Taking the asset intensive industry focus beyond mining

Friday, April 29, 2011

The Latin American division of Australian mining software company Mincom has been quite active in the region of late. On the back of a restructuring process launched late last year, aimed at overhauling both its core account focus and consulting services, this month the company held the Intensive Industry Summit in Santiago, Chile.

BNamericas caught up with Carlos Medina, Mincom's VP for the south region of Latin America, to find out more of the company's goings-on in the region.

BNamericas: I understand that Mincom's sales in Latin America are about 80% in mining and 20% in others. Will there be any focus to try to increase that 20% contribution from other industries?

Medina: Our main focus is in mining, but our portfolio of solutions, oriented toward in-field mobile solutions and optimization of inventory and materials, are transversal solutions. So we think that we'll have a significant participation in other industries where business processes require solutions that optimize asset management.

BNamericas: So what are the other industries where you're looking to increase that contribution?

Medina: We're talking about energy and transport, basically.

BNamericas: You also have the Chilean navy as a client. What role will defense play in your Latin American development?

Medina: That's a delicate issue. What I can say is that within Mincom's business units, our solutions geared toward military logistics can support the asset management of the different defense institutions. But I can't say much more on that issue.

BNamericas: What are some of the trends in the market that you see influencing business? Perhaps the price of commodities like metals and oil?

Medina: There are two things there. Right now the commodities are bringing very good prices for the industry, which opens the door more for technology use. But on the other hand, [it's also a good opportunity] to take advantage of these booming times to incorporate technological solutions to improve current productivity, while also protecting [the company] against the comings and goings of the [commodity] cycle.

BNamericas: Mincom carried out a Latin America restructuring in December last year. What have been the results of that?

Medina: It's been positive. The restructuring defined Mincom as an organization in Latin America with a much stronger focus on the client - improving the relation with the client, focusing on providing solutions to requirements and providing more solutions for their different needs.

With the restructuring, each business area in Mincom now has a common focus, a better approach to the customer, and that is reflected in the seminar we had with our clients and the continuous trust they place in us.

For example, a client of ours, Antamina, finished migrating about a month ago to the new version of [integrated EAM and ERP solution] Ellipse 6.3. This is an important mining company in Peru.

BNamericas: What is Mincom's strategic vision for Latin America over the next few years?

Medina: The first focus is to continue the development and increase the depth of our road map of solutions for the mining sector, to increase the functional richness of the mining portfolio.

There will obviously be a strong focus on the administration of assets, based on international standards such as the PAS 55 [a specification published by the British Standards Institution that provides guidance on best practices in physical asset management]. That's in terms of solutions.

On the other hand, in terms of the client focus, we will concentrate on mining accounts, looking to strengthen our position with them based principally on client satisfaction. And of course grow in our market position in Brazil, principally.

BNamericas: Do you work through partners in the region?

Medina: Mincom has been characterized as providing a complete solution - not just in software, but also in services. Due to the demand we're facing with the different needs and the growth we're looking for, we've begun alliances on the international level - in the US and Australia - with different types of companies that are looking to develop here in Latin America. So we're forming partners, but I can't name them. We still have to define the regions and the industries [the partners would target].

BNamericas: Mincom's breakdown of business is software, implementation and managed services, correct?

Medina: Those are the three basic services. Managed services includes hosting or the provision of applications centers. I'd add another area which is very relevant, which is high level solutions in applying best practices - consulting.

BNamericas: What would be the approximate breakdown in dollar terms of those four areas then?

Medina: About 40% software, 30% services, 20% in facility and 10% in best practices.

BNamericas: Are you looking to increase the consulting side?

Medina: Yes, that's one of our main goals.

BNamericas: Besides Chile, what are some of the main countries in which you're focused?

Medina: Right now, there are three - Peru, where there are number of sizeable projects coming on board, the majority of which are being taken on by our clients. But there a number of big projects that will be coming in 2013-16. There are also interesting industry developments in Colombia, when it comes to gold mining. And Brazil, due to the nature of Brazil - it's big and we can't not be there.

BNamericas: Do you see any threats to those projects in Peru due to the current political situation?

Medina: No, I don't think the political situation will affect our participation in the market or the search for better technologies. Private industry is looking for strong growth and to better the business, becoming more competitive. Technology use is an important leverage for that, and I don’t think this will change in the medium term.

BNamericas: What are Mincom's growth projections this year for Latin America?

Medina: About 15% this year. The region contributes nearly 15% to Mincom's total revenues.

BNamericas: Mincom had an acquisitions program in 2004-9. Will you look to continue down this path in the near to medium future?

Medina: That's a given. We're now consolidating those acquisitions - mostly in the technology standardization needed when you absorb a company. So far this has given us very good results; we've had very good response to this. And Mincom will always be attentive to market needs, and from there define if we provide our own solutions or if we incorporate other solutions that add value to our portfolio.

BNamericas: Which solutions could add value to your portfolio?

Medina: We've incorporated Mincom Production Accounting and MineMarket, which has to do with inventory logistics and product commercialization.

Outside of that, I can't provide details, but it'd always have to be geared toward the mining business core and asset management.

BNamericas: Mincom was acquired by California investment firm Francisco Partners in 2007. How would you say business development has been since then? How did the arrival of this investment firm influence the business?

Medina: It was a positive influence. First of all, there was a sizeable investment, and then the focus on bettering and expanding our solutions portfolio. Also looking at the sustainability of the business over time and in financial results. And a globalization of the company - there has been an important change of our image in the market.

So it's been positive from the point of view of positioning, solutions and our focus on the end client.

About Carlos Medina

Before becoming VP of south region Latin America for Mincom in March 2010, Carlos Medina was the director of the company's business development services for the region. He has been with Mincom since 1997.

Prior to coming on board with Mincom, Medina worked in a number of IT-related positions in mining companies including Doña Inés de Collahuasi and Mantos Blancos.

He has a degree in civil engineering, with a mention in computer science, from Chile's Universidad Católica del Norte, Antofagasta.

About the company

Australian software and services provider Mincom specializes in enterprise asset management (EAM) solutions for asset intensive industries including mining, utilities, public infrastructure and defense.

Founded in 1979, Mincom now has nearly 1,000 employees with offices worldwide. In Latin America, it has offices in Chile, Brazil, Peru and Colombia.

In 2007, Mincom was acquired by EAM Software Finance, a company indirectly controlled by Francisco Partners, a US tech private equity firm.