Trends and driving forces

Digitalization and automation

Digitalization and automation are evident shifts in the industries we serve. Access to big data, sophisticated analytical tools, robotics and artificial intelligence are creating new business opportunities and improved business intelligence. New ways for people to interact with machines and the ability to transfer digital instructions into physical products or equipment enable real-time decisions in the machining process. This reduces costs, increase productivity and enable swift response to demand fluctuations. Sandvik has leading digitalized solutions and services to optimize its customers’ operations pertaining to costs, productivity, safety, and environmental impact.

Historically, design, machining and analysis have been three clearly defined phases in the manufacturing of components. Digitalization and technology, such as AI and metrology, enables integration of the three phases to form a seamless, automated end-to-end value chain.

In the mining industry, digitalization and automation are used across the value chain, from mine planning through mining and crushing operations to the extraction of minerals. Data collection, for example in mining equipment, enables advanced analysis to optimize processes and predict maintenance needs. Sandvik has a favorable position to capture these trends, with market leading automation solutions for underground mining equipment.

Economic and political developments

Increased regionalization impacts Sandvik and our industries, and geopolitical tensions are raising the level of trade barriers globally. This development underpins reshoring (bringing production back to the home country) and an increasing demand for localized production and local supply chains. Coupled with protectionism, this trend also drives demand for automated solutions to ensure competitiveness and resilience.

Urbanization is a key global trend that increases the long-term demand for infrastructure, metals, and sustainable construction materials. Building the smart cities of the future also drives investments in energy-efficient solutions and recycled solutions for the construction and infrastructure segments.

Many regions across the globe are facing skills shortage in the workforce. This development is accelerated by demographic shifts and an aging workforce combined with the trends of manufacturing reshoring and rapid development of new technologies. Addressing these challenges requires an increased level of automation in all our customer industries, and a need for reskilling/upskilling of the current workforce to stay competitive in the future.

New technologies

A number of emerging technologies are affecting our industries. The rise of artificial intelligence is rapidly transforming the business landscape, with generative AI emerging as a powerful productivity driver that can perform increasingly complex tasks. Sandvik is investing in AI and machine-learning models across all its operations where applications include, for example, optimized component manufacturing, monitoring of tools or mining equipment, or the ability to identify a need for maintenance to avoid equipment breakdowns before they happen. This trend also puts increasing emphasis on cybersecurity and the need for protection of both our own and our customers’ data, being a core asset of business operations.

The expanding demand for battery-electric vehicles offers vast business opportunities for Sandvik within its mining operations but also headwinds in other parts of its business, for example in component manufacturing for the automotive sector.

Multi-axis technology, enabling the machining of a material from several different angles, improves efficiency and allows for products with, for example, more complex design.

Sustainability

The Paris Climate Agreement places demands on companies and society for change and new thinking. One consequence is the rapid electrification of society, increasing demand for electrification minerals and the need for fossil fuel-free energy sources. Sandvik is world-leading in electric mining equipment, and supplies tools and tooling systems for the energy industry, including renewable energy.

Sandvik has set a clear goal of reducing its greenhouse gas impact across the entire value chain. Our largest impact is through our products and solutions, and we continuously strive to increase productivity and minimize the environmental impact. We aim to increase circularity by using more secondary material in production. We repurchase customers’ used cemented carbide inserts, drill bits and rock tools and use them to manufacture new tools.

Today’s customers and stakeholders require ethical conduct from businesses and Sandvik is committed to the highest business standards.