Bucyrus International (BUCY)

Competitors

Our primary global competitor in electric mining shovels and draglines has historically been Joy Global Inc.’s P&H Mining Equipment division (“P&H”), although for certain applications our electric mining shovels also compete against hydraulic shovels made by other manufacturers. In rotary blasthole drills we compete with several worldwide manufacturers. In China and Russia, we also face competition from regional and domestic equipment manufacturers. Competition factors are diverse and include price, lead times, operating costs, machine productivity, technological enhancements, design and performance, reliability, service, delivery and other commercial factors. Long standing relationships that we have with our customers and our competitors have with their customers and their decision makers can provide a strong incumbency advantage in retaining business and securing new orders.

For most owners of our machines, we are the primary replacement source for highly engineered, integral components. Competition in replacement parts sales consists primarily of will-fitters. P&H also participates in this replacement parts business. Copies of our components that are manufactured by others are generally sold at lower prices for use on older machines and are generally acknowledged to be of lower quality than components we manufacture. We also face significant competition from manufacturers and distributors in the sale of consumable replacement parts which we do not manufacture, including wire rope, non-specialized parts and electrical parts, as well as aftermarket services competition from these market participants and local machining and repair shops.

We have a variety of programs to attract large volume customers for our replacement parts. Although will-fitters engage in significant price competition in parts sales, we believe that we possess non-price advantages over will-fitters. We believe that our engineering and manufacturing technology and marketing expertise exceed that of our will-fit competitors, who in many cases are unable to duplicate the exact specifications of our replacement parts. Moreover, the use of replacement parts not manufactured by us can void the warranty on a piece of original equipment, which generally runs for one year, with certain components under warranty for longer periods.

In recent years, we have received several large orders for the refurbishment and relocation of machines, especially draglines. P&H also participates in this business, as do several smaller regional companies.

Competitors

We are one of only two suppliers worldwide that offer complete system solutions to the underground mining industry (Joy Global Inc.’s Joy Mining Machinery division is the other). Our business enjoys significant barriers to entry, some of which include large initial capital expenditures required for the machinery to produce the original equipment and replacement parts, the importance of establishing a large global presence and an active installed base to support aftermarket sales, and key patented proprietary technology essential to the productivity and efficiency of our machines.

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We are now facing increased competition from manufacturers based in low cost regions such as China, Russia and Poland. For example, in China there is significant pressure to increase domestic purchases for roof supports and to reduce the cost of roof supports which are imported. To better compete in these low-cost regions, we have two manufacturing facilities in China and we may consider further expansion in the future. Our other original equipment competitors in other parts of the world are small, regional manufacturers that typically serve only the regions where they are located. To date, the market share of these companies is minimal but may grow in the future.

Competition in parts sales consists primarily of will-fitters, which produce copies of the parts manufactured by us and other original equipment manufacturers. Copies produced by will-fitters are generally sold at lower prices, but we believe are of lower quality.

Competitors

We are one of only two suppliers worldwide that offer complete system solutions to the underground mining industry (Joy Mining Machinery is the other). Our business enjoys significant barriers to entry, some of which include large initial capital expenditures required for the machinery to produce the original equipment and replacement parts, the importance of establishing a large global presence and an active installed base to support aftermarket sales, and key patented proprietary technology essential to the productivity and efficiency of our machines.

We are now facing increased competition from manufacturers based in low cost regions such as China and Russia. For example, in China there is much pressure to increase domestic purchases for roof supports and to reduce the cost of roof supports which are imported. To better compete in these low-cost regions, we have two manufacturing facilities in China and we may consider further expansion in the future. Our other original equipment competitors in other parts of the world are small, regional manufacturers that typically serve only the regions where they are located. To date, the market share of these companies is minimal but may grow in the future.

Competition in parts sales consists primarily of independent firms called “will-fitters,” which produce copies of the parts manufactured by us and other original equipment manufacturers. Copies produced by “will-fitters” are generally sold at lower prices, but we believe are of lower quality.

Competitors