industrial

Hungary’s largest steel producer gets Chinese support for green upgrade

Dunaferr steelworks Hungary

China’s CISDI Engineering has signed a memorandum of understanding with China Export and Credit Insurance Corporation (Sinosure) on underwriting 1.3 billion euros in financing for two 150-tonne capacity electric arc furnaces it is supplying to Indian-owned Liberty Dunaujvaros, Liberty Steel Group said on Monday.

CISDI representatives announced the MoU during a visit to Liberty Dunaújváros’s steelworks in central Hungary. The CISDI officials also consulted with experts from Switzerland’s NPT and Germany’s RCG on optimising systems at the base and building ancillary support for electricity, gas, water, and steam.

The 1.3 billion euros of investments, which include upgrades of the hot-rolled mill and galvanising line and the installation of new production lines, will turn the steelworks into a supplier for the local defence and automotive industries.

Liberty Steel Europe CEO Thomas Gangl said the project was advancing “on schedule”.

CISDI chairman Xiao Peng said the MoU with Sinosure was a “significant step” in reducing the CO2 emissions of the 3 million-tonne capacity mill.

Liberty Steel acquired the assets of troubled steelmaker Dunaferr in a liquidation procedure in the summer of 2023 for about 20 billion forints (EUR 50.2m).

As we wrote earlier, Hungarian steel maker Liberty Dunaújváros has started shutting down its two coke ovens, details HERE.

  • read also: Hungarian company to build aircraft factory in China – VIDEO

Brutal drop in battery production in Hungary in May

sk battery battery plant komárom2

According to recent data from the Hungarian Central Statistical Office (KSH), the volume of battery production, a key sector, fell by 32% in May compared to the same month last year.

Battery production falls brutally in Hungary

Overall industrial production was also worse than a year earlier. In May, it dropped by an annual 5.2% based on unadjusted data, and by 4.9% according to working-day adjusted data, the Central Statistical Office (KSH) confirmed in its second estimate on Friday.

Most manufacturing sub-sectors saw a decline, with the largest fall in electrical equipment. Output of the automotive industry, fell by 14.5% year on year. Seasonally and working day-adjusted data showed May industrial output down 1.1% compared with the previous month.

Electrical equipment production was 18.7% down on a year earlier, but the worst performer was battery production:

The volume of battery and dry cell production fell by 32%, and that of electric motor, generator, distributor and controller production by 12.0%.

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Brutal fall in export turnover in Hungary

china shipping trade export

Hungary’s trade balance in May posted a surplus of 1.146 billion euros, narrowing from 1.750 billion in April, the Central Statistical Office (KSH) said on Friday in a first reading of data.

Export and import fall

Exports fell by an annual 8.8 percent to 11.922 billion euros, while imports dropped by 9.0 percent to 10.776 billion.

In the January-May period, Hungary posted a trade surplus of 6.739 billion euros, with exports down 4.9 percent to 60.945 billion euros and imports 11.6 percent lower at 54.406 billion.

May industrial output falls

Hungarian industrial output in May fell by an unadjusted 5.2 percent, KSH said.

Adjusted for the number of working days, output fell by 4.9 percent.

Output of most manufacturing sector branches fell, KSH said. Among the biggest segments, output of the automotive, the electrical equipment, and the computer, electronics and optical equipment segments dropped, while output of the food, drink and tobacco segment grew from a year earlier, it added.

Month on month, output was down 1.1 percent based on seasonally and working day-adjusted data.

In the January-May period, industrial output declined by an annual 2.4 percent.

May retail sales up

Retail sales in Hungary grew by an annual 3.6 percent in May, down from 3.7 percent in April, KSH said.

Adjusted for calendar-year effects, the May figure was 3.6 percent higher.

Adjusted food sales grew by 6.3 percent, non-food sales by 1.8 percent, while vehicle fuel sales eased by 0.7 percent.

Month on month, sales edged up 0.1 percent, adjusted for seasonal and calendar-year effects.

In the January-May period, retail sales rose by an unadjusted 3.3 percent and an adjusted 2.7 percent from the same period a year earlier.

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Hungary’s largest coke ovens shut down

Hungary's largest coke ovens shut down Dunaújváros

Hungarian steel maker Liberty Dunaújváros has started shutting down its two coke ovens, Indian owner Liberty Steel said on Monday.

The inefficient and difficult-to-maintain coke ovens are being shut down as Liberty Dunaújváros prepares to switch to green steel.

Liberty Steel noted that it had recently signed a contract with China’s CISDI Engineering on the delivery of an electric arc furnace that would cut carbon emissions by around 80 percent.

In the meantime, Liberty Dunaújváros is working to ensure employees affected by the measure are retrained and transferred to other areas within the company.

Liberty Steel acquired the assets of troubled steelmaker Dunaferr for 20 billion forints in a liquidation procedure in the summer of 2023.

In a separate statement, the national economy ministry said the government will support the technology transition at Liberty Dunaújváros with all means at its disposal and pointed to employment programmes that could smooth the switch. The government remains in close contact with the company, it added.

As we wrote in January, Hungary’s biggest steel producer in trouble restarts rolling mills.

As we wrote yesterday, the National Directorate General for Disaster Management reported to the Hungarian News Agency (MTI) that an earthquake shook Dunaújváros, in the county of Fejér, on Saturday evening, details HERE.

Hungarian industrial production still cannot recover

MOL Largest Investment Industry Industrial Factory

Industrial output in April rose by 6.4 percent year on year, according to unadjusted data, though working-day adjusted figures showed a 2.4 percent decline as there were three more working days this month than in April last year, the Central Statistical Office (KSH) said on Friday in a first estimate.

Industrial production still cannot recover

Seasonally and working day-adjusted data show industrial output fell by 0.7 percent month on month.

Most manufacturing sub-sectors such as vehicle manufacture, computer, electronic and optical product manufacture, as well as food, beverage and tobacco, added to output, while output of electrical equipment shrank, according to KSH.

IIndustrial output in March-April was 1.7 percent lower than in the same period of 2023.

Commenting on the data, the national economy ministry said Hungarian industry continued to be weighed by an ailing European economy affected by the war’s fallout.

The statement said the Hungarian economy’s fundamentals were healthy as the twin deficits had dissolved and real wages had been growing steadily for six months, while more inactive people were entering the workforce.

Improved domestic demand as households gradually abandon caution over inflation and government measures supporting investments would help to get industry back on track, it added.

Real wages in foreign markets are also improving and interest rates abroad may decrease, the ministry said, so a small improvement in other economies are likely in the second half of the year, providing a modest fillip to Hungarian manufacturers.

The economy is expected to grow by 2.5 percent in this year and by 4.1 percent in 2025, the statement said.

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Hungarian company to build aircraft factory in China – VIDEO

magnus aircraft in china

The Hungarian-owned company Magnus Aircraft’s factory units will be structurally complete near Wuxi, in south-eastern China, by October, the company said on Tuesday. This will enable the company to start producing aircraft not only in Hungary but also in China.

Magnus Aircraft

The Magnus Aircraft company, based in Hungary, is a prominent player in the light sport aircraft industry. Founded in 2011, Magnus Aircraft has quickly risen to prominence with its innovative designs and commitment to high-quality manufacturing. The company’s flagship model, the Fusion 212, exemplifies their approach to combining advanced aerodynamics, safety features, and cutting-edge technology.

The Fusion 212 is a two-seater aircraft primarily used for sport flying, flight training, and leisure. It boasts a sleek, aerodynamic design that enhances its aesthetic appeal and improves performance and fuel efficiency. Made with composite materials, the aircraft is lightweight and robust, ensuring a smooth and reliable flying experience.

Safety is a paramount concern for Magnus Aircraft. The Fusion 212 is equipped with a whole-aircraft ballistic parachute system, providing an added layer of security for pilots and passengers. Additionally, the aircraft includes advanced avionics and an ergonomic cockpit designed to enhance pilot comfort and control.

Magnus Aircraft’s commitment to innovation extends beyond the Fusion 212. The company actively engages in research and development to push the boundaries of aviation technology. This includes exploring electric propulsion systems and other sustainable aviation solutions, positioning Magnus Aircraft as a forward-thinking leader in the industry. Moreover, Magnus Aircraft places a strong emphasis on customer support and training. They offer comprehensive pilot training programs and maintenance services, ensuring that customers have the knowledge and resources needed to operate their aircraft safely and efficiently.

Magnus Aircraft in China

The statement said the new production base will be located in a 210,000-square-metre industrial park currently being developed near Wuxi, which mostly includes Chinese state investments.

Once the production units are structurally complete, employees will be trained, and production is planned to be launched starting next year.

The statement added that a Chinese-Hungarian joint company, Jiangsu Magnus Aircraft Manufacturing, is planned to create 300 jobs, with Hungarians in leading positions.

 

The company plans to turn out two- and four-seater planes primarily for the Chinese, Iranian, and African markets.

As we wrote earlier, Magnus Aircraft announced that its Fusion 212 airplane, powered by an internal combustion engine, successfully completed a transatlantic test flight from Hungary to the United States, details HERE.

As we wrote before, Hungary’s Magnus Aircraft laid the cornerstone of an aircraft production hall in Pogány, details HERE.

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Green activists shut off entrance to Samsung battery factory in Hungary

Green activists shut off entrance to Samsung battery factory in Hungary

Opposition LMP activists have shut off the entrances to the Samsung battery plant in Göd, north of Budapest.

Antal Csárdi, the green party’s deputy group leader, at a press conference held at the factory on Monday, called on the government to force compliance with the court ruling in respect of the validity of Samsung SDI’s environmental permit and reduce capacity by more than 98 percent.

Neither the environmental protection office nor the local government office had shown willingness to take action, he said. As we wrote before, Samsung factory in Hungary could be closed immediately under new court order, details HERE.

He said LMP would “persevere” with its action with the goal of forcing the plant to abide by the court’s ruling that the company was in breach of environmental regulations.

He said it was “obvious” that the government was only concerned with falling in line with the interests of multinational companies rather than protecting the health of the Hungarian public.

As we wrote earlier, fetus-harming chemicals were found in water near the Samsung battery plant, details HERE.

 

Suzuki CEO Toshihiro Suzuki in Budapest

Prime Minister Viktor Orbán held talks with Toshihiro Suzuki, the CEO of Suzuki Motor Corporation

Prime Minister Viktor Orbán held talks with Toshihiro Suzuki, the CEO of Suzuki Motor Corporation, in Budapest on Monday.

They reviewed the situation of the automotive industry in Europe and Hungary and the challenges posed by the industry’s technological transformation.

Orbán said Hungary had an interest in Suzuki’s success, adding that the ties between Hungary and the company “is more than just business; it is a friendship”.

Speaking about the Hungary’s economy, Orban told his partner that it was expected to grow this year and in 2025 as well, adding that credit ratings agencies, investors, Hungarian entrepreneurs and the Hungarian people had trust in the country.

“We are optimistic,” Orbán said, adding however that the war in Ukraine posed a big threat.

“The situation is in that regard very difficult, because the war destroys not only human lives, families and the assets of people, but entire economies,” the prime minister said.

As we wrote in January, Suzuki has announced a temporary halt regarding the production of the Vitara and S-Cross models at its Esztergom plant for a week due to the recent events at the Red Sea, details HERE.

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  • Japanese TDK investing EUR 67m in Szombathely, details HERE

Japanese TDK investing EUR 67m in Szombathely

tdk szombathely

Péter Szijjártó, the minister of foreign affairs and trade, said at the inauguration of a building at the Japanese-owned company’s base in the city on Friday that TDK could create 250 jobs with a 26 billion forint (EUR 67 m) investment in Szombathely, western Hungary.

The investment programme is adding 12,000sqm of production area at the base, he said. TDK is bringing electronics production for the automotive industry that aren’t made anywhere else in Europe to Szombathely, the minister added.

He said Hungary had faced “tight competition” in attracting the investment, adding that it was supported with 6.7 billion forints (EUR 17.2 m) from the state.

 

In a press release, TDK said it was bringing production of sensors not made elsewhere in the European Union to the base as the manufacturing base for the products at a TDK base in Indonesia reached its capacity limit.

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Hungarian minister Nagy meets German industry representatives

germany hungary flag

National Economy Minister Márton Nagy met for talks Philipp Haussmann, Deputy Chairman of the German Committee on Eastern European Relations, and Barbara Zollmann, Executive Board Member of the German-Hungarian Chamber of Industry and Commerce (DUIHK), in Budapest on Tuesday, his ministry said.

At the talks, the minister noted that Germany is Hungary’s most important trading partner, accounting for 24 percent of the country’s foreign trade, the ministry said in a statement. German companies employ over 220,000 people in Hungary and represent 18.7 billion euros worth of foreign direct investment out of a total of 100 billion, he said.

The sides reviewed bilateral economic and business relations and cooperation. Nagy said collaboration with German companies remains close and thriving in the vehicle, retail, telecommunication and defence industries, among other sectors. Thanks to the favourable business environment, four-fifths of the German companies present here would choose Hungary again as an investment destination, the minister said.

Regarding Hungarian-German relations, Márton Nagy pointed out that, despite the fruitful ties, there is a false and misguided sentiment in certain circles. He made it clear that it is not true that there are problems in the food industry or retail trade in terms of cooperation, and that the airport buy-back is on schedule in a spirit of partnership. He added that the only sector with a conflict was cement, where the companies concerned had abused their dominant position.

read also:

  • Hungary’s Minister of Economy talks about cooperation between Hungary and the German automotive industry, details HERE
  • Representatives of the Bavarian Christian Social Union in Budapest, details HERE

Orbán: Hungarian government aiming to import ‘the most developed’ industries

Viktor Orbán Hungarian super secret service

Prime Minister Viktor Orbán pledged to introduce the most developed industries to Hungary at the inauguration of a MOL complex in Tiszaújaváros, in north-eastern Hungary, on Tuesday.

Orbán talks about new industries

Orbán said the country’s electricity demand would increase by 50 percent by 2030 due to the new industries. “We will have Eastern and Western car plants, technologies and production capacities to store green energy, we will participate in space research and link Hungary to the [international] bloodstream of the most modern information technologies,” the prime minister said.

In addition, Hungary has ambitions to build the most modern defence industry in Europe, and develop its food, pharmaceutical and chemical industries to a higher level, he said.

Orbán said the government’s industrial policies would ensure that the industry was supplied with sufficient energy and a well-trained labour force.

Concerning the Tiszaújváros plant, he said value-added jobs were being created, “providing a secure, predictable future for 300 people”.

Hungary is in the process of diversifying its energy resources to make itself less dependent on global market trends, Orbán said. Hungary imports gas from Qatar, it will buy green energy from Azerbaijan, increase its solar energy capacities, while the upgrade of the Paks power plant is under way, he added.

A crucial component of the Hungarian government’s industrial strategy is to provide incentives to Hungarian businesses entering foreign markets. “Hungarian industry has grown so big that Hungary is now too small,” he said.

Currently 12,000 Hungarian companies are active abroad or make products for export, and the government is planning to “create or subsidise another 5,000” to achieve a similar status, the prime minister said, adding that a relevant scheme would soon be announced.

The government’s industrial strategy “is a good one”, Orbán said, adding that MOL had an important role. “Just like MOL, the industrial strategy is ambitious … but with both feet on the ground,” he said.

MOL, Orbán said, “has taken the same path as the Hungarian economy, having a single focus 20 years ago, trading in crude oil; now it is spreading in the region, it has a biogas and diesel plant, it has entered the haulier market and it has become a crucial player in waste management.”

The company’s new polyol plant will produce the “Swiss knife of plastics manufacturing”, good for the automotive industry, furniture production, the construction sector and textile manufacturing, he noted.

The prime minister noted that MOL already had two plants in Tiszaújváros, built with support from Japanese investors, while the new polyol plant had taken over technology from Germany’s Thyssenkrupp. “MOL is Hungary’s largest and most successful company … when they build something … it is built solid,” Orbán added.

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Featured image: depositphotos.com

Scandalous: Fetus-harming chemicals found in water near Hungarian battery plant

contaminated water illustration battery plant

A fetus-damaging NMP solvent, which is also used for battery production, was found in the municipal sewage system of the Samsung battery plant in Göd, Greenpeace informed, following a response letter from the Duna Menti Regionális Vízmű Plc. (Danube Inshore Regional Waterworks).

Samsung battery plant in Göd violates regulations – again

samsung factory hungary plant göd
Samsung plant in Göd, Hungary. Photo: lanterv.hu

In February, the environmental organisation took samples of water from a large spillage of NMP solvents on the land near the Samsung battery plant in Göd. However, it was not known at the time whether the spill was communal or industrial wastewater, Népszava writes.

Laboratory analysis of the samples revealed the presence of a significant amount of NMP solvent, 200 micrograms per litre, and Greenpeace has submitted a data request to the authorities.

The authorities have not sent a substantive response to date, but the Duna Menti Regionális Vízmű Plc. sent Greenpeace the following:

“On 21 February 2024, a blockage occurred in the Göd public sewerage network […], which carries social wastewater from the Göd factory, caused by sewage pollutants of unknown origin. As a result of the blockage, urban wastewater of municipal origin was discharged at the ‘Bócsa roundabout’ in Göd, which also leaked into the field area adjacent to the roundabout. There was no pipe breakage during the incident in question.”

samsung göd battery plant
The Samsung battery plant in Göd. Photo: Wikimedia Commons

Simon Gergely, Greenpeace Hungary’s chemical expert, said that they demand that the authority investigate this case, take legal action against the pollution, launch an investigation into whether this pollution continues and take immediate steps to prevent similar irregular releases from happening in the future.

Greenpeace has also launched a national petition. They demand the following:

  1. The authorities should take strict and effective action to guarantee the pollution-free operation of battery plants in our country.
  2. Develop a strategic environmental assessment showing the environmental impacts of battery industry plants.
  3. As long as these conditions are not met, no new battery installations should be allowed in our country, nor should existing ones be expanded.

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Featured image: depositphotos.com

German software company Evosoft invests €8.7 million in a new R&D project in Hungary

Daily News Hungary Logo Új

The government is focusing on a paradigm change in the Hungarian economy, and on transforming Hungary into the most innovative economy of Europe as swiftly as possible, the minister of foreign affairs and trade said in Budapest on Monday.

Péter Szijjártó announced that German-owned software developer Evosoft is investing 3.4 billion forints (EUR 8.7m) into a new R and D project developing the effectiveness of installing production lines. The project has received a 682 million forint government grant and will create 75 jobs, 57 of them in Budapest and 18 in Miskolc, in north-east Hungary, a ministry statement quoted Szijjarto as saying.

He said Evosoft, a member of the Siemens Group, operates several R&D facilities in the region, and Hungary won the investment amid stiff competition.

German companies remain the largest group of investors in Hungary, with some 21 percent of all investments linked to German companies, Szijjártó said. He said that Germany is also Hungary’s largest trading partner, with bilateral trade surpassing 70 billion euros last year.

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Revolting: Samsung factory in Hungary could be closed immediately under new court order

samsung factory hungary plant göd

The Samsung factory in Göd, Hungary could be closed down immediately, according to a court order, as the factory’s environmental permit has been annulled.

Samsung factory in Göd could be closed down

samsung hungary plant göd
Samsung plant in Göd, Hungary. Photo: lanterv.hu

The 10-year environmental permit for the Samsung factory in Göd, issued last December, has been challenged in court by the Göd-ÉRT Association. The NGO has asked the court to order immediate legal protection and to prohibit the Samsung factory from using the environment for the duration of the lawsuit, Átlátszó reports.

The Budapest District Court ruled that the request of the civilians was well-founded and ordered the suspension of the filing of the statement of claim until the end of the lawsuit, Átlátszó quotes the association’s statement on the matter.

At the end of last year, the Göd-ÉRT Association for the Protection of the Environment and Towns (Göd-ÉRT Környezetvédelmi és Városvédő Egyesület) argued that the operation of the factory (authorised by the authorities) did not comply with either Hungarian or European environmental standards.

According to the association, the Pest County Government Office did not take into account, among other things, the plant’s noise pollution, which had been present for years, when issuing the permit. It was also extremely permissive in the matter of air and water pollution and battery waste generated during production.

The association has now announced on its social media page that the Budapest District Court has ruled that the application is well-founded and ordered the full stay of the action, i.e. it has applied the institution of immediate legal protection and

annulled the environmental permit of Samsung SDI Plc.’s Göd factory until the final outcome of the case.

According to the NGO, the decision, which banned the Göd factory from using the environment, should lead the authority to order the suspension of the plant’s operation. The association has also sent a letter to the Pest County Government Office and Samsung Hungary Plc. calling on them to shut down the Göd factory.

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How to Accurately Estimate the Cost of Your CNC Machining Project

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CNC machining, also known as computer numerical control machining, is a versatile and powerful manufacturing method that can produce a wide range of parts from a variety of materials. However, for individuals new to CNC machining, project costs can be a mystery. Keep reading this post to learn how to precisely estimate the cost of your CNC machining project, so you can make informed decisions and budget effectively.

Understanding the Cost Breakdown

Several factors influence CNC quote or CNC machining costs, all of which contribute to the final price. Here is a breakdown of the main elements:

Material Cost 

In machining operations, material cost is a crucial consideration, and costs are directly influenced by the kind of material used. Because of their special qualities, exotic materials like titanium are more expensive than more typical materials like aluminum. It’s critical to account for any waste from trimming and unsold inventory because these can have a big impact on the project’s final cost. In machining operations, cost optimization and profitability can be increased with the use of effective material management techniques.

Part Complexity 

Production time and cost are directly impacted by part complexity. Longer machining times and greater costs are a result of intricate geometries, tight tolerances, and many features. On the other hand, simpler designs with less detailed elements and basic shapes can be produced more cheaply and rapidly. For machining projects to be as cost-effective as possible while maintaining high quality, design complexity must be carefully considered. Moreover, part complexity affects the overall functioning and performance of the finished product in addition to production time and cost. 

For some applications, like aerospace or medical devices, where precision is important, intricate geometries and close tolerances may be required, while simpler designs might be adequate for less demanding uses. Achieving the best outcomes in terms of functionality and cost-efficiency requires striking a balance between design complexity. Therefore, to guarantee that the finished product satisfies the required standards without going over budget or sacrificing quality, engineers and designers must carefully consider the trade-offs between complexity, performance, and cost.

Machining Time 

Production time and cost are directly impacted by part complexity. Longer machining times and greater costs are a result of intricate geometries, tight tolerances, and many features. On the other hand, simpler designs with less detailed elements and basic shapes can be produced more cheaply and rapidly. For machining projects to be as cost-effective as possible while maintaining high quality, design complexity must be carefully considered.

The choice of material is also very important for machining cost and time. A variety of materials have different qualities, like hardness and machinability, which have an immediate impact on how well a material is machined. Compared to softer materials like aluminum or plastics, tougher materials like titanium or hardened steel, for example, require slower cutting rates and may require specialized tools, which results in longer machining times and higher prices. Thus, to achieve both cost-effectiveness and high-quality results in machining projects, it is imperative to optimize material selection in conjunction with design complexity.

Quantity 

When making use of the benefits of CNC machining, quantity is important. A lower cost per part can be achieved by spreading setup expenditures over a larger number of units through larger production batches. One of the main benefits of CNC machining is its economies of scale, which enables producers to fulfill different demand levels while maximizing productivity and cost-effectiveness. Companies can increase their profitability and competitiveness in the market by optimizing their operations through strategic planning of production quantities.

By utilizing economies of scale in CNC machining, production process efficiency is improved overall and per-part costs are decreased. Businesses may improve resource use, decrease downtime, and expedite workflows by properly planning production numbers. This method ensures that every unit produced contributes considerable value to the whole operation while also maximizing productivity and enabling improved resource allocation. To succeed in the cutthroat market of today, CNC machining companies must have a solid understanding of quantity dynamics.

Machine Utilization 

Effective machine use not only controls expenses but also guarantees project completion on schedule, building client confidence and satisfaction. CNC machine firms may stay competitive in the market and provide their customers with constant quality and reliability by optimizing uptime and decreasing downtime.

Labor Costs 

Investing in ongoing training and skill development for machinists can yield long-term benefits by enhancing productivity and minimizing errors. While it may require upfront investment, the expertise gained through training can lead to smoother operations, fewer delays, and ultimately, lower overall labor costs. Additionally, well-trained machinists can offer valuable insights and optimizations, further optimizing the efficiency of CNC machining processes.

Tooling Costs 

Optimizing tooling strategies can also have a big impact on the total cost of the project. CNC machining businesses can reduce tooling costs while optimizing performance and longevity by carefully choosing the right tools and utilizing effective tooling procedures. By implementing techniques such as tool life monitoring, tool reconditioning, and strategic toolpath planning into practice, tool lifespans may be increased, replacement frequency can be decreased, and tooling costs can be eventually decreased without sacrificing accuracy or quality. One of the most important aspects of cost management in CNC machining operations is the upfront investment in high-quality tools and their ongoing maintenance, which can result in significant savings over time.

Overhead Costs 

For CNC machining operations to remain profitable and competitive, overhead costs must be managed effectively. Machine shops may efficiently control overhead costs by putting measures in place to improve resource usage, streamline operations, and decrease waste. This might involve putting lean manufacturing ideas into effect to maximize space utilization, adopting energy-efficient techniques to save power expenses, and investing in quality management systems to guarantee customer satisfaction and minimize rework. To gradually down overhead expenses even more, utilizing technology such as automation and digital monitoring systems can also help locate inefficient areas and facilitate data-driven decision-making. Machine shops can improve their financial stability and maintain their competitiveness in the market by taking proactive measures to manage their overhead expenses.

5 Steps to Take for an Accurate Estimate

Now that you understand the cost components, follow these steps to get a more accurate CNC machining project estimate:

  1. Define Your Part Requirements: Specify the part’s dimensions, tolerances, material specifications, and surface finish requirements. The more explicit your specs, the easier it will be for the machine shop to produce an accurate price. Include any sketches or 3D models you may possess.
  2. Consider Design for Manufacturability (DFM): Even if you have a functioning design, work with a CNC machining professional to simplify the design for manufacturability. This could include reducing difficult features, improving toolpaths, or recommending alternative materials that are easier to machine. DFM can considerably cut machining time and costs.
  3. Research Potential Machine Shops: Look for reputable platforms, such as the Rapid Direct instant quote platform that have handled projects comparable to yours. Inquire about their capabilities, available materials, and average return times. 
  4. Request for Quotation (RFQ): After you’ve found a few possible platforms you can use the information you have to request a quote. 
  5. Review and Compare Quotes: Carefully consider the quotes received from various platforms. While cost is important, examine the shop’s reputation, previous experience with similar projects, and ability to fulfill your deadlines. Don’t settle with the lowest choice; a reputable and knowledgeable shop may be worth a slightly greater price in the long run.

Additional Tips for Cost Optimization

Here are some other ways to keep your CNC machining project costs under control:

Prototype Before Production 

Before plunging into full-scale CNC machining, try making a prototype with alternate techniques such as 3D printing. Prototyping enables you to test your design’s functionality and detect any difficulties early on. By identifying and fixing these difficulties during prototypes, you can save costly rework and revisions during CNC machining.

In addition to facilitating functionality testing, prototyping creates opportunities for originality and creativity. It serves as a playground where you may experiment with various sizes, forms, and materials without having to invest in pricey manufacturing procedures. Furthermore, because prototyping offers a physical manifestation of the design concept, it encourages teamwork and communication with stakeholders. Prototypes clear the path for polished, market-ready items by promoting iteration and feedback, so your final CNC machined output will perfectly match your goals and vision.

Negotiate Batch Sizes 

Having more flexibility in batch sizes can help you save money. Discuss with your machine shop the idea of altering batch sizes to capitalize on economies of scale. Larger production runs frequently result in cheaper costs per component due to economies in setup and machining time. Negotiating batch sizes depending on your project’s requirements and budget allows you to maximize cost savings while maintaining quality.

Investigate Alternative Materials 

While some materials may appear more expensive at first, they may provide long-term cost benefits through faster machining times or lower tool wear. Engage in talks with your machine shop about alternate materials that will suit your project’s specifications while potentially cutting total machining expenses. Consider material attributes like strength, durability, and machinability to ensure that the material you choose meets your project’s criteria and budget.

Using eco-friendly materials can help your project meet your company’s sustainability objectives while also lowering its carbon footprint in light of the growing environmental concerns. Seek for materials with less environmental impact throughout the course of their lives, recyclable materials, or renewable materials. You can accomplish cost savings and promote a more ecologically friendly production process by adding these factors into your material selection procedure.

Optimize Tooling Techniques 

Efficient tooling techniques have a major impact on CNC machining costs. Work closely with your machine shop to improve tool selection and use. This may include selecting the appropriate cutting tools based on the material type and complexity of the machining operations, as well as using tooling methods such as high-speed machining or toolpath optimization to increase efficiency and reduce machining time. Furthermore, over time, considerable cost reductions can be achieved by routinely evaluating and improving tooling procedures. Close cooperation with the machine shop enables ongoing enhancements in the choice and application of tools.

 You can find ways to maximize surface finish quality, reduce tool wear, and optimize cutting tool performance by utilizing the knowledge and skills of machinists and tooling specialists. Furthermore, adopting cutting-edge tooling techniques like adaptive machining or specially designed tools for certain uses can lower total machining costs while improving efficiency and accuracy. Investing in R&D to investigate novel tooling solutions can eventually lead to increased competitiveness, shorter lead times, and higher productivity in the CNC machining sector.

Minimize Setup Time 

Minimizing setup time is critical for cost efficiency in CNC machining. Streamline the design and production processes to eliminate setup difficulties and allow for faster job changeover. Furthermore, consider using standardized fixturing and workholding solutions to simplify setup procedures and reduce downtime between machining operations. Cutting setup time increases overall productivity in CNC machining operations while also improving cost efficiency. Machine shops can reduce the amount of time needed for material handling, machine setup, and tool changes by optimizing their design and manufacturing processes. Using more sophisticated scheduling strategies, including batch processing or optimal sequencing, can help save setup time and increase machine efficiency. Investing in sophisticated CNC programming methods and automated tool-changing systems can also speed up setup times and boost machining output. CNC machining businesses can improve workflow and become more competitive in the market by placing a high priority on minimizing setup time.

Opt for Lean Manufacturing Practices 

Adopt lean manufacturing principles to reduce waste and increase efficiency throughout the CNC machining process. This could include optimizing workflow patterns, minimizing non-value-added operations, and conducting continuous improvement programs to increase productivity and save costs over time. Lean manufacturing techniques must be used if CNC machining processes are to become more profitable and efficient overall. Machine shops can improve resource utilization, decrease lead times, and streamline workflow patterns by getting rid of waste and simplifying operations. Lean concepts place a strong emphasis on ongoing development, giving teams the tools they need to spot inefficiencies early on and take proactive measures to fix them. Machine shops can systematically identify areas for improvement and execute focused solutions to increase productivity and quality while decreasing costs through programs like Kaizen events and value stream mapping. CNC machining businesses can achieve sustainable growth and keep a competitive edge in the market by implementing lean manufacturing techniques.

Conclusion

Understanding all of the factors that influence CNC machining costs and following the methods indicated above will allow you to acquire accurate project estimates. Working jointly with a respected CNC machine shop can improve your cost estimation process by leveraging their experience and resources to ensure the best results. Furthermore, investing in new technology like CAD/CAM software and simulation tools helps streamline the design and machining processes, resulting in increased productivity and cost savings. Continuous monitoring of industry trends, technology breakthroughs, and best practices is critical to being competitive and addressing changing client demands. Taking a proactive approach to cost estimating and project management not only increases profitability but also develops relationships with clients and stakeholders, setting your company up for long-term success in the ever-changing CNC machining industry.

Disclaimer: the author(s) of the sponsored article(s) are solely responsible for any opinions expressed or offers made. These opinions do not necessarily reflect the official position of Daily News Hungary, and the editorial staff cannot be held responsible for their veracity.

Insight into the production process of the Lynx combat vehicle in Hungary – photos

Production process of the Lynx infantry fighting vehicle while visiting the Rheinmetall plant in Zalaegerszeg. Photo: hmzrinyi.hu

The personnel of the HDF 30th Mechanized Infantry Brigade got a unique insight into the domestic production process of the Lynx infantry fighting vehicle while visiting the Rheinmetall plant in Zalaegerszeg on 3 April.

A cornerstone of the National Defence and Armed Forces Development Program’s success—besides procuring state-of-the-art equipment to meet the challenges of the age—is the renewal of the Hungarian defence industry that guarantees the continuity and sustainability of long-term armed forces development, writes Honvedelem.hu. A basis and citadel of this is the Zalaegerszeg-based Rheinmetall Hungary Zrt., which rolled out the first KF41 Lynx infantry fighting vehicle in late 2023, within three years after the ground-breaking ceremony. Read also: Rheinmetall plant inaugurated in Zalaegerszeg, Hungary – details, PHOTOS

“As a result of the newest manufacturing and product technologies applied by the expert Hungarian staff, state-of-the-art vehicles are being handed over to the Hungarian Defence Forces. To get a view of performance and possible future developments, it is important to understand the complexity, modularity, and testing processes of next-generation vehicle types”—emphasized Andreas Baumeier, chief operations officer of Rheinmetall Hungary Zrt. regarding the significance of production.

Production process of the Lynx infantry fighting vehicle while visiting the Rheinmetall plant in Zalaegerszeg. Photo: hmzrinyi.hu
Production process of the Lynx infantry fighting vehicle while visiting the Rheinmetall plant in Zalaegerszeg. Photo: hmzrinyi.hu

The soldiers from Hódmezővásárhely had the opportunity to learn about the details of the production during their visit to the Hungarian plant of Rheinmetall Hungary Zrt., which is unique in size and applied particular technologies in Europe and within the Rheinmetall Group. Besides learning about quality control built into the production process, they had the opportunity to see how the newest welding, machining, internal logistics, and final assembly technologies are applied.

Another important part of the tasks at the plant is related to post-production service and training. This includes the maintenance of delivered vehicles, the repair of vehicles, equipment, and components, the developments based on user feedback, the installation of new components for future developments, and related training. These upgrades are possible because of the modular construction of the Lynx, which provides mechanical and electronic growing potential for decades.

Production process of the Lynx infantry fighting vehicle while visiting the Rheinmetall plant in Zalaegerszeg. Photo: hmzrinyi.hu
Production process of the Lynx infantry fighting vehicle while visiting the Rheinmetall plant in Zalaegerszeg. Photo: hmzrinyi.hu

Producing infantry fighting vehicles labelled as “the crown jewel of the Hungarian armed forces development” is not the only aim. Utilizing the fighting vehicle family’s modular construction, other variants of the vehicle will also be produced in Hungary, such as the field ambulance, reconnaissance, and command vehicle types, among others. The first units of the latter two are planned to be delivered in 2025.

The third distinguished component of the company’s profile – besides production and development – is testing. The test tracks of the premises built for this purpose are varied and thus contribute to spotting all kinds of developmental or technical malfunctions before handover. Besides mobility testing equipment, climatic chamber, EMC chamber and underground life-saving firing tunnel tests are also used in the plant in Zalaegerszeg to guarantee the highest quality possible.

“It was good to hear that other military equipment is planned to be produced and developed here in the future. I think that it will only benefit the Hungarian Defence Forces”

Private Csaba Walter summarized the visit. He also mentioned that his application to the Lynx pilot program was primarily motivated by the modernity of the fighting vehicle. Therefore, the fact that he is among the future operators of the combat vehicle type produced in Zalaegerszeg has added a lot to the experience of the factory visit.

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Hungary doomed to be the assembly line of Europe?

factory assembly line illustration

With its affordable workforce, Hungary attracts international companies, yet while assembly plants provide jobs for Hungarians, the country may not reap significant benefits from these setups.

Pénzcentrum analysed 2023 macroeconomic data published by Eurostat, arguing that Hungary has become the “assembly country” of Europe.

Looking at hourly labour costs within the European Union, and more narrowly, the Eurozone, we see that since 2022, there has been a steep rise in wages. In the EU, the average hourly labour cost rose from 30.2 euros in 2022 to 31.8 euros last year. For Eurozone countries, these figures were 34 EUR in 2022 and 35.6 euros last year.

Hourly average labour costs in the industry sector vary significantly across different fields. Therefore, Eurostat detailed different industries. For instance, in the EU, labour costs in construction averaged 28.5 euros, whereas in services, they soared to EUR 31.8.

Hungarian workforce costs a fraction compared to other EU nations

A further complication in calculating average labour costs is the substantial price discrepancies across the continent. For instance, Luxembourg, with the highest average hourly labour cost, stands at 53.9 euros. Second and third, perhaps unsurprisingly, are Denmark and Belgium with costs over 47 euros.

It is in this context that Hungary stands out within the EU, albeit for the wrong reasons. Hungary ranks as the third cheapest nation in terms of hourly labour costs, at 12.8 EUR. Only Romania, where workers earn an average of 11 euros per hour, and Bulgaria, with 9.3 euros, have lower costs.

Low wages attract assembly plants but indicate a fragile economy

As Pénzcentrum highlights, lower labour costs make the country appealing to international corporations. These figures show that in Hungary, employees are willing to accept lower wages, given the relatively lower income levels in the country compared to other EU nations. Consequently, these lower costs translate to cheaper overall production, resulting in increased profit margins for companies.

The relatively weak Hungarian salaries are further evidenced by another statistic we covered last month: Romania has outpaced Hungary in GDP based on purchasing power standards for the first time. This implies that Romanians can afford more with their salaries than Hungarians can with theirs. Overall, Hungarian GDP per capita was the 6th lowest in the EU in 2023, standing at 76 percent of the Union average.

Assembly lines offer employment, yet pose long-term economic risks

Assembly lines in factories provide jobs for many in the countryside, Telex reported in 2022. They wrote about how according to data gathered two years prior, 1.9 percent of men, and around 3 percent of women worked at assembly lines in the country. In 170 towns over 10 percent of the population was employed as assemblers. In certain regions of Hungary, these jobs, usually having to do with car manufacturing or battery production, are invaluable.

Assembly lines in factories provide employment opportunities for many, particularly in rural areas, as reported by Telex in 2022. According to data gathered two years prior, approximately 1.9 percent of men and around 3 percent of women worked at assembly lines in Hungary. In 170 towns, over 10 percent of the population was employed in assembly roles. In certain regions of Hungary, these jobs, usually having to do with car manufacturing or battery production, are invaluable.

However, the news outlet highlights that an economic model centred on assembly plants, characterised by low added value, may be unsustainable in the long term. With robotisation on the rise, the stability of these positions is precarious, and mass layoffs during modernisations can lead to economic instability.

In recent months, the issue of battery manufacturing has been a political minefield, with the government supporting the expansion of multinational companies into the country. Read our coverage of the issue here: Hungary becoming a battery superpower: is it a good idea?

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Over 2 million euro expansion of Autoflex-Knott handed over

autoflex knott

Foreign Minister Péter Szijjártó on Monday inaugurated an 800 million forint (EUR 2.1m) capacity expansion at car-parts manufacturing plant Autoflex-Knott, and said Hungarian companies were increasing their market shares abroad.

At the ceremony held at the plant in Kecskemét, in central Hungary, Szijjártó said the investment would allow the plant to produce parts of higher performance and so expand the company’s share of the European and American markets.

The government supported the investment with a 400 million forint grant, a ministry statement cited Szijjártó as saying.

Szijjártó said the investment would also bring about further training of the work force and foster greener, energy-saving solutions.

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