Anyone has experience with Die Casting and Furnace?

December 25, 2025

by a searcher from University of Wisconsin - Madison in Seattle, WA, USA

Looking at a company working in Zinc and Aluminium alloys and has customers in the automobile industry. They have figured out interesting supply chain economics that make them uniquely positioned both in the offering and the price. If there are people with experience in this area of manufacturing would be good to connect.

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Reply by a lender
from Cornell University in Los Angeles, CA, USA

Hi ^redacted‌ - nice to meet you. I've successfully financed companies in this sector, and after working with both buyers and sellers, here's what I've learned: In die casting, furnaces and melting operations are one of the biggest cost drivers. Small differences in energy efficiency, scrap re-melt rates, and uptime can meaningfully change margins. Businesses who optimize furnace efficiency and reduce scrap have a structural cost advantage that competitors can’t easily copy. Automotive OEMs and Tier-1 suppliers care deeply about process stability, defect rates, and delivery consistency. Once a die caster is qualified and integrated into a customer’s supply chain, switching suppliers is costly and risky. This creates sticky relationships and long contract lives for high-performing operators. In zinc and aluminum die casting, especially with automotive customers, it’s common for a business to have high customer concentration because parts are tied to specific vehicle platforms and long production runs. This is an important point if you are seeking SBA funding. If you ever need help talking through a deal, I am happy to help. We work with all the major SBA lenders. The bank pay us after your loan closes, so this is a 100% free service for you.You can email me directly at redacted or schedule a meeting with me: https://cal.com/francodeguzman/30min. Look forward to chatting!

Reply by a searcher
from University of Ontario Institute of Technology in Calgary, Alberta, Canada

I completely agree with everything Franco De Guzman has said. I actually worked in a steel manufacturing plant, and the dynamics you mentioned resonate a lot with my experience. Scrap costs are high and a commodity, so there’s really no leverage in raw material pricing. My company had a shredder and produced our own scrap, even selling non-ferrous materials to China to help offset raw material costs. The furnace is responsible for roughly 90% of all costs, so any small change in yield can have a substantial impact on conversion costs. Due to the capital intensity, the manufacturing overhead rate was north of $10K+ per hour, which means any downtime significantly impacted finished goods costs. Energy consumption was also a huge factor—we even had an energy division lobbying for legislation changes. On high-demand days, the plant would sometimes “curtail” operations and sell energy back to the market because the savings outweighed the cost of shutting down. It’s a very complex operation, but absolutely fascinating. Reach out if you have any questions!

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