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BUSINESS EXCELLENCE June 2014 | www.bus-ex.com

Comair PowerStream

MONTHLY EDITION

Resource Generation

Perth Airport

Western Australia’s airgate The hub for Western Australia is expanding to cope with future growth

Also featuring:

SPECIAL FOCUS: manufacturing


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contents

special focus: manufacturing

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Conveyors

Best practices in conveyor relationships

How a collaborative experience among partners, manufacturers and end users creates a culture of best practice.

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automation

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Agnostic automation vendor selection: Objectivity required

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When selecting a vendor for agnostic automation, objectivity is of paramount importance.

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warehousing

Why the cloud is not always the answer for distribution centers

How the lag time of cloud based warehouse management systems are driving more distribution centers to warehouse control systems.

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22

Executive Insight

Glenn Uminger, Director, Lean Systems Program

Glenn discusses the lessons he has learned, the achievements he has made and the people who have inspired him.

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business showcase

Lean Systems Program

Celebrations are afoot at the University of Kentucky where 2014 marks the 20th anniversary of its revolutionary Lean Systems Program.

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Strategy

The secrets to a successful business relationship in China

Why the understanding of and respect for traditional business values is key to successfully trading in China.

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operations

44

Deal with an irate customer, don’t lose them

The hardest part of any job can be dealing with angry, upset customers. Here are the secrets to placating, and more importantly retaining such individuals.

Leave me alone, i’m blue-sky thinking!!!

48

feature

The 50 most hated office jargon phrases

We asked more than 500 workers to name their top three most despised pieces of management speak.

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54

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operations

How to make employees happy?

Invest in your employees and this will make for happier and more productive workers.

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top ten

Top ten causes of work place conflict

Whether it’s a clash of personalities, or you’ve fallen victim to poor communication, we list the top ten causes of work place conflict.

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contents

Business of the month

62 Perth Airport

Western Australia’s airgate Perth Airport is the hub for Western Australia’s domestic traffic, its channel to Asia, Europe and beyond, and definitely the entrepôt for all of its trade: it is expanding to meet these challenges and to cope with future population growth.

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Transport & Logistics

Comair

Flying through turbulence Comair Ltd continues to deliver operational excellence and consistent profitability in what can only be described as an economic headwind: its CEO Erik Venter explains how.

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62

Kenya Airports Authority (KAA)

Flying the flag for Kenya By focusing on greater efficiency, quality service and increased airport capacity, KAA is helping to facilitate the grown of the country’s aviation sector as well as the wider economy.


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122

Kenya Ports Authority

Transportation hub Mombasa, on the Indian Ocean coast of Kenya, has long played a key role as a major port on the east coast of Africa: run by the Kenya Ports Authority (KPA) it is expanding fast, but is set to be eclipsed by a megaport on the island of Lamu.

104 Gelibolu Shipyard

A titan among Turkish shipyards Gelibolu Shipyard has been delivering expertly designed turn-key vessels for the better part of four decades.

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Metropolitan Transit Authority of Harris Country (METRO)

Infrastructure

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Mangaung Municipality

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City of Bathurst

Navigating Space City Delivering vital public transportation services to the people of Houston and its surrounding areas for the best part of 35 years.

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The heart of South Africa A spate of important developments, initiatives and infrastructure projects are contributing to the city of Mangaung living up to its position as the “heart of South Africa” and 2014 will see the “city of roses” blossom further still.

City of enterprise Bathurst is a city with a great past as one of the New World’s first permanent settlements, and a great future: though it may be experiencing a few little local difficulties just now, the way it deals with them is part of its success story.

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contents

138

mining & minerals

138

Barrick Gold â&#x20AC;&#x201C; Lumwana

Concentrating on copper A combination of a large resource, impressive cost savings and a recently updated mine plan means that the future looks very bright indeed for the Lumwana copper mine.

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146

Nordgold

Growth on a global scale One of the most geographically diversified companies in the mining industry, Nordgold is looking to follow up a prosperous 2013 with further growth.


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192

City Power Johannesburg

Power to the people Powering an evergrowing metropolis is no easy task, but one that City Power Johannesburg takes the utmost pride in delivering on a daily basis.

202 COTCO 156

Resource Generation

Steady going at Boikarabelo One of the most strategically important coal resources in South Africa, the Boikarabelo project owned by Resource Generation Ltd is on track to produce its first coal in 2015. energy & Utilities

170

PowerStream

182

SaskPower

Bringing neighbouring nations together The multi-billion dollar Chad/ Cameroon Petroleum Development and Pipeline Project is helping to bring economic benefits and a better quality of life to some of Africaâ&#x20AC;&#x2122;s poorest inhabitants.

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Skating to the puck A relatively recently formed energy supply company, PowerStream has already shown the way to leverage new technologies and business models in the interest of the customers and communities it serves.

Catching carbon In the final stages of completing a truly innovative programme that has attracted the attention of environmentally aware power utilities from across the world.

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Best practices in con How a collaborative experience and end users creates a Words by

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Thom


nveyor relationships among partners, manufacturers culture of best practice

mas R. Cutler BE Monthly [ June 2014 ]

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T

he historical perspective is easy to grasp. Automated product movement is a well-established, easily understood concept. It is so familiar and normative that many in the material handling sector consider conveyance technology little more than a commodity. That is a wild over-simplification. Conveyor solutions are developed from dynamic and complex challenges which require safe, ergonomic, tested and proven products, developed by creative people with a focus on lean manufacturing continuous process improvement. According to Material Handling Equipment Distributors Association

“Hytrol Conveyor Company’s first conveyor, designed by founder Tom Loberg in 1947, moved bags of seed in preparation for stacking, and folded when not in use”

(MHEDA), the only trade association dedicated solely to improving the proficiency of the independent material handling equipment distributor, conveyor systems have been an integral part of material handling for more than a century, and transport of bulk materials by conveyor belts dates back to around 1795; the vast majority of these early iterations were used to move grains over very short distances. The first conveyor belt systems were very primitive and consisted of a leather, canvas or rubber belt traveling over a flat wooden bed. This rudimentary system was successful enough to provide incentive

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for engineers to consider conveyors as an economical and efficient way to haul large quantities of bulk material from one location to another. By the turn of the 20th century, conveyors were being used in the Minneapolis-St. Paul area to unload wooden shingles from railcars. Conveyors are now used for thousands of additional applications, particularly moving items in manufacturing plants and distribution centers. Hytrol Conveyor Company’s first conveyor, designed by founder Tom Loberg in 1947, moved bags of seed in preparation for stacking, and folded when not in use. Loberg discovered that the right angle reducer he had designed for a rotary lawn mower was just the right size to make a belt run at the proper speed on a conveyor. The Tested Conveyor Element Designing an automated conveyance system on paper lacks the kind of rigorous testing needed to ensure that postinstallation the technology solution works the way it was designed and intended. Few organizations have an internal testing system. Based in Jonesboro, Arkansas, Hytrol installed a test system at their Technology Center, allowing customers and integration partners fully test products prior to implementation. This unique resource provides a level of confidence and reassurance to customers. All issues and workability concerns are addressed before conveyors are at the customer plant floor. Until very recently service was a major determining factor in selecting Motor Driven Roller (MDR) equipment. Providing the best 24 volt conveyor drive technology globally is another way to assuage material handling and manufacturing concerns. E24, 24 volt (MDR) conveyors are being


manufacturing

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widely used due to their simplicity and flexibility. Since the drive train is distributed along the conveyor length a single piece of equipment can perform multiple functions. This includes different speeds, multiple directions, and starting/ stopping individual sections. This breakthrough E24 technology is unique among conveyor providers and the modular design allows for easy

â&#x20AC;&#x153;This breakthrough E24 technology is unique among conveyor providersâ&#x20AC;?

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configuration with minimal maintenance. The safe, quiet, and energy efficient operation offers greater speed options because the conveyor speed is not based on fixed gear ratios. Since one motor is used for all widths and speeds, there is only one motor to stock. The minimum conveyor width is not limited by drive components and multiple motors per zone are available for long zones. The People Element Designing and manufacturing for major companies all over the world, Hytrol made clear that these are some of the most advanced conveyor systems in the material handling industry. More than 700 dedicated employees consider themselves


manufacturing

a member of the Hytrol family. It is this cultural context that evaporates the notion that these conveyors are a commodity. The products and services represent personal integrity and dynamic lean thinking. The Partner Integration Element Bob West, Vice President of Corporate Development at Hytrol extended the values of the organizations and noted, “Strong relationships build success. A key component of the Hytrol Advantage is the success of our integration partner network, which is focused on bringing you the best solution. With more than a hundred locations around the world, Hytrol’s network of local service providers offers you great piece of mind. Through

“A key component of the Hytrol Advantage is the success of our integration partner network”

our strong relationships, Hytrol is able to provide local presence, on-site expertise, and the instant assistance needed by customers today.” This sentiment was echoed by Matt Farris, Director of Business Development at Hytrol who remarked, “Our integration partners are experts managing the total

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project with best-of-breed software and equipment. They go beyond just selling equipment and explain how our system solutions can improve your methods. They work hard to develop a deep understanding of each customer’s business in order to recommend the right solution every time.” An integration partner can be on a job site at a moment’s notice. They work with end users to make sure that they understand the system. Strong integration partners integrate conveyor equipment

“Lean principles are at the core of everything we do here at Hytrol”

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with other technology to fit the customer’s needs. Local integration partners know local codes and they understand local law providing conveyor. They are familiar with customers in that area; they are neighbors. The real relationship is at a local level, which makes them accessible anytime the customer needs them. From concept to implementation the integration partner network is a unique business model that allows heightened customer service. The Lean Element Lean manufacturing is a comprehensive approach to preserving value, from concept to completion. Lean manufacturing is infinite and ever evolving. Chris Glenn, Hytrol’s Vice President of Manufacturing and Engineering Operations emphasized the importance of lean manufacturing and urged, “Lean principles are at the core of


manufacturing

everything we do here at Hytrol. It’s a unique way of thinking, a philosophy built on efficiency that offers the most value to our customer.” The execution of best-practice and continuous process improvement was articulated by Chris Taylor, Focus Factory Manager at Hytrol. “It’s all about how the product flows through the facility. It’s about problem solving and streamlining processes to improve production and eliminate waste. We implemented lean principles into the Hytrol facility in 2004, and we’ve never looked back. It’s ingrained in our culture.” Few conveyor companies have been as wise to build the entire enterprise around operator-centric processes. An operator brings value to the manufacturing and assembly of a product that a piece of automation does not always provide. Every Hytrol conveyor system is geared toward supporting that operator and getting product out the door. By continually investing in people, the is a customer competitive advantage driven by these cultural imperatives. Integrating Best Practice Elements The most important thing about fulfilling a customer’s needs is the

“We implemented lean principles into the Hytrol facility in 2004, and we’ve never looked back. It’s ingrained in our culture”

total solution. Putting all of the technologies together with the correct controls and the applications ensures a total system and promises that the implementation goes as smoothly with integration partners. The concept of conveyance is easy to grasp; the execution of great conveyors indeed rests with centers of excellence, supported by comprehensive testing, knowledgeable partners, and creative and passionate people. The conveyor culture modelled at Hytrol illustrates the dynamic requirements of manufacturing best practices. This conveyor culture creates a collaborative experience among the manufacturer, the end user, and the integration partner.

About the author

Thomas R. Cutler Thomas R. Cutler is the President & CEO of Fort Lauderdale, Florida-based, TR Cutler, Inc. Cutler is the founder of the Manufacturing Media Consortium including more than 5000 journalists, editors, and economists writing about trends in manufacturing, industry, material handling, and process improvement. Cutler authors more than 500 feature articles annually regarding the manufacturing sector. Cutler is the most published freelance industrial journalist worldwide and can be contacted at: trcutler@trcutlerinc.com @ThomasRCutler www.trcutlerinc.com

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Agnostic automation vendor selection: Objectivity required When selecting a vendor for agnostic automation, objectivity is of paramount importance Words by

John Hayes

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R

epresenting an AGV vendor is often a conflict of interest. The end-user customer’s interests may not align with the AGV vendor’s interests. The only way to avoid these conflicts is a vendor agnostic approach to automation. As a sales manager for several automated guided vehicle (AGV) companies there was an intention: sell AGVs. Performance was measured by number of vehicles sold per month, per quarter, per year, year over year, and at a measured profitability. It took courage to say to the customer and to C-level AGV management, “Sorry this isn’t the right product for you.” Rather than entering an automation conversation with a pre-designated solution, there are steps to clearly recognize the best-practices, the leanest solutions, the most rapid return-oninvestment (ROI), while avoiding the landmines and confusing games played by many AGV salespeople. Knowing the “tricks of the trade” has inspired the creation of No Risk Automation. Asking the right questions from the beginning drives a much more precise selection of appropriate automation solutions. This knowledge and experience-based approach cannot be duplicated or Google searched. It requires having walked in the shoes of the AGV vendors and the AGV automation purchaser.

“It took courage to say to the customer and to C-level AGV management, ‘Sorry this isn’t the right product for you’”

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Four Steps to No Risk Automation Step 1: Application Study and Analysis A comprehensive vendor agnostic study of potential automation applications is essential. Some automation projects are simply a waste of time, a poor project concept, or ignore applications that may have immediate positive return on investment. Again an AGV vendor sales pitch essentially suggests to a prospective customer that a prescribed AGV solution is best. Perhaps it is; often it is not. Stopping after this first step may be sufficient to avoid the substantial financial hemorrhaging from poor automation technology solutions. Step 2: Specification Development Automation vendors write proposals based upon what a prospective customer request. If the automation needs are not properly vetted, and a rigorous specification document developed, these same vendors will provide the proposal they deem best (often targeted to their sales goals and profit margins. This step is only needed when a decision has been made to pursue an automation project. The risk is eliminated by clearly directing vendors to propose the specified solutions. All the unneeded bells and whistles, add-on services, and superfluous functionalities are eliminated. Stopping after this second step may also prove efficacious when there are sufficient internal resources to move forward with the internal automation project. Step 3: Vendor Selection Without the need or incentive for advocating a particular automation AGV supplier, a comprehensive and objective viable pool of vendors can establish a fair, unbiased selection process. Instead of “making a solution fit the automation demand” the opposite paradigm is developed. Vendor selection is expressly guided by the


manufacturing

metrics, deliverables, cost-constraints, and objectives of the customer. The goal is to both exclude vendors lacking the specific project automation expertise and include the best vendors with proven knowledge and experience delivering targeted automation solutions. The step is only possible with decades of knowledge about the players in AGV automation. Knowing the successes and failures, the strengths and limitations of each vendor is a shortcut to avoiding an expensive and ineffective automation decision. Vendor selection may be another opportunity to internally handle the implementation, staff permitting. Step 4: Project Manage Once the automation system is purchased, the next risk danger is a poorly implemented solution. If there are sufficiently experienced automation experts employed by the customer, this project management need not be sourced to a third party firm. Often there is a champion of automation, perhaps an operations director, or material handling vicepresident. The daily operational demands and copious responsibilities on that experienced management team member can detract from a correct, efficient, and cost-contained implementation.

“There is no single way to completely eliminate all the risks in automation selection”

Being vendor agnostic at the first phase is critical to eliminating risk, by the time implementation occurs, internal stakeholders have their own interests within the organization. The automation decision team may have consisted of three or four people. By the time project management rolls around an expanded group of individuals at each customer location must be addressed. Each has a different agenda and in most companies the margins are increased by change orders. Effective project management, especially from an outside source, can ensure this does not happen. There is no single way to completely eliminate all the risks in automation selection. There are steps and processes that mitigate the likelihood of costly mistakes. These steps are the same as putting on a seatbelt and having airbags. They go a long way in protecting the automation customer.

About the author

John Hayes John Hayes is a solutions-finder for the material handling industry. For more than twenty years he has been evaluating, designing, developing, and implementing innovative software and hardware solutions for businesses in high-volume retail, wholesale (B2B), and direct-to-consumer (B2C) distribution systems. Hayes is a 2014 Supply & Demand Chain Executive “Pros to Know” recipient with vast and specific expertise in automated guided vehicles (AGVs). NoRiskAutomation is an organization founded by Hayes to inform and protect automation decision-makers. @NoRiskAutomate www.noriskautomation.com

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Why the cloud is not always the answer

for distribution centers How the lag time of cloud based warehouse management systems are driving more distribution centers to warehouse control systems Words by

Thomas R. Cutler

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R

ich Hite, President of QC Software, a Tier 1 warehouse control systems solutions provider, suggested, “Even the best WMS has a brief lag time in transmitting of instructions to a high-speed sortation system. There are simply too many warehouses with tens of thousands of decisions being made daily that require split-second timing.” Hite, along with other industry leaders agree there is a place for both warehouse management systems (WMS) and warehouse control systems (WCS). Thomas N. Williams is a global expert on WMS and WCS solutions. His client roster includes Home Depot (Atlanta, GA), UPS Airhub (Louisville, KY), and Under Armour (Baltimore, MD). As a systems and industrial engineer with thirty-five years of experience, he has designed, developed, and implemented highly productive and costeffective software and hardware solutions for high-volume distribution systems. His company has won national awards for design in both the US and Canada. Williams noted, “The Material Handling industry continues to change. Recently, ecommerce and multichannel distribution have added new layers of complexity to the supply chain. The IT industry has evolved in response to these changes.” James Cooke, Editor at Large for DC Velocity has covered logistics and transportation as well as supply chain strategy and technology for two decades. A former editor at Logistics Management

magazine, he has earned numerous awards for his well-written, in-depth articles spotlighting developments in distribution. Cooke helped drive the launch of Supply Chain Management Review. He is a frequent speaker on the logistics conference circuit. Cooke offered warnings about cloudbased WMS solutions suggesting, “When it comes to their software, a lot of warehouse and DC managers have their heads in the clouds these days. Rather than buying a traditional warehouse management system (WMS) and installing it on their corporate servers, they’re opting for cloud-based applications that are hosted by the vendor or a third-party on an offsite server, often far away, and delivered via the Internet.” He also acknowledged, “Much of the appeal of cloud-based solutions is their low cost. Companies can avoid a hefty upfront capital outlay for software licenses as well as ongoing expenses for upgrades and maintenance. At present, most cloudbased WMS users are small warehouses that use basic equipment like forklift trucks, bar-code scanners, and radiofrequency devices in their operations.” The WMS is the freighter moving slowly across the ocean (or more literally in a cloud-based transactional modality. The WCS is the agile solution that operates within the four walls of a plant or distribution center. WCS is the speed boat. There is value in both the WMS and WCS, yet as the high volume distribution

“At present, most cloud-based WMS users are small warehouses that use basic equipment like forklift trucks, bar-code scanners, and radio-frequency devices in their operations”

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manufacturing

Tier-1 Warehouse Control System

Inventory Management

Shipping Management

Order Management

Conveyor Management

Core Components

PLAN

EXECUTE

VERIFY

REPORT

SLOTTING LOCATION CONTROL CROSS DOCKING

RECEIVING PUT-AWAY PRODUCT TRANSFER REPLENISHMENTS

CYCLE COUNTING PHYSICAL INVENTORY QUANTITY ADJUSTMENTS AUDIT TRAIL

PALLET BUILDING BOL / MANIFESTING ADVANCED SHIP NOTICE LOCATION METRICS

RATE SHOPPING SHIP METHOD OVERRIDE ADDRESS VALIDATION

MULTI-CARRIER SHIPPING DOMESTIC/INTERNATIONAL CARRIER COMPLIANT LABELS AUTOMATED PRINT & APPLY

EMAIL SHIP NOTIFICATION BUSINESS RULES SHIP LABEL CONFIRMATION

CARRIER COMPLIANT DOCS END OF DAY PROCESS SHIPPING COST

WAVE PLANNING SKU ALLOCATION CARTONIZING WORKLOAD BALANCING

PAPER PICKING RF PICKING PICK-TO-LIGHT VOICE DIRECTED AUTOMATED PICKING SYSTEMS

CONTENTS LIST MANUAL PACK VERIFY WEIGHT CHECK VERIFICATION SCAN/PACK AUDIT RULES

INVOICES/PACK SLIPS FILL COUNTS PICK PRODUCTIVITY SKU METRICS

ROUTE PLANNING FLEXIBLE MAPPING

REAL-TIME SORTATION HOST/WCS DIRECTED ROUTING ZONE SKIPPING ROUND-ROBIN SORT RATE CONTROL

IN-LINE SCALE DIVERT CONFIRMATION CARTON TRACKING SCANNER LOG

SCANNER STATISTICS SORT STATISTICS

FLEX SCREENSTM GRAPHICAL USER INTERFACE SECURITY CONTROL SYSTEM PARAMETERS

HOST INTERFACE SERVICE MANAGER EMAIL/TEXT ALERTS

DIAGNOSTIC TOOLS STATISTICS DEBUG TRACING

FLEX REPORTSTM EXCEL EXPORT CRYSTAL REPORTS

©2014 Queen City Software Inc./QC Software

centers with B2C (Business to Consumer) focus attempt to cope with exponential proliferation of SKUs, the WCS is keeping an important reality check. Cooke consulted several industry experts who insisted, “To prevent these kinds of delays, a robust warehouse control system is essential.” Hite agreed that a WCS, installed at the warehouse, serves as a local agent for the remote WMS, downloading information on what items need to be put away or retrieved from inventory and then converting the information into instructions for the sorters, carousels, conveyors, carrying out the required tasks. Because the WCS processes data on-site, delays caused by communication disruptions are virtually eliminated.”

Often a WCS executes instructions provided by an upper-level host system, such as an enterprise resource planning (ERP) system or a WMS system. Tierone WCS software provides advanced management capabilities including inventory control, resource scheduling and order management. The best-of-breed WCS systems are modular in nature, easily configurable and platform independent, with a scalable architecture to satisfy the needs of any size warehouse. There is confusion when to apply a WMS software solution versus a WCS which directs real-time data management and interface responsibilities of the material handling system as well as provides common user interface screens for monitoring, control, and diagnostics.

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“Cartonization allows picking directly to shipping container and eliminates movement from pick container to shipping carton”

The focal point for managing the operational aspects of the material handling system, WCS provides the critical link between the batch-time data host and the real-time programmable logic controller (PLC) material-handling system. The PLC coordinates the various real-time control devices to accomplish the daily workload. At each decision point in the distribution process, the WCS “determines” the most efficient routing of the product and transmits directives to the equipment controllers to achieve the desired result. The decision-making process is often controlled by two separate utilities, the sort manager and the route director. Cartonization allows picking directly

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to shipping container and eliminates movement from pick container to shipping carton. The size and number of cartons are projected up front and the shipping method and cost can be calculated up front as well. This aspect of a warehouse control system (WCS) is vital. Looking the available carton sizes defined by the customer or the carrier also allows for MHE considerations. Cartonization also allows for in-line weight tolerance checking. This is but one element of the WCS and is quite distinction from the purpose and functionality of a warehouse management system (WMS). Wave Management controls release of work to the floor and is an important part


manufacturing

â&#x20AC;&#x153;Often the conversation of WCS versus WMS arises when other inefficiencies are located in the packaging operationâ&#x20AC;?

of warehouse control systems (WCS) and differentiates warehouse management systems (WMS). Work flow can be managed via a wave or waveless operation; group picks are made by order attributes such as shipping method or delivery zone, order types, or pick zones. WCS allows warehouses to limit wave size to balance picking activity and balance picking by zone. There is also the ability to limit work by destination, if required. Often the conversation of WCS versus WMS arises when other inefficiencies are located in the packaging operation, such as orders picked into a tote, not into shipping cartons. This presents a challenge because when the tote is sent to the packing area, the packing operator must select the correct box for the contents, pack it, seal it, and forward it to shipping. Most companies require a system that allows for multiple carriers, where the server passes information only once per day.

One of the schemes many WMS solutions providers utilize to drive increased revenue is to modify a WMS solution to resemble a WCS. Modification is code for charging more money. Once WMS modifications are made, upgrades need to be verified as compatible and integrated with other IT systems (including, but not limited to, ERP - enterprise resource planning software). Some WMS upgrades are a deliberate revenue generating plan for the technology vendor via verification processes and procedures. The cost of these modifications, verification checks and double-checks are often more expensive than the outright purchase of a Tier 1 WCS. Warehouse control systems are not for everyone; yet as lean efficiencies are mandated many companies are looking at WCS solutions which enable them to streamline warehouse operations with a low total cost of ownership.

About the author

Thomas R. Cutler Thomas R. Cutler is the President & CEO of Fort Lauderdale, Florida-based, TR Cutler, Inc. Cutler is the founder of the Manufacturing Media Consortium including more than 5000 journalists, editors, and economists writing about trends in manufacturing, industry, material handling, and process improvement. Cutler authors more than 500 feature articles annually regarding the manufacturing sector. Cutler is the most published freelance industrial journalist worldwide and can be contacted at: trcutler@trcutlerinc.com @ThomasRCutler www.trcutlerinc.com

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Glenn Uminger Director, Lean Systems Program Glenn Uminger discusses the lessons he has learned, the achievements he has made and the people who have inspired him throughout his career Edited by

Will Daynes


Executive insight Nobody’s perfect. What quality or ability do you wish you had? I would like to have been better in the past at sharing ideas and goals with others related to what I am doing. I realised that in the past, as I moved initiatives forward I would tend to focus on the immediate people needed to achieve the goal. I found that down the road I would come across people I would have loved to have brought in earlier. That has been a pretty big realization for me that over time. I have tried to do more outward and upward communication and engagement. I realise now that this is a critical ingredient to achieving one’s long term goals.

What is the best business book you have ever read, and why? There are two that come to mind, the first one being “Theory Z”, a 1981 book by William Ouchi. I read that when in graduate school, before I had any involvement whatsoever with Toyota or a Japanese company. It just made sense to me because it was not only about engaging people and engaging your whole staff to achieve goals, but also to connect them with the business and the goals of the company. That really had an impact on me. I have been supervising people since I was 23 years old and that book really contributed to the way I supervised people and engaged them to achieve team success while providing for their personal development and satisfaction. I also really liked “Good to Great”, a 2001 book by James C. Collins. What is interesting about that is that it talks about how one doesn’t simply go from being good to being great by saying: “I am going to make a major change” or

“I am going to make this happen now”, rather it is about companies who over many years do the fundamentals well and focus on the longer term aims. I think that really sits well alongside the principles of Lean and with the fundamentals of business excellence.

Who would you say is the individual who has had the most profound impact on your business life? Kaz Nakada, who in my mind was the best person from inside Toyota that I ever worked with. He was the expert in Toyota Production Systems (TPS) who came from Japan to the US, and I was fortunate enough to work alongside him for almost four years leading the Toyota Production System group inside Toyota. Nakada’s clarity, direction and understanding of the fundamentals of TPS were the best I have ever seen to date. Today he is based in Zurich running his own consulting business and I still enjoy regular contact with him.

Someone you would most like to have met, living or dead, and why? John McEnroe. The reason is I saw him as being a perfect example of someone getting the most out of limited physical talent to achieve number one in the tennis world. His drive and his focus managed to get a lot more out of him than perhaps just his talent would warrant. He demonstrated the hard work and dedication, along with very strong mental toughness to over achieve. Combine that with the level of insight and depth he now provides in his role as a commentator at tennis events and it makes for a very interesting character, one I’d take great pleasure in meeting.

“I would like to have been better in the past at sharing ideas and goals with others related to what I am doing”

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What do you consider to be your major achievement (in life or business)? Being a leader in the start-up of Toyota’s North American Manufacturing Headquarters, in 1996. Being one of the first people inside the building while still under construction and tasked with starting up the Production Control and Logistics divisions was a huge challenge. Essentially we had to create from just a blank sheet of paper and meet all the challenges that were presented: hiring people, building organizational capability, establishing processes and systems, all at a time when production capacity in North America was being rapidly expanded was a major accomplishment for me. Along with that there is a different tangent, and that is earning the respect of all those who worked for and with me over the years. To this day I still hear from people who used to be on my staff who show respect and seek out my opinions. That is very rewarding for me personally.

What mistakes have you made (professional or otherwise), and what did you learn from them? My mistake at times has been trusting people too much along the way. I always trust everybody 100 percent, but over the years I have learned to become much more aware of trust and where I place it, and to recognize earlier the signs of when such a large degree of trust perhaps shouldn’t be offered. I mean, I still trust everybody I encounter for the first time, but I am much more aware now than I used to be of when there is reason to not trust somebody or something. Sometimes people have conflicting motivation and objectives.

Who or what do you think is overrated?

Which one piece of wisdom would you pass on to your successor?

The term “results oriented”. Everybody needs to achieve results yes, but there is a right way to go about achieving them. In a number of instances, results are accomplished with force, but that is not sustainable. How one goes about obtaining sustainable results is vital and that is

I would tell them, don’t come storming in. Don’t come into the situation acting like you know it all. Rather you should at first spend time really understanding what you are responsible for. Understand the purpose of what you are doing, the goal, what your customers’ needs are and so forth. Then once you have a sound understanding, take a step back and think, what can I do now to lead the organization to the next level and how can I make my mark.

“Kaz Nakada’s clarity, direction and understanding of the fundamentals of TPS were the best I have ever seen to date”

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done more through the adoption and use of proper processes. The results oriented concept often means that people are getting rewarded for achieving short term results and taking personal credit for something that is not at all sustainable. To me that cliché is very overrated.

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What message or piece of wisdom would you pass on to a company that has expressed a desire to adopt Lean principles into the way they do things? The first thing I would do is ask them, why would you want to do that? Based on their


Executive insight

“Unquestionably it was my father who provided me with a better starting point and that allowed me to achieve my success”

answer it would take me to the next step. If there answer was, “well everyone else is doing it so there must be something good about it”, I would say that is not a good reason. But If they can really understand and accept that they can be better as a company and they are patient and committed to long term improvement, and they do have some understanding of what Lean means and that it is a fundamental culture shift - if they have that mind-set I would then be able to help them clarify their way and coach them on their journey.

Who has been your inspiration professionally? My father, who really demonstrated hard work, drive, dedication, humility, no need for excesses and making the most of what you have. He never told me that in words but he demonstrated it in how he conducted his life. He came from nothing, from a family with very limited means. He worked many odd jobs as a young teenager, went into the army, which helped pay for his college education, before going on to become an electrical engineer. Where he came from in life, what he did and where he ended up, that drive and determination really inspired me. Unquestionably it was he who provided me with a better starting point and that allowed me to achieve my success.

Who is inspiring Lean culture today and driving it forward? Actually, clients and customers are driving it forward, their desire to want to pull, learn and do more, and their hunger to apply Lean to their business in order to improve their sustainable capability. There is a varied and wide body of knowledge out there and the pull from companies and leaders from many different industries that want to learn is really engaging and inspiring. The challenge is how to practically apply the Lean Principles and Practices for each specific industry and company.

How would you like to be remembered after you retire? I would like to be known as a person who led people and groups to significant accomplishments as a team, and that each person involved felt that they were challenged personally, were given space to create by themselves, develop themselves, and that they were able to achieve beyond what they thought they could.

Do you have a quote or motto you live (or work) by? “Do the right thing”. When faced with difficult situations and decisions, step back and ask, what really is the right thing to do? Applying this motto to life and work really has served me well throughout my career. Turnover to read about the Lean Systems Program 20th Anniversary and how they’ve developed during that period.

Learn more about Lean Systems Program www.lean.uky.edu

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A very happy anniversary Lean Systems Program Celebrations are afoot at the University of Kentucky where 2014 marks the 20th anniversary of its revolutionary Lean Systems Program words by

Will Daynes

research by

Vincent Kielty

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n approach to production practices that emphasises efficiency through the systematic identification and elimination of waste, the lean approach was derived from the Toyota Production System, developed in 1948. The lean approach seeks to produce the maximum amount of value for the customer from resources expended in production. “Lean is about the endless pursuit of converting resources, materials, equipment, labour and energy most effectively and

A

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efficiently,” says Glenn Uminger, the University of Kentucky’s Lean Systems Program director. “The goal is to deliver the highest customer satisfaction with zero waste, while providing an engaging and rewarding environment for employees and delivering a good return for shareholders. This applies to any industry, including manufacturing, service, transportation, healthcare, restaurants, even government.” This year marks 20 years since the University of Kentucky took its first


Lean Systems Program

“This year marks 20 years since the University of Kentucky took its first steps towards becoming one of the world’s leading lean systems trainers”

steps towards becoming what is today recognised as being one of the world’s leading lean systems trainers. Prior to 1994, no comprehensive academic study of the Toyota Manufacturing System had been conducted, nor did an academic centre exist where the principles of the system could be explored and taught, refined, elaborated, and tested experimentally. This all changed in March of that year when Fujio Cho, president of Toyota Motor Manufacturing U.S.A. in Georgetown, Kentucky, sent what

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would become a historic letter to Kozo Saito, professor of mechanical engineering at the University of Kentucky’s College of Engineering. The letter outlined the goals of a proposed collaboration between the University and Toyota, and marked the establishment of a partnership for research on painting technology and lean systems training that has flourished now for two decades. “Cooperation between the University of Kentucky and Toyota was a success from the start,” said Saito, now director of the Institute

of Research for Technology Development (IR4TD). “Kentucky is a manufacturing state and needs to advance its technology constantly to maintain global competitiveness. In keeping with the lean philosophy, Toyota wanted to learn and share knowledge, which is the basic mission of the University. It’s a natural fit.” Working with Toyota, the University of Kentucky’s College of Engineering established the Lean Systems Program to provide training in the Toyota Production System. Starting

“Cooperation between the University of Kentucky and Toyota was a success from the start”

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Lean Systems Program

of Kentucky has grown into a in 1996, the program began Did you know? successful program. Through to offer certification in Lean the Lean Certification Program, Systems, currently featuring the Lean Executive Leadership former Toyota employees as 1948 Institute, and a variety of instructors. Leadership training The year that the different custom-tailored training was also first offered that year, Toyota Production opportunities, an average of with the creation of the Lean System was first 1,500 attendees from about 75 Executive Leadership Institute. developed different companies are served A year later, in 1997, the by the program each year. University played host to the first 20,000+ people “The Lean Systems Program International Lean Manufacturing Served by the Lean has been truly fortunate to conference, featuring a keynote Systems Program in experience the benefit of Dr. address by Mikio Kitano, its 20 year history Cho’s vision, and has developed president of Toyota’s Kentucky and flourished,” Uminger said. manufacturing operations, while “Overall we are humbled to be in 1998, the Toyota Fellows in a position to truly make a Program was created to provide difference and contribute to society.” a unique opportunity for students who want Saito meanwhile believes that the program to help shape the future of manufacturing. will continue to find ways to grow and improve. During the course of the last 20 years “When we started Toyota-sponsored lean the Lean Systems Program at the University

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Lean Systems Program

“The Lean Systems Program has been truly fortunate to experience the benefit of Dr. Cho’s vision, and has developed and flourished”

and R&D programs, Toyota president Cho gave us his advice: ‘Do not rush, but keep in mind a steady gradual progress over many years to come.’ We’ve kept his advice in our hearts, but never thought we could reach our current status. The Lean Systems Program itself has served over 20,000 people from 48 states and 33 countries over 20 years. We couldn’t have accomplished that without practising continuous improvement. But we can’t stop here, and will continue our journey for the benefit of Kentuckians, the state, the nation, and the world.” The 20th anniversary of the program will be formally observed of 28 October, 2014, with a special program jointly coordinated and sponsored by the University of Kentucky and Toyota. Held in conjunction with the Fourth Annual Lean Users Conference, the celebration will include a reception and dinner with special speakers, company displays and a video, and will be covered in greater depth within Business Excellence later in the year.

Lean Systems Program

(859) 257-9000 @UKYpres www.lean.uky.edu

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The secrets to a successful business relationship in China Why the understanding of and respect for traditional business values is key to successfully trading in China Words by

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David Clive Price


A

client recently asked me: ‘Is it really necessary to know all that much about traditional values and etiquette and all that in Chinese business culture? After all, China is rapidly modernising and becoming more and more Westernised. We all do business in the same way. Soon the Chinese will be more or less like us.’ Well, yes and no. There is no doubt that the mixture of Confucian, Taoist and Buddhist influences on the way Chinese think about life and do business is less visible to the unsuspecting Westerner than it was twenty years, or even ten years ago. There is a surface veneer of intense modernity and cosmopolitanism to the residents of the Tier 1 (Beijing, Shanghai, Guangzhou etc) and big coastal cities of China that would seem to infer that amid all the advertising hoardings, the large cars, the latest mobile phones and electronic gadgets, the speaking of English, the Chinese way of doing business was becoming more or less similar to that in Western countries. SCRATCH THE SURFACE However, scratch beneath the surface and many foreign executives will find that the Chinese business environment, although apparently ‘Westernised’, retains many of the traditional characteristics of Chinese culture. Family values remain extremely important, as Confucianism dictates, with high respect for

seniority and the elderly, and those children that are not sent off to college or university (many to the UK) remain in the family home until they are married. That said, there is one exception to the Confucian rule that emphasizes the predominance of the male line, which is still observed in Japanese and Korean families and business. In China, communism’s emphasis on everyone being equal means that there are many more women in business, and in positions of power, than in other Confucian societies. Due to their history, the Chinese are polite but often slow to accept any outsider into their charmed family circle or local network. To the foreigner, they may seem to be not very trusting and even secretive or ‘unreadable’. But even within their own circles, the Chinese can be very slow to accept others. If you speak the same dialect or come from the same village or locality, it is much easier to be accepted. What is true at the local level is even truer at the big city level, where identity and trust are preserved through behaviour that may seem ‘clannish’ to the outsider. This closed mentality means that Westerners must devote time and effort to getting into the circle of trust by slowly building good relationships. PERSONAL TRUST IS ESSENTIAL Generally speaking, in Chinese business the question of the deal (the ‘offer’), the

“many foreign executives will find that the Chinese business environment, although apparently ‘Westernised’, retains many of the traditional characteristics of Chinese culture”

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strategy

“Chinese business is above all personal, and it is as a likeable and well-respected person that will succeed, not necessarily as a professional as in the West”

potential profits, the possible transaction, the organisation your represent, even the win-win benefits of a proposal will be considered as secondary to the question of whether your Chinese counterpart will feel comfortable doing business with you. In other words, trust (xinyong) has to be established. However, trust usually takes a considerable time and a lot of entertainment and socializing. Chinese business is above all personal, and it is as a likeable and well-respected person that you succeed, not necessarily as a professional as in the West. That is why first impressions are so important in Chinese business etiquette and in all Chinese business negotiations. At the corporate level, senior Western executives should make sure that they fulfil the expectations of Chinese protocol when they meet their Chinese counterparts and that junior managers do the same. The Chinese will expect

similar ranks to be matched with similar ranks in meetings, and that their Western counterparts build a personal relationship with their equals in the pecking order. Companies that chop and change their staff in their China offices, or their senior executives, will often find that these personal relationships have to be formed all over again. In other words, Confucian values and etiquette still have meaning in Chinese business culture. Despite all the apparent modernity, the new technology and internet businesses, and the desire of the younger generation in the more affluent cities (known as the Millennials or Generation Y) to break away from their parents’ way of doing things, the emphasis on hierarchy, teamwork and family still holds sway. If you want to succeed in China, learn the traditional business values!

About the author

David Clive Price With 25 years’ experience of Asia business, David Clive Price helps Western companies, SMEs and entrepreneurs to launch and expand in Asian markets. His bestselling Master Key Series offers proven strategies for building profitable partnerships and gaining competitive advantage in Asia. www.davidcliveprice.com

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Deal with an irate customer donâ&#x20AC;&#x2122;t lose them The hardest part of any job can be dealing with angry, upset customers. Here are the secrets to placating, and more importantly retaining such individuals Words by

John Tschohl

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F

acing off with a screaming, unreasonable, irrational customer represents the ultimate test of any employee’s service skills. It can take you to your breaking point if you’re not careful.  Staying grounded and above the fray requires you to find inner strength, and persevere beyond the initial difficulties. Dealing with irate customers is one of the most pressure-packed experiences you will ever encounter on any job.  During every confrontation it is important to remember: 1) Every customer is a different person with a unique set of circumstances and personality traits. 2) Irate customer encounters can emerge out of nowhere—the key is to be ready. 3) You represent an opportunity to set things right. 4) Compassion is essential. 5) Despite your best efforts, sometimes there is nothing that can save a situation. Ditch the “I’m Sorry” Script Sorry, just doesn’t cut it sometimes.  Saying “”I’m Sorry” is so overused it sounds insincere.  Be specific by saying “I apologize for th i s i s s u e …”  Make sure your apology directly makes reference to the actual issue, and

ALWAYS try to use the customer’s name when addressing them. It adds a personal connection to them. Get on the customer’s side of the counter Visualize for a moment an upset customer walking in your door and approaching you.  The first thing an angry customer does is attack you.  It’s very important to remember that you are not personally being attacked but are listening to someone who is in an attacking mode. Partner with your customer Let the customer know that your job is to go to bat for them.  This tells them that you are their emissary and you want to resolve it together. The 4 C’s of Handling Irate Customers and Difficult Situations It’s all about: 1) Compassion –  Listen carefully and react to their words, not just their behavior.  Examine the facts. 2) Calm – Remain calm and don’t lose your cool. 3) Confidence  – Handle the situation knowing you are following company guidelines—and serve the customer. 4) Competence  – Save the customer with your competent handling of

“Make sure your apology directly makes reference to the actual issue, and ALWAYS try to use the customer’s name when addressing theM”

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operations

“Remember, it costs at least five times as much to gain a new customer than keep an existing one and with social media it’s even more costly”

the situation so he or she continues to be a customer. Regardless of how a problem is solved, getting it done now is the best way to stop the venting and to bring an irate customer around.  You need to show your customer than, as an employee and as the face of your organization you are invested in solving the problem. 5 Steps to Handle Irate Customers 1) Listen carefully and with interest. Put yourself in your customer’s place 2) Ask questions and actively listen to the answers 3) Suggest alternatives that address their concerns 4) Apologize without laying blame 5) Solve the problem quickly and efficiently. Remember, it costs at least five times as much to gain a new customer than keep an existing one and with social media it’s even more costly.  The average number

of friends on Facebook is 130. Keeping a complaining customer, according to Tschohl, should be the top priority, and at these cost ratios you can afford to be generous in your time and effort.  Take Care Of Yourself Dealing with irate customers will drain you physically and emotionally and put your skills to the test.  You must find ways to take care of yourself.  As part of your “recovery time”, know that dealing with irate customers is allowing yourself to relax, recharge and assess your role.  Recovery separates you from the situation and gives you a chance to breathe. Learn from every complaint Do something!  Fix the process; train staff in the issue; eliminate the fault.  Wherever possible let the complaining customer know that they have helped you resolve a problem – they’ll feel great and come back again and again (and will probably tell their friends!).

About the author

John Tschohl John Tschohl, the internationally recognized service strategist, is founder and president of Service Quality Institute in Minneapolis, Minnesota. Described by USA Today, Time, and Entrepreneur as a “customer service guru,” has written several books  on customer service including his new program Handling Irate Customers and Difficult Situations. John’s strategic newsletter is available online. www.johntschohl.com

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The 50 hated jargon

We asked more tha name their top thr pieces of mana Words by

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offic


0 most office

Leave me alone, iâ&#x20AC;&#x2122;m blue-sky thinking!!!

phrases

an 500 workers to ree most despised agement speak

cebroker.com

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Don dot cro

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feature

n’t forget to the ‘i’s and oss the ‘t’s

“I’m someone who despises management speak, but sometimes I just can’t stop myself using it”

‘B

lue-sky thinking’, ‘pinging emails’ and ‘drilling down’ have been named as some of the most annoying office phrases – according to a new poll. Jargon clichés such as ‘running something up the flagpole’, ‘thinking outside the box’ and ‘taking something offline’, also featured prominently. Nearly eight in ten, 79 percent, of office workers also confessed to using at least two examples of cringeworthy office jargon each day. Other examples of management speak which made workers see red included ‘on my radar’, ‘singing from the same hymn-sheet’, and ‘low hanging fruit’. One man who took part in the study said: “I’m someone who despises management speak, but sometimes I just can’t stop myself using it. “More often than not it will happen in meetings when I’m presenting something. I’ll open my mouth and a diatribe of guff will just spew out. I can even hear myself saying it as well – I sound like a complete pillock.” One woman added: “Office jargon is definitely a man “When you hear a person thing, you very using jargon, it’s because rarely hear women they haven’t got a clue speaking like that. what they’re talking about” “I definitely think that when you hear a person using jargon, it’s because they haven’t got a clue what they’re talking about, but still need to sound clever”. A spokesperson for officebroker.com commented: “There are some pieces of management speak that have become so overused that they are now a parody of themselves, bluesky thinking springs immediately to mind. “If used sparingly these phrases can be quite effective but if relied on too much they will detract all meaning from everything you say, and make you look like a cheap David Brent impersonator.”

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1. Blue-sky thinking

19. On my radar 20. Bench mark 21. Value added

2. Idea shower 3. To ‘action’ a project

22. To run an idea up the flagpole

4. Going forward

23. Results driven

5. Brainstorm

24. To take something offline

6. Getting the ball rolling 7. Drill down 8. Out of the loop 9. Thinking outside the box

25. The idea’s got legs

26. Game-plan 27. Hit the ground running

10. Touch base

28. Customer centric 29. No ‘i’ in team 30. Back to the drawing-board

11. Singing from the same hymn-sheet 12. Circle back

31. Re-inventing the wheel 32. Dot the ‘i’s and cross the ‘t’s

13. Strategic fit 33. Action plan 14. Bottom line 15. Low hanging fruit 16. Win-win

34. Bells and whistles

17. Play hardball 18. Best practice 52

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35. Moving the goalposts


feature

36. Back of the net 37. On the same page

Time to take this idea ‘off piste’

38. Open door policy 39. To ‘ping’ an email 40. To kick a project into the long grass 41. Joined up thinking 42. Pick up and run with it 43. Streamline

44. Close of play

45. To take an idea or project ‘off piste’ 46. Level playing field 47. Quick win 48. In the driving seat

49. No brainer

About the author Founded in 2001 by Jim Venables & Andy Haywood, the officebroker.com story began after the one time recruitment specialists switched from filling job vacancies to empty offices. Drawing upon their experience of working closely with clients and satisfying requirements, officebroker.com soon began to offer a unique service to businesses seeking office space. www.officebroker.com.

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How to make employees happy? Invest in your employees and this will make for happier and more productive workers Words by

Marielena Sabatier


operations

I

n surveys, people often say they want more money and shorter hours, but these are just hygiene factors, it stops them from being unhappy, but it doesn’t engage them. Engagement and motivation comes from having the right leaders and a good workplace culture and leaders who value their employees. Nowadays, work is so integrated into our lives that it is important to feel motivated and fulfilled. To achieve this, leaders need to create a sense of purpose and vision. A sense that what people are doing really does matter. There is plenty of hard evidence that shows that happy employees lead directly to better performance and higher profits. In other words, invest in your employees and this will make for happier and more productive workers. Below are some of my top tips on how to create a culture and workplace that is happy, dynamic, fun, wildly productive and highly profitable. 1) Pay fairly Money is a hygiene factor. It doesn’t make people happy, however, unfair pay can make people feel unhappy and demotivated. Smart leaders pay people well. This is non-negotiable. 2) Deliver good benefits Whether it’s a good health plan, childcare, transportation, a fitness center or free lunch on Fridays, benefits make people’s lives easier and better. They feel appreciated and cared for, which leads to increased loyalty and a willing to go the extra mile. 3) Keep an open leadership door — and an open mind Numerous studies have down that when management is approachable and responsive, employee engagement soars. People spend a big chunk of their lives at work, and when they feel voiceless their frustration grows.

4) Share the profits When employees share in the good times, their investment in the company grows and they will be far more likely to work hard — and to dig deep during the not-sogood times. 5) Make your workplace fun This doesn’t have to be cheesy bonding days out. It is merely about encouraging people to bring their personalities, quirks and passions to work. This leads to an increasingly seamless work/life mesh, a sense that people can really be themselves at work. Games, laughter, fun are great stress relievers, they renew and refresh us, and build very real bonds between employees. According to a Gallup poll Friendship is one of the 12 questions that is correlated to happiness and engagement in the workforce. Friendship helps people work better at work as they support and care about each other. Work is a long part of our days and it needs to be fun. People are happier when they feel they are adding value, when they feel they are trusted and valued and when they feel their work has a purpose. There is the story of a Janitor cleaning Cape Canaveral when the rocket was going to the moon. A news reporter asked him what he did, his answer was to help people go to the moon. It just showed how purpose made his job important to him.

About the author

Marielena Sabatier Executive Coach and CEO of Inspiring Potential works with businesses and executives to develop and boost their confidence to improve their performance at work. www.inspiring-potential.com

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Top ten causes of

Words by

Chris Meredith

U

nless you have the patience of a saint, you’ve probably come across someone at work whose personality clashes with your own. Or, maybe you’ve just fallen victim to poor communication from your fellow colleagues or been distracted by their inappropriate work wear.   Here, Chris Meredith CEO of  Officebroker.com  explains the top ten causes of work place conflict. >>>

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10 Not doing the washing-up It’s hard to believe that this is one of the top ten causes of work conflict, but there always seems to be one employee who doesn’t do their fair share. It’s unfair to assume that only the most junior of staff should hold the tea and coffee duty, and it is important to make sure you take it in turns. Why not draw up a rota, which will ensure everyone knows where they stand and does their fair share. Failing that, invest in a dishwasher.

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Top ten

7

9

Annual leave There are rules around when you can take your holiday due to others booking time off first. There’s always going to be a popular period to go on holiday, particularly if you have children, and it’s important to recognize that everyone in the office is just as much entitled to it as you are. If there is a specific time that you desperately want off make sure you book it up ASAP to avoid disappointment and quarrelling with colleagues.

Inappropriate clothing This is a colleague who treats every day as an opportunity to impress with a series of short skirts or low cut tops. Or, if they’re male, they turn up with one too many buttons undone.   Appropriate work place dress is extremely important as it helps employees respect each other. Also, if you’re meeting clients or business partners it is imperative that you make a good impression.

6 Office romance

8 Brown-noser There’s always that one coworker who is a little bit too chummy with the boss. Every office has someone who brazenly sucks-up for a promotion, and it’s difficult not to be annoyed when they get what they want. The key to combating conflict with a brownnoser is to not get embroiled in their business. Maybe they actually deserved that raise. Resist the urge to chat with work allies around the water cooler and instead focus on doing your job to the best of your ability.

Flirting between two employees can be both annoying and uncomfortable. Therefore it is important to recognize that if love does blossom in the office it should stay duly out. If you’re in an office whirlwind romance yourself it’s also important to make a conscious effort to treat all your colleagues the same. On the otherhand, if you’ve found yourself sat in the middle of shameless Ping-Pong of bad flirting, speak up. It’ll soon open the lovebirds’ eyes to the awkwardness it’s causing everyone else.

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5 Competitiveness There’s always someone in the office who seems to want to do everything better than everyone else. Maybe they’re after a promotion, or maybe they just want to prove that they’re the best. Either way, their constant campaigns to outdo everyone in their path can be both undermining and aggravating. It’s best to try and focus your efforts on your own work instead of worrying about other people. If you’re doing the best you can do then your efforts won’t go unnoticed.

3 Clash in personalities The nature of a work place means you’re thrown into the deep end with people who you might not otherwise socialize with. There will always be some sort of disagreement on matters in the office because everyone has their own view, and it would be a very dull place if everyone thought the same. However, making sure you know when to hold back your opinion is key.

2 Two faced colleagues

4 Slackers A slacker’s desk is covered in dust and they pull one to many sickies for it to be believable anymore. Or, maybe they’re the one whose lunch hour turns into the whole afternoon. Whichever one, it’s never nice to feel like you’re doing all the work.

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They know everything there is to know about everyone, and seem to be best of friends with each and every person in the office. They’re overly nice, but always seem to have the latest gossip.  Talking about your colleagues behind their back, no matter how annoying is a disaster waiting to happen and it’s one of the biggest causes of office conflict.   If you’re not impressed with the way a colleague is acting tell them you don’t want to get embroiled in other people’s business. It’s best to stay out of the politics.


Top ten

1 Poor Communication A fellow employee who fails to deliver vital information across is a big problem and can cause plenty of problems.   Good communication is key when it comes to working in a team. If someone doesn’t communicate well or fails to send down the right message, people will start to get annoyed at their incompetence. Be clear, concise and make sure you keep to the point when passing on information and you’ll be fine.

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Perth A

Western Austral

Perth Airport is the hub for Western Australia’s domestic tra the entrepôt for all of its trade: it is expanding to meet th words by

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John O’Hanlon


Airport

raliaâ&#x20AC;&#x2122;s airgate

affic, its channel to Asia, Europe and beyond, and definitely hese challenges and to cope with future population growth research by

Stuart Platt BE Monthly [ June 2014 ]

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Terminal 1 landside food beverage area

hen in 2012 we last visited Perth Airport in these pages Brad Geatches, Perth Airport’s CEO, had already overseen a period of unprecedented growth as Perth became established as the capital of Australia’s fastest growing state. Currently with a population of around two million souls, based on current trends, Perth’s population will grow the fastest of any Australian city and overtake Brisbane in about 15 years’ time when they both reach three million people. According to the Australian Bureau of Statistics’ mid-range

W

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growth projection, 5.5 million people will live in Perth by 2061, compared with Melbourne (8.6 million people), Sydney (8.5 million) and Brisbane (4.8 million). The city’s infrastructure needs to prepare to meet these predictions, according to Committee for Perth CEO Marion Fulker: “This is a game changer. It means that we potentially have less than 40 years to more than double the number of houses, roads, public transport, hospitals, schools and services than have been built in the region over the past 185 years.”


Perth Airport

The airport will be crucial in supporting this level of expansion. In the 2012/13 financial year, Perth Airport recorded 9.9 million domestic passengers and 3.7 million international travellers through its terminals, an overall increase of 8.2 percent on the previous year. Traditionally the European routes have been a mainstay of traffic into Perth and there has been growth here with UK inbound traffic up by 6.7 percent and strong growth in Italian, French and German visitors. All in all, international traffic is still growing,

and immigration data to March 2014 indicates growth of 10.9 percent in Australian outbound travel in the last financial year. Ultimately, Perth Airportâ&#x20AC;&#x2122;s vision is to consolidate all commercial air services to one precinct, near the current International Terminal (T1), which will ensure greater convenience for customers. Competition to Europe will intensify further when the rapidly growing Middle Eastern carrier Etihad Airways begins daily flights to Perth in July 2014. However a big advantage Perth has

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Connecting communities Leaders in Airports Throughout Australia, New Zealand and the South Pacific, Fulton Hogan is the market leader in providing airport operators with pavement solutions for runways, taxiways, aprons and other airport surfaces. Our extensive experience, from major international airports to remote air strips, recognises our technical knowledge of heavy-duty pavement construction, combined with our know-how in managing complex civil projects.

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Perth Airport

International expansion

“The entry of SCOOT into the Perth market in December 2013 has boosted competition in the market”

lies in its close proximity to South-east Asia, with destinations such as Indonesia and Singapore popular with Perth residents. “The entry of SCOOT, the Singapore-based lowcost long-haul airline, into the Perth market in December 2013 has boosted competition in the market,” says Geatches. “Low cost carriers now account for over 30 percent of international seats and passengers now have the choice of up to ten different carriers for access into South-east Asia.” However, he adds, growth in the domestic market driven by the mining sector has slowed considerably since we last spoke, as many projects have moved from the construction to the production phase and consequently

for the time being fewer personnel are being shuttled inland to the mines. Perth Airport is much more than just a runway and some terminals though. Covering more than 2,100 hectares, approximately 53 percent of the land is used for aviation. A third is used for non-aeronautical property development as it is a critical commercial land supply for the city of Perth and a natural home for transport/logistics companies and many of the service companies that work in the resource sector; and the remainder is set aside for permanent conservation of fauna and heritage sites. Additionally, it is well connected by road with the port of Fremantle, and is close to the main rail freight hub. Nevertheless in

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Weekly Because a month is a long time to wait... Your weekly digest of business news and views www.bus-ex.com 68

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Perth Airport

2011 Perth Airport commenced an extensive, privately funded $750 million redevelopment programme. “Our programme has gained significant momentum, with construction well advanced in and around all of the terminal buildings – and indeed right across the airfield,” Geatches says. The first component of the redevelopment – the new Domestic Terminal 2 (T2) – was completed in less than 18 months and opened to the public on 2 March 2013. The design and construction of T2 was driven largely by the resource sector’s fly-in, fly-out (FIFO) workforce deployment model, and represents a major step forward in meeting the requirements of the resource sector, which remains a major customer. “We have a significant departure peak in the morning,” says Geatches. “We are just one element of a very substantial logistics chain for the mining companies,” he stresses. The location of T2 next to the current International Terminal (T1) has improved the travel experience for these workers, and other passengers from regional Western Australia, as they are now able to connect through to international services in one convenient location. T2 includes some innovative environmental features such as rainwater harvesting and re-use for toilets and gardens, with 2000 cubic metres of underground storage capacity; underground ducting of ventilation for air-conditioning to reduce energy use; and a sophisticated building management system to reduce energy consumption during operations. There is also a co-generation plant that uses its heat to power the air-conditioning for both terminals, which is expected to reduce greenhouse gas emissions by up to 55 percent. The second major project is the $80 million expansion of the international arrivals area and includes extending T1 by 60 metres to the east, effectively doubling the size of the existing arrivals area. The first phase was completed in November 2013 when the new immigration arrivals area was relocated into an

brierty Brierty has been working with Perth Airport since 2007, delivering a significant number of operationally critical projects. Brierty have delivered key facilities in time for peak holiday periods minimising public and stakeholder disruption. Brierty understand the operational environment and has the capability to find solutions aligned with Perth Airport’s objectives. www.brierty.com.au

New departures hall

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Pier airside looking at T1

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Perth Airport

“We were acknowledged as one of the top 10 best performing companies in Western Australia for Corporate Wellness”

extensive area, more than double the size of the previous immigration area, next to a new inbound walk-through JR/Duty Free store. This first phase also included the completion of new offices on level 1 for Customs and Border Protection and the Department of Immigration and, on the ground floor, new toilets, car rental booths and a quiet/prayer room. Work is now well underway on the ground floor to double the size of the baggage reclaim and quarantine areas, with the first of three double loop baggage belts now in operation. The international departures area is changing too. With 16 additional check-in counters, four aerobridges, a new split level departures lounge and two A380-capable aircraft gates, the first of which became operational in December 2013, the departures experience will be transformed. The third major project – the $190 million Domestic Pier and $145 million expansion of the international departures area – is also going well. This work represents the largest and most complex project in this current phase of redevelopment. When completed, the contemporary designed pier will become home to Virgin Australia’s domestic services and offer 12 aerobridge gates, 14 check-in counters, new check-in and bag-drop technology, a large domestic passenger security screening zone, a premium guest lounge for Virgin Australia, a central retail and dining area with an impressive range of outlets, a large baggage reclaim area and additional retail outlets near the front of the terminal. Energy-saving aspects of this project include external shading panels and skylights,

energy efficient lighting, temperature control measures in intermittently occupied spaces, travelators and escalators activated by motion sensors, and automatic water efficient fixtures in all restrooms. This work represents a unique partnership of private and public sector organisations working together to a common vision. That is why, says Brad Geatches, Perth Airport invests heavily in the health and well-being of its staff. “This was recently recognised when we were acknowledged as one of the top 10 best performing companies in Western Australia for Corporate Wellness by HBF (a leading private health fund). We implemented a Wellness Program offering a range of opportunities that promote a healthy lifestyle including on-site therapeutic massages, reflexology, skin checks, nutrition and fitness sessions. The results have been very positive with less absenteeism, better productivity and greater retention of staff.” Of course professional training is a high priority too. Team members are encouraged to undertake tertiary studies through the Study Assistance Program, and in partnership with the Central Institute of Technology, they are also offered a Recognition of Prior Learning (RPL) program to help them achieve formal qualifications.

Perth Airport

+61 8 9478 8888 info@perthairport.com.au www.perthairport.com.au

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Flying through turbulence Comair Comair Ltd continues to deliver operational excellence and consistent profitability in what can only be described as an economic headwind: its CEO Erik Venter explains how words by

John Oâ&#x20AC;&#x2122;Hanlon

research by

Stuart Platt

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British Airways operated by Comair Boeing 737 800

ho would invest in an airline? The industry is facing a lot of challenges right now with escalating fuel prices, reduction in passenger volumes caused by the global recession and arguably the growth of technology that allows people to communicate and confer without the need to travel. These are things that affect airlines all over the world, but in South Africa life is even more challenging for a private sector airline operator that

W

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has to compete with the heavily subsidised national carrier South African Airways (SAA) and its low-cost brand Mango. The government, by taking a largely anti competition stance and allowing SAA to increase capacity in a shrinking market, has done no favours for the industry. Such is the environment in which Comair operates. Dating back to 1946 the JSE listed company has been successfully operating in southern Africa for nearly 70 years. Since


Comair

“We don’t have to go through major change management programmes every time we want to make an improvement!”

1991 it has been operating local and regional services under a licence agreement with British Airways, and in 2001 it launched South Africa’s first no frills airline kulula. com. Erik Rudolph Venter, a chartered accountant, joined the company 20 years ago and has been the Chief Executive Officer of Comair Ltd since 1 December 2011. He is a pragmatist, and entirely sees the point of the banks and investors who tell him they would never invest in the airline industry. “I

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ATNS

Air Traffic and Navigation Services (ATNS) State-Owned Company (SOC) In our 21 years of existence, we have seen the growth of the South African and global aviation industries. We have faced a myriad of challenges. And we have achieved notable and significant milestones along the way. Be that as it may, we have discovered the most innovative ways of delivering world-class safety and operational performance. ATNS is very concerned about the current aviation crisis resulting from the economic downturn, and how this could affect relations between ANSPs and airlines. Recognising the need to support the airline community in its efforts to reduce costs, we have since agreed to seek short-term initiatives, in close collaboration with our clients, including Comair. ATNS has also noted that airlines require reliable information, such as ATM and other ATM-related trends and developments. In this regard, ATNS is transparent at all times and offers proof of active cost and efficiency management to all its clients. ATNS regularly interacts with COMAIR on all relevant operational matters. The two organisations have worked closely on numerous projects, such the implementation of the RNAV (GNSS) procedures at the King

Shaka International Airport in Kwa-Zulu Natal. As is procedure, the regulator requested trials to be conducted before these procedures could be implemented. Following a well-defined programme of action (POA, this process was undertaken without a glitch. Still on procedures, Lanseria Airport Management has contracted ATNS to design instrument flight procedures for its new runway, which includes the Advanced RNP procedures. These procedures enable aircraft to access airport with terrain and airspace limitations. This is a first of its kind in Africa. Kulula - a low cost airline under Comair - is currently trialing the Advanced RNP and preliminary results indicate that these procedures will be approved for use at Lanseria Airport - in the last quarter of this year (2014). This is an exciting milestone for which Lanseria Airport management should be commended. In the main, the airline operators will benefit significant by using the advance RNP, in that it will reduce the operating costs, noise and CO2 emissions. Kulula.com operates daily flights from Lanseria International Airport to Cape Town, and Durban. ATNS continues to serve the ATM community by deploying leading technologies with foresight,

â&#x20AC;&#x153;ATNS regularly interacts with COMAIR on all relevant operational matters. The two organisations have worked closely on numerous projectsâ&#x20AC;?

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as well as on the continual improvement of safety levels. We have prioritized sustainable development by minimizing our own carbon footprint, and seek to continue developing and helping our stakeholders to minimize the environmental impact of their operations through flight efficiency programmes and other best practice initiatives. While our Vision is to be the preferred supplier of air traffic management solutions and associated services to the African Continent and selected international markets, our mission, that of providing a safe, expeditious and efficient air traffic management solutions and associated services, has been a building

block in our quest to capture the market share within the continental aviation sphere. To all our valued stakeholders, engagement and collaboration are deeply embedded in our quest to keep our skies safe. And that is through proper maintenance of sound relations with them. The effective maintenance of such carries with itself proper understanding of the “issues” that we are addressing. And that’s exactly what we’re doing with Comair. +27 11 607 1000 marketing@atns.co.za www.atns.co.za

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Comair ticketing staff

wouldn’t invest in a fund of airlines either!” So is he in the wrong job? Not a bit of it. Comair not only outperforms other airlines but a lot of other industries that are not seen as high risk. It has an astonishing record of declaring an operating profit in every one of its 68 years of existence, remarkable enough in itself but quite extraordinary in the South African climate of the last few years. So think again, investors, he says. Look at the company not the industry! The chief explanation he has for Comair’s success is its people. “We hold on to people for a very long time. Long service awards for ten years service or more are held by about 25 percent of our staff at any one time. There is a lot of experience here compared with our competitors in the market.” And the reason they stay is related to the flexibility and adaptability to change that is at the heart of the corporate culture. In the aviation industry more than most, he believes, it is essential to build that flexibility into people’s contracts and instil a continuous improvement mindset: “Everyone is used to the fact that things are always evolving, and we don’t have to go through major change management programmes every time we want to make an improvement!” People and the flexibility they bring to the company are probably the two main reasons Comair has dealt so well with the volatility of the airline market says Venter. The cost environment has imposed a harsh discipline on airlines and not all have been able to adapt. “Look at our 14 year history since 2001: costs have risen by about 168

“We hold on to people for a very long time. Long service awards for ten years service or more are held by about 25 percent of our staff at any one time”

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Comair

British Airways operated by Comair Boeing 737 800

percent against a consumer of products such as the Did you know? price index rise of around 98 prestigious Executive Club frequent flyer programme. percent in South Africa over Some years ago there were a the same period. At the same 68 number of similar franchise time the average air fare has Profitable years arrangements round the world, increased only by 37 percent, for Comair though now Comair is one of so we have had to close that only two airlines to remain in gap and that requires constant 26 the scheme. “It has been a very innovation and improvement.” Boeing planes successful arrangement both More efficient aircraft, better in its fleet for Comair and for BA in South route planning, working with air Africa – we are able to make traffic management to improve all the operational decisions landing patterns, saving weight and tailor the service to local requirements, on the aircraft – these are all strategies that while benefiting from the reputation of the have been adopted. top brand in the business.” Comair’s full service offering is flown In 2001 Comair added another brand, in the livery of British Airways (BA) under the low-cost, green-liveried kukula.com a licence agreement dating back to 1996. (slogan: Full-on Travel). Today most of the The British Airways brand brought with it popular domestic routes in South Africa are a rich heritage of stylish travel, reputation served by both carriers. The major routes for service excellence and a wide range

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are Johannesburg to Cape Town (the tenth busiest route in the world with 4.5 million passengers a year), Johannesburg to Durban, Durban to Cape Town and Johannesburg to Port Elizabeth. “After these,” says Venter, “the numbers get smaller, especially when we look at the various African destinations we serve, though some, like Harare, Mauritius and Victoria Falls are quite busy.” He is constantly looking for new opportunities. There is undoubtedly a lot of growth taking place within many economies

of sub-Saharan Africa, but it is growth from a low base, he warns, and even respectable percentages resolve into low volumes. “I don’t think Africa is quite there yet in terms of potential for passenger volume growth. A lot of hurdles remain to be overcome.” A cautious approach to expansion that will sustain the company’s profitability record. More immediate returns are being generated in cer tain aspec ts of diversification. Taking a travel business approach Comair is developing its revenue

“It has been a very successful arrangement both for Comair and for BA in South Africa”

Kulula Boeing 737-800 in flight

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Comair

Happy staff stading in front of the new airport ticket counters at OR Tambo International Airport

streams from car hire, hotel bookings and other value added services. “That segment of the business is starting to grow quite nicely. We have done a successful job of developing our airline lounges and we see possibilities in developing conference facilities and dedicated lounge facilities for other partners.” The company has also set up its own catering facilities at Johannesburg and Cape Town and is applying for licences to do third party catering for other airlines, he adds. “We are finding we can run a much more efficient catering operation than some of the legacy catering businesses were able to provide.” Another important revenue stream over the years has been third party pilot training. With simulator facilities for Boeing aircraft as well as ATR regional jets, Comair can offer

training at a much better rate than anything available in Europe or the USA. This is a service with potential for expansion. But Comair understands training. “We have to train almost everyone ab initio for Comair whether front line staff, finance staff, or cabin crew.” Extensive facilities at the Comair training centre next to O.R. Tambo International Airport provides the knowhow and instils the soft skills vital to the Comair culture. As with any airline Comair needs to keep its assets up to date, and this is the largest area for investment, with an ongoing programme to completely renew the 26 strong Boeing fleet, or at least the 18 that it owns rather than leases. Though it’s a big balance sheet item the replacement of Boeing 737-300s with the larger 800s resulted in a 15 percent increase in capacity that was a major factor

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Flight simulator at the Comair Training Centre (CTC)

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Comair

“We are finding we can run a much more efficient catering operation than some of the legacy catering businesses were able to provide”

in the 23 percent rise in revenue over the first half of the current financial year. Being more fuel efficient these aircraft also offset escalating fuel prices. Four new Boeing 737800s were introduced into the kulula fleet last year, and four more will be delivered by the end of 2015 followed by further orders by 2020, he says. Another important ongoing investment is in the migration to a new enterprise solution platform. Says Erik Venter: “We have implemented the Sabre airline solution system, which has already delivered benefits both in revenue and cost efficiency. The basic inventory hosting went live in July 2012, though that in itself does not deliver huge benefits. It’s the bolt-on modules that bring measurable efficiencies. We have been continually adding improvements and new functionality over the last 24 months and will continue to do that.” As with any ERP platform, there’s huge suite of upgrades and new products to choose from – Comair will avail itself of the most relevant functionality. These days TV and newspaper advertising are in rapid decline, with the rise of instant access to news and the ability to skip ads when watching programmes by satellite. Social media have stepped into the resulting space, and Comair is determined to make full use of the new platforms. “It’s essential to keep up to the minute with what is happening in that space especially in Africa with the reliance of so many people on mobile devices to stay in touch. It is a whole new way of thinking and requires a very different strategy. You get instant response from customers and

instant feedback compared with the old ways of communicating with customers.” It has meant getting social media addicts onto the marketing team, who understand the dynamics of the twittersphere: “People respond at 3.00 on a Sunday morning, and by 8.00 you have a trend growing across social media channels – if you are not alive 24/7 you will miss it!” As the last remaining independent privately owned domestic scheduled airline operator in South Africa Comair has a responsibility to its employees, customers and shareholders to secure a level playing field in what is after all an over-traded market, concludes Erik Venter. While in no way challenging the position of SAA nor arguing it should not be subsidised, he feels that it should share the risk as well as the rewards, and be subject to the same rules of competition that protect the industry in other jurisdictions. Things may change after the general election in May but even in the present climate the message is loud and clear – Comair is a great investment, as proved by its confident declaration of an interim dividend based on its results in the half year to December 2013 – resulting in a ten percent rise in its share price.

Comair

+27 (0) 11 921 0111 cr@comair.co.za www.comair.co.za

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Kenya Airports

Flying the fla

By focusing on greater efficiency, quality service and inc is helping to facilitate the grown of the country words by

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Will Daynes


Authority (KAA)

ag for Kenya

creased airport capacity, Kenya Airports Authority (KAA) yâ&#x20AC;&#x2122;s aviation sector as well as the wider economy research by

Stuart Platt BE Monthly [ June 2014 ]

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s first world economies seek new territories for innovation, trade expansion, conference tourism and investment, Kenya, as one of the leading vibrant stable economies in Africa, has provided a hugely viable and attractive option,” states Dominic Ngigi, Corporate Affairs Manager of Kenya Airports Authority (KAA). “This, coupled with numerous other factors, has helped contribute to the buoyant projections for the aviation industry in the country over the next 20 years, with global passenger traffic and air cargo each projected to grow by 5.0 percent per annum.” In the last year alone Kenya has played host to the initiation of several landmark projects, from the creation of Konza City, dubbed Africa’s first silicon valley, to the development of road, rail, port and airport infrastructure. Such advances have resulted in the entry of new airlines from what are referred to as “non-traditional destinations” looking to maximise on trade and tourism opportunities in the country. Furthermore, the discovery of oil in the region and the much anticipated LAMU to Southern Sudan project will also contribute to the growth of aviation in Kenya. Established through an act of parliament in 1991, KAA has since provided the country’s airports and airstrips with safe, reliable and efficient management. Today it boasts an

A

“Going forward passenger traffic is projected to grow by five percent, cargo eight percent and fleet movement three percent per annum”

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The artistic impression of JKIA and the look once complete


Kenya Airports Authority (KAA)

“The stability of the Kenyan economy has enabled KAA to post good operational results”

employee base of 1,820 individuals split across numerous departments including, projects and engineering services, marketing and business development, finance, legal, corporate planning and strategy, procurement and logistics, and operations, safety and security. “The stability of the Kenyan economy has enabled KAA to post good operational results,” Ngigi continues. “The economy improved by 4.6 percent in 2012 and is projected to have expanded by 5.7 percent in 2013, and by a further six percent in 2014 en-route to the ten percent envisaged by Kenya Vision 2030. In 2013 Kenya saw passenger numbers reach 8,919,254, cargo volumes hit 294,353 metric tonnes and aircraft movements numbering 269,923. Going forward passenger traffic is projected to grow by five percent, cargo eight percent and fleet movement three percent per annum.” With an increase is demand for aviation services comes the need to expand and in some cases modernise, and examples of this work can be found throughout KAA and across the various airports it manages. Perhaps the best examples of this work can be found occurring in and around Kenya’s main airport Jomo Kenyatta International (JKI). One of the biggest ongoing undertakings is the building of the brand new Terminal 4 structure, a project which commenced in September 2010 at a cost of $93 million, the scope of which includes the construction of

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Kenya Airports Authority (KAA)

Eng. Betty Kamunde briefs the JKIA project financiers on the status of the expansion

â&#x20AC;&#x153;In January of this year KAA signed a contract with M/s Roder of Germany to facilitate the construction of an interim domestic/international, arrival and departure terminal at JKI Airportâ&#x20AC;?

a three storey passenger terminal building with floor area of approximately 21,000 square metres. Terminal Unit 4 is due for partial completion in July 2014, at which point passengers will begin to use the new building, with full completion expected by 31 March, 2015. Terminal 4 will also feature an International Arrivals facility, a permanent facility providing arrival processing functions that will effectively make Terminal 4 an independent terminal.

In January of this year KAA signed a contract with M/s Roder of Germany to facilitate the construction of an interim domestic/international, arrival and departure terminal at JKI Airport. The $23 million contract will cover the building of a facility which, at a size of 10,000 square metres, will service some 2.5 million passengers per annum. The terminal itself is expected to serve these passengers for a total of

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Kenya Airports Authority (KAA)

Tradewinds Aviation Services Tradewinds Aviation Services is a reputable Ground Service Provider to airlines and airports in Kenya. With its initial operations at Jomo Kenyatta International Airport (JKIA), Tradewinds has increased its countrywide footprint to include Mombasa (MIA), Kisumu (KIA), Malindi (MYD) and Eldoret (EDL). Tradewinds is able to handle all types of aircraft ranging from light to AN225.The company comprises a highly qualified and experienced team which is flexible and quick to meet new challenges in the ever-changing market place. Tradewinds prides itself on providing world class ground handling services and aviation solutions, and has acquired affiliations with leading industry organizations like ASA, IATA, NBAA and has recently acquired ISAGO certification. Tradewinds is proud to be associated with Kenya Airports Authority as a stakeholder. www.tradewindskenya.com

five years, before then being converted for an alternative use. Equally integral to the expansion of JKI is the construction of the airportâ&#x20AC;&#x2122;s second runway. Measuring 5,500 metres in length the new runway will allow the airport to support direct flights to New York. Its conceptual design phase commenced in August 2012 and was completed in February 2013. Kenya Airports Authority is today awaiting confirmation of funding from the government in order to proceed. Elsewhere, JKI is also playing host to the renovation, modification and expansion of the ring building which encompasses Terminal Units 1, 2 and 3, as well as the airportâ&#x20AC;&#x2122;s arrival building. The rehabilitation is set to modernise and upgrade the current JKI terminals. This will include the demolition and reconstruction of the Arrivals Terminal building which was destroyed in a fire. The procurement process is currently underway, and the submission date for return of bids is 2 October, 2014.

A section of the new Terminal 4 now near completion

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Did you know? 8,919,254 Total number of air passengers recorded in Kenya in 2013 $93 million The cost of building JKI Airport’s brand new Terminal 4 structure

Proposed Re-design of Unit 1, 2, 3 including Terminal 4

1,820 Total number of employees split across various departments

“We find ourselves in the process of sourcing for strategic partners that will assist in the development of all manner of new structures and facilities” It isn’t just JKI that is reaping the rewards of expansion and modernisation however. Elsewhere within the country KAA is overseeing a number of ongoing projects. These include at MOI International Airport, where the designing phase is underway in preparation for the rehabilitation of the runway, taxiways and apron of the airport, as well as the upgrade of the power distribution system, work that is expected to commence in April 2015. At Kisumu International Airport work commenced in March 2012 to strengthen and

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widen the airport’s runway, cargo apron and car park, with completion expected in June 2014, while at Malindi Airport work is almost complete on the construction of a brand new terminal building. “On a collective level we have also moved forward with the automation of our business processes, implementing the Enterprise Resource Planning (ERP) System and an Airport Operations Database (AODB) system within our airports,” Ngigi says. “The ERPsystem has integrated all data and processes of the organisation into a unified system to


Kenya Airports Authority (KAA)

3D model of the 20 Million Greenfield Passenger Terminal now under construction

ensure that KAA has accurate and real-time data and enhances a paperless system. The Airport Operational Database (AODB) on the other hand has facilitated the main airport processes, ensuring they are coordinated and synchronised and provides a centralised database for all airport stakeholders.” A similar universal development has also seen KAA introduce an Identity Management System across the check-in kiosks present at its various airports. “The implementation of this system has greatly enhanced security within all of our airports,” Ngigi enthuses. “The new system has an added UV thumbprint security feature, making it difficult to forge or duplicate. The system is networked to all airports, enabling security officers to share vital information.” Clearly always focused on the future, KAA has taken great efforts to develop many strategic partnerships designed to support business development within its

airports. “To date the types of project that we have achieved through strategic Public Private Partnerships, based on a Build Operate Transfer (BOT) agreement, include transit shed warehouses, food courts and airline hangers,” Ngigi concludes. “Now we find ourselves in the process of sourcing for strategic partners that will assist in the development of all manner of new structures and facilities, from duty free facilities and airport transit hotels to medical facilities, in-flight catering facilities, transit shed warehouses and fuel service stations.”

Kenya Airports Authority (KAA)

254-02-6611000 info@kaa.go.ke www.kaa.go.ke

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Kenya Port

the transpo

Mombasa, on the Indian Ocean coast of Kenya, has long pl run by the Kenya Ports Authority (KPA) it is expanding fast, words by

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John Oâ&#x20AC;&#x2122;Hanlon


ts Authority

ortation hub

layed a key role as a major port on the east coast of Africa: but is set to be eclipsed by a megaport on the island of Lamu research by

Stuart Platt BE Monthly [ June 2014 ]

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n the past the port has been controlled by the Portuguese, the sultan of Zanzibar, and the British. Today, Kenya Ports Authority (KPA), a state-run enterprise, is responsible for the port. The city of Mombasa, its port and the facilities around it, as well as the railway that runs from the coast to Rwanda Uganda and Burundi are important to the economy of the whole of East Africa. Transit trade to these countries, the DRC, Tanzania and South Sudan accounts for 30 percent of the port’s throughput and this proportion is growing by up to ten percent a year. Mombasa is Kenya’s only international sea port. The port has grown rapidly in recent years as a transshipment node for fuel and containers. KPA aims to increase its container capacity to 1 million twenty foot equivalent units (teu). This means that ships with a deeper draught will be entering the port. To accommodate them, it was necessary to widen the access channel and the turning basin, deepen some landing stages along the quays, and build a new container terminal. The work started in June 2011. The existing channel was deepened at nine different points and around 6.5 million cubic metres of material dredged up by the contractor Van Oord used to construct the container terminal, thought to be the only berth on the east coast of Africa to be built on reclaimed land. The project was successfully completed in April 2012, and container capacity increased

I

“The new project will complement the recently launched berth number 19 and the general growth in volumes of cargo arriving at the port”

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Rubber tyred gantry crane


Kenya Ports Authority

“The Lamu megaport is one of our major projects this year” by 250,000 teu to a nominal 800,000, though in fact the total amount handled is already more like 900,000 a year thanks to careful planning and the use of off-port container freight stations. With the completion of Berth 19 last year the expanded container terminal can now handle three 250 metrelong panamax vessels at the same time. To cope with these, the new terminal has been equipped with three ship to shore gantry cranes, eight new reach stackers and 27 terminal tractors. It has 120 reefer hookups. Now a second container terminal is being planned for the port as a further extension of Mombasa’s capacity. “The new project will complement the recently launched berth number 19 and the general growth in volumes of cargo arriving at the port,” said KPA managing director Gichiri Ndua. This is a major capital project, with funding provided through Japan International Cooperation Agency (JICA), and the work is being carried out by Toyo Construction Ltd, also of Japan. It will be completed in stages, with three new berths providing a total 900 metres of space, at an alongside depth of 15 metres. The first phase is scheduled for completion by 2016 comprising Berth 21, 320 metres in length, a side berth 20 with 11 metres draught. Berth 21 will have the capacity to handle 450,000 teu, with two ship to shore cranes and four rubbertyred gantry (RTG) cranes supported by a 50 hectare stacking yard. The second and third phases are due to be built concurrently and delivered by 2019, adding two further berths (21 and 22, with lengths of 320 and 350 metres respectively).

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Your preferred Logistics Partner Mitchell Cotts offers total logistics solutions for the movement of goods in and out of East and Central Africa and, through our network of selected international business partners, co-ordinates movement of goods from any origin to any destination. Mitchell Cotts services specifically include: • Container Freight Station (CFS) • Negotiating, arranging and fully co-ordinating shipments (whether by sea, air, road, or rail) • Customs and Excise Clearance • Warehousing - including specialist facilities like bonded warehouses • Collateral Management • Packing and Removals - domestic and corporate relocation • Insurance for all aspect of the movement and storage of goods • Advice and information on various relevant legislation, tariff schedules and customs facilities www.mitchellcotts.co.ke


Kenya Ports Authority

These will be equipped with some eight ship to shore cranes and 20 RTGs and with a further 50 hectare stacking area. Once these facilities are in place the Port of Mombasa will be able to handle a throughput of 2.5 million teu per annum. The emphasis on container development reflects the growing global shift from bulk cargo and breakdown goods to container traffic, and the huge investments being made around the world to keep up with it. Container throughput already accounts for more than 40 percent of the tonnage that passes though Mombasa, and the local infrastructure has struggled to cope. However that will all change following the completion of these projects, at least as far as the port itself is concerned. Meanwhile the port authorities have shown they can play a good game with a poor hand. Despite constraints the port has improved its productivity significantly over recent years, recording 22 crane moves per hour and removing many bottlenecks. Waiting time for vessels is now down to internationally acceptable standards, generally less than two days. Though transshipment still only accounts for about one percent of total traffic delaying the establishment of Mombasa as a transport hub for the Indian Ocean, the aim following commissioning of the new container terminal in 2016 is precisely that. Mombasa is ideally positioned to service the many smaller ports of the Seychelles, Mauritius, Madagascar or Zanzibar, which can no longer berth the large container ships now coming into service.

“Despite constraints the port has improved its productivity significantly over recent years”

Mitchell Cotts With a strong regional presence, committed team and proven expertise, Mitchell Cotts has remained top of its game in the provision of Logistics services in the Freight Industry. The Company’s head office in Mombasa is located in Kibarani very close to the port. The Nairobi office is located on Mombasa road, past the turn off into JKIA and opposite Syokimau railway station. The Airfreight Division is at the Jomo Kenyatta International Airport Freight Terminal. To facilitate Kenya - Uganda cross-border trade, we have a hub on the border town of Malaba. Our services: Dry port operations (CFS), Road, air and sea freight, value add warehousing and many more. www.mitchellcotts.co.ke

Crane operator

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But for mainland Africa it’s no good having an international standard port facility if the hinterland infrastructure that supports it is lacking. In November 2013, Kenya’s president Uhuru Kenyatta laid the foundation stone for the construction of a new standard gauge railway line that will connect Mombasa with the capital Nairobi. “The project will define my legacy as president of Kenya,” Kenyatta said. “What we are doing here today will most definitely transform ... the whole eastern African region,” The standard gauge railway is planned to run between Mombasa and Malaba near the Uganda border and thence to other major east African cities such as Kampala in Uganda, Kigali in Rwanda and Juba in South

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Sudan. With this, the Kenyan government is hoping to strengthen ties between those countries through the growth of trade. Mombasa is in rivalry with the smaller but also rapidly expanding port of Dar es Salaam in Tanzania, though the latter tends to be looked to by the landlocked countries of Malawi, Zimbabwe and Zambia. KPA however has the great advantage of having been established over many decades and enjoying rapid growth in Kenya itself and benefiting fom international investment in its neighbours, notably Uganda and South Sudan. Kenya’s $25.5 billion Lamu Port and New Transport Corridor Development to Southern Sudan and Ethiopia (LAPSSET)


Kenya Ports Authority

MSC container vessel docked at the port

could become the country’s biggest ever civil engineering project. It includes the construction of a 32-berth port, three international airports, and a 1,500 kilometre railway line. A new oil refinery, in nearby Bargoni, and an oil pipeline are also planned. The pipeline would run to Kenya’s Eastern Province before splitting, with one branch running to South Sudan’s capital, Juba, and another through Moyale in the north to Addis Ababa. A 1,730km road network is also being planned. To give an idea of the scale of this project for KPA, the Lamu megaport will be Africa’s largest port, three times the size of Mombasa. Its 32 berths will give a total quay length of

ten kilometres, with alongside depths of up to 18 metres – enough to handle the largest post-panamax vessels. Construction of the first three berths will start in June under a $488 million contract awarded to China Communications Construction Company (CCCC). “The Lamu megaport is one of our major projects this year,” said Ndua.

Kenya Ports Authority

(041) 211 2999 customerfeedback@kpa.co.ke www.kpa.co.ke

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Gelibolu

A titan among Tu

Gelibolu Shipyard has been delivering expertl of four decades and with its order book filli words by

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Will Daynes

research


Shipyard

Turkish shipyards

ly designed turn-key vessels for the better part ing up, 2014 is set to be another great year

research by

Peter Rowlston BE Monthly [ June 2014 ]

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Gelibolu Shipyard

ying in close proximity to Gelibolu, along the coast of the Dardanelles, one will find Gelibolu Shipyard. A present day reminder of the historic links this part of Europe has to the maritime sector, Gelibolu Shipyard is a family owned newbuilding yard founded in 1975. One half of Aksoy Shipping Group, it specialises in the building of smallto-medium sized sea and river going vessels for its ship chartering sister company, Ali Riza Aksoy Denizcilik. Gelibolu is located at the base of the peninsula named after the town, which juts out from the Thracian mainland and extends for about 50 kilometres in a northeast-southwest direction between the Straits of Dardanelles and the Gulf of Saros, an inlet of Aegean Sea. From Gelibolu eastwards, the Straits widen into the Sea of Marmara. The site of the earliest Ottoman shipyards and navy headquarters, Gelibolu has always been a seafaring town, once serving as the capital of the Ottoman province that occupied most of the Aegean islands, all the way down to Crete. Today, due to its strategic location, Gelibolu is a garrison town, with a substantial part of its surface area consisting of military camps One of the facets of the business that Gelibolu Shipyard benefits most from is its relationship with Aksoy Shipping Group. This Turkish charterer has achieved wide success in the local market through its dedication to reliability, quality, and innovation. As a result of this relationship activity at the shipyard has remained at a steady pace and this has given the companyâ&#x20AC;&#x2122;s engineers the time to construct the modern vessels it has become so well known for. Spread over a total area of approximately 50,000 square metres, the shipyardâ&#x20AC;&#x2122;s facilities include three slipways of 30 metres by 130 metres and approximately 8,000 square metres of enclosed construction workshops with various cutting, bending, welding and shaping machines. From its facilities

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Gelibolu Shipyard

“From its facilities the shipyard’s engineers are capable of constructing vessels of up 150 metres in length and with a beam of approximately 30 metres” the shipyard’s engineers are capable of constructing vessels of up 150 metres in length and with a beam of approximately 30 metres. Gelibolu Shipyard’s experienced and loyal workforce has a strong track record of building and delivering turn-key vessels of all types, from small work-boats to fully automated ocean-going vessels of the highest standards. Examples of this work includes dry cargo carriers, product and chemical tankers, container ships, supply boats, tugs, accommodation barges, ferries and

landing craft. Each and every member of the shipyard’s workforce has helped the company fashion for itself a reputation for excellence when it comes to the quality of its products, its ability to deliver on schedule and for the way it always strives to keep the promises it makes to its customers. Gelibolu Shipyard understandably takes great pride in the high quality of its ships and their components. A perfect example of this would be the REMAS, a 75-metre offshore diving support vessel featuring diesel-electric

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Gelibolu Shipyard

â&#x20AC;&#x153;The future of Gelibolu Shipyard, like any other yard or associated business, will depend heavily upon the status of the chartering market internationallyâ&#x20AC;?

propulsion, Dynamic Positioning Class II and an environmentally friendly design, which is now owned and managed by leading offshore contractor, Micoperi. The vessel has been specifically crafted for accessing and operating in the Caspian Sea and also possesses a hull that has been designed for river passage, with shallow draught and four point mooring capabilities. The future of Gelibolu Shipyard, like any other yard or associated business, will depend heavily upon the status of the chartering market internationally and the levels of activity

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Offshore Commercial Shipping Yachting

As every boatman knows, anchors and chains must be replaced now and then. You need strong, good looking anchors and chain cables to finish your new build or your super yacht, to replace the old or lost anchor or chain cables. Wortelboer has what you have been looking for. We have been a reliable partner in the shipping industry for more than 50 years. And that is why our customers keep coming back for more! www.wortelboer.nl

Weekly Because a month is a long time to wait... Your weekly digest of business news and views www.bus-ex.com 112

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Gelibolu Shipyard

that it experiences over the coming months and years. While there is clearly something of an oversaturation of vessels in certain sectors of the maritime industry, including those in which Gelibolu Shipyard specialises in, it is the companyâ&#x20AC;&#x2122;s belief that the flexibility it possesses will allow it to adjust accordingly to service those sectors of the market where demand remains stable or strong. The sector where increased demand is confidently predicted to rise in the short to medium term is the offshore sector. This is because of several factors, not least of all the continued resilience of oil and gas prices, the new discoveries being made in this field and the surge in offshore wind farm developments in countries pushing for greater sources of renewable energy. Each of the above developments offers a company like Gelibolu Shipyard, with

its hard-earned reputation for excellence and quality, fresh opportunities for growth and thus opens up the possibility for an exciting future. This exciting future is in further evidenced in the fact that the companyâ&#x20AC;&#x2122;s order book today finds itself in an increasingly healthy state. With increased traffic entering the yard and a growing demand for its services, Gelibolu Shipyard looks set to ride this wave of prosperity through the rest of 2014 and beyond.

Gelibolu Shipyard

(+90-286) 576 81 39 info@aksoyship.com www.aksoyship.com

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Metropolitan Transit Authori

Navigating

For the best part of 35 years the Metropolitan Transit Auth public transportation services to the people of Houston, th words by

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Will Daynes

research


ity of Harris County (METRO)

Space City

hority of Harris County (METRO) has been delivering vital he fourth largest city in the US, and its surrounding areas

research by

David Brogan BE Monthly [ June 2014 ]

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amed after the famed General Sam Houston, former President of the Republic of Texas and the man responsible for commanding and winning the Battle of San Jacinto, the city of Houston was founded back in 1836 and incorporated a year later. Today the city is arguably best recognised as the home of the Lyndon B. Johnson Space Center, itself housing NASA’s Mission Control Center, and with a population of over 2.1 million people is the fourth-largest city in the United States. Houston, Texas is also the seat of Harris County, the third-most populous county in the country and home to the fifth-largest metropolitan area, with more than six million inhabitants. Servicing this vast population is the Metropolitan Transit Authority of Harris County (METRO). Based in Houston, this major public transportation agency operates the county’s bus, light rail, bus rapid transit and paratransit services, the latter under the name METROLift. It was in 1973 that Texas State Legislature authorised the creation of local transit authorities in the state. Five years later, Houston-area voters created METRO and approved a one-cent sales tax to support its operations. METRO officially opened for business in January 1979, when it took over the bus service owned by the city, then known as HouTran. Today the authority’s

N

“Based in Houston, this major public transportation agency operates the county’s bus, light rail, bus rapid transit and paratransit services”

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METRO

“The METRO of 2014 boasts an expansive and heavily used bus system, in fact its bus service is the most used system of its kind in all of Texas and the Southwest”

service area encompasses approximately 1,285 square miles and it provides employment for around 3,800 people. The METRO of 2014 boasts an expansive and heavily used bus system, in fact its bus service is the most used system of its kind in all of Texas and the Southwest. The service also includes the High Occupancy Vehicle (HOV) Park and Ride System, with Park and Ride stations found alongside the city’s freeways and used heavily during peak times. The METROLift service meanwhile provides transportation needs for people with disabilities and who are unable to board or ride a regular METRO bus. METROLift vehicles are shared ride, transporting multiple customers or groups of individuals in distinctly marked buses. METRORail, the light rail service operated by METRO currently runs along a single line called the Red Line, which was extended at the end of last year, and will soon expand to include the new East End/Green Line. At 12.8 miles in length the Red Line is the second major light rail service in Texas following the DART system. A fleet of Siemensbuilt Avanto light rail vehicles operate along the line, each measuring 29 metres in length and with a capacity of 72 seated and 148 standing passengers.

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Stertil-koni

#1 in Heavy Duty Vehicle Lifts Stertil-Koni is the global market leader in heavy duty truck lifts and bus lifts and is the preferred supplier to the world’s leading companies in the truck and bus industries. As the vehicle lift leader, Stertil-Koni’s breadth of lift products meets all ranges of lifting needs and includes mobile lifts, two-post, four-post, in-ground lifts, parallelogram lifts, half-scissors lifts and the innovative axle-engaging, inground, scissor-style heavy duty hydraulic lift configuration. Stertil-Koni is also the creator of the revolutionary DIAMOND LIFT -- a stateof-the-art high pressure telescopic piston lift designed to set new standards in precision heavy-duty lifting performance, durability, ease of use and environmental containment. The company’s lifts are ideally suited to provide

superior lifting performance for a full range of heavy duty vehicles, including articulated buses, fire and rescue vehicles as well as multiple axle trucks. 800-336-6637 www.stertil-koni.com

#1 in Heavy Duty Vehicle Lifts Stertil-Koni is the leader in heavy duty vehicle lifts. From bus lifts to truck lifts, we do it all. Our world-class product range includes award-winning mobile column lifts and inground lifts – including piston lifts and scissor lifts – as well as 2-post lifts, 4-post lifts, platform lifts, accessories, and more.

ECOLIFT

DIAMOND LIFT

MOBILE COLUMN LIFTS

SKYLIFT

4-POST LIFT

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2-POST LIFT


METRO

“All planned expansions exist within Houston’s city limits and are expected to ultimately reach the cities two major airports”

In November 2003, a vote approved the laying of additional rail across Houston, with the plans for the expansion of the METRORail system undergoing several revisions in the years that followed. All planned expansions exist within Houston’s city limits and are expected to ultimately reach the cities two major airports, George Bush International Airport and William P. Hobby Airport. Further down the line it is the authority’s intention to roll out further expansions to the network that will service many of Houston’s well populated suburbs.

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“The need to design, construct and open new transportation infrastructure is very real and is a puzzle that METRO is taking the initiative on solving” At the heart of METRO’s growth plans for the future is its large transportation and infrastructure plan, dubbed METRO Solutions, which it expects to have complete by 2020. The plan calls for a number of advances to Houston’s transportation network, including 30 miles of Light Rail

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Transit. This will be made up of the University Line from Hillcroft to the University of Houston, Texas Southern University, and eventually the city’s Eastwood Transit Center. Light Rail plans that fall under the METRO Solutions plan also includes the aforementioned extension of the Red Line


METRO

and creation of the proposed Southeast, East End and Uptown Lines. METRO Solutionsâ&#x20AC;&#x2122; plans also call for 28 miles of Commuter Rail Transit (CRT) to be introduced in and around the city, the introduction of 40 miles worth of Signature Bus Service/Suburban Bus Rapid Transit routes, the building of ten new transit facilities, including five transit hubs and four Park and Ride lots, and further conversions of roads and highways to transform them into dedicated HOV lanes. All of this has and will continue to require a massive amount of work, however the needs of the city requires it, and these needs are simple. Findings commissioned by METRO

indicate that the population of Houston has the potential to increase by up to 3.5 million people by 2030. The need to design, construct and open new transportation infrastructure is very real and is a puzzle that METRO is taking the initiative on solving.

Metropolitan Transit Authority of Harris County (METRO)

713-635-4000 info@ridemetro.org www.ridemetro.org

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Mangaung M

The heart of

A spate of important developments, initiatives and infrast living up to its position as the â&#x20AC;&#x153;heart of South Africaâ&#x20AC;? a words by

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Will Daynes


Municipality

f South Africa

tructure projects are contributing to the city of Mangaung and 2014 will see the â&#x20AC;&#x153;city of rosesâ&#x20AC;? blossom further still research by

Stuart Platt BE Monthly [ June 2014 ]

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Free State Botanical Gardens in Bloemfontein

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Mangaung Municipality

ith a name meaning “place of leopards” in the language of Sesotho, Mangaung, also widely referred to as Bloemfontein, is the capital city of the Free State Province of South Africa and one of the country’s three national capitals. Officially founded in 1846, “the city of roses”, as it is affectionately known due to both the abundance of the flowers in the city and its annual rose festival, is today home to approximately 370,000 people, while the Mangaung Local Municipality boasts a population of more than 645,000. Last year was a very significant year for the city of Mangaung in that it reaffirmed its position as being what it proudly dubs, “the heart of South Africa”. It has long been the belief of the city that it is mandated to

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tackle the problem head on and bring an end to underground pipe leaks that have cost Mangaung considerable sums of money in years gone by. As with any major city, Mangaung also has to deal with the issue of crime, particularly that which occurs within its booming Central Business District. To ensure the safety of its inhabitants and visitors, the city has gone about installing CCTV cameras at strategic points in all major towns and at several entertainment hot spots. Together with its established law enforcement centres and continued traffic police visibility, this has helped Mangaung in its fight against crime. In its efforts to make Mangaung the ideal city in which people can live, work and invest, the municipality has developed an extensive

“It has long been the belief of the city that it is mandated to deliver excellent service to the men, women and children who reside there” deliver excellent service to the men, women and children who reside there. Not unlike other municipalities across the country, Mangaung faces daily service delivery challenges, for instance backlogs in areas such as housing, water, sanitation and unemployment. In order to combat said issues the municipality has identified a number of possible interventions, for example identifying areas of land in areas such as Vistapark, Ceciliapark, at the airport and Hillside View to accommodate the rising demand for housing. Water pipe leaks have historically been a source of lost revenue within the city. To address this, South Africa’s Minister of Water Affairs has committed to assisting it in financing programmes designed to

Spatial Development Framework (SDF), which is aimed at improving the lives of Mangaung residents, while attracting investors and those seeking better opportunities – from businesses and schools, to pleasure and leisure pursuits. The projects earmarked under the SDF include the N8 Corridor Development and the Bloemfontein Airport precinct development. New industrial development and human settlements will predominantly be taking place towards the east of Bloemfontein, particularly along the vicinities of the N8 Development Zone. The municipality promises that the N8 Corridor Development Project will be one of the most significant investment opportunities that will guarantee jobs to many residents

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Navigating Commercial Law Poswa Incorporated (Poswa Inc) is a medium-sized wholly black-owned law firm committed to breaking new ground in commercial law, balancing close attention to detail with a wider worldview. The firm was established in March 2010 by its founder and CEO, Luyolo Poswa. It is a progressive law firm which provides services across all aspects of commercial law, including the structuring of transactions, negotiation and drafting of agreements, legal opinions and legal due diligences. Poswa Inc also offers conveyancing and notarial expertise as well as general legal advice and litigation through commercial, civil and labour spheres. Poswa Inc’s head office is based in Johannesburg and they have expanded their national footprint to operating offices in Bloemfontein and Durban. Poswa Inc’s proven track record spans over 90 years of combined legal experience in the corporate, private and financial sectors – Through specialist insight and personalized service, they focus on tailor made legal solutions that broaden business horizons.

Johannesburg office: Bloemfontein office: 1st Floor Block A Palm Park 1 Sandton Close 2 Suite 7 Cnr. 5th Street and Norwich Close 94 Kellner Street Sandton Westdene Johannesburg Bloemfontein Tel: +2711 783 8877 Tel: +2751 430 0296/7

www.poswainc.co.za

Durban office: Business Centre 2 Ncondo Place Ridgeside Umhlanga Ridge Durban Tel: +2731 830 5369


Mangaung Municipality

and contribute towards building a better life for all. The envisaged development at Naval Hill is expected to become one of the municipality’s world-class recreational facilities and tourism destinations that will give the local economy a great boost in the years to come. Similarly, through the ongoing development of the Bloemfontein Airport, Mangaung is working hard to position itself as one of a number of emerging aero-cities in the country. The proposed Bloemfontein Airport precinct, to the south of the airport entrance, is a multi-billion rand infrastructure and property development project that has already commenced with the implementation of the first phase. The project comprises the development of an international convention centre, a government complex, a regional shopping mall, and an array of sustainable housing typologies. It is being viewed as an opportunity for discerning property investors to widen and improve their investment portfolios. The municipality is keen to stress that youth are the core of its economy and its future prosperity, hence their development is a priority for Mangaung. Whatever the plan, the municipality wants to ensure that these plans do not exclude young people, as well as women and children. Some of the important projects being undertaken include a new furniture factory run by youth, firefighters training at Ehrlich Park Fire Station and youth centres.

“The municipality is keen to stress that youth are the core of its economy and its future prosperity”

poswa During January 2014, Mangaung Metropolitan Municipality appointed Poswa Inc as its sole legal counsel for the establishment of its DMTN Programme and inaugural note/ bond issue. The establishment of its DMTN Programme will facilitate an alternative way of raising finance as opposed to borrowing from commercial banks through the medium of conventional loans and facilities and will create a platform through which the Municipality can issue notes/bonds in the domestic market. Poswa Inc is proud to be instrumental in the establishment of the DMTN Programme for the Municipality and looks forward to an on-going relationship with the Municipality. www.poswainc.co.za

Aerial view of the City of Bloemfontein

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Bloemfontein Supreme Court

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Mangaung Municipality

“Mangaung Municipality aims to work continuously in order to fast-track service delivery and grow the economy of the city”

To augment its vision for Currently, the city’s flagship Did you know? the city, the municipality has housing project is the soonalso commenced with several to-be-occupied Brandwag 370,000 huge water and sanitation Housing Project, a mixed Population of the housing project for middle projects. It is also improving city of Mangaung income earners who are not the city’s road infrastructure, which is particularly important eligible for state housing but 645,000 because Mangaung is a cannot access bank loans. Population of the central link for South Africa. Land has also been earmarked Mangaung Local Specific individual projects in certain areas in and around Municipality include the construction of Mangaung for future mixed the Naval Hill Water Reservoir development initiatives, which to supply water to the east of will encompass residential Bloemfontein, the extension units ranging from low income of the capacity of the Longridge Reservoir, and rental to social and commercial initiatives. and road rehabilitation, construction and The city’s tourist attractions include maintenance of major roads including Naval Hill, whose status was further elevated Andries Pretorius, Eeufees, Church, Haldon upon the unveiling of the Nelson Mandela and Fort Hare Streets. statue last year and an overhauling of the An amount of R436 million has been area to make it even safer. Naval Hill gives budgeted for roads and storm water, tourists a bird’s eye view of the sprawling sanitation, waste management and water city of Bloemfontein. projects for the period of 2013/14. Through Through its various ongoing programmes, these projects and many others, 2,823 job Mangaung Municipality aims to work opportunities have been created, with 802 continuously in order to fast-track service of those being permanent. delivery and grow the economy of the city. The municipality is particularly proud that Above all else it will ensure that all the strides since the dawn of democracy, it has been made in 2013 do not fall away and that 2014 able to provide more than 176,000 stands and beyond will be even better! or households with access to sanitation, while more than 155,000 stands have access Mangaung Municipality to basic water supplies in Bloemfontein, Botshabelo and ThabaNchu. 0800 111 300 One of the objectives in terms of housing info@mangaung.co.za developments is to earmark the city for social www.mangaung.co.za integration, eradicate informal settlements and consolidate dysfunctional settlements.

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City of B

City of en

Bathurst is a city with a great past as one of and a great future: though it may be experi the way it deals with them words by

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John Oâ&#x20AC;&#x2122;Hanlon


Bathurst

nterprise

the New Worldâ&#x20AC;&#x2122;s first permanent settlements, iencing a few little local difficulties just now, m is part of its success story research by

Stuart Platt BE Monthly [ June 2014 ]

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ucked into a corner of Chaleur Bay in north-eastern New Brunswick (NB), Bathurst claims to be the only truly bilingual municipality in Canada, with exactly half its 12,000 population claiming English as their first language, half French, and most of them comfortable with either. The body of water to the north may have been named with irony – this is northern Canada and much of the year chaleur is in short supply. City Manager and Treasurer André Doucet talking to us in mid-March felt ready for spring to come: “We just had a storm that left 50 centimetres of snow – and over a single weekend in January we had 85 centimetres – it must be climate change!” However even cold weather is good for the local economy. Bathurst is a mecca for snowboarders and their local club with 800 members is the largest in the province. 4-wheel drive enthusiasts also love the snow though they come all year round. Between them, and together with people who take quieter enjoyment from the dramatic beauty of the NB north coast, they bring in a lot of revenue to local businesses and hotels. Doucet wishes the secret of the region wasn’t quite so well-kept, and that he had more resources to promote its many attractions. “A brochure is ok as far as it goes but we need to have more stuff out there on Facebook, Twitter and YouTube.” Stuff like the excellent series of YouTube shorts that you can find under Experience Bathurst in which French

T

“A brochure is ok as far as it goes but we need to have more stuff out there on Facebook, Twitter and YouTube”

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On Chaleur Bay


City of Bathurst

“Some people said Bathurst would be a ghost town after the mine closed but that has not happened” speaking Monique and English speaking Meredith try out just about all the available activities from luxury hotels to rock climbing. The city’s biggest revenue source is from property taxes. NB is unique in Canada in not collecting these on a local authority basis – instead the provincial administration in Fredericton assesses and collects the taxes and distributes them to the municipalities in twelve monthly portions. The loss of control over assessment is more than compensated for by not having to do all the admin, and an added advantage is the removal of any local pressure on City Hall. The glory days of mining, which used to sustain the area, finally petered out last year with the closure of Xstrata’s Brunswick mine, which has had several owners following its opening in 1964 and in its heyday was one of the world’s largest and most profitable zinc mines. At the peak of production it employed more than 2,000 people, and still supported 800 at the time of closure in well paid jobs that are proving hard to replace, says Doucet. The city is now pinning its hopes for a revival in regional mining on local company Trevali, which owns the Caribou mine and mill, Halfmile mine and Stratmat polymetallic deposit all located in the Bathurst Mining Camp of northern New Brunswick. Trevali plans to open three new lead/zinc operations at its Caribou Mill complex just 20 miles to the west of Bathurst in the later part of this year or early in 2015. This could create

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inspired Your weekly digest of business news and views

www.bus-ex.com

Eddy Group Limited, a Maritime based wholesale distribution business, has been a construction industry partner for over 100 years. The fourth generation family business with 7 locations throughout New Brunswick and Nova Scotia takes pride in providing quality products, customized solutions and service to our industrial, commercial and residential customer base.

www.eddygroup.com

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up to 300 local jobs and bring back some of the skilled miners that have left the region to work in other parts of Canada, Doucet points out. “These guys have been mining all their lives: their homes and families are here but they have to go where the work is – they would definitely rather work in NB though!” Nevertheless the city needs to address unemployment as a matter of urgency. Northern NB has always been an area of high unemployment, with many seasonal forestry and fishery workers in the Acadian Peninsula. “A few years ago we hired an economic development officer to attract businesses to the city, to bring new business in and make sure the existing businesses keep operating and maintain the existing jobs. We don’t want to lose what we already have!” The city works in coordination with the Province of NB’s economic development department, he says, however it is hard to compete with cities


City of Bathurst

Bathurst’s Bandstand

“A few years ago we hired an economic development officer to attract businesses to the city, make sure the existing businesses keep operating and maintain the existing jobs” like Dieppe which are close to the Greater Moncton International Airport. This may entice high tech firms, but there are some local success stories in other industries. Metal fabrication is one of Bathurst’s strengths, but one of the city’s strongest businesses is Industrial Rubber Company (IRC). When German defence contractor FFG was awarded a $100 million contract for the conversion of Canada’s Leopard 2 tanks into armoured engineering vehicles (AEVs) it selected IRC, which has vast experience

manufacturing parts for military vehicles, as its main Canadian partner on the project. As one government minister commented when the deal was announced in July 2012: “This agreement is excellent news because it will create a number of high value jobs at IRC and will generate economic spin-offs that will benefit all of Atlantic Canada.” Success stories like these, where high value jobs are brought into the city, are music to André Doucet’s ears. He is no less happy to note that some new businesses are being

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attracted to the area. Regulation changes in Canada on April 1 allow licensed producers to grow medical marijuana on a commercial scale. Health Canada estimates the North American market should top $5 billion-plus by 2016. That being so the decision by British Columbia company International Herbs to buy a former textile mill at Atholville just 50 miles west of Bathurst could be significant for the entire region. Just a quarter of the 400,000 square foot facility will be used initially, allowing plenty of scope for expansion, however it will bring 200 new jobs to the area from the start, says Doucet. All this is good news for Bathurst, and the city is doing its utmost to push economic development. That should not eclipse the best practice it has demonstrated in more mundane activities. Doucet is particularly proud of its green credentials. “We have invested to make our buildings more energy efficient. We have a civic centre with two ice rinks that was a big energy consumer, and with all the retrofit we did in that building we are saving $55,000 a year in power!” This was achieved through simple measures like changing to a more energy-efficient boiler and installing low energy lighting – but it served as a benchmark for other municipalities and contributed to Bathurst’s recognition as one of the Partners for Climate Protection within the Federation of Canadian Municipalities (FCM), which represents more than 2,000 authorities, only 230 of which have been recognised throughout Canada, and in NB only 17. It is a very rigorous programme that requires five ‘milestones’ to be passed

“We needed a plan of action and decided to use the gas tax 100 percent on road construction and repairs”

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City of Bathurst

– Bathurst passed its final milestone last year. The city has shown real leadership here – for example switching all the municipal lighting it controls over to LED. Most of the street lighting infrastructure is owned by company NB Power, and the utility is now following suit. Another huge achievement came through smart thinking. Bathurst has a network of more than 100 kilometres of roads to maintain. This is a challenge, Doucet admits, but the Canadian government has announced that its gas tax fund (GTF) that provides NB with over $225 million a year (Bathurst gets around a million of that). That is a great help but then the municipality was faced with a new requirement to spend $40 million over the next ten years to meet new government wastewater treatment standards. GTF can be spent on wastewater treatment but there was no way it would cover that level of investment. “We needed a plan of action and decided to use the gas tax 100 percent

on road construction and repairs – the high investment on water treatment was called for because of the high risk category we fell into but by combining the roads programme with water and sewage replacement below street level the risk assessment came down and the investment to a more manageable $4 million.” Expect to hear more about this city, then. “Some people said Bathurst would be a ghost town after the mine closed but that has not happened,” says André Doucet proudly. With him to fight its corner, aided by the likes of the lively Monique and Meredith, Bathurst will soon be booming again.

City of Bathurst

(506) 548-0400 city@bathurst.ca www.bathurst.ca

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Barrick Gold

Concentratin

A combination of a large resource, impressive means that the future looks very bright words by

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Will Daynes

research


d - Lumwana

ng on copper

cost savings and a recently updated mine plan t indeed for the Lumwana copper mine

research by

Robert Hodgson BE Monthly [ June 2014 ]

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Barrick Gold - Lumwana

ocated within one of the most prospective copper regions in the world, Barrick Gold’s Lumwana copper mine is one of Zambia’s best examples of a prosperous mining operation. Situated within a stable jurisdiction with a long history of mining and boasting established infrastructure, Lumwana possess a large, high potential copper deposit and a multi-decade reserve life. Ore from Lumwana, which is predominantly sulphide, is treated through a conventional sulphide flotation plant, producing copper concentrate for smelting. On site, an extensive mining fleet and array of equipment can be found at work. This includes ten Sandvik DK45 drills, three Cubex DR560 drills, ten D10 track dozers, six CAT 16M motor graders, three 777

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This concentrate is only sold on a domestic basis and is not subject to the ten percent duty imposed on all copper concentrate sold internationally. Furthermore, the longterm agreements the mine has in place help ensure that its fill production can be processed, meaning smelter capacity is not an issue for Lumwana. Production at Lumwana in 2014 is currently projected to reach similar levels to that experienced in 2013. Meanwhile, the mine is pursuing a number of initiatives to further improve on cost reductions it has achieved to date. The mine has made significant cost savings through the optimising of its mine plan to smooth our annual stripping requirements, by rationalising contractor requirements and headcount, by in-sourcing maintenance labour

“Average concentrate grades for 2013 were recorded at 31.5 percent, while the processing cost was calculated at $3.53 per tonne” water trucks, three CAT 994/993 front end loaders, 31 Hitachi 4500 dump trucks and six Hitachi 5500 hydraulic shovels/excavators. A 20MTPA design copper concentrator has been optimised to 24.5MTPA at the mine site. In 2013 Lumwana was responsible for producing approximately 260 million pounds of copper at an average copper recovery rate of 93.4 percent. Average concentrate grades for the year were recorded at 31.5 percent, while the processing cost was calculated at $3.53 per tonne. As of 31 December, 2013 proven and probable copper reserves at the mine were put at 6.6 billion pounds. Copper concentrate from the mine is sold under long-term sales agreements to three smelters based in Zambia, Chambishi Copper Smelters, Konkola Copper Mines and Mopani.

and by renegotiating various key contracts. At the same time Lumwana’s management team have successfully improved fleet productivity by increasing LMC tonnage by 18 percent compared to 2012 and achieved efficiency improvements by reconfiguring the mine’s organisational structure and launching an improved Management Operating System. In total management believes that the aforementioned focused improvements all contributed to a $100 million cost reduction in 2013. Today, approximately 90 percent of Lumwana’s workforce is Zambian, a figure that means that the mine falls in line with not only the country’s local employment plan, but also Barrick’s Community Relations Management System. Indeed Lumwana has a long history

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Barrick Gold - Lumwana

â&#x20AC;&#x153;Management believes that the focused improvements all contributed to a $100 million total cost reduction in 2013â&#x20AC;?

of working together with local communities in order to foster sustainable, long term success. Examples of initiatives taken by the mine can be placed into three categories, those being health and safety awareness, education development and community infrastructure. In the first category the mine has provided vital support to the Lumwana Community HIV and AIDS Task Force, and has contributed towards road safety education, community-led water

and sanitation, and gender-based violence awareness programmes. On the educational side of things Lumwana supports countless community schools and public libraries, funds primary and tertiary education scholarships and has successfully maintained the on-site Lumwana Mine School since 2009. In recent years the mine has also provided assistance in the drilling of boreholes for clean water, the

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Barrick Gold - Lumwana

“Today, approximately 90 percent of Lumwana’s workforce is Zambian”

commissioning of by-pass roads for haul trucks, road safety awareness campaigns and population influx management. Lumwana is also well regarded for its efforts towards fostering wealth creation. It has done so to date through the creation and support of enterprises promoting literacy in the community and the empowerment of women as earners and savers. Lumwana also supports several Agri-Food Innovation Partnerships as well as small and medium business development. In the latter it has put in place the Lumwana Business Incubator Programme as well as facilitating international joint venture investor brokering and Access to Finance partnerships. Long before the turn of the year the mine identified a number of growth opportunities for 2014 which it continues to pursue as we speak. Again it has placed these opportunities into three separate categories, which are enabling people, process initiatives and what it calls its business improvement pipeline. In the first instance the mine plans to ensure its people are well supported through a combination of training and capacity building, and communications and change management. In order to embed significant process improvements the mine has been working hard to streamline the shift handover process and enhancing the daily mine planning and review processes. It also plans to launch detailed project management best practices, which will assist in planning, delivering and tracking key 2014 priority projects, and identify the mine’s next wave of longer-horizon initiatives.

The new mine plan that Lumwana is working under is designed to maximise free cash flow in the current economic environment and preserve optionality. The goal of Lumwana’s management is to continue to improve the mine’s productivity at a time when the outlook for long term copper prices remains strong thanks to continued demand growth and supply-side challenges. What this collectively means for the mine is that it is very well positioned for what the future may bring.

Barrick Gold - Lumwana

+1 416 861-9911 info@barrick.com @barrickgold www.barrick.com

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Nord

Growth on a

One of the most geographically diversi Nordgold is looking to follow up a prospe words by

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Will Daynes

research


dgold

global scale

ified companies in the mining industry, erous 2013 with further growth this year

research by

Robert Hodgson BE Monthly [ June 2014 ]

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stablished in 2007, when Severstal Group, one of Russia’s most successful metals and resources corporations, decided to move into the gold market, Nordgold has since become recognised as one of the industry’s fastest-growing gold mining companies with operations based in West Africa, Kazakhstan and Russia. It was in 2008 that Nordgold, which until then had only been operating in the CIS, acquired a controlling stake in High River Gold Mines Ltd, a Canadian company which held a number of assets in Russia as well as in Burkina Faso. The Taparko mine and Bissa exploration project, both in Burkina Faso were among these assets. Following the positive results Nordgold achieved with turnaround project at Taparko the company decided to proceed with the development of Bissa. The secret to Nordgold’s rapid rise has been a combination of acquisitions and organic investment. Today the company operates nine mines, has one development project, five advanced exploration projects and a diverse portfolio of early exploration projects and licences. Together these assets not only provide employment for over 10,000 workers but also contributed to Nordgold’s gold production increasing to 924,000 ounces in 2013 from 717,000 ounces in 2012. Nordgold’s mission, which clearly it has taken great strides towards achieving already,

E

“The company insists that success for Nordgold is about more than just gold and that its values run much deeper than effective gold production”

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Lefa Mills


Nordgold

“One of the company’s major targets for this year is for all of its operating mines to be free cash flow positive by the end of 2014” is to create consistent growth throughout its operations, thus delivering value to its shareholders and all other stakeholders. Nevertheless, the company insists that success for Nordgold is about more than just gold and that its values run much deeper than effective gold production. In addition to this, it constantly strives to ensure that its employees know that their safety is the company’s utmost priority, that it earns and retains the trust of the investment community, that it contributes to the communities in which it operates and that it does its part in looking after the environment. While it is a young company, Nordgold has grown very rapidly and in doing so has been forced to meet the challenges that any expanding mining company would face head on. In the time that it has done so, Nordgold has embraced the realisation that, in order to truly fulfil its potential and reach the next stage of its development, it needed a clear vision as to how it honours the values it is committed to. As the employer of thousands of men and women, Nordgold understands all too well that it bears the responsibility of ensuring their safety and providing a good quality of life for them and their families. Nordgold states that one of its aims on a daily basis is to provide an environment in which its people can realise their potential in conditions that are both comfortable and safe. The company seeks to

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Nordgold

be an employer of choice in the communities in which it operates and to hire the very best people in the industry. The hiring of individuals, particularly those from within local communities, plays its part in Nordgold’s aim to support community development. Being a responsible member of the local communities in which the company operates is a central merit of the way it does business. Indeed, it sees it as a vital part of its role to invest in those communities and help them develop. As part of its efforts Nordgold brings in electricity, water, infrastructure and transport. In many areas, it also assists the local population in gaining access to education and health services. The company is focused on mutual respect and dialogue with local communities and government organisations, and meets all of its legal and tax obligations. Last, but by no means least, is the company’s commitment to taking care of the environment. Nordgold’s recognises the fact that it operates within a hazardous industry, however in doing so it makes every effort to take the utmost care in ensuring that it causes little if any damage to the environments in which it works.

Burkina Faso - support of local business initiatives - weaving

lycopodium Lycopodium has a significant success record in the development and commissioning of projects, often pioneering the introduction of modern process plants and associated technologies to remote and logistically challenging locations. The company has an international reputation for delivering projects which consistently meet or exceed all project criteria and performance targets. Lycopodium’s experience in Burkina Faso and the West African region comprises over 30 projects, including the Bissa Gold Project for Nordgold. This provides Lycopodium with the advantage of recent and relevant project development experience in West Africa, including knowledge of logistics, contractors, and community. The company has been active in the mineral processing industry for

over 20 years and has designed and built processing plants starting at throughputs from 350,000 tpa to 55 Mtpa. Their history in mineral processing and mining, coupled with the proven capabilities of their low cost value-adding design and drafting, provides the ability to offer their client a cost effective project outcome. Lycopodium has also produced a unique and successful model for the execution of projects in Francophone Africa, which has been developed over a number of projects. Lycopodium employs dual French/English translators with local capabilities and connections, ensuring the smooth delivery of information and clear communications to facilitate the successful delivery of projects. www.lycopodium.com.au

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Mining

Drilled piles

Since 1992, FTE Drilling maintains a constant and active presence in the mining sector in Canada and West Africa. Whether it is for exploration projects or for mines already in exploitation, FTE Drilling offers services ranging from core sampling (RAB – RC – DD) to grade control to help mines increase their productivity.

The economic development of Canada involves the construction of infrastructure in very difficult places, sometimes. That’s why, over the years, our clients are asking us to meet challenges. FTE Drilling has developed an enviable expertise in vertical and angle piling or caissons in small and large diameters. From the new construction to the maintenance of existing infrastructure, in coastal environment as in the heart of the most major centers, FTE Drilling is proud to contribute to the expansion and maintenance of Canadian work.

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Nordgold

Vegetable production at Bissa community

“A very significant key to our success over the last 15 years has been the renewed partnerships with aboriginal communities” One of the company’s major targets for this year is for all of its operating mines to be free cash flow positive by the end of 2014. It intends to achieve this by applying a forensic approach to cost management, diligent capex spend and working capital optimisation. Despite significant recent gold price volatility, Nordgold consolidated operations remained FCF-positive in 2013 with consolidated all-in sustaining costs reported at US$1,062 per ounce for the same period. A combination of Nordgold’s flexible capex, estimated to be US$200 million

in 2014, reduction of general and administrative expenses, improvements in operational efficiency, as well as the on-going implementation of Nordgold’s Business System, which is expected to add US$55 million to 2014 EBITDA, are keys to ensuring the company remains focused on driving down costs. Nordgold’s efficiency programmes are also showing positive results with growing plant and fleet productivity at key mines, while the company has also successfully reduced consumption of key materials and

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Bissa crushing

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Nordgold

â&#x20AC;&#x153;Going forward the company will seek to develop the existing pipeline of high quality greenfield and brownfield projects through focused exploration expenditureâ&#x20AC;? administrative expense. Furthermore, it has significantly strengthened its senior operational management team, making new hires with proven expertise. This is expected to help Nordgold to progress with its on-going efficiency improvement initiatives. Nordgold has an extensive pipeline and a proven track record of greenfield development. A perfect example of this would be the Bissa mine, which was launched on time and on budget and has significant exceeded initial production forecasts. Going forward the company will seek to develop the existing pipeline of high quality greenfield and brownfield projects through focused exploration expenditure. To supplement the organic growth pipeline, Nordgold will also seek to capitalise on other opportunities through the evaluation of potential purchases of premium-quality reserves and resources, which comply with its project criteria, to further enhance its reserve base.

Nordgold

+31 20 406 4480 va.bogomolova@nordgold.com www.nordgold.com

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Resource G

Steady going at

One of the most strategically important coal res owned by Resource Generation Ltd is on words by

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[ June 2014 ] BE Monthly

John Oâ&#x20AC;&#x2122;Hanlon


Generation

t Boikarabelo

sources in South Africa, the Boikarabelo project n track to produce its first coal in 2015 research by

Jeff Abbott BE Monthly [ June 2014 ]

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One of the rail link sites

he Boikarabelo field in South Africaâ&#x20AC;&#x2122;s Waterberg region, to the north of the country and close to the border with Botswana, is an outstanding coal asset by any standards. An extensive coal seam, between 120 and 130 metres in depth and containing zones of varying quality thermal and soft coking coal, lies only 20 metres below the surface in terrain that is flat and easy to get at. It is the ideal site for an open pit mine: the shallow overburden means that a small fleet of equipment can produce a lot of

T

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coal. Costs will be relatively low, and multiple mining benches will provide the flexibility to extract the coal quality required for a variety of markets, from thermal coal used in power stations in Asia where capacity is confidently expected to continue rising over the coming decade to South Africa itself where there is an insatiable demand. Nevertheless, with the international coal market currently more nutty slack than briskly blazing, this is a time when only the most outstanding new projects can attract funding.


Resource Generation

“We hope to complete our funding by June of this year and we are concentrating on funding the coal handling and preparation plant (CHPP)”

When we last reported on the Australian and JSE joint listed mining company Resource Generation (ResGen) its focus was on locking down its funding arrangements, and this remains its principal challenge today despite solid progress to date. “We hope to complete our funding by June of this year,” says Managing Director Paul Jury. “We are concentrating on funding the coal handling and preparation plant (CHPP). If we can achieve that we will be able to stick to the development programme and start producing coal at the end of 2015.”

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At around $200 million the CHPP is the largest capital item for the Boikarabelo project. In November the company took a major step when it agreed to terms and the design and supply of the plant. Earlier this year it put another piece of the jigsaw in place with the agreement of a $65 million infrastructure loan facility from Noble Resources International, a subsidiary of Singapore-listed global agricultural and mining supply-chain manager Noble Group, which as part of the agreement has undertaken to purchase three million tonnes of domestic middlings coal every year, for eight years after production commences. This loan is repayable by 31 March, 2016, by which time the mine is expected to be in production and generating cash flow, and is in addition to a $55.3 million loan from Noble, agreed in July 2013, for the construction of the rail link from Boikarabelo to the existing Transnet Freight Rail network. The CHPP will crush, screen and grade the coal, stockpiling it into two main categories. Coal for export will be loaded onto rail trucks

“We will be extending the camp over the coming six months to accommodate 1,300 persons”

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for transportation to the ports, while thermal coal for domestic use in the power generating stations of Eskom in Mpumalanga will be supplied direct, also by rail. Jury is hoping to resolve the remaining funding issues sooner rather than later so he can concentrate on the work of building the mine, the processing plant and the associated infrastructure, including road and rail links. The project itself is one of the soundest on the planet, which is evidenced by the fact it has continued to remain buoyant at a time when others have been mothballed or abandoned. Boikarabelo is of strategic importance to

the economy of South Africa. The mine is only 40 kilometres by road from an existing rail system that provides access to domestic markets, and Transnet is making all efforts to ensure that its lines have the capacity to transport the coal to the ports of Durban, Richards Bay and Maputo, which all have potential to expand their coal capacity, for export shipments. The proposed new transKalahari railway (TKR) from Walvis Bay to Botswana will give access to the Atlantic though that is an early stage project that was only given the go-ahead by the partner governments in March.

â&#x20AC;&#x153;By mid-February we had worked 300 shifts without a lost-time injury (LTI) â&#x20AC;&#x201C; more than 135,000 hours!â&#x20AC;?

ResGen employees

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Resource Generation

Digging out the route for the rail link

The 40 kilometre rail link that persons. In addition to that we Did you know? ResGen is building to connect have started the earthworks Boikarabelo with the main line for our major roads. As part is also a long lead item, like the of the work we have to put in $200 million CHPP, however the ground work the provincial road bypass and Capital cost is well under way says Jury. In upgrade the main road going of the CPP fact the site is a hive of activity up onto the mine and prepare already, and that activity will a new access road for the mine. 300,000 tpa increase right up to the start of Those things are going forward Boikarabelo peak mining at the end of next year. and also we are starting the production “We have a lot of construction foundation works for the coal going on on site,” he says. “Apart preparation plant.” from the rail link, we have already The CHPP is scheduled to built the first stage of our construction camp. come on stream in the first couple of months By May there will be a good 200 people living of 2016, ready to receive the coal that will there and we will be extending the camp over be flowing from the mine – initially at a the coming six months to accommodate 1,300 rate of five million tonnes per annum (tpa),

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“Construction of the mine, and ultimately the mining of the coal, will not be possible without the support and assistance of the local communities around the mine” rising to more than 30,000 tpa by 2030. There’s no denying that the mine will have a massive impact on the local community over many years – the mine life is estimated at over 100 years. That being so, ResGen is keen to ensure that impact is seen as a positive one, and not just for South Africa’s

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economy and its energy industry. From two employees on site in February 2013 there are now 250 employees and contractors on site, and their safety is a priority Jury insists. “By mid-February we had worked 300 shifts without a lost-time injury (LTI) – more than 135,000 hours!”


Resource Generation

Aerial view showing the route of the rail link

And it is not just the direct employees that are benefiting. The management of the Boikarabelo coal mine holds regular rounds of community engagement meetings. An Executive Community Engagement Forum consisting of representatives from each community as well as members of the Boikarabelo mine management has been formed. Using the existing, traditional communication structures in each community the partners work together to keep each other informed of developments not just at the mine site but throughout the local community. One of the early priorities was to encourage and support the process by which local entrepreneurs and existing

businesses from Lesedi village and other local communities can supply the mine. Community engagement remains a priority for everyone at Boikarabelo. â&#x20AC;&#x153;Construction of the mine, and ultimately the mining of the coal, will not be possible without the support and assistance of the local communities around the mine,â&#x20AC;? Paul Jury acknowledges.

Resource Generation

+61 (2) 9376 9000 info@resgen.com.au www.resgen.com.au

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PowerS

Skating to

PowerStream is a relatively recently formed energy s leverage new technologies and business models in the words by

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John Oâ&#x20AC;&#x2122;Hanlon


Stream

o the puck

supply company but it has already shown the way to e interest of the customers and communities it serves research by

Candice Nice BE Monthly [ June 2014 ]

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PowerStream maintenance crew

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PowerStream

eregulation (better described as re-regulation) came later to Ontario’s energy sector than for example to the UK where it happened in the 1980s. The Energy Competition Act of 1998 (ECA) had as its ultimate goal the creation of a competitive market in the electricity and natural gas industries. Before then the power utilities supplying Ontario were discrete bodies located in various municipalities and in the years immediately following the act there was a frenzy of acquisition in the province, with Hydro One, one of the successor companies to the former provincial utility Ontario Hydro, buying up no more than 80 municipal utilities. In the cities too this was a good opportunity for other municipal utilities to come together to benefit from advantages

D

services provider, not just a larger electricity distribution company.” It was, and remains to this day, the largest voluntary merger between municipal electric utilities in Ontario. 2004 might seem recent enough but the energy landscape has changed more in the last decade than in the half century preceding the birth of PowerStream. Technology is a huge part of that, and the biggest change has been the introduction of advance metering infrastructure (AMI), or smart metering systems of which more later. Today PowerStream taps into Ontario’s diversified generation fleet, from which coal has been eliminated but which includes a balanced mix of nuclear, hydro and natural gas with a small but significant element of wind and solar. But consumer choice and expectation have

“We’d like to get a little bigger and achieve additional economies of scale” of scale in preparation for the new realities of the sector. To the north of Toronto, the municipally-owned utilities in York Region were no exception. Three utilities, Markham Hydro, Hydro Vaughan and Richmond Hill Hydro came together under a joint board, at which point it became clear that here were significant synergies of capital planning, operations and advocacy to be had if these utilities were brought together. Reporting to that board sat Brian Bentz, now President and Chief Executive Officer of PowerStream, the company created by the merger of the three utilities in 2004. “We had identified a number of synergies and made our business case,” he recalls. “We were aiming to take around 15 percent of costs out of the combined utility to create value, with the vision of building a full energy

both changed, especially around reliability and electricity pricing, says Bentz. The merger allowed PowerStream to grow big enough to specialise and invest in innovation and new technology, while staying small enough to be nimble; to move and adapt quickly, he says. “We’d like to get a little bigger. We have around 400,000 customers now, and would ideally like to be larger to achieve additional economies of scale.” Over the course of the last decade PowerStream has nevertheless been able to make real progress towards identifying and meeting the expectations of its customers. Customers in every community served by PowerStream have seen some rate benefit as a result of the merger, and some have seen distribution rates come down by a third. Reliability has improved and technology has given the

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C5


Loris Technologies

Instant recall Every business needs to know where it is and where it’s going: the FileNexus Document Management System from Toronto-based Loris Technologies gives instant access to essential data.

The business world is at once a messy place yet interconnected. Paper records, microfilm archives, maps, drawings, manuals as well as electronic files like host generated reports, client statement streams, emails, and voice recordings are all examples of the different formats that management and staff have to track and manage on a day-to-day basis. Worse still, if a business is in the process of expanding, the information from many new systems must also be absorbed, making the task more difficult still. Just imagine – no paper, no microfilm, no logging into multiple applications – everything instantly available at the click of a mouse. That’s what Loris Tech. has been offering its clients since 1980, when it was among the first technical developers in the field of document management software. Today, the FileNexus Enterprise Document Management System has been adopted for mission critical workflow and compliant record management archival by representative organisations employing millions of people worldwide in such sectors as financial services, utilities, healthcare, retail, government, manufacturing, and others. Just as is the case with all organizations, Utility companies need to keep track of their data and FileNexus supports a large number of them right across North America, says Sal Bevan, who has been Loris’s President for over 20 years. “It gets rid of traditional storage media sources and allows the information to be filed any way the client wants. Once we have captured it, we can automate the associated day to day workflow processes in such departments as finance, customer service, procurement, human resources and so on. The

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net result is faster business resolutions and a dramatic improvement in both staff efficiency and costs associated with the production, handling and storage of traditional media.” The cost savings of deploying FileNexus can be huge to any organization, in any department, for virtually any task. One financial services company, on their annual audit alone, reduced the need for outside auditors from seven people for five weeks; to two auditors for two days! A life insurance company reduced their contract service time from days to hours and required 50 per cent less staff to do so! Another major client, the north Toronto area PowerStream, grew from the merger of some six utilities each with its own systems. The original company, Richmond Hill Hydro, had implemented FileNexus, says Bevan. “We were able to take all of the information from these systems and bring it into one cohesive repository, so that wherever the information started from originally, it could now be found and managed instantly.” Today more than 30 of the 80 or so utilities in Ontario alone use the System, as well as many others across North America, he says. 416.252.4701 sales@loristech.com www.loristech.com


PowerStream

PowerStream linesman

“We offer conservation and demand management programs to residential and business customers”

citizens a taste at least of the benefits that it is certain to deliver going forward. “We have a implemented a 24/7 System Control Centre with state of the art technology leveraging our AMI system, understanding where outages occur by monitoring meters and voltage in real time, having automated distribution on the system, as well as automated switches and a SCADA system that integrates with all of these systems.” There is a cost to innovation and installing new technology but there would be no change

if no risk were taken. The most important investment, he says, is of time and commitment on the part of PowerStream’s people in changing their focus and approach. “It is leveraging what we have now, and learning the art of the possible. Getting people to think from the customer’s point of view making best use of the building blocks we already have in the system. The question to be asked is, how can we change that value proposition to our customers and think of new ways to provide new energy solutions for consumers?”

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Bentz’s vision is for PowerStream to become Ontario’s premier integrated energy services provider by 2020. The foundation is already in place, he says as he checks off some of the achievements to date: “We offer conservation and demand management programs to residential and business customers. We have built on our core distribution business. We have a rooftop solar generation fleet that soon will be delivering between 30 and 40 MW of power. We also operate a sub-metering business administered by a new affiliate

company, PowerStream Energy Services, a subsidiary.” To sum up his approach to innovation he turns to an aphorism coined by the great Ontario-born hockey star Wayne Gretzky: “We want to skate to where the puck is going to be, not where it has been!” Anticipating a 50 percent increase in demand over the coming 15 years, PowerStream is working with all the major energy stakeholders, especially large business customers and developers of residential and commercial property to forecast the shape

“There is no reason why developers shouldn’t be planning solutions that will give them greater control over their energy requirements”

Aerial view of solar panels at Barrie

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PowerStream

PowerStream system control centre

of demand to come. A big new phase but are close enough to Did you know? be included in planning. development will no longer Pulling these systems just apply to be connected to together and developing them the grid – it will be offered a 400,000 jointly with commercial partners comprehensive suite of energy PowerStream’s and communities was the services including conservation, current inspiration for PowerStream’s demand management, building customer base Micro Grid initiative which marks efficiency, energy efficiency, the next phase in the company’s energy benchmarking and also 50% aim of supporting smart grid energy production. There is no Expected development at the provincial reason, Brian Bentz stresses, demand level and raising awareness for why developers shouldn’t be increase in the the need to leverage innovative planning solutions that will give next 15 years ‘smart’ technologies in Ontario’s them greater control over their electricity sector. PowerStream energy requirements using the will be implementing the Micro technologies now coming on Grid in two phases, over a twostream. Solar, geothermal and year period. In phase one, the demonstration CHP are quite well tried technologies. Battery phase, working with GE and other technology storage on a project of civic scale and vehicle partners, the company will draw electricity to grid (V2G) systems, which make sense when from existing assets – a solar array, a wind a fleet of vans and trucks can be connected to turbine, a natural-gas generator, a lead acid the grid when parked and used as a storage battery and a lithium battery – in order bank, are emerging from the experimental

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Vehicle to grid (V2G) system

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PowerStream

“PowerStream’s forwardlooking Micro Grid provides a benchmark for utilities across North America and globally” to provide electricity from loads such as lighting, air conditioning and refrigeration at its head office location. Electricity generated from this combination of clean and renewable sources will also be used to power the company’s electric vehicle charging stations (which energise the company’s fleet of electric vehicles) and to maintain a steady charge in the Micro Grid’s storage batteries. “We want to demonstrate that we can optimise the use of battery technology, NG generation, renewable sources, and electric vehicles (both charging and potentially discharging the vehicle’s battery back into the load),” explains Bentz. Phase two will see the roll out of what has been learned from what is essentially an in-house operation to commercial customers. The longer term goal, he says, is to deliver packaged, scalable Micro Grid type solutions that can be deployed on a mass scale. PowerStream’s forward-looking Micro Grid provides a benchmark for utilities across North America and globally, but so does its management of the day-to-day job of keeping the lights on. As an example it has adopted Loris Technologies’ FileNexus enterprise document management technology to help it become more efficient, give better service and push out the boundaries as it evolves organisationally, picking up awards on the way. Most recently, on April 22, PowerStream was named one of “Canada’s Greenest Employers”. A few weeks earlier, the Electricity Distributors

Brian Bentz, President and Chief Executive Officer

Association (EDA) awarded the company its “Environmental Excellence Award” for the third time in six years, at the same time presenting Brian Bentz with a citation for his outstanding, dedicated service to the EDA and the industry over an extended period of time. In January the company was named as one of the “50 Most Engaged Workplaces in Canada” for 2013 for the second consecutive year, and in 2013, among many other recognitions, it was proclaimed “Smart Community Employer of the Year” in north Toronto.

PowerStream

1-877-963-6900 info@PowerStream.ca @PowerStreamNews www.powerstream.ca

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SaskPower

Catching

carbon SaskPower, the electricity generating authority of the Canadian province of Saskatchewan, is in the final stages of completing a truly innovative programme that has attracted the attention of environmentally aware power utilities from across the world words by

John Oâ&#x20AC;&#x2122;Hanlon

research by

David Brogan

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Boundary Dam power station

askatchewan covers a similar area to Texas, the largest of the United States barring Alaska, but while Texas has nearly 26 million people Saskatchewan is home to just 1.1 million. Some might say that would make it much easier to supply power to everyone, but considering the power grid covers the entire province from the 49th to the 60th parallel that is not necessarily so. “We have a significant infrastructure to maintain,” says the CEO of SaskPower Robert Watson, “and I think we do a good job.”

S

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This is a growing province. Its energy consumption increased last year by 6.4 percent so SaskPower has all the normal problems of keeping the lights burning over a huge area and in conditions that has just experienced one-in-60 severe winter conditions. To do that the utility has a mix of generating options on stream: no nuclear but 25 percent hydro and 30 percent gas fired generation. The strategy is to maintain and increase that diversity and there are a number of options here. Manitoba to the east has huge hydroelectric resources


SaskPower

“Five years ago SaskPower started to guarantee production from private suppliers: today it has eleven such agreements”

that Saskatchewan could buy into, and five years ago SaskPower started to guarantee production from private suppliers: today it has eleven such agreements including three gas plants and two windfarms in the scheme, and will continue to encourage small scale enterprises of this sort, through its Small Power Producers programme says Watson. However the lion’s share of power is, and will continue to be, provided by coal. The company’s three coal fired power stations, Boundary Dam, Poplar River and Shand, are

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TOGETHER, WE CAN HELP FLATTEN THE CO2 CURVE OUR TECHNOLOGY CAN BETTER CAPTURE YOUR CO2 EMISSIONS Shell Cansolv is continuing to lead efforts in the large scale commercial development of innovative post combustion CO2 Capture technology. Our system reduces CO2 emissions helping to achieve a lower carbon energy future. Want to know how? Talk to us: +1.514.382.4411 mail@cansolv.com www.shell.com/shellcansolv

Shell Cansolv


SaskPower

Poplar River power station

“There are hardly any logistical challenges or supply risk – we just bring it to the surface and burn it”

all situated on the southern Saskatchewan coalfield, right on top of the reserves that feed them. That is a considerable bonus for the company says Watson: “There are hardly any logistical challenges or supply risk – we just bring it to the surface and burn it.” Of course it is not quite as simple as all that. Coal is supposed to be in the descendant, being phased out by greener alternatives. But there are ways coal can continue to be viable in the face of ever more rigorous environmental legislation – indeed ways its disadvantages can be turned into positives. Saskatchewan is in front in America and globally in realising that vision. Its Boundary Dam Carbon Capture and Storage (CCS) project is leading the way to make a viable, technical, environmental and

economic case for the continued use of coal. The project is the world’s first and largest post-combustion capture, coal-fired energy generation project of its kind, a $1.35 billion partnership between the Government of Canada and SaskPower. At last, power utilities will be able to study the full integration of a rebuilt coal-fired generation unit with carbon capture technology into the operation of a commercial power station, resulting in lowemission electricity and at the same time producing carbon dioxide (CO2) for enhanced oil recovery operations or storage in a deep saline formation underground. In late 2010, SaskPower kick started the project by committing to rebuild the ageing Unit 3 boiler at Boundary Dam, installing a

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“It is to SaskPower’s credit that with the support of provincial and federal governments it has turned a problem into an opportunity”

Robert Watson President and CEO Before joining SaskPower in August 2010, Mr. Watson served as president and CEO of SaskTel. Prior to that appointment he held several senior executive positions in the Canadian communications industry. Mr. Watson is a graduate in electrical technologies from Ryerson University. He has attended the international executive development program at the INSEAD Centre in Fontainebleau, France, as well as the executive management program at Ashridge Business School in the United Kingdom. He also holds an ICD.D designation from the Institute of Corporate Directors. Mr. Watson currently serves as a Board Member for the Canadian Electricity Association, Energy Council of Canada and the Canadian Nuclear Association. In the community, Robert is a recipient of the Saskatchewan Centennial Medal, serves on the Prostate Cancer Canada Board and on the Board for One Life Makes a Difference.

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state-of-the-art steam turbine, extending the plant’s lifespan by 30 years and at the same time ensuring it can operate with the planned carbon capture system. Early the following year Babcock & Wilcox were contracted to carry out that work, which has proceeded much as planned, though rebuilding the power facility is taking a little longer than anticipated. “When you take these old units apart you don’t know what you are going to find,” admits Watson. SNC Lavalin and Shell subsidiary Cansolv Technologies Limited were selected in March 2010 to oversee EPC activities and in July 2011 SaskPower placed a $30 million contract with Stantec for engineering consultancy during the design and construction of the system. The good news is that the new facility for capturing sulphur dioxide (SO2) and CO2 will be ready to run as soon as the remaining work on upgrading the boilers and associated steam pipework has been completed. It is to SaskPower’s credit that with the support of provincial and federal governments it has turned a problem into an opportunity. Doing nothing was not an option. Canadian federal legislation being introduced in 2015 says that old coal-fired power stations must close down if they can’t meet new performance standards fixed at 420 tonnes of carbon dioxide per gigawatt hour. “Our unit is expected to achieve emissions in the


SaskPower

Shand power station

of the gas that is not reused stays region of 150 tonnes of CO2/ Did you know? underground permanently, so GWh. It will beat almost any gas one way or another it is all kept plant out there for emissions,â&#x20AC;? from re-entering the atmosphere. Watson enthuses. 5 million The project will thus transform Sulphur dioxide will be made Hours worked the Boundary Dam power into sulphuric acid and sold, without LTI station into a reliable, longand the CO2 that till now was term producer of 110 megawatts nothing but a nuisance will 1 million tonnes (MW) of base-load electricity start to earn its living. Using a of CO2 will be and the CCS facility will capture pioneering amine-based carbon captured annually approximately one million tonnes capture process developed by by Boundary of CO2 per year (the equivalent Cansolv, the gas will be sold Dam CCF to taking 250,000 vehicles off to the Canadian oil extraction the road every year). company Cenovus which will CO2 from the project not pump it 1.5 kilometres down used in enhanced oil production into its adjacent oil resources. will be stored in a safe, permanent deep Enhanced oil recovery (EOR) using CO2 is a saline formation, the nearby Aquistore well tried technology that Cenovus has been Project, hosted by SaskPower and run by using at its Weyburn facility for ten years: the Petroleum Technology Research Centre the CO2 molecules attach to the heavy oil, (PTRC). Research has shown that CO2 can be reducing its viscosity of the oil, forcing more safely and permanently stored in underground of it to the surface, where it is stripped out and geological formations: what the combination of recycled by the oil company. The proportion

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“We aim to create a real centre of excellence here in southern Saskatchewan”

what is the world’s first post-combustion coalfired carbon capture facility with Aquistore and the EOR plant will finally demonstrate is the commercial viability of carbon capture to energy authorities across the world. The final piece of the jigsaw is a joint venture with Mitsubishi Hitachi Power Systems located at SaskPower’s Shand facility. The Carbon

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Capture Test Facility (CCTF) which will test a range of carbon capture technologies and assess their viability. What makes the CCTF unique is that it has been sized to manage measurement uncertainty and is the only facility emerging from a full-scale project. It should be in operation around the same time as the Boundary Dam facility comes


SaskPower

Boundary Dam power station

on line. “We will get the project running this year and then we will run it for a couple of years to just ensure its integrity and precisely what level of efficiency we can get out of our carbon capture facility,” says Robert Watson. “We aim to test not only the technology itself but also the operating processes, the financial model and the regulatory model creating a real centre of excellence here in southern Saskatchewan.” Totally focused this year on completing not one but three big coal projects, he is looking forward to unveiling his vision and SaskPower’s leadership at a symposium to be held at the end of September in the Saskatchewan provincial capital Regina. It will

be a great opportunity not only to showcase SaskPower as a company but to pay tribute to the teams that have delivered the facility, to whom he gives all credit, and will not fail to mention their outstanding safety record with over 5 million hours worked without a single lost-time incident.

SaskPower

(306) 536-2886 info@saskpower.com @SaskPower www.saskpower.com

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power to the people City Power Johannesburg Powering an ever-growing metropolis is no easy task in anyoneâ&#x20AC;&#x2122;s book, yet this is the responsibility entrusted to City Power Johannesburg, one that it takes the utmost pride in delivering on a daily basis words by

Will Daynes

research by

Robbie Hodgson

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Johannesburg at sunset

ocated in the eastern plateau area of South Africa known as the Highveld, Johannesburg is country’s largest city by population and the provincial capital of Gauteng, which boasts the largest economy of any metropolitan region in all of Sub-Saharan Africa. The economic and financial hub of South Africa, Johannesburg is one of the world’s leading financial centres. Its importance to the country’s success is such that it is responsible for producing up to 16 percent

L

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of South Africa’s gross domestic product and accounts for as much as 40 percent of Gauteng’s economic activity alone. In a survey conducted in 2007 by MasterCard, Johannesburg ranked 47 out of 50 top cities in the world as a centre of commerce, the only African city to appear on the list. Responsibility for providing electricity to such an important metropolis rests with City Power Johannesburg, which like the country’s other utilities providers is run on self-funded business lines, receiving no annual grants


City power Johannesburg

“Johannesburg’s importance to South Africa’s success is such that it is responsible for producing up to 16 percent of South Africa’s GDP”

from the city, providing billable services direct to individual households. In supplying power to such a vast geographical area, City Power has divided the city into seven regions, these being Lenasia, Bryanston, Hursthill, Reuven, Siemert Road, Midrand, Roodepoort, and Alexandra. It is the company’s core mission to provide the city with a sustainable, affordable, safe and reliable supply of electricity, while also providing prompt and efficient customer service at all times, and undertaking its

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(PTY) LTD

(PTY) LTD


City power Johannesburg

business in an environmentally acceptable manner. As well as maximising the utilisation of its assets, City Power strives to exceed customer expectations and sustain and grow its revenue base. Providing everyone with access to electricity is of vital importance to the business and in doing so it hopes to cost effectively meet both national and international standards in electricity supply. City Power is committed to good corporate governance standards and complies in all material respects with the relevant principles of the King II code. Robust systems, policies and practices are in place to ensure that City Power conducts its business in line with global best practice. City Power’s client base is segmented into key customers, large power users, and prepaid, domestic, agricultural and commercial customers, with the domestic segment forming the majority of this customer base. To meet the needs of corporate customers City Power has concentrated on improving the wire network to reduce outages and power surges. Considerable progress has been made in recent years, with 70 percent of its customers now rating the service as good. For residential customers, and in line with the government’s commitment to ensure all South Africans have access to electricity,

“It is City Power’s core mission to provide the city with a sustainable, affordable, safe and reliable supply of electricity”

Electro Inductive Industries Electro Inductive Industries (Pty) Ltd (EII) is a well-established level 2 BBBEE company, manufacturing high quality SABS approved transformers (16kVA to 20MVA up to 66kV) and miniature substations for the African market. EII is expanding with exciting developments, including the addition of related products and is proud to be the contracted supplier of miniature substations to City Power. Another initiative is an extended marketing relationship with Polybox - an established supplier of polyethylene enclosures. Together they are developing renewable energy hot water supply systems, focusing on rural African areas to bring POWER FOR LIFE FOR AFRICA! www.electroi.co.za

Electrical insulators

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Specialist in Design & Manufacturing

Revive Electrical Transformers (Pty) Ltd, established in 1997, has grown to be one of the largest Distribution Transformers Manufacturers in Africa. Our success has been our dedication to our meet with our discerning customers’ requirements and to maintain our reputation to provide the market with competitive prices, excellent quality and on time delivery. Our Local customers include Eskom, the various municipalities, Siemens, Voltex, City Power, ARB, and contractors in South Africa. Our international Customers include Botswana Power Corporation, Mozambique, Swaziland, Namibia, Zambia, DRC, Ghana, Malawi and Lesotho. Revive Electrical Transformers is the first South African company to build cast resin dry-type transformers locally. Our Products: • Oil immersed distribution transformers • Cast Resin dry type transformers • Oil Mini-Substations • Cast Resin Mini-Substations • Neutral Earthing Resistors (NER), Compensators (NEC) and compensators with Auxiliary transformers (NECRT) • Single wire Earth Return transformers (SWER Transformers) • Amorphous core transformers • Custom Design Transformers

27 Waterval Road, Kliprivier, Randvaal, South Africa Tel: +27 87 135 0149 – Fax: +27 01 020 0852 20 Linroy Street, Steeledale, Johannesburg, South Africa Tel: +27 11 613 1508– Fax: +27 11 613 1510

Email: sales@ret.co.za | www.ret.co.za


City power Johannesburg REVIVE ELECTRICAL TRANSFORMERS Specialists in design and manufacturing of oil and cast resin distribution transformers and mini substations. RET has grown to be one of the largest distribution transformer manufacturers in Africa. Our success comes from our dedication to meet with specialized customer requirements and our reputation to provide the market with competitive prices , excellent quality and on time delivery. RET has numerous accreditations namely ISO 9001, ISO 18 000, ISO 14 000 and our products conforms and certified against local and international standards I.e., Eskom, SANS 708, IEC 60076 and SANS 60076  transformers specifications. www.ret.co.za

the introduction of 50 kWh basic free electricity per month in June 2002 has been very well received. In context, this enables a householder to run two 60 W lamps and a TV set for four hours per day for the month and consume just over half the free allocation. This was one of the first-and highest-initiatives in the country and is a considerable benefit to customers in poor communities. Each and every one of the company’s customers has access to a sophisticated call centre, which manages over 63,000 calls in the peak winter months and provides a singlesource service for all queries, applications and payments. City Power also has dedicated customer service managers in all its areas of operation. Regular customer’s forums are providing a valuable base for feedback and improved customer service.

City Power employee at work

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â&#x20AC;&#x153;City Power has a responsibility to the communities in which it operates to educate customers about the safe use of electricityâ&#x20AC;? Proud to be recognised as a dynamic employer, City Power is focused on providing the best working environment in its industry and operating at consistently high levels of productivity. This has enabled the company to attract the top talent in its field, joining a team of 1,800 employees.

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Attractive benefits and leading human resources practices and policies have positioned City Power as a preferred employer. All employees enjoy retirement fund and medical aid benefits, while the new and much-used employee wellness clinic offers primary healthcare and occupational


City power Johannesburg

Johannesburg night cityscape

health management in-house, working with leading private healthcare groups. Furthermore, as a utility provide, City Power has a responsibility to the communities in which it operates to educate customers about the safe use of electricity, the impact of cable and electricity theft and the importance of account payments. A major component of the companyâ&#x20AC;&#x2122;s social responsibility has been the introduction of free basic electricity. City Power has also invested a substantial amount in community empowerment projects in Alexandra, eastern Johannesburg, and a sprawling township that is undergoing a multi-faceted renewal phase. City Power

has outsourced certain tasks to companies in Alexandra and supported schools in the area with sports equipment to improve general health and reduce crime. An educational campaign aimed at learners covers electrical safety and prevention of vandalism of electricity equipment.

City Power Johannesburg

(011) 375 5555 info@citypower.co.za www.citypower.co.za

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Bringing neighbouring nations together COTCO The multi-billion dollar Chad/Cameroon Petroleum Development and Pipeline Project is helping to bring economic benefits and a better quality of life to some of Africaâ&#x20AC;&#x2122;s poorest inhabitants words by

Will Daynes

research by

Abi Abagun

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Oil tanker

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COTCO

andlocked within north-central Africa, Chad is among the world’s poorest countries, hindered by its desert climate and the fact that it has been ravaged by various civil wars during thirty of its forty years of independence. For decades the country suffered from a lack of economic investment, leaving it with one of the continents poorest infrastructure networks and a large majority of its adult population living below the poverty line. In more recent years however there have been several positive steps taken by a handful of regional and multinational companies to bring much needed work and development to Chad, and indeed to other surrounding countries.

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Ownership of the project comes in the form of a three-company oil consortium made up of ExxonMobil, which owns a 40 percent interest, and Petronas Malaysia and Chevron, which hold 35 percent and 25 percent stakes respectively. Furthermore, the governments of Chad and Cameroon hold a combined three percent stake in the pipeline portion of the project. A s well as conduc ting oilfield development and production on behalf of the consortium, ExxonMobil also provides project management services to pipeline companies Tchad Oil Transportation Company (TOTCO) and Cameroon Oil Transportation Company (COTCO). Both TOTCO and COTCO are responsible for pipeline activities in their home countries.

“Comprising some 300 oil wells that have been drilled in Chad’s south-western region, it is among the largest public/private development projects being carried out on the continent” One such step has been the development of the Chad/C ameroon Petroleum Development and Pipeline Project. A $3.7 billion undertaking, comprising some 300 oil wells that have been drilled in Chad’s south-western region, it is among the largest public/private development projects being carried out on the continent. The oil extracted from Chad is subsequently transported via a 640 mile underground pipeline, through neighbouring Cameroon, to an offshore export loading facility based eleven kilometres off the latter’s coast. The pipeline was completed, and first oil achieved, in July 2003, roughly one year ahead of schedule, with revenues beginning to accrue later that same year.

The Chad/C ameroon Petroleum Development and Pipeline Project is expected to generate, and in a number of cases has already generated, significant benefits for both Chad and Cameroon over its lifetime. For Chad, the consortium estimates revenues in excess of $2 billion to be accrued from a combination of royalties, taxes and other sources over its 25 year existence. Meanwhile, Cameroon can expect to see revenues from transit fees and taxes of up to $500 million coming into the country’s coffers. Both of these estimates have since been supported by research conducted by the World Bank. During the project ’s three-year construction phase it provided employment to more than 13,000 people from Chad and

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Reducing risk Improving safety Increasing efficiency

caverton aviation cameroon

Leading provider of premium aviation support services in sub-Saharan Africa Caverton Helicopters Ltd (CHL) was established in Nigeria, on September 2002 as an aviation logistics support company and forms part of the Caverton Offshore Support Group. Caverton Aviation Cameroon is a subsidiary of CHL and has positioned itself in Cameroon to provide safe, quality and efficient aviation support solutions for its clients in Cameroon.

The following are services currently offered by Caverton Aviation Cameroon: • Offshore & Onshore Logistics (Helicopters & Fixed-Wing) • Private Charters (inc. Air Tours & Aerial Photography) • Maintenance, Repair and Overhaul Services • Approved service center for Agusta Westland helicopters in Africa

T: +237 99890604, +234 01 270 5656 E: enquiries@caverton-helicopters.com www.caverton-helicopters.com


COTCO

Cameroon, a large percentage of whom were previously unskilled yet received training from the operators which in turn helped them to prepare for future job opportunities. At the same time, over $740 million in procurement fees has gone to support local contractors tasked with various responsibilities including truck transportation, civil works, vehicle maintenance and food catering. Since construction began more than $3 billion has been spent on goods and services from local businesses, with almost $2 billion spent in Chad and over $1 billion in Cameroon. Despite construction having been completed in 2003 the project’s operators have continued to prioritise the engagement of local and international supply partners to manage important activities and responsibilities across the operation. Cameroon for its part obtains its project revenue primarily through transit fees earned from the use of the export pipeline system which intakes Chad’s oil at the Mbére River where the Chadian portion of the pipeline ends. The Cameroonian portion of the export

Caverton Helicopters Cameroon Oil Transport Company S.A, COTCO, contracted Caverton Helicopters Limited in March 2012, to provide one DHC6-300 Twin Otter Airplane for the provision of passengers transfer and pipeline patrol within Cameroon and Chad. This contract is operated by CHL’s subsidiary, Caverton Aviation Cameroon (CAC), which was set up for the purpose of this contract and also to fill the gap in the market for aviation service providers in Cameroon CAC maintains a hangar facility located in Zone Aviation Legere, Ancien Aeroport, Douala which is the base of its operations. The company carries out its aircraft maintenance, flight following and passenger processing from the facility. The company is also able to provide tailor-made aviation logistics solutions to its clients in order to fulfil their requirements with safety always at the forefront of its operations. www.caverton-helicopters.com

Chad/Cameroon – Doba Basin

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inspired Your weekly digest of business news and views

www.bus-ex.com We conceive, we study, we counsel and we achieve.

E.F EYENGA & Fils SARL • Civil engineering • Equipment maintenance • Area Monitoring • Equipment and material supplying • Trade Telephone: 00237 33191973 Email: eyengaetfils@yahoo.fr www.eyengaetfils.com

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pipeline system then transports Chad’s oil to the Marine Terminal located offshore from the seaside town of Kribi. Although Cameroon has no ownership share of Chad’s oil, it does have an ownership share in the pipeline system. As highlighted by this particular project, and indeed numerous others throughout the world, ExxonMobil and all of the companyies that it works alongside share a commitment to investing in the countries in which it operates. In Chad and Cameroon, ExxonMobil have spearheaded and supported a variety of initiatives, one of which is the Economic Empowerment of Women Entrepreneurs. This program provided microcredit funding and training for more than 80 traditional women’s cooperatives in the oilfield area, thus increasing the incomes of 1,600 women in the cooperatives by an average of 75 percent.


COTCO

Community development

â&#x20AC;&#x153;ExxonMobil and all of the companies that it works alongside share a commitment to investing in the countries in which it operatesâ&#x20AC;? Major malaria prevention and treatment programs remain in place in Chad and Cameroon, with millions in funding from the ExxonMobil Foundation. During the construction phase of the project alone, the Roll Back Malaria program distributed nearly 75,000 anti-mosquito bed nets in partnership with the World Health Organization and the health ministries of Chad and Cameroon. Meanwhile, project funding, along with contractor donations and community compensation micro development projects,

has enabled the construction of 130 community schools, as well as 95 water wells to provide safe drinking water in villages.

COTCO

75039-2298 info@exxonmobil.com @exxonmobil www.exxonmobil.com

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