Resource efficiency benchmarking of

the Russia Ferrous Foundry Industry:

Key findings of the study

Implemented under IFC Russia Cleaner Production Program

GOAL: to identify the ferrous foundry
sector’ resource efficiency potential and
develop practical tools for foundries to
implement it
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 Benchmarking study time line

START UP
2. SELECTION OF
METHODOLOGY
1. PARTICIPANTS
October –
Sept. 2009 November
ADVISORY 2009 QUESTIONAIRS
BOARD

DATA
COLELCTION
3. ANALYSIS 4.
3 meetings of
PUBLIC
Jan-May September REPORT
2010 ADVISORY 2010
BOARD

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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

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 What is being benchmarked?
7 Key performance indicators (KPIs)

OVERALL
PROCESS
PRODUCTION Depends on technology
YEILD
EFFICIENCY and processes
KPI 1
KPI 2

ENRGY USE SAND USE WATER USE Depends on type of

final product and
KPI 4 KPI 5 KPI 6 technology

CAPACITY
LABOUR
UTILIZATION Depend on
KPI 7 management practices
KPI 3 and equipment

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 Selected KPIs and methodology tailored to
foundry processes
Selected KPIs
1 Process Yield
2 Overall production efficiency
Metal recycling 3 Capacity utilization
Separation,
transport 4 Energy
1 2 7
Risers 5 Fresh Sand
Melting shop and Scrap
runners 6 Water
Metal yard Melting
Storage, Holding 7 Labor
charging Treatment

buy 1 2 7 3 Casting shop Finishing shop

1 2 4 6 7 3 Pouring Shot blasting
Raw Grinding Packaging Storage
Cooling Deburring
material Labeling Shipping
Shake out Thermal treatment
Separation Inspection/testing Sell
1 2 4
Sand plant Molding shop
Storage, Mold forming
preparation Core making
Core setting 1 2 6 7 3 4 6 7
2 3 7
1 2 5 7 3

Sand recycling
Transport, сooling 7 KPIs methodology tailored to foundry process

2 5 3

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32 category’ matrix developed to cover diversity
of foundry’ production
Grey Iron Product Categories Ductile Iron Product Categories Steel Product Categories

automatic moulding automatic moulding automatic moulding

GABH = automotive engine blocks DAAU = automotive other SARC = railway components (c)
and cylinder heads DAGE = general engineering SAMM = mining components (m)
GAAO = automotive other SAAC = commercial vehicles (c)
GAAG = agriculture SAGC = general engineering (c)
GAMI = mining

mechanized moulding mechanized moulding mechanized moulding

GMBH = medium size engine blocks DMAU = automotive SMRC = railway components (c)
and heads (energy generation) DMGE = general engineering SMMM = mining components (m)
GMAG = agriculture SMPC = pumps & valves (c)
GMMI = mining SMPS = pumps & valves (s)
GMGE = general engineering SMGC = general engineering (c)
SMAC = commercial vehicles (c)

manual (hand) moulding manual (hand) moulding manual (hand) moulding

GHBH = large size engine blocks and DHEN = energy generation SHMM = mining components (m)
heads (energy generation) components SHPC = pumps & valves (c)
GHMI = mining DHCO = compressor components SHEA = energy components (a)
GHGE = general engineering DHGE = general engineering SHGC = general engineering (c)

c: carbon steel,
s: stainless steel,
m: manganese;
a: high alloy steel

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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)

55sets of
independent data for foundries

Coverage :
• Period : 3 years (2007-2009)
• Total # of data sets: 150
• Categories covered: 27 out of 32 (85%)
• Industry: 478 kt (14% of market)
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KEY FINDINGS OF THE
STUDY

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 Russia foundries significantly lag behind European
Russian foundry European foundry предприятие

Russian ferrous foundry us per tone of good casting:

• Energy: 3 times more
4.5 mln t
• Sand: 3,6 times more CO2e
• Water: 161 times more
• Labor : 3,6 times more man-hours

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Inefficiencies eliminate Russian foundries’ competitive
advantage in low prices

Prices for major Costs:

resources in Russia are
less than in the EU:

• Energy: 54% less -36%

• Labor: 92% less

• Overheads: 71% less

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 4
less than 1% of casting times

• Low quality – threat for

internal markets as customers
require certain quality (eg.
automotive producers)
EU Russia

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How much can Russia ferrous foundry industry gain via
resource efficiency?

$2.13 bln $ 3 bln $ 3.3 bln

USD - 26% USD USD
- 29%

Cost structure index for ferrous foundry (materials, labor, energy, equipment maintenance, overheads, water and sand)

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 Over 50% of the potential can be implemented via low-
cost measures and management practices
Costs

$3.3 bln
USD - 43%
Low cost and
management
practices Capital
investment

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KPIs and resource efficiency potential:

Capital
investment

Low cost and

management
practices

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 Benchmarking of KPIs is a tool to priorities interventions
to achieve maximum impact
Cost structure
Overheads 12,8%
Equipment related
$ 3.3 bln
7,1%
-3.1%
USD

Labor 21,4% -2.7%

9,7%
-12% 4,4%
Energy
13,4% 9,4%
-9.2% 4,2%

Materials (metal) 45,2% -1.9% 43,3%

Russia average level Level of best practices

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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

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 Information available in public domain

http://www.ifc.org/ifcext/eca.nsf/
Content/Russia_Foundry_Russian

http://www.ifc.org/rcpp

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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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