The Changing Profile of World Foundry Production

By Joe Scarry

CastingTrade.com

One of the greatest assets available to cast metal parts professionals is the "Annual Census of World Casting Production" which has been published faithfully by Modern Casting for the past 34 years. The most recent census, covering 1999, was published in the December, 2000, edition. A summary is available on the Internet, indexed at www.moderncasting.com; I strongly recommend you also consider getting your hands on the printed version of the December edition, because it contains the actual data tables.

When we set out to create CastingTrade.com, we faced a fundamental question: is there really any clear direction in the world foundry industry? We needed a simple, clear, objective measure of the situation. We found that the 30+ year accumulation of census data from Modern Casting constituted an unbeatable resource for answering that question.

To see the answer we came up with, click here. This graphic depiction shows a fundamental shift in national shares of world foundry production over the past thirty years in which (a) North America, Europe, and Japan maintain an undeniable "bedrock" position, (b) certain newly industrializing countries (NICs) are experiencing sustained and accelerating growth, and (c) there has been a substantial reduction in the "rest of world" category.

(One key caveat: this graphic illustrates market share based on weight, not value. Also, in case you're wondering, we have chosen to define Europe as the EU countries plus the UK. And, because Mexico is so important, we have broken it out from the figures for North America.)

In addition to a 30 year historical component, this graphic also contains a 10 year projection. While we're very confident about the historical component, we're really only guessing about the future. However, we've used some assumptions that we think are pretty sensible. First, we think there is a "resistance point" that constitutes the lower limit of the market share of North America, Europe, and Japan, and that lower limit is pretty close to today's level. Second, we think that additional NICs will begin to experience growth, and so the decline in the "rest of world" share will level off, and perhaps we'll even see a small amount of growth there. Third, the NICs that figure so prominently here (China, Taiwan, Korea, India, Poland, Brazil, and Mexico) are here to stay.

Oh yes, and there's a fourth, somewhat invisible, element of our projection. We expect the overall size of cast metal production to increase. That's not apparent from the graphic, because it shows each country's share of the overall pie, rather than the relative size of the pie itself. Simply stated, we believe the world is becoming a richer place. There is more and more demand for products that use cast metal parts, and thus more production. Just consider the NICs: we often think of them simply as producers, shipping low-cost products to regions like the U.S. and Europe. But they are also growing consumers. And the production that will feed the growing consumption will come partly from within the NIC community, but also from the advanced industrialized nations. This is particularly true in one key product area: automobiles.

So, when you shake it all up, you get a picture like the one shown. It reflects a growing pie, but one that requires everyone to focus on the specific part of the pie that they are best suited to manage. When we showed it recently to a U.S. foundry association official, he said, "Can I get a copy of this graph? I think it would be a good thing to keep on hand, as a reminder of what we're facing." Of course we happily supplied one to him. The thought occurred to us: if it's useful to him (and it has already been useful to us), shouldn't we make it available to other people in the industry as well? So, if you want a free high quality 11 x 17 color poster of the graphic shown here, click here to submit a request.

[Editor's note: Do you agree with the analysis provided in this article? Or disagree? Share your thoughts at the World Foundry Forum by clicking here.]

NEXT WEEK: Some observations on developments reflected in the 1999 world production data.