Mining Equipment: KSB webcast takeaways

Research evidence excerpt

Mining Equipment: KSB webcast takeaways

ket problem solving. The group therefore sees room for the

overall mining pumps AM market to continue growing. We view this as positive for all the

mining pumps manufacturers as there is more business to compete for.

Mining pumps face harsh operating conditions and their parts have exceptionally

high wear rates. KSB GIW’s global foundry footprint and expertise in metallurgical

engineering therefore provide its competitive edge. KSB aims to manufacture pumps

that offer the highest, most stable flow-rates with the longest run times. The group’s

vertically integrated foundries are critical to its technological advancement and KSB has

therefore invested c.€40m into its GIW production plants over the last three years. While

the outsourcing of material development could reduce capital intensity, it would risk

compromising on material quality, which is key for products that face such high wear

rates. KSB’s long-term investments into its foundry network include adding capabilities

in heat treatment and advanced machining tools. These make specific material

replication challenging for competitors, whether European OEM or Chinese players.

Sharpened competition from European OEMs has put pressure on the pricing of OE

tenders, but KSB believes that its TCO-focused model will continue to attract and

retain customers. Over recent years, KSB notes an increase in competitive pressure

from players packaging their pump solutions as part of a broader flowsheet offering.

With the increased strategic focus on pumps at FLSmidth and Metso, which have

upgraded their equipment and changed their distribution strategies, KSB highlighted this

has made pricing more competitive in OE tenders, meaning its margins are now more

reliant on the aftermarket.