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BRADKEN LIMITED ANNUAL REPORT 2013 15
Bradken Limited
Directors’ report (continued)
30 June 2013
Page 15
Bradken Limited
C.
Review of operations (continued)
Operating and Financial Review (continued)
Business Strategies and Outlook (continued)
The Group’s business strategy remains focused on growing the mining consumables business by designing, manufacturing
and selling differentiated consumable wear products throughout the major global mining regions. A number of discrete
strategies will be implemented to aid this focus including:
expanding our sales presence direct to mining customers throughout the world;
new product design and innovation;
further reducing manufacturing costs; and
global distribution network to include targeted stock holdings in key mining regions to support direct sales.
Business Risks
The Group maintains a proactive Risk Management System, which identifies potential risks by site, business, region and
function, by actively pursuing the minimisation of identified business interruption risks. While each of the Group’s Divisions
has its own discrete business risks, as a group, the Group’s Executive Management Team identify high level business risks
with the potential of having a material impact on the financial prospects of the Group.
A major risk to the Group is the high cost of manufacturing within Australia. The local environment suffers from high labour
costs, high energy costs and regional scale manufacture, which may over time adversely affect the viability of manufacturing
in Australia.
A further high level business risk with the potential of having a material impact on the financial prospects of the Group is the
general economic and business conditions, both globally and domestically, particularly an extended pull-back in mining
investment due to a slowdown in China, having the potential to produce significant fluctuations in demand for the Group’s
products and an impact on earnings potential.
The Group is continuing to address and mitigate these risks by globalising its manufacturing footprint and by growing its
capabilities offshore. Most recently, stage one of the Group’s new world-class manufacturing facility in Xuzhou, China was
commissioned, which will substantially reduce the Group’s average cost of production, particularly for mining and mineral
processing products.