4 MPR May 20094 MPR May 2009 0026-0657/09 ©2009 Elsevier Ltd. All rights reserved.

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Sandvik reveals ‘dramatic’ decline in 2008Sandvik’s annual report for 2008 revealed that Sandvik took several blows toward the last quarter of last year, however confidence within the company remains strong, and potential in growing trends such as medical-technology was noted.

Sandvik’s order intake was up 1%, to SEK 92 610 m, from SEK 92 059 m in 2007. Invoiced sales were up 5% to 92 654 m from 86 338 m the previous year. Profit after financial items was down 19% from 12 997 m in 2007 to 10 577 m in 2008. Earnings per share were also down, by 18%, from SEK 7.65 in 2007 to SEK 6.30 in 2008.

According to the report, the global economic decline was ‘one of the most dramatic experienced by Sandvik’. It impacted all businesses and many of the markets. Reportedly, the market slowdown varied among customer seg-ments and was most noticeable in the automotive industry, construction and exploration industries as well as parts of the general engineering industry and consumer-related industries.

The report also noted a sharp deterio-ration in demand for Sandvik products toward the end of the year, although it remained relatively strong in South America and Africa, most notably from the mining industry. According to the report, the dramatic decline in the market meant that order intake in the last quarter was 14% lower than in invoiced sales.

The number of employees on 31 December 2008 was 50 028, compared to 47 123 the previous year, however this figure has since declined with a reduction in personnel such as the recent termination of employment cov-ering a total of 490 employees within Sandvik’s Tooling division in Sweden.

“During the first three quarters of the year, sales and invoicing were up from the preceding year,” commented president and CEO of Sandvik, Lars

Pettersson. “It was only at the end of the third quarter that weaker demand was noted and this development was accelerated by the Global financial cri-sis. From November onwards, the slow-down in the automotive, construction and exploration industries spread to most other industries, with [the] excep-tion of the energy sector.”

Commenting on the year ahead, Petterson added that “The year 2009 will be challenging. Uncertainty remains as to how the market will move in the short term. Based on the platform laid in recent years and the actions taken during the past year, Sandvik is well-positioned for the future.”

The report revealed that within Sandvik’s materials technology divi-sion, the strongest growth has been seen in the medical technology field and the energy sector. The market potential for the materials technology business area’s products reportedly exceeds SEK 150 billion, while the underlying annual market growth totals 4-6%, with higher growth rates for segments such as medical technology and energy. The report also notes such rapidly expanding markets as Brazil, Russia, India and China as increasing growth potential.

Recently, Sandvik reached an agreement to acquire Wolfram Bergbau- und Hütten-GmbH Nfg. KG (WBH), an Austrian producer and supplier of tungsten products. WBH operates a refining plant for producing tungsten carbide, including a chemical plant for recycling tungsten material, in St. Martin, Austria, where the headquarter is located. WBH has been active within the tungsten industry since 1975 and offers tungsten carbide and tungsten metal powders. The acquisition is expected to be completed during the second quarter of 2009, after approval by relevant anti-trust authorities.

Temporary subsidy for 2010 is crucial, say ECHAECHA, the European Chemicals Agency charged with managing REACH (the reg-istration, evaluation, authorisation and restriction processes for chemical sub-stances) across the European Union, have disclosed that they will require a ‘crucial’ EUR45 million temporary subsidy to cover a ‘shortfall in fees’ expected in 2010.

The issue was raised at the 11th meet-ing of the ECHA Management Board in February as part of an agenda item regarding a preliminary draft budget for 2010.

ECHA was expected to be fee-financed from January 2010, however the agency cites a last minute decision from the co-legislator to postpone the first regis-tration deadline of REACH by 6 months (until 1 December 2010) leading to a delayed fee income and a potential shortfall of EUR45 million.

It seems unlikely that ECHA will be able rely on receiving sufficient fees in 2009 to continue REACH operations until mid 2010, due to the agency’s experience with pre-registration sug-gesting that the industry will submit registrations ‘close to the December 2010 deadline’ rather than in advance.

ECHA plans to pay back the subsidy in 2011.

SMS group adopts ‘traditional’ nameSMS Demag, supplier of metallurgical plant and rolling mill technology for the steel and aluminium industry has adopt-ed the ‘traditional’ name of SMS Siemag.

The company was founded 130 years ago by the Weiss family of entrepre-neurs, and all shares in SMS are now back with the Weiss family. Chairman Heinrich Weiss stated that “by taking this step, my family is continuing the tra-dition of our family-owned company.”

Set up as a forging business in Siegen, Germany, in 1871, the company evolved into Siegener Maschinenbau AG (Siemag) in 1918, and began to produce rolling mills in 1927.

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