Elisabeth Lindström-Dupuy drives China growth
Sandvik is creating a new China division to better reach new customer segments and expand its presence. The division will be headed by Elisabeth Lindström-Dupuy.
China is a key growth market for cutting tools, with forecasts indicating yearly growth rates of more than 4 percent over the coming five years. To succeed in this market, analysts agree that local production and long-term commitment are becoming increasingly important.
“The dynamics in the Chinese market have changed. Today it is important to be present locally and to produce within China, with a strong focus on local needs,” says Nadine Crauwels, President Sandvik Machining Solutions.
Acquision of Ahno
In line with this, Sandvik has acquired a majority stake in Chinese tool maker Suzhou Ahno Precision Cutting Tool Technology (Ahno). The company has a leading position in precision cutting tools in the fast-growing local premium segment, a broad product and service offering, and an extensive sales network.
“The acquisition reflects our strategic ambition to grow in China and to strengthen our position in the strategically important Chinese market. Ahno enhances our local production capabilities, making it a great addition to Sandvik,” Crauwels says.
The acquisition’s main customer industries are general engineering and automotive, in which a significant portion is in electric vehicles. There is also a growing medical segment. “Ahno’s competitive assortment and closeness to customers is a great platform to drive further growth of our tooling business in China,” says Crauwels. “Much of the offering is focused on fast-growing segments, which makes Ahno a perfect fit with our strategy.”
Enhancing local production and market reach
Ahno will form the basis of a new China division within Sandvik Machining Solutions, headed by Elisabeth Lindström-Dupuy, formerly Head of Sales Area North Asia at Sandvik Coromant. “The international tooling brands will continue to be operated in China as they are today. Ahno’s strong market position, combined with our leading competence and international brands will enable an attractive growth platform in China going forward,” she says, adding, “We also see opportunities between Ahno and our international brands that can boost growth and provide cost synergies. We believe that this mixed model, where we utilize the strength of both our strong international brands and local presence in certain markets, will help us capture market growth.”
Lindström-Dupuy points out that having local production also reduces vulnerability from geopolitical disturbances. “Ambition and commitment are appreciated and Sandvik is seen as more reliable and trusted in Chinese eyes. Many foreign companies left China during the pandemic, whereas Sandvik remained and now strengthens the foothold.”
The purpose behind the new China division is to reach new customer segments through increased presence. “It will also enable opportunities for collaboration and knowledge sharing to reap future synergies in research and production,” says Lindström-Dupuy.
She adds that Ahno is particularly strong in terms of agility and the rapid development of non-standard tools that are fit for purpose.
Sandvik, on the other hand, will bring skills from its long history in inserts to the table and help Ahno increase its market share.
Boosting sustainability with local production
Increased sustainability is another strong benefit of having local production as it reduces the need for long-distance transport, cuts lead times and facilitates after-market servicing.
Lindström-Dupuy says the future is looking good for Sandvik in China. “It’s been increasingly challenging over the past few years to capture growth as the competition from domestic companies has grown. One reason why customers like us is because we deliver a high and consistent quality with predictable performance.”