About six months ago the newly formed Queensland company i.Power Solutions was shaping as another in the line of Australian business success stories to emerge on the flanks of the country’s huge mining industry.

Now, a year after it was established, the electrical engineering firm has confirmed its place in this group. In what has been a difficult 12 months for many of its competitors, i.Power has posted above-budget sales, lifted its staff levels by 25% and outgrown its head office and factory in the Brisbane suburb of Hemmant.

The management buyout of the former Schneider Electric-owned Nu-Lec Industries switchgear and projects divisions early last year occurred during a period of rationalisation and some contraction in the Australian industrial electrical engineering industry. However, directors of the new company — former heads of the two Nu-Lec divisions — believed there were significant opportunities for a business able to provide a complete suite of engineered electrical products and services to key markets such as the mining sector.

Mining companies comprise about 80% of i.Power’s current client list and the company has grown strongly off the back of an established customer base in the central Queensland coalfields. This region continues to generate about 50% of i.Power’s mining-related business. Other mining work comes from New South Wales, Western Australia, Papua New Guinea and, increasingly, South America. Outside of mining, i.Power supplies its electrical switchgear and services to the manufacturing, sugar, process and paper industries. Its total 2002 turnover is projected to top $23 million.

The company’s director of marketing, Tim Haight, said i.Power had established a unique position in the market as a “one-stop shop offering a total turnkey solution from under one roof”. The package included site services, low and medium voltage switchgear, substations, switchrooms, automation and control, and SCADA and information systems.

“It is becoming more and more common for customers to reduce interfaces on projects,” Haight said. “This has driven a lot of (supply) companies to form alliances on projects to complete a turnkey project to the customer’s satisfaction. The problem with this is, even if one company takes the lead and does the customer interface, if there are controls, installation and switchgear all in one project, there is still the question of who takes responsibility for the job when the finger pointing starts.

“The controls people say it was the switchgear problem, switchgear blame it on the installation, and so on. If the installation company takes the order, what happens two years down the road when they need a back-up of the control systems software and the control systems people are not in business anymore?

“We are one company that takes total responsibility.”

According to i.Power a key point of difference in its offering to the market — and a significant growth engine for the company — is its depth of expertise and integration capacity in the IT area. According to Haight, one illustration of this capacity came in the underground coal mining sector where the former Nu-Lec business pioneered the use of fibre optic technologies to extend a mining company’s internal network to a moving, working longwall face. Not only did this extend the lines of communication and control within a mine, it gave mine personnel a medium — optic fibre cable — they could deploy and remove within minutes.

i.Power recently signed a deal with leading US-based fibre connector and plug manufacturer Fiber Systems International to be its global mining market representative. Haight described it as a strategic move which allowed i.Power to present fibre optic products to the world market as part of an integrated solutions offer.

The company also developed the Link 2 enterprise wide data integration system, able to present data from multiple mine sources via a standard PC web browser interface, and has now installed the first of its Link 2 Gas systems which were developed to enable underground coal mine operators to capture, log and instantly display vital gas monitoring data without sorting through piles of paperwork.

At the time of its development in 1999, Link 2 was said to be the first web-based data management system of its type in the world. Major contracts such as a deal with BHP-Billiton to roll out the system at all of its Bowen Basin coal mines followed.

“The integration of smarter equipment — intelligent relays — fibre optics and web applications into our offer is one way we believe we are staying ahead of the competition,” Haight said.

“The trend towards access to more and more information, presented in a useable format, at higher speeds, has hampered a lot of our competitors who do not always have an integrated understanding of the total package.

“The fact that our engineers and designers come from a range of backgrounds with high levels of expertise in all of these areas mentioned, enables us to produce a high quality, cutting-edge product that allows our customers to take advantage of today’s products and tomorrow’s ideas.”

Haight said i.Power’s forecast 2002 turnover represented a 35% hike on that of the former Nu-Lec projects and switchgear divisions. Not only has the business outgrown its Brisbane base, which was expanded, but its main regional operation at Mackay also had to be relocated to larger premises. i-Power is turning the new facility into its “Mining Centre for Excellence”, where Haight said the focus would be on development of IT control and electrical systems for the mining industry. The company has also opened a new office in Sydney to support its NSW activities.

Haight described the mining electrical systems market as a niche area, which happily meant that it was not a key focal point for the world’s major electrical equipment manufacturers.

“Most mine equipment is placed under extreme conditions. In opencut applications it is often subject to dramatic load swings, power quality fluctuations and a harsh environment. Underground not only are these conditions prevalent, but the equipment needs to be very compact, robust and mobile,” he said.

“The gear in both cases is often not overhauled and maintained on a regular basis, hence the need for a high level of reliability (and) all of the electrical equipment must be built to often changing mining standards. Suppliers have to be very familiar with this industry.

“Most of the world’s major electrical suppliers would probably see this as more trouble than it’s worth. They would be set up for standard products with much higher turnover.

“There is a high cost to staying involved in this market, with little return unless you have a proven track record. It’s not necessarily attractive to them.”

i.Power’s continued elevation in the electrical equipment supplier standings will hinge on its ability to grow both its domestic market share and international sales.

Haight said the Australian market was not a mature market and “definitely growing”, while PNG and Indonesia were already important export destinations. South America loomed large as an offshore market of immense potential. Part of an Australian trade delegation which visited South American mines and local mining companies last year, Haight said Latin America reportedly was the focus of about 40% of the world’s mining investment. From 2000-2007 this was set to grow, with a projected $US20 billion to be poured into projects in Chile, Peru, Brazil and Argentina.

“We expect to really start opening doors and seeing returns within the next 12-18 months,” Haight said.