Foundry Industry in Finland - A Summary

 

The foundry industry is one of the suppliers that profides for the success of Finnish industry. In 2009 the production value of the member companies of the Association of Finnish Foundry Product Industries , itself a member of the Federation of Finnish Technology Industries, was approximately 250 million Euros. The foundry industry employs some 2500 persons. The Association has 31 member companies. The foundries are divided into cast iron, steel and metal foundries according to the raw materials they use.

Iron foundries

In Finland there are 13 iron foundries that employ more than 10 persons. Automatic moulding of cast iron is performed by Componenta Oyj in Karkkila, Pietarsaari and Pori as well as by Niemisen Valimo Oy. The largest hand moulding iron foundries are Componenta Suomivalimo Oy in Iisalmi, Leinovalu Oy in Salo, Metso Foundries Jyväskylä Oy in Jyväskylä, Peiron Oy in Kangasala and in Kokemäki and finally, Uudenkaupungin Rautavalimo Oy. The casting of cast iron has been highly centralized. This makes the number of small iron foundries in Finland low.

Steel Foundries

At the time there are seven large steel foundries in Finland: Keycast Oy in Raahe, Leinovalu Oy in Salo, Metso Minerals Oy Lokomo Steel Foundry Tampere, Peiron Oy in Kokemäki, Sacotec Components Oy in Riihimäki and Sulzer Pumps Finland Oy Karhulan Valimo. The production method of all these steel foundries is hand moulding in silica sand with the exception of Sacotec, where the moulds are manufactured by pattern die techniques. Keycast Oy uses shell mould techniques in addition to hand moulding. The Sulzer foundry also utilizes the so called Replicast method.

Metal foundries

In metal foundries the production method is either sand casting or permanent mould casting. The vast majority of non-iron alloys casted in Finland are aluminum alloys casted in various permanent moulding techniques. Some of the companies casting aluminum alloys in permanent moulds are Alteams Oy's production plants in Laihia and Loppi as well as Novacast Oy in Pirkkala, Alsiva Oy in Lehmo, Jukova Oy in Yliskulma, KM-Valu Ky in Säynätsalo and Selcast Oy in Karjaa.

Aluminum sand moulding in Finland is performed by among others Erikoisvalu H. Laakso Oy in Mäntsälä and Alteams Oy in Loppi. The largest copper alloy foundries are: Keskipakovalu Oy in Tampere, Oras Oy in Rauma and Oy Johnson Metall Ab in Pirkkala. Abloy Oy concentrates in zinc alloys. Casting magnesium or titanium alloys is insignificant in Finland.

The Market Picture

Significant underlying factors in the pronounced centralization of the foundry industry have been tightening up of competition for market shares, pressure for lower prices and also internationalization. The iron foundry group Componenta Oyj has been among the companies that reap the benefits of synergy. Componenta Oyj has expanded it's business into the Netherlands, Turkey and Sweden. Keycast Oy from Raahe and Uudenkaupungin Rautavalimo Oy have developed their companies by investing in foundries in Sweden. Alteams Oy, a part of Kuusakoski group, has expanded into the new market areas of China and India. 

Along with internationalization, the competition for market shares has become even more stringent. The means of survival for small and medium-sized foundries are first-class know-how, quality, research and development cooperation and delivery reliability. It seems that at least medium-sized foundries have found their turf quite well.

Internationally, the changes in foundry industry depend on the prevailing worldwide economic trends and especially on the growth of the automotive industry, among other things. The quantitative and qualitative changes in for instance the consumption ratio of iron castings and alloys in the automotive industry have a direct impact on foundries. There have been efforts to bring down the weight of cars both by increasing the use of aluminum and magnesium (often especially castings) and by giving up metals in favor of plastics (polymers) and polymer-based composite materials. So far the trend has not caused disasters for the foundry industry. The automotive industry is still among it's the most important customers and is apparently likely to retain that position for long.  Also, recyclability aspects keep iron and steel castings competitive by comparison with alloys and plastics.

According to a widely held view, the success factors of the Finnish foundries at the global casting market are as follows: the foundry offers Build to Order single piece or workshop production quickly and flexibly. Delivery time is often a competitive advantage for the foundry's customer as well. Further, the foundry delivers ready-to-install components or partnership manufacturing directly for the assembly line and builds networks with lean producers. Also, because a cheaper supplier can always be found, the foundry creates surplus value to the customer by research and development cooperation. As far as research and development is concerned, proximity and the fact that the foundry is domestic are assets. However, even the domestic foundry products must have a market price or one close to it. The foundries have to adjust to the roles of proto and backup foundry. A Western backup foundry is always needed if the volume production comes from low cost level countries. The foundries also specialize and build customer-specific product lines.

The recession that started at the end of 2008 has naturally had a radical impact on the foundries' situation. The automotive industry is the largest individual cast consuming industry and it is in big trouble at the moment. Luckily, Finland does not deliver much casting for the passenger car industry but for heavy trucks and work machines very much so. The foundries delivering forest and paper industry components will certainly suffer as well. Instead, the recession has not had that heavy an impact on the demand for wind farm components or diesel and electric motors. In the year 2009 foundry production hit rock-bottom. Time will tell if the expectations for an upturn in 2010 are justified.