FEATURE: While most of its peers have been taken over by larger companies, Perth-based mining software developer Micromine has stayed independent while building a global business.
While most of its peers have been taken over by larger companies, Perth-based mining software developer Micromine has stayed independent while building a global business.
ALMOST three decades after he established Micromine, managing director Graeme Tuder is stepping into a new role with a focus on expanding the company’s international operations.
But he isn’t handing over to a new recruit.
The company’s new managing director is Wally Borovac, who has been an adviser to Micromine since 1991 and a non-executive director since 2001.
That ensures a high degree of continuity for the company, which has offices in 22 countries and clients in more than 90 countries.
Chairman Alan Broome, who completes the three-member board, provides further continuity; he has also been a director since 1991, presiding over Micromine’s long-term growth as an independent mining software developer.
That makes it something of a rarity in a market sector where most of its peers have been taken over by larger, more diversified technology companies.
Mr Borovac said the company’s ability to fund its growth without recourse to external finance had been crucial to its independence.
“The main reason is that Graeme is happy to keep on investing,” Mr Borovac told Business News.
“He is the entrepreneur who has reinvested the profits back into the business.”
Mr Borovac said the reinvestment had enabled the company to maintain spending on product development through the ups and downs of the mining cycle.
He said the company had people “knocking of the door” enquiring about a possible sale, but the directors had no interest.
“We’ve actually avoided a lot of distractions; we just focus on the business,” Mr Borovac said.
Mr Borovac has diverse experience across energy, telecommunications and technology, most recently working on the merger of Verve Energy and Synergy.
He initial involvement with Micromine came through the provision of advice on R&D concessions.
The company has been very successful in gaining access to government funding; it has obtained $11 million in AusIndustry grants, money that had to be matched dollar-for-dollar by its own funds.
Mr Borovac said one of the earliest innovations was recognising that clients were moving away from mainframe computers to PCs.
“We had a culture of making it easy for the ‘geos’ to use,” he said.
“That’s been the philosophy all along.”
The company has added to its product suite over the years, with Micromine for exploration and mine design, Pitram for mine development and production, and Geobank for data management.
“That was the dream that Graeme had, to build a full suite over the entire mining process,” Mr Borovac said.
Micromine has also built up consulting, training and support services across every continent, including four offices in Russia, where it was one of the first mining software vendors.
Mr Tuder, who keeps a low public profile, plans to focus on the international opportunities, with South America a major focus.
Mr Borovac said he planned to upgrade business systems to support the growth.
“The only thing holding back the company is that it needs to set itself up for scale,” he said.
That means investing in areas such as finance, reporting and customer management, and in particular enhancing 24-7 customer service for clients around the globe.
Micromine has never disclosed sales or profit figures, making it difficult to establish the size and performance of the business.
The best available indicator is headcount; with 198 staff, Micromine is clearly a big player in mining software, though that number is down from 240 a couple of years ago.
To put that in context, arch-rival Gemcom Software International had 360 staff when it was sold in 2012.
Gemcom attracted a whopping sale price of $US360 million, after private equity groups JMI Equity and The Carlyle Group spent four years lifting its performance.
Another guide to value is ASX-listed consulting and software company RungePincockMinarco, which recently cut staff numbers to 290 in response to the slowdown in mining activity.
Its market value has slumped in recent months to $82 million, after telling the market annual revenue was likely to drop to $60 million from $63 million in the current financial year, from $74 million previously.
Micromine’s biggest direct competitor is Geovia, a brand that was created in 2012 when French company Dassault Systems acquired Gemcom.
Vancouver-based Gemcom was itself the result of multiple mergers and acquisitions, including Perth companies Surpac and Ecsi, which came together in 2005 to form Surpac Minex Group before being bought one year later by Gemcom.
Other software developers targeting the mining sector have also been bought out by larger, technology focused companies.
Brisbane-based Runge acquired Perth company Fractal Technologies back in 2007.
In 2010, Canadian aviation and defence company CAE acquired UK-based Datamine Group, while in 2011 European multinational ABB Group acquired Brisbane-based Mincom to expand its enterprise software business, Ventyx.
One of the few specialist competitors to remain independent is Adelaide-based Maptek, which has built a substantial international presence.
Scarborough-based Scope Systems has also targeted the mining sector as one of its core markets, for its ERP (enterprise resource planning) and BI (business intelligence) software products.