Tool steel giant reaps rewards of globalisation - Sweden Today no 3, 2006
The decision by automotive OEMs to slash the number of suppliers, and demand that those who remain join them in going global, has spelled disaster for many in the industry.
Uddeholm Tooling, on the other hand, has developed a complete package for the automotive industry and is already global, and so is in a strong position to benefit from developments in the sector.
“We are trying to really target the automotive industry,” says Lars Sundström, Uddeholm Tooling’s manager for strategic marketing. “We are looking into specifically two sub-segments. The first is to try to offer a complete package when it comes to car body dies, within the cold work segment, then with the hot work steels when it comes to high pressure die casting, powertrain, different aluminium engine parts and so on.”
Uddeholm has within the last year started up a new foundry in its Hagfors mill producing cast steel goods for car body dies. “We are trying to meet the need for shorter delivery times and to offer a more complete package to the industry, and the reaction has been positive,” says Sundström. “Of course for a long time there have been big foundries delivering this, but we are not looking to be the biggest supplier, but rather the second or third supplier, living by offering a complete package, and short lead times. Longer lead times can be a big problem for the automotive industry dealing with the traditional foundries.
”Sales and marketing manager Rolf Ståhlberg says the initial capacity of the foundry will be a couple of thousand tons. “But as this develops it will be easy to expand this capacity,” he says.
Record year
Uddeholm Tooling is Sweden’s biggest tool-steel producer, and has a worldwide distribution network covering more than 100 countries. It provides premium tool steel, higher-quality grades of conventional tooling material and related services to tool makers, tool users, machine builders and their customers. The company also develops, manufactures and markets special steel and related services for industrial forming tools and other applications. Uddeholm employs more than 850 people in Sweden. The crucial and growing Asian market is served by the wholly-owned subsidiary Associated Swedish Steels AB (ASSAB), which is set to become the biggest single market for the firm. ASSAB employs about 500 people in China, bringing the total workforce outside Sweden to 3,000.
Last year was a record year for the company, with a turnover of €240m, with especially large sales increases in the emerging markets of Eastern Europe and Southeast Asia. “We are working continually with cost improvements in our production which has helped us widen our margins,” says Sundström.
Uddeholm recently announced the start of cooperation with Camito on its revolutionary new tool-production process. “We will work together with them to be a certified foundry for the Camito process but also to market this new technique,” says Sundström. “It is a very interesting possibility. There is a big big interest in the car industry for this technology, and we want to be on the frontline participating in what is hopefully a very positive future.”
Frontline of innovation
Uddeholm Tooling is constantly developing new products, one of the most recent being the small pellet-like granshot. “Instead of making a steel grade into bars we make it into small pellets that are a couple of millimeters round,” says Ståhlberg. “If a foundry then wants to cast something, say 200kg, they can just take 200kg of these pellets and melt them down. Otherwise in a foundry you have to make a full heap which might be five tons or so. We can instead just melt the exact quantity for that order and that means our delivery times can be much shorter.”
Another innovation is Uddeholm Vancron 40, which is a new powder metallurgical tool steel containing nitrogen. “Normally when you make a tool and you want to improve the its performance you send it out to have it surface-coated,” says Ståhlberg. “That is an expensive and lengthy process, and the coating wears off after a while, and it needs to be repaired. The idea with this new grade is it has an inbuilt surface coating, so you save time and money and the surface coating is always there. This has attracted big interest in the automotive industry and beyond.”
“We launch about two new grades per year, so we feel we always have the best products,” says Andreas Johansson, who works in strategic market development with large automotive OEMs for Uddeholm. “The other thing is that the automotive companies are really pushing their suppliers to become global, and there we have a huge advantage because we already are very global. Our message for the OEMs is that we have the best product and we can support them both technically and commercially wherever they base their tools, which we think is an attractive offer compared to our competitors who cannot offer than possibility.
“Everyone is talking about they want to decrease the numbers of suppliers, that is why it is extremely important to have this complete product line that we have now.”
