“The market is very competitive, and we need to offer good rates; however, in the medium and long term, those that prevail will be the ones that provide value-added propositions and technology to its customers, rather than those who offer the lowest prices.”

Alejandro Caicedo

GENERAL MANAGER PERU, ORICA

June 03, 2020

What have been the main developments for Orica globally?

Orica’s focus is to have a real customer-centric organization, which is also what we are promoting in Peru. With over 140 years of experience and 1,500 blasts per day, today we continue to be the leaders in mining and civil blasting.

Locally, we are the number one seller of cyanide, as this is a strong market for precious metals, and we have a big market share in the blasting business as well. From a financial and organizational standpoint, this is a good split; both businesses are good and they offer some synergies for the Peruvian market.

Are you mostly present in open pit operations?

The underground mining segment in Peru is not as developed as in other countries, and we are bringing in new technology that will support safe and efficient underground operations.  Underground mining is still done very much in an old-fashioned manner, so there is an opportunity to change that without sacrificing margins - indeed, technology improves productivity and margins. We are currently seeing a cultural shift in customers, as well as new regulations in place that demand safer operations.

The Peruvian market is served by large international and local explosive companies. What is your positioning in this competitive scenario?

The market is very competitive, and we need to offer good rates; however, in the medium and long term, those that prevail will be the ones that provide value-added propositions and technology to its customers, rather than those who offer the lowest prices. At Orica, we are already introducing the latest technology in Mobile Manufacturing Units, Bulkmaster™ 7, to an important customer, the first advanced truck in Latin America that had only previously been used in Australia. In the same way, we are developing a fully automated blasting process, which considers innovations like WebGen™, the world’s first wireless initiating system that operates remotely and BlastIQ™, a cloud-based digital platform designed specifically to enable continuous improvement of blasting outcomes by integrating data and insights from digitally connected technologies across the drill and blast process.

How important is it to look at the blasting process with an ‘end-to-end’ approach?

Energy is just one factor; sometimes you do not want so much energy because you want to control slope stability; sometimes you want stronger fragmentation, but you need to control dilution. What I want to say is that we look for an integrated solution, not simply a product.  At Orica, we have an investment that is three times greater than that of our competitors in R&D. At the same time, we have more than 200 technologists and more than 40 software developers dedicated solely to our digital solutions to optimize the blasting process itself and the whole process downstream. We are competing with our technological solutions and not only with market-leading commercial explosives.

Recently we acquired GroundProbe®, whose technologies are used to detect instabilities in real time and predict when collapse of mines and dams will occur.

Blasting presents its own safety risks. What can be done to remove operators from the line of fire?

You can remove operators from the line of fire by having connectivity and reducing human interactions to the minimum. We already have a wireless initiating system in Australia with BHP Billiton, for instance. However, when you do not do things manually, you generate an enormous amount of data with priceless information in real time, which will allow you to improve every single process. What is going to transform the business is having the tools and the ability to analyze all that data. With our tools in BlastIQ™ we will address this challenge and allow our customers to monitor from their desks how benches are progressing, hole by hole.

Could you comment on the acquisition of Exsa in February?

This operation represents an extraordinary opportunity for Orica as it reinforces our industrial capabilities, our supply chain and our position in the Latin American market, a region with good growth prospects. Although we already had a strong presence, this will be increased thanks to its broad customer base, which is of great interest to us.

The merger of both companies generates a solid and talented team, a high range of products, top-quality solutions, cutting-edge technology and excellent service, allowing us to add more value to our customers.

With Exsa we share values and principles such as commitment to the safety and sustainability of our operations, so our focus continues to be working safely, responsibly and sustainably, ensuring the well being of our people and the communities where we operate, and consolidating our position as the strategic partner of choice for our customers.

Would you like to add a final message?

Orica’s objective is to operate as a truly global company in terms of the best standards in safety, operational excellence and global know-how, but also to act as a local company that positions its customers at the core of the business and understands their needs. We are on our way to become the number one player in blasting services in Peru. Our other main objective is to prove underground segment customers that technology does not compromise revenue nor EBIT – technology can improve their productivity and efficiency underground. We have been doing it in other countries for 50 years, so we have proven that it works, and that we can deliver.

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