With the increasing technological obsolescence of the forges and the crisis in the industry in the late eighteenth century, some owners tried to improve the production process at their works by introducing a device for rolling, drawing and thinning the iron and other metals using water-powered cylinders, or fanderías.

Around the same time, the Real Sociedad Bascongada de Amigos del País (Royal Basque Society of Friends of the Country) was looking for new solutions for the traditional iron industry, which represented an important source of wealth in the province. In general, though, their studies, reports and projects were not encouraging and the Society did not obtain the social and economic backing it would have liked. However accurate their diagnosis that the industry had fallen behind in technological terms, the corrective measures the proposed-such as the creation of an association of ironmongers to enhance the condition and working of the iron, and the promotion of new factories on the Swedish model-met with the opposition of ironmongers and traditional operators. The Society's own initiatives, such as steel-working experiments of Aramburu in Arrasate-Mondragón and Zavalo in Bergara, a button factory (also in Bergara) and an attempt to create a tin and wire factory, failed abjectly without the direct support of enthusiastic collaborators.

And because complete technical innovations were not introduced, as a result of the mistrust of the industry and the resistance to abandon old systems, competition from foreign imports continued to be a-sometimes insurmountable-stumbling-block. Protectionist measures were passed in the last third of the eighteenth century, intended to relieve the impact of foreign products on the local ironmonger's traditional markets (the Iberian peninsula and Spain's overseas possessions), but they came too late; as the members of the Sociedad themselves had remarked in 1768 "a quintal [a hundred pounds] of small hardware that they bring us is equivalent to fifty-one quintals that we mine and our extraction is left in naught". There were various reasons for this lack of competitiveness: the high unit cost of the product-in iron and charcoal-and low productivity, accentuated by the seasonal nature of the work. As a result, the building of new factories was complicated, while encouraging of the use of local coal-whose poor quality made it scarcely profitable-was even more difficult, despite the fact that the Society drew up exploitation programmes and economic incentives for raw materials, which did not receive adequate backing.

As a result, the introduction of the fanderías marked no more than the first and most important step in the reorientation of the industry towards systems which were better suited to the new times. The first, not only in the Basque Country but in all of Spain, was the Rentería Fandería, built in 1771 by the Marquis of Iranda in the existing forge of Gabiriola or Renteriola. He installed innovative machinery which mechanically cut up the iron-which had first been heated in coal-burning reverbatory furnaces-and then used a series of cylinders to draw, widen or thin it as required. This considerably reduced the work involved in forging and processing and meant that the output no longer depended only on the skills and capacity of the operators. The factory mainly produced iron fittings, nails, rods and hoops

Introduction of this new technology might have had an important impact had the War of the Convention and the resulting damage suffered by the Fandería not prevented it spreading to other areas. After the war, the works were used to prepare industrial flour, using the new Austro-Hungarian system.

The second mill of this kind the Iraeta Fandería in Zestoa, was founded by the Duke of Granada de Ega, and built on the site of the Iraeta Forge in or around 1774. It manufactured iron flasks for transporting mercury from mines in Latin America, and according to Madoz's account, by the mid nineteenth century, it was employing fifty operators.

To house this large number of workers, a "colony" or residential district was built, the first of its kind in Gipuzkoa. The fourteen houses lining either side of a single street, presided over by the distinguished administrator's house and the chapel, were to act as a model for industrial housing developments in the province. The houses were built in terraces, with the ground floor used for agricultural purposes (stables) and the dwelling area on the first floor. Workers rented these dwellings out under a contract which also gave them individual plots of cultivable land in the adjoining meadowlands, where they could grow some additional food.

In 1844 the Iraeta Fandería was radically altered when its contract to supply the state was suspended. It was re-founded as José Arambarri y Cía, and the product range was extended to include tin plate, in imitation of the processes used in England, Belgium and France. In 1855 it became the Vera-Iraeta Iron Factory, and its activities were extended to include mining in Vera de Bidasoa. The works were later used for the first natural cement plants in the Lower Urola area.

The third and final project was the Oñati Fandería, which was also housed in an existing forge-the Zubillaga forge. This was the property of Count of Oñate, and run by the Gomendio family. Created shortly after the War of the Convention, the factory suffered in successive conflicts (the Peninsular Wars and the First War of Spanish Succession), but did not lower its sights for the future. Like the other examples, production at the plant changed over the years until the contemporary metal industry was developed in the area.

Another interesting case is the Anchor Factory in Hernani. In 1750, thanks to the intervention of the Marquis of La Ensenada, the forges of Fagollaga, Pikoaga and Ereñotzu won a contract to supply anchors for the Spanish Royal Navy. The only investment required was in making slight alterations to the traditional workshops and providing a place for deliveries and checking entries; no renovation of techniques or equipment was needed. The various setbacks suffered by the Spanish crown, however, brought and end to many of its private contracts, including the provisioning of anchors, and by the mid-nineteenth century the forges had been closed.