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Resource efficiency benchmarking of the Russia Ferrous Foundry Industry: Key findings of the study. Implemented under IFC Russia Cleaner Production Program. GOAL : to identify the ferrous foundry sector’ resource efficiency potential and develop practical tools for foundries to implement it.

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Resource efficiency benchmarking of the Russia Ferrous Foundry Industry: Key findings of the study

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Resource efficiency benchmarking of the russia ferrous foundry industry key findings of the study l.jpg

Resource efficiency benchmarking of the Russia Ferrous Foundry Industry: Key findings of the study

Implemented under IFC Russia Cleaner Production Program


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GOAL: to identify the ferrous foundry sector’ resource efficiency potential and develop practical tools for foundries to implement it


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Benchmarking study time line


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What made our study successful :

Stakeholder consultations process

  • Stakeholder consultations at every important stage:

    • Methodology

    • Questionnaire for data collection

    • Self diagnostic guide

    • Matrix of casting types

  • Advisory board included over 20 representatives from industry, R&D, officials and policy makers.

  • Consultation process

    • Written comments on all key documents

    • Meetings of Advisory board

    • Workshops in smaller teams


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OVERALL PRODUCTION EFFICIENCY

KPI 2

PROCESS

YEILD

KPI 1

Depends on technology and processes

WATER USE

KPI 6

ENRGY USE

KPI 4

SAND USE

KPI 5

Depends on type of final product and technology

CAPACITY UTILIZATION

KPI 3

LABOUR

KPI 7

Depend on management practices and equipment

What is being benchmarked?

7 Key performance indicators (KPIs)


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1

1

1

1

1

1

1

Selected KPIs

Process Yield

Overall production efficiency

Capacity utilization

Energy

Fresh Sand

Water

Labor

2

2

2

2

2

2

2

2

2

4

4

4

4

7

7

7

7

7

7

7

7

Metal recycling

Separation,

transport

3

3

3

3

3

3

3

Risers

and

runners

Scrap

Melting shop

Melting

Holding

Treatment

Metal yard

Storage,

charging

Casting shop

Pouring

Cooling

Shake out

Separation

Finishing shop

Shot blasting

Grinding

Deburring

Thermal treatment

Inspection/testing

buy

Raw

material

Packaging

Labeling

Storage

Shipping

Sell

Molding shop

Mold forming

Core making

Core setting

Sand plant

Storage,

preparation

5

5

5

6

6

6

6

Sand recycling

Transport, сooling

Selected KPIs and methodology tailored to foundry processes

7 KPIs methodology tailored to foundry process


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32 category’ matrix developed to cover diversity of foundry’ production

Ductile Iron Product Categories

Steel Product Categories

Grey Iron Product Categories

automatic moulding

GABH= automotive engine blocks and cylinder heads

GAAO = automotive other

GAAG = agriculture

GAMI = mining

mechanized moulding

GMBH = medium size engine blocks and heads (energy generation)

GMAG = agriculture

GMMI = mining

GMGE = general engineering

manual (hand) moulding

GHBH = large size engine blocks and heads (energy generation)

GHMI = mining

GHGE = general engineering

automatic moulding

DAAU = automotive other

DAGE = general engineering

mechanized moulding

DMAU= automotive

DMGE = general engineering

manual (hand) moulding

DHEN = energy generation components

DHCO = compressor components

DHGE = general engineering

automatic moulding

SARC = railway components (c)

SAMM = mining components (m)

SAAC = commercial vehicles (c)

SAGC = general engineering (c)

mechanized moulding

SMRC = railway components (c)

SMMM = mining components (m)

SMPC = pumps & valves (c)

SMPS = pumps & valves (s)

SMGC = general engineering (c)

SMAC = commercial vehicles (c)

manual (hand) moulding

SHMM = mining components (m)

SHPC = pumps & valves (c)

SHEA = energy components (a)

SHGC = general engineering (c)

c: carbon steel,

s: stainless steel,

m: manganese;

a: high alloy steel


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Study based on real data from enterprises

215foundries

(first long list; 25% of all legally registered ferrous foundries in Russia)

55 sets of

independent data for foundries

  • Coverage :

    • Period : 3years (2007-2009)

    • Total # of data sets:150

    • Categories covered:27 out of 32 (85%)

    • Industry:478 kt(14% of market)


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KEY FINDINGS OF THE STUDY


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Russia foundries significantly lag behind European

Russian foundry

European foundry предприятие

  • Russian ferrous foundry us per tone of good casting:

    • Energy: 3times more

    • Sand:3,6times more

    • Water:161times more

    • Labor :3,6 times more man-hours

4.5 mln t CO2e


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Inefficiencies eliminate Russian foundries’ competitive advantage in low prices

  • Prices for major resources in Russia are less than in the EU:

  • Energy: 54% less

  • Labor:92% less

  • Overheads: 71%less

Costs:

-36%

EU

Russia at EU efficiency level

Russia


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High levels of defect rate

  • Average defect rate in Russia is 4times higher than in EU

  • Effect export: Russia exports less than 1%of casting

  • Low quality – threat for internal markets as customers require certain quality (eg. automotive producers)

4 times

Russia

EU


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How much can Russia ferrous foundry industry gain via resource efficiency?

$2.13 bln USD

$ 3 bln USD

$ 3.3 bln USD

- 26%

- 29%

Cost structure index for ferrous foundry (materials, labor, energy, equipment maintenance, overheads, water and sand)


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Over 50% of the potential can be implemented via low-cost measures and management practices

Costs

$3.3 bln USD

- 43%

Low cost and management practices

Capital investment


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KPIs and resource efficiency potential:

Capital investment

Low cost and management practices


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Benchmarking of KPIs is a tool to priorities interventions to achieve maximum impact

Cost structure

12,8%

Overheads

$ 3.3 bln USD

Equipment related

7,1%

-3.1%

-2.7%

Labor

21,4%

9,7%

-12%

4,4%

Energy

13,4%

9,4%

-9.2%

4,2%

45,2%

Materials (metal)

-1.9%

43,3%

Russia average level

Level of best practices


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  • Next steps:

  • Toolkit: Self diagnostic guide, Compendium of KPIs, Best practice guide, Benchmarking study report

  • Pilot program with 5-7 companies with foundries

  • Resource efficiency finance directly and via FIs


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Information available in public domain

http://www.ifc.org/ifcext/eca.nsf/Content/Russia_Foundry_Russian

http://www.ifc.org/rcpp


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IFC contacts

IFC Russia Cleaner Production (IFC RCPP)

Yana Gorbatenko, Program [email protected]

Study team IFC RCPP:

Kristina Turilova, Task leader [email protected]

Boris Nekrasov, Technical expert [email protected]

Maria Sigutina, PR and [email protected]


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