"In 2021, we are focusing on expanding into the underground, mineral outbounds and passenger transport segments of the mining industry."
How has demand picked up for Scania from a mining standpoint in the last 12 months, and what are some of the standout projects the company has worked on in that timeframe?
In June 2020, when things started gaining coherence and mines started opening again, Scania came back with full speed. This was partly due to all the activity in the mining operations space, the fact that we had managed to deliver more vehicles into our mining operations, as well as a part of the fleet becoming older which required more service. This has generated a situation where we are today (March 2021) invoicing twice as much within our mining operations as we were this time in 2020.
One of Scania’s main milestones is the delivery of 77 vehicles to the subcontractor Dinet, which is operating three mines – Cerro Lindo, Huaron and Morococha. All of these are underground mining operations, which is a new area Scania is entering with our Heavy Tipper. Our existing flagship projects include the Shahuindo mine and the El Brocal mine, where we have seen significant growth.
What are the benefits of Scania’s vehicles to mining clients?
Scania’s main differential is the complete solution we offer to the customer in terms of product, service and finance. Looking at the product, Scania’s Heavy Tipper solution, which offers the highest payload and highest uptime compared to other vehicles in the market, is very popular and we can customize this robust product to mining customer’s specific needs.
In terms of service, we firstly try to fully understand what the customer wants and needs. We offer a full service contract where we assume the risk of anything breaking and give our customers a 90-97% uptime guarantee. We are taking the risk out of the contractor’s operation and putting the risk onto us since we believe we are the best at maintaining Scania fleets.
Can you explain how Scania’s service solution incorporates finance?
In terms of financing, the operating lease set up has been really popular. We offer a residual value in a future point of time, which takes the risk off the customer in terms of reselling the vehicle as there is already a fixed cost with a competitive interest rate. The asset is also on the balance sheet of Scania finance and therefore not on the sheet of the customer, which is beneficial for contractors as they have a fixed cost instead of a depreciating investment.
Can you elaborate on the latest Scania solutions that contribute to more sustainable operations?
For 2021, we have clear targets to reduce emissions focusing on gas solutions. Scania has a large portfolio of gas-driven engines that can be placed in our vehicles.
We will soon be launching Scania’s 10 x 4 Heavy Tipper, which has five axels and a V8 engine. This is Scania’s largest vehicle with a gross vehicle weight of 71 tonnes and it offers a high payload of 48 tonnes. The V8 engine allows the vehicle to have as quick of a cycle time as smaller vehicles. The high payload and quick cycle time increases operating capacity and reduces the number of vehicles required by the customer, thus cutting on costs.
Looking further ahead, Scania has already put an electrical heavy vehicle on the market for distribution purposes, but it is not yet completely ready for the mining industry.
What are the company’s principal objectives for 2021?
Growth continues to be key for Scania. We managed to reach 9.3% market share in 2020, and have a goal to increase this to 12% for 2021. Looking at what we have been delivering in the first quarter of 2021, we are already above that target. In the mining segment specifically, we managed to grow our market share in 2020 to become one of the top three players of our sub-segment in the industry. In 2021, we are focusing on expanding into the underground, mineral outbounds and passenger transport segments of the mining industry. We also want to continue delivering on the development commitments of the UN global pact, of which Scania is the only heavy vehicle manufacturer in Peru that is a member.