Group to split to improve customer focus

17th February 2017


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Swedish sustainable productivity solutions provider Atlas Copco will create a new company focused on mining and civil engineering, should it receive backing at its annual general meeting in April.

The new company, comprising the group’s Mining & Rock Excavation Technique and Construction Tools divisions, should be listed on the Nasdaq Stockholm stock exchange from mid-2018, following approval.

“Both businesses are global leaders in their respective fields and will benefit from a more focused management responsibility,” Atlas Copco chairperson Hans Stråberg said in a January statement.

The mining and construction units, which will become NewCo, had sales of SKr28-billion ($3.1-billion) for the 12 months ended September 30, 2016, with an operating margin of about 16%.

Atlas Copco will focus on industrial customers and include the Compressor Technique, Vacuum Technique and Industrial Technique business areas, as well as the Portable Energy division, including service, and the Speciality Rental division.

The industrial company, which has about 33 000 employees, had sales of SKr74-billion ($7.9-billion) and an operating margin of about 20%.

“The two businesses have different demand drivers and demand characteristics,” said Atlas Copco group president and CEO Ronnie Leten in January. “A split will increase their respective abilities to add value to customers, grow the business and attract talent.”

“This is a fantastic opportunity. With the new company solely dedicated to mining and civil engineering, we can serve our customers even better than [we do] today,” says Mining & Rock Excavation Technique business area president Helena Hedblom.

The new company would include 12 000 employees, comprising all divisions within Mining & Rock Excavation Technique, Construction Tools, and related services. NewCo will have a dedicated board and CEO, which is expected to result in more agile company governance and a faster response to market requirements.

Operationally, there will not be any changes to the existing structure, as there is already a solid organisation in place, says the group. “This structure will further enable investments in growth areas like automation, digitalisation and service excellence.”

Mining & Rock Excavation Technique supplies equipment, consumables and services for drilling and rock excavation. “Whether the application is surface and underground mining, infrastructure, civil works, well drilling or geotechnical, Mining & Rock Excavation Technique will ensure an increase [in its] customers’ productivity,”

explains Atlas Copco’s website.

Construction Tools offers construction and demolition tools, portable compressors, pumps and generators, lighting towers and compaction and paving equipment.

Hedblom explains that the Atlas Copco group has strong customer centres, professional people, excellent products and superior services. “Our customer support will be reinforced as we can run [more focused] operations from [our] present premises.”

Atlas Copco serves customers in more than 180 countries, with offices in Southern Africa – in South Africa, Namibia, Botswana, Zimbabwe and Mozambique.

Edited by Tracy Hancock
Creamer Media Contributing Editor


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