Atlas Copco

Atlas Copco AB

Atlas Copco main office in Nacka (2015)
Type	Public (Aktiebolag)
Traded as	Nasdaq Stockholm: ATCO A, ATCO B
Industry	Industrial equipment
Founded	1873 (1873)
Headquarters	Nacka, Sweden
Key people	Hans Stråberg (Chairman), Ronnie Leten (President and CEO)
Products	Compressors, vacuum solutions, generators, construction and mining equipment, industrial tools and assembly systems
Revenue	SEK 102 billion(2015)
Number of employees	43,588 (end of 2015)
Subsidiaries	Atlas Copco, Chicago Pneumatic, Edwards, Henrob, BeaconMedaes, Quincy Compressor, SCA Schucker, and more.
Website	www.atlascopcogroup.com
Footnotes / references [1][2][3]

Atlas Copco is a Swedish industrial company that was founded in 1873.^[4] It manufactures industrial tools and equipment.^[3]

The Atlas Copco Group is a global industrial group of companies headquartered in Nacka, Sweden. In 2015, global revenues totalled SEK 102 billion, and the company employed more than 43,000 people. The company manufactures products at about 100 production sites in more than 20 countries. As of 2015, the United States is the company's largest single market, followed by China.^[5] The firm's shares are listed on the OMX Stockholm exchange and both 'A' and 'B' classes form part of the benchmark OMXS30 index.

Atlas Copco companies develop, manufacture, service, and rent industrial tools, air compressors (of which it is the world's leading producer),^[6] construction and mining equipment such as rock drills,^[7] assembly systems. The Group operates in four areas: Compressor Technique, Mining and Rock Excavation Technique, Construction Technique and Industrial Technique.^[3]

History

Early development

AB Atlas, as it was previously named, was founded by Edvard Fränckel, who was a Swedish industrialist, politician and senior official at Swedish State Railways. The company was established along with Andre O. Wallenberg, Johan W. Arnberg, Carl G. Cervin and Fredrik Didro. In its inauguration phase, Atlas dealt with the manufacturing, purchasing and selling of all types of material for railroad construction and operations. After the hard hit of the recession in the 1880s and the decline in railroad construction, Atlas diversified its undertakings and branched off into locomotives, central heating and tool machinery. In 1899, Atlas began developing their first air compressors and established itself as a compressor manufacturer. As older production branches started phasing out, Atlas teamed up with Diesel Motors in 1917 and the new company of Atlas Diesel emerged with two primary divisions; Diesel engines and compressor air products.^[8]

War-time development

The Atlas Diesel merger experienced significant growth during the First World War and towards the end of the war, export dominated 40–50 % of production. The depression years caused significant losses for the company, which led to several financial reconstructions in the 1920s and 1930s. The economy began recovering and demand started growing again In the mid- 1930s and Atlas Diesel experienced a boom in sales, where compressed air operations was the most expansive area.The Second World War remained an active period for the firm and an epoch where strategic planning for development played a principle roll. Manufacturing capabilities were embellished and the purchasing along with the acquisition of manufacturing subsidiaries in Sweden and other countries, was a key component to Atlas Diesel's continued growth post WWII. "The Swedish Method" was an another war period strategy that strongly influenced the firm's pneumatic program, consisting of lightweight rock drills and drill bits with carbide tips. In 1948 the company terminated its Diesel manufacturing and the name "Atlas Diesel" was no longer pertinent. The name Atlas Copco became official in 1955 and was inspired by the Belgian subsidiary – Compagnie Pneumatique.^[9]

Post-war international expansion

The Swedish method that was founded during the war period, laid the foundation for the international expansion Atlas Copco engaged in starting in the 1950s. The purchasing of the Belgian compressor company Arpic Engineering in 1956, was the firm's first major international acquisition. Eventually, Arpic's plants carried out a majority of Atlas Copco's compressor production. In 1960 another important acquisition was made with the purchasing of Craelius. It was in the 1970s when international expansion accelerated dramatically, due to various structural reforms and efficiency measures brought on by weakened economic conditions and increased production costs. These conditions meant that Atlas Copco had to accelerate and brake simultaneously in order to keep profitability up. A number of strategic acquisitions were therefore made including the French compressor manufacturer; Mauguière. In order to strengthen their position in the United States, several strategic acquisitions were made in the Airpower business, including the key purchase of Worthington Compressors.^[10]

In the beginning of the 1980s Atlas Copco was the world leader in rock drilling and pneumatics. Seeing the potential in industrial tools, they purchased Chicago Pneumatic Tools in 1987, which opened up to the important American, French and British markets. Atlas Copco then became one of the world's largest manufacturers of pneumatic tools and monitoring systems. At the end of the 1980s the company's geographical foothold grew and assortments expanded due to several acquisitions including the French company Ets. Georges Renault that manufactured pneumatic power tools. The British company Desoutter Brothers Plc. that supplied industrial tools and monitoring systems was purchased in 1990. In 1992 AEG Elektrowerkzeuge was purchased and in 1995 Milwaukee Electric Tool was acquired, which further strengthened the company's reach. In 1997, Atlas Copco made its biggest and most important acquisition with the purchasing of the Prime Service Corporation, which was the largest machine leasing company in the United States. The North American Rental Service Corporation was purchased in 1999.^[10]

Business lines

Atlas Copco has four main business areas; Compressor Technique, Industrial Technique, Mining and Rock Excavation Technique and Construction Technique.^[11] They all focus on the design, manufacturing and marketing of a large range of products for different industry segments.

Compressor Technique

Atlas Copco's Compressor Technique area creates products such as: industrial compressors and vacuum solutions, oil and gas treatment equipment, air management systems, and gas and process compressor/expanders. The products are mainly used in the manufacturing, oil, gas and process industries. Their compressor solutions are used in ships, trains and hospitals, and in other facilities and applications. Their main market competitors in this area are; Ingersoll-Rand, Kaeser, Hitachi, Gardner Denver, Cameron, Sullair, and Parker Hannifin.^[12]

Industrial Technique

Atlas Copco products in Industrial Technique are mainly developed for the automative and aerospace industries, but are also used in industrial manufacturing and maintenance and vehicle service. Products manufactured include; assembly systems, industrial power tools, quality assurance products and various types of software. Their main competitors in this area are Apex Tool Group, Ingersoll-Rand, Stanley Black & Decker, Uryu and Bosch.^[13]

Mining and Rock Excavation Technique

These products are developed for underground mining, infrastructure development and geotechnical applications such as; blasthole drilling for ground engineering and aggregate production & drilling for oil, water, energi and gas. Drilling and rock excavation is the main industry the products are manufactured for, but is also manufactured for work in underground, open pit mines and mineral exploration. The company's main competitors in this area are Caterpillar, Sandvik, Furukawa and Joy Global.^[14]

Construction Technique

This area produces portable compressors, lighting towers, pumps and generators, paving equipment, compaction equipment, demolition tools and construction tools for a wide variety of infrastructure projects. These include; civil works, road construction, gas and oil and drilling construction projects. Main competitors in this are include; Doosan Infracore, Kaeser, Sullair, Volvo, Caterpillar and Wirtgen.^[15]

Operations

Manufacturing

Atlas Copco manufactures critical equipment components in-house and co-operates with business partners for non-critical components. Approximately 75% of the production cost of equipment represents purchased components and around 25% are internally manufactured core components, assembly costs and overhead. Equipment represents less than 60% of revenues and the manufacturing of equipment is primarily based on customer orders and only some standard, high volume equipment is manufactured based on projected demand.^[16]

Distribution

Atlas Copco has customer centers in over 90 countries and sales in 183 countries. Sales and service are primarily direct, but also channeled through alternative sales mechanisms, e.g. distributors. Sales of equipment is performed by engineers and service and maintenance are performed by technicians. Service is the responsibility of divisions in each business area. The responsibility includes development of service products, sales and marketing, technical support as well as service delivery and follow-up. About 40% of revenues are generated from service (spare parts, maintenance, repairs, consumables, accessories, and rental).^[16]

Brands

The Atlas Copco Group has dozens of brands around the world, including Chicago Pneumatic for compressors and tools, Edwards for vacuum, BeaconMedeas for medical gas solutions, and SCA & Henrob for automotive assembly solutions.^[17]

Structure

Atlas Copco's organization is based on the principle of decentralized responsibilities and authorities. Their operations are organized into four business areas and more than 20 divisions. The organization has both operating units and legal units. Each operating unit has a business board which reflects the operational structure of the Group. The duty of a business board is to serve in an advisory and decision-making capacity concerning strategic and operative issues. It also ensures the implementation of controls and assessments. Each legal company has a legal board focusing on compliance and the legal structure of the Group.

Board of directors

The Board of Directors has overall responsibility for the organization, administration and management of Atlas Copco. The Board sees to it that all applicable rules are followed and that control systems are in place.The Board regularly evaluates the long-term growth incentive program based on the current financial situation and the financial, legal, social and environmental risks.

Corporate social responsibility

Atlas Copco has five elements in their corporate social responsibility approach: innovation, business ethics, safety & health, resources, and teams.

Charity

Water for All

Atlas Copco's main community engagement initiative is Water for All. http://www.water4all.org/us/The charity, which builds infrastructure for clean drinking water in countries in need worldwide, was founded by Atlas Copco employees in 1984, and it is still driven by employees. It is financed by employees together with the company. ^[18]

Innovation

Atlas Copco conducts research and development in a wide range of technologies at their global research centers, where each division has its individual area of focus and resources. The amount invested in product innovation including capitalized expenditures was MSEK 3 253 in 2015. Training and workshops have been rolled out in customer centers and product companies in Europe and China. The divisions work with eco design achievement templates that are integrated into marketing material for customers. The Construction Tools division introduced two innovations that doubled their market sales in 2015. The Rammers LT 5005 and LT 6005 that won the 2015 iF Product Design Award and the Grand Award of Design in the Public's Favorite category. The Construction Tools division also introduced the HRD100, the electro hydraulic hand-held rock drill developed in collaborations with customers in South Africa.^[19]

Business ethics

The Atlas Copco Business Code of Practice has been translated into 33 languages and is based on the following international standards and guidelines:

• United Nations International Bill of Human Rights of the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights.
• The ILO Declaration on Fundamental Principles and Rights at Work] has identified the following core labor standards: freedom of association and the right to collective bargaining; the elimination of forced and compulsory labor; the abolition of child labor; the elimination of discrimination in the workplace
• The United Nations Global Compact is the means by which businesses worldwide can align their operations and strategies with 10 core principles in the areas of human rights, labor standards, the environment and anti-corruption.
• The OECD Guidelines for Multinational Enterprises are a set of government-backed standards for responsible business conduct in areas such as employment and industrial relations, human rights, the environment, information disclosure, combating bribery, consumer interests, science and technology, competition, and taxation.

Safety and health

Atlas Copco has a global Safety, Health and Environmental (SHE) policy that sets standards for workplace safety, health and ergonomics. Each division's president, general manager and manager has operational responsibility for the safety, health and environmental performance as well as the implementation of the Atlas Copco Group SHE Policy. The Group SHE Council maintains and updates policies, which is subject to approval by Group Management. Atlas Copco companies provide training in SHE awareness and all employees are responsible for complying with safety and health regulations. The company evaluates business partners, such as suppliers, subcontractors, joint venture partners and agents in accordance with SHE regulations. Customer centers with more than 70 employees and all product companies shall be certified according to OHS-AS 18001 and ISO 14001. Each division and reporting company is responsible for the reported information and key performance indicators are assessed by the Executive Committee Meeting (ECM) annually.^[20]

Resources

Atlas Copco has a supplier evaluation process that includes business partners' use of energy and related carbon dioxide emissions. All major product facilities and customer centers should be certified to the international environmental management standard ISO 14001.

Internal awards

The Peter Wallenberg Marketing and Sales award is considered prestigious within the company and is awarded annually within sales and marketing for successfully implemented methods.^[21]

The John Munck Award for Innovative Technical Development is also awarded annually to a team, a product developer or designer for outstanding contributions.^[22]

External awards

Atlas Copco has been the recipient of multiple external awards for areas such as technical innovation, product design and sustainable business approaches.

• Grand Award of Design- In 2015, Atlas Copco was awarded by the Association of Swedish Engineering Industries for the design of the LT 6005 Rammers series.
• Red Dot Award- In 2015, Atlas Copco was awarded for their MicroTorque screwdrivers and the MT Focus 6000 controller.
• Industriepreis- In 2016, Atlas Copco was awarded for the R TEX handheld pneumatic breaker in the industrial and mechanical engineering category.^[23]

References

External links

Wikimedia Commons has media related to Atlas Copco.

• Official website

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