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Metal Casting Technologies : September 2007
2007 OVERVIEW AsianFoundry New Zealand has insignificant automotive manufacturing involvement and the 2006 closure of our only automotive components foundry halved the size of the local foundry industry by tonnage, leaving an even spread of ferrous and non ferrous operations. Dairy commodities are a significant New Zealand export and prices for dairy products have been very strong recently. This healthy income for New Zealand in conjunction with a significant increase in central government spending in recent years and New Zealanders' propensity to borrow heavily to purchase real estate have all contributed to producing an inflation rate outside the reserve bank's target band. The reserve bank has consequently reacted to battle this inflationary pressure by setting a high official cash rate (8.25%). This has attracted foreign deposits causing a rising New Zealand Dollar. The high $NZ coupled with a weak US currency has effectively meant that the $US will now purchase only half what it would in 2001 in $NZ terms and the $NZ is now recognised to be significantly overvalued. The high exchange rate has several negative affects on manufacturers; not only does it make the job of the exporter more difficult but it also compounds this by making it more attractive to import products into the country. New Zealand has seen a number of our traditional high profile manufacturers move their manufacturing operations off-shore attracted by lower manufacturing costs and the significant incentives offered by competing economies. These manufacturers take their demand for metal castings with them leaving New Zealand with a contracting manufacturing sector and a contracting market for New Zealand foundries. In New Zealand our central government is unwilling to offer incentives to keep our industry viable. They are far too academic and purist in their approach without the common sense that officials in some other countries employ. New Zealand metal casters' challenges don't end there; we "enjoy" one of the world's lowest unemployment rates (3.8%) making it difficult to maintain a stable workforce in our unattractive working environment. There is no foundry training school in this country and formal training of skilled foundry operatives stalled more than 10 years ago. Thus for many years we have relied on skilled migrants to top up the trades and tertiary trained technical positions. In spite of the un-level playing field some of our foundries are leveraging their competitive advantage, and they are prospering. In many cases the successful business is high value, niche focused and operating where design and services are bundled in with the castings. We are extraordinarily good at problem solving and devising innovative solutions. Our successful operations are the ones that offer small run, highly technical, high value castings or are foundries owned by business that manufacture their own high value niche product that incorporate castings and hold onto the foundry for strategic reasons. The New Zealand Metal Casting Industry is full of good people. We're a clever yet modest bunch, well connected and capable. There is a core of technologists and entrepreneurs that continue to innovate and offer exciting opportunities. The industry has recognised that to survive it needs to cluster joint venture and co-operate in marketing, training and technology growth. Together we fight for our right to earn a living adding real value to our economy. In every case it is our people that make the difference. SINGAPORE By Paula Wallace, Associate Editor MCT From a thriving industry twenty years' ago Singapore's foundries have dwindled to less than ten. A spokesperson for German company Magmasoft, which sells foundry simulation tools from its office in Singapore, said, "Foundries in Singapore have more or less moved to neighbouring countries like Johor West Malaysia where there are about five major companies with something like 300 die casting machines alone." The die casters in Johor mostly supply to the disk drive industries churning about 2-2.5 million drives (2.5 and 3.5 inch) per week, for customers like Seagate, Western Digital, Motorolla, Samsung, Toshiba, and Hitachi. The few foundries remaining in Singapore mostly produce for their own needs, companies like Philips and MARIS. "Singapore has become more of HQ or engineering base, and development work and production are carried out in Malaysia," said Magmasoft. There are less than five die casters left in Singapore which do the initial run of small quantities before shipping the dies/product to China and Malaysia for mass production. This is the process for making products such as consumer electronics, electrical appliances and some automotive electronics. When asked what factors have influenced the metal casting industries in its region in the past year, Magmasoft told MCT magazine, "Singapore is rebranding itself not as a production base but a centre for R&D in the engineering sector. In terms of cost we are still able to get by since it is not too difficult to get labour from our neighbouring countries." With that shift in thinking, the casting industries are represented by government bodies like SIMTech (Singapore Institute of Manufacturing Technology), an organisation which is aiming to re-focus casting on more lucrative markets such as aerospace engineering/services providing 50 www.metals.rala.com.au