Sandvik (STO:SAND)

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Sandvik in China

1. Sandvik to open new strip service center in China

Sandvik Materials Technology is investing in a dedicated service center with its own slitting line in Zhenjiang, Jiangsu province, China.

The new service center will offer greater supply flexibility, with material finished to size from stock held onsite, whilst ensuring delivery times of precision strip to all customers in China of just one week. The service center is scheduled to be open during October, 2009.

Initially intended to supply strip to customers throughout the Chinese market, the center will also open up options to supply other Asia Pacific markets from the first quarter of 2010.

Investment in the new Sandvik service center in Zhenjiang is part of a long term strategy, designed to extend Sandvik Materials Technology’s presence in Asia Pacific.

2. Sandvik to build new plants in China By Chen Jialu (China Daily) Updated: 2008-04-28 10:17

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The Swedish-based Sandvik group, one of the world's largest engineering equipment producers, plans to expand its manufacturing production bases on the Chinese mainland this year to tap the nation's mining and construction boom.

Sandvik China is set to build three new factories in Wuxi, Jiangsu province, to enhance its production capacity, Svante Lindholm, president of Sandvik China Holding Co, tells China Business Weekly.

The three factories, operated by the company's three business sectors: Sandvik Mining & Construction, Walter, and Sandvik Hard Materials, will respectively produce cemented carbide tools for mining equipment; design and produce cutting tools and special tools; and produce cemented carbide wear parts.

The factories will start construction in October, the company says.

In addition, the company also plans to expand its production lines for mining equipment crushers in Jiading of Shanghai this year.

"The new production lines will mainly serve the Chinese market, and the secondary purpose is to serve Asian market and exports," said Svante.

Sandvik notched up 3.8 billion yuan ($542.74 million) sales revenue in China last year, a 20 percent year-on-year growth. While sales from mining equipment business grew the fastest among all its three business sectors.

The Swedish firm specializes in three major business sectors: tools, which cover tools and tooling systems for metal cutting and components; mining and construction which provides equipment, tools and services for mining and construction; and material technology, which focus on stainless steel and special alloy products for niche applications, resistance materials and steel belt process systems.

As a drilling equipment provider, Sandvik sees opportunities in China's new round of mining exploration as a strong stimulus to drive their profit growth. The recent price hikes of some core mining crude products including iron ore and coal are luring many investors rush to explore new mines.

The Sweden-listed company reported SEK 86 billion ($14.37 billion) global income last year, on which net profit hitting SEK 14.39 billion.

China ranks as Sandvik's No 8 regional market in terms of revenue and employers, according to Sandvik's 2007 fiscal report.

3. Sandvik: China mining gear market worth $8 bln http://www.cementchina.net [2010-5-20]

Swedish tool and machinery maker Sandvik said on Wednesday that it saw market potential for mining and construction equipment in China at 60 billion Swedish crowns , though competition was fierce.

The company also said its order intake in China had risen at the start of the second quarter.

"I estimate our available market potential at 60 billion crowns," Antonin Beurrier, in charge of Sandvik Mining and Construction for East Asia, said in a presentation.

"Clearly, we are running into competition from Western rivals. We're also seeing new local rivals coming in, and they are a potential threat but also potential partners," he said.

However, Beurrier added that the Chinese market was likely to be more profitable than the global average across the firm's mining and construction division, despite the fact that it remained underdeveloped.

In 2010, the mining and construction division's Chinese unit would probably boost its employees "dramatically" from the current 444 to keep up with demand, he said.

China is planning to restructure and consolidate its mining industry, which is mostly focused on coal and iron ore.

"That is a good thing for us -- that they increase scale and modernise and mechanise production," he said.

Sandvik's order intake in Asia in the first quarter rose 43 percent, and China outstripped that.

The head of operations for China, Svante Lindholm, said the start of the second quarter had been better than the first quarter, though he saw a slowdown ahead.

"I think that the enormous order intake (in the first quarter) was partly due to the fact that Chinese industry had relatively low stocks," he said.

At the same time, he still expected good order growth for the full year.

References

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