Relevant GRI Indicators
Strategy and technology
Strategic focus areas
We aim to strengthen our market position and deliver profitable growth through a business cycle. To succeed, we will focus on developing safer and more sustainable solutions, delivering customer value and expertise as well as staying in the forefront of automation, digitalization and electrification. We will strengthen and grow our core business through active portfolio management.
Focus on core
Our focus on strengthening the core business includes three main areas. First, we continue to invest in our aftermarket offering and local application expertise to deliver value for our customers. Second, we dedicate a significant share of our R&D resources to enhancing our core technologies. Third, we gradually divest product groups that fall outside of our core capabilities. In October, we signed an agreement to divest the majority of Varel’s Drilling and Completions operations, which are linked to the oil and gas industry. We are retaining the mining-related part of Drilling and Completions, in line with our efforts to focus on the core business.
Technology leadership and innovation
We are investing heavily in research and development and shaping the mining industry eco-system when it comes to automation, digitalization and electrification. Through the automation of mining processes, such as AutoMine®, we are creating a safer working environment and increasing productivity for our customers. Digital systems, such as OptiMine®, provide customers with data to help them optimize production and pinpoint where operational improvements are needed. So far we have installed 53 AutoMine and 63 OptiMine systems. We invest in artificial intelligence (AI) to strengthen our maintenance diagnostics and services offering, as well as to optimize the performance of our rock tools. In 2019 we successfully launched several new products, for example an enhanced OptiMine platform, connected cone crushers and a heavy-duty underground drill rig.
Automated solutions
Sandvik offers the industry’s most advanced automation and teleoperation systems. These solutions significantly improve productivity and safety, while lowering the total cost of ownership. The software systems also help customers to monitor their machines, giving them a full overview of their fleet and enabling them to control and optimize their operations.
Overview
Mining
Construction
Product portfolio
Equipment for drilling, cutting, breaking, crushing, loading and hauling. Drilling consumables (rock tools), service, spare and wear parts.
Market characteristics
Consolidated customer base of some 200 global major and junior miners. Remote locations, decreasing ore grades as well as safety requirements drive volume output and need for semi- to fully automated solutions. Significant aftermarket business.
Sandvik is active in the niche areas of rock excavation and comminution. The customer base is fragmented with more than 25,000 individual customers. Localized offering and local competition.
Demand drivers
- GDP growth rate and resource intensive industry development
- Metal and mineral prices
- Production levels in existing mines and expansion projects (greenfield and brownfield)
- Productivity improvements and new technology, for example automation and electrification
- Demand in the areas of environment, health and safety
- GDP growth/urbanization
- Infrastructure investments and spending
- Government stimulus programs
- Aggregates production
- Cement consumption
Competitive landscape/Major competitors
Consolidated in certain segments, i.e. underground hard-rock mining: Epiroc, Metso Minerals, Caterpillar and Komatsu Mining.
Some global competitors present in several niches and many local players: Epiroc, Terex, Metso Minerals, Caterpillar and Furukawa.
Go-to-market model
Direct sales ~95 percent with worldwide service network.
Due to a fragmented customer base, 50 percent of sales is via distributors. Global sales and service organization.
Growth strategy
Grow aftermarket business on the installed base. Climb the service ladder by data-driven productivity and advanced services. Automation, electrification and exploring complementary technologies and offerings through mergers and acquisitions.
Strategic risk management
Various forms of business environment risks with an impact on the mining and construction market in general, such as increased market competition with new technological developments and the emergence of new competitors, fluctuations in commodity prices and compliance-related risks. Political uncertainty in some parts of the world.