Mining software provider Gemcom Software International has decided to maintain all of its existing products following the acquisition earlier this year of Perth competitor Surpac Minex but has noted that its products will “come together” over time.
Mining software provider Gemcom Software International has decided to maintain all of its existing products following the acquisition earlier this year of Perth competitor Surpac Minex but has noted that its products will “come together” over time.
The $34 million acquisition prompted speculation Vancouver-based Gemcom would drop some products to contain costs and boost returns but chief executive Rick Moignard has scotched this suggestion.
“We are keeping all products moving forward in parallel,” Mr Moignard said.
He said the second phase of integration between the two companies would be “aggressively looking at taking technology from one of the products and moving it into another product”.
“As we build up new components, and this is what the competition maybe is referring to, they will be compatible with both sets of technology.
“That is one of the key factors in putting these companies together.
“There is a lot of very strong, underlying technology that will allow us to build components that can be used across the Minex product, the Surpac product and the GEMS product.
“Over time, there is no question, as we build more and more of the shared code base, these products will come together more and more.
“Our customers will see this as an evolution of the products.”
Gemcom is hoping its acquisition of Surpac will be a step-change in the mining software industry.
The merged group claims to have about 40 per cent market share, making it “the largest supplier of specialist mining software in the market space it services”.
Comparable data for other big mining software suppliers like Adelaide-based Maptek, London-based Datamine and emerging Perth supplier Micromine is not publicly available.
However Maptek, which has a large R&D centre in Perth, clearly has a different take on the market, noting that its Vulcan modelling and mine planning software is used at more than 600 sites around the world.
While competing firms also have a large number of installations, Maptek notes that it services most of the world’s biggest miners, rather than exploration companies with smaller budgets.
Mr Moignard said Gemcom and Surpac had a “fairly strong installed base” at major mining companies and serviced “the full spectrum of the market place, everything from early exploration right through to majors”.
He emphasised that the merged company would continue to spend 20 to 22 per cent of its sales revenue on research and development, which he believed was a large proportion for a company of its size and maturity
In the past financial year, Gemcom generated global sales of about $23 million while Surpac had sales of $19 million, which was nearly triple its sales in 2002.
When asked about further consolidation, Mr Moignard said: “We’re not done yet; we think there are other opportunities to add more components and people and technology.
“However over the next six months we have to focus on making sure our current product portfolio is moved forward.”
