Transense Technologies Plc (LON:TRT) Chief Executive Officer Graham Storey caught up with DirectorsTalk for an exclusive interview to discuss their third contract with Glencore Plc, the benefits of using a structured rental & service basis and the improved appetite in the mining sector for iTrack
Q1: Now Graham, you’ve had some more good news this week with another contract with Glencore Plc (LON:GLEN), can you tell us a bit about what you’re going to be doing with them?
A1: So, the last 2 orders are for combined 107 iTrack SYSTEMS, they are used in the trucks measuring temperature and pressure in the tyres and from the information that we’re able to give them, they are in a position to increase the productivity by maximising the hours a truck is working so the trucks are on the road for longer which goes directly to increasing productivity.
Using Transense Technologies’ data analytics, we have a 24/7 data analytics centre, we’re also able to now give enhanced features such a g-force so by measuring the actual g-force that is exerted on a tyre, again this is avoiding breakdowns, maximising the hours that a truck is working and that really is the essence of what the system is providing.
Q2: This is your third contract with Glencore, can you talk us through how the relationship’s developed with them?
A2: We’ve been dealing with Glencore for a little over 2 years now and that’s been quite a vigorous period of testing and validation of the system. I think it’s fair to say we’ve jumped through those hoops and we’ve entered a new, more exciting, phase of adoption and probably most relevant about the recent order was the fact that it was an order that didn’t follow a trial. So, every order that we’ve had in the past has always followed trials and the fact that we’ve now started receiving orders without trials I think is significant in terms of what the market perception and value of the system, the acceptance of the system and of course, more importantly for us, in terms of the speed of future orders.
Q3: These deals, they’ve been structured on a rental and service basis, what are the benefits of this?
A3: I think for both side really you have clear stable budget visibility so no lumpy sales for us and no lumpy costs for the client so I think advantage is for both parties.
Q4: Just moving back to iTrack, do you see an improved appetite for Transense Technologies’ iTrack systems in the mining sector?
A4: Absolutely, I think that as the information that the system is becoming more widely accepted and validated by different companies then I think adoption rates will increase. BHP Billiton’s Spence mine in Chile published a paper where they were talking about savings on tyres, so only tyres not the real big win is increasing production but just on tyres, savings on a mine of 40 odd trucks saving over $1 million a year. So, I think as that sort of information percolates through the marketplace and it’s our clients that are saying it rather than us, I think adoption rates will increase.
