Ohh I knew the guys wouldn't let us down, contracts every month....

Ohh I knew the guys wouldn't let us down, contracts every month.


New China order boosts Industrea contract wins to $10m per month in FY10
• Industrea secures US$6 million (AUD$6.5m) order with Shanxi Shenfu South Section Produce and Service Corporation for four Industrea Mining Equipment (IME) longwall roof support carriers and associated spares
• New customer won as part of growing trend of electricity producers establishing coal mines based on leading equipment
• Continued growth in Industrea client base in coal-rich Shanxi Province
• Chinese product contracts now totalling $43 million since start of 2009/10 financial year, or around $10 million per month, as Industrea builds order book
The Chinese coal industry’s productivity push continues to deliver growth opportunities for Industrea Limited (ASX:IDL), with the global mining products and services provider announcing today a US$6 million order from another new Chinese client.
The contract signed with Industrea’s China-based subsidiary Wadam Industries is for the supply of four IME high productivity longwall roof support carriers and associated spares to new customer, Shanxi Shenfu South Section Produce and Service Corporation, for its Northern Shanxi Zone coal mines in north-west China.
Industrea Managing Director and CEO, Robin Levison, said the order from Shanxi Shenfu was part of a new trend of electricity producers establishing coal mines based on leading international practices, and with the most advanced mining productivity and safety equipment.
“China’s push to consolidate smaller mines and improve mining productivity and safety has now led to the larger electricity producers establishing their own large coal mines as a source of guaranteed supply,” Mr Levison said.
“We are expecting a number of similar orders from other electricity producers for our leading equipment, including methane gas drainage, collision avoidance systems and longwall roof support carriers, due to our strong position as a supplier of choice to China’s leading coal producers.”
According to the China Coal Information Institute, 473 small mines were shut in the first half of 2009, with 300 million tonnes of productive capacity eliminated from 2005 to 2008 in line with the Chinese Premier’s call for improved safety and the construction of large-scale mines with modern equipment.
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China’s continued strong economic performance and resulting growth in energy demand has sparked moves to raise domestic coal production, with plans to increase output from the record 2.8 billion tonnes produced in 2008 to more than 3.3 billion tonnes in 2015.
“China is determined to improve standards, with the Central Government spending around $500 million a year on coal mine safety as part of an ongoing safety drive,” Mr Levison said.
The new order in China’s largest coal-mining province follows the more than $36 million of contract wins secured since July with leading Chinese mining groups, including the Jincheng and Shanxi Mining Groups and Inner Mongolia Yitai Coal.
“Industrea’s Chinese business is going from strength to strength, as shown by our successful participation at the recent China Coal & Mining Expo 2009, during which we announced another $4 million in new equipment contracts,” Mr Levison said.
“This latest contract win puts the total of new contracts for China since the start of the 2010 financial year at around $43m, giving us a monthly average of more than $10m since July in sales of our leading mining productivity and safety equipment.
“In addition to the longwall carriers, the contract includes a significant spares order and reflects the growth of recurring revenue as we increase the size of our operational fleet of IME and AMT (Advanced Mining Technologies) equipment in China.”
Mr Levison said the recent interest shown in Industrea’s suite of Australian-built mining equipment at the October coal show in Beijing was expected to generate further new orders from our growing Chinese client base, supported by growing recurring revenue from the product support centre in the supply of spares, training and maintenance.
“Industrea is forecasting higher revenue and profitability in FY2010 due to the strength of our Chinese business and recent growth in the mining services business, along with anticipated new export orders from South America and other markets,” he said.
“Demand for our non-discretionary products is as strong as ever, and we are in a great position to benefit from not only China’s rapid growth but also the upturn in the global economy.”