) 758 1827 105 Corbett Road, R.D. 3, Bell Block, New Plymouth 4312
0800 117 259
www.ianroebuckcranehire.co.nz
YOUR PARTNER FOR THE FUTURE For over 35 years, the Tasman group have been a leading provider of equipment and services to the oshore, onshore and geothermal drilling markets.
Tasman Australia 27 Jackson Street Bassendean WA 6054 Ph: +61 8 9379 2100 infoau@tasmanoiltools.com
Tasman New Zealand 13 De Havilland Drive West Bell Block, New Plymouth 4312 Ph: +64 6 755 0443 infonz@tasmanoiltools.com
Tasman United Arab Emirates PO Box 262559 Jebel Ali Free Zone, Dubai Ph: +971 4 881 0705 infouae@tasmanoiltools.com
www.tasmanoiltools.com
TA G O I L According to Pierce, at today’s oil price levels it can be a more sensible business decision to buy companies or substantial shares in companies, which can be cheaper than developing a new project. “The way we look at it is with a larger production base, you’ll be self-sustaining cash flow-wise. You reduce your overall G&A; the team employs more individuals, and if you have a larger production base, you can carry a larger team. It gives you benefits and expertise.” Pierce added, “The other benefit of growing through acquisitions is building a larger and more diverse
ENERGY
portfolio. It also provides more access to financing, giving us a wider range of deals to look at.” TAG maintains a balanced approach to its portfolio of oil and gas assets, with conventional production as its core focus. However, the company does consider opportunities wherever they may lie. “If the upside makes sense for us, it’s something we’ll consider,” said Pierce. According to Pierce, the company’s competitive edge is in its clean balance sheet. “We have no debt, solid cash, and are producing assets with a skilled workforce.
w w w. t a g o i l . c o m
93
TA G O I L
TAG Oil tanks at its Sidewinder production facility in the Taranaki Basin
We’re active, we are aggressive, and in harmony,” said Pierce, “and who we’re looking at a number of things are self-starters. We’re a relatively at the moment.” flat organization, so we need a highly competent, seasoned team Right people in place with a who can keep us nimble. We’re also system that works a diverse, international group.” Looking behind the scenes, one Another major component to TAG key to TAG’s success has been its Oil is safety. With the right team in workforce. place, the company is committed “We seek the very best skillsets to providing the safest working when recruiting new employees. We conditions along with the highest want people who can work together standard of training. 94 October 2015
ENERGY
“New Zealand has good programs in place for safety but we take it a step further with our safety culture,” said Pierce. “We’re very good on that end and we’re always working to improve. It’s our number one priority.” Technology also plays a critical role in efficiency and safety. “We’re always looking for new ways to improve both safety and efficiency, and we’re quick to adopt proven technologies.” One component of having the right people in place is meshing with the culture and community of TAG’s host country of New Zealand. The oil and gas producer strives to play an active but respectful role. “We’re a guest in New Zealand and it’s very important to us that we respect that and give back to our community,” said Pierce. The company’s grassroots approach to community relations involve sponsoring activities that support safer and healthier communities, enhance the productivity in natural resources, and promote local education opportunities. “We sponsor students to get actively engaged in science through field trips, educational programs and a scholarship. We also sponsor outdoor activities including swim meets and lifesaving, an annual kids’ athletic competition, a golf club, and the local rugby team,” said Pierce. “It’s important to us to be part of the community, and these are things we really care about.” The right pieces are in place, and TAG Oil thinks it’s their time to shine.
Company Information INDUSTRY
Oil & Gas HEADQUARTERS
885 West Georgia Street Suite 2040 Vancouver British Columbia Canada, V6C 3E8 FOUNDED
2002 EMPLOYEES
29 REVENUE
$53.7 million
w w w. t a g o i l . c o m
95
Lynas Corporation The Comeback Kid
As an integrated source of rare earths from mine to customer, Lynas has experienced highs, lows and everything in between. With a new CEO at the helm, the company is now positioned for long-term success. Written by: Robert Spence
Produced by: Jeffrey Bailey
97
C O M PA N Y N A M E
Bagging plant at Mt Weld
F
or Lynas Corporation, rare earth elements continue to create huge opportunity, and challenge. The Australian-based company is putting the finishing touches on a considerable corporate turnaround, traveling a tough road of repositioning itself as a major player in the rare earths market, which has been historically dominated by China. Driving the turnaround is Amanda Lacaze, appointed CEO in June 2014 . With Lacaze at the helm, 98 October 2015
Lynas is poised for a breakout year. Back story Originally formed in 1983, Lynas has gone through a whirlwind of changes in recent years. The company undertook its first mining campaign in 2008, developing the Mount Weld mine in Western Australia, one of the largest and highest-grade known deposits of rare earths in the world. “In 2010, rare earths looked like a runaway market with the price spiking at more than six times
SECTOR
the current prices,” said Lacaze. “Lynas raised significant funding and accelerated construction of the LAMP facility in Malaysia seeking to take advantage of this boom.” According to Lacaze, when the rare earths bubble burst in late 2011, the company’s corporate structure and style of operations weren’t adjusted to the new market settings. In addition, ramp up of production at the LAMP facility was delayed by both operating challenges and legal challenges. The result by the middle of last
year was a business that had consumed a huge amount of debt and equity funding in developing both the mine and the larges processing plant, but was yet to show a return on that investment. “When I joined, production was unstable. We had high costs and were very cash consumptive. We had to reset our cost base and improve our operating performance while dealing with a market that was significantly less profitable than before.” w w w. l y n a s c o r p . c o m
99
LY N A S C O R P O R AT I O N
MINING GLOBAL
Rebirth of Lynas Appointed CEO in June 2014, Lacaze’s first plan of action was to establish a strategic framework to put its financial house in order. “When I first started, Lynas had corporate offices in Sydney, KL and Perth as well as the facilities in Mt Weld and Kuantan. We decided it was best to ensure our people were co-located at our production facilities with a small number in Perth. This improved teaming and business efficiency and also deliver lower costs,” said Lacaze. “Shutting down some of the offices proved significant savings for us.” Another critical component in the turnaround was reducing the company’s headcount. According to Lacaze, the unpopular move can actually spark improvement.
SUPPLIER PROFILE
Amanda Lacaze, CEO and Managing Director
SIBELCO GROUP
Founded in 1872, the Sibelco Group has grown into a multinational business with more than 245 mining and production facilities worldwide. In 2012, Sibelco acquired QMAG Limited, one of the world’s most trusted producers of high grade Caustic Calcined Magnesia (CCM). Sibelco has partnered with Lynas from early 2014 to provide our Caustic Calcined Magnesia (CCM) and is helping Lynas effectively stabilise their production process and maximise RE recoveries. At Sibelco we pride ourselves on our capabilities in operations management, process engineering and research and development. We have a team of highly qualified and experienced technical experts in the hydrometallurgical industry, who work closely with Lynas staff to improve process efficiency and increase the value in use of our magnesia. Sibelco has a global portfolio of customers and our magnesia products are sold and delivered to over 30 countries worldwide. We provide tailored logistics solutions through our global network of service providers and the global Sibelco presence. Through our QMAG product range, Sibelco Australia is well positioned to deliver further growth and support our magnesia customers long into the future. Website: www.sibelco.com.au w w w. l y n a s c o r p . c o m
101
LY N A S C O R P O R AT I O N
A shift supervisor turns on pumps at LAMP 102 October 2015
MINING GLOBAL
VP of Production Kam Leung stands next to concentrate ready for shipment to Malaysia
“My experience is there are many times when reducing your headcount improves your results. When you start, people find it counterintuitive; however, when you have many people working together and they’re not fully utilized, they become accustomed to not doing their best work every day. It’s also not at all satisfying for staff to feel they don’t have productive work to do,” Lacaze said. “We worked really hard to create a culture of performance. Quality of action is something we focus on and I’m a big believer that there is no substitute for hard work.”
With the framework for a concentrated workforce in place, production is now profitable and sales revenues continue to grow. “As CEO, one of the most important aspects of my job is getting everyone in the Lynas team to do the best job possible,” Lacaze said. As a sign of the good times to come, Lynas recently announced a restructure and debt agreement with its 2 lenders. The deal, according to Lacaze, is a natural next step for the company. “We’ve come a long way: We’ve fixed production issues, we’ve improved engagement with our w w w. l y n a s c o r p . c o m
103
Industry: FM Global - International Freight Forwarder and Licensed Customs Brokers with offices in Australia, Malaysia and throughout South East Asia and Indian Subcontinent, offer a diverse range of personalised, reliable and competitive services tailored to our customers’ needs. Services: FM Global specialises in oil/gas and mining related shipments. We understand the remoteness associated with the mining industry, tailoring a logistics package suitable to our client’s requirements. Ongoing Projects: FM Global in Australia and Malaysia are providing a full range of logistics services door-to-door for the Lynas/LAMP facilities to accommodate the movement of all cargo.
Allow us to exceed your expectations
Perth | Sydney | Melbourne | Brisbane | Adelaide Main Office: 1 Hines Road, O'Connor WA 6163 www.fmgloballogistics.com.au
Tel: +61 8 9314 2004 Fax +61 8 9314 6004 Email: sales@fmgloballogistics.com.au
LY N A S C O R P O R AT I O N
MINING GLOBAL
customers, and now this new debt restructure puts us in a position to complete the turnaround.” Driving the change For Lacaze and her team, diversity is a large contributing factor to drive positive change. “My executive team comprises three women and 6 men. We have Australians, Malaysians and others from various European countries. It’s a good combination with varying backgrounds,” said Lacaze. “I want diversity in our company whether it’s gender, experience, age, ethnicity. It is my experience that
SUPPLIER PROFILE
varied experience leads to richer discussions on issues and new and different ways to address business challenges.” As surprising as it sounds, Lacaze had no prior experience in the mining industry, having spent the majority of her career focused on marketing. “Over the past 15 years, I have primarily worked in the IT&T industry. When I took this job many people in the industry wondered how I would run a rare earths business. My approach is that I knew how to manage performance, and I knew how to run a profitable business. I
FM GLOBAL LOGISTICS PTY LTD
Employees: 13 Established: 1st August, 2005 Management: • Brad O’Donnell – Managing Director • Mike Fairnie – Business Development Manager • Tania Stamboulakis – Project Manager Website: www.fmgloballogistics.com.au
w w w. l y n a s c o r p . c o m
105
LY N A S C O R P O R AT I O N
Administration staff at Mt Weld
A shift supervisor instructs a tunnel furnace worker
106 October 2015
MINING GLOBAL
did need to learn about rare earths – and I made it my business to learn as much as I could from the experts in our company and at our business partners as quickly as possible,” said Lacaze.
Company Information INDUSTRY
Setting the tone For Lacaze, the job of the CEO is to cultivate the energy and spirit of the organization. “I update all my staff every quarter on all important aspects of business performance. I do this in small groups so we can talk in detail and I can be sure that everyone knows what’s going on with the business and we build trust in each other. People in this organization are working harder than they’ve ever done in their lives and I want them to be successful,” said Lacaze. “The result is we bring the sum total of our experience from all those areas and therefore we’re able to have rich conversation.” Lacaze remains very positive about the future for rare earths and for Lynas. “Rare earth minerals are used extensively in growing markets including environmentally significant segments such as energy efficient cars and the new technology in wind turbines,” said Lacaze. “ Lynas offers users environmental assurance from mine to finished product and this will become increasingly important as the market grows.” With the right pieces in place, Lynas Corporation is now poised to become a fully-integrated provider of rare earths for the long-term.
Mining Global HEADQUARTERS
Level 1, 7 Tully Road East Perth Western Australia Australia, 6004 FOUNDED
1983 EMPLOYEES
650
w w w. l y n a s c o r p . c o m
107
Jetcrete Strength from within
Even after growing into the largest specialised shotcrete contractor in Australia, Jetcrete stays true to its small family business values Written by: Eric Harding Produced by: Jeffrey Bailey
109
JETCRETE
J
etcrete has risen up the ranks over the years to become Australia’s largest shotcrete contractor in Australia, but not much has changed within the company. Despite growing to over 300 employees during its 35 years of existence, Jetcrete is still run like a small, family-owned business that sticks to its core values of honesty, safety and completing tasks in a safe and cost-effective manner. The company’s system of promoting from within ensures the management team at the top were once the workers It’s one of the main reasons Jetcrete has maintained its 110
October 2015
core values and continuity within its workforce throughout its almost four-decade history. “Everyone all senior people in the organisation have come from the ground level up,” said Jetcrete operations manager Scott Johnston. “The managers have a good understanding of what it’s like to be at the forefront, doing the most difficult of tasks. We’ve all had our hands in it, getting dirty at some stage.” Jetcrete rewards its employees through promotion, and several staff members have been with the company for over 10 years. The majority of Jetcrete’s senior
MINING
employees started off as entry level workers before working their way up to supervising and managing one of Jetcrete’s many sites or one of its global offices, and Johnston acknowledged that job satisfaction is a big factor in retaining personnel. “The key to any successful company is you really want to maintain your key personnel,” said Johnston, who is in his fourteenth year at Jetcrete. “We try our best to do that and it’s working for us.” Improving on Excellence A company that provides the unique service of shotcrete in several major mining operations, Jetcrete employs the latest techniques and specially adapted placement materials to maintain best industry practice, to ensure a totally
“Everyone from general manager and all senior people in the organisation have come from the ground level up.” – Scott Johnston, Jetcrete operations manager
w w w. j e t c r e t e . c o m . a u
111
FOR TOUGH JOBS UNDERGROUND Expertise in customer processes: > Ground Support - Lateral & Shaft · Sprayed concrete · Scaling · Surface support liner · Ground consolidation · Bolting > > > > > > > > > >
Explosives Charging Equipment Life Cycle Management Groundwater Control Services Installations Backfill Caving Hangup Removal TBM Operation Lining Waterproofing Life Time Care
Normet Asia-Pacific Pty Ltd. 10 Ashwin Parade | Torrensville, SA 5031 | Australia Tel. +61 8 8152 7700 | Fax +61 8 8152 0667
www.normet.com
JETCRETE
MINING
safe environment, and to minimise disruption to the ongoing mining operations. Shotcrete, a special type of concrete, is sprayed through a hose at high velocity onto a surface as a construction technique. Working hand-in-hand with its major fibre supplier Sika has seen Jetcrete be able to offer lower cost alternates to it clients for the production of Fibrecrete. Jetcrete supplies shotcrete services to mines and several different companies in Australia. Since being introduced and widely accepted in the mining industry, shotcrete allows for quicker advancement and ground preparation to complete projects. But as a leader in continuous improvement, Jetcrete constantly tests new products to increase efficiency. Some of Jetcrete’s
SUPPLIER PROFILE
NORMET ASIA PACIFIC PTY LTD
NORMET Group is among the Market Leaders, with 50 years of experience in the development, production and sales of specialised equipment and vehicles for underground mining and tunnel construction. We pride ourselves in providing advanced solutions and developing strong working partnerships with customers such as Bynecut and Jetcrete. Normet Australia is developing rapidly and strengthening the positioning of our products and services to better meet the needs of our partners. We have also strengthened our management team with the recent commencement of a new Managing Director – Neil Fitzmaurice together with a new Business Manager, Ground Control and Construction Technologies – John Gelson. To further demonstrate our commitment to the Australian market, Normet Australia recently inaugurated a new facility in Sydney which houses state-ofthe-art local production for a range of products for Sprayed Concrete, Ground Control and Injection, Concrete Admixtures, Waterproofing and Water Stopping as well as TBM technology products. Website: www.normet.com w w w. j e t c r e t e . c o m . a u
113
Build something great ™
Construction Materials & Cement
More than a supplier: Your solutions-based project partner. For more product information: Quarries and Sand Port Hedland 0401 897 650 Karratha
Asphalt Mobile Projects
(08) 9458 0400
www.boral.com.au/constructionmaterials - infowa@boral.com.au Boral is a registered trademark of Boral Limited or one of its subsidiaries. BCC_13584 May15
SHOTCRETE SOLUTIONS FROM SIKA
SHOTCRETE ́ ́ ́ ́ ́
Super Plasticisers Shotcrete Stabilisers Pumping Agents Accelerators Equipment Protection
STRUCTURAL FIBRES ́ Synthetic Macro Fibres ́ Hard Drawn Wire Fibres ́ Hook-end Hard Drawn Fibres
Over 100 years of industry experience and with a wide variety of produts and systems, Sika can offer a one stop shop for shotcrete production.
+ HIGH EARLY STRENGTH & STABLE ACCELERATORS + ON-SITE PRODUCTION FOR ACCELERATORS + ALL PRODUCTS MANUFACTURED LOCALLY
aus.sika.com 1300 22 33 48
Concrete Port Hedland Mobile Projects
0439 944 722 13 26 75
JETCRETE innovations include the teleremote application of shaft lining it incorporated in early 2000 as well as the introduction of hydro-scaling to the Australian Mining industry Other forms of new technology Jetcrete plans to introduce include a new mapping system with a scanner that will take thousands of points, download the data to an on-board computer and map the thickness for clients. The company has already done a few preliminary trials with this mapping system, and looks to launch it within the next couple weeks. In addition, Jetcrete introduced two 3D simulators last year that it sends from site to site for training purposes. Employees must do a number of training modules to maintain their status and make sure they’re up to date on the latest improvements to this advanced technology. This training also helps with new employees, allowing them to gain confidence using the machinery the company uses underground without having to put them in a real time situation. “We try to be a leader and not a follower,” said Johnston. “Some
MINING
things work and some don’t, but if you don’t try it and you’re not looking to improve on the past, you won’t grow as a company and you’ll fall behind. If you’re just happy with what you’ve got, someone else will come in and go past you. “These are things we brought to the industry so we could do the work on a safer and more efficient basis. Wherever we can remove direct human interaction and error from a task and have it performed by someone on a machine or on controls working remotely, we’re all for it.” Working Smarter Jetcrete uses several different types of equipment in its projects, working with Normet as its top supplier for underground mining equipment, as well as a number of units from MacLean Engineering. While the company has worked on several different projects throughout Australia, Johnston believes each has a high degree of importance in an industry that has been slowed from both a contractor and principal mining point of view. It also makes Jetcete’s new w w w. j e t c r e t e . c o m . a u
115
JETCRETE
innovations such as the mapping system that much more vital for efficient production. “Everyone wants to tighten their belt buckles, so to speak, to try to save a dollar,” said Johnston. “If we can review our efficiency and turn it into dollars, we can pass those dollars on to our clients. Obviously, 116
October 2015
it gives us a competitive edge over other standard forms of ground support, as well as our major competitors as service providers.” As the company keeps safety and quality at its forefront, Jetcrete has a number of procedures, inspections and audits in place. Jetcrete completes independent safety
MINING
audits twice a year and looks to remedy any shortfalls identified to ensure that the company is up to date with the latest industry and Australian standards. “Our whole Safety Management System is reviewed on an ongoing basis to make sure there aren’t any shortfalls,” said Johnston. “This has enabled us to attain Australian and ISO quality standards.” Future Goals With a home office in Perth as well as other offices throughout Australia, and its joint ventures for international expansion in North America, Jetcrete is among the industry’s leaders in diversification. Johnston said when he began Jetcrete North America in 2009, it was one of the worst times to start a business. Despite this, Jetcrete was able to survive its expansion in the United States and Canada and add more business to its portfolio. “The mining industry goes in cycles,” Johnston said. “Obviously, it all comes down to supply and demand.” Jetcrete is tied into several long-term contracts in Australia, and there are some major civil works and oil and gas projects looming that the company is considering for the future. “Business in Australia is about maintaining what you’ve got, and making the most of your opportunities when they come along,” said Johnston.
Company Information INDUSTRY
Mining HEADQUARTERS
1 George Wiencke Drive Perth, WA Australia, 6105 FOUNDED
1980 EMPLOYEES
250 REVENUE
$100 million
w w w. j e t c r e t e . c o m . a u
117
First Setting the indu
First Solar’s PV modules lower the cos
Written by: Eric Hardin
Solar dustry benchmark
st of utility-scale solar electricity in Australia
ng
Produced by: Rob Benson
119
FIRST SOLAR
First Solar employees at the Greenough River Solar Farm
T
he global energy industry is witnessing a fundamental change, driven by economic growth, desire for affordable, reliable energy, global demand, the need for non-volatile energy sources and the need for a diversified energy portfolio. First Solar heavily invests in and capitalizes on advanced technology, innovation and R&D. Starting with industry benchmark solar modules and extending to an advanced Balance of System (BoS) and O&M solutions, First Solar is benefiting from an R&D investment that exceeds that of any of its competitors. 120
October 2015
“We want our customers to believe in the quality and reliability of each of our technologies, as well as the enhanced benefit of integrating technologies throughout the power plant, to drive superior results,” said First Solar Asia Pacific regional manager Jack Curtis. “Most of our competitors focus on one or a couple of the many components of the PV value chain such as manufacturing or construction,” added Curtis. “But almost none of them have the ability to manage the integration & components of the entire value chain
ENERGY
like we do at First Solar.” Investing in Technology Building on the lessons learnt from developing, building and operating utility-scale solar power plants, First Solar recognizes the importance in investing in its core Cadmium Telluride (CdTe) PV module technology. The technology has historically been hampered by lower efficiencies than traditional c-Si modules but has surprised industry observers by its unprecedented efficiency improvements in 2015. First Solar claims it is now executing
against the industry’s most aggressive module technology cost and efficiency roadmap. “We are the only manufacturer of solar panels taking advantage of the semiconductor materials that we use,” said Curtis. “First Solar’s CdTe thin film is now rightly categorized as a high performance product,” said Raffi Garabedian, First Solar’s CTO. “At one time, we might have been characterized as a low cost, low efficiency technology, but consistent with our technology projections, we are now proving that CdTe thin film
Aerial view of the Broken Hill Solar Farm w w w. f i r s t s o l a r. c o m
121
FIRST SOLAR delivers both industry-leading performance and sustainable thin-film cost structures.” Garabedian noted that efficiency combined with other real-world performance attributes result in First Solar technology delivering higher energy yield and density than traditional multicrystalline Silicon (m-Si) solar panels. Given the same installed nameplate module capacity (Watts) with equivalent ground coverage ratio, he said, First Solar’s CdTe product will provide up to 8 per cent more useable energy from the same land area than m-Si, which gives First Solar a competitive advantage over other PV technologies. This advantage becomes
Installing the first module at Nyngan Solar Farm, the largest solar farm in the Southern Hemisphere
CONNECTING YOU TO RENEWABLE ENERGY SOLUTIONS
ELECTRICAL DESIGN AND MANUFACTURE
FABRICATION TRANSFORMERS ELECTRICAL PROTECTION
AUTOMATION FIBRE OPTICS AND CABLE
ASSET MANAGEMENT
Ampcontrol has successfully partnered with First Solar on projects in Nyngan and Broken Hill. We offer a broad range of solutions to renewable energy projects for a sustainable future.
ampcontrolgroup.com
ENERGY
increasingly pronounced in hot and humid locations, which explains why First Solar’s modules are installed in the majority of utility-scale projects in Australia. In addition to the continued trend of efficiency records, First Solar’s modules are amongst the highest quality, most reliable modules in the world, having passed the industry’s most rigorous multi-stress testing protocols such including Atlas 25+, IEC Long Term Sequential and Thresher Tests. “The cost of a power plant is very important, but the commercial and financial viability of both the project and the company that stands behind it is equally important,” said Curtis. “Predictable lifetime energy is critical to confidently project the expected value of the sellable energy from a PV plant designed for long-term operation.” Current projects First Solar’s two primary ongoing installations in New South Wales include its Nyngan and Broken Hill projects. The 102-megawatt Nyngan installation will be the largest solar
project in the Southern Hemisphere and is being constructed for AGL Energy. In addition, First Solar developed, owns, and operates a diesel-hybrid project in Queensland. Electricity from the project will be sold to Rio Tinto Alcan under a long term PPA. Combing solar power with existing diesel generation offsets the cost of the fuel optimizes the efficiency of gensets and provides a more economical solution. “That is an application that we think exhibits a lot of potential,” said Curtis. “We think combining diesel with solar represents a very significant market, so it’s a project we’re also pretty excited about.” Thriving in a Skeptical Market Curtis said he has noticed a large shift in Australia’s perception of solar energy, as it has gone from just being a niche market to one that is now a common solution. “Australia historically has been a bit behind the curve when it comes to utility solar adoption,” said Curtis. “However, I think the large power companies in Australia are seeing what’s starting to happen globally w w w. f i r s t s o l a r. c o m
123
FIRST SOLAR
First Solar Asia Pacific regional manager, Jack Curtis
and that they view utility-scale solar as an inevitability.” Curtis believes that the industry has nearly come to a point where government policy will no longer be the primary reason for the adoption of solar power. “Even though the policy backdrop driven by the current government isn’t as encouraging as it once used to be, I think we’re seeing a commitment to the sector that will detach from what is happening at the policy level, driven by the increasing commercial attractiveness of solar power. I think 124
October 2015
that is very encouraging.” Moving Forward “We believe there are a few things that drive the market: one is the focus on policy, and the other is the energy gap, where emerging countries require to power up quickly to meet growth and infrastructure demands. The demand creators are fuel limitations, energy security exposure or fuel price volatility. As a company, our focus is to understand where the gaps and opportunities in various
ENERGY
markets are, and how we can help leverage our experience in those markets,” said Curtis. “Our primary focus is always to find a more cost-effective way to deliver solar electricity out of a utility-scale power plant, and to accelerate the rate at which solar continues to be adopted into the mainstream,” he said. Curtis also believes that the increased use of energy storage is the future. He compared the current state of energy storage to where solar was five to six years ago, as it appears to be a logical step but wasn’t available at the right cost. International Expansion With over 10 gigawatts (GW) installed across the world, First Solar believes clean affordable solar power is an important part of the worldwide energy mix. Through integrating technologies, services and expertise across the solar value chain, First Solar delivers bankable PV energy solutions that help create a world powered by reliable and affordable solar energy. According to Curtis, First Solar has aggressively pursued expansion opportunities over the past few years, including in Latin America, Asia and Japan, Africa, and the Middle East. “We really want to make sure we’re localizing the right capabilities in the right markets on the back of what’s been a pretty aggressive expansion strategy for the company,” said Curtis.
Company Information INDUSTRY
Energy HEADQUARTERS
Level 3, 16 Spring Street Sydney, NSW, Australia 2000 FOUNDED
1999 PRODUCTS/ SERVICES
Renewable energy
w w w. f i r s t s o l a r. c o m
125