Vehicle Supplier Undeterred by Barriers to Entry

Wed, 10/21/2015 - 11:11

Although there are a number of established suppliers of LHD trucks and dump trucks for the Mexican mining industry, foreign companies are still looking to enter the market due to the array of opportunities it presents. Establishing sales and service operations in Mexico, however, requires a local presence in the country and guaranteed on-time delivery of products and spare parts. German mining equipment manufacturer GHH Fahrzeuge (GHH) is one such supplier, confident that it will find success in the Mexican mining market with its innovative products. “The Mexican mining market has large growth potential, though the current state of the industry is already attractive enough for GHH. We believe we have the perfect machines for the Mexican mining market,” states Mortimer Glinz, the former Managing Director of GHH Fahrzeuge. According to Glinz, GHH offers high-performing machines “that are not too complicated to operate or maintain,” making them especially useful in remote mines.

Although the company is largely unknown in the Mexican sector, it has been present in the country for some time as it was part of the global MAN group until 1999 when it was taken over by mining group Schmidt, Kranz, & Co. After this acquisition, GHH turned its focus towards increasing international sales, one country at a time. Glinz explains that GHH would have liked to commit fully to the Mexican market earlier, but did not have the capacity to service this market. Now, instead of finding a booming industry on the rise, GHH is faced with the difficult task of convincing mining companies to use its products at a time of capital discipline and expenditure costs. “We have a local partner in Mexico, Topo Machinery, which is imperative for supplying the Mexican mining market and communicating with our clients in the country.”

“Our engineering efforts focus on creating simple, robust vehicles designed for long-term use with decreased downtime,” states Glinz. “Even when the vehicles do experience some failure, they are designed to be easily repaired with basic training.” These features give GHH a measure of flexibility in how it reaches out to customers since it can provide technical training for operators and service mechanics to use the vehicles efficiently and solve technical problems in-house. Additionally, another feature that makes its equipment stand out is the ergonomic design of its vehicles. “Mining equipment is not known for its ergonomics due to the limited space in the machines. Through our latest innovations, we have substantially improved the ergonomics of our vehicles, resulting in a better working environment for the operators, a decrease in mistakes and accidents, and an increase in safety,” says Glinz. Moreover, GHH produces machines with a hydrostatic drive coupled with an intelligent control system. These components guarantee that the trucks will not go downhill too fast and will always move at a speed at which braking space and time are met. On the other hand, a hydrostatic drive and intelligent control systems pertain to the direct safety of the mine operators, as they minimize the risk of the machine being used incorrectly. Furthermore, the central bearing of GHH’s dump trucks is designed so that the front wheels and back wheels can turn independently of each other. “This improves the safety of the machine as it becomes very difficult to tip and guarantees ground contact by all four wheels all the time,” explains Glinz. “No technical features can replace proper training though, which is why, to reduce the risk of accidents, we offer training for operators and service mechanics.”

This customization ability stretches to GHH’s own design and manufacturing. Although the company produces standard models suited for most mines, it can also design and produce tailored solutions. This alternative does entail added costs for the vehicles but also creates the opportunity to lower the cost per tonne of material extracted. “Larger customers facing very specific geological conditions may ask for vehicles with a specific height and maximum capacity, for example,” Glinz explains. “We have standard models for all types of machines that come equipped with certain additional features. For Mexico, we supply air conditioning equipment and use materials that can withstand temperatures up to 52°C.” Additionally, the company’s LHD trucks include an optional drive train that makes use of the hydraulic pumps and the engine in order to brake, reducing wear and tear on mechanical brakes. Through such standard and tailored features, the company aims to position itself in Mexico as a robust and reliable provider of mining equipment.

“Some mines are still using equipment that we manufactured in the 1980s,” Glinz tells, in order to prove his point on the robustness of GHH’s equipment. “We have already shipped spare parts for the Mexican market so they can be available when our customers need them. Through Topo Machinery, we are able to supply spare parts from Zacatecas to other mining regions. If a problem requires it, we can dispatch somebody from GHH working in Chile or send international service technicians from Germany who are used to working in remote mining areas.” Thus, GHH’s strategy to enter the Mexican market is based on its versatile vehicles, the robustness of its products, and the customization of solutions to meet the market’s needs. However, its long-term success may depend on its ability to outperform expectations and for GHH to cater to the constant need for innovation within mining companies