The Industry

Management believes there is significant room for expansion for AMTG and our subsidiaries in the metal casting and metal fabrication industry worldwide. We are in a multi-billion dollar metal casting industry. At least ninety percent of all manufactured goods contain one or more cast metal components. Metal castings components are integral in the U.S. transportation, energy, aerospace, manufacturing, and national defense.

International Market Performance & China's Acceleration

With 23,000 iron foundries, China has become the number one tonnage producer in the world. China’s rapid emergence as a dominant economic superpower has radically changed the competitive balance and cost structure across all manufacturing industries, including precision machined parts manufacturing. The Industry is experiencing first-hand the impact of this sea change in the manufacturing supply chain.

In 2001, the U.S. dropped to second in world ferrous casting production (Share of Tonnage Produced) with 16% of the world market. Illustration 1 is the world ferrous casting production for 2001 based on tonnage produced. China leads the world in ferrous casting production with 24% of the world market. In 2000 and 2001, China experienced a 10% and 7% growth in ferrous casting shipments respectively while the U.S. experienced nearly a 10% decline in casting shipments in 2001. Other major producers of ferrous castings are Russia, Germany, Japan, and India.

Illustration 2 is the world nonferrous casting production for 2001 based on tonnage produced. The U.S. was the leader in nonferrous castings across nearly Exhibit 11all alloy types with 24% of the 2001 World Nonferrous Casting Production world market share, down slightly (Share of Tonnage Produced) from 27% during 2000. Japan followed the U.S. with 12% of the world market. Aluminum represented 90% of Japan’s nonferrous casting shipments, whereas the U.S. was more diversified with aluminum accounting for 68% of the nonferrous casting shipments. China held 11% of the world market. Mexico continued to have strong nonferrous production with8% of the world market share. This is a significant increase from1995 when Mexico held only 2.9%of the world market share. Other leading producers of nonferrous castings include: Germany, Russia, and Italy.