Much more than just a foundry Livar

MUCH MORE THAN JUST A FOUNDRY

Slovenia’s Livar foundry is using key enabling technologies for its break through into emerging markets. By enhancing its innovation capacity, business services and entrepreneurial focus, Livar is adding machining and assembly processes to its production of iron castings to take it to new levels of metal technology and new markets. Peter Mercer reports

Livar is the largest foundry in Slovenia, producing around 40,000 tons of grey cast iron and nodular cast iron each year at two production sites. Nodular iron castings are mostly produced at its plant in Ivancna Gorica, which is also the company’s headquarters, while grey iron castings are produced at Crnomelj. The beginnings of iron casting in Ivančna Gorica reach back to the setting up of a small mechanical workshop where a cupola furnace was lit for the first time in 1954; so this year is Livar’s 60th anniversary. Today the company’s castings are widely used in agricultural machinery and civil engineering as well as by the home appliance, automotive, pipe fitting, and railway industries. Its major current markets are in Italy and Germany as well as in Slovenia itself.

Livar is widely known in Slovenia and in the countries of the former Yugoslavia for its range of cast iron manhole covers and gratings, which have been a feature of the region’s streets for more than 40 years.

“These traditional products for the utilities market still account for 5 per cent of our turnover and we are finding new markets for them as far afield as the Middle East but today we are focused on presenting Livar as a technologically advanced and comprehensively equipped foundry that can manage the complete production process of castings and workpieces,” says Livar CEO Alenka Rabuza. “That means that as well as casting parts we can also undertake a wide range of mechanical processes, such as turning, milling, drilling, slotting and balancing. We have our own tool-making shop and design department and we are fully equipped with the latest CNC machines and CAD, CAM. Our development of these mechanical processing capabilities means that we can work with our customers to develop products from the initial concept to the final workpiece.

“For example, in the past we would supply castings for, say, tractors or combines, to a customer who would then carry out the necessary machining and assembly and sell the finished part on to the end customer. Now we can work with the end customer ourselves to develop the part and deliver it completely machined – we have 50 years of experience in this. That means we can offer a very high degree of flexibility and guarantee quality as well as delivering significant cost savings to the customer. In essence, we want the market to understand that Livar is no longer just a foundry.”

Rapid restructuring

This transformation of Livar has been achieved in a very short time. A comprehensive restructuring of all the company’s operations, focused primarily on improving quality and encouraging innovation, was set in motion only at the end of 2012 but a year later the management had succeeded in diversifying the product range, particularly by introducing higher value products, and in turning the cash-flow positive so that critical new investments could be implemented.

Ms Rabuza says that the restructuring is coming to its completion in 2014 now that the company has been stabilised financially, organisationally and in terms of its human resources. The way is now open for an intensive investment programme over the next three years to further modernise and auto-

mate production to achieve greater capacity and productivity, higher product quality and better cost-effectiveness.

“In 2013 and 2014 we will have invested a total of almost €4 million in our production facilities,” she says. “The two largest investments to date are the installation of a new holding furnace for the cupola furnace at the Crnomelj plant and a new DISAMATIC moulding line at Ivancna Gorica. We intend to continue with this intensive investment programme over the next three years which will extend further our capabilities in mechanical processing and give us a better educated workforce with the skills and technical knowledge necessary for success in today’s markets.”

New markets

The company is raising its competitiveness not only on existing value chains and their leaders but also on new markets.

Livar’s largest market sector remains the farming machinery industry, a market where it sees excellent opportunity for organic growth and opportunities to move up the value-added ladder, particularly through the production of fixtures and fittings. The construction machinery, electricity and machine building industries are also important sectors and the company is building up a significant business in the railway industry.

A part of Livar’s development plan up to 2020 is to increase the share of nodular cast iron in the production mix and to offer more machining and assembly services. “We are developing technically demanding nodular iron castings that can withstand extremes of heat and cold and by focusing on the enhancement of mechanical properties we see opportunities to offer advanced nodular castings that can be used in place of steel and welded castings, which are much more expensive,” explains Ms Rabuza. “We are also taking advantage of our technical knowledge, flexibility and machining capabilities to offer small and medium batches of castings. We are not interested in high volume production but in leveraging our expertise in metallurgical engineering to build a niche position. We can offer rapid prototyping, for example, to produce and deliver parts in as little as 10 days.”

Livar intends to continue to develop its current export markets in western and eastern Europe, which include Italy, Germany, Austria, Benelux, Sweden, Finland and Russia, while also exploring the potential of more distant regions such as the Middle East and the USA. “Italy is a very important market for us, partly because of the historical ties with Slovenia and its proximity, but we are growing our business significantly in Germany and Hungary,” says Alenka Rabuza. “We are currently supplying castings for railway train brakes to a Germanowned customer in Hungary and for the UK we are producing parts for the vehicle exhaust system aftermarket.”

Securing the future

Care for the environment is a key concern at Livar and the issue is addressed at a number of levels. There is extensive cooperation with suppliers to develop environmentfriendly materials as well as a continuing drive to ensure the efficient use of energy, a field in which the company has received two awards. Equal attention is given to reducing the amount of waste resulting from production. In cooperation with the Slovenian Building and Civil Engineering Institute, Livar is working on a project to reconstitute waste foundry sand into a construction material.

“We have put a lot of money and effort in the last two years into reducing the environmental impact of our business,” explains Ms Rabuza. “Our main foundry is located in the middle of a small town, only 500 metres from the school, so it’s really important that we present a clean and responsible image to our neighbours, our visitors and all our customers. When people come to see us they find a plant that is

very different from the traditional image of an iron foundry.”

Alenka Rabuza is certain that the future growth and profitability of Livar rests above all on maintaining and developing close strategic ties with its business partners – both its suppliers and its customers. “We work hard on maintaining dialogue across the supply chain so we can continue to exchange knowledge, skills and innovative thinking between all parties to achieve the best possible results. By 2020 we intend that 30 per cent of our production will be of machined and part-assembled castings – it’s currently around 10 per cent – and we will continue to develop strategic alliances with our major customers to take us into new sectors and new export markets.” n

www.livar.si