Restructuring of the mechanical boring machine business

13 jan 1998

Stockholm, January 13, 1998---Atlas Copco will phase out its tunnel boring machine operations, which involves Atlas Copco Robbins. The changing conditions for the mechanical rock excavation business, with a cyclical and limited demand together with a growing second-hand fleet, has led Atlas Copco to take this decision. Restructuring costs of million 50 SEK, incl. write-downs of assets, are charged to the 1997 result. Existing contracts and commitments, servicing, parts, rental fleet and rebuilding of existing machines, will be fulfilled.

Atlas Copco Robbins Inc., USA, is specialized in mechanical rock excavation equipment for tunnel boring, raise boring, cutters and relevant servicing. The Robbins operations for raise boring equipment and cutters will be maintained and transferred to other Atlas Copco divisions, however Borpak and Mobile Miner will be discontinued.

"Atlas Copco will leave the niche market for tunnel boring machines and concentrate on traditional rock excavation technique where the other CMT divisions are focused," said Freek Nijdam, Senior Executive Vice President of Atlas Copco Construction and Mining Technique (CMT). "Robbins is a leader in the TBM niche, but the synergies with other Atlas Copco divisions are few when it comes to technology, service and distribution".

"The cyclical and limited requests for new tunnel boring machines together with the growing second-hand business make it extremely difficult to maintain know-how and competence at the required level. The consequence is that we do not foresee Robbins to meet the standards for profitability required by Atlas Copco within a reasonable time".

Atlas Copco Robbins has 115 employees worldwide and is one of the smallest divisions within the Atlas Copco Group. Up to 80 jobs will be affected because of the restructuring process.

For further information, please contact:
Freek Nijdam, Senior Executive Vice President, Atlas Copco Construction and Mining Technique +46-8-743 8314
Annika Berglund, Vice President Corporate Communications +46-8-743 8070,
+46-70-322 8070.