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Market Overview 1 INVESTMENT CASTING MARKET OVERVIEW NORTH AMERICA Scott Hanson President Auburn Investment Casting.

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Presentation on theme: "Market Overview 1 INVESTMENT CASTING MARKET OVERVIEW NORTH AMERICA Scott Hanson President Auburn Investment Casting."— Presentation transcript:

1 Market Overview 1 INVESTMENT CASTING MARKET OVERVIEW NORTH AMERICA Scott Hanson President Auburn Investment Casting

2 Market Overview 2 Investment Casting Trends North American Investment Casting Industry Across the Board increase in activity Foundries & Suppliers are busy Raw Material Cost/Availability Energy Cost Offshore Sourcing

3 Market Overview 3 Investment Casting Trends - contd Segment summary Aerospace – commercial – record level of new orders military – D.O.D. in transition IGT – Significant spare part demand New Build Growth forecasted for Asia, Mid-East & Africa Automotive - activity in complex applications & Turbocharger Systems General Industry – growing with overall economy

4 Market Overview 4 Market Segments Aerospace Jet Engine Blades & Vanes (Airfoils) Integral Wheels & Nozzles Hardware and Structures Airframe Hardware and Structures Missile & Rocket Components Other Military Ordnance

5 Market Overview 5 Market Segments Industrial Gas Turbines Blades & Vanes (Airfoils) Hardware and Structures Turbine and Combustor Components

6 Market Overview 6 Market Segments Automotive Valves Turbocharger Components Complex Powertrain Parts Chassis Applications - Passenger Car and Motorcycle

7 Market Overview 7 Market Segments General Industry Medical Implants, Instruments & Testing Equipment Industrial Valves / Pumps Petrochemical Food Processing Off-Road Equipment Firearms Construction Equipment Hand & Power Tools Recreational & Sporting

8 Market Overview 8 North American IC Industry United States, Canada & Mexico Approx. 46% of worldwide investment casting production 130 companies 170 foundries (not including dental, art or jewelry) 30,000+ direct workers All market segments All castable alloys All size capability

9 Market Overview 9 North American Investment Casting 2005 Sales ( $ Million - USD) Aerospace 1,600 IGT 800 Automotive 250 General Industry 550 TOTAL: $3,200

10 Market Overview 10 North American Investment Casting Market by Alloy Type Aluminum & Copper: 7% Titanium: 9% Steel: 33% Superalloy: 51% 2005 Casting Dollars $3.200M

11 Market Overview North America 3,200 Europe 1,700 Asia 2,000 Other 100 TOTAL: 7,000 Worldwide Investment Casting ( $ Million - USD)

12 Market Overview 12 New Aircraft Builds > 50 Passenger Aerospace - Commercial Large Transports World traffic up 6% Load factors & New Orders at Record Level build forecast avg. 970 / year Asian Market Growing Rapidly New Programs A380 / A350 / 787 China Regional ROM Associates: 2- 06

13 Market Overview 13 Aerospace – Commercial contd Concerns / Issues: Airline losses continue High Fuel Prices Several US Airlines in Chapter 11 Airlines adopting the Low Cost Business Model

14 Market Overview 14 Aerospace – Commercial contd Business Jets New orders up significantly Delivery of new aircraft 30% higher Corporate ownership/leasing & Fractional Shares Increased demand for used aircraft Airframe & Engine Manufacturers very busy Private Jets New Market starting to develop Low cost replacement for some General Aviation models

15 Market Overview 15 Aerospace - Military Increase proposed for D.O.D Budget Demand for engine spare parts for Fighter, Helicopter & Transport aircraft Some Advanced Aircraft Programs being pushed out Future Combat Systems - Smart Munitions - Lightweight Armament - Battle Field & Ship Board Applications

16 Market Overview 16 Industrial Gas Turbines High Spare Parts Demand Increase in Aero derivatives Growing After Market Business Large Frame Growth in Asia, Mid-East & Africa Limiting/Competing factors Infrastructure for NG Price / Availability of NG Future Technology: Wind Power Coal Gasification New Land-based Turbine Builds – 50MW Consensus Industry Forecast

17 Market Overview 17 Automotive New Investment Casting Applications Design Activity in Commercial Trucks, Passenger Cars & High Performance Vehicles Driven by new emission standards and fuel efficiency Turbocharger Demand straining capacity Titanium Alloy components growing

18 Market Overview 18 General Industry Dispersed among many casting suppliers Wide range of size & alloys Applications across all industries Many Niche opportunities High volume applications susceptible to offshore sourcing Overall, should continue to increase with growth in economy

19 Market Overview 19 Aerospace 1,725 8% IGT 850 6% Automotive 265 6% General Industry % TOTAL: 3, % % Change North American Investment Casting 2006 Estimated Sales ( $ Million - USD)

20 Market Overview 20 Opportunities for Consideration - Machined Parts - Finished / Ready to Assemble - Low Volume & Custom Parts - Military Munitions & Support Equipment - Military Spares - After Market for Aerospace & IGT - Medical Instruments & Testing Equipment - Conversions from other processes - Combining Multiple Parts into Integral Casting - Higher Value Alloys - Larger Castings - International Customers - Die Casting Prototyping

21 Market Overview 21 ICI GDP Ind. Production DeWolf - Commercial + 4% SFSA +10% BICTA + 8% % Change 2006 Forecast Comparison

22 Market Overview 22 Summary Overall North American IC growth will continue All Market Sectors will benefit Off-Shore Sourcing effect on N. American foundries? Some concern with Raw Materials & Energy Opportunities for New Casting Applications Need to focus on market Niches & Supplying Value Added Features / Services

23 Market Overview 23 Acknowledgement The Investment Casting Institute wishes to acknowledge the following companies for their contribution to this report. - Alcoa Howmet - Blayson Olefines, LTD. - Doncasters Inc. - ESCO Turbine Group - Hitchiner Mfg. Co. - ROM Associates

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