Scott Technology is confident a new generation of robotic rock sample processing systems for laboratories will achieve its first sales this year.
Scott Technology purchased Rocklabs in 2008 for $6 million cash and $4 million in shares, with the new but well-established subsidiary immediately being cash-positive to the bottom-line, a position which continued through the recession as Scott Technology staggered under the weight of the high New Zealand dollar.
Scott Technology has three divisions: its joint venture meat robotics project with Silver Fern Farms in Dunedin, its mainstay assembly line manufacturing in Christchurch and Rocklabs in Auckland.
The 40-year-old Rocklabs has been manufacturing three key sample-processing machines for decades. The machines take test drill core samples from mining exploration or blast samples and refine them to a powder for final assay analysis.
In separate processes, and using a large number of laboratory technicians, the machines crush the core, pulverise the material almost to dust, then divide it into samples for assay.
However, Scott Technology and Rocklabs have co-developed separate robotic and linear (automated processing line) versions of the three-machine process to link up the systems, working towards sales to customers in the Pacific, Nevada and Chile.
Scott Technology chief executive Chris Hopkins said the company had competition already in the robotics and linear systems, but there had been failures elsewhere and the market remained "relatively wide open".
"Contamination of the sample is the biggest concern. Some [processed] samples weighing only a few grams will determine what is held in hundreds of tonnes of rock at the mine," he said.
The Rocklabs units ranged from a large integrated robotic system capable of processing 1200 samples daily and worth $3 million-$5 million, through to smaller versions that processed 600-900 samples per day, down to a container-sized (12.1m) model worth $250,000-$300,000, handling up to 300 samples.
The applications included sampling for coal, iron sands and all precious metals, with around 80% of Rocklabs' annual sales for gold mines.
Mr Hopkins said the robotic and linear refinements to the existing process delivered the consistent, quality results required by the mining sector, and also cut down on on-site staff.
"The miners don't want to be targeting large areas without the sampling having been done properly," he said of the need for consistent results.
Preparation of the rock samples was so critical that even metals used to manufacture the various crushing heads must be accounted for so samples were not unwittingly contaminated.
Customers for the individual sampling machines included Newmont Mining, Newcrest Mining, BHP Billiton and Barrick Gold.
The new robotics and linear models had applications for sale to mining companies to use on-site, or for sale to stand-alone certified laboratories.
Since Scott Technology acquired Rocklabs, Mr Hopkins said $300,000 to $500,000 had been spent annually on research and development for new products and prototypes.
When RockLabs was sold by its founder, Dr Ian Devereux, who still worked there, it employed 35 people. At present, it had 41 employees, plus occasional staff there on secondment.
Scott Technology posted a string of losses during the recession, but RockLabs' profit contribution was understood to have stabilised the losses, with the full group returning after-tax profits of respectively $390,000 and $973,000 in its past two half-year results.
In Scott Technology's full-year accounts to August 2009, RockLabs appeared to contribute $14 million within the wider group's revenues, but Mr Hopkins cautioned its exact contribution was difficult to determine, with the three divisions increasingly contributing to different projects.
Included in that revenue stream from Rocklabs was about $2 million worth of annual sales in another niche-market product; a powdered, certified "reference material" containing minute but exact amounts of minerals.
Laboratories purchased the reference material to check and calibrate their own sampling systems in order to gain credibility and certification of their systems, Mr Hopkins said.
"We are one of the largest suppliers of this material. It is a global reference check used for laboratories' own quality control," he said.
