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Epiroc pursues stronger growth after Atlas spin-off

A year after unbundling from an Atlas Copco business unit into a fully owned independent subsidiary, mining, infrastructure and natural resources equipment spin-off Epiroc is optimistic about the future and eyes growth of 8% a year in the short to medium term.

Equipped with a mostly organic and bolt-on acquisitive growth strategy, Epiroc president and CEO Per Lindberg tells Mining Weekly of the company’s ambitions to become the best in the industry in terms of profitability, beyond the success that has emerged over the past year.

“So far, so good,” he says, highlighting the strategies that include technological development and innovation and the improvement and growth of existing business with bolt-on acquisitions, as opposed to large acquisitive activities.

Epiroc’s latest acquisition includes a South African underground rock reinforcement products manufacturer.

In November, Epiroc agreed to acquire Johannesburg-based Innovative Mining Products, which is more commonly known as New Concept Mining.

Innovative Mining Products, with facilities in Peru, Zambia and Canada, manufactures a comprehensive range of underground mining roof-support products, rock monitoring systems and related accessories.

Innovative Mining Products, which has about 900 employees, posted R950-million in revenue during the year to September 30.

“This acquisition will enable us to strengthen our global position in the hard rock bolting market,” says Epiroc mining and infrastructure senior executive VP Helena Hedblom.

The acquisition is expected to be completed in the first quarter of 2019, pending approval from regulatory authorities.

This follows on several acquisitions worldwide throughout the year, as the group targets several bolt-on acquisitions to strengthen its capabilities.

Epiroc was spun out of Atlas Copco’s global mining and rock excavation technique business cluster and its construction tools division in November 2017.

The industrial segment remained with Atlas Copco, while Epiroc went on to become a fully independent company when it listed on the Nasdaq Stockholm.

With Epiroc dedicated to the mining and civil engineering sectors and Atlas Copco focusing on the industrial market, the split provides the best growth opportunities for both listed companies.

In the third quarter of 2018, Epiroc achieved growth across the board, with strong revenue and profit.

In

the July to September 2018 quarter, orders received increased 10% to kr9.4-billion; revenues increased 27% to kr9.65-billion; organic growth rose 19%; and operating profit was kr1.89-billion, including costs of kr126-million related to the split from Atlas Copco and the change in provision for long-term incentive programmes.

In September, Murray & Roberts Cementation placed more than R160-million of mining equipment orders with Epiroc for its underground production build-up of the Kalagadi manganese mine, in the Northern Cape.

The group also continues to focus on technology and intelligent mining to help its clients create greater value through innovations in battery technology, automation and interoperability to drive the future of intelligent mining, which includes the fossil-free mine concept and mechanical rock excavation.