The Sweden-listed company reported SEK 86 billion ($14.37 billion) global income last year, on which net profit hitting SEK 14.39 billion.

China ranks as Sandvik's No 8 regional market in terms of revenue and employers, according to Sandvik's 2007 fiscal report.

However, Lindholm expects China's global rank will be higher in the upcoming years.

Sandvik entered China in 1985, and currently has 1,500 staff, and 7 manufacturing plants across the country.

Its first industrial plant in China is located in Langfang, southern Beijing, which mainly produces cemented-carbide tools.

Lindholm, who became Sandvik China president in 2005, pointed out that the biggest challenge for Sandvik, a technology-intensive company, is "how to nourish a pool of human resources".

As a stimulus to attract and retain the employees, Sandvik China recently initiated a corporate pension plan and has signed the corporate pension plan agreement with Taiping Pension Co which help invest and operate the fund and the account manager China Merchant Bank late last month.

Under the plan, the company and each of their employees will each contribute 7 percent and 1 percent of the staff's wage every month to their pension fund pool.

So far, the plan has covered 97 percent of the company's 1,500 contracted Chinese staff.

"It takes us years and years to train laborers, and they are assets that are much more valuable than anything else," says Lindholm.

As the new labor contract law came into effect, many labor-intensive foreign-invested enterprises are reported withdrawing from the Chinese mainland to countries with a cheaper labor pool in anticipation of slimmer profit margins due to the rising costs.

However, Sandvik says the company has "a long-term commitment to China because of its people".

"We will not transfer our production base to anywhere else because of labor cost rise, definitely not," says Lindholm.

China's labor costs are still very competitive compared to elsewhere, says Lindholm.

"When we are selling our product, we are trying to sell not only products, but also productivity," says Lindholm. "In order to sell productivity, we need to have interaction, communication and a direct relationship with our customers, and that means we are in China".

(China Daily April 28, 2008)