LAS VEGAS—Fenner Dunlop Worldwide's belt manufacturing operation is expanding again, this time in Australia.
Spurred by customer demand, the global conveyor belt producer's Fenner Dunlop Australia division is spending about $20 million to build a second press line at its Kwinana, Australia, belting facility. That will double the plant's present capacity of about 100,000 meters a year.
The expansion gives the factory a second curing line—which includes a press, creel, consolidator and other equipment—to produce steel cable reinforced rubber belts, according to David Landgren, executive director of Fenner Dunlop Worldwide and a long-time veteran of the company, a Fenner P.L.C. business.
The facility has a work force of about 19 but probably will grow by another 13 when the second line is installed, said Graeme Vickery, commercial and technical manager at the Australian site.
Also, he said, “the extra output will create a need for additional installation and service staff, which is likely to mean another 30 jobs or so.”
The line is expected to be up and running in 2013.
Fenner Dunlop, which is celebrating its 150th anniversary this year, previously didn't produce steel cord belting in Australia, but its operations in the U.S. and South Africa have been making the giant belts for several years.
During the installation and commissioning of the Kwinana facility, the company brought key manufacturing personnel to Australia from the U.S. to help with startup. It also sent several Australians to the firm's plant in Port Clinton, Ohio, to become proficient on the processes and technology needed to make steel cord reinforced rubber belts, Landgren said.
Spanning about 145,000 square feet, the Australian factory doesn't have to be enlarged because it was built with expansions in mind, according to Vickery.
This is the second phase of an expansion process that will include at least one additional line and possibly more in the future, Landgren said during an interview with him and Nicholas Hobson, Fenner P.L.C. chief executive, while attending NIBA—The Belting Association's conference in Las Vegas recently.
“The decision to undertake the expansion and double the plant's capacity comes a little over a year after our original $70 million investment to establish the plant and reflects the strength of demand from the Australian resources industry,” Landgren said.
He said the Kwinana factory originally was structured and designed for two additional steel cord press lines. “We are happy to say that the latest expansion is ahead of original projections with the need to install this second steel cord line coming earlier than expected.”
The facility also can produce rubber ply belting, the executive director said, and it has successfully produced ply belts on the facility's present press, “predominantly for the very heavy and wide demands of the Western Australian market.”
“Customers are purchasing our steel cord belting because of our quality,” according to Hobson, add¼ing that the company's growth is customer driven. The belts are used heavily in the mineral mining industry in Australia and China, he said, and all mining sectors “are the guts of our business.”
He said the company built the greenfield steel cord plant in Australia in 2009 despite the recession because there was a strong need for that type of belting in the mining business, particularly in China and Australia.
“We also built a steel cord plant in South Africa in 2008-09, a weaving facility in Georgia and a plant in Ohio, alongside a facility we have there. So we had a lot of expansion projects going on at the same time,” Hobson said. While other companies cut back, “during the recession we were shooting for growth,” he said.
Fenner Dunlop Americas alone spent $200 million between 2007 and 2009 to significantly expand the North American operation, according to Cassandra Pan, president of the Americas business.
Full service package
Hessle, England-headquartered Fenner Dunlop launched the Kwinana factory in 2009 with one press, which the two officials said is the widest in the world. The biggest beneficiaries have been customers in Western Australia, who previously had to import their belts.
Mining companies, which are under pressure to increase output to meet demand, in Western Australia “now have the convenience of dealing with a substantial and state-of-the-art heavyweight conveyor belt manufacturer in their own back yard that, combined with our extensive conveyor service operations, offers a true engineered conveyor solution to reducing the cost of ownership of conveying,” Landgren said.
The service end of the firm's operation has become a significant part of its total revenues, according to Hobson. “Many want the total package à so we sell our full service package in many regions.”
Belts made at the Kwinana facility are used for the coal, iron ore, gold and copper industries, and by customers throughout Southeast Asia, as well as in Australia and China. “The majority of demand is from within Australia, but the site houses the group's widest manufacturing line so we also make belt for the rest of the business that exceeds their capacity,” Vickery said.
“We are geographically very close to expanding Southeast Asian markets and expect an increase in demand from that region in the medium term,” he said.
The company operates two other plants in Australia: one that makes ply rubber belts in Melbourne and another that produces solid fabric belts in Sidney.
Demand for iron ore, in particular, continues to be strong with an increase of about 68 percent in the last year. And producing belts for the urbanization in China, India, Indonesia and Africa will require companies to expand their operations and increase output to meet the demand, Landgren said.
Fenner Dunlop Worldwide has been expanding regularly the last few years. In 2008 it acquired two service businesses—one in South Australia and the other in the Northern Territory—to strengthen that end of its business.
More recently, it added two wider looms at its Revesby, Wales, factory to manufacture the firm's solid woven Fire Resistant Anti Static conveyor belts for the underground coal mining market; acquired 51-percent ownership of Belle Banne Victoria and subsidiary Leading Edge Solutions, allowing it to provide specialized products to customers; and purchased Tasmania-based Statewide Belting, a major service company, to gain an even bigger footprint in Australia.
In addition, Hobson said, Fenner Dunlop is planning to expand its weaving plants in the U.S. and Australia. “We also placed an order for the next steel cord belt line in Australia and for another steel cord line at our plant in the Netherlands.”
Fenner Dunlop will continue to pursue acquisitions “where it enables us to continue the path to be strategic partners with our customers and provide total engineered conveyor solutions,” Landgren said.