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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Benchmarking study time line

START UP METHODOLOGY
ADVISORY BOARD

1. Sept. 2009

2. October November 2009

SELECTION OF PARTICIPANTS

QUESTIONAIRS

3. Jan-May 2010

DATA COLELCTION ANALYSIS 3 meetings of ADVISORY BOARD

4. September 2010

PUBLIC REPORT

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

What is being benchmarked?

7 Key performance indicators (KPIs)

PROCESS YEILD KPI 1

OVERALL PRODUCTION EFFICIENCY

KPI 2

Depends on technology and processes

ENRGY USE KPI 4

SAND USE KPI 5

WATER USE KPI 6

Depends on type of final product and technology

LABOUR KPI 7

CAPACITY UTILIZATION
KPI 3

Depend on management practices and equipment

Selected KPIs and methodology tailored to foundry processes

Selected KPIs
1 2
Metal recycling Separation, transport

Process Yield Overall production efficiency Capacity utilization Energy Fresh Sand Water Labor

3 4
Risers and runners

1
Metal yard Storage, charging

5
Scrap

Melting shop Melting Holding Treatment

6 7

buy Raw material

3 1 2 4 6 7 3

4
Sand plant Storage, preparation

Casting shop Pouring Cooling Shake out Separation

Finishing shop Shot blasting Grinding Deburring Thermal treatment Inspection/testing

Packaging Labeling

Storage Shipping Sell

Molding shop Mold forming Core making Core setting

1 3

Sand recycling Transport, ooling

7 KPIs methodology tailored to foundry process

32 category matrix developed to cover diversity of foundry production

Grey Iron Product Categories automatic moulding GABH = automotive engine blocks and cylinder heads GAAO = automotive other GAAG = agriculture GAMI = mining Ductile Iron Product Categories automatic moulding DAAU = automotive other DAGE = general engineering Steel Product Categories 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)

mechanized moulding mechanized moulding GMBH = medium size engine blocks DMAU = automotive and heads (energy generation) DMGE = general engineering GMAG = agriculture GMMI = mining GMGE = general engineering manual (hand) moulding GHBH = large size engine blocks and heads (energy generation) GHMI = mining GHGE = general engineering manual (hand) moulding DHEN = energy generation components DHCO = compressor components DHGE = general engineering
c: carbon steel, s: stainless steel, m: manganese; a: high alloy steel

Study based on real data from enterprises

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

sets of independent data for foundries

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Coverage :

Period :
Total # of data sets: Categories covered:

Industry:
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3 years (2007-2009) 150 27 out of 32 (85%) 478 kt (14% of market)

KEY FINDINGS OF THE STUDY

Russia foundries significantly lag behind European

Russian foundry European foundry

Russian ferrous foundry us per tone of good casting:

Energy:
Sand: Water: Labor :

3 times more 4.5 mln t 3,6 times more CO2e 161 times more 3,6 times more man-hours
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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: Labor: Overheads: 54% less 92% less 71% less

Costs:

-36%

EU

Russia

Russia at EU efficiency level

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High levels of defect rate

Average defect rate in Russia is

4 times higher than in EU 1% of casting

4 times

Effect export: Russia exports less than

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

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How much can Russia ferrous foundry industry gain via resource efficiency?
$2.13 bln - 26% USD $ 3 bln USD $ 3.3 bln USD

- 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 lowcost measures and management practices
Costs

$3.3 bln USD

Low cost and management practices

- 43%
Capital investment

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KPIs and resource efficiency potential:

Capital investment

Low cost and management practices

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Cost structure

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

Overheads Equipment related

12,8%
7,1%

-3.1%

$ 3.3 bln USD

9,7% 4,4% 9,4% 4,2%

Labor

21,4%

-2.7%
-12%

Energy

13,4%

-9.2%

Materials (metal)

45,2%

-1.9%

43,3%

Russia average level

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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

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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 manager YGorbatenko@ifc.org Study team IFC RCPP: Kristina Turilova, Task leader Boris Nekrasov, Technical expert KTurilova@ifc.org BNekrasov@ifc.org

Maria Sigutina, PR and stakeholders MSigutina@ifc.org

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