Australian manufacturing companies are thriving supplying innovative technology, products and services to the mining and resources sector. AMT Magazine spoke to one of them: Berg Engineering based in Brisbane.
Berg Engineering has been successfully growing its business with the mining sector and other industry sectors for almost 50 years. Since joining the family business in 2007 as CEO, Derek Berg and his team, together with his father Roger as chairman, have grown the $3m workshop they had in 1996 into a very successful global business. Berg Engineering manages around $90m in rotable assets and collects revenue in manufacturing and construction of more than $45m per annum.
“Rotable assets in our industry are those assets that can be charged out and shut down,” explains Derek. “It includes fixed plant equipment, and within that, pumps, valves, gearboxes, autoclaves and other specialised equipment. Components of those assets can be removed from site when special work needs to be done on them – so they rotate out of the business.”
Roger Berg, the company’s founder, trained as a fitter and turner and started the business in 1972, working out of his parent’s garage, making rivets and bolts. His wife and co-founder Pam was the delivery driver and handled all the accounting side of the business. Berg Engineering has certainly come a long way since then, after almost five decades of Australian manufacturing and engineering.
The business has manufacturing operations in both Brisbane and at its newer plant at Gladstone in Central Queensland, with 50 employees at each site. It also has offices in Indonesia, The Philippines and New Caledonia. Berg’s mining sector client list includes BHP, Rio Tinto, PT Aman, Indonesia and Boron Nickel, New Caledonia, to name a few.
Speaking on the innovative asset management and registration work that Berg carries out for the mining sector, Derek explains: “At mining sites, there is generally some disconnect between capital expenditure and how the operations run its assets as well as handle its repairs and maintenance. How you measure the operational cost of the valve or pump, should include all the aspects of operating the valves and pumps, what it costs for the spare parts, the cost to install the item and to keep it running.”
He adds that Berg Engineering is the only company in Australia, as far as he is aware, that performs both the asset management side and the client consultancy, that verifies that the innovative process is dropping the asset cost. This practice helps increase the mining company’s accountability. Derek’s qualifications in law and accounting, followed by three years on London’s Metal Exchange, has certainly equipped him to drive the valuable mining sector asset management part of the business.
“Another innovation we are offering is medium-to-large machine capability, as well as large-scale, high-end welding technology,” he adds. “We have more than 40 welding technologists on-site. Other companies may have to outsource some of their welding, but we can do all of ours in-house. Berg has certification AS 3834 in welding technology and we have our own in-house NATA testing laboratory.”
Berg manufactures a wide range of components for mining companies, including pumps, valves, pullies and draglines to drive shovels used to power coal and other minerals out of the ground.
Derek describes an interesting project the company is doing to assist one of its mining clients in its processes: “When a business owns a fleet of valves and gearboxes, anything associated with running that fleet, from holding the inventory, to purchasing it, to managing the down-time, is a head wind to that company making a profit – it’s an overhead. Companies may be very good at making gold but they are not experts at making valves.
“Berg has a program called the Asset Optimisation Program where we take responsibility for every aspect of managing the fleet of valves and gearboxes. So, the company has a valve when they need it.”
Last June, Berg Engineering achieved an extra boost for its Gladstone operations, receiving $161,000 in Queensland Government funding to employ five new staff and purchase a Titan SC 40/50 – 4HY double-column vertical boring and turning mill. Berg Engineering purchased the machine from Germany for around $2m, primarily to attract extra defence industry work, which it has achieved. It is also being used in its mining sector and in projects for other industries.
Berg Engineering continues to have a successful growth path with its Australian and global business operations.
“The next generation of leaders are coming through to run the company, so in the future, I will resign as CEO and become the chairman,” Derek says proudly. “My existing management team will manage the business here in Australia and I will manage the overseas business.”