an encouraging half-year product integrity - Berco S.p.A

SOMMARIO
Editorial
EDITORIAL
AN ENCOURAGING HALF-YEAR
FRONT PAGE
PRODUCT INTEGRITY
OEM
KOMATSU-BERCO, A WINNING PARTNERSHIP
TKBEST
SECOND ROUND OF PROJECTS ON THE WAY
NEWS
A PRESTIGIOUS NEW APPOINTMENT
AUDITORS TOURS 2003
NEW TECHNOLOGIES
SPLIT LINKS PAR EXCELLENCE
MACHINE TOOLS
PETERSON, NEW STRATEGIC DIRECTION
INSIDE BERCO
THE BEST IN FIRST AID
DEALER NEWS
EQUIPMENT SALES & SERVICE CANADA
MARKETING CORNER
“BERCO MERCHANDISE”
PROJECT FINALLY OPERATIONAL
BERCO MINING PRODUCTS
READY FOR THE CHALLENGE
BERCO D10N REACHES 5,118 HOURS
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Berco News is a quarterly magazine published for the employees, customers,
suppliers and friends of Berco. Its articles and photographs can be reproduced only
if expressly authorised by the editor.
Cover photograph: the first four Berco “black belts”
Contributors to this issue: L. Baraldi, L. Barattoni, C. Bellini, L. Guzzinati, D. Koester,
P. Malfatti, G. Neodo, B. Panin, A. Petrucci
Publisher:
Berco S.p.A. - Marketing & Communications Dept.
Via 1° Maggio, 237 - 44034 Copparo (FE) Italy - e-mail: marketing@berco.com
Editor: G. Micheletto
tel. +39 0532 864116 - fax +39 0532 864462 - e-mail: gim@berco.com
Text: Marketing & Communications Department
Art and graphics: Silvia Ungaro
Pictures: L. Barattoni, G. Micheletto, S.Ungaro e altri
Printer: Chinchio Industria Grafica
Circulation: Italian 5,000 - English 5,000 - Portoguese 500
AN ENCOURAGING
HALF-YEAR
Figures for the first 6 months of 2002/03
Anyone being optimistic or positive at times like this runs the risk of
being seen as either foolhardy or a visionary, and yet, on looking at
the indicators and figures for the first six months of 2002/03 we
can’t help but feel satisfied. Berco, in these times of war and economic
disaster, has logged a positive performance, with shipped production
volumes in the first half-year (+19
tons) at the same level as last
year, despite the substantial drop
in global demand (-15%) in this
sector of the market. And when
sales volumes stay at the same
level in a shrinking market, this
means that our market share has
increased and our leading
worldwide position has been further
consolidated.
But this isn’t all. In the first six
months, the same amount (92,000
tons) of components was produced as last year, despite the fact that
there were three working days less and a significant reduction in
the number of employees (-103), which fell to 2838 units in Italy. This
means that productivity has increased, a result of the maximisation
of internal processes and the massive investments in new technology
and automation.
In the month of March we shipped more (550 tons) than we produced,
a turnaround after many months that makes us hopeful for the
future. Turnover has stayed in line with last year, even though, as we
can see in the profit and loss account, profitability has suffered from
the increases (in the last few months) in the cost of steel (+16%), energy
costs (+4%), labour costs (+3,8%) and, last but not least, the
strengthening of the euro against the dollar (+27% in 12 months),
an important factor if one considers that over 40% of sales proceeds
are from the dollar area and that the recent increases in listed prices
(by just a few points) are certainly not enough to compensate for the
increased costs.
And so, despite everything, Berco steams ahead. Just recently the
massive investments for the current year have been confirmed, with
the planned construction of a 6,000 m 2 building to house the new
automatic assembly department, which will work at a rate of 5,000
rollers per day. The upgrading of internal process and procedures is
set to continue, and on this subject special mention should be given
to the arrival of 6 Sigma at Berco, which, following in the footsteps
of Vision2000, shifts the focus to multi-variable statistical methods,
aimed at the radical upgrading of business processes.
What about the future It won’t be easy, and could indeed be as
tough as the last 12 months, but Berco has great faith in its capabilities
and its achievements so far. We can only hope that the economic situation
and political context improve, so that we can finally get back to
talking about a year of new records.
Giovanni Bertoni, Berco Managing Director

Front Page
PRODUCT INTEGRITY
New division formed to guarantee high standards
of service and even greater customer satisfaction
Following on from the work
done by Jerry Gehrke over the
past few years, Berco’s management
has decided to incorporate
another organizational unit,
known as Product Integrity, into
the company structure. The
new unit will be broken down
into two management areas:
• Quality Control Management,
to be headed by Luca Baraldi
• Product Management, to be
headed by Carlo Bellini.
This new move stems from a
need that has arisen in several
areas to rationalise the channels
and means of communication
used by the company for qualityrelated
problems, be they internal,
supplier-related or after-sales,
(i.e. sales to Berco dealers,
manufacturers, manufacturers’
dealers and end users).
QUALITY CONTROL
MANAGEMENT
It is responsible for quality control
activities, from design support
(i.e. from the issue of product
drawings to the inspection of
prototypes) to the entire
production process cycle (supplier
acceptance and approval, checking
and approval of internal processes
and shipment of finished items).
Together with Product
Management, Quality Control
Management then monitors
product performance in the field,
with the aim of continually
improving the Berco design and
production processes.
Together with the Managing
Director, Quality Control
Management is also responsible
for defining the activities inherent
in the Berco Group’s Total Quality
Policy, which mainly involve
managing internal Procedures
and process indicators in line
with the ISO9001:Vision 2000
certification schedule.
Implementation is by means of
an initial organisational layer
under the Management, covering
the following areas of activity:
1 Materials Testing and
Development Centre, providing
a chemical/physical testing
and research back-up service
to company departments.
2 Total Quality Assurance Service
certification management and
improvement of all company
processes.
3 Prototypes, New Designs, Testing
product development and
improvement, working together
with Engineering Management.
4 Supplier and Production Process
Control for the three Berco
factories, working together
with Purchasing Management
and Production Management.
PRODUCT MANAGEMENT
It is responsible for external
quality and customer satisfaction
with Berco products. A wide
range of activities is covered,
such as:
• Management and organisation
of technical assistance service
(Product Support) for Berco
customers, dealers and original
equipment manufacturers
(OEMs) all over the world.
• Management of Berco product
warranty, including decisions on
possible direct action.
• Collection and organisation of
field data on Berco product
reliability for making
improvements to product design
and production processes.
• Organisation of internal training,
external training courses for
dealers and/or external seminars
for customers on the use of
Berco products.
• Organisation and management
of trials and tests on new
products and/or prototypes onsite
with end users.
The above measures are
implemented by means of an
initial organisational layer under
the Management level, covering
the following areas of activity:
1 Field assistance and trials, i.e.
actions aimed at external
customer,
2 Returns and complaints, i.e.
analysis of warranty problems
and product development,
3 Training and “Knowledge Base”,
i.e. training area and field
feedback data collection,
analysis and distribution service.
The customer will benefit in many
ways from these organisational
changes, for example:
• with a single interface, the
channel for technical
communications on Berco
product functioning and
performance will be more easily
accessible,
• training activities will be more
structured, organised and, in
short, improved and made-tomeasure
on the basis of
customer needs,
• procedures regarding warranty
problems will be improved,
with the streamlining of internal
flow patterns,
• the use of Berco component
performance data will be
improved in order to enhance
product improvement,
In short, there will be higher
levels of service and customer
satisfaction.
Luca Baraldi
Quality Control Management
Carlo Bellini
Product Management
BN34 • 2nd Quarter 2003 3

OEM
KOMATSU-BERCO,
A WINNING PARTNERSHIP
10 years of joint work on a constantly growing scale, bringing
technology and innovation to the earth moving industry
Never has there been a time
when the importance and
historical value of image and
brand name been so prominent,
with such an immediate and
tangible effect on international
market performance, even in the
critical, economically difficult
period we are going through.
The relationship between Komatsu
and Berco has created an
economical and technical synergy
that has had a positive effect on
the growth of both companies.
The companies have been working
together now for over 10 years,
producing undercarriages that
continue to be important points
of reference in the different
categories of tracked machinery.
Komatsu, whose name has become
synonymous with quality and
reliability in the ranks of the most
important earth moving machinery
manufacturers in the world, began
its life in 1917 when a small
mining company opened a steel
works in a little town called
Komatsu, in central Japan.
“Komatsu Ltd” was officially
established in 1921, when the
steel works split off from its parent
company. In these early years its
development was based on
technological innovation and
product quality, still to this day seen
as essential company attributes.
Production was diversified over
the following years and Komatsu
started to be recognised as a
leading company on the
construction machinery market,
with the launching of the first
bulldozers, track loaders, quarry
trucks and excavators.
In 1955 Komatsu started exporting
its machines all over the world
and, a few years later, the company
took the strategic decision to
operate increasingly from local
bases and started relocating
production to factories in the
United States, Brazil, Europe and
other countries throughout the
world.
Komatsu, with head offices in
Tokyo, Japan, now has over 130
companies, 30,500 employees
and a turnover of almost 8 billion
dollars.
THE TURNING POINT
IN BERCO-KOMATSU
RELATIONS
After numerous contacts and a
few minor supply orders, the
volume of component sales to
the Komatsu factories started to
increase dramatically in 1991,
going from a few hundred tons to
over 38,000 tons in just seven
years. The difficulties at first were
many, especially because of the
strict technical and technological
specification requirements, and
all Berco divisions and departments
were involved in coming to grips
with the task of supplying a
worldwide OEM. But it was these
very “requests” (sometimes
considered impossible), and the
ambitious programs devised in
response by Giovanni Bertoni,
that spurred Berco into taking a
series of crucial qualitative and
technological steps forward over
the years, helping it to become
the main supplier for all the major
earth moving machinery
manufacturers in the world.
4 BN34 • 2nd Quarter 2003

Nuove tecnolo-
Komatsu UK
Komatsu do Brasil
For Komatsu, the relationship
with Berco is based on trust, coengineering
and the certainty of
total cooperation. This philosophy
has been a further stimulus for
the radical restructuring of Berco
plant and, in just a few years,
with investments of tens of millions
of euros, Berco’s production
technology has been brought
to levels of perfection, even
in the more difficult
processes. Komatsu has
always appreciated the
Berco approach to
projects, and Berco has
always been very
attentive to Komatsu’s
technical and quality
requirements.
TECHNICAL DEVELOPMENT
AND GEOGRAPHICAL
DEVELOPMENT
Over the years, the relationship
with Komatsu has spread over
the 5 continents and encouraged
Berco to open branches and
logistics centres in various places
throughout the world for “just-in
- time” delivery to Komatsu
factories: Berco of America (in
Wisconsin and North Carolina),
BercoSul in Brazil and Berco
Deutschland.
Thanks also to Komatsu, Berco
has become a global supplier who,
on the basis of its force and
business capacity, has managed
to contribute to the technological
development of undercarriages,
raising them to quality and service
levels never attained by other
suppliers. The latest example of this
development and cooperation is
the special extendable PC450
frame (45 ton
for Komatsu UK)
in which the Berco
undercarriage has
been assembled.
Proof of the excellence of the
service and product quality can be
found in the numerous awards
and acknowledgements that Berco
has received from Komatsu, the
more recent of these being KUK
supplier of the year in 1999, best
KDB supplier in 2001, etc.
All the top Komatsu managers
have visited the Copparo and
Castelfranco factories, witnessing
the continuous growth of Berco
year after year.
Over the years, Komatsu engineers
have been seconded to Berco for
periods of 6-12 months, working
side-by-side with Berco engineers
in the study and improvement of
undercarriages, resulting in the
joint development of products
with excellent mechanical, quality
and wear resistance characteristics
and at the best price. In the same
way, Berco engineers have been
to Komatsu in Japan. These
exchanges have been important
on a cultural as well as a technical
level, giving us a better
understanding of the underlying
logic and approach of a people
quite different to us
Europeans.
In the more than ten years
of this relationship, over
450,000 track chains,
2,000,000 rollers and
more than 200,000 idlers
have been sent from the
Berco factories to
Komatsu, and the rate is
increasing, thanks also to the
continuous expansion of the range
of products supplied to Komatsu,
which now goes from the PC150
to the PC100O for excavators and
from the D39 to the D375 for
dozers.
One of the key people in the
relationship with Komatsu over
all these years has been Alfredo
Petrucci, who, with the help of
his assistant Cecilia Capatti, has
been dealing with the Komatsu
branches all over the world, striving
to convey their many and varied
requests to the engineering,
production, logistics and quality
departments and working to keep
customer satisfaction at a
constantly high level.
Alfredo Petrucci
Key Account OEM
BN34 • 2nd Quarter 2003 5

SECOND ROUND OF PROJECTS ON THE WAY
AMONG THESE ALSO “6SIGMA” AND A NEW ROLLERS ASSEMBLY PLANT
As already reported in Berco
News, the “Tk best” program
(business excellence in service
and technology), launched by
ThyssenKrupp as part of a plan
to harness and expand the
potential of the companies in the
Group and obtain lasting economic
benefits, was actively introduced
to Berco in the Summer of 2000.
Berco started off with five projects,
now in the final assessment stage.
These are:
1 Roller components warehousing
- project leader: Francesco
Buriani.
2 Rollers assembly - project leader:
Ing. Nicola Battistin.
3 Track shoes - project leader:
Carlo Zardi.
4 Seal groups - project leader:
Andrea Bianchi.
5 Set-up reduction of CF2 turning
machine - project leader: Stefano
Sinz.
A NEW ROLLERS ASSEMBLY
PLANT
The first two of the “TK best”
projects listed above are directly
linked to an investment plan, to
be completed over the next two
years, which involves the
construction of a new building
to house the new track roller
assembly department. The rollers
are currently assembled manually
at Berco’s Copparo and
Castelfranco Veneto factories,
and the aim of the project is to
concentrate assembly work in
Copparo, increase production up
to 5,000 rollers a day and
considerably reduce end product
total costs by introducing
semiautomatic work centres (or
lines, according to the type of
roller). The assembly lines will be
served by automatic component
warehousing, thus paving the
way for further future development
using AGV or LGV systems.
The “TK best” projects can thus
be seen as a preliminary stage in
defining the characteristics of
the warehousing system (transfer
elevator performance, type of
loading stations in relation to the
kind of pallets/containers stocked,
space maximisation, etc.) and the
assembly lines/centres (automation
grade, cycle times optimisation,
interface management, etc.). This
approach was praised by Prof.
Willi Predhöl, “TK best” project
Coordinator for the Technologies
Division, who gave a positive
assessment of the parallel
management of “TK best” projects
and investment, whilst noting the
diversity of the fields of application.
SEALS GROUP
The “Seal Groups” project, aimed
at reducing defects in the cast
iron rings used in seal groups,
has already reached a successful
conclusion and achieved its set
goals. The project involved studying
the profile of the ring to be turned
Simulation of the new
rollers assembly plant
and introducing numerical control
machines into the turning process.
Still in the context of “continuous
improvement”, the “Set-up
reduction of CF2 turning machine”
project has led to a reduction of
about 25% in retooling times on
CF2 half-roller rough grinding
machine. On the strength of this
success, the same solution will
be applied to the second roughturning
machine, practically
identical to the CF2. Similar setup
time analyses are planned in
the near future for other processes.
6SIGMA
In addition, Berco has decided to
use the “6sigma” method in its
“TK best” projects, with Miss
Trevissoi, Mr. Bianchi and Mr.
Zardi being sent on a special
“Black Belts” training course for
this specific purpose. In “6sigma”
language, “Black Belts” are experts
qualified to train so-called “Green
Belts”. “6sigma” is well known as
an important method for defining
and managing an organisation’s
processes. It was first implemented
by Motorola in 1987 and then by
Texas Instruments in 1988. It
gradually spread throughout North
America in the nineties, being
adopted by ABB in 1993, Allied
Signal in 1994 and General Electric
in 1996, and it was this latter
company that perhaps did most
to apply the method in its most
advanced form (even in
transactional processes), with
declared savings of millions of
dollars.
The expression “6sigma” refers
to a set target for the distance
of a process’s output from the
tightest tolerance limit, measured
in standard deviation. With
tolerance specifications of at least
6sigma, in statistical terms the
process will give a defect rate of
not greater than 3.4 parts per
million, equivalent to 99.99966%:
this target is intended not only
as a standard but also as a goal,
albeit still a long way away for
most daily processes, be they
technological processes or, above
all, service processes.
The “6sigma” target is indicative
of the method’s general approach,
which is based on data collection
for measurement and statistical
assessment. Process output
“variability” control becomes the
main concern of the system, with
a number of specific practices
and techniques previously used
only in certain statistics-based
technological contexts being
applied to the containment,
measurement and reduction of
variability. These practices,
reformulated in such a way as to
be applicable without specialist
statistical knowledge, have been
adapted and extended to nontechnological
processes, where
process characteristics are not
generally evaluated using
traditional measurement
instruments.
6 BN34 • 2nd Quarter 2003

News
A PRESTIGIOUS NEW APPOINTMENT
Giovanni Bertoni appointed Chairman of Executive Board
of “ThyssenKrupp Acciai Speciali Terni”
As with any system, “6sigma” has
its own specific glossary with its
own set of terms and initials.
Amongst these there is DMAIC,
which refers to a coded sequence
for improvement and re-design
activities: Define, Measure, Analyse,
Improve, Control. The Deming
cycle (PDCA, i.e. Plan, Do, Check,
Act) is adapted and applied to
reengineering, with specific tools
such as diagnostic matrices,
reticular techniques, checklists,
etc.
Getting back to “TK best”, the
“Track Shoes” project, which aims
to reduce the number of track
shoe nonconformity suspensions,
has been chosen as the “6sigma”
pilot project.
PROJECTS 2003
As the “TK Best” 2002 projects
draw to a close, the fields of
application for Berco’s “TK Best”
2003 projects have already been
forwarded to Prof. Predhöl. Given
the potential of “6sigma”, it has
also been decided to associate a
“Black Belt” to each new project,
thus making the acquired methods
available to each work team and
encouraging the rapid spread of
analysis and testing instruments
aimed at finding better solutions.
The themes of the new projects are:
• Complaints analysis: activities
aimed at reducing customer
“returns/complaints” costs;
• Track link hardening/quenching
/boring lines: optimisation of
automatic track link process
lines;
• Consumable materials and stock
withdrawals: activities aimed
at verifying the correct
management of stock materials.
At the meeting of the new
Board of Directors of
ThyssenKrupp Acciai Speciali
Terni (TKAST) on the 4th of April
2003, Giovanni Bertoni was
appointed Chairman of the
Company Executive Board (i.e.
equivalent to Managing
Director).
TKAST, a company with 3,600
employees and a turnover of
1,513 million euros, specialises
in the manufacture of flatrolled
stainless steel for a wide
range of uses. “Acciaierie di
Terni”, established at the very
dawn of Italian industrial society
in 1884, was merged with
ThyssenKrupp Steel, one of the
seven segments of ThyssenKrupp
AG, in 1995, when it was
purchased from the IRI (Institute
for Italian Reconstruction). Bertoni
was chosen for his three-year
assignment by the group
management. On accepting his
new role in the Terni company,
Bertoni confirmed that he will
stay on as Managing Director of
Berco until his current contract
expires at the end of 2005, the
only obvious difference being
AUDITORS TOURS 2003
Dr. Stefan Kirsten, Executive Board member, visits Berco
On the 4th of April Dr A. Stefan Kirsten visited
the Berco factory in Copparo. Last August Dr.
Kirsten was appointed to the ThyssenKrupp AG
executive board in charge of Finance, Investor
Relations, Corporate Accounting, Taxes and
Customs and Insurance Services. Dr. Kirsten
comes from “Metro”, the German distribution
giant, and in his new role with TK over the past
few months he has been visiting the many
companies in the group and meeting personally
with the managers. As part of the program of visits,
known as the “Auditors Tour”, Dr. Kirsten came
to Copparo last Friday accompanied by Dr.
Ziolkowski (member of TK Technologies Board),
Dr. Hense (Director of Corporate Accounting)
and Dr. Nunnenkamp (Partner in the KPMG
that he will be able to spend less
time in Copparo. In his official
address to the company, Bertoni
didn’t rule out a partial
involvement of Berco
management in specific TKAST
activities and projects, thus
making use of the great expertise
and know-how in practically all
the Berco company sectors . We
would like once more to wish
Giovanni Bertoni all the best in
his new role, in the firm belief that
he will make the same great
contribution to the new company
as he did to Berco.
accounting firm), and met Giovanni Bertoni and
other members of the Berco management team.
The meeting, which included a trip round the
factory, gave the visitors a chance to see the
effects of the massive investments made in recent
years.
Ludovico Guzzinati
Supply Management
BN34 • 2nd Quarter 2003 7

New Technologies
SPLIT LINKS PAR EXCELLENCE
Installation and start-up of 2nd split link deep
grinding machine, the ELB CAM-MASTER I/1
At the beginning of March
2003 the first split links were
produced on the ELB CAM-
MASTER I/1 creepfeed machine.
Production was started gradually,
so as to be able to run a complete
set of checks on the functioning
of both the line and the process
management software.
As and from now the line is
considered as ready to start
normal production of master
split links.
The difference between
this new machine and
the first unit, installed
in March 1999, is that
it has more power
available at the main spindle
(an increase of about 25%, from
196 kW to 250 kW) and a function
that automatically adjusts the
grinding wheel washing jet, thus
ensuring more effective cleaning
of the wheel during machining
and avoiding burns on the ground
surfaces.
All the other technical
specifications, such as continuous
in-process diamond dress,
machining cycle and coolant flow
rate and pressure are the same
as for the previous machine.
The experience gained from the
installation and start-up of the
first ELB line, in terms of machine
parameter and filter system
settings, has made it possible to
define specifications right down
to the finest detail, working
together with the supplier, thus
allowing the immediate production
start-up of the second machine.
CONFIGURATION OF
NEW SPLIT LINK MACHINING
DEPARTMENT NOW
COMPLETE
The configuration of the new
master split link manufacturing
department, consisting of two
robot-assisted milling-hardening
centres, two ELB units and a
MAZAK Palletech, is thus now
complete, with the following
capabilities:
a) Production capacity of about
300 sets of split links per day for
an equivalent number of lubricated
tack chains,
b) simultaneous production of a
minimum of 4 different sets of
split links in the last boring and
drilling stage, for track chain
assembly.
The department is thus capable
of manufacturing all the master
split links for KOMATSU OEM,
from the D41 to the D375, and
for CAT AMs from the D3C to the
D11NR.
The production capacity and
flexibility of the new department
is absolutely unrivalled: it’s enough
to compare it with the old
department, which had a
maximum production capability
of one set at a time and average
lead times three times as long.
GLOBAL PROCESS CHANGE.
The completion of the technological
innovation program in the master
split link manufacturing area
marks yet another important stage
in production process evolution in
BERCO’s factories.
These changes are bringing
about a series of equally
significant and complex
transformations at the
product engineering
and tooling level, which
are re-examined in the
context of the
production process and
broken down into matching
families. Maintenance and
operative personnel training in
the new technologies, aimed at
maximising process parameters
and plant maintenance practice,
now becomes a crucial factor.
These changes underline our
company’s great commitment to
the goals of improved quality and
reduced costs and product delivery
times, in the context of increased
end customer satisfaction.
Giuliano Neodo
8
BN34 • 2nd Quarter 2003

Machines Tools
THE BEST IN FIRST AID
THE FIRST AID CENTRE IS EQUIPPED
WITH A SEMIAUTOMATIC DEFIBRILLATOR
Inside Berco’s Copparo factory
there is a first aid centre
equipped for dealing with minor
incidents (acute illnesses and/or
accidents), with a private
ambulance for administering onscene
first aid and transferring
patients from the different factory
departments to the surgery. For
major incidents the company
contacts the local Accident and
Emergency Service.
A few months ago, in response to
a regulation allowing companies
to use automatic cardiac first
aid equipment when dealing with
emergency heart cases, company
management and the Industrial
Medicine Service asked the local
health authority (Ferrara Health
Authority) and the Delta Hospital
Accident and Emergency
Department to help organise a
training course for a group of
employees, so that a defibrillator
could be purchased and
the company could be
equipped to deal
with this
type of emergency as quickly as
possible. The statistics on this
subject are extremely significant:
of the 60,000 people every year
suffering from sudden cardiac
arrest, only 2% survive, unless
treatment with a defibrillator is
immediately available on scene.
On receiving the assent of the
local authorities a training course
was organised straight away with
Ferrara Soccorso 118, the local
accident and emergency unit.
The course was in two stages,
one theoretical and one practical,
and was attended by twelve
employees, selected on the basis
of their existing knowledge of
basic first aid and heart/lung
resuscitation and their work
shifts, with a view to providing
24-hour emergency cover in the
factory. On completing the course,
the participants were awarded
a first aid qualification certificate.
Here too, Berco has confirmed
its role as an attentive and
responsible company by being
the first workplace in the Ferrara
Provincial District to have
conformed to the new
standard and
acquired medical
equipment of vital
importance to the
health and safety
of its employees.
PETERSON MACHINE
TOOL UNVEILS NEW
STRATEGIC DIRECTION
After the change of ownership, PTM
launches a new marketing strategy
Peterson Machine Tool, Inc., Berco distributor of enginerebuilding
equipment since 1962 years, under new ownership
since last fall, has a new corporate strategy utilizing the industry's
best practices. Under the new strategy, Peterson will maintain its
tradition (since the 1940's) of offering quality machinery. At the
same time, the company will use the most advanced technology
in order to offer all engine rebuilders the equipment that meets
their stringent standards. To help communicate the "new Peterson,"
the company has launched a new marketing strategy that is
characterized also by a dynamic new corporate logo. The new Peterson
logo symbolizes the revitalized company spirit and is accompanied
by the theme line: "Where the pros go for speed and performance!"
This theme line summarizes the company's goal of providing the
highest standards in premier quality equipment for professionals
at every level. In addition, Peterson is expanding its in-house
engineering department and the sales and marketing department
staff is growing in order to react more quickly to customer needs.
Customer service is paramount to Peterson's new strategy.
As a consequence of this new era on Feb. 24 and 25th Mr. Doug
Hutchinson – new owner of PMT – has visited us in Copparo
both to learn more about our company and also to sign a new
revised contract for the distribution of Berco machine tools in North
America. The meeting gave Berco Management the chance to also
examine the first results of the new PMT strategy. The outcome
is certainly very positive if you consider that in the first semester
of the new organization total sales have equalled those of the last
12 months under the old organization. We want to take the
chance to thank Mr. Hutchinson for visiting Berco and also to
welcome Mr. Chip Brown as new sales manager for North America
of PMT.
Go away!
On-going analisys.
HOW IT WORKS
To use the defibrillator, bare the chest of the person suffering from the
heart attack, apply the two defibrillator pads and follow the voice guide
instructions, then stand back. The equipment is able to assess the need
for a “shock” and administer it.
BN34 • 2nd Quarter 2003 9

Dealer News
EQUIPMENT SALES
& SERVICE CANADA
Celebrate 10 years of association with Berco
April 14 2003 represents a
significant milestone in the
history of Equipment Sales &
Service. This date represents ten
full years of partnership with
Berco. This is a very significant
achievement and both companies
look forward to many more years
of co-habitation.
ESS have been in the heavy
construction distribution business
serving the construction, mining
and forestry industries in Canada
since 1946 under the same family
ownership. In addition, the
company has been a major supplier
to the pipeline and recycling
industries, as well as government
agencies, both locally and
internationally through the
Canadian industrial development
agency and Canada's export
development corporation.
ESS was founded by William M.
Willis following world war two.
The demand for construction
equipment was high then but the
supply was nonexistent. In the
1950’s the company began to
attract suppliers that were
emerging as market leaders, within
their particular niches.
A COMPLETE RANGE
Today ESS is the oldest serving
Linkbelt crane and excavator
distributor in the world. In Ontario
Equipment Sales & Service
represent the Komatsu full line
of construction equipment. This line
of equipment fits well into the
ESS commitment to provide their
customers with high quality
products and superior after-sale
service. In Fort Mc Murray, located
in northern Alberta, ESS represents
the O&K product. ESS have a large
service facility which maintains
five of the largest hydraulic shovels
in the world. These RH400
machines are working the “tar
sands” clearing the overburden.
This is a 24/7 production operation
which requires a dedicated team
of technicians to live up to the
high expectations of the mining
industry.
Other manufacturers represented
by ESS in various parts of the
country are the crushing and
construction line for Esco, Terex
articulated trucks and Dynapac
compaction equipment and other
brands like Labounty, Mitsi Mike
and Broderson. However a very
important product line which
rounds out the ESS offerings to the
customers is certainly Berco.
PRODUCTS AND SERVICES
ESS is deeply involved in the mining
industry in western Canada and as
a matter of fact ESS have many
sets of D10N undercarriage working
in some of the largest coal mines
in the world. ESS has recently
supplied a full D11N undercarriage
to a large mine and is being
monitored for performance. The
relationship with these companies
has been built on supplying superior
product and most importantly
providing after the sale service.
ESS have a very competent crew
of outside sales people who are
welcomed by these companies to
help them meet their goal of cost
reduction. In 2002 ESS purchased
and installed a new Berco PT350
ton press along with the
appropriate tooling to ensure the
service to the customer with large
dozers (up to D11 and D575) and
excavators.
ESS across Canada are selling
undercarriage to a variety of
different machines within the
forestry industry. All the operations,
from Montréal (Quebec) to
Vancouver in British Columbia do
a large volume of business in this
market segment these machines
are very demanding on the
undercarriage and work in very
difficult conditions. Berco has
lived up to its reputation of high
quality and the Berco name is
well respected and accepted in
this industry. ESS feel that in the
forestry and mining industries
there are opportunities for growth
and they will be concentrating
their efforts in these areas in the
years to come.
TODAY
Equipment Sales & Service Ltd.
is a limited company, controlled
by Michael L. Willis, President and
Peter M. Willis, Chairman of the
board. They are both active solely
in the business. The companies
chief financial officer and treasurer
is V. D. Boyd, while M. B. Smith is
the VP & General Manager, B.
Hardman the General Manager
OEM Sales & Service and G. Parps
is the General Manager Aftermarket
Sales & Service. These three senior
managers are directly responsible
for day to day operations.
ESS operates distribution outlets
covering the provinces of British
Columbia, Alberta, Manitoba,
Ontario, and Quebec. Within the
province of Ontario, revenues
come from branch operations in
Ottawa, Sudbury, London, and
from the companies corporate
headquarters in Toronto. In Quebec,
a fully bilingual operation in
Montréal, covers the province. In
western Canada, branches in
Tumbler Ridge serve the British
Columbia coal mining industry.
In lower British Columbia there
is a full service operation servicing
the undercarriage market. As
indicated earlier, Ess have also a
service operation in fort McMurray.
Equipment Eales & Service have
represented the Berco product in
Canada for ten years and have
achieved considerable respect in
the forestry, mining and
construction industries, Berco and
ESS management team look
forward on building an even closer
relationship to help the business
grow in Canada in the years to
come.
10
BN34 • 2nd Quarter 2003

Marketing Corner
“BERCO MERCHANDISE”
PROJECT FINALLY
OPERATIONAL
The Berco Merchandise project
is finally up and running, 15
months after the official
announcement and a little behind
schedule (for organisational
reasons). In the time between
the project’s announcement
and its implementation the
many problems that arose
have been resolved:
administrative problems
(related to the
management and
invoicing of
material never
previously
dealt with by
the company),
customs
problems
(commodity coding
and international
customs classifications),
logistics problems (related
to product storage and
shipment to 5 continents)
and purchasing problems
(rationalization of range
and suppliers). Each
article has been coded
and entered in the
company management
procedure and an
automatic stock
management system has
been purchased to keep a constant
check on the stock levels and
movements of each single item.
A number of different solutions
have been studied for shipping the
merchandise, with the material
being shipped either by container
(where possible) or by courier,
at particularly economical rates
and with reduced waiting times.
In the meantime the product
range has been extended
and renewed with highly
interesting items that are
both good quality and
excellent value for
money. In this way
dealers and
customers will be
able to select and
buy products from
a vast range. The
merchandise is
already being sold
by all the official
dealers and is available
from the Berco
Employees Club. A new
catalogue has been
produced for all the
clothing, accessories and
objects, which will be
distributed at Intermat 2003
(Paris, May 2003), but
which is already
available online and can
be ordered by sending an e-mail
to marketing@berco.com. The
first orders have already arrived,
and now everything is ready and
the “Berco Merchandise” project
can finally take off.
VERHOEVEN - NL
GUESTS
CABLEPRICE - NZ
13-17 MAY 2003 - PARIS, FRANCE
The International Exhibition of equipment and techniques
for the civil engineering and construction industries
HALL 6 STAND F20
21-25 MAY 2003 - BOLOGNA, ITALY
The International Exhibition of equipment
and services for the transportation industries
HALL 30 STAND B16
BN34 • 2nd Quarter 2003 11

Berco Mining Products
BERCO D10N
REACHES 5,118 HOURS
In official tests conducted at the CVRD mines,
Berco track chains easily exceed the 4500
hours average life of an original undercarriage
READY FOR
THE CHALLENGE
The new BMP organization in North America
If you are in the market for an
undercarriage that fits the
largest crawler type machinery,
Berco Mining Products may be the
best source available today. Over
the course of several years, BMP
has seen steady growth in a
market often ignored by other
undercarriage manufacturers.
Given the strong heritage of
Berco undercarriage for
construction equipment, it is
only natural that Berco leads the
way into the mining sector.
Berco’s dealer network in North
America has had increasing
success in the mining sector. A
large population of D10N/R and
D11N/R machines are running
with Berco track in all types of
operating conditions. From the
phosphate mines of Florida to
the tar sands of Canada, Berco
tracks can be found on the very
large machines. One area of
success is in the Mesabi Iron
Range of Northern Minnesota.
Berco D10R and D11R tracks are
achieving very good wear life in
comparison to the original.
Additionally, a new PT 350 track
press allows the Berco dealer to
provide service in the immediate
area of the various iron mines.
Another area of success is in the
open pit coal fields spread across
America. Many coal mines today
are using Berco undercarriage
for their very large machines.
PRODUCT AND SERVICE
To build upon the current success
in North America, Berco is
developing plans for improving
availability and service for not
only the most common models of
large type undercarriages, but
also for those models which may
be less common and less likely to
be stocked by individual dealers.
We believe that the very large
dozers, excavators and shovels
require a strategy of not only a
great product line but also great
service. A closer relationship
between the customer, the dealer,
the factory and the Engineering
group makes BMP unique in it’s
ability to provide a product that
stands up to the 24 hours a day
use that the largest mining
equipment can expect to achieve.
Of the various undercarriage
manufacturers, whom else but
Berco has the Maxi-Press that
can forge the largest track links,
roller shells and
o t h e r
components
used on these
very large
undercarriages.
Add Berco’s
Machine Tools
Division with
the production
of the PT350
track press and
Berco becomes unique in it’s
ability to not only manufacture
the largest undercarriages but
also the equipment needed to
service it.
Dave Koester
BMP - Berco of America
Selling
undercarriage
components in mining isn’t
easy. On the one hand it’s essential
to offer an excellent level of
service, with weekly site visits,
and on the other the product has
to be put through rigorous official
field duration tests in order to
obtain an “authorised product
and supplier” certificate. And so,
in February of last year at the
Cauê-Conceição mining complex
at Itabira (Minas Gerais – Brazil)
comparative tests were begun on
two D10Ns with original track
chains on one side and track
chains with Berco shoes on the
other. After turning the pins and
bushings at 2,644 hours, the test
was completed on the 8th of
January this year, with the Berco
track chains ending their useful life
at 5,118 hours, i.e. 618 hours more
than the average life of the original
product. There were no unexpected
machine downtimes caused by
problems with the Berco product
during the test, and the
undercarriage performed
excellently, with no abnormal
joint overheating or oil leaks. Two
other tests were run in parallel
on 2 other track chains on 2
different machines, and these too
came up with positive results,
amply exceeding the required
4500 h. A third set of track chains
(on another 2 machines) is
currently completing the second
stage of the test, with pins and
bushings already turned.
These tests are another important
step for Berco in consolidating
their presence in the mining area,
and yet further confirmation of the
value of the Berco Mining Products
project. We would like to thank all
the management team of the
Companhia Vale do Rio Doce, in
particular J.F. de Aguiar Andrade,
F.A. Lanza and J. Dorotèia Gomez,
E: Milanio who gave us the
possibility of conducting the tests
and demonstrating the excellence
of Berco products.
Paolo Malfatti
Product Support
BercoSul Ltda.