Looking at the Environmental Protection Problems of Castings Sourcing from Global Foundry Sourcing Conference

The 21st Global Foundry Sourcing Conference was opened on Sep. 22nd 2017, in Grand Regency Hotel, Qingdao. The conference was held by Suppliers China Co., Ltd. (SC), co-organized by Nation Technical Committee 54 on Foundry of Standardization Administration of China, more than 350 delegates from both at home and abroad having attended. The main contents of this conference can be summarized as follows:

1、The environmental protection policy greatly affects the small-medium foundries at home

Currently, with the ever-growing development of Chinese foundry industry, there has been a batch of large-scale professional foundries, who are transforming into green, circular development with complete environmental protection, advanced technology and equipment. Apparently, Environmental protection has been hot words on the lips of every foundry entrepreneur. From prevention and treatment of air pollution delivery channel in the Jing-Jin-Ji regions last year, to the supervisions of environmental protection inspection group, the local governments issued all sorts of environmental laws and regulations and environmental policies, such as eliminating the laggards, transformation in limited time, staggering production, shutdown enforcement, etc. Environmental protection is all good but no flexibility, especially, irritates a great many of excellent foundries, which not only blocks the foundry transformation and upgrading but also generates challenges on the transnational supplier’s chain. Nevertheless, the environmental protection policy exerts little effect on foundries who are equipped with large scale, advanced technology and normalized management. Among this conference, take Shannxi Huaxiang Group Co., Ltd., the world largest foundry of compressor parts, and Shanghai No.1 Machine Tool Foundry (Suzhou) Co., Ltd., the professional foundry with the most investment and largest scale in Shanghai, as examples, they gave the company introduction, production introduction, etc. as the eminent foundries showing the changes Chinese foundry. 

2、Transnational buyers participated the conference actively with their definite goals

The conference has attracted over 60 transnational buyers, such as Foton Daimler, GE, Delphi, Carraro Group, FLSmidth, Wacker Neuson, Decathlon, Lemken, Thyssen Krupp, Armstrong, Hyundai, Hitachi, SKF, Norwood, Holam, Korens, etc., among which MAHLE, Parogon, Shannxi Automobile, Shandong Pengxiang Automobile made purchasing presentations about global sourcing strategy, development plans of Chinese suppliers, requirement on suppliers and specified introduction of supply chain management.

The large transnational groups put emphasis on professional safety, health and environmental protection at the beginning of developing suppliers. And, this time the environmental protection policy do not make great influence on the supplier chain management. The transnational buyers value more about the suppliers’ R&D ability, production equipment, detection ability, management level, environmental protection level, occupational health and other comprehensive strength. We understand from the meeting site that the transnational groups were moving on as planned, but the biggest block they encountered was that the domestic foundries could not meet their technology requirements.

The environmental protection policy leading to small-medium foundries at home shutdown or transformation in limited time causes most orders can not be delivered in time. As a result, it frustrates the small-medium buyers overseas and parts of Chinese procurement centers, who are forced to develop new suppliers to divert their purchasing products and make sure of the normal purchasing activities. Besides, when the purchasers inquire the new projects, they attach importance to the environmental protection level of the suppliers. Moreover, the downstream buyers also cast influence on Chinese foundries’ upgrading and reconstruction from the market point of view.

3、It’s essential for foundries and downstream buyers to know Chinese foundry standard

Nation Technical Committee 54 on Foundry of Standardization Administration of China is in charge of the standardized technology management of Chinese foundry and the international standardized management in line with the domestic technology. Meanwhile, it has revised around 200 national standards and occupation standards, and taken an active part in the revise of international standard in cooperation with the domestic enterprises, research institutions and universities. Ms. Wang, the depute secretary-general of Nation Technical Committee 54 on Foundry of Standardization Administration of China, gave a speech from the point of foundry industry national standards and basic common technical standards, hoping to improve the standard service level of enterprises, and provide technical standards for the export enterprises. By data and pictures, the report introduced at length that the committee had implemented the national standard and industrial standard to promote industry development since 2009 by the China Foundry Quality & Standard Forum. After the report, some interested principals of domestic foundries came to consult Ms. Wang, while other principals of buyers, like Shaanxi Automobile also visited Ms. Wang and hoped to make further conversation about Chinese foundry standard, industrial standard and the state of the implementation. They wanted to get the electronic edition of Foundry Standardization Communications to boost their business.

4、FSC expert panel assisted the global buyers to achieve successful purchasing 

The FSC expert panel include experts on casting technology, production, procurement, supply chain management, quality control and logistics. In the conference, Mr. Star Bear, the senior engineer made a report in terms of the technology of used sodium silicate sand reclamation by water. Against the backdrop of increasing difficulties of buying castings in China through a stable way, if any buyers need assistance, please contact us, FSC who will do you a favor in supplier development, sample making, lowing rejection rate, supplier chain management and other sourcing and technical support to increase success rate.

5、The industry keeps focusing on the follow-up environmental protection policy whose influence to Oversea buyers needs observing

The organizer said that the domestic foundries should not have fluke mind. The stricter environmental protection is a general trend sifting out foundries who are lack of competitiveness under extensive management.  On the conference in Shanghai, we also mentioned that Chinese foundries are under great pressure of cost increase and labour shortage. Consequently, some other developing countries with geographic advantages, like India, Thailand, Vietnam, Pakistan, Malaysia, etc. are attracting the procurement orders moving from China. There is no doubt that this adjustment will accelerate the transfer of low-end product to other developing countries. At the same time, the increasing price of the raw material for castings produces a new challenge to foundries’ production.

There is one point needing our much attention. The environment protection measures this time is of no unified nationwide normative documents adapted to the industry. Even in some area, there is poor management or no flexibility when implementing the environmental protection policy, which can delay the closure time of domestic excellent small-medium foundries. Consequently, it can sway the confidence of transnational buyers. If it happens, overseas orders won’t come back to China easily even if the domestic foundries resume production.

The participants of FSC concern about Environment Tax which will take effect on Jan. 1 2018. Both suppliers and buyers hope an unified nationwide, normative and explicit standard to sift out high pollution and high energy-consuming companies and regularize their behavior. So that a good development environment being created is able to boost a healthy and sustainable development of companies and the updating of Chinese foundry as well.


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