Vigerslev Allé 77
Telephone: (+45) 36 18 18 00
Fax: (+45) 36 44 11 46
Web site: http://www.flsmidth.com
Sales: DKK 18 billion ($2.9 billion) (2017)
Stock Exchanges: Nasdaq Copenhagen
Ticker Symbol: FLS
NAICS: 333922 Conveyor and Conveying Equipment Manufacturing; 423810 Construction and Mining (except Oil Well) Machinery and Equipment Merchant Wholesalers; 237990 Other Heavy and Civil Engineering Construction; 423830 Industrial Machinery and Equipment Merchant Wholesalers; 541330 Engineering Services; 541420 Industrial Design Services
FLSmidth & Co. A/S provides equipment, technology, services, and consultation to the cement and mining industries through its large network of subsidiaries. The company manufactures a wide range of equipment and machinery, from individual parts to complex handling and processing systems, and even designs and builds physical plants and production facilities. On the services front, FLSmidth provides engineering consultation, maintenance, and repair work, and even contracts to operate cement plants and minerals processing facilities. Headquartered in Copenhagen, Denmark, FLSmidth & Co. is active in more than 50 countries.
In 1882 Frederick L. Smidth launched his engineering career in a single room in a building owned by his family. Smidth's earliest interests went toward developing steam-powered milling machinery and equipment. Before long, however, he began focusing on building machinery for the brick and tile industry, and in 1884 completed his first large-scale contract for the construction of a tile works. Smidth's innovation was to build a works capable of operating year-round, which was a rarity in the industry.
Smidth began hiring new employees, including Poul Larsen and Alexander Foss, who became partners in the company in 1887. At that time, the company was renamed FLSmidth & Co. By then the company's work for the tile industry had given it contacts with the growing cement industry. This led to FLSmidth being given a contract to build a complete cement plant in Limhamm, Sweden, that was finished in 1887. Cement plants and machinery quickly became a core area of operations for the company. The successful completion of that contract quickly led to others, including the construction of the cement works in Christiania (later known as Oslo), in Norway. That plant was completed in 1888.
The company next joined in constructing the works for the Aalborg Portland Cement Plant. That project helped the company build on its expertise in the cement manufacturing process. This in turn led it to invent a new type of cement: sand cement. Sand cement, which mixed sand into the typical cement mixture, was more economical to use than traditional cement. Its success allowed FLSmidth to become a major figure in the global cement industry, as well as an important cement producer in its own right.
FLSmidth opened its first foreign office, in London, in 1890. By the turn of the 20th century the company had opened additional offices in New York, Berlin, Paris, and elsewhere. Another factor in the company's continued success was its 1893 acquisition of the rights to the newly invented tube mill, which made possible a number of difficult grinding processes, notably in sand cement production. The company's redesign of the tube mill increased its efficiency and quickly found a worldwide market.
By the end of the 19th century FLSmidth had added yet another machinery specialty, becoming the first in Europe to develop a coal-fired rotary kiln in 1898. The company built its first two 18-meter rotary kilns that year and went on to sell more than 2,000 rotary kilns over the next century.
FLSmidth's technical expertise placed it at the forefront of the rapidly developing cement and concrete industries, not only in the Scandinavian region but also worldwide. The early 20th century saw the adoption on a massive scale of cement- and concrete-based building techniques. The need for new and more efficient cement production machinery and factories meant a steady stream of orders for FLSmidth. By the outbreak of World War I, the company's sales had taken it to North and South America, across western and central Europe into Russia, and into the United Kingdom. The company opened a number of new sales offices during this period to support its growing geographic reach.
The company's sales branches proved vital to its survival during World War I. With its primary European markets all but shut down during the war, the company relied on its foreign offices, and especially its New York and London branches, to win continuing business. Meanwhile, the company's Copenhagen headquarters turned its engineering expertise toward developing machinery for other industries, marking FLSmidth's first diversification.
The company also continued to develop its technologies, and during the interwar period FLSmidth remained one of the cement industry's top innovators. Over the next two decades the company rolled out important industry innovations, such as the Tirax mill, Symetro gears, and the Unax cooler. These played an important role in improving the efficiency of the cement-making process. During the 1920s and 1930s also FLSmidth developed into a major producer of ready-mix concrete and fiber-cement.
Just prior to the outbreak of World War II, FLSmidth's management took the precautionary measure of transferring parts of its operations, including many of its technical plans and other documents, to its office in New York. A number of staff members moved to the United States as well. The move proved prescient, as the Nazi occupation of Denmark soon put an end to the group's normal business. The Copenhagen operations remained in business on a reduced scale.
Business boomed for the company again during the postwar era. The reconstruction of Europe, coupled with an extended period of economic prosperity throughout much of the West during the 1950s and 1960s, created a new surge in demand for FLSmidth's machinery and plant engineering skills. By 1957 FLSmidth was able to claim that its machinery was responsible for approximately 40 percent of the global cement production of the period.
FLSmidth had also branched out into a number of new business areas. One of these was materials handling, especially difficult-to-load products such as cement and related materials. During the 1980s FLSmidth increased its operations in this area, adding subsidiaries such as Kovako of the Netherlands, MVT Materials Handling of Germany, and H.W. Carlsen of Germany. FLSmidth's expansion and diversification also brought it into a number of other business areas, such as the production of machinery for power generation and industrial processes.
By the end of the 1980s FLSmidth had grown into a full-fledged conglomerate, overseeing a global empire of more than 125 companies. To gain more efficient control over its operations, the company restructured in 1989, creating a new parent company, FLS Industries, to oversee its diversified operations.
FLSmidth made a significant acquisition in 1990, when it purchased the U.S.-based Fuller Company. That business traced its origins to two companies founded during the early part of the century. The Traylor Engineering and Manufacturing Company, founded in 1902, provided engineering services for the mining industry. The second company, the Fuller Company, was founded in Pennsylvania in 1926 by James W. Fuller and began producing cement production equipment and turnkey cement plants. In 1959 Fuller acquired Traylor, and the combined company emerged as one of the largest cement-related groups in the United States.
Following the acquisition of Fuller, FLSmidth restructured its operations, placing its own and Fuller's mineral processing business into two separate divisions: Fuller Mineral Processing Inc. in the United States and FLS Minerals A/S in Europe. The remainder of the company's business was placed into FLSmidth-Fuller Engineering (FFE). After incorporating Fuller Mineral Processing and FLS Minerals as independent subsidiaries in 1995, the company merged them into a single entity that was under the oversight of the FFE. In the meantime, FLSmidth expanded its North American presence again in 1994, when Fuller acquired Canada's Technequip, a leading maker of hydrocyclones and knife gate valves.
In 1998 FLSmidth made another significant acquisition, that of Germany's Pfister Group. That company was founded in Augsburg by the blacksmith Ludwig Pfister to produce mechanical weighbridges. The company remained in the Pfister family through much of the century, when it was acquired by Klockner-HumboldtDeutz in 1970. That same year the company also launched its first fully electronic scale. Pfister was later acquired by the Netherland's Koninglijke Machinefabriek in 1989, before majority control was passed to Maximilian Scheugenpflug in 1991.
FLSmidth's expansion also included the acquisition of Switzerland's MAAG Gear Wheel. The manufacturer of mill gear units for cement product plants, as well as high-speed gears and high-power main gears, was originally founded in Zurich in 1913. Soon after its acquisition by FLSmidth, MAAG moved into Poland, buying up ABB's Polish gear operations in 2000.
In early 2005 FLS Industries shareholders voted to change the company's name to FLSmidth & Co. A/S, in a bid to rebrand the entire conglomerate under its most venerable trademark and finalize its realignment as a cement- and mining-industry solutions and engineering firm. The company's ownership structure also underwent major changes as Potagua FLS A/S, the controlling shareholder, actually became a subsidiary of FLSmidth as a result of a share exchange. Also joining the conglomerate during this period were the American Excel Foundry & Machine, Inc., and Germany's Koch Transporttechnik GmbH. In 2007 FLSmidth celebrated its 125th anniversary by awarding shares in the company to all 7,000 employees.
The company's metamorphosis continued into 2007, as FFE Minerals became FLSmidth Minerals and the Densit business was sold. The company was still in the acquisition hunt as well, picking up the U.S. bulk materials handling systems manufacturer RAHCO International, Inc., and completing the largest purchase in its history when it acquired the minerals processing division of Canada's GL&V Inc. for around $1 billion. The acquisition added 1,000 employees to the FLSmidth payroll and significantly expanded its presence in the market for downstream copper separation solutions.
More acquisitions followed in 2008 with the purchases of the engineering consultancy firm CEntry and the oretesting specialist firm Dawson Metallurgical Laboratories, both based in Utah; and the pressure filter maker Pneumapress Inc., based in California. That same year FLSmidth posted the highest revenue in its history, with sales of nearly $5 billion. Its 2008 earnings before interest and taxes also set a record, at nearly $500 million. However, by the end of fiscal 2009 a major global recession had settled in, and both figures slid downward.
Undeterred by the downturn, the company continued its pattern of strategic acquisitions, picking up two more companies in the United States and one in India in 2009. It was also finalizing the consolidation of its branding and business structure, renaming all its subsidiaries and assorted businesses under the FLSmidth name by the end of the year and introducing the slogan “One Company—One Name—One Source.” Acquisitions for 2010 included South Africa's Roymec, a materials handling solutions supplier, and Australia's Essa, a major mining equipment supplier in its region. FLSmidth had also begun contracting to manage, operate, and maintain cement plants.
The year 2012 brought more restructuring as the company was organized into four divisions—Cement, Customer Services, Materials Handling, and Mineral Processing—and refocused as a full-service provider of products and solutions to six central industries: cement, iron ore, coal, gold, copper, and fertilizer. That same year FLSmidth acquired Australia's Ludowici, the world's top supplier of coal centrifuges and related equipment. Sales for 2012 slightly topped those of 2008, setting a new record. Revenues for 2013 were even higher. However, as the revenues began ticking downward the following year, the company still seemed focused on international expansion, opening new offices in Colombia and Mexico.
To improve efficiency, FLSmidth was restructured once again in 2014, leaving it with four divisions: Cement, which provided technology and solutions for the cement industry; Customer Services, which provided direct sales of parts and maintenance services to several industries; Product Companies, a collection of individual subsidiaries that produced and sold branded equipment and supplies; and Minerals, which served the mining industry with assorted processing and handling technology and solutions. At that point the market for the company's products was clearly in a cyclical downturn, as sales declined more than 20 percent between 2013 and 2017. A significant drop in the value of the Danish krone during the same period only aggravated the situation.
Despite the belt-tightening and reorganization efforts, FLSmidth still found room in its budget for strategic acquisitions, picking up the South African–based mining systems business of the Swedish conglomerate Sandvik AB in early 2018. The company also announced a comprehensive renovation of its Copenhagen headquarters campus set to begin in 2019 or 2020. At that point FLSmidth's revenues came roughly equally from the mining and cement segments, with mining accounting for 53 percent of sales and cement generating 47 percent.
M. L. Cohen
Updated, Chris Herzog
Cement; Minerals; Customer Services; Product Companies.
CEMTEC Cement and Mining Technology GmbH; Globe Machine Manufacturing Company; Krupp Polysius AG.
“F.L. Smidth A/S Merges Subsidiary into Parent Company.” Nordic Business Report, March 4, 2004.
“FLS Industries A/S Completes Sale of Aalborg Portland and Unicon to Cementir.” Nordic Business Report, October 29, 2004.
“FLS Industries A/S Divests German Subsidiary Motan Materials Handling GmbH.” Nordic Business Report, May 4, 2004.
“FLSmidth to Continue Manufacturing in Australia.” Australian Mining, January 22, 2018.
“FLSmidth's Acquisition of GL&V Process Is Now Closed.” Globe Newswire, August 10, 2007.
Penman, Andrew, Michael Greenwood, and Guy Dennis. “Future Looks Shaky for FLS.” Mirror (London), September 18, 2003.
Thomson, Linda. “FLSmidth Opens New Technology Research Center in Midvale.” Deseret News (Salt Lake City, UT), September 29, 2010.