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Metso Outotec merger sets sights on tomorrow

 

Metso has officially merged its minerals business with Outotec to form a new company with aims to become an industry leader across the minerals, aggregates, metals refining and recycling industries.

The newly-formed Metso Outotec will fuse and enhance the two companies’ offerings, covering sustainable technology, solutions and services for minerals processing and other areas.

“Our aim with this merger is to reach much higher — really reach out so that we can clearly say that we are a Tier 1 company when it comes to financial performance but also other things,” Metso Outotec president and chief executive officer Pekka Vauramo said at a media briefing.

Before becoming Metso Outotec, Metso’s mineral business offered dry minerals processing, crushing, screening and milling equipment, along with pyro technology and tailings management systems, while Outotec developed wet processing technology to the industry, including flotation, hydrometallurgy and filtration.

Finalised on 1 July, the merger brings together the two Finnish companies, which had €4.186 billion ($AUD6.8 billion) in combined sales for 2019, with that number now expected to grow even higher.

The two companies had 61 per cent of their joint sales attributed to the mining industry in 2019, followed by aggregates (26 per cent) and metals and recycling (13 per cent).

Vauramo hopes that the merger can grow Metso Outotec’s market presence in the Asia Pacific region, which includes Australia.

“Asia Pacific is really the emerging supply base for many of our products,” he said.

In 2019, the Asia Pacific contributed to 23 per cent of the Outotec and Metso mineral businesses’ joint sales.

The merger covers six business areas including minerals, aggregates, metals recycling, services and consumables.

Hit to aggregates

Vauramo mentioned COVID-19’s hit on Metso’s aggregates business earlier this year, which saw equipment sales almost plummet to zero back in March.

“If we go all the way back to mid-March, that was the time when the world really realised that it’s [COVID-19] not something that happened in China and doesn’t reach us,” he said. “It did reach all of us and when [it did] we saw our order intake almost going down to zero for about one month.

“We are on our way towards recovery in [aggregates] but it remains to be seen whether we’ve seen everything from [COVID-19]. Many quarries have continued to operate but some at much lower capacity and that is affecting the services and consumables business,” he added.

“In the mining side we haven’t seen that kind of weakness in the market, it has in fact continued on a reasonably strong level through the second quarter.”

Based in Finland, Metso Outotec has 15,000 employees working in 50 countries across the globe, with some workers expected to change positions and location.

“Both companies have been operating almost globally in all countries where there’s relevant business for the companies and that’s why our presence is very wide,” Vauramo said.

“This means many opportunities – new job opportunities, many people will find themselves in new roles, some people in new countries – and these are all good and exciting opportunities for our people.”

R&D leadership

Vauramo said Metso Outotec plans to become an industry leader “in many terms”, with the company already having a strong foothold on research and development (R&D).

“Our investment in R&D when it comes to annual basis is approximately €100 million and that is more than anyone else does in this industry,” he said.

A big focus on global megatrends such as climate change, digitalisation and scarcity of natural resources will be addressed by the company. This includes a focus on urbanisation.

Urbanisation means more construction is needed – not only for housing but “roads, railways, airports, many things”, Vauramo added.

“When you look at how much you spend on aggregates in construction projects – it varies depending on a project – but somewhere between 20 to 35 per cent. It’s quite a lot when you think about how much material is made out of rock.”

Metso Outotec’s focus is still on continuing to lead positive change in the industry.

“We live in a changing world and we live also in exceptional times right now and we have learned many things in these exceptional times,” Vauramo said.

“But the changing world means that we all need to look critically at our own operations and so do we as a new company and so do our customers with how they operate.

“We will be also seeking with different kinds of partnerships with our suppliers. We want to jointly develop our offerings and I’m sure that there’s so much experience and competence amongst our suppliers. Naturally, we work as one going forward.”

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