Sandvik AB (“Sandvik”) (STO:SAND) today signed a letter of intent with
Zhuzhou Cemented Carbide Group Co., Ltd. (“Zhuzhou Group”) to form a
joint venture for strategic cooperation.
The Zhuzhou Group is the largest domestic manufacturer in China of
cemented carbide and its compatible tools. It also offers smelting
services for tungsten, molybdenum, tantalum, niobium and cobalt. The
company is based in Zhuzhou, China, and the number of employees
encompassed by the strategic cooperation is approximately 2,000. Annual
sales for the part of the business concerned amount to about 1.3 billion
RMB (1.4 billion SEK).
Sandvik and Zhuzhou Group intend to establish a joint venture based on
the existing manufacturing facilities of Zhuzhou Group in China. The
products will be sold and marketed in and outside China. Based on the
strength of Sandvik Machining Solutions and the position of Zhuzhou
Group, the ambition is to drive profitable growth and capture market
shares in the fast-growing mid-market segment.
“The cooperation with Zhuzhou Group strengthens our position in one of
our largest markets, China. It is also in line with our current strategy
to become a key player in the mid-market segment, which has been growing
in size and importance in recent years,” says Jonas Gustavsson,
President of Sandvik Machining Solutions.
“Expanding beyond the premium segment in the metal-cutting tool industry
is an important part of Sandvik’s growth ambitions. This preliminary
agreement is a significant step in that direction,” says Olof Faxander,
Sandvik’s President and CEO.
The letter of intent between Sandvik and the Zhuzhou Group expresses the
parties’ preliminary intention to negotiate a strategic cooperation. It
does not impose any binding obligation on either party to enter into
final and definitive agreements relating to the strategic cooperation.
Apart from this press release we cannot give any other information or
comments at this stage.
Stockholm 17 June 2014
Sandvik AB
Sandvik Group
Sandvik is a high-technology and global industrial Group offering
products and services that enhance customer productivity, profitability
and safety. In 2013, the Group had about 47,000 employees and sales of
just over 87 billion SEK in more than 130 countries.
Sandvik Machining Solutions
Sandvik Machining Solutions is a market leader for tools and tooling
systems for advanced industrial metal cutting. Products are manufactured
in cemented carbide and other hard materials such as diamond, cubic
boron nitride and special ceramics. In 2013, Sandvik Machining Solutions
had about 19,100 employees and sales of 28.5 billion SEK.
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Copyright Business Wire 2014