Business area Sandvik Materials Technology is a developer and producer of advanced stainless steels, special alloys, titanium and other high-performance materials. It produces tubes, powder, strip and products for industrial heating technology.
During 2017, there was good development in several of the market segments addressed by Sandvik Materials Technology. However, continued low oil prices and fierce competition from China presented several uncertainties and challenges for the core and standard business within the Tube product area. While being late to react on changed market conditions, mitigation actions have been launched within product area Tube during 2017. It is now on track with a strong focus on cost efficiency improvements and an active portfolio management.
Being no 1 or 2
The wire product portfolio (welding wire and stainless wire), did not meet up to the company’s strategy to be number one or two in the market and was announced to be divested. In October 2017 it was announced that the welding wire business will be divested to ESAB, a global leader in the welding industry, while the process to divest the stainless wire business will continue during 2018.
Focus on core
There are several specific trends that work in favor of Sandvik Materials Technology’s portfolio. With additive manufacturing (3D printing) as well as other powder-based manufacturing methods developing at a fast pace, the powder market for stainless and advanced alloys is growing and the transition from gas-heated industrial furnaces to electrical heating, present new opportunities for the Kanthal product area.
Efficiency and continuous improvements
Sandvik Materials Technology continued its efficiency program in 2017 with strict cost controls and cost reductions, including layoffs. There was also heavy restructuring in line with the strategic direction to decentralize and allocate resources to the product areas. The goal is to bring business closer to customers for a positive impact on sales, efficiency and product innovation.
The restructuring generated four partly new product areas: Strip, Kanthal, Powder and Tube. This has led to improved accountability and transparency, as well as a more logical organizational structure.
Sandvik Materials Technology collaborates with customers on ways to help them to work safer and more energy efficiently. One recent example is the development of Safurex®, a patented powder that reduces the risk of explosion during production of fertilizers. Umbilical tubes are improving safety in the oil and gas industry, flapper valves are helping to improve energy efficiency, and we offer material technologies that can conduct heat in solar panels or be used in desalination plants.
We continue to optimize our operations through reducing energy, water and waste. During the year, many local initiatives to minimize our environmental footprint were implemented; energy efficiency programs at a majority of the business units, improved monitoring and control of water use, improved treatment of process water and investigation of new solutions to optimize our waste management.
In 2017, energy usage remained unchanged and carbon emissions decreased by 2 percent, despite 5 percent organic growth. Total water usage decreased 140,000 cubic meters (–4 percent) and waste volumes were reduced by 7,000 metric tons (–8 percent).