Vaughn said the company began the process with a market assessment and some preliminary prospecting, and in 2003 the company signed its first Russian mining contract.
“We segmented the market after our initial prospecting into three tiers – the industry giants, which includes several large prospective customers; the middle-market, which includes hundreds of prospects; and the small market, which we chose not to size,” he said.
“We decided to focus our efforts on direct sales using Australian-based staff and targeted our sales campaigns on the industry leaders. These were large scalable organisations that had progressive management teams, access to foreign capital and demonstrated strong brands within their industry segment.”
Mincom’s product sales in Russia include localised versions of its flagship product, Mincom Ellipse, which is an integrated enterprise asset management solution; Mincom LinkOne, its software for graphical content management; and Mincom MineScape, an integrated solution for geological mine planning and mine modelling.
Most of the company’s work in Russia to date has been in underground mines, with Mincom recently signing contracts with coal mining companies Raspadskaya and SeverStal Resurs.
“The software is being deployed in the underground environment and we have further projects underway to continue to deploy our solutions underground,” Vaughn said.
The company’s initial concerns about its ability to deliver in such remote locations have since been abandoned, as it has applied its expertise and experience from working in harsh and isolated Australian sites to its Russian mining operations.
Vaughn said as the company has built its presence in the Russian mining market space, Mincom’s strategy has been to localise its products and services.
Today Mincom has three offices in Russia (Norilsk, Moscow and St Petersburg) to service the country’s developing economy and in particular, its mineral industry.
“We have been running multiple projects in Siberia and other parts of Russia since 2004 and recently succeeded in having our mining products translated and certified to meet all Russian standards and requirements,” Vaughn said.
He said the Russian market was one of the company’s fastest growing markets as measured by market penetrations, new customer acquisitions and revenue growth.
The coal sector in particular is a very appealing market for Mincom as large organisations such as SeverStal, SUEK and Raspadskaya are principally based around the coal-rich Kuzbass Region.
“Our work in Russia also provides a platform for further expansion into the region, including target opportunities in Kazakhstan and Uzbekistan,” Vaughn said.
While the company has so far concentrated on the first-tier clients, Vaughn said it would eventually work with the middle-tier market, especially if it starts consolidating.
Vaughn said there are a number of very professionally managed and progressive mining organisations in Russia that are gaining access to foreign capital and looking towards countries like Australia as innovators and leaders in the global mining industry.
“The potential for Australian service organisations in the Russian mining industry appears quite large, especially for firms that market expert systems, processes or help miners gain competitive advantage.
“There is a quite a large local mining equipment manufacturing industry, so opportunities for Australian mining suppliers to break into this area would need to be carefully researched,” he said.
