Iron & Steel casting demand is expected to grow at 5% mainly driven by demand in Valves, Pumps, Cement, Mining & Aluminium smelters

Global Foundry Industry Overview—China still biggest producer; castings consumption driven by passenger cars & CVs; light weighting trends increase need for Aluminium castings

Globally 40,000+ producers with production of ~84 million MT; Producers from China, India, US major control 70%; GCC is nascent with 0.2 MMT

Key Takeaways—Operational Efficiencies, Closer touch points with customers with regard to application engineering shall be a crucial success factor

Diversification into various grades, end-user segments to derive higher margins; JVs/alliances critical for offtake agreements and market expansion

Scope & Limitations

KSA and UAE drive the market in terms of Local Production and consumption

Market for Ferrous Casting is majorly catered through Iron casting which is a high volume & low value; Top 5 players control 20% market

KSA: Ferrous Casting was estimated at around 119,670 MT in 2016; India & China are the major importers

RoGCC: Ferrous Casting was estimated at around 188,585 MT in 2016; is a major exporter due to higher export focus by UAE producers

KSA’s Ferrous Castings demand comprises mainly Iron Castings (GI & DI) with 80%; Machined casting consists of approx. 70% of demand

RoGCC’s Ferrous Castings demand comprises mainly Grey Iron with 65%; Machined casting consists of 71% of demand

KSA: Foundry Market Overview—Approx. 31% of domestic sales consumed in the KSA; Infrastructure & Valves & Pumps are the key drivers of the market with 78% demand

RoGCC: Foundry Market Overview—Approx. 35% of Domestic Sales of Iron & Steel Castings consumed in RoGCC; UAE is the major producer

Valves, Pumps, Cement, Mining & Smelters are the key drivers both from Volumes and value perspective

Ferrous Castings Imports into GCC are mainly from India and China catering to the low end castings (Municipal Castings)

Capacity utilisation is expected to increase in future along with forward / backward integration

Import substitution key opportunity; India’s economies of scale & China’s export subsidies hinder local producers’ capacity utilisation

Vendor Selection Criteria – Price & Value Addition in the form of Machined Castings is a key factor for success

GCC industry is characterised by Direct end user sales from local foundries; India & China sell their casting products predominantly through the trader route

Voice of Customer—Imports delayed due to custom clearances; multiple local foundries preferred for local supply; India preferred import partner

Falling oil prices negatively impact govt. development budgets; countries to reduce subsidies, introduce 5% VAT by 2019

Key Growth Trends in GCC—The Mining & Automotive Industry has a strong demand uptake for Ferrous Casting parts

KSA’s diversification strategy to reduce oil revenue dependence; budgetary cuts impact on non-oil private sector high due to reliance on govt. tenders

Housing and infrastructure development, growth in industrial sector and Aluminium smelters to be regional growth drivers

Decision Makers spotlight—CEOs Perspective (1/2): Benchmarking with leading Indian/European foundries to drive production values; always-on technical support for customers to be key

Decision Makers spotlight—CEOs Perspective (2/2): Potential end customers in the proposed foundry should perceive a distinct advantage in sourcing to ensure sustainability of proposed business model

List of Acronyms

Maximize opportunities from existing products and markets; systematically explore new products, markets, including inorganic Opportunities

Our Growth Consulting Canvas

Legal Disclaimer