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Sandvik to enter lucrative mid-range China market

2014-03-27 08:05 Global Times Web Editor: qindexing

Swedish engineering group Sandvik's China business contributed to more than 7 percent of its total revenue in 2012 and it will advance into the mid-range China market to tap the country's potential, Olof Faxander, CEO of Sandvik Group, said in Shanghai Wednesday.

"We perceive a vast mid-range market in China as many enterprises are still using old machineries and have a greater need for standardized parts and components than first-rated technological services," Faxander told the Global Times Wednesday.

"But the growing trend would be more and more Chinese customers would move to a high-end product range in the long run, based on their need to reduce the number of operators and increase efficiency."

On March 6, the company unveiled a new R&D center belonging to its material technology unit in Zhenjiang, East China's Jiangsu Province.

"The industries involved with Sandvik products and solutions contributed 30 percent of China's GDP," Zhang Zhiqiang, president of Sandvik Greater China, told the Global Times.

Sandvik will continue to offer the best efficiency to the high-end market, and will expand business into the mid-range market, he said.

Zhang noted the company going forward possibly could consider acquiring a local company or set up its own mid-range sub-brand to make a foray into the mid-range market, a market he believed will see fiercer competition from domestic and foreign players.

Valuing the huge market scale and opportunities in China's industrialization process, the company, which has been operating in China since 1985, already has set up 14 plants across the country, according to Faxander.

Sandvik Group's sales revenue in China stood at 7 billion yuan ($1.13 billion) in 2012, mostly from sales of its high-end products.

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