International Foundry Forum, 26 - 27 Sept 2014 in Venice - CAEF The European Foundry Association
The European Foundry Industry Structure, Key Figures, Forecasts
and a brief Insight into Trends
IFF 2014 - Venice
CAEF - The European Foundry Association
Vorführender
Präsentationsnotizen
I am going to use various structural data, key figures, a new forecast and some examples of important trends to introduce you to the spectrum of Europe's foundry industry.
Fe means Iron, Ductile and Steel Castings, NF = all light metals and copper and zinc The European foundry industry produces almost more than 15m t of cast components with a production value of more than 41bn Euros. This output comes from almost 5,000 companies employing a workforce of roundabout 285,000.
International Foundry Forum, 26 - 27 Sept 2014 in Venice - CAEF The European Foundry Association
India9%
R. of World2%
Japan5%
Taiwan1%
Korea2%
CAEF15%
Brazil3%
Canada1%
Mexico2%
USA13%
China43%
Russia4%
Casting Production Main Regions
Source: CAEF, moderncasting, national associations, Data 2012
Vorführender
Präsentationsnotizen
On the basis of the data from 2012, therefore, the European foundry industry accounts for 15 % of the global casting production. As my predecessor told us so impressively, it is the second most powerful extended foundry region after China.
International Foundry Forum, 26 - 27 Sept 2014 in Venice - CAEF The European Foundry Association
0
5
10
15
20
25
30
35
40
China CAEF USA Russia India Japan
m to
ns 2000 2010 2012
European Foundry Industry Fe-Castings – Second Worldwide
+274% -22% +268% +1% -8% -38%
Source: CAEF (2000 incl. Turkey) , moderncasting, national associations
Impact of 2008/2009 followed by slight recovery
Comparison 2012:2000
Vorführender
Präsentationsnotizen
We see clearly that the European foundries had to deal with a slight decline in casting production in the decade from 2000 to 2012. Ultimately, the causes for the decline in production are rooted in 2008 and 2009. Production slumped so massively that the losses could not possibly be made up in 2010 alone. To be sure, the production data for 2013, which of course are available for Europe, indicate that the last years were exactly what was needed to nearly make up the losses caused by the recession. Even so, Europe's foundries were able to retain their second rank after China.
International Foundry Forum, 26 - 27 Sept 2014 in Venice - CAEF The European Foundry Association
0,0
1,0
2,0
3,0
4,0
5,0
6,0
China CAEF USA Japan India Russia
m to
ns 2000 2010 2012
European Foundry Industry NF-Castings – Second Worldwide
+33% +324% +16% +12% +450% +17%
Impact of 2008/2009 followed by stable recovery
Source: CAEF (2000 incl. Turkey) , moderncasting, national associations
Comparison 2012:2000
Vorführender
Präsentationsnotizen
On the non-ferrous metal side, the only effect the recession had was that the positive growth rate was somewhat less than in 2000. Thus, foundries were able to stabilise their second position in the global ranking. This, however, indicates certain trends which I shall discuss in greater detail below.
International Foundry Forum, 26 - 27 Sept 2014 in Venice - CAEF The European Foundry Association
Zinc1,3%
Grey Cast Iron40,1%
Ductile Cast Iron30,1%
Steel Castings6,0%
Copper Castings1,6%
Magnesium0,2%
Aluminium20,6%
European Foundry Industry: Materials
Source: CAEF, Data 2013
Vorführender
Präsentationsnotizen
Having a closer look at the materials side it is clear and not suprising that Grey cast iron is dominating with a share of 40 %. Ductile cast iron (including Vermiculargraphit) represents 30 % of the European Casting structure. Steel castings acounting for 6%. Jumping to the non-ferrous sector Aluminium is the dominating material with a share of 21 %. Magnesium as the other light weight material represents only 0.2 %. Copper castings are calculated with nearly 2 % and zinc for a little more than 1 %.
International Foundry Forum, 26 - 27 Sept 2014 in Venice - CAEF The European Foundry Association
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
Switzerl
and
Norway
Hunga
ry
Denmark
Finlan
d
Belgium
Sloven
ia
Portug
al
Austria
Sweden
United
Kingdo
m
Czech
Rep
.
Poland
Spain Ita
ly
Turkey
France
German
y
2010 2013
1.000 t
Europe: Ferrous Castings 2010/2013 (sorted by 2010)
Source: CAEF
Production volume 2013 12.231 million tons Compared with the first year after the crisis 2013:2010 = + 4.5 %
Vorführender
Präsentationsnotizen
Needless to say, the European foundry industry comprises many different nations with larger or smaller casting industries. The ferrous castings side clearly shows that, judging by volume, the European market is dominated by six foundry nations. All in all, production was successfully increased during the last years compared to the first year after the crisis by nearly 5 % to 12.2m t. Of course, all supposedly minor foundry nations are home to potent foundries capable of holding their own on the global market, of which quite a few have their own unique selling points.
International Foundry Forum, 26 - 27 Sept 2014 in Venice - CAEF The European Foundry Association
0
100
200
300
400
500
600
700
800
900
1.000
1.100
Belgium
Denmark
Norway
Finlan
d
Switzerl
and
Portug
al
Sloven
ia
Sweden
Czech
Rep
.
Hunga
ry
United
Kingdo
mSpa
in
Austria
Turkey
Poland
France Ita
ly
German
y
2010 2013
1.000 t
Europe: Non-Ferrous Castings 2010/2013 (sorted by 2010)
Source: CAEF
Production volume 2013 3.545 million tons Compared with the first year after the crisis 2013:2010 = + 10.5 %
Vorführender
Präsentationsnotizen
The non-ferrous castings side reflects this situation. Here, we have two and/or five dominant nations who are mainly responsible for the output increase by nearly 11 % during the last years since 2010 to more than 3.5m t in 2013. Once again, however, we must remember that in Europe we have a very heterogeneous foundry landscape populated by generalists, specialists, and hidden champions.
Driven by automotive platform strategies and similar components: bigger units to manage high volume series. Plus delayed recovery of investment in equipment
Vorführender
Präsentationsnotizen
If we analyse foundry and employee numbers in the period from 2005 to 2013, we arrive at the following results: After the recession, the number of foundries on the ferrous side has declined by nearly five % to 2,100 companies since 2010. On the other hand, however, the workforce was only down by less than 2 % to roundabout 166,000. This fact can be explained relatively easily. First, the OEMs' trend towards platform and standard-part strategies is taking effect among automotive suppliers, which account for about 50% of the whole. This leads to larger foundries capable of coping with higher-volume production series. At the same time, foundries with focus on labour-intensive heavy hand-moulded castings want to hold there qualified employees. companies that dropped out of the market were relatively small.
International Foundry Forum, 26 - 27 Sept 2014 in Venice - CAEF The European Foundry Association
CAEF Number of Non-Ferrous Foundries and Employment
2960 2985
27542853 2896 2880 2858
1.000
1.500
2.000
2.500
3.000
3.500
2005 2008 2009 2010 2011 2012 2013
num
ber o
f fou
ndrie
s
Source: CAEF
Foundries 2013:2010 = + 0.2 %
126200
108800110700
113200
118600
95.000
100.000
105.000
110.000
115.000
120.000
125.000
130.000
2005 2008 2009 2010 2011 2012 2013
num
ber o
f em
ploy
ees
Employees 2013:2010 = + 9.1 %
These figures are underlining the positive development of the non-ferrous sector as a whole driven by the recovery at the automotive market.
Vorführender
Präsentationsnotizen
On the non-ferrous side the foundry head count of roundabout 2850 was stable since 2010. Workforces grew disproportionately by more than 9 %. Once again, one of the moving forces was probably motor-vehicle engineering; green field installations especially were probably established to serve the OEMs' lightweight construction trends. Additional: Only small companies have left the market.
International Foundry Forum, 26 - 27 Sept 2014 in Venice - CAEF The European Foundry Association
Productivity in the European Foundry Industry 2013
Source: estimation by CAEF and BDG 2012, * in percent of GPO (raw materials and supplies, without energy)
• Ferrous castings average performance: 70 tons (2010=55 tons) per employee with a range up to 120 tons
• Non-ferrous castings average performance: 30 tons (2010=22 tons) per employee with a range up to 58 tons
• Average Company (as an example): Gross Production Value (GPO) = 198,300 Euro per employee Amount of material (43.4 % of GPO*) used = 86,000 Euro per employee Gross profit = 75,600 Euro per employee
Picture: Lickfett
Vorführender
Präsentationsnotizen
The traditional standards by which productivity is measured are either per-capita volume output or per-capita sales. Both are admittedly tricky because very often, apples are compared to oranges, i.e. mass-produced automobile castings and individually hand-moulded heavy castings. Still, it pays to calculate tonnages. On the ferrous castings side, the average volume per capita across the European foundry industry is 70 tons, although individual figures range as high as 120 tons. �This clearly shows that differences in the production structures of individual companies, such as that between highly automated casting production and heavy hand-moulded castings made singly, necessarily lead to different results. �On the non-ferrous side, we have an average of 30 tons per employee, with a bandwidth ranging up to 58t. But everyone knows: All these calculations are significant influenced by metal and raw material prices and additional turnover and profit are not the same! GPO Ferrous Castings: 190 100 Euro per employee�GPO Steel Castings: 182 100 Euro per employee GPO Non-ferrous Castings (leightweight): 182 700 Euro per employee�GPO Non-ferrous Castings (heavyweight): 314 100 Euro per employee� Germany: Umsatz or total output (Gesamtleistung) 167 000 Euro, amount of material used (Materialaufwand) 52 000 Euro, Gross profit (Rohertrag) 80 TEUR
International Foundry Forum, 26 - 27 Sept 2014 in Venice - CAEF The European Foundry Association
Export quota European Foundry Industry 2013
Source: estimation by CAEF
• Export quota total (including deliveries inside Euro area) 36 %
• Export quota Euro area 22 %
• Export quota outside Euro area 14 %
• = castings are produced where castings are needed: >85 % delivered directly within the Euro area! The end use of European castings is all over the world! Picture: Soschinski
Vorführender
Präsentationsnotizen
In the foundry industry, the average export quota amounts to c. 36 %. Because of the peculiar structure of the greater European region, this includes goods delivered within Europe. Estimates indicate that nearly one quarter of all castings are delivered within the Euro Area, with 14% accounted for by deliveries outside the Euro region. Ultimately, the only conclusion we can draw from this is the often-quoted mantra, 'castings are produced where they are needed'. More than 85 % of all castings made in Europe end up somewhere within the euro zone. However, the end user of European castings is the entire world market.
International Foundry Forum, 26 - 27 Sept 2014 in Venice - CAEF The European Foundry Association
Source: Markit
Euro area Purchasing Manager Index (PMI) Sept 2014
Service
Industry
• A closer look at the sectors in Sept • Positive level yes (>50 points),
but dropping significantly!
Vorführender
Präsentationsnotizen
PMI is the earliest available information about the real delvelopment in the industry! How can the PMI be interpreted? During the last years we had to learn that passing the 50 point barrier coming from the bottom leads to expanding industrial production.�Coming from the upper part and passing the 50 point line the PMI gives a signal that production is starting to decline. The current status gives the signal that industrial production has moved near to stagnation level. The reason are uncertainties for the background of different crises and the bumpy development of investments inside Europe.
International Foundry Forum, 26 - 27 Sept 2014 in Venice - CAEF The European Foundry Association
Source: Markit
Euro area GDP vs Purchasing Manager Index (PMI) Sept 2014
PMI complete Index GDP yoy
• Close relation GDP and PMI • PMI is the earliest available information on the current status • PMI is no forecasting tool!
Vorführender
Präsentationsnotizen
But the PMI is no forecasting tool. It can be the basis to calculate a forecast! How exact the PMI works we can see if we overlapp the charts of PMI and the real GDP development. e.g. The PMI is available for September at the End of September. The GDP data are available two month later, more important for historians as for us. Therefor working with the PMI gives first available information about reality!
International Foundry Forum, 26 - 27 Sept 2014 in Venice - CAEF The European Foundry Association
EURO Area Gross Domestic Product Quarter over Quarter Change in % qoq
Source: Eurostat, forecast 3Q 14 – 4Q 15 Dekabank
Vorführender
Präsentationsnotizen
What is the message of the PMI? The Eurozone recovery remains weak and economic performance stagnated in the second quarter 2014. We can expect only small growth in the third quarter but it is positive growth! The IMF forecast (International Monetary Fund) is based on a small growth rate in 2014 of 1.1 % followed by a slight recovery of 1.5 % for the next year. This is the picture for the European economy as a whole. Let us now have a first view over the years to come for the foundry industry.
International Foundry Forum, 26 - 27 Sept 2014 in Venice - CAEF The European Foundry Association
Forecast of Foundry Production until 2018 by IKB Bank
Vorführender
Präsentationsnotizen
IKB is one of the leading banks in Europe with industrial focus, The bank is close connected to the foundry industry. The experts are working with different calculation models for the customer industries and the foundry industry. Two weeks ago they have finished the first forecast for the years 2015-2018.
International Foundry Forum, 26 - 27 Sept 2014 in Venice - CAEF The European Foundry Association
• Growing need for castings on a global level
• Based on the development of the vehicle industry, passenger cars as well as truck industry! Driving forces are - the growing wealth in the emerging markets (passenger cars) - and the tight regulations for the truck industry to improve emmission standards and energy efficency
• Impulses for general engineering will come from - chemical industry - food industry and - energy sector
• Building industry will be shaped by - booming infrastructure investments in the emerging markets - and a slight recovery in Europe as well as - positive development in the USA
Source: IKB
Forecast until 2018: Background
Vorführender
Präsentationsnotizen
IKB forecasts a growing need for castings on a global level for the next years This forecast is based on the development of the vehicle industry, means passenger cars as well as truck industry! �Driving forces are �- the growing wealth in the emerging markets ( impulses for passenger cars)�- and the tight regulations for the truck industry to improve emmission standards and energy efficency Impulses for general engineering will come from - chemical industry - food industry and - energy sector Building industry will be shaped by - booming infrastructure investments in the emerging markets - and a slight recovery in Europe as well as - positive development in the USA
International Foundry Forum, 26 - 27 Sept 2014 in Venice - CAEF The European Foundry Association
•Global Iron and Steel Casting Production in Mill. Tons (rounded data)
Westeuropa China
Rest-Asien
NAFTA
Südamerika
Afrika
• Western Europe can hold the level with slight increases • NAFTA will profit from the reindustrialisation trend in the USA,
positive development is expected especially for Mexico • The market share of China will grow and India has a chance to catch up
Osteuropa
9 8,9 9,2 9,6
8 7,9 7,9 8,4 12 12 12 13
3 3 3 3 0,3 0,3 0,3 0,4
37 38 40 43
16 16 16 16
Forecast until 2018: Iron and Steel Castings
Source: moderncastings, CAEF, Forecast IKB
Western Europe
Eastern Europe
South America
NAFTA
Africa
India, Japan and Rest of Asia
China
2018 2015 2013 2012
Vorführender
Präsentationsnotizen
Let us summarize the main points of the forecast for Iron- and Steel Castings Western Europe can hold the level with slight increases NAFTA will profit from the reindustrialisation trend in the USA, �positive development is expected especially for Mexico The market share of China will grow and India has a chance to catch up
International Foundry Forum, 26 - 27 Sept 2014 in Venice - CAEF The European Foundry Association
Westeuropa
China
Rest-Asien
NAFTA
Südamerika
Afrika
Osteuropa
2,3 2,3 2,4 2,6
1,5 1,6 1,6 1,8 2,6 2,7 2,8 3,0
0,2 0,2 0,3 0,3
0,0 0,0 0,0 0,0
4,5 4,7 5,0 5,0
2018 2015 2013 2012 3,2 3,2 3,3 3,4
• Western Europe will expand the production while the increase in Eastern Europe will be more dynamic
• The positive growth rates expected for the NAFTA region are mainly based on investments of European OEMs
• China will set the pace in Asia Source: moderncastings, CAEF, Forecast IKB
•Global Aluminium Casting Production in Mill. Tons (rounded data)
Forecast until 2018: Aluminium Castings
Western Europe
Eastern Europe
South America
NAFTA
Africa
India, Japan and Rest of Asia
China
Vorführender
Präsentationsnotizen
For leightmetal castings the message is Western Europe will expand the production �while the increase in Eastern Europe will be more dynamic The positive growth rates expected for the NAFTA region �are mainly based on investments of European OEMs China will set the pace in Asia
International Foundry Forum, 26 - 27 Sept 2014 in Venice - CAEF The European Foundry Association
A Brief Insight into Trends in the European Foundry Industry beside the Competition of Materials and Casting Processes
• Substitution
• Additive Manufacturing
• Smart Production = Smart Castings
Source: BDG/Soschinski
Vorführender
Präsentationsnotizen
Now let us jump to the final part of my presentation, the brief insight into trends, Trends beside the competition of Materials and Casting Processes I will concentrate only on three examples: substitution, additive manufacturing and smart production
International Foundry Forum, 26 - 27 Sept 2014 in Venice - CAEF The European Foundry Association
• After Material: Aluminium DG Weight: 4.2kg
• Advantage Weight reduction of >14kg!
• Before Material: sheet steel
Source: GF Automotive
Current Trend: Substitution e.g. complexe structural parts, door frame passenger cars
Vorführender
Präsentationsnotizen
The first example is the well running trend to substitute parts e.g. components produced by sheet steel with complexe casted structural parts. In this case a weight reduction of 85 %! There is nothing more to say about that. An perfect example of the performance of the foundry industry, for the important contribution to reduce vehicle weight by castings
International Foundry Forum, 26 - 27 Sept 2014 in Venice - CAEF The European Foundry Association
Source: Heinz Nixdorf Institute, Fotolia
Current/Future Trend: Additive Manufacturing
• Not only pattern and mould manufacturing
• In future: finished products on metal base
• Rethinking of construction restrictions to use the potential of additive manufacturing
• No „Killerapplication“ or final „Game Changer“ but an additional business for foundries!
Vorführender
Präsentationsnotizen
The second example is a trend running today with new impulses for the future The idea of additive manufacturing was born some decades ago. No we recognise that there is more than pattern and core making. We have to rethink all learned construction regulations to use the potential of this process. In future we can add the production of finished products made by additive manufacturing. This is for shure no game changer for heavy weight hand moulded castings, But we have the chance to integrate this new production process as a further business opportunity. We can be shure if we don´t do it other industries will make the money!
International Foundry Forum, 26 - 27 Sept 2014 in Venice - CAEF The European Foundry Association
Source: DMRC
Current/Future Trend: Additive Manufacturing in Metal
• Not only pattern and mould manufacturing
• In future finished products on metal base
• Rethinking of construction restrictions to use the potential of additive manufacturing
• No „Killerapplication“ or final „Game Changer“ but an additional business for foundries!
• Development of new applications using new design rules
• E.g. internal structures
Vorführender
Präsentationsnotizen
The second example is a trend running today with new impulses for the future The idea of additive manufacturing was born some decades ago. No we recognise that there is more than pattern and core making. We have to rethink all learned construction regulations to use the potential of this process. In future we can add the production of finished products made by additive manufacturing. This is for shure no game changer for heavy weight hand moulded castings, But we have the chance to integrate this new production process as a further business opportunity. We can be shure if we don´t do it other industries will make the money!
International Foundry Forum, 26 - 27 Sept 2014 in Venice - CAEF The European Foundry Association
The European Foundry Industry – Yearbook 2013
Vorführender
Präsentationsnotizen
For more detailed analyses, I recommend ordering the European foundry industry's yearbook for 2011, where end uses are discussed for every material separately.