Aluminum casting & mold design services

Introduction

In the modern manufacturing industry, transitioning to a “Circular Economy” to achieve sustainable growth is no longer just an environmental initiative but a critical management imperative. Aluminum is regaining significant attention as a core material for this transition. Often referred to as “canned electricity” due to the immense energy required for primary smelting, aluminum possesses an extraordinary recycling profile: it can be repurposed using only 3% to 5% of the energy required for new ingot production.

This article provides executives and procurement managers in the Japanese manufacturing sector with an in-depth look at how aluminum serves as a catalyst for a decarbonized society. We will examine its technical advantages, economic value, and why aluminum casting in Vietnam—where renewable energy adoption is rapidly accelerating—presents a powerful strategic choice for diversifying supply chains. We hope this guide helps you formulate a next-generation procurement strategy that balances cost reduction with environmental compliance.

Why Aluminum Lies at the Heart of the Circular Economy

Permanent Materiality: From Scrap to High-Quality Products

The most significant characteristic of aluminum is its status as a “Permanent Material,” meaning its quality does not degrade even after repeated recycling. Compared to steel or plastics, aluminum benefit from established impurity-removal technologies. Through proper sorting and melting processes, it can be reintegrated into high-end sectors demanding rigorous quality standards, such as aerospace components and automotive structural materials.

In Japan, aluminum recycling is prioritized under the Ministry of Economy, Trade and Industry’s (METI) “Resource Autonomous Economy Strategy.” Increasing the domestic secondary aluminum utilization rate is vital for achieving Carbon Neutrality by 2050 and ensuring economic security by reducing dependence on overseas raw materials.

95% Energy Reduction: The Overwhelming Environmental Edge of Recycled Aluminum

Producing primary aluminum from bauxite consumes approximately 14,000 kWh of electricity per ton. In contrast, producing aluminum ingots from collected market scrap requires only about 700 kWh—a 95% reduction in energy consumption and associated CO2 emissions.

This “recycling efficiency” is aluminum’s greatest weapon in the circular economy. By adopting “Eco-design” principles from the initial design phase to ensure recyclability, manufacturers can drastically lower the carbon footprint across the entire product lifecycle.

Global Aluminum Market Trends and Challenges for Japanese Manufacturers

The Impact of the EU’s Carbon Border Adjustment Mechanism (CBAM)

The European Union’s implementation of CBAM imposes a carbon price on imports of specific goods, including aluminum, based on the emissions generated during their production. This is not merely an environmental regulation; it is a direct trade cost. For Japanese component manufacturers exporting to Europe or integrating into European supply chains, adopting low-carbon aluminum is becoming an essential condition for doing business.

Escalating Procurement Costs and Supply Risk Diversification

Since 2020, aluminum prices on the LME (London Metal Exchange) have fluctuated wildly, and supply chain disruptions due to geopolitical risks have become a reality. Japanese procurement managers are being pressured to move away from “over-reliance on China.” In this context, the strategic “China Plus One” approach, with Vietnam as a primary destination, is gaining momentum.

Aluminum Casting in Vietnam: The Optimal Balance of Environment and Cost

Why Vietnam? Rapid Adoption of Renewable Energy

Vietnam is currently driving “Green Transformation (GX)” faster than almost any other ASEAN nation. Under the Vietnamese government’s Power Development Plan 8 (PDP8), the country aims to significantly increase the share of renewable energy, such as solar and wind, by 2030.

At Daiwa Aluminum Vietnam, the infrastructure surrounding our facilities is evolving, making the transition to manufacturing processes powered by clean energy a reality. Producing aluminum castings using renewable-derived electricity directly reduces the “Embedded Emissions” of your products, enhancing the environmental value proposition of Japanese companies.

Achieving Japanese Quality and Cost Competitiveness

While “quality” is often a concern when sourcing from Vietnam, Daiwa Aluminum Vietnam has fully transplanted Japanese-standard Quality Control (QC). With guidance from master technicians and the introduction of the latest casting equipment, we provide high-precision aluminum parts ranging from sand casting to gravity casting, all compliant with Japanese JIS standards.

Furthermore, Vietnam’s young and abundant workforce, combined with manufacturing costs that remain lower than those in Japan, provides a significant advantage that can offset the investment costs of transitioning to a circular economy. We break the conventional wisdom that “environmental compliance leads to increased costs” through efficient production and the establishment of recycling schemes in Vietnam.

Actions for Japanese Executives Today

Building “Circular Partnerships” with Suppliers

Procurement must evolve beyond a simple “buyer-seller” relationship into a partnership that considers the entire cycle from material recovery to reuse. One example is “closed-loop recycling,” where aluminum chips and scraps generated during the manufacturing process are efficiently collected and returned as raw materials.

At Daiwa Aluminum Vietnam, we propose schemes to collect scraps from our customers’ factories, remelt them, and deliver them back as new products. This simultaneously achieves waste disposal cost reductions and stabilization of raw material expenses.

“Visualizing Carbon” through Digitalization

To accurately understand a product’s Life Cycle Assessment (LCA), transparency in energy consumption data during manufacturing is essential. We manage production data digitally at our Vietnam plant to support our customers by providing the environmental evidence they need. This significantly boosts the reliability of your “Sustainability Reports” to end-users.

Summary

Aluminum is an irreplaceable material in the circular economy due to its infinite recyclability and the energy-saving benefits of light-weighting. For manufacturing executives, designing products that leverage aluminum’s properties and securing low-environmental-impact procurement routes will be a critical management decision determining competitiveness over the next decade.

Daiwa Aluminum Vietnam integrates advanced Japanese casting technology with the growth energy of Vietnam to strongly back your decarbonization and cost-optimization efforts. To transform “environmental investment” into “future profit,” why not start by reviewing your current procurement structure? We welcome any inquiries regarding aluminum sourcing in Vietnam or the utilization of recycled aluminum. Let us work together to build the new standard for a circular society.