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Keech to cast longer

A decision to concentrate on core lines and raise its profile in hard-rock mining is paying dividends for one of the country’s oldest castings companies.Keech Castings Australia is about to expand its operations to cope with the strong demand for its products.Director David Keech said the foundry floor space would be extended in the next three to four months.The increased capacity is needed after a spectacular surge in sales. Keech said sales jumped 45% in 2007-08 and he is projecting a 30% lift this financial year. “We definitely need to expand our capability,” he said.Keech Castings runs two foundries, one for high alloy products, and employs 125 people at its Bendigo plant. It has sales offices in all capital cities and also in Kalgoorlie and the Hunter Valley.Established in 1934 by Gordon Keech senior, the business diversified its product base over the years, developing lines for the mining, agriculture and construction industries. It also markets an inventory management supply system.Keech, the grandson of the company founder and a cousin of co-director Garth Keech, said there had been a shift in direction in recent times.“Our core business is a steel foundry,” he said. “We’ve refocused on industrial products, such as rail components.“We’re focusing on mining, on underground, opencut and on ore flow. In the opencut area, we’re focusing on hydraulic and rope shovels.“We make ground engagement tools and we concentrate on the health and safety aspect, making safety tools for replacing GET.”Keech Castings was the first company to develop a hammerless retainer system for fitting points and adapters to big shovels and draglines.Keech said it was an association forged 12 years ago with mining and construction equipment giant Hitachi that had galvanised the operation.All Hitachi machines sold in Australia, from small skid steer units right up to the 600-tonne behemoths, are fitted with Hitachi GET, designed, made and fitted by Keech Castings.The contract accounts for about 20% of business and Keech is hopeful it could eventually extend to the Japanese company’s global operations.He said its patented Side-Lock GET retainer system had been a major factor in gaining the Hitachi contract. Keech described it as one of the most significant steps the company had taken in the past 25 years.Hitachi signed on with Keech Castings shortly after it moved its operations from Mascot in Sydney to Bendigo.The company was forced to search for an alternative site because of environmental issues. Keech said the transition was a trying time for both the business and customers.The company recently diversified into refurbishing buckets and truck bodies used in underground operations.It is supplying refurbished buckets and truck bodies to BHP Billiton’s Olympic Dam project in South Australia. It has also opened a bucket-hire business.Keech said another major focus had been on the hydraulic shovel market in the iron ore and hard rock sectors. The company believed its Sidelock GET system had great potential in this sector.“We’ve recently introduced new systems into Mt Gibson [Western Australia] and through Hitachi into Savage River [Tasmania],” he said.Keech Castings is targeting operations in the Pilbara, Hunter Valley and Northern Queensland, regions where the use of hydraulic machines is increasing.The company is always on the lookout for businesses to acquire that have good synergies with the existing operation. Keech predicts the resources boom will continue for at least five more years.About 10% of the company’s earnings are derived from exports. It exports castings to Indonesia, North America, South Africa and Europe and recently won a contract to supply GET for a big shovel destined for Dubai.Keech said Chinese manufacturers continued to encroach but they tended to concentrate on the smaller end of the construction market.Rapidly rising costs were a major concern. All of Keech Castings’ products are made from scrap metal, which has just topped $700 a tonne. Only four months ago it was $500/t.“There have been significant cost increases,” Keech said. “The days of signing a contract and holding prices for 12 months have gone.”After squaring away the foundry expansion, Keech Castings will turn its attention to 2009 when the family company will celebrate its 75th anniversary.