The 74th General Assembly of the National Association of Non-Ferrous Metals Industries was held in the sign of the handover by Italo Amedeo Romano, now at the conclusion of his second presidential term, and the managing director of Intals Spa, Ing. Marco Vedani.

In his parting speech, the outgoing President said he was confident “to leave an association capable of proceeding towards increasingly ambitious goals representing an important manufacturing sector that sees Italy occupy a leading European role”.

In fact, the non-ferrous metals industrial supply chain in our country employs 25,000 people, with a consolidated 2018 turnover of 25.7 billion euros and almost two million tons of raw metals produced, including copper, aluminum, lead, zinc and precious metals. With regard to semi-finished products (rolled sections, bars and sections, pipes, wires, etc.), production reached 2.4 million tonnes last year, with a substantial export volume of almost 40%. The jets, on the other hand, reached 915,000 t. The contribution of scrap is increasingly relevant: for aluminum we are around 50% with over one million tons on a total use of 2,116,000 tons, while for copper the use of scrap is around 600,000 tons. . Lead and zinc are instead, respectively, at 250 thousand tons and 70 thousand tons.

Marco Vedani, having thanked those present for the trust given to him, underlined how he intends to proceed with the association commitment on the long-established established line, aiming however to take more into account the dynamics of each single sector represented by Assomet and implementing the actions of associative marketing in order to have the widest and most articulated base possible.

The presentations by Dr. Fabrizio Maronta (Limes-Italian Geopolitical Magazine) and Dr. Livio Romano of the CSC-Confindustria Studies Center were particularly appreciated by those present. The first presented a study entitled “The battle for the new world order” in which he highlighted the factors that contribute to determining the US-China opposition and the different territories on which this challenge is being played and will be played. Beginning with the US maritime dominance in all the oceans to move to the new silk roads and related economic corridors, continuing with the analysis of the countries that hold American credit (in particular China and Japan, which together reach over 30%) for to reach the current relations between Europe and Russia and the new iron curtain, the concrete presence of China in Europe (ports and maritime routes, financial centers, logistic centers), and the future scenario that in 2100 will see the world population reach 11 billion, of which 4.3 billion in Africa, almost four times the current population (and with other areas of the world in slight growth and Europe in decline).

With the report “Where the Italian industry is going in the difficult global context” Livio Romano explained the reasons (Brexit, election of Trump, US protectionism) for which the uncertainty in the world is currently at its maximum and how US duties can represent a danger for Italian exports. “The world is entering a new phase of development – said the representative of the Confindustria Study Center – the propensity to export is decreasing and the growth of manufacturing production is structurally slowing down”. The German locomotive has stopped racing and this is not good news for Italian industry if we consider that Germany is the first partner for Italy (12.5% ​​of our exports) while domestic demand is sluggish.

“But – he concluded with a note of Roman optimism – in this scenario we are witnessing the reorganization of the Italian industry, with the quality of production constantly growing even if not in all the markets in the same way”. And, with regard to investments in 4.0 technologies, where the small and medium-sized manufacturing companies in the north prevailed, he added that in a global context that certainly does not help Italian companies are the choices of national economic policy to be fundamental to restore confidence and sustain competitiveness in the medium-long term.

During its General Assembly in Rüschlikon, CECIMO announced a turnover for 2018 of €27.5 billion, which is 9% higher compared to 2017. This secures a 35% market share in the global machine tool production. But slowing global trade and weakening business sentiment are heavy downside risks for the European machine tool manufacturers. On the policy side, the General Assembly debated artificial intelligence and skills for the machine tool companies. Skill mismatch is a complex, multidimensional and dynamic phenomenon. The panel discussion focused on the challenges for machine tool companies to acquire the necessary skills and build confidence and inhouse capabilities in artificial intelligence.

Economic outlook and trends
Industrial growth has slowed down in 2018 driven by global trade stagnation, geopolitical uncertainties and weaker business sentiment. We expect the industrial activity to slow down in 2019 and recover some momentum in 2020. This year, the European machine tool market is likely to expand slower than the US and Asia.

CECIMO’s latest estimates for 2018 suggest yet another record machine tool production amounting to €27.5 billion, which is 9% higher than in the previous year. The global output grew at a flat rate of 1% and reached a volume of €79.7 billion in 2018. The production growth was dragged down by China, Brazil, Turkey and Canada posting two-digit negative growth rates.

Our clients in Europe registered a 1.8% production growth rate in 2018 and expect a flat growth this year. The global production of the machine tool purchasing industries around the globe posted a growth of approximatively 5% in 2018 and is expected to slow down to 2.3% in 2019.

Both European and world machine tool trade has slowed down a gear. Although the main US import tax measures are aimed at China, the European automotive sector is under risk. Industrial activity of other consumer sectors is slowing down as well. Last year, CECIMO manufacturers exported a volume of €21.7 billion worth of machine tools. We registered an export growth of 8.4% – slower than the one in 2017 (9.5%). Our main export destinations outside CECIMO membership were China (25.7%), USA (18.3%), Poland (8.1%), Mexico (4.7%) and Russia (4.6%). In 2018, the world machine tool trade accounted for 44.1 billion, and posted a slower growth rate of 6.9%, after a 9.5% rate in 2017.

Based on internal figures, CECIMO’s machine tool consumption in 2018 is estimated at 18
€billion, 11.8% higher than in 2017. This year, our colleagues from Oxford Economics suggest a flat growth rate of 1% and a 4.2% recovery in 2020. The world machine tool consumption grew by 4% in 2018. This year, we expect a 2.3% growth and an acceleration of 3.5% in 2020.

A deceleration of the global trade, geopolitical risks and supply chain disruptions are weighting heavily on the European machine tool manufacturers. “A strong global trade is absolutely necessary to support the industrial activity in Europe and the entire world. That is why, we need to make our best efforts to build a robust trade relationship with the US. A bilateral trade deal on industrial goods would be a great place to start” says Mr Marcus Burton, the Chairman of CECIMO’s Economic Committee.

Artificial Intelligence and skills
According to the World Economic Forum’s Future of Jobs report (2018), 54% of employees will require significant reskilling and upskilling by 2022. These findings are also reflected in a recent LinkedIn Learning survey which suggests that artificial intelligence is on the top 5 hard skills that companies need most in 2019. CECIMO at the General Assembly looked at how to meet the demands of the machine tool industry in artificial intelligence skills.

In his opening speech, Francisco Betti, Head of Advanced Manufacturing Industry, World Economic Forum, highlighted the unique role that machine tool companies play today to transform factories and business models. He also stressed the criticality of talent and skills for the future of advanced manufacturing and to keep pace with the changes brought by artificial intelligence and other technologies, and the need for strengthened multi stakeholder collaboration.

Skills for industry strategy 2030 are on top of the EU political Agenda but there is need for concrete commitments by political leaders in education and training, starting from a reassessment of the education systems.
Filip Geerts, CECIMO Director General, called for “a massive skills upgrade of the European workforce to catch up with the rapid transformation of industry. Developing and introducing Artificial intelligence in manufacturing requires special core skills, which need to be carefully fostered to secure EU’s leadership in this field”.

Companies need to invest in the professional development of their workforce overtime. In this context, the main challenge for the machine tool companies is to train mechanical, electronic and electric engineers in AI, Python for data science, essential mathematics for AI, data science research methods and so on. Employees need to be motivated to continuously learn and grow. Marc Ziegler, Partner at Porsche Consulting, presented the strategic partnership on AI and skills with “appliedAI”, an initiative of UnternehmerTUM, one of Europe’s largest Center for Innovation & Business Creation. He explained that “transforming corporates into AI- driven companies requires a set of new dedicated roles that entail various new competencies – from data science to machine learning engineers.”

Finding the right talent is critical for the machine tool industry to capitalise on the opportunities that Artificial Intelligence offers.
For example, according to a study by McKinsey, artificial intelligence could create an estimated potential value of $500B to $0.7T in predictive maintenance across the supply chain management and manufacturing sectors globally. Dr Roland Feichtl, CECIMO President, stated that “Machine tool companies who consider the option of building their own AI solutions will need to consider whether they have the capacity to attract and retain Artificial Intelligence talent to be able to integrate these technologies in their manufacturing processes”. Thomas Schneider, Managing Director Research & Development at TRUMPF Werkzeugmaschinen GmbH + Co. KG, underlined the importance of artificial intelligence for achieving the next level of Industry
4.0. In this respect, Andreas Rauch, Head of Digital Business at GF Machining Solutions, described that “AI will be our natural path for Zero Defect Manufacturing and is the glue for future multi-technology solutions”.

Written by:
Filip Geerts, Director General of CECIMO