Technocast builds for the future: Caterpillar and Mexican firm Grupo Industrial Saltillo were the solutions to each other's quests for a strategic partnership in the casting of diesel engine blocks and heads.

Grupo Industrial Saltillo (GIS), based in Saltillo, Mexico, was ready to try a different strategy. As a $1-billion, publicly traded company consisting of manufacturing businesses in the construction, housewares and cast auto parts sectors, its metalcasting portion was based on high-volume automotive work. In the early 2000s, it consisted of Cifunsa, an iron auto parts manufacturer, and Castech, an aluminum block and head maker, which was recently sold to auto parts manufacturer Nemak, Monterrey, Mexico. Both metalcasters were independent facilities with the aim of providing various customers with automobile parts.

But for its next venture, GIS wanted to build a relationship with one good customer and develop a new metalcasting facility in conjunction with the customer's needs. At the same time, Caterpillar, Peoria, Ill., needed a long-term partner for a specific line of complicated parts.

In 2005, GIS and Caterpillar struck a joint venture agreement, and Technocast, Saltillo, Mexico, was born.

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"Both companies had common strategies and goals," said Juan Aguirre, manager of Technocast. "We felt it was a good match."

A $160 million investment, the metalcaster produces iron diesel engine blocks and heads for Caterpillar. Its first projects will be the highest volume jobs, at 6,000 units a month. It currently is the sole source supplier of three products for Caterpillar and has completed the production parts approval process for one of the parts. Eventually the firm will absorb 70% of the tonnage produced at the Caterpillar metalcasting facility in Mapleton, Ill.

Investment Decision

Before Caterpillar decided to enter into a joint venture, it was faced with a situation that demanded attention. Its two main green sand molding lines in Mapleton, which produced its diesel engine blocks and heads, were operating on old equipment that required investment in order to meet desired productivity levels to remain competitive.

"Here we have a 70s-era metalcasting facility that needed to be recapitalized," said Ric Woldow, technical manager at Caterpillar's Cast Metals Organization. "So the economics of recapitalizing the existing facility was analyzed vs. entering the joint venture in Mexico."

Caterpillar decided to move forward with the joint venture, with plans to phase out its existing green sand lines dedicated to diesel engine blocks and heads. Its other casting operations will remain running in the Mapleton plant, and new equipment has been installed in a couple of lines, including its floor molding sector, which casts parts for the strong wind energy market.

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Meanwhile, Technocast is plowing through the steps necessary to reach full production in 2009. At full capacity, the facility should produce 93,000 tons a year.

With that volume in mind, Technocast was designed with wide open spaces and room for expansion. Its molding line was engineered for efficiency and productivity, even during times when equipment is down. Plus, the proximity of Technocast to the U.S., along with its affordable local resources, was hoped to keep operational costs and casting prices low.

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Border Benefits

Mexico's most obvious cost-saving advantage is its less expensive labor costs, but if Technocast works as efficiently as it's meant to, the effect of lower labor costs will shrink. Technocast was engineered to be highly automated for better throughput and reduced labor costs. At its startup, labor accounted for 13% of the total operational costs, but at full capacity, it is expected to account for 9-10%.

Business incentives from the Mexican government for companies located in the Saltillo industrial park also were a draw. And Saltillo's proximity to other engine manufacturers, such as Cifunsa and Castech, has harvested a community of engineers that can share ideas and processes.

"When you have similar companies clustered together, dedicated to the same thing, they can help each other develop technology," Aguirre pointed out. "We also have the capability of receiving faster feedback and responding quicker since we're close to the U.S."

Technical Integration

According to the joint venture agreement, GIS owns two-thirds of Technocast and Caterpillar keeps a one-third share. The board of directors is represented by four GIS members and two Caterpillar members, but the technical director is appointed by Caterpillar.

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John Grabel, product development manager of Caterpillar, said the company gave some input to the facility's setup, since they've been running lines for the parts for years. But most of that input has been related to the successful casting of a specific part rather than the overall efficiency of the line.

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Technocast employed Vulcan Engineering as a modified turnkey contractor.

"We wanted to have control over the major purchases," said Juan Carlos, who was project manager of Technocast during the design and setup of the facility. "But we needed someone to integrate everything and help us acquire the rest of the equipment. We're in the business to make castings, not plants."

The main goal of the new facility was to create a continuous production flow that would reduce labor and increase throughput. An open plant configuration was critical to achieving that flow.

"I wanted a facility that makes the process visible, so you can see very easily what's going on," Juan Carlos said. "The metalcasting industry has a reputation of being smoky and nasty, so we decided, let's be different. We wanted wider spaces and more room. We wanted it to feel less cramped."

The result is an airy facility spanning 550,000 sq. ft. with a view of the Sierra Madre Mountains. The setup incorporates two Loramendi coremaking lines with a single Kunko Wagner molding line, which is fed by three ABB furnaces melting 45 tons/hour total. General Kinematics installed the plant's shakeout and cooling conveyance equipment. With expansion in mind, the melting, coreroom and finishing departments were designed with extra space for additional equipment or materials, if necessary, but all will still be tied to a single molding line.

"As much as possible, we wanted a single-stream production flow with as little process interruption as possible," Juan Carlos said. Defume times for cores, which can be 16 hours, put a wrench in the total single stream flow, however. An inventory of cores is used to keep the line running without pause.

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Technocast's molding line produces both blocks and heads, but two separate finishing lines, equipped by Pangborn and Maus, were installed to accommodate the two products.

"Capacity is balanced so as one product line's molds are cooling, the other product line is going through the finishing department," Cados said.

Potential downtime in specific areas of the metalcasting operation also has been anticipated. "The four areas of operation, molding, pouring, core making and shakeout, are independent of each other, so if one line goes down, we can continue operation in the other sections," said George Kokos, a Caterpillar employee serving as technical director for Technocast.

The sand system, which was installed by Simpson Technologies, has built-in added capacity for situations where the molding line is needed to produce more molds if the finishing line is down.

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The facility will produce castings in a range of volumes from 120 a month to 6,000 a month. Eventually it will cast heads and blocks in the 5.5- to 43-L range but will start out in the 10- to 32-L range. Average engine head and block weight is 425 lbs. (192.8 kg) and 1,300 lbs. (589.7 kg).

According to Aguirre, Technocast is expected to have double the productivity as its aluminum counterpart, Cifunsa, and the same productivity as Caterpillar's Mapleton plant, with fewer man hours/ton worked. The facility is designed to be operated in two shifts, 296 days a year, 15.5 hours a day by up to 700 employees.

Missteps and Recoveries

Juan Carlos believes that due to the extent of automation at the plant, which extends everywhere but core assembly, the facility should be operated at full production with fewer than the expected 700 employees.

"In my opinion, this is the best metalcasting facility of its class," Juan Carlos said in February, as Technocast neared production ahead of schedule. So far, the joint venture's Caterpillar counterparts have acknowledged the strides the new facility has made.

"We've had comments from other metalcasters who have seen the parts coming out of the facility that these are the best-looking castings they've seen," Grabel said.

"This is a good bang for your buck," Kokos declared during a walk-through of the facility in February. "So far we're ahead of schedule and have had a great response from the customer."

But that doesn't mean there haven't been hiccups along the way. As with any startup, the logistics of the operation requires acute attention to detail. "Now that the plan is in place to create this thing, we have to look at the details of how to make it work," Grabel said.

Caterpillar also is dealing with the pains of moving an in-house operation a plane flight away. Everyday problems that crop up in running the facility in Mapleton often can be fixed simply with tools or equipment already present. With the new operation in Saltillo, the answer is no longer a few steps away.

"It's been a learning experience. You forget what it really takes to start up a green sand facility," Wodow said.

Technocast, Saltillo, Mexico

Year Founded: 2005.

Facility Size: 550,000 sq. ft.

Metal Cast: Gray iron.

Casting Process: Green sand.

Employees: 225.

Casting Products: Diesel engine blocks and heads.

Cycle Time Breakdown:

Coremaking: 30 minutes

Core defume: 16 hours

Molding: 1 hour

Cooling: 7 hours

Mold set: 2.5 hours

Finishing: 1 hour

TOTAL: 25 hours

Shannon Wetzel, Senior Editor