Global market leader with international brands
Sandvik Tooling develops and manufactures tools and tooling systems for metal cutting, as well as wear parts and components in cemented carbide and other hard materials. The business area is a global market leader with a portfolio of international brands, including Sandvik, Sandvik Coromant, Walter, Valenite, Valenite- Safety, Dormer, Precision and Diamond Innovations.
Sandvik Tooling conducts comprehensive research and development work in close cooperation with customers. Each year, a large number of products are introduced. New products account for a substantial proportion of sales. The focus of the research and development work is on improving the production economy of customers
through more effective tooling solutions. The products are manufactured of cemented carbide and other hard materials, such as synthetic diamond, cubic boron nitride, ceramics and high-speed steel.
Customers include companies in the automotive, aerospace and engineering industries, within oil and gas extraction and in the electronics and medical-technology industries. Through turning, milling or drilling of steel, cast iron, aluminum, titanium and other materials, customers produce finished products or components.
Market’s driving forces
The demand for Sandvik Tooling’s products is driven by a growing demand for lighter components, among other factors. Lower weight in a vehicle, for example, reduces energy consumption. Lighter components often consist of difficult to-machine materials that increase the consumption of high-performance and advanced tools. There is also a growing awareness among customers regarding the critical importance of tools in their total production economy.
Despite tools representing a small portion of total production costs, the right tool can result in cost savings of up to 20% of total costs. Reduced environmental impact and lower total costs drive demand for tools that permit machining without cutting fluids.
Market
The world market for metal-cutting tools is valued at approximately SEK 140 billion, of which sales of cemented-carbide tools account for about SEK 110 billion and high-speed steel tools for about SEK 30 billion. The market potential for other components and wear parts made of hard materials is estimated at about SEK 30 billion. Growth in the entire cementedcarbide market in recent years has averaged 3–4% annually.
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| Invoiced sales | Operating profit and operating margin |
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| INVOICED SALES, SEK M | 2008 | 2007 | 2006 |
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| Sandvik Tooling | 25,975 | 24,732 | 22,477 |
| OPERATING PROFIT AND OPERATING MARGIN | 2008 | 2007 | 2006 |
| SEK M | % | SEK M | % | SEK M | % |
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| Sandvik Tooling | 5,461 | 21 | 5,989 | 24 | 5,191 | 23 |
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Operations during the past year
Sandvik Tooling developed favorably in all markets until the latter part of the third quarter, after which demand was impacted negatively by the downturn in the world economy. The negative trend started in NAFTA and Europe and spread during the fourth quarter to the rest of the world. The oil and gas sector developed positively. The activity in the aerospace industry declined, but remained at a high level. Demand from the automotive and general engineering industries decreased gradually during the year.
In view of the global economic slowdown, a number of measures were implemented toward year-end to lower production capacity, adjust inventory levels and reduce costs through personnel reductions and other actions. In parallel, efforts continued to consolidate operations, improve operating efficiency and increase productivity in production.
Sandvik Tooling continued to develop operations in growth markets and within fast-growing product ranges. The Walter and Sandvik Hard Materials product areas invested in new production facilities in Wuxi, China. Demand for the Coromant Capto® modular tool-holding system continued to increase, and production capacity investments were made in Sandviken, Sweden, and Semine, Japan. A new plant for the production of medical technology products was opened in Zell, Germany. A new production unit for high-speed steel taps was also inaugurated at the Group’s plant in Pune, India.
The Walter Titex Prototyp product area changed name to Walter and introduced a new uniform brand portfolio encompassing three competence brands – Walter, Walter Titex and Walter Prototyp. The new Walter has a broad product portfolio and substantial application knowledge which further strengthens the product area’s attraction and growth potential. Dormer and Precision product areas were integrated into one product area named Dormer, and have during the year successfully profiled their brands in NAFTA. ValeniteSafety developed and improved its product portfolio. The integration of Diamond Innovations was completed.
At the beginning of the year, Sandvik Tooling acquired Norwegian Teeness, a developer and manufacturer of antivibration tools for turning, milling and drilling. The acquisition strengthens Sandvik’s offering, particularly within the fast-growing aerospace and energy segments. Sandvik Tooling also acquired 49% of the shares in US-based company Precorp, a producer of tools in polycrystalline diamond and cemented carbide. The tools are used for machining of composite materials as well as many other advanced materials, mainly in the aerospace and automotive industries. Sandvik Tooling reached an agreement to acquire UK-based BTA Heller Drilling Systems, a producer of tools and tooling systems for deep-hole drilling. The company will be included in Sandvik Coromant and will strengthen the product area’s offering within deep-hole drilling. Sandvik Tobler was divested at the beginning of the year.
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 | WMX-WIPER
The WMX-wiper cementedcarbide insert from Sandvik Coromant is designed for turning. The insert facilitates higher feed rates and improved surface finishing and covers a broad application area. The new insert design is combined with new cemented-carbide grades. Shown are inserts in cemented-carbide grades GC2015 (left) for machining of stainless steel, GC3210 for cast iron and GC4215 for steel. |  |
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COROMANT CAPTO ®
Coromant Capto® is the leading and only true universal toolholding system for rapid tool changes and higher flexibility in lathes and CNC machines. |
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Aerospace industry’s high demands on drills
The international aerospace industry has grown about 10% annually. Aircraft manufacturers are introducing larger models with capacities to accommodate more passengers than ever before, but are also developing models with lower fuel consumption than preceding aircraft of the same size. In both cases, low weight is required to achieve favorable overall economy.
The larger and lighter aircraft are, to an increasing extent, being built in difficult-to-machine but lighter materials, such as composites. This places special demands on the tools. A new drill from Sandvik Tooling meets the growing demand for effective solutions for machining of composite materials.
Growing pressure on costs and more stringent environmental demands are forcing aircraft manufacturers to offer aircraft with lower fuel consumption per passenger. This is leading to larger and lighter aircraft. Accordingly, the aerospace industry must increase productivity through continuous development of new and better machining methods.
Composites are material compounds in which constituent materials vary depending on the application area, but carbon-fiber composites are predominant. The composites’properties are determined by what materials are included. Composites are used in the aerospace industry because they are strong, lightweight materials contributing to lower fuel consumption.
During the 1990s, composite materials were introduced in the structural elements of new aircraft models. Older models consisted of about 10% composite materials. In the latest aircraft models, the proportion has more than doubled – and the development is continuing to accelerate.
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The newly developed drill consists of a cemented-carbide shank with a polycrystalline diamond (PCD) drill head. The drill’s design creates consistently uniform holes without crack formations or damaged fibers. PCD is four to six times harder than cemented carbide. |
Composite materials place completely new demands on machining. Although the materials are extremely strong, they are also brittle and must be handled correctly. Otherwise, the different material layers can separate during drilling operations, or the composite fibers may become deformed. The machining tools are also subjected to considerable strain. More than seven million holes have to be drilled in a large, modern aircraft to accommodate fasteners and other fixtures. Consequently, a technology is required that provides both high and consistent drill-hole quality.
In close cooperation, the Diamond Innovations and Dormer product areas have developed a diamond-tipped drill that is specially adapted for composite materials. The drill meets the growing demands from the aerospace industry. Diamond Innovations offer unique expertise in synthetic diamonds and Dormer in rotating tools.
The new drill has a much longer tool life than cemented-carbide drills. The required time for machining has also been reduced by the new drill’s capacity to operate at higher cutting speeds. The technology shift towards increased utilization of composite materials has gained greater momentum and demand for an effective drilling solution is strong. As a result, considerable importance has been focused on the efforts to introduce the new tool as quickly as possible. |