Synthesis and strategies of Italian foundries in a global setting
by Mario Conserva
Amafond’s annual event was held on November 30th in the congress area at the Villa Fenaroli Palace Hotel in Rezzato, a few miles away from Brescia; this is an appointment not to be missed for the national and international foundry system organized by the Italian Association of Foundry Machine, Product and Service Suppliers (Amafond). The congress, presided over by the association’s President Maurizio Sala and by Fabrizio Carmagnini, developed by means of a panel moderated by Debora Rosciani with speakers of the highest level: Roberto Ariotti, President, Assofond; Roberto Vavassori, President, Clepa; Bruno Ferrari Salmeron, Managing Director Automotive Division, Schulz; and with the participation of the Hon. Massimo Garavaglia, Undersecretary at the Ministry of Economics and Finance. The global foundry industry is going through a phase of evolutions and great changes; Amafond’s annual event offered a clear testimony of this situation, made evident by the great participation of the industry’s operators, from foundries to manufacturers of machines and plants, to technicians of user companies, to the world of research and development, especially from the automotive industry.
Exports and Industry 4.0 bonuses
More specifically, President Sala in his opening report highlighted that the general situation is characterised by good results from the order trend standpoint both as regards the machine and the product industries, with an overall picture defined by the association with 103 associates, 2017 revenues adding up to 1,526 million euros (1.7% more than in 2016) and exports adding up to 1,048 million euros, showing a very slight decrease with respect to 2016 but with a ratio with respect to revenues which is nonetheless always around 70%.
All in all, the good performances of the economy in general, as well as the beneficial effects of dispositions linked to the Industry 4.0 initiative, are driving the industry towards pre-crisis levels. The extension of bonuses (super amortization and hyper amortization) foreseen in the Budget law will be able to support investments in machines which need to be renewed and this will allow to increase the manufacturing production capacity with important advantages for the mechanical industry and metal foundry in general.
Even though the overall context is favourable, according to Amafond’s president it is necessary to point out the difference between companies operating in the light alloy foundry segment (low pressure and gravity die casting) which are undoubtedly characterized by a more positive trend with respect to operators in the cast iron and steel segments.
The particularly significant growth on the Italian market should be attributed partly to the Industry 4.0 plan, encouraged and supported by the Federmacchine association of which Amafond is a member, and, as Maurizio Sala underlined, by the commitment of such enlightened entrepreneurs as Alberto Bombassei, founder of Brembo, who followed during the past years the complex parliamentary procedure which led to this law. The plan, by offering companies the advantageous opportunity of renewing their machine park without diverting too many internal resources, allowed Italy and its manufacturing industry to grow so much as to approach the levels reached in Germany, where an analogous incentive system had previously been adopted.
Regarding exports and the main countries concerned, the United States confirm their first place, China is second and Mexico, having recorded the highest growth rate with a 127% increase, third.
Tariffs and sanctions
According to president Sala some considerations were in order regarding the tariff and sanctions battle, which characterized the global agenda for the best part of the year, a rough and high-pitched skirmish which began on account of a series of considerations which were more strategic and political than commercial in nature by the US administration against Europe, although the real target is China, the great competitor for global leadership in the forthcoming decades. As Maurizio Sala pointed out, the entire occurrence did affect our market because it concerned such elements as aluminium and steel which are important for our economy but fortunately without too many damages for now.
From the standpoint of foundry operators the issue of aluminium appears to be very delicate because, as we know well, the production of primary metal in Europe is disappearing. Just over 2 million tons a year are manufactured, while the demand is of almost 8 million tons. Multinational producers relocate smelters where energy costs are lower; the EU and therefore Italy are forced to import massive amounts, sanctions against Rusal jeopardized a fundamental source of aluminium procurement. Besides, Sala concluded, Europe is burdened by an EU tariff on the imports of raw aluminium, which today is a tariff meant to protect a domestic production of primary aluminium which is disappearing following its own decision and on account of the exorbitant European energy costs. This tariff is completely senseless since it causes the cost of the metal to be higher with respect to the global context and it limits the competitiveness of the entire downstream compartment, from transformations such as the production of primary extruded foundry castings, rolled products, right up to final uses, from building to automotive. It is time for the EU to deal with the issue seriously since a large number of jobs are at risk.
In accordance with Maurizio Sala’s presentation, enlivened by the debate fuelled by Deborah Rosciani, the other speakers highlighted, according to their specific competence segments, the essential datum of the improvement of the economic scenario at a global level, at least in the ten years which elapsed since the crisis which started in 2007-2008. Very important statements were made in this respect by Roberto Ariotti concerning the excellent performances of foundries associated to Assofond during the first part of the current year; but the uncertainties determined by the permanent atmosphere of conflict regarding global economic policies should also be noted, as this state of things does not enable companies to define the best strategies to seize future opportunities. Finally, a very interesting point of view was presented by the Hon. Massimo Garavaglia regarding the Industry 4.0 Plan: according to the Undersecretary of the Economics Ministry, at a government level the plan is absolutely not being questioned, it should therefore not only be confirmed but empowerment measures are being studied which will undoubtedly be able to help the Italian foundry segment to tackle the challenges of the next few years.