IFC 2014 FORGING INDUSTRY IN EUROPE IFC 2014 June 2014 Jose Yudego Euroforge President Commercial CIE Automotive Jose Yudego – Euroforge Director President - Commercial Director CIE Automotive 1 INDEX IFC 2014 1 EUROFORGE FORGING PRODUCTION 2 EUROPEAN ECONOMIC CLIMATE 3 EUROPEAN FORGING TRENDS Jose Yudego – Euroforge President - Commercial Director CIE Automotive 2 1.- FORGING PRODUCTION - EUROFORGE IFC 2014 WORLWIDE PRODUCTION PER REGION in ´000 Tons 38% China 9.550 Taiwan 1.316 Europe 5.875 Korea 748 23% Russia 730 Others 3,567 Brazil 417 Australia 356 14% Japan 2.205 Nafta 2,084 India 2.110 9% 8% 8% 2013 Data Jose Yudego – Euroforge President - Commercial Director CIE Automotive 3 1.- FORGING PRODUCTION - EUROFORGE IFC 2014 PRODUCTION PER COUNTRY in ´000 Tons 48% Germany 2.807 China 9.550 Others 3,567 Europe 5.875 EUROPE 5.875 India 2.110 Italy 1.183 Nafta 2,084 Japan 2.205 Turkey 165 Sweden 84 Slovenia 43 Belgium 13 Finland 10 5% Others 315 20% UK 235 France 450 4% Poland 266 5% Cz Rep. 294 5% Spain 326 8% 5% 2013 Data Jose Yudego – Euroforge President - Commercial Director CIE Automotive 4 1.- EUROPE FORGING INDUSTRY SNAPSHOT IFC 2014 Most important customer: Automotive Industry (70%) Most used Forging Technology: Closed Die Forging (70%) 600+ Forging plants in Europe employing 70.000 people Many Family Owned companies 50% of the companies having less than 50 employees About 11 billion € annual turnover Production Evolution (in ´000 tons) Jose Yudego – Euroforge President - Commercial Director CIE Automotive 5 1.- EUROFORGE IFC 2014 EUROFORGE Member Associations EF was founded in 1953 Actually 11 member associations Several activities: Energy benchmarking Automotive group Open die working group Hatebur users group Economic reports Scrap and alloy price-development Legal basics, compliance Jose Yudego – Euroforge President - Commercial Director CIE Automotive 6 2.- EUROPEAN ECONOMIC CLIMATE IFC 2014 The worst of the European crisis seems to be over. Southern European countries have done their homework and their situation is more stable now. Eurozone is looking forward to a slow but steady recovery Inflation Rates 2 1.6 1.8 GDP 1.5 1.4 2.0 1.7 1.5 1.5 1.5 1.6 1.0 1.1 1.2 1.4 1.0 0.8 0.5 0.4 0.0 0 2013 2014 2015 2016 2017 2018 -0.4 -0.5 2013 2014 2015 2016 2017 Source: EY Eurozone Forecast: March 2014 Jose Yudego – Euroforge President - Commercial Director CIE Automotive 7 2.- EUROPEAN ECONOMIC CLIMATE IFC 2014 But still some “Black clouds” in the Horizon: East of Europe in economic downturn (Turkey, Russia, Ukraine…) Unrest in the Ukraine area Unemployment still in too high levels Provided that the Ukraine situation is not worsening, 2014-2017 looks like a period of stabilization and slow but steady growth Jose Yudego – Euroforge President - Commercial Director CIE Automotive 8 2.- FORGING DEMAND OUTLOOK IFC 2014 Main Forging Markets Evolution European MHV production (>3,5tn) European PC & LCV production (<3,5tn) 900 24,000 20,000 K units K units CAGR 6.3% CAGR 2.7% 22,000 18,000 700 16,000 500 14,000 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Construction & Agricultural sector expectations also giving positive signs Imports growing but at a low pace Economic climate positive FORGING DEMAND OUTLOOK IN EUROPE IS POSITIVE Jose Yudego – Euroforge President - Commercial Director CIE Automotive 9 3.- EUROPEAN FORGING TRENDS IFC 2014 CONSOLIDATION & INTERNATIONALIZATION Major Automotive Customers pulling European forging suppliers to follow them to high growth markets Platform strategy and its big volume projects are intensifying competition among forging companies internationally Only companies of certain size are able to propely fulfill big customer requirements in global coverage and investment needs IMPORTANT CONSOLIDATION SMALL & MEDIUM FORGING COMPANIES In most cases, not able to fulfill customer requirements for big global projects Needs to put in place a proper strategy in accordance with its size, its possibilities, and concentrating mainly in local projects Jose Yudego – Euroforge President - Commercial Director CIE Automotive 10 3.- EUROPEAN FORGING TRENDS IFC 2014 WEIGHT REDUCTION European Strict enviromental regulation (95 gr CO2/km in 2020 for Cars) are obliging to a continuous reduction of CO2 emissions and thus a never-ending weight reduction request Important migration from steel to Aluminium (or even Magnesium) ELECTRIC CARS In parallel/addition to CO2 reduction, the rising market penetration of electric vehicles (or hybrids) is threatening the forging production Jose Yudego – Euroforge President - Commercial Director CIE Automotive 11 3.- EUROPEAN FORGING TRENDS IFC 2014 HIGH ENGINEERING / INNOVATION REQUESTS Mainly in Automotive & Truck markets, continuous push to reinvent forged components towards a lighter & more effective solutions PRICE PRESSURE Never-ending pressure to lower prices Higher costs of electricity (greener electricity) Production push to Eastern Europe and in some cases, Asia Low profitability sector Jose Yudego – Euroforge President - Commercial Director CIE Automotive 12 3.- EUROPEAN FORGING TRENDS IFC 2014 As a summary, a very challenging environment, with good opportunities and a market on a slow but steady growth Jose Yudego – Euroforge President - Commercial Director CIE Automotive 13 IFC 2014 THANK YOU Jose Yudego – Euroforge President - Commercial Director CIE Automotive 14
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