Mining Supply News
Mining Technologies International is the country’s largest privately owned mining equipment manufacturer. President and CEO Robert Lipic is being honoured by Northern Ontario Business for his company’s export potential.
Mr. Lipic received the Export Award as part of the annual Northern Ontario Business Awards ceremony held in Timmins earlier in October.
Mining Supply News sat down with Mr. Lipic in his Lively office to talk about his business, the challenges in the export market and what makes him tick.
Q. You are the recipient of numerous community awards including Entrepreneur of the Year in 2006. Has your focus shifted since this official recognition? What major changes in the company occurred since then?
A. There was a slow down in 2008 and we felt those affects to a degree but we had built a large back log to help carry us through without any real job loss or loss of productivity. We were fortunate. The cycle was a short one.
We’ve had good growth year after year, expanded our markets to include more and more companies on an international scale. At this point it’s safe to say 60 per cent of our revenue comes the export market. The downside is Canadian banks are not so focused on supporting companies in export markets.
Q That’s the biggest challenge in exporting outside the country?
A You hear on the news our finance minister is encouraging business to spend more. I think all the way down the line things have to change. Are we going to focus on developing or having more companies exporting? EDC (Export Development Canada) is a support group from the government but like all government agencies are very slow to respond. Often times you have a shelf life on the deal and if you don’t get their support in the beginning, and they don’t commit to it, you’ll lose it.
Q What should happen to make it easier for businesses in the export market?
A. Everybody has to assume more risk. We as manufacturers have to assume more risk in selling products outside the country. Banks should be willing to accept more foreign receivables. They have a hard time to quantify the caliber of the company and net worth to take on the financing. When you bill a large piece of equipment, it could be $1.2 or $1.3 million. That’s a lot of cash to put out.
Then there’s shipping time…it’s just not about loading it on the truck and taking it 500 miles up the road.
Q How have you overcome these challenges?
A. You follow the guidelines from our banks. They accept a limited amount of foreign receivables for Canadian receivables and your inventory. Canadian banks are pretty typical in how they finance, based on that criteria.
Q Is the answer to manufacture outside of Canada?
A Well we did for a period of time. For 10 years I had two plants in Australia and two plants in the U.S. In the downturn of 1998 to 2003, we had to reserve cash, pay down debt. So I sold off those facilities and continued to build everything in Canada rather than have those international locations.
Q Your focus remains on Canadian operations?
A. That’s the easiest one to control. We have opened up another facility in the U.S. on a much smaller scale. We’re half of what we used to be in the U.S, in terms of employees and manufacturing capabilities.
Service is important in our equipment today and safety – all those things that you have to engineer in the design of the unit to make sure there are not injuries or fatalities. It’s an important aspect in what you do.
Ergonomics, operator comfort, soundproofing and climate control – those are big changes that have come along in recent years that people are asking for.
Q. What keeps you going, what motivates you as an entrepreneur?
A. I’m a self-motivator. I don’t need very much to drive me. I like what I do.
I like the travel, visiting new areas and new things, seeing how people do things and offer suggestions on how to do things better or cheaper. That certainly has been my ability to be successful, to show somebody a different way to get higher productivity and lower cost.
Q At what point in your life did you decide you wanted to go into the manufacturing business? Did you like to assemble things as a child?
A. My father was a hard working guy, in the aggregate business, in the mucking side. He had an appreciation for quarries and drilling. At a young age I thought that was something I would like to do. My dad of course wanted me to work for him but an opportunity came to go to the Haileybury School of Mines and I took that challenge. My interest in hard rock mining rather than quarries changed.
I got a good cross section of the industry. I spent time in mining production, geology, field exploration, contracting and then I entered equipment sales. I never thought I would stay in it as long as I did.
Q. MTI has collaborated on a few projects with other companies such as Cast Resources and Xstrata Nickel. Is there a fine line between collaborating and remaining competitive?
A. It certainly takes two companies to work together. Margins are probably not as good when two people are involved, Often times one company will bear a little higher cost than the other but the net result is the growth of the business.
Q. Where would you like to take the company in the next 10 years?
A. Well, I don’t know if I’ll be around in 10 years (laughs) but that’s a good outlook. We’re looking at growing our international locations and service facilities to support our equipment. We’ll concentrate on the higher populations of the countries that have an active mining industry. We’re using that as a stepping-stone to develop more business.