Solutions for sustainable productivity

With a new business area structure, a continuing process of strategic acquisitions and a focus on product innovation, Atlas Copco is helping customers all over the world to improve their productivity. Peter Mercer reports.

Earlier this year the Atlas Copco Group decided to modify its business area structure to strengthen its focus on specific product and customer segments. The company’s divisions for portable compressors and generators, road construction equipment and construction tools joined together in a new Construction Technique business area. The divisions for underground and surface drilling products as well as crushing, loading, hauling and exploration equipment now work under the umbrella of Mining and Rock Excavation Technique.

The Stockholm headquartered global group is thus now organised in four, more tightly focused business areas, in place of three. Its Compressor Technique area is now focused on stationary equipment for air and gas related services – industrial compressors, gas and process compressors, air and gas treatment equipment etc – while Industrial Technique continues to specialise in high-quality industrial power tools and assembly systems for the automotive and aerospace industries as well as for general industry.

“With more focused business areas, each will have a strong platform from which they can develop the offering for their customers,” said Ronnie Leten, president and CEO of the group. “The modified structure also allows us to better capture the sales and service synergies between our construction businesses and capitalise on the future growth of construction projects around the world, especially in emerging markets.”

Global reach, local service

Atlas Copco is a company with a global reach – its activities span more than 170 countries – and in 2010 it had 33,000 employees and revenues of SEK 70bn. Its Construction Technique business contributed SEK 11.2bn of this total and has product development and manufacturing units in Belgium, Germany, Sweden, China and Brazil. It supplies compaction and paving equipment to civil engineering contractors across the world as well as light construction tools such as breakers, cutters, drills and handheld compaction equipment to trade contractors and rental companies. Its portable compressors and generators are used to provide power in all kinds of construction applications.

“The new structure will enable us to combine product families so we can present customers with a greater and more integrated service and at the same time have fewer people facing those customers. So our service will be more productive, more efficient and more distinct from that of our competitors. But we won’t at all reduce our ability to offer local services, through our many component businesses; we deliver global solutions but we will still leave it to local managers to decide what suits their markets best.”

Quality counts

The new Construction Technique business area faces, of course, a global market that has seen continuing uncertainties over the last three years but Mr Gaar says that while the total volume of business in this market has declined, Atlas Copco’s market share has grown – and continues to grow. “Our mission is to help customers increase their productivity with more efficient products and equipment and this is even more important for them when times are hard,” he explains. “Customers come back to us because they need quality products and first-class service. In developing markets especially, there are big opportunities for Atlas

Victaulic

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Making Your World A Quieter Place

CDM has specialised in the design and manufacture of vibration isolation and sound insulation products for the Building, Rail and Industrial markets for over 60 years.

Machines, such as compressors, pumps, generators and loom equipment are often located close to noise sensitive spaces within buildings and so the noise and vibration levels from these machines have to be carefully evaluated and managed.

Since 2003 CDM has worked with Atlas Copco to develop a range of bespoke isolated fixings which decouple the vibrating elements of their machines and significantly reduce the emitted levels of noise and vibration.

Copco construction tools as customers in Russia, India and China explore how to replace old equipment with new, high-quality products that will increase their productivity. They are just as capable as our European customers of seeing the difference between low-cost and high-quality products.”

Michael Gaar adds that Atlas Copco is also continuing its acquisitions strategy, looking for companies that will help it to strengthen its local presence all over the world. Last July, for example, the Group acquired the Spanish generator manufacturer Gesan. Based in Zaragoza, Gesan supplies generators to more than 85 countries, and Europe, Russia and Africa are its most important markets. “Gesan complements Atlas Copco’s generator business very well geographically. We also expect synergies in sales, service, purchasing and manufacturing,” said Ronnie Leten. Atlas Coco will keep the Gesan brand name and the business will operate within the Portable Energy division of Construction Technique.

Continuing innovation

“We will continuously review potential acquisitions to add new technologies,” said Ronnie Leten, “but it is even more important that we remain focused on product development and innovation.” In fact, Atlas Copco was named last August in a Forbes magazine list as one of the world’s 100 most innovative companies. An excellent example of this innovative spirit is the new conceptual battery-powered asphalt roller that has been developed by Dynapac, the Swedish compaction and paving equipment manufacturer that has been a member of the Atlas Copco group since 2007.

The Dynapac CC900E is not only emissionfree; it is also very quiet in operation and offers the same compaction performance as its diesel-driven counterpart, the CC900. For normal tasks this electric roller will work for a full day on one charge and can be recharged

overnight. Thanks to its low noise level and emission-free drive the CC900E is ideal for indoor operation and work in noise-sensitive environments. It is currently being evaluated by customers in the field prior to full production.

Growth potential

Atlas Copco continues to develop markets all over the world but it sees the greatest current potential for growth in China and the USA. At the beginning of 2011 it announced an investment of SEK 60m in a new research and development centre in Nanjing, China. The new centre will provide customers within the Chinese mining and construction industries with specialist engineering services, laboratories and testing facilities.

In the USA, Atlas Copco has recently acquired the compressor distribution business of the Tencarva Machinery Company, a long-time distributor of the Swedish company’s products. The acquisition brings it closer to its customers in Tennessee, Virginia, Mississippi, Maryland and Delaware.

Michael Garr said, “but we now have the right people there, we have good logistic systems and a growing network of dealerships. We see the USA as a market with a very high potential for Atlas Copco.” n

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SKF: Strategic Partnership

A strong and long-term partnership that has lasted for over 30 years, enabling both Atlas Copco and SKF to fully reap the benefits of innovation, R&D, product development and knowledge sharing.

The SKF five-platform model offers an advanced solution and services supporting the total life cycle of asset management.