Materials Processing & Mining Rick Nichols, President Terex Cranes.
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Transcript of Materials Processing & Mining Rick Nichols, President Terex Cranes.
Materials Processing & MiningRick Nichols, President Terex Cranes
Recent Management Changes
Rick Nichols has been named President, Terex Cranes. He has been serving as President, Terex Materials Processing & Mining (MP&M). He also reports to Mr. Riordan. Mr. Nichols has been successful in leading the advancement of lean manufacturing capabilities to improve margins and capacity, overseeing acquisitions, and changing the business strategy for the Terex mining truck business.
Terex Materials Processing & Mining
Crushing & Screening
Mining Shovels Crushing Plants
Mining Drills
AC Drive Trucks
MINING PRODUCTS MATERIALS PROCESSING
Highwall Miners
2007E Sales by Region
ROW13%
Australia20%
Asia13%
USA24%
Europe24%
Africa6%
USA
Europe
Africa
Asia
Australia
ROW
MP&M Snapshot
Financial Performance
$951
$1,360
$1,625
$1,877
$0
$500
$1,000
$1,500
$2,000
2004 2005 2006 LTM 9/07
$ Revenue
0%
2%
4%
6%
8%
10%
12%
14%
OP Margin
Terex Materials Processing & Mining
5
Fort McMurray
Alberta
Fort McMurray
Alberta
UK & IrelandUK & Ireland
SantiagoCHILE
SantiagoCHILE
PerthAUSTRALIA
PerthAUSTRALIA
JakartaIndonesiaJakarta
Indonesia
BeijingCHINA
BeijingCHINA
DortmundGERMANYDortmundGERMANY
Gillette, WY
Gillette, WY
MackayAUSTRALIA
MackayAUSTRALIA
Tulsa, OKTulsa, OKSherman,
TXSherman,
TX
Gillette, USA
Cedarapids, IACedarapids, IA
Vancouver, WAVancouver, WA
Louisville, KY
Louisville, KY
Beckley, WV
Beckley, WV
• A Global business today with significant growth opportunities in emerging markets – BRIC & EMEA
• Industry leader in mobile crushing & screening & hydraulic mining excavators
• Materials Processing uses a dual distribution & branding strategy
• Mining sales & service network developing a balance between company owned branches and independent dealers
• Opportunity to expand product range
Business Overview
• Mining and Crushing & Screening markets will remain strong for the next 3-5 years
• Commodity prices remain at historically high levels
• Infrastructure investment in emerging markets and in developed markets drives a continuing demand for our products
• Commodity prices continue to be strong with periodic corrections
• Coal, Iron Ore and Copper will lead industry investment
• Emerging markets GDP growth supports mineral demand and infrastructure spending
• General feeling of uneasiness with credit market and potential spill over into other countries
• US market demand for crushed rock and recycling will continue to decline related to residential construction spending
• Eastern Europe, Russia and India gaining economic momentum in construction & infrastructure
• Total market will grow offsetting decline in US domestic market
2008 Market Conditions
GOLD World Production
2450
2500
2550
2600
2650
2700
2750
2000 2001 2002 2003 2004 2005 2006
Me
tric
to
ns
of
go
ld c
on
ten
t
0
100
200
300
400
500
600
700
$ / o
z.
Average Annual Price
IRON ORE World Production
0
200
400
600
800
1000
1200
1400
1600
1800
2000 2001 2002 2003 2004 2005 2006
Mill
ion
me
tric
to
ns
of
us
ab
le o
re
0
10
20
30
40
50
60
70
80
90
$ /
dry
me
tric
to
n
Average Annual Price
NICKEL World Production
0
200
400
600
800
1000
1200
1400
1600
1800
2000 2001 2002 2003 2004 2005 2006
Th
ou
sa
nd
me
tric
to
ns
of
nic
ke
l c
on
ten
t
0
5000
10000
15000
20000
25000
30000
$ /
metr
ic t
on
Average Annual Price
COPPER World Production
12000
12500
13000
13500
14000
14500
15000
15500
2000 2001 2002 2003 2004 2005 2006
Th
ou
sa
nd
me
tric
to
ns
of
co
pp
er
co
nte
nt
0
1000
2000
3000
4000
5000
6000
7000
8000
$ /
me
tric
to
n
Average Annual Price
COAL World Production
0
1000
2000
3000
4000
5000
6000
7000
2000 2001 2002 2003 2004 2005 2006
Mill
ion
me
tric
to
ns
0
10
20
30
40
50
60
70
80
90
100
$ /
me
tric
to
n
Annual Average Prices
Norwest Europe
US Central Appalachian Coal
Japan Coking Coal Import
Favorable Commodity Trends are Expected to Continue
0
2
4
6
8
10
USA Japan Europe Australia China India Brazil Russia
% GDP Growth
2001-2005 2006-2010
Business Fundamentals – Commodity Price and Production
Customer and Channel
• Mining customers reporting solid profits and free cash flow (usage = debt, exploration, shares, dividends, M&A)
• Mining customers feeling increased cost pressure; will effect pricing and buying decisions
• Fuel price and tire availability are effecting buying decisions and strategic thinking
• C&S customers increasing expectations on manufacturers through guarantees, financing and rental options
• Will continue trend in movement to mobile C&S from static applications
• Global skilled labor shortage continues to effect industry
• MP&M undertook more than 165 separate Kaizen events encompassing over 1,420 team members during 2007
• Savings of over $8 million were realized from productivity improvements, reduction of rework and reduction of outsourcing due to additional space that was more efficiently utilized due to lean and other cost reduction initiatives
• Production space utilized decreased by over 10,000 sq ft allowing for capacity expansion with no facility costs
• Truck production was increased from 4/month to 16/month with less floor space
Impact of Lean Initiatives
MP&M is in the early stages of implementing Lean
Lean is the core foundation to achieve improved operating results
Pegson / Powerscreen
• XA750 Jaw Crusher
• XC950 Cone Crusher
• XH250 & 500 SR Impactor
• Horizon 5163
• Chieftain 1700Chieftain 1700
XH250 Impactor New VSI Impactor
New Product Introductions – Pegson / Powerscreen
Payload: 363 MT (400 ton)
GVW: 600,000 kg (1,320,000 lb)
Max Speed: 64 km/hr (40 mph)
Horsepower: 2797 kW (3750 HP)
Retarding: 4476 kW (6000 HP)
Dynamic retarding to full stop
Controls: IGBT
New Product Introductions – MT6300AC
New Product Introductions – RH170 Electric Drive
• A large number of electric rope shovels are to be replaced, especially in CIS countries
• Infrastructure for electric drive is available
• Reasonable demand in 350 t class
•Market still shows signs of growth or opportunities
• Stay vigilant to key indicators and what customers are saying
•Customers are making money
• Achieving pricing and collecting cash will be key to success
•Business has significant opportunities to grow and develop • Internal improvement and new products• Geographic expansion
• Customer and channel development
•Lots of work ahead of us to continue to build
• The best place to work
• Superb operating company
• Customer centric organization
Summary Thoughts