Ungefärlig årlig produktionspotential och intäkter 31 december 2010 30 september 2010 Verksamhet KEQVS* MSEK/år** KEQVS* MSEK/år** Nuvarande seriproduktion 1 200 26 1 100 25 Möjlig full volym 1 500 33 1 350 31 Säkrade produktionsorder 500 11 450 10 Development Pipeline 2 350 52 2 500 58 Marknadsmöjligheter,kort sikt. Innan 2015 4 350 96 4 300 99
Ungefärlig årlig produktionspotential och intäkter
31 december 2010
30 september 2010
Möjlig full volym
De fem vågorna
While the five waves define SinterCasts core market for automotive cylinder blocks and
heads, the SinterCast technology will also be used for the production of other CGI
components, both within and beyond the automotive arena. This may include large marine
diesel engine components as produced at the DAROS and VDP foundries, off-road diesel
engines, or products such as cylinder liners, clutch plates, brake components and others. The
revenue from these production activities, plus the revenues from new installations, annual
software licences, engineering services and spare parts provide a large market with continuous
growth opportunities for SinterCast. We will continue to work together with the world
foundry and automotive industries to secure new production commitments for CGI in each of
the five waves.
SinterCast AB (publ)
2 July 2003
�nnu en variant
The patented SinterCast sampling cup enables the precision measurements required for producing high volume CGI.
You can�t control what you don�t measure. Each ladle is measured.
Sintercast and the Engine of the Future
By David Willson
There is a revolution taking place in metallurgy one that already is yielding stronger, lighter and more durable diesel engine blocks, and that eventually will improve gasoline engines and other products with high-performance cast metal applications.
Compacted Graphite Iron (CGI) was created in 1949. It has an atomic structure that makes it at least 75 percent stronger, 45 percent stiﬀer and approximately twice as resistant to metal fatigue as conventional gray iron castings. The fatigue strength of CGI is up to ﬁve times higher than that of aluminum at elevated temperatures.
CGI provides superior castability, thermal conductivity and machinability to ductile iron. As such, CGI is an ideally suited solution for complex components that are subjected to high mechanical and thermal loading.
Several attempts have been made over the last 50 years to master high-volume duction of more than one million passenger car diesel units. Initial volumes are 150,000 a year. Ford and PSA have invested over $430 million in the manufacturing and engineering of this engine.
With a performance of 207 horsepower, the engine provides best-in-class speciﬁc performance. The engine is shorter than other V6 diesel engines thanks to CGI construction and, with a fully assembled weight of 445 pounds, it is the lightest engine in its class � even compared with aluminum rivals.
The engine made its debut in the Jaguar S-type in June 2004. Ford and PSA forecast its use in at least 10 diﬀerent vehicle lines, including Jaguar, Ford, Peugeot, Citroen and Land Rover vehicles, and it likely will be used in the ﬁrst Land Rover diesel marketed in the United States.
A high-performance bi-turbo version of the CGI V6 providing 230 horsepower and massive torque was introduced in the Jaguar R-D6 concept car at the 2003 Frankfurt Motor Show. The engine can propel the lightweight car to 60 mph in less than six seconds and already satisﬁes Euro IV emissions legislation pending in 2005. The R-D6 also is destined to become the ﬁrst James Bond vehicle to be equipped with a diesel engine.
Next for SinterCast
The future has just begun for CGI, and Katrineholm, Swedenbased SinterCast is leading the way. The SinterCast CGI strategy is divided into ﬁve waves of market development based on addressing ﬁrst the greatest marketplace needs, where near-term potential is most tangible.
The internal combustion pressures in diesel engines have increased by approximately 35 percent since 1999. Horsepower and torque performance levels have doubled and the noise and emissions have halved. As a result, diesel sales have increased to approximately 45 percent of all new European passenger vehicles.
In the automotive industry, change is based on technical or economical need. As stated by Professor Robert Dover, former chairman & CEO of Jaguar and Land Rover, at the SinterCast 2004 annual shareholder meeting in Stockholm: �We didn�t do the CGI program because we wanted to enjoy the technology, we did the program because we wanted the best engine�
The strongest initial need for CGI occurs with V-type diesel engines in Europe, where consumer demand for higher performance is greatest particularly in the luxury sector.
The complex mechanical loading patterns of high-performance V-type diesel engines are speciﬁcally addressed by the properties of engine blocks manufactured from CGI castings. The very severe fatigue cycle in these engines is like a tug of war � one piston going left, the other going right. V-type engines also command a higher price premium and are therefore more able to accommodate the increased cost of CGI.
The ﬁrst wave actually began in 1999 with production of the Audi 3.3-liter V8 diesel engine at the Halberg foundry in Germany. The Tupy foundry followed shortly thereafter with its high-volume Ford-PSA 2.7-liter V6 engine. Other V-engine commitments, including an upgrade of the Audi V8 to 4.0 liters, also have been announced.
SinterCast is concurrently developing CGI applications for the cylinder blocks and cylinder heads of commercial vehicles in the 8-to-16-liter class, a ready market that represents the second wave of development. Because of the size and weight of these engines, this represents a large market potential for SinterCast, whose business model is based primarily on a per-ton technology license fee.
In short order, SinterCast expects that CGI will also ﬁnd applications for in-line engine blocks in the 1.6-to-2.4-liter class with four or ﬁve cylinders. The vast majority of European passenger cars use engines of this class and CGI can be used to achieve improved performance with weight reduction and downsizing. In this third wave, the larger opportunity for SinterCast is to enable the production of a heavily loaded small CGI engine � a 1.2- or 1.4-liter engine with the performance of a 1.8- or 2.0-liter engine.
Initial high-volume production references will come from the Vs, the in-lines and commercial vehicles between 2004 and 2006. Once the industry has these references, the volume will ramp up. These represent the ﬁrst three waves of growth opportunity for SinterCast.
Diesel in the U.S.
Several factors have caused diesel engines to be more popular in Europe than in the United States.
European legislative focus has been on reducing fuel consumption and greenhouse emissions. By contrast, legislators in the U.S. have been more concerned with particulates and their health risks. As a result, only two-tenths of a percent of the vehicles in the United States are currently diesel.
However, newly designed diesel engines are actually cleaner than a modern gasoline engine in terms of carbon dioxide, nitrogen oxides and particulates. And diesel fuel contains 11 percent more energy per gallon than gasoline. Passenger car diesel engines use 30 percent to 60 percent less fuel than gasoline engines of similar power. Wards AutoWorld recently calculated that if the U.S. had a 40 percent share of diesel engines, similar to Europe today, it would save double the amount of crude oil that it presently imports from Iraq.
Finally, American diesel fuel currently has a high sulfur level of about 500 parts per million, compared with 15 ppm in most European countries. New legislation in the U.S. will require low-sulfur fuel as of 2006. Once this standard is required, the overwhelming beneﬁts of modern diesel engines will create an opportunity for U.S. automakers.
Sport utility vehicles and pickup trucks, which now represent more than 50 percent of new vehicle sales in the U.S., are prime candidates to beneﬁt. Each of the Big Three manufacturers is currently developing new diesel engines for its 2007�08 model year, a good indication of the future prospects for diesel growth in North America.
As the world industry leader in CGI, SinterCast is ideally situated to take advantage of this fourth wave of opportunity.
Gasoline Engines and More
The ﬁfth market wave for SinterCast will be the possible application of CGI to gasoline engines. Here, CGI provides the opportunity for cost-eﬀective weight reduction in comparison with aluminum, particularly in the larger V6, V8 and V10 classes. Impetus for this phase likely will come from the early use of CGI in racing engines and increased conﬁdence in CGI from diesel-sector production references.
In the non-automotive ﬁeld, SinterCast has been actively involved in the production of engine frames, cylinder heads and piston rings for industrial power generators. SinterCast has begun successful series production with Daros, Rolls-Royce Power Engineering and, most recently, General Electric locomotive engines in the United States.
As a provider of process control solutions for the reliable high-volume production of CGI, SinterCast has a target market that includes any casting application that can beneﬁt from the higher strength, stiﬀness, durability and wear resistance of CGI.
SinterCast also has been actively involved in the production of cylinder liners for heavy-duty diesel engines, brake discs and drums for passenger vehicles, commercial vehicles, trains and motorsport applications, exhaust manifolds, ﬂywheels, bedplates, ingot molds and a variety of other components.
At the small end of the scale, SinterCast has recently begun production of CGI clutch and ﬂywheel components for the new Aston Martin ﬂagship Vanquish sports car.
To date, SinterCast has investigated more than 150 diﬀerent potential applications for CGI. However, the SinterCast strategy is to concentrate near-term on the area of greatest need � high-volume applications in automotive engine blocks. While the worldwide production of CGI engines was only about 5,000 units in 2002, that number could exceed one million engines during 2007, and that is with activation of only the ﬁrst two of the SinterCast ﬁve CGI waves.
This year the automotive industry will make approximately 45 million passenger car blocks and maybe 1.5 million truck blocks. If you consider that a truck engine is about six times heavier than a car engine, then 1.5 million becomes 9 million passenger car equivalents. So you end up with approximately 54 million engine equivalents. It�s a huge market.
As SinterCast CEO Dr. Steve Dawson puts it: "We are well-positioned in the world foundry industry, and we will continue to build on our foundry relationships to secure more and more of the world block and head capacity. After a long and successful development period, high-volume passenger car production has started and we are now looking forward to other high-volume production commitments in both the car and truck sectors. Our focus has shifted from market development to production support producing good CGI castings is the most powerful sales message we can deliver.
SinterCast Market Growth in Five Waves
SinterCast management has divided potential markets and growth into ﬁve waves occurring over the next 20 years. SinterCast will derive income from production activities, new installations, annual software licenses, engineering services and spare parts. In order to compare the potential of the diﬀerent market sectors, SinterCasts internal calculations are made in terms of "engine equivalents." Each "equivalent" is deﬁned as one 110-pound cylinder block. ( 50 kilo)
First Wave of CGI Production
Beginning in 1999, V-type diesel engine blocks in the European market
Annual passenger car sales in Europe: 15 million
At 40% diesel penetration, number of diesels: 6 million
Assume 15% of diesels are V-type: 0.9 million
With an average weight of approximately 143 pounds per CGI V-block, the ﬁrst-wave opportunity represents approximately 1.2 million engine equivalents.
Second Wave of CGI Production
Beginning from 2004-2006, commercial vehicle in-line and V-type engine blocks and cylinder heads in Europe, Asia and the Americas
Annual global commercial vehicle sales: 1 million
Assume 20% V-type commercial engines: 0.2 million
Number of commercial vehicle blocks: 1 million
Number of commercial vehicle heads: 1.2 million
At an average cylinder block weight of 662 pounds and an average cylinder head weight of 276 pounds (both values typical of 12-liter engines), the second-wave opportunity represents approximately 9 million engine equivalents.
Third Wave of CGI Production
Beginning from 2004-2007, smaller in-line passenger car diesel engines in Europe
In-line engines provide the highest volume for European passenger cars, with displacement ranging from approximately 1.2 to 2.2 liters. European diesel market share should continue to increase to approximately 50 percent during this period, potentially increasing the ultimate size of this wave.
Annual passenger car sales in Europe: 15 million
At 40% diesel penetration, number of diesels: 6 million
Assume 85% of diesels are in-line: 5.1 million
CGI will likely be applied to higher-performance versions of these smaller engines ﬁrst, due to pricing constraints, but development trends toward higher peak ﬁring pressures and downsizing will increase longer-term CGI market potential. At an average weight of approximately 88 pounds per in-line CGI diesel engine cylinder block, the total European in-line diesel market currently represents an opportunity of approximately 4 million engine equivalents.
Fourth Wave of CGI Production
After 2007, diesel passenger vehicles in America
Sources are predicting a rapid increase in diesel popularity after the introduction of low-sulfur fuels in America in 2006 � possibly reaching parity with Europe�s 50% diesel penetration by 2020. This wave assumes a 15% diesel penetration in 2010, primarily for the SUV and pickup truck sectors, which currently account for 50% of all passenger vehicle sales in America.
Annual passenger vehicle sales in USA: 17 million
At 15% diesel penetration, number of diesels: 2.6 million
Assuming that two-thirds of the American diesel engines will be V-type (typical block weight 176 pounds) and one-third will be in-line (typical block weight 132 pounds), the fourth wave represents an opportunity of approximately 3.8 million engine equivalents.
Fifth Wave of CGI Production
After 2008, the possible application of CGI to gasoline engines
Future design objectives such as increased displacement through reducing bore-wall thickness or cost-eﬀective downsizing and weight reduction in comparison with aluminum will encourage CGI application in gasoline engines. Positive CGI experiences in the diesel sector should increase industry conﬁdence and generate product commitments in the gasoline sector.
Total annual gasoline engine vehicle sales are approximately 40 million units worldwide. Assuming an average petrol engine cylinder block weight of 66 pounds, the entire ﬁfth wave equates to an approximate opportunity of 24 million engine equivalents.