Australian Die Casting Association(ADCA) Submission to VCEC April 8 2011
The Australian Die Casting Association (ADCA) is the national representative body of about
40 companies in the business of supporting and casting aluminium and zinc precision parts for
use in manufactured products. Die castings are the basis of most manufactured goods, be it in
automotive, whitegoods, building hardware and electronics and they are the essential element
of manufactured products globally. Die casting is the most economical and efficient method
of making complex parts and forms the structural base of most component assemblies and
therefore is a key capability for any manufacturing industry. Globally all manufacturing
strong nations have a major casting industry. Victoria as the centre of manufacturing in
Australia is also the centre of die casting company location.
The Global Financial Crisis which began in 2009 started a downward spiral that severely hit
manufacturing in the developed world. We saw the carmakers contract and in some cases
went into administration and the domino effect severely hit their suppliers. Die casting is
strongly linked to the fortunes of the car companies with industries such as construction,
whitegoods and electronics also being key end users. Globally die casting companies are still
vulnerable as they have large amount of under-utilised capacity and for some that has also
meant bankruptcy.
In Australia, the car companies were also severely hit as local production slumped with
Holden/Ford having major lay-offs, Mitsubishi closing down and Toyota also suffering.
Australian government initiatives have supported the local car companies with the New Car
Plan which incorporates a number of assistance programs. There have also been some new
major initiatives with the local Holden manufacture of the Cruz, four cylinder Ford Falcon,
Toyota Camry Hybrid and the commitment to a new engine plant and an upgraded die casting
facility by Toyota. As we see the automotive market pick up slowly in Australia we have to
ask when local production will be back at the previous high levels of 2006/7. Although
vehicle sales are up again over the one million mark in 2010 the swing to smaller more fuel
efficient cars has meant that the local car makers are still not at full capacity.
Victoria is the location of Mett Pty Ltd which was the star performer our industry and won
several awards including 2010 Supplier of the Year as part of awards organised the Federal
Chamber of Automotive Industries (FCAI). Mett was also inducted into the Victorian
Manufacturers’ Hall of Fame. The Nissan casting plant in Dandenong continues to be an
important local capability as it provides high quality parts to the Nissan global network of
casting suppliers. Nissan recently announced the successful bid for global contracts to supply
aluminium parts for Nissan electric vehicles and were awarded a GCIF grant. The contract
enables Nissan to make a $21.1m local investment and to achieve $160m of new sales and
support 150 jobs. The contract was awarded in Australia against stiff international
competition and one of the key deciding factors was the availability R&D and technical
support possible through the CAST CRC and CSIRO. The Nissan/CSIRO relationship spans
over a 30 year period since the establishment of the plant in about 1980. Both Mett and
Nissan export the vast majority of their castings into the global market and compete
successfully in the highly demanding automotive global supply chain.
So where does the future lie for the local die casting industry? We can see that it is possible to
export successfully into global markets. The future is seen by many as the markets in Asia,
especially as China, India and Thailand continue their rapid growth. It has been proven that
we can provide high value technologically advanced high quality components into those
markets. I believe this is the only way forward as the local market remains flat. It is possible
that other companies could follow the lead of the two aforementioned companies.
Other areas of opportunities will emerge in the move towards the electrification of vehicles
and the reduction of emissions. Weight reduction is a big factor in reducing fuel consumption
and emissions and probably more so in electric and hybrid vehicles because of increased
weight due to batteries. Weight reduction has been recognized globally with every carmaker
and automotive research program including lightweight design and materials as an important
area of development. Energy efficient manufacturing is also important as the energy
consumption and therefore emissions generated by production processes are considered. Die
Casting has a major advantage as the aluminium (secondary metal) is a recyclable metal and
requires a fraction of energy content compared to primary aluminium. It is important that our
companies thoroughly understand their energy consumption sources and endeavour to achieve
world class energy efficiency.
In the recent Team Australia Automotive mission into Detroit a senior buyer from Chrysler
stated “we would like to get our parts at the material source (aluminium) and that puts
Australia as a good location, we import castings from Brazil and there is no reason why it
cannot be from Australia”. Victorian companies are already doing this successfully and there
are many opportunities in the global market. t.
ADCA supports the die casting industry and seeks to help in its growth and capability
development. ADCA urges the Victorian government to collaborately support this vital
industry as it plays a pivotal role in developing a more competitive manufacturing industry
which will secure a successful manufacturing future for this state and Australia.
Sam Tartaglia
National President
Australian Die Casting Association