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Metal Casting Technologies : September 2008
Foundry 2008 ASIAN high quality and highly skilled, mass produced industrial and consumer durables for the global markets in general and the Japanese and the German markets in particular! This type of trade is what opens up a vast and potential opportunity for the Chinese castings manufacturers and OEM producers based in China to tap not only the rough cast, machined cast components but also the higher value added OEM and ODEM markets. This market is estimated to grow from the current estimated US$ 180 b by 50% before reaching 2015. How to overcome various challenges by the Chinese foundries? In order to address various above stated challenges in China, in the author’s opinion, there are two main areas of focus or segmentation approach for the Chinese foundries to consider. Area 1 Focus on specialized jobs of small to medium size foundries having 50 -60 people engaged in highly skilled high quality castings production. Such foundries will have to be equipped with latest 3D designs enabled with CAD/ solid prototyping capabilities for fast service. Examples in this segment will be investment casting, nonferrous castings, and special and high integrity alloy steel castings for chemical, transport and mining. The mindset has to change in view of the growing competition for customer loyalty, growing difficulties in obtaining consistent supplies of material resources and the challenges of developing and retaining quality human resources. A multilateral collaboration with suppliers, equipment designers, industrial consultants, management experts, customers and local society and the governments will be a winning initiative. 38 www.metals.rala.com.au Area 2 Focus on high capital intensive, large scale, producing MT 100,000 +per year repetitive castings for large range of industries such as automotive, wind-mill, energy, telecommunication, transport and precision machines. This will then provide the necessary economy of scale to compete effectively. In addition, as mentioned in the previous section the need of the hour is for multilateral collaboration and partnerships for sustainable profit and growth in this highly capital intensive segment that is equally hard pressed for resources-scrap, pig iorn, clean water ,air and cheaper energy. Whatever be the area of focus the local industry must recognize three basic partnerships agenda for: ? The role of a separate “castings development center –to look for local firms in need of cast and machined components. Begin with final customer requirements, needs and expectations. It calls for a full team of engineering, materials, foundry and business management experts to look for “casting opportunities” ? The opportunities for developing cost effective alloy materials in place of conventional alloys need to be investigated through such R &D centers. The same center should look for opportunities in competing industries –forged and welded parts or assemblies. Look for cost and weight reducing alloys with an ultimate aim to go after engineering plastics as well –because foundry castings are the truly recyclable, safe and durable partners of the modern industry! ? The role of a marketing and sales department” for embarking on a multilateral collaboration to offer the best value to a given customer, further there should be a special effort in creating after sales service network. This will then lead to proactive business development atmosphere and there will be gradual growth of trust between casting’s buyers and the foundries. Perhaps this will lead to creation of “brands” that will then bring about customer loyalty and dependability. This will be the future for the casting industry. The opportunities and the recommended approach for future success The Chinese foundry industry has a bright future, it is not just a statement but also a fact related to various achievements in the world trade scenario: Wal-Mart exports nearly 12-14 b US$ worth of consumer goods to USA alone. A number of big box retailers in industrial and household items also are China focused in a multi-billion dollar trade. Every second toy, every fifth brief case, every third mobile phone set are being manufactured in China. Major international branded clothes, sports accessories and shoes are manufactured and exported to various countries also. Major multinational companies have businesses in China: GM, FORD, ITT, ABB., Rolls Royce, BP, Caterpillar, Toyota, Daewoo, Mitsubishi, Siemens, Mobil, Henkel, Pfizer, Honeywell, J&J, Reebok, Nike and many more. The list is even bigger, from these facts one may estimate the requirement of casting components that are necessary to produce machines such as plastic injection molding sets, tools & dies for shoe molds, phone moulds and auto accessories that will be purchased and procured by these factories. A closer look at Guangdong, Jiangsu and Dalian enterprises will provide some insights about cast component opportunities. In addition, there is growing opportunity in wind-mill energy components, telecommunication and medical areas where there are