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Be aggressive, got to be aggressive.

Two speeches I listened to recently (one at CastExpo '05 and the other at a small business seminar) refocused some of my thoughts on how U.S. metalcasters can compete in a global market. While we must continue to upgrade our facilities in the U.S. with enhanced technology, value-added services and second-to-none customer service, we also must realize that our strengths and competencies aren't bound by the Atlantic and Pacific oceans that surround us. We must realize that our capabilities and knowledge are second to none in the world market and valued by potential customers throughout the globe.

With the current value of the U.S. dollar in the global market, a great opportunity exists for U.S. metalcasters to export their products to new customers abroad. Consider the current value of the strong Euro to the weaker U.S. dollar, potential European customers could see a significant reduction in casting price from buying in the U.S. Although this price reduction doesn't factor in shipping, insurance, taxes, duties or other delivery costs, the difference in currency even with the added costs makes it an eye-catching alternative for European casting buyers.

Every industrialized nation around the globe requires metal castings, but each of these nations has gaps in its production capabilities where domestic sources can't be quality- and/or price-competitive. Take, for example, the steel railroad casting market in the U.S. This niche of our industry was decimated by the economic downturn from 2001-03. As a result, the capacity left in the U.S. today is running full tilt and still has trouble trying to keep up with cur rent railcar production demands. While U.S. railcar producers would like to use U.S. sources, they are having to explore foreign producers to keep up with the railcar demand. Why can't U.S. metalcasters explore these supply inequities in other countries? In some cases they are.

U.S. cast ductile iron pipe is being exported to China. Cast and machined ductile and malleable iron valves are being sent to Mexico and South America. Cast ductile iron automotive components are being exported to Europe.

The U.S. has the most extensive metalcasting capabilities in the world--from material to process. You can't forget that. While your niche capability may seem commonplace to you, don't assume metalcasting industries in other nations feel the same way. The market analysis required to find these niches is the first step, followed by finding the best agent to represent and support your efforts to infiltrate the new market. The agent is the one to cross the "t"s and dot the "i"s to determine the true end cost of your U.S.-produced castings when they arrive at your foreign customer's doorstep.

Many of you reading this column probably think I am crazy for suggesting exporting as a way to develop new customers. "I am only a small, 75-person shop that has enough trouble keeping my customers in the U.S. happy," you are saying. "How can I possibly expand globally?" My response is that today's average metalcaster, with its costs in order and capabilities that people need, can and should consider the prospect of global customers. The barriers to doing business abroad have dissipated while the resources have increased.

As with anything new, the underlying key is having the confidence to overcome the fear of the unknown. Many of us fight every day with our customers in the U.S. over pennies because many of them view suppliers based on price, not quality. Why not try a new market where your capabilities and quality may be valued at the same level or even above that of price? While tapping foreign markets may not mean new customers for you tomorrow, it may mean new customers three years down the road when the U.S. market may be ready to turn (for the worse) again.

If you have any comments about this editorial or any other item that appears in MODERN CASTING, please don't hesitate to email me at aspada@afsinc.org.
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Title Annotation:EDITORIAL; suggestions for metal casting industries to compete in gobal market
Author:Spada, Alfred T.
Publication:Modern Casting
Geographic Code:1USA
Date:May 1, 2005
Words:677
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