South African-based Roytec Global’s territorial expansion strategy taken four years ago has seen the mineral separation equipment supplier defy economic challenges to post a 20% year-on-year growth, says Roytec’s business development director Peter Sampson.
“Roytec’s decision to expand into the Democratic Republic of the Congo, Zambia and Tanzania, and global destinations of Australia and China in 2017, has seen the company achieve a turnover in excess of R400-million in this financial year,” he says. “South Africa’s mining operations only account for 20% of overall turnover while in excess of 50% of turnover has been achieved from projects located in global destinations.”
Prior to entering the Australian market, Roytec Global made a strategic move into China – a decision that has seen the company reap the benefits of reducing equipment cost-effectively, while being able to maintain world-class standards.
In early 2018 Roytec opened an office in China which consists of three western engineers tasked to control product engineering and manufacturing at its plant in Yantai, a large industrial city in east China.
“In this tough operating environment clients are looking for improved efficiencies coupled with cost-effective prices on equipment. While the bulk of non-critical equipment is manufactured in China at competitive prices under our direct control, critical components are sourced in South Africa where quality assurance for these products is a priority,” notes Sampson.
Following on the heels of launching its office in China, Roytec entered the Australian market in 2018.
The strategy of entering the Australian market was driven by the realisation that funding for a large number of new mining projects and project expansions were being raised on the Australian Stock Exchange.
“Furthermore, many engineering companies undertaking the engineering development of these projects are based in Australia, so it made sense to establish a Perth-based office so as to have access to the engineering decisions being made on African projects,” explains Sampson. He cites the Balama Graphite Project in Mozambique as a case in point and explains that while the project is located less than 1 000km from Roytec’s Johannesburg office, the engineering decisions were handled from Perth.
He adds that Roytec’s liquid/solid separation equipment has been well received by the Australian market and subsequently led to the company being awarded two contracts – one for the supply of six large vacuum belt filters for a lithium conversion plant, and the other for the supply of large thickeners for an iron ore expansion project in Pilbara, Australia. Both orders are in execution phase and together are worth an estimated R150m.
Sampson says battery minerals including cobalt, lithium, graphite, nickel and copper, which is used in the development of electric vehicles, have emerged as the key drivers for the development of a number of new projects.
Beating the odds
Roytec Global’s drive to remain ahead of the competition has seen the company invest heavily in product development such as the Roytec RadFlow Thickener Feedwell, which has resulted in the privately owned equipment manufacturer being able to reduce the size of thickening equipment by as much as 25%.
“The market is extremely competitive. In fact, the number of new mining projects being developed has significantly reduced from three or four years ago, so industry participants are chasing the same projects. By being able to deliver leading technologies which are competitively priced, we are better placed to win projects. The move to develop products that are modular, have a smaller footprint and improved efficiency, has led to a significantly reduced price tag for the customer. These products have been extremely well received by our customers.”
Strategy for 2020 and 2021
Sampson cites Roytec’s diversification strategy and the company’s flexible structure as the key drivers in it achieving its targeted revenue of more than 20% year-on-year for the 2019 financial year.
“We are a focused small company that is nimble enough to make quick decisions when required. We are also able to adjust our strategy speedily and adapt to the needs of the environment,” explains Sampson.
The leading supplier of thickening, clarification, filtration and flotation equipment plans on entering the North American market in 2020 with an eye on the Canadian market. By 2021, Roytec expects to use its “North American market footprint to expand into South America”.