Implemented under IFC Russia Cleaner Production Program

2

Benchmarking study time line
1.
Sept. 2009
START UP
METHODOLOGY
ADVISORY
BOARD
2.
October –
November
2009
SELECTION OF
PARTICIPANTS
QUESTIONAIRS
3.
Jan-May
2010
DATA
COLELCTION
ANALYSIS
3 meetings of
ADVISORY
BOARD
4.
September
2010
PUBLIC
REPORT
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What made our study successful :
Stakeholder consultations process

Stakeholder consultations at every important stage:

Methodology



Questionnaire for data collection
Self diagnostic guide
Matrix of casting types

Advisory board included over 20 representatives from industry, R&D, officials and policy makers .

Consultation process

Written comments on all key documents


Meetings of Advisory board
Workshops in smaller teams
4

What is being benchmarked?
7 Key performance indicators (KPIs)
ENRGY USE
KPI 4
PROCESS
YEILD
KPI 1
OVERALL
PRODUCTION
EFFICIENCY
KPI 2
SAND USE
KPI 5
WATER USE
KPI 6
Depends on technology and processes
Depends on type of final product and technology
LABOUR
KPI 7
CAPACITY
UTILIZATION
KPI 3
Depend on management practices and equipment
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buy
1
Raw material
2
Selected KPIs and methodology tailored to foundry processes
1
Selected KPIs
Process Yield
2 Overall production efficiency
Metal recycling
Separation, transport
1 2 7
3
4
Capacity utilization
Energy
Metal yard
Storage, charging
Melting shop
Melting
Holding
Treatment
Risers and runners
Scrap
5
6
7
Fresh Sand
Water
Labor
1 2 7 3
1 2 4 6 7 3
Casting shop
Pouring
Cooling
Shake out
Separation
Finishing shop
Shot blasting
Grinding
Deburring
Thermal treatment
Inspection/testing
4
Packaging
Labeling
Storage
Shipping
Sell
Sand plant
Storage, preparation
Molding shop
Mold forming
Core making
Core setting
1 2 6 7 3 4 6 7
2 3 7
1 2 5 7 3
Sand recycling
Transport, сooling
2 5 3
7 KPIs methodology tailored to foundry process
6

32 category’ matrix developed to cover diversity of foundry’ production
Grey Iron Product Categories automatic moulding
GABH = automotive engine blocks and cylinder heads
GAAO = automotive other
GAAG = agriculture
GAMI = mining
Ductile Iron Product Categories automatic moulding
DAAU = automotive other
DAGE = general engineering mechanized moulding
GMBH = medium size engine blocks and heads (energy generation)
GMAG = agriculture
GMMI = mining
GMGE = general engineering mechanized moulding
DMAU = automotive
DMGE = general engineering manual (hand) moulding
GHBH = large size engine blocks and heads (energy generation)
GHMI = mining
GHGE = general engineering manual (hand) moulding
DHEN = energy generation components
DHCO = compressor components
DHGE = general engineering c: carbon steel, s: stainless steel, m: manganese; a: high alloy steel
Steel Product Categories automatic moulding
SARC = railway components (c)
SAMM = mining components (m)
SAAC = commercial vehicles (c)
SAGC = general engineering (c) mechanized moulding
SMRC = railway components (c)
SMMM = mining components (m)
SMPC = pumps & valves (c)
SMPS = pumps & valves (s)
SMGC = general engineering (c)
SMAC = commercial vehicles (c) manual (hand) moulding
SHMM = mining components (m)
SHPC = pumps & valves (c)
SHEA = energy components (a)
SHGC = general engineering (c)
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Study based on real data from enterprises
215 foundries
(first long list; 25% of all legally registered ferrous foundries in Russia )
55 sets of independent data for foundries
Coverage :
• Period :
• Total # of data sets:
• Categories covered:
• Industry:
3 years (2007-2009)
150
27 out of 32 (85%)
478 kt (14% of market)
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9

Russia foundries significantly lag behind European
Russian foundry European foundry предприятие
Russian ferrous foundry us per tone of good casting:
• Energy: 3 times more
• Sand:
• Water:
• Labor :
3,6 times more
161 times more
3,6 times more man-hours
4.5
mln t
CO2e
10

Inefficiencies eliminate Russian foundries’ competitive advantage in low prices
Prices for major resources in Russia are less than in the EU:
• Energy:
• Labor:
54%
92% less less
• Overheads: 71% less
Costs:
-36%
EU Russia Russia at EU efficiency level
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High levels of defect rate
• Average defect rate in Russia is
4 times higher than in EU
• Effect export: Russia exports less than
1% of casting
• Low quality – threat for internal markets as customers require certain quality (eg. automotive producers)
EU
4 times
Russia
12

How much can Russia ferrous foundry industry gain via resource efficiency?
$2.13 bln
USD - 26%
$ 3 bln
USD
- 29%
$ 3.3 bln
USD
Cost structure index for ferrous foundry (materials, labor, energy, equipment maintenance, overheads, water and sand)
13

Over 50% of the potential can be implemented via lowcost measures and management practices
Costs
$3.3 bln
USD
- 43%
Low cost and management practices Capital investment
14

KPIs and resource efficiency potential:
Capital investment
Low cost and management practices
15

Benchmarking of KPIs is a tool to priorities interventions to achieve maximum impact
Cost structure
Overheads
Equipment related
12,8%
7,1%
$ 3.3 bln
USD
Labor 21,4%
-3.1%
-2.7%
Energy
13,4%
-12%
-9.2%
9,7%
4,4%
9,4%
4,2%
Materials (metal) 45,2% -1.9% 43,3%
Russia average level Level of best practices
16

Next steps:
• Toolkit: Self diagnostic guide,
Compendium of KPIs, Best practice guide, Benchmarking study report
• Pilot program with 5-7 companies with foundries
• Resource efficiency finance directly and via FIs
17

Information available in public domain
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IFC contacts
IFC Russia Cleaner Production (IFC RCPP)
• Yana Gorbatenko, Program manager YGorbatenko@ifc.org
Study team IFC RCPP:
• Kristina Turilova, Task leader KTurilova@ifc.org
• Boris Nekrasov, Technical expert BNekrasov@ifc.org
• Maria Sigutina, PR and stakeholders MSigutina@ifc.org
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