New acquisition of Chinese crusher manufacturer will spearhead the drive into mid-range markets.
Sandvik Mining and Construction will use its newly acquired Chinese subsidiary, crusher and screen manufacturer Shanghai Jianshe Luqiao Machinery (SJL), to reach buyers of mid-range equipment. The company, which describes itself as a premium supplier, says it has so far failed to tap into this fast-growing section of the market.
According to Sandvik, SJL, which markets its products under the Shanbao brand, is China's leading crushing and screening equipment supplier, with sales last year of SEK 1 billion (US$ 150 million), 95% of which came from China. Early October saw Sandvik close its acquisition of an 80% stake in the company from Shanghai Electric and China Road & Bridge. Shanghai Electric retains a 20% share.
Sandvik plans to use the acquisition to launch a global dual-brand strategy, retaining Sandvik for premium products, and using equipment made by Shanbao, along with Sandvik's own 'Basic' range of drills and breakers, to address mid-market buyers.
Thomas Schulz, president of Sandvik's construction business said, "It is very important for Shanghai Electric that we are not competitors. Sandvik is a leading player in the premium market with a huge focus on R&D, but clearly with a weakness in the mid market. That is where Shanbao is strong."
"It is no secret that this mid-market is growing far faster than the premium market worldwide," he added.
Mr Schulz said Sandvik and Shanbao would work together to improve the reliability of the Chinese-made products and help it establish a global presence. "We will go global with Shanbao," said Mr Schulz.