Blacksmithing

Industry Data

There are approximately 1,300 active blacksmith shops in Israel, of them approximately 100 are metal processing facilities.

 

Industry Sub-Division

This industry includes a wide variety of occupations:

  • Modern blacksmith shops (also called machining workshops)- industrialized and operate computerized CNC equipment.
  •  Regular blacksmith shops (semi-industrialized, with 2-3 computerized machines, and the rest manually operated)
  • Old blacksmith shops with only manually operated equipment.
  • Heavy-duty blacksmith shop specializing in large products such as: Gates, control towers, storage containers, truck trailers, etc.
  • Electronic kit manufacturers characterized by high technology level and adherence to quality regulations.
  • Businesses specializing in processing and cutting metal and aluminum sheets and/or repair of tools
  • Blacksmiths- craftsmen specializing in metals.

 

Market Characteristics

The modern blacksmith market is quite competitive although some businesses develop a relative advantage by specializing in a single area of expertise.

 Sub-contracting orders are usually placed by regular customers, and therefore business owners try to maintain proper work relationships, good quality work, and reasonable prices.

 

Customers: Defining the Target Market and Its Size, Market Segmenting

Occasional customers for repairs of agricultural tools, equipment, and small jobs. These customers are a minority in the blacksmith industry, and the majority of blacksmith revenue.

Sub-Contracting-most orders placed are for sub-contracting. Blacksmith shops specialize in a limited area of expertise, or allocate some of the production force to do so. For example, refurbishing vehicle parts, equipment covering, furniture manufacture, etc. An additional sector is the construction industry. This industry places orders for gates and guardrails.

Regular customers- furniture stores and wholesalers marketing metal equipment.

 

Vendors:

Raw material in the industry is metal, existing in avariety of forms such as: Sheets, hollow tubes, full cylinders, U or I iron. Metal of various sizes, types and qualities exist, such as: Steel, cast iron, stainless metals, etc. There is a wide variety of importers and manufacturers in Israel and supply is met. Raw materials can also be ordered directly from manufacturers abroad as needed.

Equipment and tool vendors-There are a number of vendors importing machining equipment. Most imported products are computerized machines. Additional equipment is abundant in the market at a variety of prices and quality. In addition, various quality and price tools and instruments required for the business are also abundant.

 

Future Development Options:

In the machining area-use of more sophisticated raw materials such as various alloys. More sophisticated quality control methods. Traditional blacksmith shops are becoming obsolete.

Awareness for unique metal processing products is growing. More craftsmen are entering the industry and focusing on production of unique products, or a combination of unique materials such as: Glass, marble, and stone. The industry is thriving and prices for these products are relatively high.

 

Entry Barriers:

Very high investment level in computerized equipment.

New businesses have difficulties penetrating the market as the industry is characterized very high customer allegiance.

Low payment morality and long payment terms.

Professional training- employees must undergo comprehensive professional training, sometimes even at the business before they can operate machinery.

Lack of high quality professionals.

Local authority licensing is required.

 

Human Resources:

Human resources in the machining and blacksmith industry include: work managers, professional and non-professional machinery operators, programmers, and quality controllers.

The number of workers at a blacksmith shop ranges between 3-100.

A blacksmith craftsman is usually accompanied by 1-4 apprentices.

 

Financing:

Industry Revenue and Profitability

Revenue in the blacksmithing industry is affected mainly by number of orders and the business’ production ability. As there are many types of blacksmith shops (not including machining).

The formula for calculating revenue will be detailed according to cost for the business.

Ø  Private customers- (material cost+ cost of sub-contractors) X 3 or 4= transaction price.

Ø  Business customers- (material cost+ cost of sub-contractors) X 2 or 3= transaction price.

Ø  Craftsmen jobs- coefficient will be higher and reflects reputation and type of material.

  • Machining revenue per worker can be calculated according to 1,800 hour yearly unit prices (machine+ worker)

 

Yearly revenue data per professional worker for 2003 (in NIS thousands)

A professional worker operates of computerized or regular machinery, or a work manager, programmer, or quality controller.

 

 

Worker in a computerized machining environment.                 385-  482

Worker in a regular machining environment.     241 - 289 

(*) data for 2003.

 

Calculation only refers to professional workers (not including administrative staff and apprentices.)

 

 

 

Typical Terms of Payment

Most transactions are conducted with other business owners by sub contracting or ordering from manufacturers.

The metal industry is considered to have the lowest payment morality of all industries.

Occasional jobs, private customer jobs, or blacksmith product sales are conducted in cash or credit card.

 

Licensing, Certification, and Relevant Regulations:

Local authority licensing is required.

Welding jobs must adhere to the Israeli Standard (1032 part 1)

 

Insurances:

Business insurance (for content and inventory), third party insurance, employer’s liability insurance, and loss of income insurance.

  in addition to the above, an insurance agent should be consulted in regards to the need for additional insurance.

 

Relevant addresses:

  • Industrialists Association, Metal and Electricity industries department.  Phone: 03-5198829 Fax: 03-5103152. Website: www.industry.org.il
  • Online information at: www.metal.co.il

 

TIPS:

  • Information pamphlets of the Safety and Hygiene Institute at www.osh.org.il/infoPublications.asp#
  • Machining Safety, by H. Einav, A. A booklet published by INSTITUTION FOR SAFETY AND Hygiene
  • Welding and Gas Flame Cutting Safety, published by the Institution for Safety and Hygiene.
  • Electric Welding Safety, by Y. Shavit, a booklet published by the Institution for Safety and Hygiene
  • It is recommended to consult with your local Business Development Center regarding business establishment and operations.

 

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