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INSIGHT Fair Lawn, New Jersey, USA Still, its products have undoubtedly had an impact on your life. The Swedish-based company, whose North American headquarters is off Route 208 in Fair Lawn, makes tools for the metal-cutting industry. Its products help shape the engines in cars, the wings that let airplanes fly, and molds for plastic soda bottles, among other things. It's had a presence in Bergen County since moving to Nevins Road from New York City in 1955 and employs about 250 people there. "We're a big company. We're a world-class company. We're No. 1 in cutting tools around the world," says Jim Baker, president. "Yet we're a small company from the standpoint of our presence here in Bergen County." Founded in 1862 as a steel producer, Sandvik has grown into a group of companies involved in tooling, mining, and construction and specialty steels. It operates in 130 countries, rakes in $5 billion, and has 36,000 employees. The North American market represents about 25 percent of all revenue, with more than $1 billion in annual sales. Baker, a 57-year-old Kinnelon resident, has been with the company for 28 years. He started in the Scranton, Pa-based steel division after graduating from the University of Scranton with a bachelor's degree in accounting and a master's degree in finance. He leads Sandvik Coromant in its production of about 16 million inserts per year. These inserts are attached to tools that the company produces in North Carolina. Then Sandvik's clients use the tools as the surgical arm of huge machines. The tool rips through steel like butter, discarding shards of hot coiled metal, to make a prescribed product. In Fair Lawn, employees make inserts, or the part of the tool that actually does the cutting. They cost about $12 to $15 each and are roughly the size of a thumbnail. The inserts are shipped to clients in the United States, Mexico, Canada, and South America via a distribution warehouse in Kentucky. "The customer wants all the products that we manufacture in one package," Baker says. "They don't want three or four packages from different plants around the United States, even though theoretically you might be able to get it to them a little bit sooner. They don't want the hassle." Q. What sets Sandvik Coromant apart in the industry? Each year we come out with 1,500 new catalog [items], so 50 percent of our sales come from products that are less than five years old. That's possible because we spend 4 percent of total sales per year on research and development. If you would look at our main competitors in the world, their R&D spending is in the 2 percent range. So we're double the R&D investment of most of our competitors. That allows us to introduce more new products. Q. How many clients do you serve? According to the stats we have, in the U.S. there are about 180,000 customers that use metal-cutting products. Of that I'm going to say we sell to 25 percent. So there are many new customers that we can gain. Q. Which industry is your fastest-growing market? The die and mold industry. It has a lot to do with model changeover for cars. You see the model changes in cars are coming more and more rapidly. It also has to do with cellphones, plastic bottles. A lot of the products we're seeing nowadays are being high- speed injection-molded. It's very competitive, and the people need the latest and greatest tools because they want to do it at higher speeds and they want to stay in front of their competition. Q. What effect has the economy had on your business? We had a visible downturn in the business that started in the last quarter of 2000 and has prevailed through this day. Our North American business was off about 5 percent in 2001 compared with 2000. We were doing better than the rest, so we're winning the market share game. We're positioning ourselves for an upturn in the second half of this year. Q. What areas of industry impacted you? The decreases in aircraft production and the fact that they weren't drilling as much oil. So we weren't making pumps and valves and fittings for oil and gas conversion. The automotive industry ... even though it was a highly productive year last year, it was down from 2000. Also, truck production and construction equipment production was down. Q. What are your plans for the future? We're in the process of buying [the Michigan-based metal-cutting tool maker] Valenite for $175 million from Cincinnati-based Milacron, [which also makes machine tools, components, and accessories]. We filed acquisition paperwork with the Federal Trade Commission on June 27 and we are now going through the antitrust approval process. We're hoping that will be done within the 60- to 90-day time frame. Q. Why is Sandvik Coromant interested in Valenite? It'll give us a foothold in the automotive market far beyond what we've been able to attain with the Coromant products here in the United States. Valenite is an automotive-focused direct selling company, and they have very good contacts and products.
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Source: Bergen County Record
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