Steel-facing minerals merger: LKAB swoops for Francis Flower

By Scunthorpe Telegraph | Posted: 19 Nov 2018

Two mineral businesses playing critical roles in British Steel's supply chain are to merge, after LKAB was given international clearance to buy-out Francis Flower.

Both have a presence in northern Lincolnshire, with the former’s main UK operations at Flixborough and the latter’s largest production stream embedded within the steelworks.

Francis Flower is a leading provider of ground granulated blast furnace slag, which is produced in Scunthorpe as a cement substitute for concrete, bringing CO2 emission-reducing qualities from the steel-making by-product.

The plant was bought out from Hanson Cement in 2015.

The Francis Flowers site within the steelworks, with Brigg Road running bottom left. 

LKAB is a major supplier of highly upgraded iron ore products to British Steel, with deliveries dating back to the Thirties.

Swedish-owned, it agreed the undisclosed deal in October for the Somerset-headquartered family company, and was signed off by the Austrian Competition Authority today, Monday, November 19. The buy-out is now scheduled to complete on Monday, December 3. 

MORE: ABP to take-over British Steel's port operations and invest £65m in Immingham infrastructure

Francis Flower’s main shareholder, chairman and chief executive Adrian Willmott, will step down into a consultancy capacity as the £70 million turnover business is integrated into LKAB Minerals under the leadership of Darren Wilson, who heads up the UK and European arm from Flixborough.

Mr Wilson, pictured left, who has been at the helm of LKAB Minerals – formerly Minelco – for four years, said: “This is a positive and exciting step towards strengthening the two companies. 

“It is a strategic fit for LKAB Minerals. Francis Flower has a strong entrepreneurial spirit and focus on sustainability which is a critical success factor that is growing in importance. They have modern state-of-the-art production facilities and a dedicated team of mineral processing experts and industry specialists with a broad network of contacts in the end user segments. I believe we will be able to realise synergies that strengthen both our operations, increase cross-selling and improve service to our combined customer base in a very positive way. I look forward to meeting with all customers and future co-workers in the coming weeks and months.”

Adding that Francis Flower’s portfolio of sustainable products will strengthen LKAB Minerals’ position in the building and construction industry, he said: “We also view this as a form of circular economy as there is a strong link to LKAB’s iron ore business,” highlighting the roles at either end of the steel-making supply chain. 

Of the 1.3 million tonnes of minerals produced and sold annually by Francis Flower, 500,000 tonnes are in Scunthorpe, with further operations in Somerset, Cheshire and Cambridgeshire.  A total of 130 people are employed.

LKAB Minerals’ UK operations are described as of a similar size, with four sites employing around 160 people, including operations at Bagmoor.  Last year saw sales of £210 million. 

Leif Boström, senior vice president for the special products division in LKAB and chief executive of LKAB Minerals Group said: “We have an ambition of growing the industrial minerals business significantly over time, to balance LKAB’s growing iron ore production. We are doing this through organic growth. 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.”

Read more: £50m Scunthorpe Rod Mill enhancement will see British Steel leapfrog European competition

Other products offered include limestone fillers for use in construction and agriculture; anhydrite binders for flowing floor screeds under the brand name Gypsol, and other anhydrite products for industrial and agricultural uses. A range of high performance soil conditioners are marketed under the brand name Calcifert, with dolomite and marble powders supplied to food, pharmaceutical, construction, polymer and coatings industries.

Mr Willmott said: “LKAB Minerals is in a unique position to further develop Francis Flower across all its product lines. I have the utmost confidence that they will do so using the same core values we have adopted with our customers, suppliers and employees throughout our history. There is no doubt that LKAB Minerals’ links to its parent’s iron ore business will present much opportunity to Francis Flower in its next chapter, combine this with the ambitions of Darren Wilson and Leif Boström and Francis Flower is going to continue to be an exciting place to be.”

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