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Foundry Daily News

28. August 2008

UK - Weir Group foundry may be sold

Weir Group, the Glasgow-based engineering company, is expected to sell its Manchester foundry within the next 12 months.

But a disposal would be unlikely to net much cash for the seller and may leave the operation facing an uncertain future, according to a source familiar with the company.

The Weir Materials plant in Newton Heath, which employs 200, used to supply the majority of its steel castings to Weir Pumps in Glasgow, but since the sale of that operation in May 2007, there has been a sharp drop in orders placed with the Manchester site. It is believed that only about 20 per cent of the output from the foundry is now supplied to Weir, with the rest going to third-party customers.

In June, London-listed Weir announced the reorganisation of its business to better reflect its increasing focus on the areas of mining, oil and gas, power and industrial markets. This immediately sidelined three businesses: the foundry operation in Manchester, a Canadian distribution business and a liquid gases company. Analysts have said all three are up for sale, but Weir itself declined to comment, having said in the past it is considering its options as far as its non-core operations are concerned.

Weir earlier this month reported an 85 per cent increase in first-half profit to £81.8m and said it expects more progress this year helped by acquisitions but does not break out the performance of its individual businesses. However, one individual familiar with the company said that the foundry business “broke even at best” last year. As a result, he said the company “will be lucky” to get anything for it.

Another senior executive in the pump industry in Greater Manchester, who spoke on the condition of anonymity, said that very few manufacturers were still sourcing castings from the UK because rival products made in Asia are much cheaper. As a result, he believed it was likely that any potential buyer would be from outside of the pumps industry.

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