By Liz Nickels
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 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 number of employees included would be around 2,000.
The companies’ aim is to drive profitable growth and capture market shares in the fast-growing mid-market segment in and outside China.
Key player
"The cooperation with Zhuzhou Group strengthens our position in one of our largest markets, China,” said Jonas Gustavsson, president of Sandvik Machining Solutions. “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.”
"Expanding beyond the premium segment in the metal-cutting tool industry is an important part of Sandvik's growth ambitions,” added Olof Faxander, Sandvik's president and CEO. “This preliminary agreement is a significant step in that direction.”
Sandvik and the Zhuzhou Group have currently only signed a letter of intent, expressing their intention to negotiate a strategic cooperation. It does not impose any binding obligation on them to enter into final and definitive agreements relating to the strategic cooperation.
