Sandvik's structural shifts

OPPORTUNITIES to generate economies of scale within Sandvik Mining Solutions are the call of the day.
Sandvik's structural shifts Sandvik's structural shifts Sandvik's structural shifts Sandvik's structural shifts Sandvik's structural shifts

A Sandvik rotary blasthole rig.

Noel Dyson

Some such opportunities have already been identified, such as incorporating Seco Tools products in Sandvik’s distribution centre in Kentucky.

That means the Seco Tools US distribution centre in Troy will be closed.

Combined with other initiatives across the business area, including a headcount reduction in Fagersta in Sweden, which is expected to result in a cost reduction of 150 million Swedish krona ($US22.5 million).

The nonrecurring charges associated with these moves are expected to hit earnings by just under 100 million krona in the fourth quarter of 2012 and by 200 million krona in 2013.

This is on top of the reduction of 650 employees globally across the Sandvik Mining division.

That includes the closure of the units in North Bay, Canada and Rocklea in Queensland, Australia.

Third party contracts with more than 350 individuals will be terminated.

Charges of a nonrecurring nature are estimated at 175 million krona and will be recognized in Q4 2012, with another 175 million krona recognized in 2013.

Last year Sandvik split its mining and construction arm in two as part of its plan that was based on the four cornerstones of ambition, speed, focus and global/local.

Sandvik chief executive officer Olof Faxander said a year had passed since the new plan was implemented.

“A great deal of hard work has been done and much has been achieved,” he said.

“In our drive to continuously improve our company, we have identified several additional opportunities.

“Consequently, decisions have been taken on a number of actions to adjust costs and capacity. None of these measures affect our ability to grow our business in the long term.”

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