Sandvik recovers from shock

Regarding the lower dividend rate Sandvik Asia8217;s chairman, Gunnar Bjorklund, said that with more crises expected in the coming years the company had to be careful with its reserves. He said that the company was in a position to pay this rate of dividend thanks to the timely restructuring and improved productivity. Bjorklund blamed the negative results on the recessionary trends resulting in a decline in the demand for most of the company8217;s products.

This year8217;s turnover was almost at the same level as last year8217;s at Rs 134.20 crore. But stiff competition had eroded market prices and Sandvik was faced with lower price realisation which affected the company8217;s bottom line. The voluntary retirement scheme VRS for 103 employees and writing off of obsolete stocks also contributed to the company losses. The positive gains of last year was a more than 100 per cent jump in exports which went up to Rs 14.20 crore from the previous year8217;s figure of Rs 5.50 crore.

Bjorklund informed shareholders that 19918217;s first quarterly Q1 performance was more positive with sales of Rs 36.20 crore during the first three months. This is a 19 per cent growth compared to last year8217;s Q1 performance. Q1 has also seen Sandvik register a net profit of Rs 1.97 crore.

During the year Sandvik invested Rs 3.25 crore in establishing a joint venture project, Titex India Pvt Ltd in collaboration with a German company, M/s Gunther amp; Co for manufacture of HSS range of precision tools and solid carbide project. Sandvik Asia has a 25 per cent stake in this company. As per the global reorganisation the rock tools division has been renamed as Sandvik Tamrock and some of Tamrock8217;s capital equipment has been incorporated into Sandvik Asia8217;s product programme.

Sandvik AB, Sweden8217;s saws and tools business has been acquired by Snap On Inc. USA. However in India Sandvik Asia will continue to operate the saws and tools division and distribute these products.