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Metal Casting Technologies : September 2007
2007 OVERVIEW AsianFoundry www.metals.rala.com.au 42 (d) In 2002, the expected production would be 89% of total demand; the expected CGR from 2000 to 2002 is - 7.9%. (e) The overall CGR from 1996-2002 is - 9.4%. Overall, the industry suffered a setback over the years 1996-2002, except for the steel sector with a CGR of 8.8%. Today, the industry is still faced with practically the same nagging problems as last year: (1) The cost of scrap metals is still very high, varying only slightly from last year. This is because there is still an existing export market for scrap metals, so scrap metals are being exported for dollar incomes. The industry has to contend with meeting export prices in order to get any raw materials for itself, whenever scrap is available. (2) There is a continually increasing cost of electric power. The charges of the electric utility company for energy (KWH) and demand (KW) are tabulated below showing the historical increases as gathered from the Manila Electric Company (MERALCO - the electric utility company serving the region) Billing Department. While energy charge increased by 385% only from 1985 to 2005 (19.25% per year), it decreased by a minimal 6.68% from 2005 to mid- 2007 (or - 3.34 % per year); and while demand charge increased by 3,032% during the same 20-year period (151.6% per year), it increased by 141.88% only from 2005 to 2007 (or 70.94% per year). Since there seems to be not even a temporary respite from the ever-increasing excessive demand charge, and as there is no better alternative to electric induction melting for ferrous metals, more diligent study and due consideration is being done today for the claimed possibilities of the "ElectroFlow System" (a patented system) for saving electric energy. This is an electrical system connected in parallel and factored into the electrical load of a plant that is claimed to be able to reduce the plant's ampere-load, kilowatt demand, kilowatt-hour consumption, and reactive (non-useful) power while stabilizing the voltage, balancing the three phases, and filtering-out harmonics, surges, and transients in the system. (As an Electrical Engineer, I can appreciate what this system is all about, understand what it can do, and think it could be THE SOLUTION to the present electrical energy problem of our industry -- in fact, for any industry dependent on huge electrical energy consumption.) (3) The ever-rising cost of living in the Philippines is claimed to be caused by rising oil prices in the world -- although sometimes I suspect this is only a ruse of the oil companies here. Because of this, the labor sector still demands an increase in the legislated minimum wage -- which it did not get fully last year -- in order to cope. It will be noted that increasing the labor cost further would merely increase production costs with the same labor productivity, and the ultimate resulting higher prices could and would make the products that much less competitive. Metal Alloy 1996 1998 2000 2002 CGR % Demand Prodn. Demand Prodn. Demand Prodn. Demand Prodn. Cast Iron 853,658 482,076 603,257 362,928 496,452 313,560 383,924 252,984 - 10.2 Cast Steel 115,659 51,132 84,604 52,140 85,240 61,740 105,265 85,044 8.8 Bronze 64,651 61,476 33,811 29,928 47,533 45,420 44,290 42,528 - 4.9 Aluminum 62,053 303,960 38,415 190,740 34,231 161,160 25,484 117,348 - 14.7 TOTAL 1,096,021 898,644 760,087 635,736 663,456 581,880 558,963 497,904 - 9.4 Notes:  MIRDC (Metals Industry Research and Development Center), The Philippine Metalcasting Industry, 1996 edition.  MIRDC, Philippine Metalcasting Industry Study, 2003 edition (this is the last edition published).  CGR = Compounded Growth Rate, for Production only. Note: 1 By April 1997, this was increased to P220.00 per KW maximum demand. 2 This is an average figure (P366.32 to P406.12) as the demand charge was now based on the input voltage. 3 The average demand charge for the year 2006 was P429.39 per KW maximum demand. Item 1985 1995 2005 2007 Energy Charge per KWH used P1.79 P2.94 P6.89 P6.43 Demand Charge per KW max. demand P12.60 P25.001 P382.00 2 P542.00 3