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Suppliers examine business, environmental trends.

Despite generally good business conditions in recent years, foundry equipment manufacturers and suppliers are casting a wary eye ahead as they look toward current and long-term trends in the economy and the impact new environmental regulations will have on their businesses, as well as those of their foundry customers. These subjects were the focus of the 72nd Spring Conference of the Casting Industry Suppliers' Assn, March 15-18 in Ft. Myers, FL.

According to Joseph R. Ponteri, senior vice president, Lester B. Knight & Assoc, business prospects for foundries in the near term may not be pleasant, but the longer term outlook shows improvement. In terms of the general economy, Ponteri said that 1989 showed a significant slowdown compared with 1988. "Overall corporate profits fell an average of 11.5% for '89 versus '88," he said. "Business fixed investment, adjusted for inflation, rose 8.4% in 1988 compared with only 3.3% last year.The fourth quarter alone showed an annualized rate of 6.4%. We expect this to increase this year by a rate of only 2.9%. "

While a business slowdown appears imminent during 1990, Ponteri indicated that it may represent only a breather before another period of rapid growth. "We view 1990 and '91 not as recession years, but as generally sluggish years for the economy. By mid-1991 we expect this slowdown to bottom out and the economy to begin relatively rapid growth. Indications are that 1992 through 95 will be strong years for the economy across the board."

Environmental Trends

"Several years ago I thought that the train carrying environmental regulations had passed by. But now it's on its way back with another cargo of much more stringent regulations," Richard Caister told the CISA meeting attendees. "The [new] regulations are more complex and far reaching than the early days and will require our mutual cooperation in order to survive."

Caister, vice president/Facilities Development for Intermet Foundries, considered to be the nation's largest independent foundry organization, sees current trends toward new and tougher environmental legislation as possibly the most critical challenge confronting foundries in the 90s. "All industry is in a 'fishbowl' and is under intense scrutiny by the public and public advocacy groups which now have unlimited access to volumes of information about materials used in industry. Dealing with [the new] legislation and insuring that our plants are in compliance is a job for a new major specialty--environmental engineering."

The Intermet executive said that the capital expenditures required to meet environmental and health regulations will be dollars not spent on expansion or operational improvements. "Intermet in the U.S. over the past five years has spent nearly $9 million in capital projects dealing with EPA or OSHA mandated regulations. Our best guess today is that we'll spend about $15 million in the next five years." He estimates that annual operating expenses for this control equipment will cost another $4 million.

Caister requested help from both suppliers of consumable products and equipment manufacturers in complying with the new regulations, by eliminating materials and processes that may result in health and safety problems. "Develop nontoxic alternatives that will do the job and we'll beat your door down to buy them. Methanol and phenol in binders and hazardous chemicals in core washes need your immediate attention.

"When you design equipment for us in the future, be aware of its potential environmental impact. Give us the next generation of collection systems now. Give us systems that will better capture problem materials, will be easier to operate and will be less prone to potential safety hazards. All packing materials should be either consumed or capable of being recycled on site. The only thing leaving our premises should be castings. Help us eliminate all additional waste," Caister suggested.

Gary Thoe, president and COO of Waupaca Foundry, echoed Caister's sentiments on the accelerating trend of stricter environmental compliance. Waupaca operates four foundries in Wisconsin, and according to Thoe, "Wisconsin has some of the most restrictive environmental laws that can be found anywhere in our country, with the possible exception of California. And we see a national trend toward the type of environmental atmosphere that we [are currently] working under." Since 1984 Waupaca has spent 35% of its capital dollars in the environmental area, much of which went toward installing, in 1984, water and solid waste treatment facilities at three of their plants.

Thoe, too, called on industry suppliers to take an active part in reducing hazardous materials and meeting environmental regulations. Avoiding the use of nonhazardous materials, such as solvents which may find their way into our sands, will continue to grow in importance. We think that many suppliers are better equipped than we are to do testing on their products and how they will react in the foundry. Some of you may even be able to suggest control technology for the emissions from your products." Thoe also suggested that as a last resort "we may actually have no choice but to look for products to use in our processes that do not have organics in them."

The Waupaca president concluded on positive note by saying, "As tough as these challenges seem, there will be a foundry industry in this country for a long time. We each have felt many times before that we were faced with the impossible only to find ourselves working our way through it, and it's no different now. The key will lie in how well we all work together."
COPYRIGHT 1990 American Foundry Society, Inc.
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Copyright 1990, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Casting Industry Suppliers' Assn.
Author:Kanicki, David P.
Publication:Modern Casting
Date:May 1, 1990
Words:910
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