"We are very well prepared"
We at RINGSPANN see the international mining industry as being on the verge of an upturn
As an internationally operating supplier of ready-to-install drive components for mining engineering, RINGSPANN is used to thinking in longer economic cycles. At present however, the company′s management is confident that an upturn of the raw materials industry could be just around the corner. Sales director Nico Hanke describes in an interview why RINGSPANN has the best opportunities to profit from this.
The raw material and mining industry are important international sales markets for the products of RINGSPANN. However, these industries have not given investors much to rejoice about recently. How do your company′s analysts evaluate the current situation?
Nico Hanke: We are observing the current development in all segments of the global raw materials industry very closely – so both coal mining and the extraction of metallic ores and non-metallic minerals. Based on our internal analyses, I would say our current feeling is a tensed yet optimistic one.
But the economic and trend reports from these industries have been anything but glowing lately. So your assessment is surprising…
Nico Hanke: … that may be, but it is often worth taking a second look. We need to differentiate on the one hand between reports relating to the economy and those relating to structural developments. On the other hand – and I feel this to be much more crucial – the economic trend in the global raw materials market has always been characterised by very long cycles with running times of 14 to 16 years. These cycles in turn are full of ups and downs, which industry insiders often divide into four phases.
But what, more specifically, are your positive expectations based on?
Nico Hanke: We can now see, by looking at the development of raw material prices for instance, that we are at the end the last downward phase of a long cycle which began in the year 2000. Numerous indicators such as the price development of copper even suggest that the first upward trend of the new multiannual cycle will start in 2016 already. The last update on the economic situation from VDMA (German Association of Machine and Plant Builders) also points in this direction. This early phase of a new cycle is an extremely important time, for it is characterised by strong rises in prices. And times of higher prices are synonymous with times of strong investments, because mining companies start plucking up courage again and spending more money on machines and plants for the areas of quarrying, crushing, conveying, separation, processing, cleaning and more.
The tension is mounting then. What effects do the long economic cycles of the raw materials industry have on a supplier company like RINGSPANN?
Nico Hanke: Well, apart from global sales structures we always need steady nerves and a great deal of patience and staying power. For we as component suppliers only find out about the investment decisions of the Asian, South American, Australian or Russian mine operators and mining companies with a certain delay. We supply our freewheels, brakes or clutches to renowned system manufacturers such as Rexnord, which acts on the behalf of major plant engineers from the league of ThyssenKrupp, which in turn realise large-scale projects for mining enterprises overseas. And so it can always take a few months for the big decisions to reach to our component supplier level as projects.
Will not all competitors in all product segments of RINGSPANN have similar expectations to you and be right beside you in the starting holes ready to sprint at the right moment?
Nico Hanke: Sure, but that is not a new situation for us. We see it as more of an incentive and I feel that we are currently very well prepared for the forthcoming upturn in the mining industry. Recently, our extensive portfolio in particular has emerged as a convincing unique selling point of RINGSPANN. There are not many component suppliers who manufacture so many different drive components that also complement each other so perfectly in terms of function and design. The visitors of our stand at the mining trade fairs CIME 2016 in Peking were very impressed by this. And I am quite sure we will also manage to convince with our range at the Hillhead 2016 Exhibition from 28 to 30 June 2016 in Great Britain and in September at the Electra Mining Africa in Johannesburg and the MINEXPO 2016 in Las Vegas.
Can you give us an example of what advantages this has for design engineers in mining technology?
Nico Hanke: You see, a system manufacturer or plant construction company not only gets fast and slow running freewheels and overload clutches from us for the drive systems of conveyor belts, crushers or bucket conveyers, but also brake systems and controls for the controlled braking of bulk material belts as well as many kinds of shaft-hub connections. With this selection, we are something of an ideal partner for designers and engineers in mining engineering. It has also meant that we have recently been able to assert ourselves in the fluctuant long-term cycle of the international raw materials market much better than some competitors. At the same time, we have managed to score brownie points in customer focus with great flexibility and convince again and again with great power of innovation in technology and engineering.
Talking of innovation: Can you give us some current examples of innovative products?
Nico Hanke: An outstanding innovation of the last few months is our new RIMOSTAT® high-performance friction torque limiter RSHD, which was developed as overload protection for heavy-duty applications. It is able to keep the highest slipping torques of up to 60,000 Nm constant over a very long operating time with minimum wear and stands out for its high dry running stability. We therefore offer an ideal solution for use in the mining industry′s bucket wheel excavators, crushing units and conveyor systems. A further example of our innovativeness of engineering is our largest housing freewheel yet, which we implemented for an Asian plant construction company. Its nominal torque of over 40,000 Nm sets standards internationally. And our new electrical disc brakes with clamping forces of up to 24 kN are high-performance components for the retention or emergency stop systems in the hoisting winches of mining installations.
What country do you think is responsible for the decisive momentum that has triggered an upturn in the raw materials industry?
Nico Hanke: Well, the first signals that the price of copper could rise have come to us from China. That would be an important early indicator. I have no doubt that the growth period will begin soon, the question is just when exactly. As I have said – we always need a great deal of patience and steady nerves.