Weir prepares for expected boom in shale activity

The Glaswegian firm, with its roots in manufacturing pumps for steamships, now sells to miners and oil companies.

Weir’s revenue has grown by two and a half times since 2006 as both mining and fracking have expanded.

In the mining industry, it is already a global supplier of equipment and services, with centres in places as far flung as Mongolia, the Arctic circle and the Congo.

This gives it an advantage, if and when fracking spreads to other countries, said Keith Cochrane, the Scottish chief executive who joined Weir in 2006.

“If shale starts to internationalise, the really interesting thing is how we use our global footprint,” he said in an interview in London.

Mr Cochrane listed China, Australia, Saudi Arabia, and Argentina as markets where Weir sees early signs of shale activity.

In China, Weir took the plunge a couple of years ago to build a manufacturing plant through a joint venture in order not to miss out on a possible shale boom.

But until shale production becomes widespread, Weir remains reliant on North America, which accounts for more than 70 per cent of its sales to the oil and gas industry. This has hit Weir’s profits this year. The company warned on Monday that a slower-than-expected recovery in the oil and gas business, particularly US shale, combined with a weak mining market would result in lower-than-expected full-year revenue and profit. But the focus on US shale was the only way to get a big slice of the new market early on, Mr Cochrane said.

“That’s where the market was, that’s where the opportunity was,” he said.

“We needed the critical mass of product and capability, the customer relationships in North America, and that then becomes the platform as those customers start to undertake and build on the international opportunities around shale.”

Weir derives almost equal revenue from mining and from oil and gas, and that has helped shelter it from a collapse in mining equipment orders this year as miners look to cut costs by delaying new projects.

Weir employs more than 400 people at its base in Todmorden, West Yorkshire.