Foundries and Automotive at Amafond’s 73rd Assembly

The annual appointment of the Italian association of foundry machine, plant and product manufacturers was held in the Franciacorta region

On June 13th, 2019, Amafond’s 73rd ordinary assembly was held in Borgo Antico San Vitale (near Brescia), attended by almost all members. It should be noted that Amafond companies are currently 92, 87 being associates, 5 subsidiaries, subdivided into 75 associates of the Plant and Machine group and 17 of the Products and Services group. The assembly, chaired by president Maurizio Sala along with the director, Fabrizio Carmagnini, had a busy schedule including issues relative to the association’s internal initiatives and promotional activity, the examination of the overall macroeconomic scenario and industrial production, an update of data of the Foundry segment and of the specific sectors lined to Amafond, and finally an in-depth analysis on the global automotive system by Fabrizio Guelpa, Director, Industry & Banking Research, Intesa Sanpaolo.

MOU between Amafond and Russian Aluminium Association
Among the international activities, worth noting is the exchange and cooperation agreement between Amafond and the Russian Aluminium Association, signed in Rome on December 17th, 2018, by President Maurizio Sala and by the President of the Russian Association, RAA, Irina Kazovskaya. This Memorandum Of Understanding was underwritten to allow a close cooperation between parties as regards the development of the production and consumption of aluminium in Russia and in Italy and to start off an international dialogue regarding the problems of the aluminium industry, its promotion and its products. As illustrated by Director Carmagnini, the key issues of this important memorandum of understanding concern particularly the organization of trade shows, symposiums and round tables; the support of direct partnerships between companies; the creation of joint ventures; the promotion of technical exchanges and information between the two countries. It should be noted that on this occasion a similar agreement was signed by the Russian association with Assomet’s Centroal too.

The global foundry industry
According to the latest analysis by Modern Casting relative to 2017, the global production of castings increased by 5.3% with respect to the previous year, a growth rate which occurred after two years of increases lower than half a percentage point. The scenario shows China as the world leader, with a volume of castings adding up to 47.7 million tons, followed by India at 12 million tons, the US at 9.5, then Germany at 5.48, Japan at 5.41, Russia (3.5), Mexico (2.9), Korea (2.5), Italy (2.2), France (1.7 million tons).

The Italian foundry industry and the trend of the Amafond sector
In the analysis carried out by Maurizio Sala, for Italian foundries 2018 ended with a moderate progress, the year had started off very well but it gradually ran out of steam. The causes of the deceleration during the past few months were determined by the drop of almost all client segments, by the lack of an upswing for the building industry and by the sharp deceleration of the European production of cars. Regarding Amafond’s specific segment, Maurizio Sala underlined that the Italian foundry machine and auxiliary product industry ended 2018 with revenues on the increase by 4.3% with respect to the previous year. Exports recorded an expansion of 2.8%.
Practically, 2018 confirmed god performances for the machine, plant and product segment, both as regards the internal market and exports.
The industry reacted rather well to the upheaval caused by Trump’s trade war, to the deceleration of the automotive industry and to uncertainty regarding global economies linked to Brexit, keeping up a growth trend both on the internal market and as regards China, Germany, India, the United States, Hungary, Mexico, the Czech Republic, France, Brazil and Spain. According to Amafond’s analyses, the expectation for the production in 2019 confirm the current stable economic phase, with an outlook which is however characterised by a contingent situation which is, all things considered, difficult, and outright negative for some segments. President Sala then concluded with some short reflections on the outlook of the automotive segment, which is fundamental for the foundry industry: the future of the global car industry is today linked to the capability of adapting to two great challenges, from a technical standpoint as concerns the shift to electric power and politically and commercially, considering the current warfare of standings on protectionist measures and tariffs. Regarding the latter issue, according to Amafond’s president it is clear that questioning international treaties and introducing protectionist measures unilaterally implies turbulence on the commercial exchanges and, in the medium term, damages for everyone.

Economic automotive scenarios and their repercussions on the industry
The start of the macroeconomic scenario analysis provided by Fabrizio Guelpa was clear, with an overall global picture which is still positive but more complex on account of political uncertainty; a growth deceleration process is ongoing, detected by the indicators which anticipate the cycle and by the acceleration of global trade, global GDP is still growing, especially in developing countries, in Italy the manufacturing industry’s revenues progress slowly because of reduced investments, a factor which fetters competitiveness, just like production capacity and technological endowment. In the automotive segment the reference market is increasingly Asia, both as regards manufacture and registrations, most analysts envisage the African continent as the new trade frontier for cars. According to the Opec’s forecasts, by 2040 the car park in Africa will reach 90 million vehicles against the current 59 million, and among the countries of the African continent which are trying to obtain a significant role as suppliers of automotive components we should mention first of all Morocco. As regards the developments of electric cars, we are faced with a continuous growth, (globally, +54% in 2017 and +48% in 2018), but the trend is considerably different from one area to another and at any rate we are still talking about a niche product and of sales of electric vehicles which are very low compared to the total, reaching about 1.7% last year. It should also be noted that growth is still closely linked to incentive and benefit measures. Overall in this sector there are some traces of difficulties in the short term, but a good recovery on the medium run during the next 5 years, which is enough to provide good grounds for optimism to foundry operators, for whom the next appointment is the great Amafond congress to be held on November 29th, 2019 in the extraordinary location of the Villa Fenaroli Palace Hotel in Rezzato, just outside Brescia.