B R I C S FOUNDRY FORUM RUSSIA 2015 B R A Z I L and Foundry - PowerPoint PPT Presentation

B R I C S FOUNDRY FORUM RUSSIA 2015 B R A Z I L and Foundry Industry Overview / Trends Remo De Simone President Brazilian Foundry Association - ABIFA

M AIN TOPICS 1) Brazil in figures 2) Infrastructure and Raw M aterial 3) Cast M etal in Brazil 4) Foreign Trade 5) Trends – Brazil and Foundry Industry

BRAZIL - 2014 POPULATION: 200.4 M AREA: 8.5 M km 2 GDP: 2.35 TRILLION US$ 7th WORLD ECONOMY FLEET OF VEHICLES: 41.7 M BRAZIL IS THE LARGEST COUNTRY IN SOUTH AMERICA REPRESENTS: • 48% IN TERRITORY • 51% OF POPULATION • 48% OF GDP ONLY BRAZIL AND ARGENTINA HAVE A ESTABLISHED FOUNDRY INDUSTRY.

Brazil – GDP Evolution Billion US$/ ano 3.000 2,613 2,412 2,391 2,353 2.500 2,209 1,695 2.000 1,809* 1,667 1,396 1.500 1,108 893 1.000 560 509 560 670 500 0 2001 2003 2005 2007 2009 2011 2013 2015 * 2015 Source: BACEN estimated

Brazil – GDP Evolution (%) without inflation of the period 10 8 7,6 6 6,0 5,7 5,0 4,4 4 4,0 3,9 3,1 3,1 2,7 2 1,8 1,3 1,2 0,2 0,1 0 -0,2 -1,8 -2 -4 * estimated Source: BACEN

Brazil – Inflation Evolution (%) accumulated per year 14,0 12,5 12,0 10,0 9,3 9,3 8,0 7,7 7,6 6,7 5,9 6,5 5,8 5,9 6,4 6,0 6,0 5,9 5,4 4,5 4,3 4,0 3,1 2,0 0,0 * estimated Source: BACEN

Participation of the Industry in GDP (%) Manufacturing Industry Foundry Industry 0,65 20,0 0,70 17,9 16,7 0,63 0,61 16,6 0,60 15,2 0,51 0,49 0,49 15,0 0,57 0,50 15,0 14,4 11,5 14,0 0,40 0,47 10,0 0,41 13,9 10,9 0,41 0,30 0,36 0,20 5,0 0,10 0,0 0,00 2000 2002 2004 2006 2008 2010 2012 2014 2000 2002 2004 2006 2008 2010 2012 2014 Source: IBGE/ABIFA

World Ranking – GDP (Trillion US$) 2014 2015 ( * ) 1st USA 17.419 18.125 1st 2nd China 10.380 11.212 2nd 3rd Japan 4.616 4.210 3rd 4th Germany 3.860 3.413 4th 5th UK 2.945 2.853 5th 6th France 2.847 2.470 6th 7th BRAZIL 2.353 2.308 7th INDIA 8th Italy 2.148 1.843 8th 9th INDIA 2.050 1.809 9th BRAZIL 10th Russia 1.857 1.615 10th Canada ( * ) PREVIEW Source: BACEN 8

M AIN TOPICS 1) Brazil in figures 2) Infrastructure and Raw M aterial 3) Cast M etal in Brazil 4) Foreign Trade 5) Trends – Brazil and Foundry Industry

Electric Power Hydro Generation is the main source in Brazil Source: 95.7 GW Install Capac ANEEL/FIRJAN

Natural Resources - Electricity for its continental dimensions, hydro generation is the main source in Brazil - Iron Ore Brazil is the third largest producer and also has the third reserve of iron ore - Bauxite Ore Bauxite ore (aluminum) - also in this case, we are the third largest producer and have the third reserve of bauxite ore for the production of primary aluminum

Brazil has a surplus in its main raw materials 100 100 100 100 90 80 70 60 50 50,3 40 40 30 36,5 20 10 0 Pig Iron Aluminum Ferroalloys production exports Source: ABAL/ABRAFE/SINDIFER

M AIN TOPICS 1) Brazil in figures 2) Infrastructure and Raw M aterial 3) Cast M etal in Brazil 4) Foreign Trade 5) Trends – Brazil and Foundry Industry

Cast metal world production (ton) 2013 2012 • 1 º CHINA 44,500,000 42,500,000 2 º USA 12,250,000 12,824,960 • • 3 º INDIA 9,810,000 9,344,400 4 º JAPAN 5,538,037 5,342,837 • • 5 º GERMANY 5,186,727 5,214,114 • 6 º RUSSIA 4,100,000 4,300,000* 7 º BRAZIL 3,071,400 2,859,898 • • 8 º KOREA 2,562,000 2,435,800 9 º ITALY 1,970,968 1,959,680 • 10 o FRANCE • 1,748,166 1,800,156 Source: Modern Casting/Dec 2014 * 2011 data

The crisis of 2008-09 had a strong effect on our country Production 2006-15 4.000 3.500 3.000 Thousand ton 2.500 2.000 1.500 1.000 500 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Brazil 3.087 3.250 3.355 2.297 3.241 3.344 2.860 3.071 2.737 2.450 Source: ABIFA 2015 preview

quick analysis of cast metal production in Brazil Total production 2,737.2 th ton (2014) Non ferrous 217.5 th ton Source: ABIFA

South and Southeast Region in Brazil represent 95% of all production 61% 34%

Sales of casting are concentrated in automotive industry SIDERURGY OTHER 2% 6% EXPORTS 15% AUTOM OTIVE CAP GOODS 58% 13% INFRASTRUC 6% Source: ABIFA

Worldwide Vehicle Production (thousand units) 2013 • 1 º China 22,117 2 º USA 11,046 • • 3 º Japan 9,630 • 4 º Germany 5,718 • 5 º South Korea 4,521 6 º India 3,881 • 7 º Brazil 3,712 • • 8 º Mexico 3,052 • 9 º Thailand 2,457 10 o Canada 2,380 • Source: ANFAVEA 5th automotive world market

Brazil - vehicle production 4000 (15,3)% 3500 3000 (20,5)%) Thousand unit 2500 2000 1500 1000 500 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Brazil 2612 2980 3216 3183 3382 3416 3403 3713 3146 2500 2015 preview Source: ANFAVEA - Brazil

Countries of Latin America (Argentina, Brazil and M exico) have a great dependence of Automotive Industry PARTICIPATION IN PRODUCTION ARGENTINA 57% BRAZIL 58% M EXICO 75 – 80% Source: ABIFA, CIFRA, SMF

Shows a potential to be exploited to reach the developed countries (2014) INHABITANTS/ VEHICLE ARGENTINA 3.7 BRAZIL 5.4 M EXICO 3.6 INHABITANTS/ VEHICLE GERM ANY 1.7 ITAL Y 1.6 SPAIN 1.9 FRANCE 1.7 USA 1.3 Source: ANFAVEA

M AIN TOPICS 1) Brazil in figures 2) Infrastructure and Raw M aterial 3) Cast M etal in Brazil 4) Foreign Trade 5) Trends – Brazil and Foundry Industry

Evolution of foreign trade in Brazil 2500 unit: M illion US$ (2005-15 2000 1500 1000 500 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Exports 1095 1374 1354 1494 763 1185 1521 1362 1233 1216 1150 Imports 159 300 559 808 1926 1096 1260 2061 2250 1714 400 2015  preview Source: ABIFA

Brazil  55% of total exports going to EUA – US$ - % Iron + Steel + Non Ferrous Source: ABIFA,

Brazil  27% of total imports come from ASIA – US$ - % Iron + Steel + Non Ferrous Source: ABIFA,

M AIN TOPICS 1) Brazil in figures 2) Infrastructure and Raw M aterial 3) Current Situation 4) Cast M etal in Brazil 5) Trends – Brazil and Foundry Industry

Necessary Investments in Foundry Industry in Brazil in the next years (2015 – 2019) From 2015 until 2019 the Foundry Sector is expected to invest 880 million dollars to increase the production of 400 thousand tons needed to meet the growth of sectors such as Automotive, Railway, M ining, Wind Generation and other.

Production and installed capacity needed to meet the expected demand in Brazil (unit: thousand ton)

THANK YOU ! Brazilian Foundry Association – ABIFA Av. Paulista, 1274 – 20 o andar 01310-925 – São Paulo – SP - Brazil Ph: (+55 11) 3549-3344 and Fac (+55 11) 3549-3355 Remo De Simone – president presidencia@abifa.org.br www.abifa.org.br Sept/ 2015

Source: ABAL - Brazilian Aluminum Association ABIFA – Brazilian Foundry Association ABRAFE – Brazilian Ferroalloys Association ANEEL – National Agency of Electricity (Brazil) ANFAVEA – National Automobile M anufactures Association (Brazil) BACEN – Central Bank of Brazil CIFRA – Argentina´s Chamber of M etalcaster FIRJ AN – Federation of Rio de J aneiro Industries IBGE – Brazilian Institute of Geography and Statistics SINDIFER – Producers of Pig Iron Trade Union (Brazil) SM F – M exican Society of M etalcasters