RPM stays focused on high-speed transition
RPM is in the midst of a significant period of transition that new chief Richard Mathews expects to transform its profitability, global presence and growth prospects.
Here he gives HighGrade Briefing an update on progress.
It’s been a few months since our last interview. Some mining-sector suppliers are calling the low point of the cycle, in terms of demand. Others see a difficult year ahead. What is your view?
In terms of the overall market, everyone has a different view on that. If you look at it across commodities and across the geographies, some of the things that we see are probably different from others, given our international flavour.
HGB: Commodity-wise, and geographically, where are you seeing resilient or even robust demand for your products/services?
RM: I am sure that everybody is saying the same thing about coal – it’s still pretty tough. It’s tough in Australia, but even tougher in the US. We don't have the same level of market share in the US as we do in other parts of the coal world so we are not hurting quite as much as others but it is still tough given the move to natural gas, coal seam gas and shale gas and even the oil sands guys up in Canada are looking at it now and saying that oil is going to be replaced by gas in America. Copper, feels like, it is improving and we are seeing a lot more proposals coming out in that space. And gold, I would say it is treading water. I know a lot of people think that gold is going well as a result of its market pricing but the gold guys are aggressively looking at how they can reduce their cost base and increase their margins. They don’t necessarily expect gold to keep moving in one direction only. We are doing a lot of work with them in the cost area using our XERAS product at the big end of town (majors) and we are also seeing continued but selective activity with the junior miners in resource estimation and updates as the segment seems poised for M&A. But it’s a little bit mixed depending on geography, commodity and customer. We are doing lots of work in Toronto, Canada, and some of the far-flung regions of the world, and they are still going pretty well.
RM: Yes, the guys here in Australia have got a lot of challenges, but our recent restructuring in that region has better aligned us with the needs of the market. While, coal is tough, iron ore is very good, metals are generally okay, and then some of those precious
metals are a bit up and down.
HGB: You have an advisory presence in the established mining jurisdictions/financial centres and some emerging markets, and you are growing the software business along similar lines. What is happening in the regions and particularly some key spots that have been in the news lately for the wrong reasons. like Mongolia and Indonesia?
RM: I will touch on Mongolia since you kicked off with that one. Yeah, that’s a tough market to play in and I guess that’s really due to where the government is up to in relation to updating of its mining laws, everyone is a bit confused and concerned at the moment and with uncertainly comes cautiousness. We have a pretty good market share in Mongolia; we work with all the big guys in the advisory space and it is negatively impacting our revenues. Where foreign investors were investing quite heavily in Mongolia two or three years ago, they are now sitting and waiting for a clearer direction before they invest. Local investors are continuing to invest but at much more cautious levels then seen in the past.
You can view the full interview by visiting Highgrade.net or clicking here.