Sandvik Materials Technology

During the year Sandvik Materials Technology showed positive development for some parts of the business, whereas other parts impacted the profitability negatively.

2017 in figures

Revenues: 13,643 million SEK (12,931) with 5% organic growth
Operating profit: 284 million SEK (1,115)
Operating margin: 2.1% (8.6)
Return on capital employed: 2.2% (8.7)
Employees: 6,483 (6,490)
Gender balance: Men 82%, Women 18%
President: Göran Björkman, as of 1 November 2017
Lost time injury frequency rate (LTIFR): 3.6
Share of recovered raw material: 79%
Estimated market size: 130 billion SEK

REVENUES BY customer segment

  • Energy 39
  • Engineering 24
  • Consumer and Electronics 12
  • Automotive 7
  • Chemicals 6
  • Construction 4
  • Other 8


  • Europe 53
  • North America 25
  • Asia 18
  • Africa/Middle East 2
  • South America 1
  • Australia 1

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.

Market situation

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.

Sustainable business

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).


Product portfolio

Tubular products, bars, billets, strip. wire, rock drill steel, heating systems (Kanthal) – as well as metal, powder to for example additive manufacturing as well as powder-based products.

Market characteristics

Selected niches in demanding industries where material requirements, as well as product quality and reliability, are extremely high. High entry barriers.

Demand drivers

  • Energy demand and oil and gas prices
  • Industrial production
  • Environmental demands and legislation e.g. reduced emissions and energy consumption
  • Materials evolution i.e. advanced material requirements such as additive manufacturing
  • Increased demand for safety, reliability and more sustainable materials

Competitive landscape/Major competitors

Nippon Steel & Sumitomo Metal (tube), Tubacex (tube), Jiuli (tube) VoestAlpine (strip), Aperam (heating elements and systems), smaller niche players.

Go-to-­market model

Direct sales ~80 percent

Growth strategy

Increased focus on products and solutions improving energy efficiency and reducing emissions. Continued material evolution through focused R&D efforts and green technologies such as powder metallurgy.

Strategic risk management

Fluctuating oil and gas prices. Increased competition of high-tech material from China. Local protectionism in the steel industry.

Technology leadership and innovation

Research and development focuses on applications related to energy efficiency and other customer benefits, such as corrosion resistance, high-strength materials and materials that withstand higher temperatures for applications, such as in the solar power industry.

Working with modeling and simulation in materials design and in production processes, has not only optimized production, but also significantly reduced research lead time in materials design before entering product development.

Profitable growth

While there was growth for some of the more specialized tubular products, profitability for the core and standard business within product area Tube remained at a low level. The Powder and Kanthal product areas had good growth development throughout the year, whereas the product area Strip was struggling to reach profitability and efficiency targets.

No competitor today has as many products in the materials technology field as Sandvik. In order for the business area to reach profitability targets, an increased focus on operational and commercial excellence will be important. We will continue to solve the needs of our customers as trends and technologies shift, for example in the areas of digitalization and additive manufacturing. Sandvik’s wide range of Osprey® gas atomized metal powders, for example, are being used for, among other applications, additive manufacturing (3D printing). A small but rapidly growing niche of 3D printing customers are using metallic powder from Sandvik Materials Technology. Increased focus on sustainability targets from our customers will continue to influence our product development with more energy-efficient and fossil-free products for customers.

Indo-mim relies on Sandvik Osprey® Powders

2017 product highlights


The intelligent tube system helps customers control the status of the tubes inside their processes with the help of cloud-based computing. The true innovation lies in the combination of metallurgical knowledge and the sensor technology.

Coiled Tubing/Extreme coils

Extreme coils is the longest single seamless stainless tube in the world. This is an innovation that fulfills customers' demands in critical applications mainly in the oil and gas industry.

Furnace Roller

Kanthal APMT™ is an iron-chromium-aluminum alloy, ideal for high temperature applications, such as furnace rollers in the steel industry. The rollers remain straight and rigid with excellent resistance to oxidation and hot corrosion, even in extreme temperatures.