SAIF Presentation - 21-07-2015

2015 TRADE FAIR EXPERIENCE Presentation will be presented by:Jaco Breytenbach – IIW, CswiIsaac Mogoba - MetallurgistPaul Malone - Metallurgist

THOS BEGBIE INTRO Thos Begbie & Company was established in 1887. We produce

components for the Pyro metallurgical Industry. Services includes: Sales & Marketing Pattern Making Casting Simulation Foundry, Fettling Machining Inspection & Testing.

TOPICS THE TRADE FAIR

SWOT ANALYSIS COMPETITOR AWARENESS

SA SWOT ANALYSIS EUROPEAN FOUNDRY COMPARISON EMPHASIS ON SKILL

TRADE FAIRHeld in Messe Düsseldorf Germany 4 exhibitors in 1:

GIFA METEC THERM PROCESS NEWCAST

78000 visitors from 120 Countries2214 ExhibitorsHeld every 4 Years13th Anniversary

TRADE FAIRGIFA Experts from ferrous &

non-ferrous, metal casting industries.

NEWCAST Visitors from engineering,

apparatus engineering and tool making.

METEC Visitors from iron and steel

production, plant engineering, construction apparatus, engineering and tool making.

THERMPROCESS Experts from automotive

and gear manufacturing.

TRADE FAIR

A Main user requirement of new technology is resource & energy efficiency.

Companies presented their innovative technologies and thus could get in direct contact to potential customers from all over the world.

The fair was a complete success for the promoting of various

associations.

The demand for innovative products as well as the atmosphere were promising.

Feedback from Organizers:

STRENGTHS

TRADE FAIR SWOT ANALYSIS

The Fair provides a marketing platform to the majority of the World in the related sectors.

Provides and Identifies a comprehensive summary of new Technology and Sufficient Systems.

Show casts participating Companies Products, Services and Systems to the world.

WEAKNESSES


It is not well marketed in Developing Countries like ourselves.

Due to cost related aspects attendance and participation from Developing Countries are limited.

The fair only takes place over 5 days which do not allow sufficient time for a complete evaluation of all stands.

OPPORTUNITIES


Market competitiveness and trends can be studied and the necessary actions can be detriment

By understanding these shifts, roles, and influence points, both incumbents and new entrants can give themselves the tools to successfully navigate the new landscape of foundries.

Companies presented their innovative technologies and thus could get in direct contact to potential customers from all over the world.

THREATS


Competitors can scrutinize each others Products and Services if presented at the Fair.

Established Customers can make direct comparisons between Suppliers or manufacturers.

TRADE FAIR

“The Fair has helped us to understand the requirements even better, and to identify the market trends”

“The atmosphere was positive and the visitors at the trade fair showed very keen interest in the technical trends in the industry and in the

optimisation of their processes”

“World leaders in foundries and metal processing enjoyed a demanding presence staking a claim that they are here to stay”

“The actual exhibition of processes was a big eye opener for us, realizing that most of the processes followed in South Africa are outdated”

Comments from visitors:

There was many new and improved existing technologies , here are a few reflections:

TRADE FAIR

Pneumatic Hammers

Heavy duty pneumatic hammers for the remove of risers with contacts up to 10" in contact diameter. Construction is substantial and the unit is MADE IN THE USA

HAMMER IT!!!!! KNOCK OFF RISERS WITH THE PULL OF THE TRIGGER.

TRADE FAIR 3D Geometry Scanning

Delivers three-dimensional measurement data and analysis for industrial components such as sheet metal parts, tools and dies, moulded parts, castings, and more. Reverse engineering can be done with equipment like this.

CAD comparison, mould can be scanned first then the final casting, it can then be digitally fitted to manage things like contraction and machining allowances. It also measures surface finishes. Inspection reports are generated instantly after Scan is complete.

TRADE FAIR Sand Reclamation Plants

China`s current average sand reclamation ratio: sodium silicate sand ≥60%, Alkaline phenolic resin sand≥70%, furan resin-sand ≥90%, clay sand≥95%.

TRADE FAIR 3D Mould Printing

3D printing sand moulds and cores directly from CAD data eliminates the need for physical patterns and pattern storage, since parts can be stored digitally. Design freedom is the largest advantage of the process - even very large and complex mould and core designs can be realized. Uses Silica sand and furan binder it is considered a “no bake” product, which means that printed silica sand moulds and cores are immediately ready for casting. Build volume up to 2200(w) X 1200(d) X 700(h)mm at a build speed up to 14 ft³/h.

TRADE FAIR

Don’t Know / Don’t Attend

Local Trade Events

International Trade Events

Seda Events Business Expo's Conferences 0.0

10.0

20.0

30.0

40.0

50.0

60.0

53.7

31.5

7.43.7

1.9 1.9

Trade Events

Figure indicates the percentage gap in the awareness of trade events in South Africa Source: dti SEDA

TRADE FAIRThe Trade Fair was an eye opener on how technology has

progressed.Countries like China and India had a massive presence at the

Trade Fair.For South Africa to stay competitive:

Introduce new Technology Improve Processes Improve Efficiency Upskill

Quality StandardsProvide the opportunity to compare used Standards in

South Africa to the current and future International norm of acceptance.

TRADE FAIR

Other South African Companies which where present:SCAW METALS, SAIF,Lauds Foundry Equipment, AFSA, FOCHEMPROCON AFRICA And 30 Others…

0.5% OF THE EXHIBITORS WHERE SOUTH AFRICAN BASED

Source: Casting sa vol 16 #1

TRADE FAIR

Where were:COLUMBUS STAINLESS, ATLANTIS FOUNDRIES.ARCELORMITTAL, SAMANCOR, STELOY, CISCO.

This Chart shows that the major Countries produce 80% of all world castings. The rest of the world produce 20% and South Africa produce 0.43%. Thus the small amount of castings produced by South Africa are vulnerable towards massive

markets like China.

COMPETITOR AWARENESS

Source: AFS 46th Census of World Casting Production 2012


This chart shows the Countries with the most Foundries in the world, compared to South Africa. Take note of the quantities stipulated on the

vertical axis.



The following indicates the average amount of cast tonnes per foundry produced by the applicable Country. South Africa produce a moderate

2361 tonne per foundry.



TOP 3 & South Africa, Total Castings Produced per Annum:

WORLD = 103 229 774 t CHINA = 44 500 000 tUSA = 12 250 000 tINDIA = 6 700 000 tSOUTH AFRICA = 375 000 t

THE STATISTICS:


COMPETITOR AWARENESS The Chinese government plans

to invest £237 billion in industry over the current 5-year plan to improve manufacturing efficiencies.

The highest education/skill and consultancy in modern techniques in manufacturing and engineering.

Surveys shows that China is viewed as having a mainly positive influence in the world by a majority or plurality of citizens in 14 countries.

On time delivery & costs.

They have a strong government investment programme.

largest Information and Communications Technology (ICT) market in the world.

Abundance of electricity, nuclear installed capacity in China is 58GW by 2020, with a further 30GW planned. 26 nuclear power reactors are under construction in addition to the 22 already in operation.

According to the China Foundry Association 2013, foundry equipment demand in the future:


Advanced and efficient automatic mould making, core making and cleaning equipment

Efficient and energy-saving melting, sand processing and reclamation equipment

On-site application of various kinds of robotsAluminium alloy melting and die-casting equipmentDe-dusting equipmentOnline casting detection, testing and analysing devices

Joint Venture with China: exploit the market knowledge, manufacturing capability the technology, manufacturing know-how and marketing experience of the foreign partner.

Due to the overgrowing population this trend is usually followed to ensure future organizations can be successfully established in China securing employment and wealth for their people.

Just one of the reason that the Chinese highly invest in their educational sector.



Intellectual Property (IP):China uses a ‘first-to-file’ system for trademarks. You may lose legal protection if a similar mark has already been registered within China. Therefore, you must register your trademarks in China before entering the market. This is one of their weaknesses, the chances are good that they will not protect your IP`s.

USA vs CHINA

We where fortunate to spend a day at a well known foundry in Netherlands and this was our observations:

EUROPEAN FOUNDRY ASSESSMENT

• Motivated and proud employees.• Employees gets rotated to ensure skill level throughout the organization.• Self-motivated following procedures.• Selling a product not a process 3rd Party inspectors not allowed, the product

can be tested after manufacturing.• Emphasis toward Quality and Safety, each employee takes responsibility. • Specialists in their field do not allow other outside influence jeopardise their

production processes.• With a cast capacity of 55 ton Non-Ferrous and 13 ton Ferrous the whole

foundry gets operated by only 15 employees. • Low reject and nonconforming product rate.

The most noticeable thing was the passionate attitude of the employees. The pride in what they do and the success of each casting they made. The great care and precision, together with their skill towards manufacturing these medium to large castings. That makes Europe the trend setters in the foundry industry today.

WEAKNESSES STRENGTHS

SA SWOT ANALYSIS

South Africa has world-class infrastructure, exciting innovation, research and development capabilities and established foundries.

South Africa is remarkably well-endowed with metals.

South Africa is also one of the highest ranking developing economies and surpasses countries such as Hungary, Italy, Brazil and Thailand.

Viewed as a percentage of production costs, labour costs in South Africa are the highest among BRICS countries at 33.5 percent.

By contrast, electricity costs have been raised by over 170% in South Africa, and this is predicted to continue to escalate at more than double the forecasted inflation rate.

In 2004 unskilled and semiskilled labour accounted for 63% of total employment in metal products.

In 1982 there were 13 000 artisan apprentices registered, but this figure had dwindled to only 2 000 in 2003,

South Africa only beneficiates 15% of its iron ore and 3% of its chrome into finished steel products,

Source: SA STATS & SEDA

THREADS OPPORTUNITIES

SA SWOT ANALYSIS

The future of the metallurgical sector in South Africa lies in the country’s ability to become a stable business destination, globally competitive and beneficiate locally produced products.

The fact is that we as South Africa manufacture more now than we ever have in our history the future of our foundry sector should be about rapidly advancing technology.

South Africa had about 450 foundries in the 1980s and just over 200 in 2003. Between 2007 and 2011 another 13% closed and employment in the industry declined by 30%.For instance, in 2012 China had more than 30 000 foundries

Our domestic market is vulnerable to imports from China, India, Brazil and other countries which offer much higher incentives and protection to their manufacturers.

Treads faced by the foundry industry include international competition due to continuous technological improvements and cost-competitiveness.

EMPHASIS ON SKILL

We once had 150 training centres for teachers we no only have 25. WE CAN HAVE THAT AGAIN , only if foundries and institutions work together and can come up with a strategic training plan for this and other sectors.

We must know that all the experience needed to do the job is nothing without the correct educational background, because you could have been doing it wrong all these years with out knowing the theory and concepts that go with the job.

In South Africa the attitude that sees poaching rather than training as the solution to skills needs is linked to the size and system constraints of firms.


EMPHASIS ON SKILLSkills are critical for the growth and expansion of general engineering and foundry skill, however, does not exist outside the context of the prevailing technologies. Many of the machines being utilised in the industry are operated through numerical control technology. Interviewees emphasized the importance of computerisation for the industry; one employer described computerization as the ‘backbone of modern industry.

Scenario putting stress on cost and on time delivery which we are starting to face today: work is contracted to firms in the sector, but the client is required to employ a number of additional personnel to oversee the work that is assigned to the organisation, to ensure the required amount of skill and know how are implemented on basic practices thus overcoming potential setbacks.

Not all foundries situated in South Africa acknowledge the fact that skill comes from comprehensive training, and that lower skill level jeopardise work ethic, sufficiency , problem solving , Higher Quality Product , on time delivery , scrap ratio , cost saving , higher profit margins & a safer work environment.

EMPHASIS ON SKILLSouth Africa’s international manufacturing output, at a percentage of total world manufacturing output, decreased from 0.61% in 1990 to 0.5% in 2010. This indicates the need to strengthen SA’s manufacturing position, given the potential for employment creation, economic growth and export earnings.

The New Growth Path aims at creating 5 million new jobs by 2020. However, this seems very unlikely given the current structure of the economy, including supply side constrains (power, rail networks and levels of education amounts others).

Lets stop blaming and start building, the warning lights are flashing we as South Africa must take hands. The future are in our hands , lets stop this day to day concept and plan for tomorrow.

The world are leaving South Africa behind, Start TRAINING now for tomorrow. We can once again be powerhouse by leading by example in the foundry industry.


ALL SA FOUNDRIES South African Foundries should work together, support local product !!!

We as Thos Begbie would like to Thank the South African Institute of Foundrymen for the opportunity to provide our observations through this presentation to other South African Foundries. We believe that

this awareness will have positive endeavours for this sector.

Documents

SAIF Presentation - 21-07-2015