ATLAS COPCO – A GIANT OF INDUSTRIAL INNOVATION

Atlas Copco’s reputation and customer reach spans the globe. The company has more than 44,000 employees, supplies customers in 180 countries and has multi-billion dollar earnings in construction, industry and mining.

 

Of course countless people may not even be aware that it has a hand in the production of many everyday things – from the juice you have at breakfast to that relaxing glass of wine after a hard day’s work.
The company has an array of products and services such as power tools and assembly systems, as well as being the leading provider of compressors. But it’s low key approach is very much in keeping with the origins of the company back in 1873 when engineer Edvard Franckel approached Andre Wallenberg of the Swedish banking dynasty to finance a new venture.
The manufacture of railway cars began then but neither man could have foreseen the impressive global growth that has taken place for 150 years.
To strive to reach the top in any given activity is demanding – but staying there elevates the challenge even further, as CEO Ronnie Leten explained: “We have top products with the latest technology to boost consumer productivity. We have a service organisation that promotes continuous growth but we all want to do better, whether it is in sales, service or production so there is a continuous drive from all of us.”

ENERGY EFFICIENCY

That drive is based on key touchstones such as innovation, energy efficiency and satisfying demanding customers. Mr Leten continued: “For the buyer of a compressor or construction equipment like a roller or paver, or mining equipment like a boomer, the energy efficiency of those machines is a very real factor in whether a customer buys.
“When it comes to tools, we are the facilitator that helps provide energy efficient solutions to the customer. For example, our assembly technologies allow auto manufacturers to build cars using lighter materials such as aluminium, making them more fuel efficient.
“Also our customers want to be sure our products are 100% safe. And innovation is a core value because technology is changing rapidly and this means customers have to remain competitive.”
Operational efficiency is also paramount for the lean company, says Mr Leten: “in several factories we have made assembly more efficient but we still have some way to go to improve the supply chain and eliminate waste.
“Why are we so focused on innovation? Part of the answer is because it supports our goals for sustainable profitable development.
“We strive to increase our competitive edge by improving our customers’ energy efficiency by 20 % through products that are developed, manufactured and sourced responsibly.
“That is why we are so focused on providing high-quality products that are more productive, energy efficient, safer, ergonomic, lighter or that in other ways make customers more successful.”

CHALLENGING CLIMATE

The business climate remains challenging with mixed demand for Atlas Copco’s products and service. At the company’s last annual meeting, the CEO reported that manufacturing industry was healthy, as is the motor vehicle industry and that orders for small and medium-sized compressors and for vacuum increased. However, the construction industry was more or less flat.


The mining sector had a very low demand for equipment and just like in 2013 measures have been necessary to safeguard competitiveness.


Despite these conditions, orders increased by 1% last year and record revenues were achieved with good contribution from growth of the service business and strategic acquisitions. Mr Leten said: “Sustainability aspects and efforts are integrated in the way we do business. In our world this includes everything from competence development and ethical behaviour to the development of new innovative products which offer customers even higher productivity.
“We have ambitious goals for energy efficiency and continue to decrease our CO2 emissions in relation to cost of sales in our total supply chain. Even more important, we are launching many new products that dramatically lower our customers’ energy consumption. Management systems are in place to ensure that we safeguard the environment, health, safety and quality in our operations.”


It said that its service business remained robust in all business areas and that moderate growth had been achieved. Demand for Atlas Copco’s equipment, however, decreased in total. The demand from some customer segments, for example automotive and electronics, remained healthy, while other segments continued to be weak. These included mining, construction, and oil and gas.


Order volumes increased for industrial assembly solutions as well as for vacuum equipment, while they decreased for mining and construction equipment and for compressors.


Geographically, Atlas Copco said Europe was robust and a moderate year-on-year order growth was achieved in the region. Order volumes also grew in India, but they were lower in many other markets, including China, Brazil, Australia and the US, it said.


Atlas Copco is claiming “solid profitability” and record cash flow in tough market conditions, in its interim report on the fourth quarter and full-year summary of 2015.


The company’s products include compressors, vacuum solutions and air treatment systems, construction and mining equipment, power tools and assembly systems.

COMMUNITY DEVELOPMENT

Water For All is Atlas Copco’s main community engagement initiative. Run by employees, the mission of the organization is to provide people in need with long-term access to clean drinking water.
Water for All was founded in Sweden by Atlas Copco employees in 1984. Through voluntary employee donations and contributions by the company, this non-profit organization has so far provided clean drinking water to more than 1.5m people. Water for All also welcomes external contributions, such as from non-governmental organizations or customers.
Today, there are employees in some 30 countries running or in the process of starting up Water for All. These local organizations always work together with a partner in the field. The partners are carefully selected and have to be well-reputed non-profit and non-political organizations.
The majority of the projects have been in sub-Saharan countries such as Kenya, Tanzania, Malawi, Mali and Ethiopia. There have also been substantial projects in China, India and Bangladesh, to name a few countries. The first project ever was in Peru.
Learn more about Water for All at its dedicated website www.water4all.org.

KEY PROJECTS

The Olympics in Rio take place later this year with construction of facilities at an advanced stage. The Barra Olympic Park comprises an athletes’ village, sports arenas, media centre and a 400 bed hotel. The lead contractors have turned to Atlas Copco for leasing much of the required construction equipment. Spokesman Luiz Mendes explained: “Atlas supply state-of-the-art equipment, has a worldwide reputation and provides outstanding technical support.”