Sustainability, customers and employees
Sustainability is strongly integrated into our operations. The main CO2 emission reductions are made through our products, which increase energy efficiency and thereby decrease the CO2 footprint of our customers. We aim to be the most carbon-effective company in the industry. We already have a very low operational footprint within Sweden (0.2 percent of total emissions for the entire country at 100,000 tons a year) and globally, Sandvik Materials Technology accounts for a CO2 footprint of 130,000 tons a year. We already buy fossilfree electricity for our EU operations and are now focusing on clean electricity agreements for our operations in other markets.
Through our recycled steel, products for higher energy efficiency, and solutions that enable a transition to cleaner energy we can help our customers achieve their sustainability goals as well. We offer direct buy-back of materials from customers and end users and are working to increase our use of secondary (scrap) raw material in the steel melting process. Our steel operations use an average of more than 82 percent recycled steel in their production.
Customer’s first choice
Sandvik Materials Technology develops products that improve customers’ energy efficiency, productivity, profitability and safety. In 2021 we renewed a nearly 20-year alliance with strategic business partner Tenaris to service the oil and gas market. The new five-year agreement is for the supply of OCTG (Oil Country Tubular Goods) with premium connections and specialty steel alloys. We received the first order for Sanicro® 35, a high-alloy stainless steel with extreme pitting resistance, and will supply tubes for two heat exchangers used in a crude unit fractionator at a major refining company in the US. Several years ago, steel producer Ovako began electrifying its heat treatment furnaces with Tubothal® metallic heating elements from Kanthal. So far, the company has converted 14 furnaces and estimates CO2 savings of up to 2,000 tons per year per furnace and Ovako has also improved the quality and consistency of its product through enhanced temperature control.
Agile through cycle
We continued to prove our resilience in the face of market volatility in 2021, maintaining profitability despite the pandemic. This was achieved through continuous improvements and cost-saving activities, resulting in lower cost levels compared to pre-pandemic levels. In the short-term we managed cost savings through reduced travel and a reduction in the number of employees.
We continued with our footprint optimization program. For example, we finalized the closure of our tube site in Charost, France, exited rental premises in Hallstahammar, Sweden, and announced the closure of our Sonora, US unit, among our consolidation efforts in North America. At the same time, we are expanding our footprint in Asia and during the year announced an investment in our Mehsana Mill in India to meet increasing customer demand for hydraulic and instrumentation tubing. The 2020 cost-cutting programs resulted in annualized run-rate savings of SEK 310 million.
Employer of choice
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Climate challenges need to be addressed in future business operations. As part of her thesis program, Tove Engvall analyzed how collecting rainwater can help optimize production processes.
The continued uncertainties imposed on our business due to the pandemic remained a challenge in 2021 but we kept our focus on communication and safety routines. This helped us prevent any major outbreaks in our operations during the year.
In order to be fully operational as an independent company in 2022, we have been recruiting to about 150 new functional positions. During the year we initiated a project to structure our work on inclusion, diversity and equality that will form the basis for measures and initiatives going forward. We began cooperating with the Allbright Foundation, which works for equality and diversity in leading positions, and initiated local training programs in Sandviken to promote equality in our operations.