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COMMITTED TO SUSTAINABLE PRODUCTIVITY 140 years of achievements March 7, 2014

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Committed to sustainable productivity140 years of achievementsMarch 7, 2014

1. Committed to sustainable productivity

Atlas Copco has always been about innovation, sustainability and ethics. We develop new products and offer better service that meet our customers needs. Our ambition is to meet higher requirements for the usage of natural resources as well as regarding safety, ergonomics and productivity.

At Atlas Copco its also important that we enjoy what we do. Our success would never have happened if our work and the interaction with customers and suppliers did not provide all of the inspiration we have had, have and will get.

My name is and I will tell you a little about how we became one of the worlds most innovative and sustainable companies. And 140 years old.

Atlas founded in 1873

Atlas offers equipment for building and running railways Own machinery is modernized and a compressor purchasedFirst tool is developedEduardFrnckelAndr OscarWallenbergDavid OttoFranke1873 18801890 1900 191019201930 1940 1950 1960197019801990200020102014


2. Atlas was founded in 1873

It all started in the late 1800 in Sweden, a country with less than 5 million people at the time. The economy was developing and a modern railway system was under construction.

In 1873 Eduard Frnckel, chief engineer of Swedish Rail, managed to persuade some merchants and bankers to provide the investment needed to form a company named Atlas. The companys mission was to produce equipment for the railways. Together with David Otto Franke and Andr Oscar Wallenberg, Frnkel became one of the founders and also the first CEO. The new company was set up in the city of Stockholm.

Unfortunately the Swedish Rail growth rate abruptly slowed in 1876. With the help of the Wallenberg family, Atlas reconstructed and was able to continue on the road to success.

The companys orientation towards steam engines and the purchase of a compressor paved the way for a completely new business line, the one that would make Atlas world famous. When the need for better tools arose, the company started to develop its own.

The Wallenberg family has throughout the years played an important role for Atlas Copco, both as owners and Board members. Still today, the Honorary Chair and one of the members of the Board of Directors are from the Wallenberg family.


Meeting the customers needsMerges withDiesels Motorer and becomesAtlas DieselRangeof pneumatic tools and compressors growsEstablishes sales operation in Russia

1873 18801890 1900 191019201930 1940 1950 1960197019801990200020102014


3. Meeting the customers needs

In 1917, Nya (new) Atlas merges with Diesels Motor, which was a manufacturer of diesel engines. The same year, the company established its first sales operation outside Sweden, in St Petersburg in Russia.

In the 1920s and 1930s the company was hit hard by the Depression. It was decided to concentrate the business on diesel engines.

However, somewhat hidden, sales of compressed-air tools were being developed in Sweden. The range of tools and compressors grew continuously and crucial development work in the field of compressed-air technology was done during this period.


The Swedish methodThe one-man machine, a light rock drill, is introducedThe technology supports international expansion

1873 18801890 1900 191019201930 1940 1950 1960197019801990200020102014


4. The Swedish method

In 1936, the one-man machine, a light rock drill, was introduced. The method combined a light rock drill with a pusher leg and an integral drill rod with a tungsten carbide chisel insert. A single person could operate each drill machine, and as a result the phrase one man, one machine became synonymous with the Swedish method.

With the Swedish method Atlas Diesel had found a way directly to the technicians and mine directors all over the world. Once the method had been introduced and accepted by the technicians, the purchase became a mere formality.

The Swedish method supported Atlas Diesels international expansion and many new sales companies were established to market the method to the mining industry worldwide.


From a technology-based to a market-oriented production companyCustomer needs become the starting point for product development and sales strategies

Customer orientation

1873 18801890 1900 191019201930 1940 1950 1960197019801990200020102014


5. Customer orientation

In 1940, the owners decided to restructure Atlas Diesel. The company changed from a technology-based, production-oriented company to a market-oriented one.

Because of the international closures through World War II, Atlas Diesel focused primarily on increasing sales of compressed-air products to new domestic market segments.

A new policy was implemented, customer needs became the starting point for the development of product lines and sales strategies.


Arpic Engineering is acquiredAtlas Copco new name in 1956

Specialized company goes internationalDiesel engine production terminated

1873 18801890 1900 191019201930 1940 1950 1960197019801990200020102014

1940 1950

6. Specialized company goes international

After the Second World War it was clear that Atlas Diesel did not have enough resources to both produce diesel engines and to further develop compressed-air equipment.

In 1948, the company decided to focus on compressors only.

A few years later, in 1956, Arpic Engineering in Belgium was acquired. The acquisition included an 8000 m2 portable-compressor production facility and 300 employees. Arpic later became Atlas Copco Airpower, which was established as an independent product company with the mission to be the compressor center of the Group.


From Atlas to Atlas Copco

1873 18801890 1900 191019201930 1940 1950 1960197019801990200020102014


7. From Atlas to Atlas Copco

The year Arpic was acquired, 1956, was also the year the companys name was changed from Atlas Diesel to Atlas Copco. Copco came from the French words Compagnie Pneumatique Commerciale.

Over the years the Atlas Copco logotype has had many different shapes and colors. The idea of a uniform look of Atlas Copco did not happen until late in the 21st century. Today the same brand rules apply everywhere: one look, one brand promise, common messages and values. This structure is also valid for all other brands in the Group.7

Widening trade horizons1968 The Group was divided into three production companies

Compressors rapidly developed Mechanization introduced in mining and constructionFocus on ergonomic features for tools

1873 18801890 1900 191019201930 1940 1950 1960197019801990200020102014


8. Widening trade horizons

In the 1960s Atlas Copco began to modernize and expand its production plants. The Swedish method was outdated and new product development was initiated in a number of different areas. New compressor types were rapidly developed. Mechanization was introduced to the mining and construction side with heavy, highly mechanized drilling rigs. In the tools area more focus was put on ergonomic features.8

Innovative compressor technologyOil-injected screw compressor introduced in 1958 Oil-free compressor introduced in 1967 broadens the market

1873 18801890 1900 191019201930 1940 1950 1960197019801990200020102014


9. Innovative compressor technology

The compressor business developed rapidly and the first oil-injected screw compressor was launched to the market in 1958.

From 1967, with the launch of an oil-free compressors in the range, Atlas Copco broadened its market further. New opportunities opened up in, for example, the textile, food, and pharmaceutical industries.9

Acquisitions in many countriesWorld leader in rock drillingand compressorsExpansion of the tool business; CP acquired in 1987

Growth through acquisitions

1873 18801890 1900 191019201930 1940 1950 1960197019801990200020102014

1970 1980

10. Growth through acquisitions

In 1975, Atlas Copco began to acquire more companies, both in Sweden and abroad. The reasons for the acquisitions were many, expansion of the product ranges, new technology or new markets or distribution channels.

In the early 1980s, Atlas Copco had become a world leader in both rock drilling and compressed air, but not yet in tools.

To expand the tool business, US-based tool company Chicago Pneumatics, CP, was acquired in 1987. If was followed by more acquisitions in the same area.

Through all of these strategic acquisitions, and a well-established brand-portfolio strategy, customers were offered a greater choice and more complete system solutions.


Community engagement

Water for All founded in 1984Providing people in need with clean drinking water

1873 18801890 1900 191019201930 1940 1950 1960197019801990200020102014


11. Community engagement

In the beginning of the 1980s Atlas Copco owned companies in some 40 countries. The international expansion meant that more people travelled to more places to visit and serve customers. Besides doing business they learnt about different living conditions.

Water for All was established in 1984, after two employees had visited Peru. Devastated by the draught they had seen and how people suffered, they decided to help people in need of clean drinking water, an initiative that was supported by both colleagues and Atlas Copco.

Through voluntary employee donations, projects are implemented around the world, drilling or digging for water. Atlas Copco contributes with twice the amount of what the employees donate.

Clean water is a human right is the vision and overall motto for Water for All.


First in MindFirst in Choice Sales companies become customer centersDevelopment according to modular conceptVision and values established

1873 18801890 1900 191019201930 1940 1950 1960197019801990200020102014


12. First in MindFirst in Choice

Closeness to customers became fundamental to all thinking in the Group in the early 1990s, throughout the value chain.

A new product development philosophy was implemented, with focus on core components and equipment built on a modular concept.

The sales companies were renamed into customer centers to further emphasize the importance of being the best possible business partner in the industry. The mission of customer centers was both to sell the equipment and to service it throughout the lifetime of the products.

In this period Atlas Copco also established its vision, to become and remain First in MindFirst in Choice . Atlas Copco should be the company that customers think of first when they are going to buy a compressor, drilling rig or tool, but they should also select us as their supplier.

The core values - innovation, commitment and interaction - were identified after research among customers, distributors and employees.


Sustainable profitable developmentHigher requirement on resource efficiencyBusiness Code of Practice Increased focus on diversity and competence development

1873 18801890 1900 191019201930 1940 1950 1960197019801990200020102014


13. Sustainable profitable development

As we are all aware, the current millennium is so far characterized by escalating climate change, with higher average temperatures said to be caused by rapidly increasing carbon-dioxide emissions. Corporations and governments look for renewable energy and resource efficiency in operations and products. Atlas Copco continues to launch new innovative products to meet or exceed the new demands.

In 2002, Atlas Copco published a Business Code of Practice, which summarized all internal policies related to business ethics and social and environmental performance. Given its importance on many markets where Atlas Copco operates, the company enhanced the fight against corruption in all aspects and has decided to eliminate it completely in the Group.

Focus on competence development, mobility and diversity increased.


Eleven CEOs in 140 years


Oscar Lamm1887Tom Wachtmeister1975Gunnar Jacobsson1909Michael Treschow1991Walter Wehtje 1940Giulio Mazzalupi1997Kurt-Allan Belfrage1957Gunnar Brock2002Erik Johnsson1970Ronnie Leten2009

1873 18801890 1900 191019201930 1940 1950 1960197019801990200020102014

14. Eleven CEOs in 140 years

Atlas Copco has only had eleven CEOs during its first 140 years. Only two were recruited from outside of the company, Walter Wehtje and Gunnar Brock.

Eduard Frnckel was the driving force behind the creation of AB Atlas. Oscar Lamm reconstructed the company into Nya (new) Atlas and gave it a new direction.

Gunnar Jacobsson expanded the pneumatic range in particular. He was succeeded by Walter Wehtje who concentrated on compressed air products and international marketing.

The focus on research and development was enhanced by Kurt-Allan Belfrage. He was succeded by Erik Johnsson who was committed to increasing the sales worldwide.

When Tom Wachtmeister became the CEO all customer centers reported directly to him. This situation was not sustainable and he decentralized the organization further.

Michael Treschow focused on having structure and processes in order. Giulio Mazzalupi increased customer focus and strengthened the Group's position when the products were in use. Major divestments and acquisitions were made by Gunnar Brock, who also enhanced a better market penetration.

In 2009 Ronnie Leten became the second non-Swede to lead the Atlas Copco Group. Strong focus on service, operational excellence and brand portfolio management characterizes his leadership.


Servicing customers anytime, anywhere

IndustrialTechniqueMining and RockExcavation TechniqueCompressorTechniqueConstructionTechnique

1873 18801890 1900 191019201930 1940 1950 1960197019801990200020102014

15. Servicing customers anytime, anywhere

In 2011, Atlas Copco modified its business area structure to strengthen the focus on specific product and customer segments. This resulted in four business areas instead of three, Compressor Technique, Industrial Technique, Mining and Rock Excavation Technique and, finally, Construction Technique.

Each business area has a dedicated service division to safeguard professional support 24/7 and to create customer loyalty. About one third of all employees are working in the service business.

In this respect it must be remembered that Atlas Copcos success depends on one resource only: competent and professional people committed to customer value. 15


First pneumatictool produced1893 First rock drillproduced1905Customers in 182 countries2014CP becomesa Group brand2008Three business areas formed1968Swedish method leadsto rapid international expansion19461873AB Atlas, manufacturer of locomotives, is founded1904First air compressorproduced1917Focus on diesel engines2011Four business areas with dedicatedservice divisions2002Business Codeof Practice1956Atlas Copco name focuses on compressed air1873 18801890 1900 191019201930 1940 1950 1960197019801990200020102014

1616. Milestones1873: AB Atlas was founded in 1873 with the mission of manufacturing and selling railway equipment. 1890: The first pneumatic tools produced by Atlas in the mid-1890s were intended for the company's own workshops. In 1901 they were officially introduced on the production line.1904: The Atlas company produced the first air compressor and in 1905 the portable compressor was developed.1905: The first rock drill was manufactured, a heavy tripod-mounted machine. 1917: AB Atlas merged with AB Diesel Motorer and became Atlas Diesel.1946: The launch of the Swedish method after World War II led to rapid expansion. 1948: The diesel business was sold, after producing 5 447 diesel engines. The company became completely focused on compressed air.1956: Change of the company's name to Atlas Copco. New production companies were also added, biggest was Arpic. 1968: With the rapid expansion of its business, the company became more complex to manage. Three business areas were formed2002: Group-wide Business Code of Practice is launched. 2008: CP, Chicago Pneumatic, becomes a Group brand 2011: Atlas Copco established four business areas: Compressor Technique, Industrial Technique, Mining and Rock Excavation Technique and finally, Construction Technique. 2014: Atlas Copco is serving customers in more than 180 countries. It has own operations in some 90.


1717. Committed to sustainable productivity

Atlas Copcos brand promise is expressed as committed to sustainable productivity. What better proof is there of this commitment than our more than 140 years of history?

With a solid structure in place and world-class people, we are ready to take off for the next 140 years.

Thank you!