Bradken Limited Annual Report 2015 - page 25

BRADKEN LIMITED ANNUAL REPORT 2015 l 25
Australia that offset substantial reductions in market size as
mine operators increased utilisation of larger, more efficient
equipment and lower sales for regional maintenance services
on reduced customer spend. The Division continues to
achieve incremental sales growth in targeted global mining
regions where the fully released latest generation GET
product designs have received promising market acceptance.
Sales of Industrial products primarily for OEMs and general
industry in Australia increased by 2% in a flat market.
New rail wagon builds reduced significantly from 1,218 in
2014 to 625 in 2015, as reduced capital spend by the major
miners in iron ore, coal and the large freight rail operators
took hold combined with strong competition from Chinese
competitors. This resulted in an overall sales reduction of
45%, and the requirement to restructure the business to
reduce overheads while maintaining the capability to design,
sell and execute future contracts. In the absence of a strong
loading of rail wagon production the Xuzhou, China facility is
now being utilised for the manufacture of mining buckets and
other fabricated products such as cane bin wagons for the
Australian sugar market.
Werris Creek Mine (Whitehaven Coal), New South Wales AUS
With strong competition in the Australian market with Chinese
wagon manufacturers firmly established the business has re-
focused on winning niche opportunities for intermodal wagon
projects where operators are seeking overall efficiencies
through improved design, executed plans to succeed in new
and emerging markets such as the Middle East and providing
a differentiated offering of Rail consumable spare parts and
maintenance to the market.
Outlook
Looking forward we expect mining operators to maintain
production across most commodities but with capital
expenditure to remain subdued. Demand for mining
consumable products is expected to be in line with mining
production volumes now that one-off reductions in inventory
levels have been largely exhausted, while the Division’s
increasing sales presence in major mining markets outside
Australia is providing new opportunities for growth.
The Division continues to invest in product development and
customer support, expanding its presence in major mining
markets around the world and increasingly realising the
benefits of relocating product manufacture to Bradken’s
lower cost operations.
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