CHINESE DEMAND DRIVES INDUSTREA

Written on the 11 March 2011

CHINESE DEMAND DRIVES INDUSTREA

CHINA’S love affair with Australian coal will continue to unearth growth for Industrea, according to its CEO Robin Levison (pictured).

A strong performance in the mining services and technology divisions has bolstered revenues to $140 million in the half year leading up to December 31, 2010.

Levison identifies the underground coal mining sector as the largest market for Industrea’s products.

“China is the largest coal producer in the world, producing over three billion tonnes of coal in 2010, with over 95 per cent to output sourced from underground mines,” he says.

“So the Chinese demand for coal continues to grow, driven by thermal power, crude steel output and cement output and the new Chinese Government tax on coal will fund the purchase of safety equipment.

“There is continued innovation to Industrea’s product range to capture additional revenue in China’s push for improved safety and productivity.”

Levison says the company’s mining services division will continue to be a major growth sector for the group.

“We have new contracts with Cockatoo Coal for Baralaba mine and contract extension at Rio Tinto Mt Thorley Warkworth,” he says.

“Planned capital expenditure for this area is $60.5 million including $49.4 million for fleet expansion and $10.4 million for fleet repairs and maintenance.

“We’re also focusing on expansion projects with existing customers in all major regions including Cockatoo Coal’s Baralaba mine, Rio Tinto’s Mt Thorley Warkworth and Xstrata Handlebar Hill expansion plans.”

The diesel equipment and technology divisions of the company also continue to be money spinners.

“In our diesel equipment division, there’s been a 98 per cent increase in revenue, driven by a strong Chinese order flow and an expanded installed equipment base in China that’s also driving recurring revenue,” says Levison.

“In our technology division, the drill guidance system continues to be a global leader in underground coal methane gas drainage. Our collision avoidance system is also continuing penetration with global miners with further sales in Australia and South Africa.”

David Cahill was promoted to chief operating officer in December of last year while Jeff Watson was appointed CFO in January.

Top Companies Profile: Industrea (IDL)
CEO: Robin Levison
Market Cap: $487 million
Revenue ’10: $313.2 million
Profit ’10: $49.1 million
Staff: 400
Established: 1999


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