Published in Australia's Longwalls

A story of true home-grown success, Hydramatic began operation in 1972 out of the Hunter Valley, where its head office and manufacturing facilities are still located, and built up its business servicing coal mines in the nearby area. The foundations laid in those early years were integral in shaping the company’s reputation for producing high quality machines capable of efficiently installing strata control and withstanding the rigours of the underground environment. According to a recent estimate, it has progressed to control more than 90% of the market for ground stabilisation equipment in the Australian coal sector.

However, it was back in 1993 that a noticeable contraction in the worldwide coal industry, felt also on a local level, drove Hydramatic offshore in search of opportunities that would allow it to remain viable and provide scope for growth. A strategic long-term export plan was devised, with the initial target being the depressed British coal industry. The company promptly established an office in England, giving it an avenue into other European markets, and moves into Canada and Asia followed. More recently, it has established subsidiaries in South Africa and the United States.

With most of these markets on growth trajectories, Hydramatic’s sales have followed suit. The past four years, in particular, have seen company turnover increase steadily, from about $17 million in 2000 to $27 million last year. Testament to the success of its export push, the domestic market now only accounts for 25% of that annual figure.

While Hydramatic managing director John Wood said contributions from all regions had helped boost revenue, there had been some standouts. Huge demand for mobile bolting rigs had come from China’s rapidly-mechanising coal industry, where the company had just secured orders for 12 new units. These will join a population of about 30 similar machines already in operation in the country. Hydramatic had also been kept busy by solid activity in South Africa, Britain and the European tunnelling industry.

With its presence now established, Hydramatic expects the US to be the next market to take off. “We would have been in America a lot sooner, except we lacked the funds,” Wood said. “We just had to take it one market at a time and we reached the point where the US was the next progression. It’s a huge potential market for our products.”

Hydramatic believes it has pulled off a coup by recruiting well-known US coal industry identity Paul Spedding to spearhead its charge into the new market. As vice president of Pennsylvania-based subsidiary ARO Mining USA, Spedding has a considerable task in front of him. “Just in the region where he is, there are two or three times the amount of longwall mines to service as we have in all of Australia,” Wood said. “It’s huge by comparison, they have about 2000 mines over there.”

While rising revenue levels and winning acceptance in new markets are all well and good, Wood and his colleagues were more than aware that a haphazard approach to growth could be unhealthy. “We have to manage growth,” he said. “It can actually kill a company because of the amount of capital it takes.”

Further motivation for maintaining a close rein on expansion activity has been the fact that the company considers its optimal size to be a major edge over competitors. “It gives us enormous flexibility,” Wood said. “We are small enough to be able to accommodate customer requests, enabling us to tailor equipment to suit their specific needs, yet large enough to ensure that all such projects are seen through to successful completion.”

Hydramatic’s efforts to introduce a little Australian know-how to the world have not gone unnoticed on the home front. In fact, the company is one of the country’s most decorated when it comes to export, technology and business awards, something it believes has aided in breaking into new markets. “Winning such awards helps to boost morale across all sections of the company and adds to the marketing effort both in Australia and overseas,” it said. “It helps to affirm the company’s credibility, especially in markets where the company is totally unknown.”