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<strong>Vesuvius</strong>’ products are largely single-use by nature, as they are either consumed or<br />
transformed during contact with the molten metal during casting. In a typical foundry<br />
process, <strong>Vesuvius</strong>’ products may be used in the melting shop, core shop, moulding line and<br />
pouring stages. Using the chemical binders and refractory “paints” of <strong>Vesuvius</strong>, the<br />
customer foundries prepare the sand moulds and cores, the quality of which determines the<br />
precision and surface finish of the final casting. As liquid metal is transferred from the<br />
melting furnace to the casting line, it may be in contact with the molten metal transfer<br />
products of <strong>Vesuvius</strong>, such as insulating ladle linings, and be modified and conditioned by<br />
metal treatment equipment and additives. <strong>Vesuvius</strong> ceramic filters are used within the<br />
mould to remove impurities and reduce turbulence during pouring, thereby reducing scrap<br />
and improving the mechanical properties of the finished casting. Its feeding systems are also<br />
important in the reduction of material waste and improvement of casting quality: its<br />
exothermic feeding aids may be employed in the mould to provide secondary heat sources<br />
that can control cooling, minimising the adverse effects of shrinkage during solidification,<br />
helping to optimise the yield and the quality of the finished casting.<br />
Foundry consumables typically make up less than five per cent. of the total cost of<br />
manufacturing the final casting. Foundries are typically small and are often jobbing shops<br />
(i.e. producing different castings for different end-markets based on spot demand). They are<br />
often relatively unsophisticated in their understanding of the casting process and how they<br />
can improve product quality and plant efficiency.<br />
<strong>Vesuvius</strong> estimates that revenue for the Foundry Technologies product line is broadly split<br />
by end-market as follows: general engineering 28 per cent., light vehicles 25 per cent.,<br />
construction, agriculture and mining 18 per cent., medium and heavy vehicles 15 per cent.,<br />
railroad 4 per cent., pipes and fittings 2 per cent. and other 8 per cent.<br />
<strong>Vesuvius</strong> believes that the Foundry Technologies business was significantly enhanced by<br />
the acquisition of Foseco <strong>plc</strong> on 4 April 2008. Foseco <strong>plc</strong> produced ceramic consumables<br />
for foundry and steel casting applications. For the year ended 31 December 2008 (at<br />
reported exchange rates and as if Foseco <strong>plc</strong> had been acquired on 1 January 2008, rather<br />
than 4 April 2008), the Foundry Technologies business had revenue and EBITDA of<br />
£454.3 million and £79.3 million respectively.<br />
Fused Silica<br />
<strong>Vesuvius</strong> believes it is one of the world’s leading manufacturers of fused silica refractory<br />
products. Its Zyarock ® fused silica product range is used in a wide variety of highlydemanding<br />
industrial applications, such as glass melting and transformation and steel and<br />
aluminium casting. Since the late 1990s, <strong>Vesuvius</strong> has been applying Zyarock ® technology<br />
to make crucibles used in the manufacture of silicon wafers for photovoltaic solar panels.<br />
These Solar Crucibles are at the heart of the manufacturing process for multi-crystalline<br />
and more recently quasi-mono solar-grade silicon ingots.<br />
<strong>Vesuvius</strong> also supplies a wide range of fused silica refractories for the manufacture of flat<br />
glass and the shaping of safety glass for the automotive and architectural industries.<br />
1.1.2 Precious Metals Processing business<br />
<strong>Vesuvius</strong>’ Precious Metals Processing (“PMP”) business is a leading supplier of fabricated<br />
precious metals (primarily gold, silver, platinum and palladium) to the jewellery industry in<br />
Europe and also has significant precious metal recycling operations. On 1 May 2012, the<br />
US operations of this division were sold to Richline Group Inc. (a subsidiary of Berkshire<br />
Hathaway Inc.), leaving only the European operations in the UK, France, Spain, the<br />
Netherlands and Portugal.<br />
PMP products include alloy materials, semi-finished jewellery components and finished<br />
jewellery, as well as coin blanks for sovereign mints. PMP has approximately<br />
500 employees and 14 facilities in the UK, France, Spain, the Netherlands and Portugal.<br />
Customers of the PMP business include jewellery manufacturers, jewellery retailers and<br />
sovereign mints (including the Royal Mint).<br />
In 2011, PMP had revenue of £326 million, net sales value (being revenue less precious<br />
metal content) of £132 million and trading profit of £6.2 million. In the first half of 2012,<br />
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