Xabier Errasti
Managing Director

Bright Future for Fine-Blanking Processes

Mon, 09/01/2014 - 16:07

Xabier Errasti, Managing Director of Celay, has witnessed rapid growth in the demand for fineblanking technology in the Mexican automotive industry. Similarly to other metal stamping processes, fine-blanking distinguishes itself by allowing the production of high quality precision pieces in one press stroke while largely eliminating the need for post-processing. One of its biggest advantages is that its repeatability throughout a production run makes the process economical for large production operations, characteristics automotive companies are keen to seek out. However, this particular technology entails higher equipment costs compared to other choices and higher tonnage requirements for the presses. To date, the presence of fine-blanking technology has been limited in the Mexican automotive market, but the automotive industry boom is leading to increased demand. Celay, a company with 13 years of experience in manufacturing metallic parts using this technology, can lay testament to this increasing demand as it acquired 60% of the market share in Mexico over the past two years.

The difficulties entering the market can to a large extent be attributed to the problems associated with implanting the fine-blanking process. “It demands a lot of experience, knowledge, and technology, which in turn creates barriers for companies wishing to enter in Mexico,” explains Errasti. The high machinery costs required from the outset represent a huge investment. Upon its arrival to Mexico, Celay was fortunate to be supported in this respect by its corporate headquarters, Elay Group. With over 40 years of experience in the process, Elay Group helped lay the foundations of technology and knowledge required for the selective fineblanking technique. According to Errasti, after 13 years, Celay now dominates this technology and acts independently from its parent company. “Due to the highly complex technology involved, many assume that fine-blanking quality levels in Mexico are not on par with other more developed countries, but this assumption is absolutely wrong.”

In order to ensure the high quality required of fine-blanking processes, a good supplier base is a key consideration. OEM and Tier 1 companies are mostly uniform in their operations worldwide and are more willing to share technology. Errasti has seen that further down the supply chain at the Tier 2, 3, and 4 levels, essential certifications may be lacking and certain materials cannot be found. “Some materials are sourced in Mexico but Celay still has to turn to Europe or the US for some of its needs. However, as demand for qualified suppliers rises in Mexico, existing suppliers will expand and improve their quality standards while new ones while be established.”

One of the characteristics of fine blanking is that multiple features can be simultaneously incorporated in one single operation, but as a unique and complex process it requires highly skilled workers. One of the biggest challenges for Celay, according to Errasti, is to transfer and translate knowhow and ensure factory processes are conducted at the level envisaged by the company’s headquarters. “Fortunately, Celay has been able to find very good and capable engineers in Mexico,” says Errasti. The struggle to find the right professionals is not limited to Mexico but to Europe as well. Celay has developed a training program in Spain where engineers looking to learn fine-blanking can be sent from Mexico and elsewhere.

The boom in fine-blanking demand coupled with the exponential growth Celay has experienced in the last couple of years has triggered an aggressive expansion strategy, with Errasti expecting gains of 24% in the coming years. To achieve this goal, Celay has adopted three clearly defined steps: optimization, increased production capacity supported by a continuous training program for workers, and further automation of processes. This is followed by designs to increase the client base and exportation levels to other markets. For Errasti, raising production levels will automatically increase the volume available for exportation. The desire to expand into other markets has been spurred by Celay’s dependency on the US market. “In the past, Celay’s growth depended on whether the US market grew or not,” comments Errasti. To circumvent this reliance, Celay has begun to export to other markets in Europe, China, and Brazil, which has also helped broaden its fine blanking client base. The continuing entry of new OEMs and Tier 1 companies to the Mexican industry seem to paint a fine future for fine-blanking. “New companies are arriving and are trying to localize all their products,” says Errasti. Although many Japanese Tier 1 companies are arriving to Mexico with their own suppliers in place, Errasti explains that this typically does not include fineblanking specialists. This has created a snowball effect, as new entrants offer a good opportunity for established fine-blanking companies to increase work contracts, while the presence of fine-blanking experts offers even more incentives for the entry of players in need of such specialists.