HBT Owner Charts a Growth Plan for the Group

The owner of the HBT Group, Christoph Koslowski, said he first became familiar with Hauhinco Maschinenfabrik as a student intern in 1991. He never worked for the company, but he stayed in contact with them. In 2019, he was asked to support Hauhinco as a supervisory chairman, which eventually turned into a CEO position. “This was the path that led to my acquisition of Hauhinco,” Koslowski said. “It was clear that Hauhinco needed to grow. In our quest to realize growth opportunities we came across Caterpillar, looking to divest its underground mining business.”

He described the process as long, complicated and expensive. “However, when two parties want the same thing, they find a way to make it work,” Koslowski said.

Coalescing the existing Hauhinco staff and the former Cat and Deutsche Bergbau Technik (DBT) teams under the new HBT Group required a special effort. “The challenges were and are manifold,” Koslowski said. “Caterpillar had already started to exit the underground mining business, and that part of the company was in steady decline.”

The first task, Koslowski explained, was to stop the decline and begin the turnaround process. “The pillars of a successful turnaround are securing talent, utilizing technology, and embedding transparent and fast communications worthy of a medium sized corporation,” he said.

At the same time, Koslowski believed that this group of coal mining specialists needed to return to the roots that made them so successful, like putting the customer first and being accountable for the last mile with the customer. They needed to tie the mine operator and their specific requirements to HBT’s product development and engineering capabilities.

“The Cat dealers were providing the last mile of service to the customers, but they had a limited ability to influence product development and were not in charge of engineering and production,” Koslowski said. “This break led to conflict with the mine operators, and it needed to be reversed. While that sounds simple enough, the necessary infrastructure was not in place, and we needed to rebuild bridges quickly.”

The infrastructure, both as an organizational and brick-and-mortar facilities, needed to be re-established simultaneously in India, China, Australia, Germany and the USA. “Parts of the infrastructure were dormant, but intact,” he said. “The market was still there, and the decision was made to bring it all back quickly – from shearers to legs and cylinders.”

These two companies that were merged, Hauhinco and the former DBT, which were more than 100 years old, now had to act like a start-up. “We have a fantastic mix of young and experienced colleagues that are equally excited about the opportunities that we have,” Koslowski said. “The excitement about the fundamental changes is palpable everywhere throughout the company. A lot of blood, sweat and tears has been invested by everyone to bring us to this point.

Behind the scenes, the group also had to deal with the financial strain of conducting multilevel, multidimensional changes in a relatively short period of time. “It was a strenuous and constant uphill battle, and an impressive achievement by a resilient and dedicated group of people across the globe,” Koslowski said.

In March 2023, Koslowski launched the HBT Group, which had assembled a vast array of machinery, equipment and experienced staff, and the company began to look at how they could better utilize these assets. The group also began to acquire and partner with other companies.

Key Acquisitions

Shortly after the launch, HBT acquired Waratah Engineering, an Australian coal equipment company; Advantec, a German roaderheader manufacturer; and Exprotec (formerly Bartec), an automation specialist.

Building the infrastructure and the bridges from HBT to the market and its customers required drastic organic organizational changes, Koslow-
ski explained. “We still could not overcome some weaknesses quickly enough, so we targeted companies that could deliver services, infrastructure, technology, and valuable team members,” Koslowski said. “They round off, fill blanks and enable us as we enable them to be better positioned in our and their markets.” More recently, the company acquired Breuer Motors and Pempek Systems, which also added important pieces to the puzzle.

“Part of the task is also to build the bridges of communication between the HBT Group companies, so we can learn from one another and support one another for the benefit of our customers,” Koslowski said. “An important aspect of the HBT transformation is the integration of those companies. Today, we regard ourselves as an engineering and services company, rather than an underground mining equipment supplier. That is our pedigree, but not our sole purpose.”

All the acquisitions expanded HBT’s horizons. As an example, HBT had strong historical ties to Waratah Engineering, Koslowski explained, which played a role in our last mile to the customer approach in Australia.

Advantec and Exprotec (now HBT Automation) were located near HBT’s headquarters in Germany. “The local companies have either moved or are moving to our Westfalia Campus in Lünen,” Koslowski said. “With 265,000 m² of space, the facility offers all the necessary infrastructure for those businesses. The key is to facilitate communication between the companies, so we can gain speed in service, development and principal learning abilities from one another. Our success lies in communication, and it’s an enormous task, as we are so spread out across the globe with different time zones and cultures.”

Based in Australia, Pempek is a leading supplier of equipment control, telemetry, hydraulic control, and roof bolting solutions for mining applications. The Pempek acquisition is key to HBT’s transformation as it will open the door to other applications outside of the underground mining market, Koslowski explained.

“We develop, engineer and manufacture machinery that can withstand and operate under the harshest conditions – safely with unmatched productivity,” he said. “All of these technologies, all the experience across the globe can be applied in parts and sometimes in whole to other industries. Yes, other industries have specific legal requirements, regulations, certifications, etc., but the technology is there. The capabilities in engineering and manufacturing are there and can be applied to many, many industries.” As an example, Breuer Motors supplies heavy duty motors to HBT, but 80% of its business lies outside of mining, mainly in oil and gas exploration.

“With Pempek and HBT Automation there is an interesting electric-vehicle angle, indeed, as our mining customers steer away from combustion engines where they can,” he said.

Koslowski’s plan is to steer the HBT Group further toward an engineering and technology company. “We believe there is a lot of potential for growth in our existing markets, especially since other large players are departing these spaces,” he said. “However, we understand the limitations of underground longwall mining, and hard rock mining, tunneling and construction all seem like logical steps. A closer look at our portfolio within the different businesses, may that be for hydraulic pumps, automation, Breuer motors or Pempek’s abilities, or service and maintenance quickly reveal that there a many, many opportunities that may be a bit distant from longwall mining, but a logical and easy step for Breuer or Pempek.

“We also have SAP base level support staff within our HBT India Engineering team,” he said. “What should keep us from offering such services to companies outside of our group? Other medium and smaller-sized businesses could take advantage of that service. Why not use those capabilities and better utilize our internal capabilities to mediate our fixed costs?”

Today, the HBT Group has more than 1,400 employees around the world and it will generate $400 million in sales in 2024, doubling the $200 million in sales for 2023. “For next year (2025), we expect further growth,” Koslowski said. “The opportunity for growth comes from longwall mining projects to a large extent, but Breuer, Hauhinco Maschinenfabrik, Pempek, all grow at a compound annual growth rate of 10%-15%. The total sales we acquired amounted to about $100 million, or about 25% of the total for 2024.”

When asked about his plans for the U.S. market, Koslowski said they would likely expand the Hauhinco facility in Evans City, Pennsylvania, similar to the company’s growth activities at other facilities around the world. “We will concentrate on building and delivering our end-to-end business capabilities, supplementing our product portfolio and divesting into other markets where our value proposition exists,” he said.

HBT had a large presence at the MINExpo INTERNATIONAL trade show, which was held in Las Vegas at the end of September. “It was a great opportunity to meet and communicate with customers and market players alike,” Koslowski said. “We had a large group of experts from across the globe and across the companies, who will attend, immerse, connect and learn.”