Salt of the earth
Just 15 months ago Aard Mining Equipment emerged from beneath the protective umbrella of mining services giant Boart Longyear. Managing director Alistair McGillivray talks to Gay Sutton about the challenges and excitement of the first year of independence.
It was on 1 March 2008 that Aard Mining Equipment came into existence as a self-contained and separate entity, but the company was certainly no newcomer to the industry. It had grown and developed over many years, beginning as a mining equipment maker and then a business unit within the company we know today as Boart Longyear. 
Boart itself had been a wholly owned subsidiary of Anglo American, but when it was sold to private equity firm Advent in 2006, the decision was made to concentrate on core business activities and divest those that were non-core. ÔÇ£And we were told we were non-core long before we were actually sold,ÔÇØ says managing director Alistair McGillivray.
After thorough due diligence, the private equity arm of a local South African bank and a black empowerment investment company put up the money, and for around 15 months now the company has been standing alone. ÔÇ£It has been a great year for us,ÔÇØ McGillivray says. ÔÇ£The timing was very fortunate because it took place during the mining boom, and the market has remained very buoyant throughout our first year. The only changes weÔÇÖve had to make within the company are to accommodate growth which has been fairly substantial, and we are in the process of looking for larger premises.ÔÇØ┬á
The experience has been liberating both for the company and its staff, putting an end to the uncertainty of the previous two years. And the normalisation process has been helped considerably by the development of a true company identity. The name aard is an old Afrikaans word meaning ÔÇ£earthÔÇØÔÇömost appropriate for a mining equipment company.┬á
ÔÇ£When we were looking for names, the first few names we chose were already taken, and I have to say they were fairly generic, uninspiring names,ÔÇØ McGillivray explains. But it was one of the local employees who suggested using the word aard, which had, by sheer happenstance, become closely associated with the company.ÔÇØ
Way back in the early 1990s one of its products, a small load haul dumper (LHD), had been affectionately given the name ÔÇ£AardvarkÔÇØ by its users. ÔÇ£It was a very descriptive name. It was a small underground load haul dumper that scurried around. Then as we developed the product line, we began to give our products the name Aard something. For example, we developed the Aard Major, which was a slightly bigger LHD, and the Aard Master, which was a drill rig. So Aard essentially became a product name. And it has become a much better name for us as a company than any of the generic names we could have chosen.ÔÇØ
Aard also benefitted significantly from the fact that it had been allowed to operate fairly autonomously within Boart LongyearÔÇöor as McGillivray describes it, as an orphan child. Many of AardÔÇÖs customers had watched the sale of the business with a degree of apprehension. Investing in mining equipment is a long-term decision, and the capital outlay is significant, so the concern was that without the backing of a big parent company, Aard could be a risky long-term prospect.
McGillivray spent a considerable amount of time meeting with customers, ÔÇ£explaining that we had effectively been an independent self-funding operation for the previous 10 years.ÔÇØ
This independence had also encouraged the company to become lean, a story that has parallels with the evolution of lean manufacturing in Toyota. Just as post-World War II Toyota was unable to get funding from the Japanese banks, Aard received no cash injections from Boart, so stock levels had to be funded completely from the cash generated by sales. There could be no build-up of inventory, and waste had to be kept to a minimum. ÔÇ£We got involved in things like just-in-time delivery and having our suppliers hold stock for us. We also have a very flat management structure,ÔÇØ he continues. With a manufacturing staff of around 150 and about 40 maintenance engineers located at a customerÔÇÖs mine, the company has a total of just 12 managers, including the executive team.
Aard operates in a highly competitive marketplace and has based its business model on building strong long-term relationships with its customers, not only providing high-quality products and spare parts, but delivering a very high level of personal service with a fast response time. ÔÇ£We do this, perhaps to a fault. The equipment we supply is expensive stuff, and everyone accepts that from time to time it will break. But if a drill rig stands idle, then the mine is losing money, so our customers need to know that we will get it going again in a very short time.ÔÇØ
The company frequently works with clients to develop new products, and its engineering capability has enabled it to exploit a lucrative niche in the market. Its major competitors are large global organisations. ÔÇ£They benefit from economies of scale and reputation, but they have to focus on production lines, and this leaves a niche for us. We can go to a customer with the standard machine and we can customise it for them, and this gives us a huge competitive advantage over the international players.ÔÇØ
To deliver this level of personal service, Aard relies heavily on its suppliers. ÔÇ£Trust and reliability are at the forefront of these relationships,ÔÇØ McGillivray says. Many parts are sourced from the large global players, but where possible, the company likes to source locally. All the fabrications, for example, are made in the Johannesburg area.
The necessary skills can, however, be quite hard to come by, as there is a significant skills shortage in South Africa. But Aard is doing its bit to help fill the gap. ÔÇ£My background is in HR,ÔÇØ McGillivray explains, ÔÇ£so training has been a major focus. If thereÔÇÖs a shortage of skills, what better way to address it than to train your own people? In addition to a programme to constantly upgrade shop-floor skills, we have always had an apprentice program in place. We recruit five or six apprentices a year, and we have 12 apprentices at the moment.ÔÇØ
Planning for future growth, the company provides an on-site maintenance team for one of its customers and is currently in discussions with many more of its customers to expand this side of the business.
With the first successful year of independence under its belt, strong growth, a probable expansion into new premises, and a new service offering, the future looks bright for Aard.
