With 42,000 employees operating in 130 countries, Sandvik had SEK 72 billion ($10.1 billion) in sales last year. The company is divided into three distinct areas: materials technology, tooling, and mining and construction. “Last year, the Sandvik Mining & Construction [SMC] Group sold SEK 25 billion [$3.5 billion],” said Lars Josefsson, president, SMC. “We experienced fantastic growth and it has accelerated dramatically in the last three years.” SMC’s business has grown from SEK 10.7 billion ($1.5 billion) in 2000.

“Our business, along with the mining and construction industries, is developing in a very positive direction,” said Josefsson. “Our business is well distributed around the world. It is dominated by Europe and Australia. The growing market for us today is South America. Looking toward the future, the BRIC countries (Brazil, Russia, India, and China) are areas where we see good growth. For the SMC group itself, the construction market has the largest potential.”

For mining specifically, Sandvik sees potential in South America and Mexico. “We experienced great growth in South America last year,” Josefsson said. “If we continue to do things right, the market potential is there. We have now established ourselves in that market and we have decided to expand further when it comes to new facilities in South American countries.”

The company also has very high ambitions for Africa, specifically central and west Africa. “The DRC has enormous market potential,” Josefsson said. “We are waiting for a more stable situation to step in with our main customers.”

Good metals prices are giving Sandvik’s customers a chance to invest in new equipment, processes, and systems. “We see a push for more equipment and a similar growth in exploration spending,” Josefsson said. “That’s why last year we decided to invest and acquire exploration-related companies and created a new segment within our company to concentrate on that activity.”

Similar to the mining business, Sanvik has had to deal with a shortage of skilled labor. “It’s limiting growth not only for us but for our customers as well,” said Josefsson. “We are taking responsibility to make sure that enough resources are available.”

“On the technology side, we are seeing a move toward more mechanization and automation,” said Josefsson. “We also see more of our customers going underground in the future. The mines are looking at more continuous processes.”

Mergers and acquisitions within the mining business have created huge, global companies and they are now focusing on total costs. Sandvik needs to be prepared to meet their needs on a large scale around the world. To do this and make it easier for the mining companies to do business with Sandvik, the company needed to implement a new strategy. “We could not continue to keep all of those brands,” said Josefsson. “We couldn’t continue to be only product oriented. We needed to take a new customer-oriented approach.”

In addition to brand consolidation, Sandvik’s new strategy places an emphasis on customer focus. “We will focus on customers by region,” said Josefssson. “Those divisions are responsible for service, sales, and customer relations and contact. The two common functions that we found to be extremely important to be able to live up to our reputation as the world leader in supplying these types of services to the mining industry is: logistics and supplies.”

SMC now has five customers segments: construction, surface mining, underground soft rock mining, underground hardrock mining, and mineral exploration. “The two largest segments are underground hardrock mining and construction, accounting for 30% each or more in sales,” Josefsson said. “Surface mining and soft rock mining have about 15% of sales each. The newly formed mineral exploration segment is still fairly small.”

To support this new strategy, the company decided to consolidate all the brands under one name: Sandvik. “It’s much easier for the sales organization to justify that this drill goes with this crusher and that conveyor if they all have same brand name,” said Magnus Titus, marketing director, Sandvik Mining & Construction “We are interested in selling solutions rather than equipment. One way to look at it is in product design. With the new product design, all of the equipment has the same basic design elements. It’s a common look that has been developed for all processes, all parts, equipment, and packaging.”

Sandvik believed that customers had difficulty understanding one company we had all of this equipment in its portfolio. Assembling 23 brands under one name in less than a year was no easy task.

The goal with the new brand name is to establish recognition and uniformity, and to show a unified company and product range. “This also means that we will change the way in which the company communicates,” Titus said. “From now own, we will use either Sandvik or Sandvik Mining & Construction. We either renamed or are in the process of renaming all of our products. The name starts with Sandvik, then the description, followed the equipment capabilities.” As an example, with the Sandvik UH 440i, the U stands for mobile unit, H stands for Hydrocone crusher, 400-series, and “i” refers to intelligent.

“We believe if we do this as we have planned we can serve our customers better,” said Josefsson. “That’s what this is all about. We believe that full service is something more customers will require. Some customers are asking only for equipment, components, and parts. Other, more-advanced customers are asking for full service and performance contracts.

“As an example, a customer in northern Canada [DeBeers’ Snap Lake diamond mine] just recently began production and we signed an alliance partnership with them last year,” Josefsson said. “The partnership called for much more than the sales of equipment. We had to provide on-site service with a maintenance crew. The agreement consisted of 50 units of equipment with a training program. We installed a simulator to train the operators to train the crews before they go underground with the equipment. We have also established a service depot and branch near the mine. This is a unique place where the property is accessed by an ice road. Equipment can only be delivered during a couple of winter months when the ice road is open.”

This is just one example, but it demonstrates Sandvik’s complete approach to the customer. “We can be a different, better type of supplier than we have been before,” said Josefsson.