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Sandvik announces restructure

Sandvik has announced that it is to restructure as part of a new strategy aimed at increasing profitability, strengthening market position and creating more active portfolio management.

The new organisational structure, which splits the company into five business areas instead of three, will be effective from January 1, 2012.

The move aims to increase the transparency and operational focus of the organisation, and create a stronger platform for utilising common resources.

The five business areas are:
• Sandvik Mining: products, solutions and services for hard and soft-rock underground and surface
   mining operations.
• Sandvik Machining Solutions: products and solutions for advanced industrial metal cutting.
• Sandvik Materials Technology: advanced metal products for demanding applications in
   selected niches.
• Sandvik Construction: products, solutions and services within selected niches of the global
   construction industry.
• Sandvik Venture will be created for fast-growing operations in product areas with limited connections to other business areas, or closely linked to several other business areas. It will include Sandvik Process Systems, Sandvik Hard Materials, Diamond Innovations, Wolfram and Dormer, as well as the medical devices part of Sandvik MedTech. The implants and instruments part of Sandvik MedTech will be divested.

Unless a credible path to acceptable profitability is visible in the medium term, the Sandvik Materials Technology and Sandvik Construction business areas will be evaluated for full or partial divestment.

The new strategy will introduce a stronger focus on growth in strategically important, fast growing and profitable markets, and aims to shorten decision-making to assist the company to adapt more quickly to changing market conditions.

“Sandvik has a strong offering and a market-leading position in many fast growing and developing markets, as well as in more mature markets. We need to strengthen this position and also improve in some areas to be world-class in all our businesses,” said Olof Faxander, Sandvik’s president and CEO.

“Sandvik will always have ambitious targets but there also has to be a strong commitment to reaching these targets. We need to act as one company, and make sure we allocate resources and capital to the businesses where we get the best return.

“It is essential that we adopt strategies and organisation to a rapidly changing global market, where the ability to act and react fast is crucial for long-term success. The new organisation means a clear and strong focus on four core business areas where our targets are both market leadership and world-class profitability. We also need to enable development of adjacent businesses and, in the fifth business area, ensure that smaller operations with high potential have the opportunity to develop in the best way,” he added.

Courtesy Geo Drilling
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