WEIR Group yesterday unveiled a clutch of deals – including the takeover of an Australian company – aimed at strengthening its position in a £3 billion minerals processing market.
The Glasgow-based engineering group said the agreements would extend its exposure to products needed by the “comminution” sector, a process where solid materials are reduced in size through crushing and screening.
The agreements include the acquisition of Aspir, a small Australia-based manufacturer of centrifuges.
Weir has also agreed a distribution partnership with Taiwan’s Minyu Machinery Corporation, which designs and manufactures crushing equipment.
In addition, the two parties have formed a joint venture, majority owned and operated by Weir, to develop higher capacity machines suitable for use in larger mine site applications.
It is expected that the new, larger cone crushers will be launched within three years.
Weir has also signed an exclusive agreement with Germany-based KHD, which will see it directly control the design, manufacture and distribution of high-pressure grinding rolls in minerals processing applications using KHD technology.
Several KHD technical staff will be offered employment with Weir as part of the arrangement.
Over the past three years Weir has acted as KHD’s agent for the marketing of the equipment in the minerals sector.
Weir chief executive Keith Cochrane said the agreements represented the “logical next steps in our growth strategy in minerals processing”.
“They provide access to attractive markets that we know well and can benefit from our capabilities and technology,” Cochrane added.
The combined upfront cost of the agreements is £7 million with a similar amount expected to be invested over the next three years.
Shares in Weir closed down 35p, or 1.6 per cent, at 2,101p.
• Engineering firm Amec has secured a two-year extension to its contract with BP to provide maintenance, operations and project support to the Forties pipeline system in the North Sea.
Mike Horgan, managing director of Amec’s asset management business, said the firm has been working on Forties for the past 16 years and the contract renewal was worth between £10m and £15m a year, depending on activity levels, and will run until the end of 2014.
He added: “We are pleased to be continuing our long-term relationship with BP and supporting them to meet the needs of the central North Sea’s oil and gas development.”
The Forties system has a capacity of more than 750,000 barrels a day and carries around 40 per cent of the UK’s oil production. Shares in Amec closed down 5p at 989p.