Rating Manual section 6 part 3: valuation of all property classes

Section 430: foundries

This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.

1. Scope

This section describes a foundry, survey requirements and valuation approach.

1.1 General description

Foundries vary considerably in size and character from small jobbing concerns to large factories supplying castings to major industries. There are also specialised firms producing elaborate and costly castings, some of great size, and others small and intricate.

Founding is an old industry and some old foundries are no more than casting shops, which are badly laid out, cavernous and smoky. More modern foundries can be found in typical factory units or may be in heavy engineering type buildings with crane gantries and such ancillary features as administration and technical offices, maintenance workshops, canteens and amenity buildings.

Aluminium foundries differ from both iron and steel foundries and are much more akin to standard industrial buildings. The castings are of a higher quality requiring modern specialised techniques.

Environment standards dating from the 1990’s onwards require sophisticated pollution control equipment to be installed.

1.2 Historical background

The foundry industry is as old as the history of metals, as the casting of metal in moulds was the earliest form of metal shaping. Shapes were made out of clay or sand and liquid metal poured into the hollow formed. Initially metal shaping was associated with small objects such as cannon and cannon balls. More recently, foundries have been associated with the heavy engineering industry, producing not only the manufactured product but also the tools and machinery necessary for the engineering of other goods.

Its relationship with the heavy engineering and manufacturing sector of industry has meant that the fortunes of the foundry have followed a similar path.

Steel castings are used mainly in mechanical engineering for such products as bogey frames and railway couplings for rail cars, stern frame assemblies and parts of engineer casings on ships, valves and pumps, as well as parts for heavy earth-moving equipment and steel mills. Because of the difficulty of obtaining the right tolerances and finish in small components using steel, the motor industry generally use iron for engine blocks, manifolds and clutch houses and aluminium for heads.

The industry was inevitably affected by the economic recession of the late 1970s and early 1980s. The decline in output would have been even greater but for the effect of demand in the offshore oil industry. There followed a period of dramatic rationalisation and closure within the industry. Large numbers of foundries closed and those remaining had to cut operational costs to a minimum in order to maintain a reasonable order book. This period also saw intense competition from countries such as Spain, Poland and East Germany. These countries were able to undercut their British counterparts by anything up to 30%. To retain orders profit margins in Britain fell to as low as 2%. Since then the British Foundry Industry has hit back with extensive investment and also a relatively aggressive export drive. Exports have concentrated upon the quality end of the business which has benefited most from this investment and also new technology. The state of the industry after this period is indicated in the relevant Practice Note.

1.3 Glossary of technical terms

The following glossary of technical terms may be of assistance in dealing with foundries:-

Blast: Air blown into a cupola or other furnace to aid combustion. Such blast may be pre-heated and/or oxygen enriched.
Bright Dips:- The pickling process leaves the casting with a dull black appearance which for certain types of work is undesirable. In such cases the castings are put through a chemical solution which brings them out "white" as though they had been nickelled.
Charge, or Burden: Materials charged into a furnace to produce molten metal of the composition required.
Coke (cupola): Coke having the characteristics required for use in a cupola furnace.
Coke (furnace): Usually a softer coke of higher ash and sulphur content than cupola coke.
Core: Sand compacted into a given shape inserted into the mould before it is closed and cast, so that it forms an internal cavity in the casting which cannot be shaped by the pattern.
Critical Range A furnace in which the charge is melted no a shallow hearth by flame passing above the charge and heating a low roof. Firing may be with coal/pulverised coal, oil or gas. Much of the heating is done by radiation from the roof.
Die Casting: The process of introducing molten metal into metal moulds as distinct from sand moulds.
Downgate: The main passage, running vertically, which allows metal to enter the mould from the ladle.
Fettling: The cleaning of castings, and the removal of surplus metal by chipping or grinding or by some form of mechanised plant.
Forehearth: A fixed receiver joined directly, or by a short spout, to the cupola.
Hand Shank: A small ladle carried by one or two men.
Ladle: A vessel of steel, lined with refractory material, used to contain molten metal.
Launder (cupola) The spout, lined with refractory material, which delivers the molten metal from the annealing or holding furnace.
Melt: A batch of metal in the process of being, or having been, melted.
Mould: The form, usually of sand, which contains the cavity into which metal is poured to make castings.
Moulding Box: A container, generally made of metal, into which sand is rammed around the pattern to form a mould.
Pickling Tanks or After casting the oxide scale is removed by pickling in a solution of sulphuric acid for about 10 hours. Hydrofluoric acid may be used and although this process is slower it is less liable to cause corrosion.
Quench Tank For carrying steel from above the critical range to immersion in oil or water.
Receiver: A refractory lined container servicing as a reservoir for molten metal.
Riser: The opening loading from a mould cavity which, among other things, indicates when the mould has been filled.
Sand Mill: A machine which kneads and mixes sand to develop its moulding properties.
Sand Mixer: A machine which turns over and stirs the sand to ensure uniformity of mixture and the proper distribution of moisture and bonding materials.
Satin Finish Dip Brass casting requiring a satin finish may be dipped in an acid solution and then run through a bright dip which gives them a satin-like lustre.
Shaking out: The separating of the sand and the casting.
Shot Blast: A casting cleaning process which utilises abrasive particles shot through a nozzle under pressure on to the casting being cleaned. Carried out in a shot blasting chamber.
Slag Spout (cupola) The short metal spout in the wall of the cupola on the cupola shell, placed so as to allow slag to be drawn off the surface of the metal.
Slag: The non-metallic covering on molten metal formed from the impurities in the furnace charge.
Tuveres (cupola): The passages through the shell and refractory lining of a cupola by which the blast enters the furnace.
Vibrator A cylinder, with an extremely high speed piston, operated pneumatically or electrically, causing intense vibratory action, thus assisting the withdrawal of a pattern from the mould.
Wood Flour: Finely powdered wood used as an addition to moulding sands to reduce the tendency towards the occurrence of scabs, buckles or rat tails.

1.4 The Basic Process of Casting

The basic art of founding is in filling a shaped mould with fluid metal so that after cooling the metal retains the shape and contour of the mould, the resultant article being described as a “casting”.

Castings may be produced from a variety of metals and alloys but the most common are iron, steel, brass, bronze, manganese, aluminium and gun metal.

Iron castings are produced from pig iron which is re-melted and to which is added scrap metal to produce the grade of iron required. Different types of furnaces may be used for this purpose but the most common is the cupola which is, in effect, a small blast furnace.

A replica pattern moulding, usually of wood or metal, is made of the object to be cast and this is made slightly larger than the final casting to allow for the metal contracting on cooling. This pattern is placed inside a moulding box and suitable sand mixture is rammed around the pattern so that on its removal an impression is left in the sand for subsequent filling by the molten metal. In some cases the moulding is done in floor sand.

Heavy castings are usually done on the floor or in pits. In the latter case the pit usually takes the form of a large moulding box sub-divided so that several patterns may be moulded simultaneously. if any parts of the casting are to be hollow “cores” of specially moulded sand are used.

Loam moulding is used for large castings of simple outline. The sand is of small grain and relatively high clay content so that it may be used in a plastic state or as a slurry. Generally this type of mould is prepared in a pit and the shape is built up in brickwork and finished with loam.

To make the casting, molten metal is tapped from the furnace and carried in a ladle to the moulding into which it is poured through “gates”. Pouring continues until the metal appears in “risers” which are placed in different parts of the mould and which show when the cast is full. The risers also act as a reservoir for feeding back into the cast as the metal cools and contracts. In automated works the moulds are fed on a mechanised conveyor system and for certain classes of work casting is carried out by machines as a continuous process.

1.5 The methods of casting

Other methods of casting include:

Continuous casting:

Molten metal is poured into the upper end of a vertical mould, open at both ends and appropriately cooled so that a solid casting of the sectional shape desired is continuously withdrawn from the lower end. Another type of continuous machine employs shaped rollers through which the metal is poured to achieve a similar result.

Centrifugal casting:

Metal is poured into a revolving mould and centrifugal forces throws it to one end of the mould where solidification of the metal is progressive.

Pressure casting:

Achieved by utilising pressure developed b centrifugal action to force molten metal into moulds. Pouring is through a feeder at the centre of rotation and metal is injected into moulds arranged around a central downgate.

Precision investment moulding (or “lost wax” process):

Used for the production of small castings requiring a high degree of accuracy and finish. Jointless moulds are employed together with expendable patterns, either of wax or plastic.

Shell moulding:

Thin, biscuit-like cores or moulds are made using a sand bonded with a thermo-setting agent. these are formed as a thin shell against the faces of a hot pattern plate or core box.

1.6 Types of Furnace and Ovens

Electric Arc Furnace

This type of furnace varies in size from half a ton to approximately 30 tons in holding capacity. Essentially it is a cup shaped vessel with either a fixed or removable roof. The walls and roof are refractory lined and the whole furnace is mounted on rockers or trunnions so that it can be tilted. In the case of the direct arc furnace graphite electrodes are inserted through the roof and heat is generated by the arc truck between the electrodes and the charge.

A smaller indirect arc furnace is commonly used in foundries for non-ferrous metals and, here, the arc struck between two electrodes generates the heat needed to melt the charge.

Resistance furnaces

Furnaces in which the heat is transmitted either by means of an immersion type heater within the furnace or a resistance element placed around the outside wall of the furnace.

Induction furnaces

There are two types of induction furnace, the core-less and the core type or channel furnace.

The core-less type of furnace is the modern equivalent of the crucible. It comprises a refractory lined vessel encircled by a stout, water cooled, copper coil the ends of which are connected to the terminals of a high frequency motor generator set. A current alternating at some 1,000 cycles per second and at about 400 amps at 2,000/3,000 volts passes through the coil. This type of furnace is used for the production of the highest quality alloys and may be fitted out with a hood and exhauster pumps to melt metals in vacuum.

The core type or channel furnace is used where relatively small capacity is adequate and for larger capacities (over two tons) the “drum” furnace has been developed. This comprises a refractory lined horizontal cylinder with inductors below.

Annealing furnaces

Batch worked or continuous furnace with controllable atmosphere in which metal alloy is annealed. (Annealing is where the metal is held at a temperature above the upper critical temperature for a variable time and then cooled at a pre-determined rate, depending on the allow and the particular properties of hardness, machinability etc which are needed, in order to avoid imperfections).

Heat treatment furnaces

Furnaces in which castings are re-heated and then cooled slowly. Used for relieving internal stresses in castings due to uneven cooling and contraction in the mould particularly the thermal treatment of steel by normalising, hardening or tempering. Used for aluminium hardening.

Mould and core ovens

Ovens for drying moulds or cores before insertion in a mould.

Cupolas and cupolettes

Vertical shaft furnaces, top charged, in which a burden comprising coke and limestone is refined to produce foundry iron. A cupola is similar in principle to a blast furnace and is constructed of steel plate with a refractory brick lining. Air blast is introduced through tuyeres near the base of the shaft. An alternative method of construction is in steel plate, but with a water cooled shell.

Hot blast may be produced by making use of the waste heat from the cupola or by the installation of an independently fired unit.

Reverberatory furnace

This type of furnace, usually brick built, contains a bath in which the metal is melted. Firing is usually with oil or pulverised coal, the flame being directed over the metal.

2. List description and special category code

2.1 List Description: Foundry and Premises

2.2 Special Category Code 110 should be adopted. Suffix S.

2.3 This is a split class and suffix G or S should be used. The size of the hereditament and its complexity will determine the G or S classification.

3. Responsible teams

Each individual Unit is responsible for the valuation and assessment of foundries.

4. Co-ordination

The Specialist Industrial classes Co-ordination Team and the Industrial Valuation Panel have responsibility for this class ensuring effective co-ordination across the business units. The team are responsible for the approach to and accuracy and consistency of foundry valuations. The team will deliver Practice Notes describing the valuation basis for revaluation and provide advice as necessary during the life of the rating list. Caseworkers have a responsibility to:

  • follow the advice given at all times

  • not depart from the guidance given on appeals or maintenance work, without approval from the co-ordination team

There are no separate legal considerations for this class.

6. Survey requirements

The basis of measurement for this class is Gross Internal Area (GIA). Reference should be made to the Code of Measuring Practice for Rating Purposes in England and Wales.

7. Survey capture

Rating surveys should be captured on the Rating Support Application (RSA). Plans and surveys should be stored in appropriate folder within the Electronic Document Records Management (EDRM) system.

8. Valuation approach

Where the foundry is situated among similar buildings the preferred method of valuation is on the rentals basis having regard to the local industrial tone (see RM 4:5).

Foundries of more specialised design and plant and machinery may require to be valued on the contractor’s basis (see RM4:7).

The existing method of valuation should not be changed from one to the other without consultation with the Class Co ordination Team.

Plant and Machinery

In addition to the normal rateable plant and machinery employed in industrial hereditaments a number of specialised items will be met within foundries. These include cupolas, furnaces, ovens, chambers for shotblasting, tanks and baths etc which are either specifically mentioned in Class 4 of The Valuation for Rating (Plant and Machinery) Regulations 2000 or can be identified with items mentioned therein. For a more detailed account see RM4:3.

In larger foundries considerable quantities of water are required and it will generally be more economical for the hereditaments to have its own water supply, treatment and recovery plant. In some cases this may extend to water intakes, boreholes, reservoirs, water towers and coolers, cooling ponds, settlement tanks and screens. RM4:3 may assist in respect of these items.

The Statutory Decapitalisation Rate must be used when valuing p & m.

9. Valuation support

Practice note: 2017 - foundries

1. Market appraisal

Summary of the UK Casting Industry view of the market:

The casting of metal in foundries was the start of the Industrial Revolution and the UK still leads the way in new innovations and techniques in the casting industry. From these traditional roots the UK foundry industry has developed into a hi-tech area to work in with many UK foundries employing world class manufacturing techniques which have completely transformed the image of the dirty foundry.

The UK foundry industry has recovered significantly since 2008-10 recession with the expectation that current output will be around the pre-recession 2008 levels of turnover by both tonnage and value. The industry has withstood the recession with few losses.

Despite a difficult period during the recession:

  • No major UK foundries have closed

  • Production is rapidly returning to pre-2008 levels

  • 400 Foundries in the UK

  • Producing 523,000 tonnes of castings

  • A turnover of £2.2Bn

  • Employing 17,000 people

Rationalisation and global competition have taken out the old and inefficient companies leaving an innovative industry that often leads the world.

While foundries tend to be located in the more industrial regions of the UK such as the West Midlands, Yorkshire and Humberside, they are also major employers in small rural towns right across the country.

UK foundries produce castings in a wide range of metals, sizes, quantities, and shapes from a 325 tonne steel press body to tiny intricate gold jewellery, a million identical aluminium car components to a single iron sculpture.

Whilst aluminium foundries were generally busy in 2014 there was still some fluctuation from quarter to quarter with die casters faring better than sand foundries. The requirement for added value parts continued to grow, with more companies looking at new arrangements for in-house or sub-contract machining. Ferrous founders reported improvement in order books and whilst there were exceptions, most appeared to be generally happy with their current workload. Foundries supplying the automotive sector reported good demand for castings destined for commercial vehicles and premium car brands.

2. Changes from the last Practice Note

There has been no previous detailed practice notes for this class of property.

3. Ratepayer Discussions

There have been no discussions with ratepayers of industry representatives for 2017.

4. Valuation Scheme

The basis of valuation will follow previous practice:

Where the foundry is situated among similar buildings the preferred method of valuation is on the rentals basis having regard to the local industrial tone.

Foundries of more specialised design and plant and machinery may require to be valued on the contractor’s basis. Regard should be had to the Cost Guide where appropriate.

NSU Industrial and Crown must be consulted where it is proposed to change valuation method from rentals comparison to contractor’s basis or vice versa.

Rating Support Application (RSA)

Survaid

The Class Coordination Team (CCT)