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

Presentation Transcript

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

Benchmarking study time line

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

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)

1

Selected KPIs

Process Yield

Overall production efficiency

Capacity utilization

Energy

Fresh Sand

Water

Labor

2

4

7

Metal recycling

Separation,

transport

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

6

Sand recycling

Transport, сooling

Selected KPIs and methodology tailored to foundry processes

7 KPIs methodology tailored to foundry process

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

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)

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

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)

KEY FINDINGS OF THE STUDY

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

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

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

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)

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

KPIs and resource efficiency potential:

Capital investment

Low cost and management practices

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

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