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An interview with Dinggui Gao – President of Sandvik Construction

FocusOn – Global Insights. Interviews with the top executives of manufacturers and end users of equipment for the Mining, Aggregates and Construction industries

Dinggui Gao is the President of the Sandvik Construction business area since October 2013.

Mr. Gao has an MBA and B.Sc. in Mechanical Engineering. He held various senior positions at Bosch, Honeywell and Sinotruk before joining Sandvik.

Questions have been prepared and submitted by Rick Vandekieft, publisher of FocusOn Mining, Aggregates and Construction.

Vandekieft is also the President of the FocusOn Group Inc., the publisher of several industry specific online trade journals.

1. In the early years of your life, what did you want to be when you grew up?
I grew up at a time that China was still at the end of the ‘Cultural Revolution’. Hence I could not begin to think of any business related career, let alone working in multinational companies such as I been fortunate to have experienced. The opening up of China provided me with unique opportunities which mean that I can live a life that I could have never dreamed of. For that I am very thankful.

2. Is there one person in particular that has had a major impact on the direction you took professionally?
I have been very fortunate that throughout my career I have worked with some great colleagues, managers and leaders. Each one of them gave me different kind of advice and provided me with a unique style of leadership. Therefore it is difficult to single out one or even a couple of them.

3. What is the main reason(s) why young people would choose to join Sandvik Construction for their career?
I think the best way to answer this is to share with you what inspired me to join Sandvik a year and half ago. Sandvik is a great company with strong technical and engineering expertise in rock excavation and processing segment; it has a great culture of valuing the contribution of its people and therefore there is a pool of great talent in the organization. Sandvik Construction has developed a strong position amongst its loyal customers through decades of excellent service, product development and a focus on customers’ real requirements. Thus Sandvik Construction is a place where young talent can learn, contribute and shine.

4. If I were to talk to some of those that have worked with you, without you in the room and I asked what it was like to work with you at Sandvik, what do you think they would they say?
Honestly I cannot answer this precisely, but I will try: I think they would say that Dinggui is a very open-minded, team-oriented, people-focused person. I pride myself on being very focused on targets and always stay on top of what is going on. I like to spend time with customers as well as frontline people in our organization so that I can gain as full an understanding as possible.

5. With a global customer base and multi locations under your management, what percentage of your time do you travel?
Maybe too much…last year I spent more than half of my time on the roads or in the air! Hopefully I can scale it down a bit this year, as the organization has been stabilized and as some of our projects gain traction. That said, I genuinely enjoy going out to the market and experiencing the excitement of seeing the developments of markets.

6. Sales in the Sandvik Mining & Construction business area have grown by almost 215% in the last 10 years. Considering the increased number of competitors, how was this growth possible?
Speaking solely about Construction, yes we did grow quite fast during the ‘super cycle’ prior to the financial crisis. However in the past 5 years the market has been stagnant world-wide. Our focus has always been to create the right product and service packages which help our customers to maximize their business performance, be it productivity, cost efficiency, or profitability. If we manage to continue with this, and it is greeted with customers’ acceptance, we feel that growth will come from our in-built customer focus.

7. What is the most successful product that Sandvik Construction has introduced since you joined the company?
We have really good engineering capability which enables us to bring new products to the market. In each of our product lines we have seen some great new additions to our offering since I joined the company. A few examples: CH550, CH540 cone crushers, DX drills, DG drills and rock tools, as well as new generation impactors, mobile screens and breakers.

8. In the recently released Interim Annual report, Mr. Faxander said; “In 2014 actions were taken to further optimize the Sandvik business portfolio in an effort to reduce earnings volatility, develop more towards fast-growing markets and yield higher returns”. In 2015 are there any fast growing markets that hold great opportunities for the Construction business area?
We are constantly scanning opportunities in the marketplace for areas in which to grow. However in 2015 our utmost priority is to stabilize and improve the performance of the Construction business. When we achieve our targets we will be able to target those areas of most potential.

9. “Global demand from the mining industry remained stable and on par with the preceding quarter.” – Sandvik 2014 Interim Annual Report. While we expect a significant market retraction in North America, Europe and China in 2015 with few forecasting an increase in sales, how will you try to increase your market share?
Again I can only speak for Construction: our focus is to do a better job every day for our customers. If we do this properly this will enable us to get new business whenever our customers are ready to invest. In addition, even when the total market is flat, there are pockets, either geographically or in business segments, of growth. We will make sure we are not missing out the chances to serve those growing pockets.

10. Is this a time to increase, reduce or maintain the advertising and marketing expenses?
We always match our advertising and marketing activities to the needs of our customers. For example, our ‘Quarry Academy’ is an excellent forum to exchange technical expertise with industrial experts, our partners and customers. We are proud that it has become synonimous with the Sandvik name.

11. In the Sandvik 2014 Interim Annual Report shows the largest percentage drop in sales for all of Sandvik’s divisions in Australia. This shows up in competitive reports as well. What happened in Ausralia 2014?
Again this depends on industry. In 2014, mining activities have been reduced quite significantly in Australia. Construction projects were also relatively slow. Heading into 2015 we have seen really positive movement in the construction sector with multiple infrastructural projects kicked off, especially in the Sydney and Melbourne areas.

12. From chain saws to crushers, the introduction of innovative products was very limited as R&D was focused on EPA standards, particularly Tier 4. Is Sandvik now able to devote more time to product innovations?
Innovation has always been one of our key focuses. We have already introduced products with Tier 4 engines to the market. We will continue to drive innovations around energy efficiency, environmentally friendly operations, safety, and serviceability.

13. When we ask manufacturers what is the number one request from the end user, we hear a variety of responses from better fuel efficiency, lower maintenance costs, higher productivity, immediate availability of parts and service. We expect your answer can be “all of the above” but what do customers most commonly ask of Sandvik?
You are right; I have heard all of the points. If you want me to reflect what my concerns are, I’d say what customers wanted us to deliver is to be faster in response and more precise in dealing with their needs. This may not be product related, for instance, as there are more and more customers requesting financing and buy-back options. Those are the areas we are working on. It differs from region to region, from one type of customer to another, as each customer is unique, but we spare no efforts in providing solutions for them.

14. Looking forward, what are the major trends in quarry operations that will effect Sandvik Construction product development?
We have seen the emergence of ‘super quarries’, meaning the quarries become bigger and bigger, especially in regions like China. Environmental protection and energy efficiency are both becoming bigger and bigger concerns as well as operational productivity. Quarry customers are also requiring that equipment suppliers offer more so they can be freed up to focus on operating their quarries.

54. When the workday ends for you, what makes it a good day?
In one of our plants they installed a bell which rings every time the factory receives an order. It is certainly a rewarding finish to a day with the ringing of that bell!





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