Dinggui Gao watches on as speaker Devon Harris talks to guests at the Sandvik Construction exhibition stand.
The former Jamaican military officer is probably better known as a member of his country’s four-man bobsleigh team that first competed in the 1988 Winter Olympic Games in Calgary, Canada, and which inspired the film Cool Runnings, writes Patrick Smith.
Today Harris is a motivational speaker and author whose book Keep on Pushing is for those who want to overcome obstacles and convert challenges into accomplishments.
“That was very good,” says Dinggui Gao (known within
Appointed president of the business area Sandvik Construction in May 2013, and a member of the group executive management, Dinggui Gao took up his post in October 2013.
Coming from outside the construction equipment sector he is understood to be the first Chinese person who has made it to the very top of a Western company.
“I cannot predict whether this will be a trend but I am really honoured to lead the business of Sandvik Construction and take it to next level with my excellent team,” he says.
Dinggui Gao, 49, was previously at MAN Group as its executive representative at one of its invested companies, Sinotruk Hong Kong. Prior to this, he was employed by Honeywell, Eagle Ottawa and also for more than a decade held progressive leading positions in the Bosch group.
Indeed, in the 1980s after gaining an MBA, he joined Bosch’s China operations and spent three years in Stuttgart, Germany, before returning to China in 2001 so as not to miss out on the country’s economic boom.
Since becoming president of Sandvik Construction life has been very busy as he gets to know the company, its employees and what plans there are for the future.
Indeed, when Devon Harris spoke Dinggui Gao was attending his first major exhibition as president, the
Sandvik Construction, a business area within the Sandvik Group, provides solutions for almost any construction industry application encompassing such diverse businesses as surface and underground rock quarrying, tunnelling, excavation, demolition, road building, recycling and civil engineering.
It offers a range of products including rock tools, drilling rigs, breakers, bulk materials handling and crushing and screening machinery, and in 2013 sales amounted to more than 8.6 billion SEK (€960 million). It employs over 3,000.
Indeed, while the company has been through tough times, like other manufacturers, demands for its products improved somewhat during the fourth-quarter of 2013 from the low level recorded earlier, excluding an order backlog adjustment.
Order intake declined by 1% compared with the year earlier period at fixed exchange rates for comparable units, but increased by 15% excluding the adjustment, and amounted to 1.8 billion SEK (€200 million/US$280 million). Invoiced sales declined by 7% compared with the year-earlier period and amounted to 2.2 billion SEK (SEK 2.4 billion in the same period in 2012).
During the quarter, the closure of one production unit was announced under the initiative to optimise the supply chain, and more recently it has been announced that production is to stop at the Swadlincote plant in England.
However, over the full year overall demand for Sandvik Construction fluctuated significantly.
“The negative demand trend noted in the third-quarter was reversed in the fourth-quarter with visible signs of improvement.
“Demand in Asia improved from a weak level, most notably in general demand for crushers in China. Activity increased in North America and Europe, predominately in Germany, Turkey and Norway.”
Mobile crushing and screening equipment recorded a strong quarter, while demand for tunnelling equipment varied across regions. Demand for tools, consumables and services remained relatively unchanged.
Production rates were maintained significantly below sales levels, and inventories were thus reduced.
The first phase of the initiative to optimise the supply chain was announced at the end of the quarter, and this aims to increase the share of products sourced from best-cost countries.
Consequently, the business area’s production footprint will be realigned. During the quarter, the closure of the production unit for screens and feeders in Chauny, France was initiated.
Already Gao and his team at Sandvik Construction have drawn up five objectives aimed at making the company more global and to support the aim of long-term growth.
The objectives look at services packages to offer the best value for customers; sales; operational efficiency; a competitive footprint and partnerships, he and the team now have a clear idea of the company’s strategy up to 2020, a strategy that was finalised in the last quarter of 2013.
“To me the best value in meeting our customers is to understand their needs and understand how they operate their businesses,” says Gao.
“This is why I am keen that we have as much interaction with the customers as possible.”
Indeed, in his short time as president he has travelled thousands of kilometres meeting customers and discussing their requirements and aspirations. He has also visited all the Sandvik Construction sites.
“From meeting the customer you can get an idea of how we can help them, whether it is with products, services, innovation or business models.
“We can provide value to our customers. If we can do this we will win together. This is my belief. This is the reason why we always go out to meet our customers.”
Looking at the marketplace he feels that in 2013 many operations were optimistic about the market and while in 2014 the consensus was that there will be a certain degree of growth in the first few months he says there has been slow growth. The US and Asia has seen slow growth. Europe has been pretty strong, particularly the UK, Germany and Turkey.
“From a growth perspective and based on our knowledge I think the best opportunities will come from the US and Asia.”
However, he admits that the company will see changes according to markets and products and that manufacturing will be based where it is most competitive and where it is best for the company’s customers.
“I was really happy being at Conexpo and was in contact primarily with US customers, although I met customers from all over the world as well. Every customer was telling me stories of how they feel more confident about the market. This gives me confidence that we can grow the business together.
“In 2013 we launched 37 new products and in 2014 we will see more than 20 new products.
“These products have been the result of that interaction with our customers and these are designed to meet the demand from our customers.
“New products and innovation have always been one of the strengths of the Sandvik Group. Indeed, Sandvik has been nominated as one of the 100 most innovative companies in the world for two consecutive years.”
While at Conexpo product launches included the new CH540 cone crusher; the Sandvik Ranger DX800, a new and improved version of the former best-selling Ranger series of surface top hammer drill rigs, and offerings from
