Richard Roberts │ 16 Sep 2016 │ Feature │ Future of Mining
DINGO CEO Paul Higgins … software positively impacting high-capex mining hardware returns
Paul Higgins, CEO of a company with a quintessentially Australian name, DINGO, started his privately owned company from an apartment in Brisbane, Queensland, in 1991. The company has built a healthy market presence in Australia and North America with its cloud-based condition management software, said to be used to manage more than A$7 billion of mining, rail and energy assets globally.
Houston-based energy giant ConocoPhillips bought 10% of DINGO more than a decade ago and that investment was poured into product R&D and ultimately helped DINGO open a bigger market window in North America.
Now it is stepping into South America on the back of some sizeable orders after Higgins visited the continent with an Australian trade delegation less than a year ago.
“I was really pleasantly surprised by what I saw and their receptiveness to Australian technology,” he said.
“We immediately acted on that. I came back and appointed a partner/manager, a Colombian native, and since then we’ve had a few wins and we’ve got a solid developing pipeline. So it’s been a good move for us and I expect it’s going to be an important part of the future.”
The A$700,000 or so of new recent business out of Latin America, the US and Canada has been a further welcome sign of a turnaround in market sentiment after several bleak years for most mining industry suppliers – even those with technology that helps miners reduce costs and ‘sweat’ assets intelligently, rather than by hacking limbs off.
DINGO’s Trakka software allows users to closely monitor and manage equipment health, and identify ways to improve performance and durability. An example of the impact – where a Canadian client tripled the life of $350,000-500,000 wheel motors in electric drive trucks over about five years – is impressing companies in South America, where there is a big population of electric-drive haul trucks.
“We’ve developed an extensive database of the sorts of things we’ve been able to achieve,” Higgins said.
And it is all making more sense to mining companies now.
“It seemed like the mining boom worked against us because miners didn’t need to do anything other than keep doing what they were doing and more of it. It didn’t matter if a wheel motor lasted 13,000 hours if you were making 30% net profit. You just buy more of them.
“Now there is an imperative for customers to change. And that’s what I saw in Latin America. That’s what we’re seeing in the Australian coal industry now. After the initial freezing [of spending] that happens with management, who are worried about keeping their job, they get onto, well, what can we actually do about this [margin squeeze]?
“And when there are real answers through METS [mining equipment, technology and services] companies we find the audience is more willing to listen nowadays.”
Higgins says widespread use of maintenance and repair contracts (MARC) during the boom, mainly with equipment suppliers, has also given way to pragmatism.
“Miners are looking to cut costs in any way they can. They stand to save about 40% by managing their own heavy machinery and our technology and systems help them to do it,” he said.
While the South American mining market is alluring – Higgins thinks it could be as big as the Australian and Canadian markets combined – Australian METS companies have had mixed success due to language, culture, distance and cost barriers. DINGO is “springboarding” off existing relationships with big miners in North America and elsewhere.
“Now we’ve got a couple of mines up and running with what we do, and they’ve had a positive experience, they’ve turned into reference sites for us that we can use to build further momentum.
“The appointment of Carlos Perez, someone who speaks the language and is familiar with the culture, has been a good move as well.
“It still early days, but we’re fairly optimistic.”
DINGO recently launched a Spanish version of the Trakka software. The company was founded on a product that had a fox logo, but Queensland miners called it the ‘DINGO’ software and the name stuck.
“In terms of our future plans we really are focused on continuing to grow the business organically,” Higgins said.
“We think there is a lot of upside in our business before we’d consider something like [M&A].
“We’ve had a direct sales force up until now. We understand that to get to a larger market an indirect path and partners is a good strategy for us, and that’s what we’re pursuing at the moment, both with agents and also potentially larger partners we’re talking to as well.
“We’ve appointed another partner in Indonesia, and in South Africa and that’s the model we’re pursuing at this time. And the opportunities that are in front of us are really solid and I’m very positive about them.”