MeetSandvik 2/99

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Sandvik’s International CapitalMarkets Day in Finland on 1 June1999 attracted some 70 partici-pants from the financial communityand media. The participants camefrom Sweden, the UK, Germanyand France. The focus during theday was on Sandvik’s newly estab-lished Mining and Constructionbusiness area.

Mining and Construction PresidentAnders Ilstam and other senior executives made presentations ofthe Group’s various operations andparticipants were given the oppor-tunity to become better acquaintedwith the Sandvik Tamrock plant forthe production of underground loaders and trucks in Turku andthe rock drilling rig production

plant in Tampere. In Turku, visitorswere given practical demonstrationsshowing how the latest loaders andfast underground trucks performwith maximum loads. The visit toTampere was concluded with guestsbeing shown an advanced drillingrig in operation deep down in theSandvik Tamrock test mine adjacentto the plant �

Well-attended Capital Markets Day

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Cutting argument from SandvikSwiss company Victorinox, whichproduces the world-renowned SwissArmy Knife, is an important SandvikSteel customer. Victorinox purchasesspecially developed cutlery steel withproperties that match the company’sextremely high quality requirementsin terms of the steel’s chemical com-position, mechanical properties andthickness tolerances. It becomesrapidly evident that the only very bestis good enough for this leading Swissmanufacturer when, for example, youstudy the most advanced product in the Victorinox range, a pocket knife with 33 different functions and an optimal finish �

Finnish Sandvik doctoral positionsThere are now two SandvikTamrock doctoral positions inFinland. The positions have beenestablished at the TampereInstitute of Technology,within the Hydraulics andAutomation field, and atthe Helsinki University of Technology within theInstitute of IntelligentMachines and Special Robots.These research areas arestrongly linked toSandvik Tamrock’s development of rock-drilling machines and loaders.Each of the positions extends for aperiod of four years and Sandvik’scooperation partner is the FinnishGovernment �

Popular convertiblesMore than 7,000 of Sandvik’s10,000 employees in Swedentook advantage of the oppor-tunity to purchase convertibledebentures, which can be exchanged for sharesin the company during the period 2001-2004. This meansthat every employee who has subscribed for convertibles can exchange them for shares for an average of SEK 136,000in accordance with a previously fixed conversion price ofSEK 219. If the price is more than SEK 219 on the conver-sion date, the employee will make a profit. The convertiblesoffer is designed to stimulate employee motivation and commitment �

trial distributors dedicated to servingthe Group’s thousands of French cus-tomers.

An example is the market for cutting tools, in which Sandvik Coromant holds a leading position,particularly within the growing auto-motive industry, with Renault as oneof its major customers. As a result ofits recently initiated partnership withNissan of Japan, the well-knownFrench automotive producer has be-

This also means that France is impor-tant for Sandvik. Today, France is theGroup’s fourth largest market, withsales of SEK 2.6 billion and some1,900 employees at Sandvik’s Frenchproduction facilities. Sandvik’s closerelations with France go back a longway. The first commercial links wereinitiated as early as the 1860s, whenthey were handled through agents.The subsidiary Sandvik S.A. wasformed in 1923.

The subsidiary has its headquartersin Orléans, about 100 km south ofParis in the beautiful Loire Valley,famed for its many castles. In additionto Sandvik’s head office in France andthe business area managements, Sand-vik Coromant’s plant for special toolsmade from cemented carbide, as wellas a steel warehouse and distributioncenter for steel products are also locatedin Orléans. Sandvik is also representedin France through production at some20 different companies in the centralregions of the country and in the Parisarea. Sandvik has a well-developednetwork of sales personnel and indus-

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Today, France ranks as the world’s fourth largest industrialnation, with advanced production technology in, for example,the automotive industry, the aerospace industry and telecom-munications. The Concorde supersonic jet airliner, the TGVhigh-speed train and the Ariane communications satellite arejust a few examples of projects in which French engineeringskills have shown their capabilities.

come the fourth largest vehicle manu-facturer in the world. Sandvik sells anextensive range of advanced cemented-carbide tools to Renault for the pro-duction of key components, such asengines, gearboxes, brakes and wheelmountings. Some of these special toolsare produced at the Group’s modernplant in Orléans. The close coopera-tion between Renault and Sandvik hascontinued for a number of years andprogressively deepened. Sandvik partici-pates actively, alongside the customer,in ongoing projects to improve quality,productivity and profitability in auto-motive production.

Another sector where Sandvik’smodern cemented-carbide inserts assist customers in increasing theirproduction tempo is the aerospaceindustry. Sandvik is a major supplierto the French aircraft engine manu-facturer Snecma.

Sandvik Mining and Construction’sSouthern-Europe market area has itsbase in Lyon, France, where SandvikTamrock’s plant for production ofdrilling rigs and small loaders is based.The French construction industry andFrench mining operations are bothimportant customers. Machinery andequipment are also exported fromFrance. In Viriat, not far from Lyon,Sandvik MGT produces tools formechanical mining of coal and cuttingof soft minerals.

Sandvik is the market leader inseveral areas within the stainless specialty steels area. The automotiveindustry is a major customer for wireproducts. One of the largest customersfor strip steel is the razorblade pro-ducer BIC. The main customers forSandvik’s seamless tubes include theoil and gas industry, the powerindustry, the automotive industry andthe semiconductor segment. SandvikFrance is strengthening its positions in key future-oriented sectors. To usean automotive metaphor, Sandvik isrunning in top gear �

AllezSandvik!

25% lower production costs The expanding Swedish company Haldex is a leadingmanufacturer of brake equipment for trucks andother heavy vehicles. Major savings were made as theresult of a suggestion involving alterations to themanufacturing process using customized Coromanttools. The total production costs per component werereduced by more than 25%. In addition, more than4,000 machine hours were freed per year, which

meant that the companywas able to relocate all ofits production to Swedenfrom units abroad. This is yet another example ofhow Sandvik is helping its customers to improvetheir competitiveness andprofitability �

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World’s cleanest steel repairs broken bonesQuality steel from Sandvik is to be found in manycontexts, including the world of medicine. Weeven produce material which is so clean it can be used inside the human body as an implant toreplace worn-out parts of the skeleton. Examplesinclude material for bone nails and hip-jointprothesises. The steel pieces used must be tissue-friendly, be free of toxic substances and not causeallergies. In addition, they must be absolutely safefrom corrosion. To produce such super-clean steelrequires that the content of slag inclusions be re-duced to an extremely low level. Sandvik achievesthis by using methods such as vacuum-remelting �

A world of opportunitiesThis year, 15 years have passed since Sandvik hostedits first Swedish foreign-country trainees. Through theyears, thousands have applied for these attractive sum-mer jobs. Since the start in 1985, a total of nearly 200young students in Sweden have received the opportu-nity to work for a few months within Sandvik’s interna-tional organization. This year, ten young engineering,economics and system analyst students departed intothe wide world – to Sandvik companies in the U.S.,Brazil, the U.K., France, Switzerland, Spain and Turkey.One of these was Anders Dahl, who studied materialstechnology with a special focus on industrial eco-nomics and organization at the Royal Institute ofTechnology in Stockholm. He is now working atSandvik Steel in Scranton, Pennsylvania in the US �

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Bits & Pieces

Net attracting attentionInterest in Sandvik’s website on the Internet is

increasing. The Group’s website, www.sandvik.com,now has the equivalent of more than half a million visitors each year.These visitors want financial information, news and, in particular, toknow more about the various products. It is the products which areincreasingly coming into focus. Now, in various sectors of the Group,electronic catalogues are being produced, and these are a prerequisite forthe next stage of development – electronic commerce. Commerce via thenet will become an important complement to Sandvik’s traditional saleschannels in just a few years �

Sandvik scholarship awarded to Chalmers researcherDoctor of Technology Yashar Yourdshahyan at the ChalmersInstitute of Technology has been awarded Sandvik Coromant’s 1998Materials Scholarship. Lars Pettersson, president of Sandvik Coro-mant presented the scholarship, which is worth SEK 35,000. Yasharwas recognized for his successful work in using advanced calculation

technology within hard surfacecoatings for insert materials.This is an area of major interest to the development of Coromant tools for metal-working applications. �

Sandvik to the foreSay the name Ferrari andmost motor enthusiasts willadopt a dreamy-eyed look.The legendary Italian autocompany’s Formula 1 teamhas won more victories overthe years than any otherteam. Did you know that theadvanced cemented-carbidetool from Sandvik Coromantis an important element inthe company’s manufactureof such components as engineblocks and crankshafts?Materials such as aluminum,which are difficult to handle,require tools of the highestclass to match the extremelyhigh quality demands. That is all that counts – inthe short run as well as thelong race �

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Sandvik at the bottom of the sea The oil and gas industry is an important Sandvik customer.At sea, the hydraulic remote control of production is acore issue. This is where Sandvik comes into the picture.Sandvik supplies high-strength stainless steel pipes whichcan handle the extreme pressure at depths of 1,500meters. The pipes are supplied in welded lengths of up to20 kilometers, coiled in large rolls. The pipes are includedin “umbilicals,” which consist of a number of small-diameter pipes twisted around an electric cable or a pipein the middle. The entire package is covered in severallayers of protective plastic. Installation is then carried outfrom a special vessel – in the North Sea, the Atlantic, andthe Gulf of Mexico or in other places where oil and gasare extracted from under the sea �

Neat power packageSandvik Tamrock’s new drillingrig, the Axera DO6, is currentlyarousing great interest in themining sector. The compact andpowerful rig is easily maneuvered.It has been specially developed tobe able to work in confined spacessuch as small mine drifts. This is an interesting niche with greatdevelopment potential �

Refined ability Of course diamonds are surrounded bya little magic – the world’s most expen-sive precious stone, adored by humansfor centuries. Did you know that onlyevery tenth diamond that is mined,often using Sandvik Tamrock’s drillingtools, is classified as a precious stone?The remaining 90 percent aretoo small, of the wrongcolor or have otherdefects. These are usedinstead as industrial dia-monds, such as abrasives,for cutting glass or in drill bits for such activitiesas oil drilling. Synthetic industrial diamonds are also produced and this is an area in which Sandvik has major materials and technological skills.Graphite is exposed to extremely highpressure, approximately 60,000 bars,and temperatures of around 1,500° C.In order to withstand these enormousstresses, cemented-carbide tools areused in the form of punches and padsmanufactured by Sandvik HardMaterials. High-pressure technologycan also be used for the production ofso-called polycrystalline diamonds andcubic boron nitride which are used asmaterials for tools with extremely highrequirements on the durability of thecutting edges. The fact that Sandvik ispart of these areas, too, is another story– but just as precious �

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Did you know thatSandvik is now concentratingon three core areas?

Sandvik’s focus on growth has nowborne fruit. During the past five years,we have nearly doubled our sales.Today, consolidated annual salesamount to more than SEK 40 billion,with 34,000 employees at300 companies in130 countries.

In order toestablish a breed-ing ground forcontinuedstrong expan-sion, we are nowfocusing our ope-rations on threemain areas – Tooling,Mining andConstruction, and Specialty Steels.

The Tooling business area is mainlyinvolved in tools and tools systems formetalworking applications. Major cus-tomers include the world’s automotiveand aerospace industries.

Mining and Construction special-izes in equipment and tools for rock

excavation. These are used in minesand civil engineering projects world-wide

Within Specialty Steels, productsare developed in stainless steel, special

alloys and ceramic resist-ance material. Customers

are from most indus-trial segments.

We want toachieve a world-leading position

for all of thesebusiness areas –

each of which hassales of nearly SEK

10 billion or more. Theconcentration of our opera-

tions is aimed at further strengtheningour positions.

And this is of particular benefit to our customers. The bigger andstronger we are, the better able weare to improve their productivity andprofitability. And it is exactly this thatis the core of our business concept �