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INVESTMENT CASTING MARKET OVERVIEW NORTH AMERICA Scott Hanson President Auburn Investment Casting

INVESTMENT CASTING MARKET OVERVIEW NORTH AMERICA Scott Hanson President Auburn Investment Casting. Investment Casting Trends. North American Investment Casting Industry “Across the Board” increase in activity Foundries & Suppliers are busy Raw Material Cost/Availability Energy Cost

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INVESTMENT CASTING MARKET OVERVIEW NORTH AMERICA Scott Hanson President Auburn Investment Casting

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  1. INVESTMENT CASTINGMARKET OVERVIEWNORTH AMERICA Scott Hanson President Auburn Investment Casting

  2. Investment Casting Trends • North American Investment Casting Industry • “Across the Board” increase in activity • Foundries & Suppliers are busy • Raw Material Cost/Availability • Energy Cost • Offshore Sourcing

  3. Investment Casting Trends - cont’d • Segment summary • Aerospace – commercial – record level of new orders military – D.O.D. in transition • IGT – Significant spare part demand New Build Growth forecasted for Asia, Mid-East & Africa • Automotive - activity in complex applications & Turbocharger Systems • General Industry – growing with overall economy

  4. Market Segments • Aerospace • Jet Engine • Blades & Vanes (Airfoils) • Integral Wheels & Nozzles • Hardware and Structures • Airframe • Hardware and Structures • Missile & Rocket Components • Other Military Ordnance

  5. Market Segments • Industrial Gas Turbines • Blades & Vanes (Airfoils) • Hardware and Structures • Turbine and Combustor Components

  6. Market Segments • Automotive • Valves • Turbocharger Components • Complex Powertrain Parts • Chassis Applications - Passenger Car and Motorcycle

  7. Market Segments • General Industry • Medical Implants, Instruments & Testing Equipment • Industrial Valves / Pumps • Petrochemical • Food Processing • Off-Road Equipment • Firearms • Construction Equipment • Hand & Power Tools • Recreational & Sporting

  8. North American IC Industry • United States, Canada & Mexico • Approx. 46% of worldwide investment casting production • 130 companies • 170 foundries (not including dental, art or jewelry) • 30,000+ direct workers • All market segments • All ‘castable’ alloys • All size capability

  9. North American Investment Casting2005 Sales ($ Million - USD) Aerospace 1,600 IGT 800 Automotive 250 General Industry 550 TOTAL: $3,200

  10. North American Investment Casting Market by Alloy Type Aluminum & Copper: 7% Titanium: 9% Steel: 33% Superalloy: 51% 2005 Casting Dollars $3.200M

  11. Worldwide Investment Casting ($ Million - USD) 2005 North America 3,200 Europe 1,700 Asia 2,000 Other 100 TOTAL: 7,000

  12. Aerospace - Commercial Large Transports • World traffic up 6% • Load factors & New Orders at Record Level • 2005-2009 build forecast avg. 970 / year • Asian Market Growing Rapidly • New Programs • A380 / 747-8 • A350 / 787 • China Regional New Aircraft Builds > 50 Passenger ROM Associates: 2- 06

  13. Aerospace – Commercial cont’d Concerns / Issues: • Airline losses continue • High Fuel Prices • Several US Airlines in Chapter 11 • Airlines adopting the ‘Low Cost Business Model’

  14. Aerospace – Commercial cont’d Business Jets • New orders up significantly • Delivery of new aircraft 30% higher • Corporate ownership/leasing & Fractional Shares • Increased demand for used aircraft • Airframe & Engine Manufacturers very busy Private Jets • New Market starting to develop • Low cost replacement for some General Aviation models

  15. Aerospace - Military • Increase proposed for D.O.D Budget • Demand for engine spare parts for Fighter, Helicopter & Transport aircraft • Some Advanced Aircraft Programs being pushed out • Future Combat Systems - Smart Munitions - Lightweight Armament - Battle Field & Ship Board Applications

  16. Industrial Gas Turbines • High Spare Parts Demand • Increase in Aero derivatives • Growing ‘After Market’ Business • Large Frame Growth in Asia, Mid-East & Africa • Limiting/Competing factors • Infrastructure for NG • Price / Availability of NG • Future Technology: • Wind Power • Coal Gasification New Land-based Turbine Builds – 50MW + 2-06 Consensus Industry Forecast

  17. Automotive • New Investment Casting Applications • Design Activity in Commercial Trucks, Passenger Cars & High Performance Vehicles • Driven by new emission standards and fuel efficiency • Turbocharger Demand straining capacity • Titanium Alloy components growing

  18. General Industry • Dispersed among many casting suppliers • Wide range of size & alloys • Applications across all industries • Many Niche opportunities • High volume applications susceptible to offshore sourcing • Overall, should continue to increase with growth in economy

  19. North American Investment Casting2006 Estimated Sales ($ Million - USD) % Change Aerospace 1,725 8% IGT 850 6% Automotive 265 6% General Industry 570 3.5% TOTAL: 3,410 +6.5%

  20. Opportunities for Consideration - Machined Parts - Finished / Ready to Assemble - Low Volume & Custom Parts - Military Munitions & Support Equipment - Military Spares - ‘After Market’ for Aerospace & IGT - Medical Instruments & Testing Equipment - Conversions from other processes - Combining Multiple Parts into Integral Casting - Higher Value Alloys - Larger Castings - International Customers - Die Casting Prototyping

  21. 2006 Forecast Comparison % Change ICI + 6.5 GDP + 3.5 Ind. Production + 3.8 DeWolf - Commercial + 4% SFSA +10% BICTA + 8%

  22. Summary • Overall North American IC growth will continue • All Market Sectors will benefit • Off-Shore Sourcing effect on N. American foundries? • Some concern with Raw Materials & Energy • Opportunities for New Casting Applications • Need to focus on market Niches & Supplying Value Added Features / Services

  23. Acknowledgement • The Investment Casting Institute wishes to acknowledge the following companies for their contribution to this report. • - Alcoa Howmet • - Blayson Olefines, LTD. • - Doncasters Inc. • ESCO Turbine Group • - Hitchiner Mfg. Co. • ROM Associates

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