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Randall freeman, mastermyne

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  • 1. Mastermyne Group Limited Managing Through the Downturn – A Contractors Perspective
  • 2. Company Overview Mastermyne Underground Mastermyne Engineering Mastermyne Services •Underground Roadway Development •Drift Construction •Installation of conveyors •Longwall relocation and maintenance •Supply and installation of ventilation control devices •Installation of secondary support •In Seam Directional Drilling •Equipment Fleet •Design and engineering QDS underground equipment •Manufacturing and distribution of mining products and consumables (Mesh, Salt, Brattice, Victaulic Pipe, consumables) •Manufacturing and fabrication of underground ventilation control devices (doors, vehicle doors, overcast etc) •Surface electrical and mechanical services •Permanent Mine Infrastructure Projects •Construction & Upgrade Projects (switch rooms, surface & overland conveyors) •Asset management (water, gas, electrical, piping) MyneSight •Cleanskin Training •Miners •Trades •Deputy’s Training •Training land Inductions •Consultancy Services •E Learning •Additional Services •Drug Testing •Training Equipment Hire •Relief Training Personnel Mackay business, founded in 1996 by Andrew Watts and Darren Hamblin Operations with 850 workforce servicing mine sites in QLD’s Bowen Basin, the Southern NSW Illawarra district and the Northern NSW Hunter area Exclusively focused on the Australian underground coal industry Track record of growth - invested significantly in systems and people to manage the growth Publicly Listed Entity: MYE
  • 3. What Happened Before the Downturn 2009 Acquired Highlands Mining 1996 Mastermyne founded 1998 First longwall installation contract 2003 Awarded Longwall Magazine ’ s longwall contractor of the year 2006 Acquired 50% of Capricorn Mining Queensland 2007 Acquired remaining 50% of Capricorn Mining Queensland 2007 Acquired DRE Electrical 2009 Acquired Infin - Tech 2004 Revenue $25m Staff 200 1996 1998 2003 2006 2007 2008 2009 2004 2005 2005 Tony Caruso appointed CEO 2007 Revenue $50m Staff 330 2008 Acquired PYD Mining Services 2010 2010 Acquired MTR Mining Services 2005 Champ Ventures and management buy in 2009 BHP Billiton “ Illawarra Coal Contractor Recognition Award ” 2009 Revenue $90m Staff 386 2010 Revenue $98m Staff 490 2011 2010 ASX Listing 2013 Acquired 4 Sight Training Solutions 2012 2013 2012 Revenue $272m Staff 1088
  • 4. What Happened Before the Downturn •Cost creep over a period of time. Volume driven. •Shortfall in an experienced workforce. •Increase in fleet hire and growth in the contract market •EA’s negotiated locked in increases to wages. •Project Management structures increased. •Market went to quarterly contracts.
  • 5. What happened in the downturn Industry Perspective: •35% reduction in revenue •Parity + with the exchange rates •Capital Expenditure focussed •Focus on unit costs • Productivity not production
  • 6. Contract Market: •Est 30 to 40% reduction in market ($400M) •Capital Projects cancelled or deferred. •Contracts terminated or renegotiated •Small companies were competitive What happened in the downturn
  • 7. What happened in the downturn Internal Perspective: •Reduction with On Costs •Restructure Projects •Increased competiveness from all companies
  • 8. The Market after the Downturn Competition from internal costing Clients have removed duplicate costs Fixed Price work to reduce exposure to risk Removing Project Teams and transfer to labour hire Increase in tendering however smaller scopes Reduction in Capital Projects
  • 9. Our Response Downsize Overhead Cost structure Reviewed Roles Requirements of System Project Support Business Development
  • 10. Our Response Reallocated responsibilities Support Functions minimised Site responsibilities increased. Greater use of functional support Up and Cross Skilling workforce (Greater scope less people)
  • 11. Our Response Major change in contract type from cost + performance margin to fixed price - understanding risk - Verifying assumptions - Risk reward margin
  • 12. Our Response How we manage reduces the cost of the scope of work. - Supervision. - Management Operating System. - Engagement. - Flexibility with our agreements.
  • 13. Our Response Jetstar Model - Labour Hire structure. - Minimal supervision. - Site management? Challenge is to keep the Mastermyne connection Systems Symbols Behaviours
  • 14. The Future Understand the value added dimension. Focus on Excellence Maintain flexibility to market changes. Build our business
  • 15. Discussion