Market drivers

Market growth and developments in the foundry and cast components industry are strongly depending on the economic situation. The demand for the Group's products and the Group's business operations are influenced by changes in the operating environment and customer sectors.

The iron and aluminium cast components manufactured by Componenta are used in heavy trucks, construction and mining machines, private cars, agricultural machinery, by the wind power industry and in other machine building, for example in elevators, cranes, robots and diesel engines.

Market development in early 2011 was positive, but uncertainty in the financial markets increased considerably towards the end of the year, resulting in slower demand in our customer segments.    

Demand for heavy trucks

is mainly affected by the overall state of the economy and the financial market, by development in logistics, especially in eastern Europe, Russia and South America, and by environmental legislation and regulations.

Components supplied by Componenta are primarily used in the European market, which saw the demand for heavy trucks remain fairly positive in 2011 even after a strong start to the year. 
The arrival of next-generation trucks on the market is likely to have a positive impact on the market and demand. The share of aluminium components as a proportion of the components in the heavy trucks is also expected to increase considerably.
Demand prospects in the heavy trucks industry are uncertain at the beginning of 2012.

Demand for construction and mining machines

is affected by developments in the prices of raw materials and minerals and demand for these. Investments in infrastructure investments, in the construction of roads and tunnels for example, have an impact on demand for large construction machinery, while population growth and urbanization increase or decrease demand for smaller construction machinery.

Demand in the construction and mining segment grew steadily throughout the year 2011.
Raw material prices on the world market are expected to remain at a level that contributes positively to continued investment in the mining industry. Growth in construction is likely to continue in developing countries, with strong demand for construction machines. Growth in Europe, Japan and the United States is expected to be steadier and in these markets future challenges include responding to tighter emissions restrictions on construction and mining machines. 
Demand for construction and mining machinery components at the beginning of 2012 is expected to continue to develop favorably mainly due to the high level of activity in the mining industry and in developing markets.

Demand for agricultural machinery

is mainly affected by the price of food and growth in demand for food, by the size of the harvest, higher living standards and the general rise in GNP, as well as improvements to the infrastructure in India, Russia and Eastern Europe.

Demand for agricultural machinery was strong in Europe, the United States, Canada and Asia. Our sales grew particularly well in the Turkish and European markets.
The global market for agricultural machinery is expected to grow as demand remains high.
At the beginning of 2012 demand for agricultural machinery is estimated to rise from the previous year mainly as the result of relatively high food prices.

Factors affecting demand for pASSENGER cars

are the overall state of the economy and the money market., and environmental legislation and new environmental regulations.

The demand for aluminium components grew in the early part of 2011, only to level off towards the end of the year.
EU tariffs on aluminium wheel imports from China helped demand for aluminium wheels remain strong throughout the year, contributing to a considerable increase in sales. The market situation is expected to remain unchanged.
A significant proportion of automotive components are made from aluminium. The use of aluminium will increase further as car manufacturers respond to environmental legislation and emissions restrictions by opting for lighter components to reduce the weight of cars for lower emissions.
Demand in the automotive industry at the beginning of 2012 is expected to remain at the same level as in the previous year mainly due to the increase in market share.

MACHINE BUILDING INDUSTRY

The main factor in demand from the machine building industry is the overall state of the economy and the money market. Demand for diesel engines is driven by orders for new ships and various power plant projects around the world.

Demand in the machine building industry varied between countries and customer segments, but total demand in the European market remained stable throughout the year. Positive market development is expected in the machine building industry. 
Market demand in the machine building industry at the beginning of 2012 is expected to remain at the same level as in the previous year.

WIND POWER

Demand for wind power components is dependent on the overall state of the economy, project financing, environmental legislation and new environmental regulations.  

Demand in the wind power industry continues to suffer from the impact of the financial crisis and European market prospects remain weak.        
Nevertheless, the emission-free energy generated by wind power is still considered to have great growth potential.
Demand in the wind power sector at the beginning of 2012 is expected to remain on low level in Europe.