On June 30, the long-awaited combination of mineral processing giants, Metso and Outotec, took place. The completion of Metso’s partial demerger in accordance with the agreement signed on July 4, 2019, was registered with the Finnish Trade Register and, after absorbing the Metso Minerals Business, Outotec became Metso Outotec Corp.
The 15,000 strong team of employees can now, officially, call themselves the world’s largest team of mineral processing experts.
Pekka Vauramo, newly appointed CEO of Metso Outotec, and CFO Eeva Sipilä presented the combined company to global media and investors on July 1.
“Today is the first day for Metso Outotec,” Vauramo said. “It’s a great day for all of us. Two great industry names are joining forces.”
Metso Outotec has a presence in more than 50 countries. Mining is its largest market ahead of aggregates and metals recycling, accounting for 61% of its 4.186 billion euros in 2019 sales. Vauramo mentioned that while aggregate capital equipment sales had been hit hard by COVID-19 during the second quarter, there had been relatively few impacts in mining, with sales and services holding strong.
The new company is arranged into six business units: aggregates, minerals, metals, recycling, services and consumables. Aggregates and recycling originated from the former Metso, and metals from Outotec, with combined interests forming the minerals, services and consumables divisions.
Services will play a big part in the new company’s offering next to capital equipment. Services accounted for 56% of total Metso Outotec sales during 2019 and around 5,000 people — a third of the company’s workforce — will be employed in this area going forward, at 140 service locations worldwide.
Metso Outotec also boasts three performance centers that can remotely monitor and manage equipment and processes for its customers; something that Vauramo said had proven particularly valuable with social distancing measures and travel restrictions in place at most operations.
Most interesting though, is the new company’s ability to span the entire value chain for mining and metal production, with solutions for exploration and development through to comminution, separation and refining. This will offer new opportunities for clients who are looking to optimize their processes and business models in line with global trends such as decarbonization, emissions reductions and circularity.
“Global mega trends like urbanization, the circular economy and scarcity of natural resources… We see all of them as opportunities for the new company,” said Vauramo firmly. “With the combined capability that we have we can take a more holistic view on the entire process.”
In its first year, the company has allocated 100 million euros, approximately 2.5% of sales, to research and development. Vauramo said he would not hesitate to increase that number to 3% if the right opportunities presented themselves. Activities will be mainly concentrated at Metso Outotec’s 30 R&D centers located across the globe.
“We have a mostly decentralized R&D model and that will continue going forward,” Vauramo explained. “Because we want R&D to be as close to our businesses and as close to our customers as possible.”
He added that Metso and Outotec branding will be kept for existing product lines, but that new, jointly developed solutions and equipment will carry the new Metso Outotec name.
“We have such famous products and it really doesn’t make sense to start changing those,” he said. “In the future, if we head into new areas, we will see. But in existing areas, we will stick with the product names with have today.”
For further details on the new company and its strategy, see E&MJ’s August issue, which will carry a full interview with Stephan Kirsch, president of Metso Outotec’s new Minerals business area.