Export prospects buoy industry.

"There are some bright spots for steel casting foundries, despite the fact that the last few years have produced so many dark ones. The brightest could invigorate some faltering markets--like construction--if plans for long-overdue federal, state and local infrastructure rebuilding demand kick in."

That was the view of Don Paul, Spokane Steel Foundry, and marketing committee chairman of the Steel Founders' Society of America (SFSA), in his market review and forecast at the group's annual meeting on October 4-6 in Napa, California.

He said the proposed infrastructure rebuilding program has wide public support, and chances are good that Congress and the White House will move quickly on it.

Road and bridge projects rely heavily on steel castings because of steel's low cost, ready availability and inherent strength. Few other materials can duplicate its unique structural qualities, but Paul warned that ductile iron is a strong competitor for the same market.

He urged steel foundries to use quality assurance programs and aggressive sales efforts to maintain construction market share. Paul predicted a modest 1.2% market gain for steel castings in 1993 and assessed their principal markets for steel castings as:

* Railroads--the largest users of steel casting, the outlook for 1992-93 is flat. Rail markets are losing ground to truck competition and new articulated railcars will use fewer castings per car;

* Mining--a slight improvement in 1993;

* Construction--totals 20% of steel casting production, but ductile iron substitution is a growing problem;

* Trucks, motor vehicles--they represent 70% of steel casting output, but ductile iron is gaining in this market also;

* Ordnance/Military--downsizing defense spending by 5-10% annually will see demand off by 7% in 1993;

* Oil Field---shrinking demand will keep this segment flat;

* Pumps/Valves--with less than 10% of the market for steel castings, this segment also will remain flat in 1993.

Fred Meikle, president of Varicast, Inc. and SFSA president, reported that the organization's research projects--particularly those involving clean steel--will continue. Although attendance at the annual meeting was down, associate member numbers were up, partly as the result of a drive to expand membership, he said.

Industry Image

The steel foundry industry's image among its customers was the subject of a survey by Catherine Houska, Technical Marketing Resources, Inc. She discussed customer perceptions of foundry quality, cost effectiveness and technical assistance.

Critical services included lead time, quality (surface finish, tolerances, inclusions and strength), delivery and preproduction support. Although different industries reported varying requirements for acceptable quality, cost and technical assistance, customers indicated a growing trend toward using fewer foundries and developing closer working relationships with selected ones, Houska said.

This, she concluded, points to a further market contraction. Service-related issues were a major reason for eliminating vendors and designing away from steel castings in favor of forgings and ductile iron castings.

Export Opportunities

Charles Ludolph, U.S. Dept. of Commerce director of European Community affairs, said export opportunities that will allow American steel casters to profit from Europe's infrastructure needs (such as transportation, power and roads) are limitless.

He estimated that 30% of European foundries won't be able to contribute to the $500 billion investment needed to rebuild just the infrastructures of France, Germany and the United Kingdom. Along with a lower dollar, this translates into an immediate advantage for exporting steel foundries, Ludolph said.

The Eastern European market's bill for rebuilding will be even larger but it is about five years away. However, sharing in this area's rebuilding program requires knowledgeable and cautious planning, Ludolph said. He offered the services of his office for immediate assistance to foundries able to service overseas markets.

ISO 9000

Malcolm Blair, SFSA technical and research director, said ISO 9000 certification is imperative for exporting foundries. ISO 9000 is important for cross-border product standards in 18 countries, pre-empting all previous standards, he said. It also reduces the cost of quality control certification for cross-border product movement and specifies that a product meet specific standards.

ISO 9000 is a documentation system required in Europe and costs up to $19,000 for certification. Ninety countries are members of ISO 9000 and each has one vote to accept or reject recommendations for inclusion. The system consists of 2651 technical bodies that monitor product and process quality.