Klen fires up as market turns

Klen International’s work in the gold sector offers a valuable insight into how Western Australian companies are taking the expertise from the state’s resources industry and developing it well beyond the mine pit.

The company’s Neerabup manufacturing facility is one of a half dozen worldwide producing fire assay flux, a chemical used by assaying laboratories to test for gold in drill core samples, according to executive director of business development, Greg Peisley.

A strong showing in 2016 after a tough few years in the market has prompted Klen to diversify into specialist materials used to certify lab equipment accuracy.

“Our business is driven largely by exploration, so when there’s more people exploring for gold, sending gold to the labs, they’re using more of our product,” Mr Peisley said.

“We’ve been through a very quiet time, but the past 12 months have been a lot more positive.

“While we saw a drop in volume of product going out, we were able to maintain our customer base; so now things are turning around and picking up, we’re in a good position to grow.”

An injection of capital was one of the major contributors to Klen’s positive outlook, with US-based lab supplier VWR International buying the company in late 2012.

While the funds were vital for investment in the building and capital, Mr Peisley said VWR’s involvement also reinforced the management team’s confidence in its strategies.

“Since the time VWR purchased the business they have been very supportive and have shown considerable patience in dealing with a global downturn,” he said.

“It would have been a far more difficult process to maintain the company structure had we been under the old ownership.

“It’s a fairly specialised area.

“One of the issues with making the product for fire assay is that it contains lead, so you need environmental licensing.”

Another major requirement is having very exacting quality control.

“The issue is getting a product out the door that has a low and very consistent level of gold as a background measurement,” Mr Peisley said.

Part of the issue is that the lead used in the flux is usually found with gold.

“So you need to be particularly careful in your selection of raw materials and you need a very rigid quality control program,” Mr Peisley said.

That focus on accuracy lends itself to the company’s next target, producing certified reference materials that are laboratory standards used for most mineral industries, which will be on the agenda this year.

It had taken many months to build up a knowledge base to enter the market, Mr Peisley said.