Trends Germany, Italy, Türkiye: foundry industries compared

Germany, Italy and Turkey are the three most important producers of castings among the countries belonging to the CAEF (Association of European Foundries). Taking advantage of some statistical advances from the German Association “BundesverbandderDeutschenGießerei-Industrie (BDG)”, the Turkish one “TurkishFoundryAssociation” and some information and market data from the ICE agency “ITA – ItalianTrade Agency”, it is possible to draw a rough picture on the performance of the foundry sector in these three countries.

How the ranking of the main CAEF countries has changed over the last 10 years

Until 2013, the top four boxes of the main producers of castings (ferrous and non-ferrous) among the CAEF member countries were occupied respectively by:

• Germany (production share of the total CAEF countries equal to 34%)
• Italy (13%)
• France (12%)
• Türkiye (10%)

Since 2015, Turkey has overtaken France and since 2018 also Italy. The post-pandemic crisis ranking, in addition to the order of positioning, has also undergone important changes with respect to the relative weight of each country in the European foundry panorama.

Germany retains its leadership, but with a significant loss of its representativeness in terms of volumes produced, which fell from 34% to 28%. Turkey moves up the rankings from fourth place and follows Germany, gaining eleven percentage points. Italy and France are in third and fourth place respectively, with slight changes in their weight.

• Germany (28%)
• Türkiye (21%)
• Italy (14%)
• France (11%)

Together, these four countries account for 74% of the production of ferrous and non-ferrous castings in the CAEF area.

Foundry production in Europe and Turkey: the Turkish advance among the CAEF countries

Between 2006 and 2022, the Turkish foundry, in terms of volumes produced, developed at a CAGR (CompoundedAverageGrowth), i.e. at an average annual growth rate of +6%, against a negative average annual rate for the entire European industry of foundry of -2.5% without Turkey itself (a drop which is reduced to -1.4% if Turkey is also included).

Overall casting production in Turkey has tripled, from just over 1 million tonnes in 2006 to over 3 million in 2022. The most disruptive growth has been experienced by non-ferrous alloys, which grew at an average annual rate of +12%. , while the volumes produced went from just over 100,000 tonnes in 2006 to 740,000 tonnes last year.

In the area of ferrous alloys, however, the average increase was +5.1% with a production level more than doubled (from 1.1 million in 2006 to 2.4 million tonnes in 2022).

In 2009 and 2020, despite Turkey being hit by the international crisis and the pandemic, its foundry industry managed to contain losses in both recessionary phases, reporting declines that were decidedly smaller than those experienced by the other main competitors Europeans, who have suffered from major critical issues with a significant reduction in the volumes of castings produced.

In the same time period 2006-2022, the other three main CAEF countries, i.e. Germany, Italy and France, recorded a contraction in volumes which corresponds to an average annual rate of negative growth, i.e. equal to a CAGR of around -2% for the first two and -3% for France.

Some structural characteristics of foundry production in Europe and Türkiye

From the point of view of the main structural characteristics of the foundry industry, Germany, Italy and Turkey present substantial differences.

Number of companies, their size and average production in foundries in Germany, Italy and Turkey

The Italian and Turkish foundry production fabric is made up of a fairly similar number of units, around a thousand companies, while the German one has around half that number. Compared to the employed workforce, however, the German foundry has almost three times the number of the Italian one and double that of the Turkish one. As a direct consequence of these two peculiarities, the average size of German foundries measured as a ratio n. employees/no. companies, as a general figure, is more than five times the Italian reality and three times the Turkish one, with accentuated differences between the ferrous and non-ferrous sectors.

The German foundry is mainly structured as a medium-sized company, with the typical nature of family management. Around 91% of companies employ up to 500 people. The largest companies, with over 500 employees, represent 9% of the total industry.

The Italian foundry industry, on the contrary, is characterized by the prevalence of micro and small businesses:

• 55% of foundries have fewer than 10 employees;
• 36% of companies belong to the class between 10 and 49 employees;
• 8% are between 50 and 250 employees
• Only 1% over 250 employees.

Compared to the distribution of foundries among the types of alloys, Italy presents a more marked imbalance towards non-ferrous ones, approximately 83% of the total, while for Turkey and Germany there is a greater balance.

The situation is reversed if we analyze the output of the two sectors in terms of tonnes. In fact, in the production mix, among the three countries, Italy has a better balance, respectively 56% ferrous alloys and 44% non-ferrous alloys. For the other two countries, however, there is a heavy imbalance in favor of ferrous metals: 76% for Turkey and 80% for Germany.

The size of the bubble expresses the total volume of castings produced by the different industries; therefore, in the graph of ferrous metals, for example, the German foundry is represented by a larger size due to its over 3 million tonnes produced per year, followed by the Turkish one with over 2 million and the Italian one with around 1 million tonnes.

Regarding the ferrous metal foundry sector, in terms of combination of size and average production per company, the German foundry distances itself significantly from the other two countries with the following values respectively: 158 employees and over 14,000 tonnes of ferrous castings per company. Italy and Turkey have average company sizes that are not too different (37 employees per company in Turkey and 54 in Italy), while in terms of average production of ferrous castings, Italy prevails with around 6,000 tonnes compared to 4,000 in Turkey.

As regards the average production per employee, the situation is reversed: as regards the ferrous castings sector, Italy and Turkey express an equal value of 113 tonnes per employee, while Germany stops at 90 tonnes.

Even on the non-ferrous front there is an abysmal distance between the average size of German foundries (97 employees per company) and those of Turkish (35 employees) and Italian ones (18 employees).

Compared to the average production for non-ferrous foundries, Italy remains at the bottom with 1,000 tonnes, while Germany leads with around 2,500 tonnes, followed by Turkey with 1,800 tonnes.

Finally, the productivity per employee of the non-ferrous sector rewards Italy with 56 tonnes, while Turkey follows closely with 52. Germany's productivity in this case is drastically lower, with 25 tonnes per worker.

In summary, the average size of German foundries is significantly higher in both the ferrous and non-ferrous casting sectors. The evaluation of average production changes significantly if you look at it from the point of view of the employees or if you are based on the number of foundries. In this last case, the German superiority is very evident for both sectors, while the productivity per employee takes on decidedly better values for the Italian and Turkish foundries.

Production performance of the foundry sector in Germany, Italy and Türkiye

The 2022 results present elements of divergence between the three main CAEF producers analyzed here. Italy and Germany close with a negative sign in all sectors with a worse situation for the Italian output of non-ferrous castings.

Turkey confirms a positive performance across the board, with double-digit growth in the production of non-ferrous castings which confirms the strong growth trend of this country over the last ten years.

Turnover comparison

The comparison relating to the turnover variable is only possible between Italy and Germany, as data relating to Turkey are not currently available.

Compared to the entire foundry industry, Italy performed slightly better, with annual growth 2022 vs 2021 of +22% compared to +19% in Germany.

Going into the detail of the individual sectors, however, the increase in turnover of ferrous metal foundries was significantly more important for Italy (+33% compared to +18% in Germany). On the other hand, for non-ferrous metal foundries the growth in German turnover was higher, with a rate of +20% compared to +16% in Italy.

Even the average turnover, despite being a very crude figure, helps to understand the dimensions and allows some reflections on the phenomenon of the concentration of the two foundry industries.

From this structural profile, German ferrous metal foundries have an average size double that of the Italian one, respectively 35 million euros and 17 million euros (2022 data), while on non-ferrous foundries the gap is even more accentuated, with the German companies which have an average size almost four times larger than Italian ones (19 million compared to 5 million).

Source: In Fonderia – ll magazine dell’industria fusoria italiana