In the current downturn, hiring instead of buying machinery and equipment, is helping mine operators keep tight budgets in check, according to Phil Newby.
As the Australian mining industry regroups after the recent slowdown, many mining companies and related industries are cutting costs, focusing on core assets and looking to maximise the value of every dollar spent.
The hire industry in Australia can help mining companies focus their attention on managing their core business by drawing attention to the economic and environmental advantages of renting instead of buying outright.
Led by the key representative body for the hire industry in Australia, the Hire and Rental Industry Association (HRIA), the hire industry is increasing awareness of a compelling business case around the relative merits of hiring what you need versus purchasing and owning it.
At a time when the world economy is still struggling to recover from financial crises, hiring’s desirably cost-effective and beneficial business edge extends business options.
Helping businesses and industries meet expected demand quickly and easily, without huge capital outlay, storage problems, maintenance overheads or knowing whether that piece of equipment will ever be needed again, is the business of the hire and rental industry in Australia.
Whatever the application, from operating a remote gold mine to commissioning a new oil production facility, dewatering flooded mines or keeping essential services running during scheduled maintenance periods, the business of the hire and rental industry in Australia is all about providing peace of mind to customers and allowing them to focus on managing their core business.
“Hiring equipment is fully tax deductible which makes good economic sense during tough economic conditions. By hiring, mining companies and related businesses can offset any outlays, recoup some of their operational costs, and limit their overall capital equipment purchases, all the while enabling a wider range of jobs outside what they might normally do,” Phil Newby, Chief Executive Officer of the HRIA said.
With over 700 rental company members and valued at $4.8Bn (IBIS), the hire and rental industry covers a range of equipment across varied industries, from general plant hire, access and portable buildings, to temporary power generation and excavation equipment.
HRIA members nationwide all work to a self-regulated industry ‘Code of Ethics’ which focuses on safety, reliability and quality of equipment and support.
HRIA members take pride in sourcing and providing the latest technology and equipment, offering reliable, well-serviced and well-maintained equipment, which is fully supported by education and instruction on the safe and correct use of that equipment.
Meeting demand and allowing businesses to focus on their core concerns is vital across many industries, including mining and mine services companies.
This vital need was brought home strongly following the devastating floods in Queensland in recent years which stopped all operation in many mines due to flooding both above and below ground.
“Hiring equipment is fully tax deductible which makes good economic sense during tough economic conditions.”
For hire businesses supplying equipment to the mining industry in Queensland immediately following the floods, demand was high for dewatering plant and power generation equipment, among other items. As a result, many hire businesses servicing the mining industry brought in extra equipment to meet that peak demand, ensuring those mines could begin the recovery process.
Mr Newby said the good news is hiring, not buying, frees up scarce capital in the short term. With the recent decrease in mining activity, recouping costs while still receiving the benefits of a fully supported and professional industry like the hire industry is an added bonus.
The tough economic climate means capital costs and spending decisions are coming under greater scrutiny, especially for the mining industry which is working through difficult times.
It is expected investment growth in the mining sector will slow down significantly as Chinese demand for iron ore, copper and other minerals decreases, hurting the commodity export sector. Recent falls in commodity prices linked to economic weakness in China, Australia’s biggest trading partner are also a major consideration.
“In this environment, hiring becomes a smart alternative to buying outright and whether you are a business or a private person, there is a serious proposition to consider. People are increasingly seeing the advantages of becoming more hire-conscious.”
“When hiring, the mining industry can have immediate access to a huge range of modern equipment. New equipment can be trialled, via hiring, on the job for the days required without any capital outlay or the need to take on new debt.
“Essentially, hiring returns control to the end user by offering options, freeing up capital and allowing end users to plan when equipment is required and when it is not.”
“Hiring’s desirably cost-effective and beneficial business edge has helped all industries utilising its equipment and services to provide an increased range of services and capabilities by extending their options.”
“Once the job is finished, the equipment can be returned, without the worry of depreciation, repairs, maintenance and storage costs, or whether that piece of equipment will ever be needed again.
“All the costs are up front for the equipment hired, and, adding to the benefits, equipment hired from an HRIA member company guarantees equipment reliability and efficiency,” Mr Newby said.
“Hiring equipment can also help mining companies and related industries meet peak demands by offering and supplying more equipment when business is at its busiest.
“Essentially, hiring returns control to the end user by offering options, freeing up capital and allowing end users to plan when equipment is required and when it’s not.
“The hire and rental industry in Australia professionally meets frequent and widely variable business needs with safe, up-to-date and specialist equipment for dedicated jobs,” Mr Newby said.
There are also compelling environmental reasons for choosing to hire, Mr Newby said, explaining bought equipment often languishes unused for long periods and is essentially wasteful in an era when resources are scarce and people are increasingly conscious of their carbon footprint.
“How many times does business buy equipment and use it once or twice on specialist jobs? Hiring is often a better use of money and better for the environment, because hire equipment is always well maintained and will be used many times over during the course of its hire lifespan offering a ‘greener’ alternative.”
Another major benefit of hiring is education and instruction on the safe and correct use of equipment operators receive upon hiring from reputable hire companies and HRIA members.
Operator and workplace safety makes good business sense
End users have the opportunity to be instructed in the safe handling of building and renovating equipment simply by hiring the equipment from an HRIA member business.
Members of the HRIA work hard to make operators aware of the importance of safety. As part of the process of hiring out equipment, hire companies conform to a rigorous set of regulatory requirements plus have additional systems and services in place for operator education.
Regulatory requirements identified by the Workplace Health & Safety Act, and overseen by Workcover Inspectors in the field, are stringently adhered to by HRIA member companies to ensure the highest standard of safety for both employees and hirers of equipment.
The HRIA, as a national industry association, maintains a close eye on changes to safety legislation and works with its members and regulators to develop national codes of business management to ensure safety measures are identified, adopted and implemented into HRIA member businesses.
All rental equipment is thoroughly checked and maintained prior to each hire and electrically tested and tagged as applicable. All rental equipment is hired out complete with written operating instructions, warning decals and labels, and support manuals as required.
The hirer is instructed on the use of the equipment and further advice is available through brochures and videos. The hire company also checks the hirer’s qualifications to operate certain types of plant where a licence is required.
To increase end user accessibility, the HRIA website features a comprehensive database and search engine capable of locating specific equipment to the nearest rental supplier location. Making this location identifier even easier, the new HRIA website also features Google maps which displays local street maps and directs users to their nearest hire location.
Mining businesses that hire their plant and equipment eliminate hefty upfront capital expenditure or funding, while freeing up resources to focus it on where it really should be – on the core business of managing their regions.
EWPA & Chief Executive Officer HRIA
With a career spanning 40 years in the access industry across the UK and in Australia, Phil Newby, Executive Director of the EWPA (Elevating Work Platform Association) and Chief Executive Officer of the HRIA (Hire and Rental Industry Association) has spent his career building a safer, accredited and competent access industry.
With his early career focusing on the scaffolding market both in the UK and in Australia in management roles, Mr Newby moved into general management roles at Instant Scaffolds (now Instant Access) and at Wreckair before launching his own company, Safe Access, to train and assess users of elevating work platforms in Australia in conforming to the then new competency legislation.
At the end of the last century, Mr Newby took on the role of Executive Director with the EWPA, widening the associationís industry reach and scope and making it into a national voice, representing industry interests on Standards, training, machine structural compliance and safety.
In 1999, Mr Newby was asked to lead the HRIA as CEO with the objective of creating a truly national body to effectively represent the hire industry. Since achieving the national association in 2000, Mr Newby has led the HRIA at state and national levels; developed the annual Hire Convention and Exhibition, and represents the industry via liaison with regulatory bodies such as WorkCover and Standards Australia, among others.