In a market update, Austin Engineering has confirmed its Chile-based operation has been awarded the first tranche of purchase orders for “OEM-style” truck trays worth circa-A$7 million ($4.6 million) to be delivered in the remainder of its financial year to June 30, 2024.
This is the initial order in a program discussed with the customer to last for up to nine years and was first announced to the market in February 2024 with the award of a test tray.
This test tray was approved by a major OEM, acting as an important step before the OEM placed further orders, Austin said back in February. It added: “Our discussions with the OEM are encouraging, and there is potential for it to place significant multi-year orders, commencing the second half of our 2024 financial year, dependent on a favourable decision by the OEM.”
In today’s update, Austin said the program was expected to be the first in a series of ongoing orders from the customer in several of Austin’s jurisdictions, with manufacturing to occur in Chile and Indonesia.
“The Chile trays subject to these purchase orders will be manufactured and delivered as part of the ‘first fit’ of trays for a global truck OEM,” it clarified.
Austin will source the required steel through its bulk procurement program, AustBuy, which is now supplying its operations in Chile, in addition to Australia and Indonesia.
Austin in USA, meanwhile, has signed an extension for up to five years (three years upfront and two one-year extension options) for its biggest ongoing single supply arrangement for truck trays, with deliveries into the US, Canada and Chile. “Austin’s track record of innovation and reliable supply, leading to positive returns on investment for the customer, was a key rationale for the extension,” it said.
“Initial purchase orders have now been placed which will lead to deliveries starting in this financial year and continuing into the 2025 financial year. This program is likely to be worth circa-A$20 million per annum subject to customer demand.”
In other developments, Austin in Indonesia has now delivered the first two refurbished haul truck chassis frames to its customer at the start of what is expected to be a multi-year, production program that will increase over time, the company said. A further frame is expected to be delivered this month with eight more now on order.
“In addition, the customer has provided initial purchase orders for new matching truck trays for the refurbished truck fleet which are expected to form the start of an ongoing production during future years,” Austin added.
The purchase orders for chassis frames and truck trays placed to date are worth approximately A$3 million. Additional larger purchase orders are expected shortly and are likely to be ongoing. “This is a new and valued program for Austin, which is expected to further increase the already high utilisation of the two manufacturing units in Batam,” it added.
The company concluded: “It is important to note that all three programs highlighted above are expected to provide regular recurring income over several years. However, as is usual for Austin customer arrangements they are subject to the regular placement of purchase orders. The programs do not commit the customers to minimum orders.”
