VDMA Foundry Machinery: Sector exceeds pre-crisis level


Further ten percent growth in sales in 2011

“German foundry machinery producers closed 2011 with further growth of ten percent in sales, even considering the high level already reached as a result of sales growth in 2010,” said Dr. Timo Würz, Chairman of VDMA’s specialist Foundry Machinery Association, on Thursday. He added: “The investment backlog in Europe as a result of the crisis has now been eliminated. Following a highly dynamic turnaround, the foundry machinery sector even slightly exceeded the 2007 pre-crisis levels in 2011.” The association estimates production volume in 2011 at over € 1.2 billion.

2012: high level likely to be maintained
There are good prospects that the high level which has been reached may be maintained or even exceeded in 2012. Growth in orders received over 2011 as a whole was almost 16 percent, while growth in sales reached ten percent. The rise in orders received was mainly due to orders from other countries, which are still on the rise and are reflected by 30 percent sales growth in February 2012. As was often the case in the past, there was some slowing in orders received at the beginning of the year, while the more informative figures for the three months from December 2011 to February 2012 show growth of one percent for the EU and ten percent for countries outside the EU.

The results of the latest survey on the economic situation conducted by the specialist Foundry Machinery Association indicate that the German foundry machinery sector is succeeding in maintaining its market shares world-wide. 70 percent of respondents expect higher sales in the first half of 2012. On average, growth could be of the order of ten percent. Over the same period, more than half of these responding to the survey expect higher orders or stable orders. Predictions for 2012 as a whole are similar. While single-digit sales growth is expected on average, a slight fall in order volumes is predicted in general. “Our member companies believe that the increasingly complex competition for global market shares will pose considerable challenges in the fields of global sourcing, regional market presence and the expansion of service business,” Würz commented.

The situation of sectors which are among the largest customer groups for foundry products is just as important for foundry machinery producers as for the foundries themselves. While the ifo business confidence index showed successive falls in business confidence in the foundry, automotive and vehicle component industries as well as in metal production and processing in the second half of 2011, there has been a slight trend towards stabilization or recovery since the beginning of 2012. This is also reflected by business expectations for the first half of the year. However, the assessment of their world-wide competitive position given by vehicle and vehicle component producers for the ifo index has repeatedly been less favourable. This may also be an indication of structural shifts in the world markets of foundry product customers. The export figures for foundry machinery over the past few years show that Asia will overtake Europe as the largest destination for exports in the foreseeable future. This will be associated with tougher competition among machinery producers in the region.

Further increase in exports in 2011  new potential on markets outside the EU in 2012
The export situation further improved in 2011. Official statistics for 2011 show that the value of products supplied by German foundry machinery producers worldwide was 22 percent higher than in 2010. Exports amounted to more than € 180 million. Especially high growth was achieved in exports to Austria (94 percent) and Turkey (287 percent). Outside Europe there was a rise in deliveries to South America, particularly to Brazil (up 276 percent), and especially to Asia. Growth reached 95 percent in China and 938 percent in Korea. Growth in EU-27 exports was almost 16 percent, about the sales level in the previous year.

Participants in the current survey concerning the economic situation mainly expect new impetus from countries outside the EU in 2012, particularly from Russia as well as from China and India. They also believe that export prospects on the markets of Turkey and Korea continue to be bright.