LKAB Minerals will, subject to merger clearance, complete a cash deal transaction, acquiring full ownership of Francis Flower. “Acquiring Francis Flower accelerates our growth within the industrial minerals market. An increase of iron ore production is one building block in LKAB’s growth plan, but growing our other businesses is equally as important to create a better balance between our divisions, something that makes us less sensitive to the iron ore market volatility, which strengthens LKAB” says LKAB CEO Jan Moström.
Besides that, there are other strategic components to the acquisition, explains Moström “Bringing Francis Flower’s business into ours, creates a form of circular economy, as there is a strong link to LKAB’s iron ore business. The largest product area for Francis Flower is recycling blast furnace slag from the steel industry for production of Ground Granulated Blast furnace Slag (GGBS), a sustainable product that can replace 70% of Portland Cement in a concrete mix delivering decreased CO2 emissions.”
Leif Boström is Senior Vice President for the Special Products Division in LKAB and CEO of LKAB Minerals “We have an ambition of growing the industrial minerals business significantly over time. We are doing this through organic growth, meaning we increase sales of our existing product portfolio. We also invest in new projects such as upgrading mine waste to phosphorus and rare earth metals, and finally we have an active acquisition strategy. Francis Flower is a perfect fit for us, and importantly we believe we can add value to that business as an owner, helping to grow that further. This will strengthen LKAB Minerals’ offering to the building and construction industries. An increased presence in the industry also has the potential to increase sales of our existing products. I look forward to meeting and welcoming the new co-workers to LKAB Minerals.”
Francis Flower has annual sales of about 1.3 Mt of mineral products at a value of close to £70 million, foremost in the UK, and employs 130 people across four sites in England; Scunthorpe, Wicken, Gurney Slade and Runcorn. The company has a niche in recycled and by-stream product upgrades as well as high quality fillers for several end-user applications.
LKAB Minerals Ltd in the UK has a similar size business across four sites and employs around 160 persons. The main operations are processing and marketing of minerals, primarily for the building, construction, polymer, coating, refractory and foundry industries.
In 2017, LKAB had sales of SEK23 billion SEK of which LKAB Minerals reported sales of SEK 2.4 billion. The acquisition of Francis Flower will bring a significant addition to the sales turnover in the Industrial Minerals segment.
Francis Flower is a family owned business, and the main shareholder is Adrian Willmott, Chairman and CEO, who upon completion of the sale will resign his position in the business but remain available in a consultancy capacity during an integration phase to support a seamless continuation of the business. The operations will be integrated into LKAB Minerals existing UK operations under the leadership of Darren Wilson who manages the UK and European business within LKAB Minerals.
