The United Nations Industrial Development Organization (UNIDO) refers to the big group of metal processors as the Metals and Engineering Industries. It is considered a catalyst industry and the backbone of all industries in any economy.

In the Philippines, the metals and engineering industry involves a variety of prospects and opportunities to transform metal into various downstream products that could be part and parcel of various other industries and finished products. These products include the following: manufacture of metal products , electrical machinery and appliances, non-electrical machinery such as those intended for agriculture, metalworking and other process machinery and transport equipment. This sector comprises about 900 establishments of various sizes and level of operations.

INDUSTRY STRUCTURE

The metal processors are generally divided into three main groups, namely: a)iron and steel industry group, b) nonferrous metal industry group, and c) engineering industry group. The composition of each group is described as follows:

A. Iron and Steel Industry

The iron and steel industry could be divided into three sub-sectors: the primary, intermediate and downstream sectors.

The primary sector includes the following: a) iron making, or extraction of iron from iron ore; b) steel making, or the refinement of iron or scrap into steel; and c) bullet, ingot, and slab casting which is basically pouring of molten steel into the desired semi-finished shape.

The intermediate sector involves the processing of the semi-finished iron and steel into finished products, namely rolling, forming, drawing and finishing. This sub-sector could be further classified into:

a. Flat products. These include products that originate from slabs and rolled into steel plates and sheet/coils.

b. Non-flat steel or long products. These include products that originate from blooms, billets or ingots that were rolled into reinforcing bars, rods and sections.

The downstream sector includes the major users of iron and steel products such as major industries composed of construction, automotive and machinery, and the engineering and metalworking sector.


B. Non-Ferrous Metal Industry

The non-ferrous metal sector includes bronze and the aluminum sub-sectors. Their products are considered non-ferrous castings. The bronzes, and their close relatives, the brasses, are copper-based alloys. Bronzes are usually cast, while brasses are usually wrought. The aluminum sub-sector is aluminum-based with other elements as elements for alloy.


C. Engineering Industry

The engineering industry comprise mainly of small and medium-sized plants and shops that process all industrial alloys, usually on an intermittent basis, producing engineered and custom-built products. The group includes foundries, die-casting shops, forge shops, tool and die shops, machine shops and press shops.

This value proposition focuses mainly on the Small Tools sector under the broad engineering industry. The following Diagram 1 shows and illustrates the industry linkages of the engineered products industry in producing small tools by processing raw materials such as steels, plates, and hard plastics into custom-made products.

Product Coverage

The following are the general product coverage of Small Tools:

1. Blow lamps, portable forges, grinding wheels with frameworks, manicure or pedicure sets, and goods of HS No. 82.09

2. Articles with a blade, working edge, working surface or other working part of:

• Base metal;

• Metal carbides or cermets;

• Precious or semi-precious stones on a support of base metal; or

• Abrasive metals on a support of base metal

3. Sets consisting of one or more knives of HS No. 82.11 and at least an equal number of articles of heading 82.15.

4. Heads, blades and cutting plates for shavers and electric hair clippers.

Table 1 shows the specific product coverage of Small Tools:

Manufacturing Process

The following downstream processes comprise the complex nature of linkages between the metals and engineering industry. These processes result into intermediate or near-finished products for the following industries or sub-sectors: containers, vessels, structures (construction), vehicles, appliances, housewares, and machineries.

A. Steel making. The production of semi-finished steel products like slabs and billets from steel scrap, either by conventional casting in metal molds or by continuous casting processes.

B. Steel rolling. The production of finished steel products like coils, sheets, plates, bars and structural shapes.

C. Rerolling. The production of galvanized steel sheets from cold-rolled steel coils or sheets, tinplates for can making, and thin brass or aluminum sheets.

D. Drawing. The production of steel wires and wire products like welding electrodes, wire ropes and common wire nails.

E. Pipemaking. The production of steel pipes and tube, black or galvanized.

F. Metalcasting. The production of metal castings in general. (Note that the process is called metalcasting and the product is metal casting.) The process may be subdivided into founding and diecasting.

G. Forging. The production of hot-worked (forged) products from steel blanks or billets by the use of mechanical or power hammers.

H. Tool and die making. The fabrication of steel forging and cutting dies for forging and stamping operations, including the fabrication of tools, jigs, and fixtures for machining and assembly and the making of molds for the forming processes.

I. Machining. The machine finishing of rough castings and forgings to specified dimensions to fit as parts or components of finished products.

J. Pressworking (Stamping). The stamping or deep-drawing of sheet metal parts by the use mechanical or power presses.

K. Non-ferrous castings. The casting of non-ferrous (aluminum or brass) ingots by the use of metal molds to produce slabs or billets or the continuous casting of wire rods for subsequent rolling, extrusion, or drawing.

L. Mechanical working. The rolling, extrusion or drawing of non-ferrous metals into sheets, bards, structural shapes, wires or tubings.

Industry Players

The BOI-registered and Non-BOI registered industry players for Small Tools are shown in Tables 2 and 3.

Export and Import Performance

Table 4 and Diagram 2 show the export and import performance of the engineered products industry specifically the small tools under Chapters 82 & 83 in 2003 to 2008. Generally, there is an increasing trend in the value if imports. Based on the figure, the Philippines is considered a net importer of engineered products.

Philippine Trade Partners

Table 5 and 6 show the Philippine trade partners for the year 2008 with corresponding trade value under Chapters 82 and 83.