Company Report: HMG Hardchrome
Chrome-plating for the Mining Industry HMG Hardchrome grew from a small workshop into the largest chrome-plating facility in the Southern Hemisphere

HMG Hardchrome is Australia's answer to the chrome-plating industry. A division of the Heavy Maintenance Group since August 2007, HMG Hardchrome was established in 1959 and has since grown into one of the most technologically advanced chrome-plating companies in the world.

Founded by the Smith family, the 50-year-old Australian company began operations in surface plating but soon saw the appeal of diversification to include other engineering requirements of the burgeoning resource sector. "There are many applications for surface finishing which includes reclamation and manufacturer," explains HMG Hardchrome CEO Lincoln Gibbons. "As parts are finished they are often only one piece in the puzzle of a number of components that need to be assembled in order to produce the finished item. When faced with opportunity it is our commitment to industry that we will take an inward look at our operational capability to deliver a total solution to our customer maintenance requirements."

It was this attitude coupled with a reputation for quality service that transformed the company from a surface finishing shop to a multi-service production supplier for the mining industry. Located in Brisbane, Queensland, the company offers an array of not only reclamation but also manufacturing and design services to the mining, oil and gas, engineering and industrial markets.

NEW FACILITY
HMG Hardchrome boasts expansive chrome plating, HVOF, arc spray, machining, honing, welding and pump workshops totaling over 10,500sqm of factory floor space spanning two locations. Each facility is equipped with the latest technological advances in machinery. "It is not unreasonable to expect that a company with a 50-year history can collect a lot of old and redundant equipment," admits Gibbons. "HMG Hardchrome's growth will continue to be underpinned by its commitment to stay ahead of the industrial curve.We will maintain a proactive approach to cycle old equipment and replace it with stronger and more technologically advanced machinery that delivers best of breed outcomes."

"Companies who do not embrace technology and change will be surpassed by businesses that do," explains Gibbons. "A fundamental to maintain strong relationships and evergreen business is to ensure that you recognize your business's commitment to the importance of technology and how that translates to optimal outcomes on behalf of your target market." The company has migrated its IT and Communications platform to a remotely hosted Microsoft multi stack with the integration of Microsoft CRM and Microsoft Office SharePoint Service (MOSS) to maintain full transparency of activity and accountability throughout the business. "It is imperative to adopt a technology focus for the business as it provides the fundamentals to improve both internal and external communication including business process capabilities. It is a key focus of the business to not stop at business critical systems but to also integrate automation practices for our production environment," says Gibbons.

The most impressive advancements in technology and machinery for HMG Hardchrome can be found in the company's newest facility. With the capacity to handle any range of hard chromium electro-plating, from a small component only a few centimetres long to the largest hydraulic excavator ram currently operating globally, the 3500sqm Brisbane facility is the pinnacle of chroming technology.

"Chromium is not the most environmentally friendly solution a business can work with," states Gibbons. To counter risks associated with such a process HMG Hardchrome is supported by a first class environmental system which protects the surrounding wildlife. "When you take the time to understand what's to be implemented in line with local council regulations and guidance, it's the closest thing a business can get to green as you could possibly achieve," Gibbons proudly states. The facility recycles waste and is energy and water efficient, reusing water from its own capture systems and utilizing power saving initiatives sponsored by the State Government. It also features what Gibbons calls an "environmental pit" to ensure that the plant is not harming the surrounding environment.

The company plans to make further green improvements in the future, especially considering the Australian government's ongoing pledge to help businesses go green and its focus on promoting green industry. "We are and will continue to take advantage of this initiative," says Gibbons.

GROWING MINING SECTOR
With the latest technology and the most advanced manufacturing facilities, HMG Hardchrome and its parent company the Heavy Maintenance Group are set to take advantage of the growing mining sector in Australia, Indonesia, South East Asia and the Pacific Islands. In fact, Gibbons was brought on board in 2007 to commercialize and integrate the Groups acquisitions.

With years of experience as both a general and operations manager in diverse sectors such as aviation, telecommunications, logistics, wholesale distribution, supply chain management, professional services and IT; Gibbons is not exaggerating when he says he "came from a multi-sector environment." Highly sought after for his expertise, Gibbons was headhunted to the HMG Group in 2007.

After taking the position of Chief Operating Officer at Heavy Maintenance Group Pty Ltd, he later operated as COO and CEO for HMG Hardchrome. However, it soon became apparent that HMG Hardchrome would benefit by receiving his 100 per cent focus. "When it became evident that HMG Hardchrome was on the verge of major growth, I considered the best value add that I could bring to the Group was to focus on just two key areas: HMG Hardchrome and the Groups IT and Communications function. If and when required, I am leveraged for support by other companies within the group on an ad hoc basis," Gibbons explains.

The mining sector in Australia is currently worth about AU $182.9 billion, according to Gibbons. Built around several diverse sectors including metal product, non metallic mineral product, manufacturing, petroleum, gas, electricity generation, coal mining, metal ore mining and services to mining, each segment of industry represents an amazing platform for HMG Hardchrome to grow its core business. The addressable mining services sector alone totals around AU $250 million. "Like all industries we do have competition," says Gibbons. "It is clear and fact that production output in mining is increasing and the industry is still growing." For example, it is not new news that China, India and other highly populated countries must position themselves to have a sustainable supply of resources to meet their respective industry and communities demand, he continued.

With Queensland handling about 29 percent of Australia's current business locations within the mining market, there is scope on the East Coast providing the company with a massive opportunity. "The ability to grow is very evident," stresses Gibbons. The company has a strong presence in some markets but little presence in others. "We are looking into the spaces we are not in now, and basically we are going to attack that market centre," Gibbons explains.

The company is ready to take its business to the next level, expanding both its direct to mining sites retail channel and its wholesale market operations with original equipment manufactures. With these two sectors there is a lot of room to grow, perhaps even doubling capacity and revenue.

With the capabilities to repair and redesign OEM equipment, HMG Hardchrome will remain loyal to its supporting OEM's Hitachi, Liebherr and Komatsu and not focus its attention on that retail segment. Gibbons states: "HMG Hardchrome already boasts strong relationships with these OEMs, providing tech support, reclamation and manufacturing services. In fact we hold enough IP internally to aid our partners in their drive to enhance their equipment to become more efficient and effective."

HMG Hardchrome is currently working on a service exchange program to provide quality and timely exchange components primarily centered on Caterpillar equipment. "Caterpillar equipment and in particular service exchange of Caterpillar hydraulics is what I consider an open and direct opportunity for our expansion prospects," Gibbons notes. "The addressable market in this space on the east coast and within Papua New Guinea is substantial and we will capitalize on this opportunity".

ECONOMIC IMPACT
While mining as a sector remains strong, production volumes were negatively affected by the global economic downturn. "However, the services industry was relatively unscathed," explains Gibbons. "A lot of mines took advantage of the down turn in production requirements to proactively undertake preventative maintenance on their high valued, revenue producing assets." When the Australian dollar dipped, it became more expensive for the end user to buy new equipment directly from the OEM. Many companies decided to take another look at their practices including supply chain which on a number of instances translated to the failed parts being reclaimed and repaired instead of replaced by a new item.

GROWTH STRATEGIES
With the economy in recovery and the mining sector growing, HMG Hardchrome maintains a specific and deliberate growth strategy. The company has already expanded into Indonesia and Papua New Guinea. These markets will continue to be a key focus, and the company is already considering new markets for expansion such as the Pacific Islands.

"We want to increase our market share and see revenue and profit increase accordingly," says Gibbons. "To complement our growth initiatives we have a strong appetite for acquisitions. If it fits and we can clearly draw a line of synergy, capability and sustained revenue and profit then we will not hesitate to review that opportunity. Industry will see HMG Hardchrome's current capabilities expand and increase in the coming years. For example, the company plans to diversify and capitalize on underground operations and increase its services to non-traditional mining segments. We want to achieve a deeper, stronger presence in our core businesses in existing service areas while increasing our scope into new areas."

SAFETY AND EMPLOYEES
Operating two sites, Brisbane and Mackay, HMG Hardchrome employs over 170 staff. Most are highly experienced. About 10 per cent have worked with the company for 20 years while another 20 have been there for over five years. A few can even say they've been with the company for more than 30 years.

"We recognize our staff as our number one asset," says Gibbons. He credits the company's low turnover rate to HMG Hardchrome's "employee-centric" culture. "In our sector, many people just go for the money," says Gibbons. This can make staff retention difficult, so HMG Hardchrome chose to go above and beyond basic pay and conditions. There is a reward and retention program in place as well as an apprenticeship program. In addition, the company maintains a position to advance education and each year the business's scholarship program helps three individuals achieve university degrees.

Employee safety is a number one priority. "We have a very safety driven culture," says Gibbons. In addition to practicing lean manufacturing and quality management, the company follows all ISO protocols and is preparing for certification in three disciplines; ISO9001:2000 (Quality), AS/NZS 4801:2001(Safety) and ISO14001:2004(Environmental). Gibbons introduced a "very robust reporting program". The company is also externally audited every quarter which maintains its focus on achieving a best practice production and safety environment. "I really can't speak highly enough of our safety program," says Gibbons. "We've worked hard at it and we will continue to do so."

With a strong demand from within the mining services industry, HMG Hardchrome is looking forward to a profitable and sustainable future over the next 50 years, underpinned by expansion into the Asia Pacific region.

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