THE LATIN AMERICA FOUNDRY INDUSTRY

1
THE LATIN AMERICA FOUNDRY INDUSTRY
Brazilian Foundry Association – ABIFA
Remo De Simone – president
Sept/2014
IFF - 01
2
MAIN TOPICS
1) Latin America in figures
2) Infrastructure
3) Cast Metal in Latin America and
Worldwide
4) Cast Metal - Characteristics
5) Exports – Evaluation
6) Trends of Latin American Foundry Industry
IFF - 02
3
IN LATIN AMERICA, ONLY THREE
COUNTRIES HAVE AN
ESTABLISHED FOUNDRY
INDUSTRY.
TOGHETER WE HAVE:
A POPULATION OF 364.1 M
AREA: 13.3 M km2
GDP: 4 T US$
FLEET OF VEHICLES: 75.6 M
ARGENTINA
BRAZIL
MEXICO
POPULATION
41.4 M
200.4 M
122.3 M
AREA M km2
2.8
8.5
1.97
GDP
488 B US$
2.2 T US$
1.3 T US$
FLEET VEHICL
10.0 M
39.7 M
25.9 M
IFF - 03
4
MAIN TOPICS
1) Latin America in figures
2) Infrastructure
3) Cast Metal in Latin America and
Worldwide
4) Cast Metal - Characteristics
5) Exports – Evaluation
6) Trends of Latin American Foundry Industry
IFF - 04
Electric Power
Hydro Generation is the main source only in Brazil
Argentina
4%
60%
Hydro
Electricity
36%
Brazil
11,7%
8%
5,3%
5
Hydro Electricity
Thermoelectric
Thermoelectric
75%
Other
31.1 GW instal capac
Mexico
3%
3%
22%
72%
51,5 GW instal capac
Import
95.7 GW Install Capac
Hydro Electricity
Other
Thermoelectric
Nuclear
Other
Source:
ARG: CAMMESA
BRA: ANEEL/FIRJAN
MEX: CFE
IFF - 4.1
6
The three countries have their main raw materials.
ALUMINUM
ARGENTINA AND BRAZIL HAVE OWN PRODUCTION TO SUPPLY THEIR NEED.
MEXICO HAS CANADA AND USA AS MAIN SUPPLIERS
PIG IRON
ARGENTINA  BUY PART OF SURPLUS OF BRAZIL
BRAZIL
 IS A PRODUCER AND EXPORT ITS SURPLUS
MEXICO
 IS THE LARGEST BUYER OF PIG IRON PRODUCED IN LATIN
AMERICA BY BRAZIL.
FERROUS AND NON FERROUS SCRAP
IS GENERATED BY INDUSTRIAL PROCESSING. THE MARKET LOOKING
ABROAD FOR IMPORTS WHEN THERE IS DIFFICULTY IN DOMESTIC MARKET
IFF - 4.2
7
Brazil has a surplus in its main raw materials
100
90
100
100
100
80
70
60
50
40
50,3
30
36,5
40
20
10
0
Pig Iron
Aluminum
production
Source: ABAL/ABRAFE/SINDIFER
Ferroalloys
exports
IFF - 4.3
8
Brazil has a well-trained manpower
• Foundry Technical Courses
• Metallurgical Engineering
• Foundry MBA
• Foundry Engineering
IFF - 4.4
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MAIN TOPICS
1) Latin America in figures
2) Infrastructure
3) Cast Metal in Latin America and
Worldwide
4) Cast Metal - Characteristics
5) Exports – Evaluation
6) Trends of Latin American Foundry Industry
IFF - 05
10
Cast metal world production (ton)
•
•
•
•
•
•
•
•
•
•
•
•
•
•
1 º CHINA
2 º USA
3 º INDIA
4 º JAPAN
5 º GERMANY
6 º RUSSIA
7 º BRAZIL
8 º KOREA
9 º ITALY
10 o FRANCE
11 º MEXICO
12 º UKRAINE
…
26o ARGENTINA
2012
42,500,000
12,824,960
9,344,400
5,342,837
5,214,114
4,300,000*
2,859,898
2,435,800
1,959,680
1,800,156
1,651,679*
1,532,000
166,100
Source: Modern Casting/Dec 2013 - CIFRA
* 2011 data
IFF - 5.1
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Source: Modern Casting, CIFRA, ABIFA
IFF - 5.2
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MAIN TOPICS
1) Latin America in figures
2) Infrastructure
3) Cast Metal in Latin America and
Worldwide
4) Cast Metal - Characteristics
5) Exports – Evaluation
6) Trends of Latin American Foundry Industry
IFF - 06
13
Argentina had the lowest production in
last 10 years
Total production (2013)
149.2 th ton
Non ferrous
34.9 th ton
Source: CIFRA
IFF - 6.1
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Sales of Argentine castings are concentrated in
automotive industry
ARGENTINA
Source: CIFRA
IFF - 6.2
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Brazil stands out with the seventh world
production
Total production
3,071.4 th ton (2013)
Non ferrous
267.6 th ton
Source: ABIFA
IFF - 6.3
16
The carbon steel has the highest share among the
other types of steel in Brazil - 2013
BRAZIL
Source: ABIFA
IFF - 6.4
73% of aluminum production goes into automotive
industry. By processing we have the following
distribution, in Brazil - 2013
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133.0 th ton -> 55%
BRAZIL
GRAVITY INCLUDES LOW PRESSURE
Source: ABIFA
IFF - 6.5
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South and Southeast Region in Brazil
represent 91% of all production
BRAZIL
Source: ABIFA
IFF - 6.6
Mexico stands out with the seventh world
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aluminum production
Total production
1,651.7 th ton (2011)
Non ferrous
742.3 th ton
Source: Modern Casting – Dec 2013
IFF - 6.7
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The countries of Latin America (Argentina,
Brazil and Mexico) have a great dependence of
Automotive Industry
PARTICIPATION IN PRODUCTION
ARGENTINA
57%
BRAZIL
58%
MEXICO
75 – 80%
Source: ABIFA, CIFRA, SMF
IFF - 6.8
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MAIN TOPICS
1) Latin America in figures
2) infrastructure
3) Cast Metal in Latin America and
Worldwide
4) Cast Metal - Characteristics
5) Exports – Evaluation
6) Trends of Latin American Foundry Industry
IFF - 07
Brazil
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 55% of total exports going to EUA – US$ - %
Iron + Steel + Non Ferrous
OTHER; 15%
EUROPE; 16%
USA; 55%
SOUTH
AMERICA;
14%
Mexico 
Source: ABIFA, SMF
87% of total exports going to EUA
IFF - 7.1
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Source: ABIFA
IFF - 7.2
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MAIN TOPICS
1)
2)
3)
4)
5)
Brazil in figures
Infrastructure
Cast Metal in Latin America and Worldwide
Cast Metal - Characteristics
Exports – Evaluation
6) Trends of Latin American Foundry
Industry
IFF - 08
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Source: ANFAVEA - Brazil
IFF - 8.1
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Shows a potential to be exploited to reach the
developed countries
INHABITANTS/ VEHICLE
ARGENTINA
3.6
BRAZIL
5.7
MEXICO
3.6
ARG + BRA + MEX
4.8
INHABITANTS/ VEHICLE
GERMANY
1.9
ITALY
1.5
SPAIN
2.1
FRANCE
2.0
PORTUGAL
2.4
Source: ANFAVEA
IFF - 8.2
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POSITIVE POINTS:
• Political stability in these three countries with democratic
regime
• High investments planned between pre-salt, automotive sector
and infrastructure, more than 80 billon US$
• Projected growth in vehicle production by 2020, almost doubling
the current fleet
IFF - 8.3
28
NEGATIVE POINTS:
• High cost of electrical energy in Brazil that is unfeasible
aluminum production
• Consequences of the economic crisis in Argentina
• High tax burden and high interest rates
• Dollar is currently valued with a tendency to devaluation next
year.
IFF - 8.4
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Necessary Investments in Foundry Industry in Brazil in
the next years (2014 – 2018)
From 2014 until 2018 the foundry industry will invest 880 millions
of dollars for an increase of production of 400 thousand ton
needed to meet the growth in the automotive sector.
IFF - 8.5
Production and installed capacity needed to meet the expected
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demand in Brazil (unit: thousand ton)
5000
4500
4000
3500
3000
2500
2000
1500
1000
500
0
production
install cap
2014
2860
4200
2015
3000
4200
2016
3250
4300
2017
3500
4400
2018
3900
4600
IFF - 8.6
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THANK YOU !
Brazilian Foundry Association – ABIFA
Av. Paulista, 1274 – 20o andar
01310-925 – São Paulo – SP - Brazil
Ph: (+55 11) 3549-3344 and Fac (+55 11) 3549-3355
Remo De Simone – president
presidencia@abifa.org.br
www.abifa.org.br
Sept/2014
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Source:
ABAL - Brazilian Aluminum Association
ABIFA – Brazilian Foundry Association
ABRAFE – Brazilian Ferroalloys Association
ANEEL – National Agency of Electricity (Brazil)
ANFAVEA – National Automobile Manufactures Association (Brazil)
CAMMESA – Mercado Eléctrico Mayorista (Argentina)
CFE – Comissão Federal de Electricidade (Mexico)
CIFRA – Camara de Fundidores de la Republica Argentina
SINDIFER – Producers of Pig Iron Trade Union (Brazil)
SMF – Sociedad Mexicana Fundidores (Mexico)