Current Japanese Casting Businesses

September 27 2014

Japan Foundry Society, Inc. Chairman Hiroyoshi Kimura

１．Japanese Economy is going to get out from the deflation.

2008 2009 2010 2011 2012 2013 2014 2015

Nominal Growth Rate -4.6 -3.2 1.3 -1.4 -0.2 1.9 3.3 2.8

Real Growth Rate -3.7 -2 3.4 0.3 0.7 2.3 1.2 1.4

-5

-4

-3

-2

-1

0

1

2

3

4

％

Trend of GDP

(1) Japanese Economy Growth Rate

(2) From Strong ¥ to Weak ¥ The Strongest ¥（a） July 2014（ｂ） b/a

$/¥ Sep. 2011 76.8 102.8 34%

Euro/¥ July 2012 97.0 139.2 44%

出所：内閣府

Data: Cabinet Office

2. Mid & Long Term Trend of Japanese Economy

3.3

1.0 1.0

1.2

0.5

- 0.3 - 0.6 - 0.7

4.5

1.5

0.7

- 1

0

1

2

3

4

1980S 1990S 2000S 2010S 2020S

Impact of the variation of employees’ number

Predictability par emploｙee Real GDP

Real GDP growth

（Average Changing Rate par year：％）

（Fiscal Year)

出所：新素形材産業ビジョン

38.6 46.6

50.6

26.6 35.2

41.8

18.9

29.3

21.5

29.2

24.2

0

10

20

30

40

50

60

02 03 04 05 06 07 08 09 10 11 12 13 14 15

（％）

（2015年は見込み）

電気・電子

自動車

一般機械

化学

鉄鋼

（備考）国際協力銀行「海外事業展開調査」

3. Each industry development to overseas

(1) Trend of Japanese industries ratio to overseas.

出所：新素形材産業ビジョン

Electrical & Electronic

Automobile

Machinery

Chemical

Steel

0 500 1,000 1,500 2,000 2,500 3,000

1999年

2012年

日本

990

日本

994

アジア

155

アジア

850

北米

280

北米

425

欧州

93

欧州

148

中南米

25

中南米

103

63.1% 海外生産 36.9%

38.6% 海外生産 61.4%

アフリカ大洋州中近東

アフリカ大洋州

2577万台

1568万台

(2) Comparison of automobile production between domestic & overseas

2012

1999

25.77 M cars

15.68 M cars

Japan

Japan

Asia North

America Europe

M.S

America

Africa

etc

Africa

etc

M.S

America

Asia North America

Europe

Overseas

Overseas

Source: JFS

(3) Rising Electricity Rate

A Company: Supplier Tokyo Electric Power Company

Average Electricity Rate

8.78¥/kwh (Jan – Mar 2011)92% Rise16.52¥/kwh (Apr – Jun 2014)

B Company: Supplier CHUBU Electric Power Co.,Inc. Average Electricity Rate

8.44¥/kwh (Jan – Mar 2011)53% Rise12.88¥/kwh (Apr – Jun 2014)

1. Nuclear power plants that were 30% of total electric generating capacity have stopped caused by 3.11.2011 Great East Japan Earthquake.

2. Electric rate is rising coupled with the fuel cost of thermal power plants that are the alternative to nuclear power plants have been rising.

Source: JFS

（％）

4. The Trend of Production & Sales volume

（by materials)

（10 Million$）

1990 1995 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Investment Casting 47 45 47 49 45 40 44 46 47 54 60 43 51 52 51 52

High Pressure Diecast Casting 520 485 465 434 465 506 551 600 675 732 697 444 577 558 581 569

Aluminum Casting 312 300 289 265 269 256 260 279 307 320 309 207 263 258 274 280

Copper Alloy Casting 112 98 70 69 67 75 83 82 115 133 129 84 96 108 96 91

Steel Casting 223 174 138 141 126 122 122 143 160 175 187 133 137 131 124 125

Iron Casting 1,267 1,080 905 817 764 821 849 913 973 1,001 1,048 677 851 858 849 820

Non-Ferrous Rate 38.0 40.5 43.1 43.3 46.2 46.0 46.8 46.6 48.2 49.1 46.7 46.3 47.4 47.0 48.2 48.5

0

10

20

30

40

50

60

0

500

1,000

1,500

2,000

2,500

3,000

Non-Ferrous Rate

0

500

1,000

1,500

2,000

2,500

3,000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

1975 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13

生産量

(破線）

千t

生産量

(実践）

千t

銑鉄鋳物(含む鋳鉄管）

鋳物 総量

ダイカスト→

非鉄鋳物(除ダイカスト）→

鋳鋼品→

破線は右軸→

出所：素形材年鑑

2013

5,540

3,820

990

Max.

Total Production 8,200 K ton (1990）

Iron casting 6,190 K ton (1990）

High pressure die

cast 1,160 K ton (2007）

2009

4,380

3,020

760

5. Trend of casting production by products

2013/Max.

68％

62％

85％

Total production

Iron casting

High pressure die cast

Steel casting

Non-ferrous casting

Kton

Dot line Solid line

Kton

67.8%

90.7%

95.5%

28.9%

24.0%

64.8%

66.7%

69.7%

25.2%

3.3%

1.8%

61.4%

52.7%

28.0%

30.3%

19.1%

7.0%

7.0%

9.8%

16.4%

7.2%

10.7%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

精密鋳造品

ダイカスト

アルミニウム鋳物

銅合金鋳物

鋳鋼品

球状黒鉛鋳鉄*

ねずみ鋳鉄*

鋳造品全体

輸送機械 一般機械 電気機械 その他

6. Structure of castings demand

(1) Comparison of structures by products (2013)

出所：素形材年鑑

69.7% Whole castings

Gray Iron

Ductile Iron

Steel Casting

Copper Alloy

Aluminum

High Pressure Die

Cast

Investment Casting

Transpor

tation Machiner

y

Electrical &

Electronic Others

59.0%

7.3%

15.8%

3.8%9.8%

4.6%

52.9%

6.9%

17.3%

3.4%

13.4%

6.1%

自動車

その他輸送機械

産業機械

金属工作・加工機械

その他一般機械

その他 内円：重量

外円：金額

Passenger cars

Trucks

Moto-cycle

Industrial transport machines,

Rail way, Ships, Airplanes

Including

Electric

machines

Inner circle：Weight

Outer circle: Value

(2) Customers distributions of Japanese foundries (2011)

出所：素形材年鑑

Others

Machinery

Machining machines

Industrial

machines Automobile

Other transport machines

1990 1995 2000 2002 2004 2006 2007 2008 2009 2010 2011

High pressure Die cast 1,006 894 836 746 685 715 724 763 693 657 690

Non-ferrous castings 1,241 1,028 832 699 661 637 626 650 571 570 576

Steel castings 95 95 92 80 82 77 84 87 81 78 64

Iron castings 1,899 1,432 1,164 970 902 873 882 887 838 808 829

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

7. Trend of foundries number by materials.

出所：素形材年鑑

8. Trend of Productivity by foundries

1990 2000 2010 2011

The number of foundries 4,241 2,924 2,113 2,159

Total employees 87,558 64,029 58,474 58,511

Total casting production(K ton) 8,197 6,281 5,484 5,490

Employees / Foundry 20.6 21.9 27.7 27.1

Production / Foundry (ton) 1,932 2,148 2,595 2,543

出所：素形材年鑑

Foundry(2011） Shipping(2011）

Less than 49 621 84％ 17.5 M$ 26％

More than 50 116 16％ 48.8 M$ 74％

出所：素形材年鑑 (但し、従業員規模別生産量は日本鋳造協会）

2.6%

32.6%

5.4%

23.6%

7.6%

15.9%

10.8%

12.2%

19.5%

10.4%

14.0%

3.4%

40.1%

1.9%

0% 20% 40% 60% 80% 100%

出荷額

工場数

9人以下 10人～ 20人～ 30人～ 50人～ 100人～ 200人～

50人未満 84％

16％

9. Shipping amount classified by foundry sizes ( Iron Castings).

Foundry

Shipping

amount

< 49

< 10 > 10 > 20 > 30 > 50 > 100 > 200

26%

10. Casting production in top 10 countries (2012)

0

5

10

15

20

25

30

35

40

45

Non-Ferrous

Steel

Ductile Iron

Grey Iron

出所：モダンキャスティング

Mton

36.5

32.0

43.6

57.9

43.2

45.9

41.4

66.9

33.5

47.3

45.6

37.5

21.3

27.6

24.0

20.9

31.5

25.8

10.5

34.9

25.6

25.0

5.7

3.7

6.6

8.8

17.0

4.2

4.0

12.4

11.2

12.7

11.2

18.0

36.6

20.0

7.9

8.7

15.4

26.2

9.5

13.7

10.5

13.9

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

フランス

イタリア

韓国

ブラジル

ロシア

ドイツ

日本

インド

アメリカ

中国

世界

ねずみ鋳鉄 球状黒鉛鋳鉄鋳鋼

可鍛鋳鉄 銅合金鋳物アルミ合金鋳物

その他

出所：Modern Castig （December 2013）から作成

11. Casting ratio in top ten countries by materials with weight (2012)

Worldwide

China

U.S.A

India

Japan

Germany

Russia

Brazil

Korea

Italy

France

Gray Iron Ductile Iron Malleable Iron

Steel

Copper

Aluminum

Others

1. Active management based on creating attractive products

with excellent technologies and skills.

2. Business development with reinforcement of management

bases and sound management.

3. Enhancement of competitiveness based on positive

collaborations with casting industry, outside casting industry,

and regional industry.

4. Collaboration with overseas companies.

5. Long term development and scarcity of human resource.

6. Reinforcement of environment and energy

countermeasures.

12. The Vision of Casting Industry

1. The vision must be devoted to the development of Japanese Casting

Industry.

2. JFS focuses on six principles in Casting Industry.

Source: JFS

Foundry Introductry course 197 students for 5 years

Foundry College 661 students for 8 years

Foundry Basic course

Foundry College Advanced Course 20 students limited

First year

3 – 5 years

Job career

Novice Expert

13. Enhance cultivation foundry men.

> 5 years

>10 years

Source: JFS

Requirements to Technology

◆High Strengthening

◆Reduce Casting Defects

◆Lighter Weight

◆Thinner Wall Thickness

◆Improve Yield

◆Improve Processes

◆Technology of Integration

ETC

Trend of Technology Development

Semi Metal Casting,

Frozen Mold Casting

Sand Mold Press Casting

Liquid Metal Forging

High Vacuum Die Casting

Alternative Material for Lighter

Mg Cast Technology

Development of Casting Machine, Melting

Furnace, Holding Furnace,

Artificial Sand

Lead- Free Copper Alloy

Solidification and Fluidity Simulation

3D Printers

Ceaseless

Technology

Development

14. Technology Improvement

Source: JFS

Thank you

for your kind attention.

ARIGATO!

Hiroyoshi Kimura JFS, Inc.

Appendix: Production Data

Amount Iron casting Steel casting High pressure die cast

Non-ferrous casting

1975 5,539 4,066 645 252 251 1980 7,350 5,482 733 434 365 1985 6,987 5,201 538 551 392 1990 8,197 6,187 485 752 506 1995 6,979 5,200 370 749 506 2000 6,281 4,579 264 833 500 2001 5,812 4,196 259 789 468 2002 5,746 4,079 232 854 493 2003 6,118 4,386 235 915 494 2004 6,386 4,555 258 985 503 2005 6,619 4,702 277 1,065 510 2006 6,877 4,867 281 1,124 541 2007 6,951 4,902 293 1,158 541 2008 6,710 4,749 299 1,094 513 2009 4,384 3,019 198 758 367 2010 5,484 3,786 207 981 466 2011 5,490 3,828 218 930 467 2012 5,669 3,917 203 1,002 500 2013 5,538 3,819 182 987 506

Kton