FLSmidth, a Danish technology and service supplier to the global mining and cement industries, has agreed to sell its materials handling business to Koch Solutions, a subsidiary of Shanghai Stock Market-listed Jiangsu Rainbow Heavy Industries.

The transaction is part of FLSmidth’s pure play mining strategy focusing on core technologies and services. As part of this strategy, the company created a non-core activities segment to be divested or wound down.

“Since the establishment of the non-core activities segment, FLSmidth has through execution, re-scoping and contract terminations decreased the order backlog from around DKK3.6 billion (USD527 million) at end Q3 2022 to around DKK2.1 billion (USD307.8 million) at end Q1 2023,” the company says in a statement.

The divestment is expected to be completed in Q3 2023, subject to customary regulatory approvals from relevant authorities. 

FLSmidth chief executive Mikko Keto says: “During 2022 we kickstarted our transformation journey towards becoming a pure play company rooted on a core focus on technologies and services. 

“A key element in this journey is to exit mining activities that are not deemed to be of core strategic importance to FLSmidth. 

“With today’s announcement we are accelerating the pace of this exit, while securing customers an option for continued supply of these products and services.”

Koch Solutions will acquire a mix of intellectual property, equipment, employees and facilities in Germany and Australia as well as DKK400 million (USD58.6 million) in order backlog.

The purchase price was not disclosed.