Following record installation revenue in 2013, SinterCast’s technical team is “particularly” busy supporting new installations and upgrades in Europe, Asia and the Americas.
SinterCast, headquartered in Stockholm, Sweden is instrumental through its process control technology in permitting foundries to produce, consistent high-quality compacted graphite iron (CGI); a production-ready material for today’s gasoline and diesel engines to power both passenger cars and commercial vehicles.
During January, SinterCast secured a new order for a System 3000 Plus from one of China's largest automotive component conglomerates, to be installed at a purpose-built CGI foundry in China. The green-field foundry is currently the scene of much activity. New buildings are being erected with power lines, melting furnaces, moulding lines and core machines all being installed. The timing of the installation of the SinterCast equipment is difficult to predict. According to SinterCast president and chief executive officer, Steve Dawson, "Dates are difficult to pin down. Our timing depends on their timing."
The equipment was shipped during the first quarter of this year, according to SinterCast, and is planned to be installed during summer 2014. It will arrive in May. SinterCast will also supply the mechanical infrastructure for the cored-wire base treatment and correction operations and will provide technical support during the installation and start of production. Meanwhile, other new installation discussions are ongoing, providing opportunities to further expand the production base.
SinterCast continues to provide technical support for product development programmes for passenger vehicle, commercial vehicle and industrial power applications in Europe, Asia and the Americas.
It is estimated that the combined potential of the current series production programmes and the programmes currently under development represents a market opportunity of approximately 4.7 million Engine Equivalents per year within SinterCast's five-year planning horizon. In the meanwime, the next target SinterCast has to crack is the two million Engine Equivents per year.
Certainly, it is estimated that the programmes that are currently in series production have the potential to provide more than 2.5 million Engine Equivalents when they reach mature volume. The company claims a 30 per cent year-on-year growth rate in the first quarter of 2014 and a compounded annual growth rate of 20 per cent, such is the measure of its performance.
However, the identity of SinterCast’s China-based automotive component conglomerate remains a closely guarded secret. But the long term implications could be significant, not least because the development takes CGI into local commercial vehicle applications as well as off-road and power generation. This could be a huge step for both SinterCast and the Chinese foundry if expectations are fulfilled.
Series production at the un-named green-field foundry in China, mentioned above, is expected to begin during 2014. That the initial capacity is approximately 300,000 Engine Equivalents per year for commercial vehicle, off-road and stationary power engine applications suggests major engine components.
“This new foundry is the world’s first purpose-built CGI facility. It has been designed from a clean sheet of paper, taking advantage of the latest technology in every aspect of the foundry process,” noted Dr. Steve Dawson, president and chief executive officer of SinterCast at the time of the announcement in January. “The installation becomes the fifth commitment for our new System 3000 Plus technology.”
Meanwhile, according to Foundry Management & Technology there are many reasons causing automakers to add metal casting capacity, but two predominate: producers require more casting volume and better casting quality to meet changing demand. And each can be seen among the many projects recently completed or still in progress for automotive foundries.
Automakers were among the hardest hit by the global recession of 2008, and their casting operations were not spared in the downsizing that followed. But since the start of the economic recovery, automakers have been investing generously in new plants, new equipment, and new capabilities.
For example, Teksid Group has added production of CGI cylinder heads at its foundry in Monclova, Mexico, putting it in position to supply in this material. Teksid is understood to be adding CGI at its Brazilian foundry, also, according to Foundry Management & Technology.
If this is true then it could be possible that Iveco, Fiat Group’s truck-making subsidiary, could be moving at long last in the direction of CGI.
In the North American auto industry, General Motors has included its foundries in Saginaw, Michigan, Defiance, Ohio, and Bedford, Indiana, in a series of capital programmes that eventually totalled more than $2 billion, according to Foundry Management & Technology.
GM’s aim is to install production capabilities for its more fuel-efficient Ecotec engines. It is also expanding its powertrain operations in Mexico, including new melting and pouring capacity, but there are no signs yet of GM moving to in-house vee diesels with CGI blocks.
Meanwhile, according to Foundry Management & Technology, Chrysler Group LLC initiated a $374-million programme last spring at the Kokomo, Indiana, aluminium die casting operation and the adjacent powertrain plants. Another $162 million was targeted to buy and retool a third transmission plant in Tipton, Indiana. Chrysler announced in February 2013 the prospect of new 1,250 jobs at the sites.
Transmissions were the point of Honda’s $50 million expansion of aluminium melting and high-pressure die casting capacity at Russells Point, Ohio. Honda initiated a third transmission assembly line nearby, and the new casting capacity will supply that programme, according to Foundry Management & Technology.
The domestic metal casting industry also has seen some considerable capital investment by automotive Tier suppliers. Magna International for example: acquired an idled plant in Holland, Michigan, and remodelled it to produce high-pressure die castings at a reported cost over $160 million.
But, according to Foundry Management & Technology, among the world’s automakers the boldest investment recently was made by Audi AG, which took the ‘clean slate’ approach to addressing new demand.
The new plant in Münchsmünster is 30 km east of the Ingolstadt plant, and the automaker describes it as an element of its overall expansion program. The plant adds capacity for critical products, and it reduces the pressure for productivity on the main plant.
Further, it allows Audi to establish new competency centres for automotive suspension parts. It sees the new plant as a foundation for its lightweight design objectives, but also indicated the plant’s “new production methods extend the boundaries of what is technically feasible”.
The start-up for the 3 million-square-feet plant, carefully estimated to have cost a “low three-digit million” figure, took place in late 2013, and operating capacity will be increased in stages until full capacity is reached by 2016. By then, it will occupy about 800 workers. The foundry represents just part of the overall operation at Münchsmünster. ∎
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