GMA Garnet

Torsten Ketelsen : GMA Garnet Group

Torsten Ketelsen :

Like a rock – as Torsten Ketelsen transitions himself out of the CEO role at GMA Garnet Group, he reflects on the achievements of the company over the past 30 years.

If there is one thing that we should be clear about from the outset it is that although GMA mines and processes industrial garnet, a group of silicate minerals, founder Torsten Ketelsen does not consider the company to be a “miner”

“I don’t consider myself to be a miner or part of the mining industry,” Ketelsen says. “We are a global distribution company that produces its own products. We produce the branded garnet products and distribute them through our own network from the mine to the end users all over the world, and as such are not subject to commodity price cycles such as iron ore or aluminium.”

In fact GMA is selling a technical product and creating its market.

“The Garnet we produce has a particular requirement for our customers, they use it for abrasive blasting in the oil & gas industry, for shipbuilding and ship repair and for such unique applications as jeans blasting to create the stone wash look. Fine grades of GMA Garnet are used for building façade restorations and there is a large and growing market in high precision ultra-high-pressure water jet cutting of metals, marble & stone, composite materials and practical any other material .GMA Garnet grains can cut through five inches of steel and it is the product of choice in the global water jet cutting industry. We supply 40% of the world’s requirement from our resources because we have a quality product and global distribution network .”The GMA garnet mine in Western Australia is the largest garnet mine in the world.

In 1986 German-born Ketelsen moved from the Middle East to West Australia, having worked in Gulf countries for 13 years. It was in West Australia that he first came across garnet, which he says very few people knew about. The garnet mine in the Australia’s MidWest operated on a very small scale and was looking for markets to sell its product.

Garnet is a natural mineral product. It is known for its hardness and toughness which makes the product an exceptional efficient and effective industrial abrasive, with excellent cutting capabilities. Until then, other less efficient but low cost products were used in the market such as silica sand and waste slags – being residue of the metal smelting process.

“It was an unsophisticated, low tech, low cost market that we were looking at. But I was convinced of the potential of the GMA Garnet product because of its superior ability and high productivity compared to those conventional products. An important factor was the safe environment, health and safety aspect of the garnet product over silica sand which is now mostly banned as its dust causes silicosis fatal disease and toxic residues of slags than can cause environmental hazard.

At the time Ketelsen had his own export trading company, Ketelsen Enterprise. He set out to develop markets for the use of garnet in the familiar Middle East and set up successful distribution in Arabian Gulf region. However, with the Iraqi invasion of Kuwait in 1990, business in the Gulf came to a grinding halt. It was then that Ketelsen felt he needed to diversify.

“I went to my hometown in Hamburg and we set up a European distribution system with headquarter in Hamburg and bulk handling in Holland and distribution network throughout Europe

By 1994, the business had expanded into the entire European market. It was followed byAsia, with distribution centers in Singapore, Malaysia, and Brunei.

“I had been investing in the product distribution infrastructure but didn’t own the product. That’s when I decided it was imperative to own the garnet mine. The mine had been ramping up production since 1986 to keep up with our demand and it was important to secure supply.” The mine was 50% owned by a Sydney investment company and 50% by a US company. Ketelsen went to Sydney to make an offer.

“I did this with my European distribution partners, GMA Garnet Europe. I have three partners in that business and we made a bid. It succeeded in 2000 and in 2001 we integrated the distribution business of KetelsenEnterprise into GMA mining and processing to become Garnet International Resources.”

The entity bought the US shareholding in 2005 to become 100% owner of the GMA mine.

“We own the entire operation from mining and processing, to shipping and logistics and distribution to the final end user – all over the world! That is the secret of the business model that has made this so successful.”

It was difficult to establish the business as Ketelsen had to convince customers about the merits of garnet. It was done on a case-by-case basis, in which he highlighted the manifold benefits the product has over conventional abrasives. It wasn’t an easy sell due the fact that garnet would cost five times the amount of other abrasives on a cost per tone basis.However the selling point was that customers would save in higher efficiency, overall lower cost of operation, higher quality and better health and safety aspects of the product.

“Once you convince a customer that it is the right way to go and they realise the benefits, they say ‘why didn’t you come to me 10 years ago’. We now have over 7000 customers worldwide, many that have been with us for 20 years because of the efficiency of the product.”

As the business grew, Ketelsen looked to develop new garnet resources to keep the operation growing. This was out of necessity, as the initial resource would have run out in 14 years. GMA conducted an exploration program and added 25 years of additional mine life to their existing mine and added new international resources to its portfolio.

“We bought a mine in Montana/USA and that is giving us a significant amount of garnet in the US and we have recently concluded a joint venture with a mineral miner in South Africa. We are setting up the processing of that product to feed into our existing markets and develop new markets in Asia”

Today GMA has three international resources and will have another two in the near future that feed into the global distribution network. They have built strong partnerships with a range of stakeholders including shipping companies and service providers that have been around for 20 years.

“We meet with our stakeholders regularly. We keep them up to date and let them know what is happening. We constantly work with them to find the best solution for everyone.”

GMA prides itself on its ability to find solutions and is always innovating to build the best service experience for the client. As such they developed a recycling machine so that customers can make the most of their garnet product.

“We had to make the product as attractive as possible in terms of value to customers. When we started we were more expensive than conventional products so we had to create value. We built a machine to recycle the used garnet which enables the customer to reprocess the used garnet and extract any contaminants from the work site. GMA Garnet can be re-used up to five times. Conventional products can only be used once. We also established large industrial scale recycling plants in Dubai, Saudi Arabia, Italy, Philadelphia and New Orleans. This is a vital service we provide to our customers to dispose off the used abrasive. We take the used garnet and clean it for other applications. It has greatly increased our sales because we have opened up much wider usage and applications. When I started this 20 years ago everyone said I was crazy to promote recycling because I would sell less, but instead, the customer base has increased due to the additional value for the customers”.

Ketelsen handed over the reins of CEO in July, however he remains involved at Board level and sees a strong future for the business.

“We want to double in five years,” he says. “We have made a substantial acquisition in the garnet mine in Montana and we are investing quite heavily in Australia to expand our resource base in WA. This will allow us to keep growing the business and we are well on our way to achieving our ambitious goal. Our biggest asset are our people, some who have been with us for over 30 years.”

GMA’s dedication to delivering quality products, innovation and services to its stakeholders makes this business a unique entity, particular when you consider that they are an element of the mining industry, that doesn’t consider itself to be a miner. BF

Business First is a peer-to-peer magazine: written by CEOs and other high level executives, with interviews with some of the country’s best leaders.

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