THE slowdown in the mining sector may have prompted many businesses to scale back their operations, but Esperance company Davies Wear Plate systems has all guns blazing as it embarks on an ambitious plan for growth.
The family-owned business has been active in the mining sector since about 2007, gaining regular customers in the immediate Esperance region but also big players in the Pilbara.
Now, as many businesses in its cohort have been tightening purse strings and consolidating activities, Davies is revitalising its company structure and eyeing international markets for new contracts.
Over the past year it has established a head office in Perth, employed non-family members to run significant parts of the business, and created a formal board of directors.
With the governance and organisational changes out of the way - including employing a general manager, project manager and business development manager - Davies is now planning to more than double turnover to $11 million in the current financial year. (Turnover was $4.6 million in the 2011-12 financial year.)
The goal is an ambitious one, considering notable clients Fortescue Metals Group and BHP Billiton have recently announced cut backs, but recently appointed chairman Iain Massey told II'. 1 Business News he had no doubt it could be achieved.
“It’s not pie in the sky; more than half of that revenue will come from committed projects we’re already in the process of finishing,” Mr Massey said.
Having identified potential in the mining sector and eager to tap into the market, Esperance engineer Brian Davies founded Davies Wear Plate Systems before the GFC.
For the 25 years before that he had been focused on general engineering without a specific product aligned to the mining sector. But he soon came up with a product needed by all miners - wear plates used in machinery such as crushers and hoppers.
His product differs from others in the marketplace in that the Davies Plates are made of harder steel and have a more streamlined design, intended to increase the life of wear plates.
The business’s growth thus far has relied on word of mouth, as Mr Davies’ daughter (and now the company’s intellectual property manager) Michelle Davies says; “we haven’t had a client yet who hasn’t liked the product”.
More than a year ago, however, a visit from Mr Massey, who was then a management consultant, started the company on a path more targeted to active growth and marketing.
While WA has proved to be a lucrative market, Mr Massey has recognised the limitations highlighted by recent cut backs, and started a push into the international market.
Mr Massey said the company planning to market the Davies Wear Plates in Latin America, sub Saharan Africa, Mongolia and Central Asia.
“Our ideal situation would be for one of our existing clients that operates in the Pilbara to open a mine in one of these areas, but we’re not just waiting for that to happen,” he said. “We’re currently putting a proposal together to put to the board to actually fly our general manager out there and start marketing our product on the ground.”
Mr Massey’s not ruling out an international order before the end of the financial year.
The company had a big win this year securing a contract with FMG on its Solomon mine project.
“Being able to mention that has really given us the credibility we needed,” Ms Davies said.
“And also the size; we had done big orders before but not as significant as this one.”
Ms Davies is one of three family members working within the business. Mr Davies works out of the Esperance factory where the bolts for the wear plates are made (the remaining parts for the system are contracted out to an outside steel processor) while Mr Davies’ son, Neal Davies, is the company’s production manager.
Handing the reins of the business over to an external board and employing outside managers is a step many family-run entities fail to make, but Ms Davies said it was necessary for the company’s growth.
“We’ve been constrained by our own arms and legs up until recently ... by bringing on these people with expertise and experience (they) can help take the company forward as well as lightening the load; we’re able to actually do these things which have been somewhat hamstrung over the years,” Ms Davies said.
“Whatever is needed for the success and growth of the company, and to make these products the standard in the industry, is what we’ll look at taking on.”
The business is also in the running for the West Australian Innovator of the Year Award, which will be announced next week.
