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BusinessExcellence Weekly
ISSUE No. 63 | www.bus-ex.com
Petróleos de Venezuela, S.A. (PDVSA):
Revolutionary energy providers Arguably the greatest contributor to Venezuela’s economic and social development
Global Sourcing & SUpply (GSS):
repsol sinopec brazil:
Allied mining services:
business excellence
Business John O’Hanlon Editor johanlon@bus-ex.com Will Daynes Editor wdaynes@bus-ex.com Matt Johnson Art Director mjohnson@bus-ex.com Louise Culling Production Designer lculling@bus-ex.com Richard Turner Director of Sales rturner@bus-ex.com
Business Excellence brings you content from leading business influencers and strategic thinkers providing inspiration and guidance to help you and your business grow. We showcase some of the best examples of successful organisations from around the world giving you a unique insight into how they operate.
Vince Kielty Director of Editorial Research vkielty@bus-ex.com Sharon Rooke Administration & Operations srooke@bus-ex.com Matt Day Head of Technology mday@bus-ex.com Andy Turner Chief Executive aturner@bus-ex.com
Contributors HINT: For the best experience, click the fullscreen icon
Leon Prieto Assistant Professor of Management at Clayton State University Simone Phipps Assistant Professor of Management at Middle Georgia State College Mark Ingwer Consultant & author
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issue No.63
6 6 strategy
Emotional Needs: a Business Priority?
Many companies talk about the need to establish strong ‘relationships’ with their customers. Some compile complex Customer Relationship Management (CRM) algorithms to develop and maintain these relationships.
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12 people
Creativity, Innovation and Survival
Organizations may be missing an opportunity to leverage HR Best Practices to build a culture of creativity and refine innovative ideas among individuals and groups.
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16 Petróleos de Venezuela, S.A. (PDVSA)
Revolutionary energy providers
Arguably the greatest contributor to Venezuela’s economic and social development, everything that Petróleos de Venezuela, S.A. (PDVSA) undertakes is in the interest of the country’s inhabitants and of maintaining its unique oil sovereignty.
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contents
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26 Repsol Sinopec Brasil A partnership made in Brazil
Country Manager, José María Moreno discusses how the coming together of Repsol and Sinopec is bringing huge benefits to Brazil, both economically and socially.
36 Global Sourcing & Supply (GSS) Delivering quality of life where it’s needed most
Global Sourcing & Supply (GSS’s) multi-disciplined approach to business has allowed it to become one of the foremost providers of complete site support services and operations in all of Africa.
44 Caledonia Mining Corporation The golden touch
Stefan Hayden, Chief Executive of Caledonia Mining Corporation, explains how a combination of exciting assets and a highly-skilled, passionate workforce and management team have created one of Africa’s leading low-cost gold producers.
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56 Allied Mining Services Limited
Bringing the world to East Africa
With a history of 13 years in the mining industry and two generations of experience in the procurement sector, Allied Mining Services Limited continues to be a key contributor to East Africa’s growth.
64 Ghana Rubber Estates Ltd The substance of tyres
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With primary exports to the European market, and the main buyer being tyre manufacturer Michelin, Ghana Rubber Estates Ltd (GREL’s) international footprint and customer base is rapidly expanding.
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Emotiona a Business
Many companies talk about the need to e customers. Some compile complex Custo algorithms to develop and m Words by
6 |
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Mar
al needs: Priority?
establish strong ‘relationships’ with their omer Relationship Management (CRM) maintain these relationships
rk Ingwer BE Weekly
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T
he concept of customer relationships makes sense in the context of meeting personal needs. As in all interpersonal relationships, from friendships, to marriage, to company and client, trust and the promise of mutual benefits are the foundation for growth and development. When we put others’ needs first in relationships, we’re more likely to make those relationships work. After decades of formally documenting the stages of business-customer relationships, we’ve learned that many companies become complacent in their endeavor to understand, satisfy, and embrace the emotional needs of consumers. Companies understand the meaning of relationships, but rarely consider what it takes to make their audiences’ needs a priority. They seemingly cross their fingers hoping that what brought customers to their company will cause them to be loyal. Just as in most human romantic relationships, businessto-consumer relationships fall apart when one party (the business) fails to track the evolving needs of the partner (the consumer). The challenge of sustaining long-term value pushes businesses toward considering short-term relationships as the easiest route to profits. Indeed, if a department attracts
new customers, it wins the lion’s share of the marketing budget, but it is well documented that it costs some companies five to ten times more to attract new customers than to retain an existing one. On the other hand, if companies sustain relationships with existing customers, a mere five percent decrease in annual defections can lead to a 25 percent to 125 percent rise in profits. Another way of crystallizing these figures lies in a social reality of the Internet era. When we are satisfied with a product or service, we may tell three friends, but when we are dissatisfied, we’re inclined to tell (or Tweet) it to three thousand. Even when brands claim to desire lifetime relationships with customers, many tactically distance themselves from the humanity of their interactions. The systemic nature of marketing strategy depersonalizes their audience by using language that groups customers into segments and targets. People are commonly referred to as ‘buyers,’ ‘shoppers’, ‘payers’, ‘non-responders’, ‘early adopters’, and ‘eyeballs’. What is too often lost is the nuance - human. The routine marketing logic follows a self-sustaining strategy: measure category and purchasing behaviors, shoot a creative mix of emotionally salient messages and rational pleas at the targets, place all
“After decades of formally documenting the stages of business-customer relationships, we’ve learned that many companies become complacent in their endeavor to understand, satisfy, and embrace the emotional needs of consumers” 8 |
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Strategy
“Customer relationships, like interpersonal relationships, are built on trust. And if trust is lost, the relationship is lost as well” bets on marketing science, and presume the targets can’t help but consume. But if we truly view consumers through the lens of relationship dynamics, we’ll learn that, whether we are working, shopping, or engaging with friends and family, our psychological needs are a constant driving force. Understanding and putting this into practice strategically will eliminate the artificial two-way mirror between daily life experiences and the ways businesses communicate. The powerful role of trust Customer relationships, like interpersonal relationships, are built on trust. And if trust is lost, the relationship is lost as well. Marketing scholars Jennifer Aaker and Susan Fournier reveal how closely business relationships and interpersonal relationships mirrored each other in an Internet-based psychology test. Over a two-month period, the researchers measured the evolving strength of their relationship with customers as they were introduced to an online film processing and digital library business. The participants were told they had been selected for a pilot program before the business was to be opened to the public. They were told to take pictures and use the website’s services at their pleasure, evaluating the experience along the way. Some participants interacted with a version of the website that used exciting,
amped-up marketing language. Other participants engaged with a company that was more down to earth, personalized, and directed at forging a sincere dialogue. The sincere company Aaker and Fournier found that relationships with the ‘exciting’ company had the trajectory of a short-term fling, while those involved with the ‘sincere’ company developed a relationship that deepened over time. The sincere, relationship-oriented business had raised consumer expectations of the service quality and built loyalty to the website. If the company delivers as promised, there is no question that the personal touch will keep customers invested in the experience for a long period of time Yet there is one caveat to the research that speaks to the irony and complexity of consumer decision-making. When the researchers imposed an unexpected service failure within the experiment, for example, “Sorry, but we lost all your film!” relationships with the users interacting with the sincere business were harmed the most. Why? Because when a business promotes itself as an earnest entity that truly cares about its customers, and then fails to deliver on those expectations, it does more harm than simply not delivering. “Trust is much heralded in marketing, but it has a downside,” said Aaker in an interview for Stanford Graduate School
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of Business (GSB) News. “What needs to be understood and managed are the contracts, norms and rules that underlie the relationship between a consumer and brand, and how a brand’s actions fit or violate those norms.” Businesses must re-establish the emotional trust that is destroyed when they transgress, be committed to following through on promises, and be prepared to stand by that attitude when crisis strikes. In the days following the British Petroleum (BP) oil spill, how many times did we hear executives tell the public not to worry? While Chief Executive Officer Tony Hayward haplessly expressed how much he’d “like his life back,” BP was writing a 187-page legal report that pointed fingers at thirdparty contractors, tacking an asterisk to every apology. Perhaps they should
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have known that what won’t work with a friend or loved one won’t work for an angry public either. The deceit of satisfaction On the surface, one might think that meeting needs is purely about satisfying the consumer. It’s hard to deny that sentiment but what needs to be done is a realigning of the definition of satisfaction with what makes us deeply satisfied. Of course, companies are trying to interpret and meet emotional needs but it is questionable whether traditional consumer research methodology is capable of measuring true need satisfaction. Consider these two points: • Roughly 80 percent to 90 percent of new products and services fail or drastically fall short of sales expectations in their first year.
Strategy
• Customer satisfaction is used by 90 percent of companies as a benchmark for success. Overwhelmingly, most companies report that their customers like their products just fine. What’s at play with this apparent contradiction? One reading of the product failure data is that there are too many products in the marketplace. And, in most cases of failure, advertising and marketing efforts aren’t successfully connecting emotionally with consumers. But the customer satisfaction benchmark is confounding. If everyone says they are satisfied, why do most new products fail? Surveys fail to predict repurchase As it turns out, positive consumer satisfaction surveys are neither a predictor of repurchase nor an indicator of whether emotional needs are met. Most companies go only so far as to ask whether their clientele is satisfied with their ‘experience’: most customers say yes. The marketers congratulate themselves, only to find later that the same ‘satisfied customers’ went elsewhere the next go-round. Again, the mental process that occurs during a customer satisfaction survey is typically a rationalization of past experience. The brain quickly evaluates
“If a business is going to learn about an emotional issue, it needs to study the issue with a method sensitive to emotion” the individual’s expectations of the product, and if they were in the ballpark, the product is checked “satisfactory.” A one-time purchaser of an electronics brand may never tell a researcher, “It worked well enough. I was satisfied. But the design and overall feel just didn’t enhance my deep-seated feelings of identity and autonomy.” The consumer may have appreciated the product, but if his or her unarticulated emotional needs went unmet, the appreciation means virtually nothing for a business trying to form a base of loyal buyers. This is a problem for businesses using a logical, traditional process to study the emotional issue of satisfaction. If a business is going to learn about an emotional issue, it needs to study the issue with a method sensitive to emotion. At the end of the day, businesses must see their customers as individuals who are always striving for a healthy sense of self-identity.
About the author For 25 years Dr. Mark Ingwer has applied his psychological and marketing acumen to help companies optimize brand strategy based on understanding customers. He has worked with diverse companies across numerous industries, with a special focus on consumer packaged goods, healthcare, and advertising. Ingwer is the author of Empathetic Marketing: How to Satisfy the 6 Core Emotional Needs of Your Customers (Palgrave Macmillan 2012).
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Creativity, Innovation & Survival
Organizations may be missing an opportunity to leverage HR Best Practices to build a culture of creativity and refine innovative ideas among individuals and groups Words by
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Leon Prieto & Simone Phipps
People
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C
reativity and innovation, although similar and often used interchangeably, have a subtle, yet significant distinction. Creativity is related to the development of ideas that are both novel and useful, while innovation is related to the application of those novel and useful ideas, thus making them a reality. Both are crucial for a successful organization. Dr Warren Bennis, a leading management scholar, once said that the organizations of the future will increasingly depend on the creativity of their members to survive. Dr Michael Porter, professor, author, and a prominent expert regarding competitiveness and organizational strategy, affirmed that innovation is the central issue in economic prosperity. In this era of modernization, technological
advancements, and changing markets, the increased use of creativity and innovation is a necessity. People are the building blocks of organizations, and thus, the success of organizations depends on the ability of individuals and groups to perform their tasks effectively, to conceive and refine creative ideas, and to implement innovative solutions to maximize organizational competitiveness. Therefore, it is important to determine the Human Resource (HR) best practices that promote creativity in individuals and groups, and to find ways to foster their creative vision, so that the organizations for which they work can reap the benefits of their originality and resourcefulness. Here are some of the ways HR can play a role in promoting creativity in the workplace: Hire creative people HR should consider utilizing selection tools that assess a person’s creativity and ability to innovate. It is necessary to hire the best creative minds for various positions within the organization whether it is for Marketing, Research and Development, and Manufacturing. Creative individuals are an asset to any organization as it positively affects organizational performance. Employees’ creativity often provides a starting point for successful organizational innovation. Establish rewards for creativity Employees may experience a heightened level of excitement about creativity and innovation if HR implements policies that will create a sense of friendly
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People
“The success of organizations depends on the ability of individuals and groups to perform their tasks effectively, to conceive and refine creative ideas, and to implement innovative solutions to maximize organizational competitiveness” competition among employees and offers attractive rewards to those who innovate and create new, valuable products and services for their organization. HR needs to be progressive in offering attractive bonuses and other forms of compensation and rewards to those employees who come up with ideas for new revenue models, marketing strategies and product offerings. Offer training Many may argue that you cannot train people to be creative. However, studies show that creativity can be learned, and some creativity training programs have proven to be successful. In fact, Georgia State University offers a Certified Professional Innovator program that is designed to help executives build their organization’s internal capacity for generating novel ideas and accelerating profitable growth. Other leading institutions such as UCLA and the University of Miami also offer creativity programs geared towards executives. If the executive education programs are too costly, HR departments should consider creating their own tailor-made programs geared towards increasing their employees’ creative self-efficacy. The employees should also be given an
opportunity to transfer what they learned in training, through liberty to innovate in the workplace. Give employees a greater sense of freedom Companies such as Google and 3M give their employees time (20 percent and 15 percent respectively) to innovate. These types of initiatives remove organizational barriers and constraints that tend to accompany traditional work. Considering that deviation from the status quo does not always lead to favorable results, it is also important to allow employees who create and innovate to fail without repercussion. In addition, HR should ensure that performance evaluations award extra points to employees who pursue ambitious, creative projects, irrespective of successful or unsuccessful implementation.
About the authors •L eon C. Prieto, MBA, PhD, SPHR Assistant Professor of Management at Clayton State University • Simone T. A. Phipps, MBA, PhD, PHR Assistant Professor of Management at Middle Georgia State College
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Revolutionary energy provider
Arguably the greatest contributor to Venezuela’s econom social development, everything that Petróleos de Venezu S.A. (PDVSA) undertakes is in the interest of the countr inhabitants and of maintaining its unique oil sovereign
written by: Will Daynes research by: David Brogan
16 | BE Weekly
Petróleos de Venezuela, S.A. (PDVSA)
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mic and uela, ry’s nty
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PDVSA
O
fficially recognised as the fifth largest oil exporting country in the world, the Bolivarian Republic of Venezuela also boasts the largest reserves of heavy crude oil, estimated at more than 99 billion barrels as of 2010. When putting such an astronomical figure into context it is easy to see why the petroleum industry is universally seen as being the backbone of the country’s economy, accounting for half of total government revenues and approximately onethird of its annual GDP. Petróleos de Venezuela, S.A. (PDVSA) is the state oil company of Venezuela, created by governmental decree on 30 August, 1975, during the first presidential term of Carlos Andres Perez and following the nationalization of the country’s oil industry. PDVSA’s operations officially commenced on 1 January, 1976, and to this day its operations are supervised and controlled by the People’s Ministry of Petroleum and Mining. Seen as one of, if not the main driver of the economic and social development of the country, PDVSA is in charge of the exploration, production, refining, storage, manufacturing, transportation and marketing of hydrocarbons. All of the aforementioned responsibilities are conducted in an efficient, profitable, safe and transparent manner, and are done so for the benefit of the Venezuelan people. In the past PDVSA has been ranked as high as number 66 among Fortune Magazine’s list of the 500 largest companies in the world and as of late 2011 it was estimated that the company could stake claim to having the
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PDVSA largest oil reserves in the Siemens world, with a certified total of Over the last decades, Siemens has been a key partner 296.5 billion barrels, a figure of Venezuela providing products, solutions and services, which represents 18 percent as well as experienced professionals for its economic and of the world’s total reserves. social growth. Following the end of the Siemens has cutting-edge technology and an environmental Venezuelan general strike in portfolio available for the development of Orinoco’s Belt Project in Venezuela specifically for grassroots refineries; 2003, a new era for PDVSA power generation, transmission, and distribution of its began with a renewed different blocks; petcoke-fired power plants; substations; emphasis being placed on the petcoke gasification; electromagnetically gravity drainage fact that the company existed for heavy oil production; water technology; intelligent in the hands of the Venezuelan wellhead clusters; cogeneration; oxy-fuel turbines; tank people, thus deepening the farms; and marine terminals. country’s oil sovereignty. Siemens is committed to provide answers tailored to our customers and markets’ needs. “The New PDVSA”, as it is www.siemens.com/energy often referred to as, today finds itself perfectly aligned with the Venezuelan State’s guidelines with each one of its workers committed towards the rebuilding of the company, which represents the building of a better future for the entire nation. This theme of building towards a better future also sees PDVSA participating in and promoting activities aimed at fostering the comprehensive, organic and sustainable development of the country in areas such
99
Billion Barrels Venezuela’s estimated reserves of heavy crude oil as of 2010
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Natural resources are getting scarce. Siemens makes sure solutions aren’t. Efficient use of fossil resources is necessary for a sustainable energy system. siemens.com/energy
Although we can harness energy and generate power in new ways, we still rely on fossil fuels. As we know, the supplies of these fuels are finite, and many countries have no such reserves of their own.
That’s why we have to be ever more conservative with our natural resources. We need to use them as efficiently as possible while we develop a sustainable energy system that provides affordable power for all.
Answers for energy.
as agriculture, industrial, infrastructure, manufacturing and marketing of goods, services, and the financing of healthcare, education, housing and food programs. The goal is to establish a proper connection between hydrocarbon revenues and the Venezuelan economy, with an active contribution to the actual process of building Socialism. In recent years PDVSA has also seen its international activities expand at an unprecedented pace. From its five offices, located in Argentina, Brazil, Cuba, United Kingdom and the Netherlands, the company maintains extensive commercial relations with its existing partners across the globe as well as with those nations that possess a great deal of interest in investing in the oil sector. PDVSA’s international activities actually go even further beyond its five offices. In Europe for example it participates through its affiliate PDV Europa, which is headquartered in The Hague, Netherlands, and holds a 50 percent stake in the companies, Rulor Oil of Germany and AB Nynäs Petroleum, while it also has a presence in London where PDV UK acts as a market intelligence office. Meanwhile in the Caribbean, PDVSA operates the refinery and storage affiliate Isla Refinery in Curaçao, through a long
term lease contract. Additional affiliates in the region include Bonaire Petroleum Corporation (BOPEC) and Bahamas Oil Refining Company (BORCO), which operate storage terminals in their respective regions. Other international assets include CITGO, an affiliate in the United States and refineries all over the world.
“PDVSA participate in and promote activities aimed at fostering the comprehensive, organic and sustainable development of the country” 22 | BE Weekly
PDVSA
The last decade or so has also seen the company open up subsidiaries and affiliate entities in many important developing markets, including Columbia, Ecuador, Uruguay, Bolivia, Argentina and China. PDVSA China was created in August 2005 specifically to evaluate both upstream and downstream business opportunities in the Asian region. Together with its other affiliates it continues to help diversify the Venezuelan oil market. In the last several years the company has commenced work on a number of significant national projects, including the construction of several new refineries in the country. These include the Batalla de Santa Inés Refinery in
Barinas state, which will possess a processing capacity of 100,000 barrels per day following an investment of $2.9 billion. In its first phase it will start producing gasoline and diesel, in addition to fuel oil to meet electricity generation needs. The plant is expected to be ready by 2014. Meanwhile, the Cabruta Refinery in Guarico state will have a processing capacity of 221 thousand barrels per day from the Faja Petrolífera del Orinoco (Orinoco Oil Belt). It will be built in three stages with construction expected to start in 2017. As opposed to Batalla de Santa Inés which will produce fuel, Cabruta will initiate its operations as a heavy crude upgrader, but
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“PDVSA’s workers are as committed today as they have ever been to the defence of national sovereignty and energy sovereignty in Venezuela” later in 2027, it will be a fuel refinery. Another area of work for the company centres on the design of two industrial services condominiums. These will ensure the supply of services such as natural gas, electricity, hydrogen, nitrogen, plant air, instrument air, vapour, boiler water, cooling water, drinking water and fire fighting water to meet the demands of the
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Extra Heavy Crude Upgrading Complexes in the Junín and Carabobo areas. PDVSA estimates that the first services condominium will start operations in the year 2015 for the Junín area and in the year 2016 for the Carabobo area. PDVSA’s participation will be 60 percent, which entails an investment of $5.8 billion. Moving forward, much of the company’s
PDVSA
plans tie in with The Siembra Petrolera Plan (Oil Harvest Plan) 2005-2030, an initiative introduced in Venezuela in August 2005. This Plan sets forth the oil policy guidelines until 2030. These include supporting national socioeconomic development with the purpose of building a new economic development model which is fairer, balanced and sustainable in order to fight poverty and social exclusion, and boosting the energy integration process of Latin America and the Caribbean. The plan also calls for the oil industry to become a geopolitical instrument to encourage the creation of a multipolar system which benefits developing countries, and counteracts the current unipolar system.
PDVSA’s workers are as committed today as they have ever been to the defence of national sovereignty and energy sovereignty in Venezuela. They are aware that adding the greatest value possible to hydrocarbons is among their duties, guided by the principles of unity of command, teamwork and efficient use of resources, while transparency and accountability also constitute key values for the company that it promises to hold on to for many decades to come. For more information about PDVSA visit: www.pdvsa.com
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Repsol Sinopec Brasil
A partnership made in Brazil Country Manager, JosĂŠ MarĂa Moreno discusses how the coming together of Repsol and Sinopec is bringing huge benefits to Brazil, both economically and socially
written by: Will Daynes research by: David Brogan
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Platform Marcos Pinto
Repsol Sinopec Brasil
I
t was in December 2010 that two of the and came as a result of a strategic alliance world’s foremost oil and gas companies formed between the governments of Brazil came together in one of the globe’s and China, with Sinopec International most exciting locations for oil and gas Petroleum Service of Brazil Ltd formally development, Brazil. Repsol Sinopec Brasil established in February 2005. was born out of a capital increase, in which Since the coming together of the two Sinopec, the largest oil and petrochemical parties in late 2010 the capital invested by company in China, contributed more than Sinopec has begun to be used to develop $7.1 billion towards Repsol Brazil. The several upstream projects in the country, transaction gave rise to a company that today some of which are thought to be among the possesses a market value of some $17.8 billion. most important discoveries anywhere in Repsol’s own history in the country the world in recent years. These include the dates back to 1999, when Santos Basin, Campos Basin Repsol Spain purchased the and Espiritu Santo Basin Brazilian subsidiary of YPF. oil exploration projects. In the years that followed At the time of the two the company pioneered companies coming together the process of opening the Repsol Chairman, Antonio Brazilian energy sector and Brufau stated that the deal was the first private company was a “good reflection of The market value of to invest in domestic the value created by the the company refining by investing in the investment of technical, Manguinhos Refinery in Rio human and material means de Janeiro. Furthermore, by Repsol in exploration, Repsol also pioneered the development of particularly in Brazil’s pre-salt offshore in natural gas projects by importing gas from recent years. Together with Sinopec, an Bolivia and Argentina to the thermoelectric internationally renowned and experienced plants based in Uruguayana and Cuiabá. partner, we can do our part in expanding In addition to the above, an Asset Exchange business relations between Brazil and China.” Agreement with Petrobras in December 2001 “The relationship between Repsol and saw the company take a 30 percent stake in Sinopec in Brazil has been, and remains, the Alberto Pasqualini Refinery (Refap) in Rio nothing short of excellent,” states Country Grande do Sul, as well as a network of service Manager, José María Moreno. “The strength stations concentrated in Central, Southeast of this partnership can perhaps best be and South Brazil, plus a ten percent stake displayed by the fact that every three in the field Albacore Leste, one of the months we hold special committee meetings largest oil fields in the country. attended by senior board members of the Sinopec’s time in Brazil began in 2004 two companies. At these meetings there can
$17.8 Billion
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Repsol Sinopec Brasil be as many as ten different business proposals presented and not once to date has any such proposal been met with a negative vote. To me this reinforces the belief that we are a collective entity that shares the same vision for what we want to achieve in Brazil.” Repsol Sinopec’s already considerable portfolio was further strengthened in February 2012 by the discovery of the Pão de Açúcar well at the Campos Basin. With estimated reserves of more than 700 million barrels of extremely light oil and three million cubic feet of gas, the Pão de Açúcar well represents the biggest discovery
ever made on the Campos Basin pre-salt site. In addition to the Pão de Açúcar well, Repsol Sinopec Brasil’s assets today include two producing fields, the Albacora Leste and the Sapinhoá fields, and one field currently under
ocean rig Ocean Rig is proud to have been chosen as the preferred drilling contractor by Repsol Sinopec for its development of the ultra deepwater drilling campaign in Block BMC-33 in the Campos Basin offshore Brazil. Block BM-C-33 is one of the biggest offshore pre-salt discoveries in Brazil. Ocean Rig are confident it will successfully contribute to Repsol Sinopec’s drilling campaign by providing a highly efficient and incident free drilling campaign by utilizing the most advanced and sophisticated ultra deep water drilling unit (Ocean Rig Mylos), second to none engineering solutions, and a
highly motivated and competent workforce for the development of Repsol Sinopec’s important and strategic development offshore Brazil. Ocean Rig has a keen desire to build up long-term strategic relationship with key clients. We are very excited to include a major integrated oil and gas company as Repsol Sinocpec to our list of partners. We are convinced this partnership will create great value and optimal returns to the shareholders of both companies. www.ocean-rig.com
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Safety | Field Development Planning | Marine and Facilities Consulting Subsea and Pipeline Engineering | Flow Assurance
Deep Thinking n
n
n
n
New sources of hydrocarbons present new opportunities Deeper water and remote hostile locations present new challenges Creativity is required to unlock value from these opportunities New opportunities and challenges require new thinking
K13112 Š 2013 KBR. All Rights Reserved
For over 25 years, Granherne has found the right development solutions with creativity and efficiency – your consultant of choice.
Delivering Consulting Excellence www.granherne.com
Repsol Sinopec Brasil
2010 The year that Repsol Sinopec Brasil was established
development, that being the Piracucá fields. In addition to these the company also has one block under assessment, BM S-9 in Carioca, and a total of twelve exploratory blocks, five of which are operated by the company. Each of these possesses a great degree of potential lying as they are in one of the world’s largest growth areas for hydrocarbon reserves. With its roots so deeply entrenched in the growth of Brazil’s oil and gas sector it comes as little surprise when Moreno starts
to highlight the contributions that Repsol Sinopec Brasil has made, and is making, to the sustainable development of the country by investing in solutions to protect the environment, communities and people. “All KBR KBR and its subsidiaries GVA, Granherne and Energo of our social programmes provide innovative, cost-effective services for subsea and initiatives are continuous and pipelines, FPSOs, fixed platforms, topsides and undertakings that aim to semi-submersibles. For optimized oil and gas solutions, make a significant difference you can trust KBR to deliver. to the world around us.” KBR – Project Management, FEED, Detailed Engineering, Repsol Sinopec Brasil’s EPCm and EPC Delivery for Onshore and Offshore Fixed policy for corporate social and Floating Facilities. GVA – Hull and Marine Systems, Conversions, Drilling responsibility is based on the Rigs, Engineering Management, Construction Support. award winning guidelines of Granherne – Field Development Planning, Feasibility, its holding company, Repsol. Concept and Pre-Feed Studies for Fixed and Floating The social responsibility Facilities, Subsea Systems and Flow Assurance. projects in which Repsol Energo – Integrity Management for Fixed, Floating and Sinopec Brasil invests aims Subsea Systems, Risk-Based Inspection Planning. to enhance the quality of life www.kbr.com of communities and provide
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benefits to society in general. “As a company,” Moreno continues, “we believe wholeheartedly in Brazil and that is the fundamental reason why we have all made a commitment to work even harder towards successfully developing strong energy solutions for Brazilians in a transparent and responsible way.” One of the ways that the company has been giving back to people for some time now is through the Repsol Sinopec Education Platform. Working in partnership with the country’s Navy the company uses this
programme to train artisanal fishermen and provide them with professional qualifications. Having begun in July 2009 it has since been rolled out to 17 cities in Brazil to the benefit of more than 10,000 people. From an environmental perspective, Repsol Sinopec is the only oil company partner of the SOS Mata Atlântica foundation, with which it develops various fauna and flora conservation and recovery initiatives. The project Florestas do Futuro (Forests of the Future) is one of the widest spanning programmes of its kind
“We are very much focused on bringing our oil exploration projects to production over the next two year”
The Repsol Sinopec Education Platform
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Repsol Sinopec Brasil
The Repsol Sinopec Education Platform in transit
and involves the recovery of riparian forests in hydrographic basins, something which is vitally important for the production of water and biodiversity conservation. Its partnership with the SOS Mata Atlântica foundation has enable the company to plant two forests with a combined area that is equivalent to 22 soccer fields in the riparian forests of Paraíba do Sul river and on the Tietê river basin in the state of São Paulo. Repsol Sinopec also invests in the environmental protection of the coastal area of the country. The Costa Atlântica program has joined up with five Brazilian NGO projects that are contributing to maintaining sustainable development and the balance of the environment, including the conservation
of natural, biological, historical and cultural estates existing in those regions. “As we look to the future,” Moreno concludes, “we are very much focused on bringing our oil exploration projects to production over the next two years. Achieving our targets for these projects is of crucial importance to us. Meanwhile, as we develop our existing assets we will continue to look at the possibility of adding new ones accordingly, both within Brazil and further across the region.” For more information about Repsol Sinopec Brasil visit: www.repsolsinopec.com.br
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Delivering quality o
where it’s needed
Global Sourcing & Supply (GSS’s) multi-disciplined app business has allowed it to become one of the foremost p of complete site support services and operations in all o
written by: Will Daynes | research by: Gareth Hardy 36 | BE Weekly
Global Sourcing & Supply (GSS)
of life
most
proach to providers of Africa
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GSS catering service
GSS
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orking to the highest international standards, Global Sourcing & Supply (GSS) is an integrated facilit y management and contract supply operation supported by an advanced logistics capability. GSS is a wholly owned subsidiary of BMMI Group, headquartered in the Kingdom of Bahrain, and currently operates in Qatar, Iraq, Djibouti, Mali, Gabon, Ghana, Burkina Faso, Kenya, the Republic of Sudan and South Sudan, providing flexible options for logistics and service delivery and engaging with a multitude of international governments, non-government organisations and industrial clients. The GSS team also provides complete site support services and offers turnkey solutions in the establishment and management of remote site operations to industries as diverse as mining, construction, agriculture, oil and gas. With Africa’s remarkable growth, driven in large part by a minerals and energy boom, numerous companies seized the opportunity to explore new oil rigs in the region which opened the door for GSS to expand its integrated facility management solutions and contract logistics. In recent years, GSS has managed to successfully cater to the needs of major companies delivering quality services in the most rigorous locations in Africa. When it comes to Integrated Facility Management (IFM) solutions, GSS covers the entire spectrum, from the provision of prepared meals and a range of ancillary ser vices inclusive of housekeeping,
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laundry, operations and maintenance, to camp retail (commissary) services and leisure requirements. GSS understands the importance of delivering quality services in the most remote locations in Africa and therefore it ensures that it caters to its clients, using only the best quality, handpicked ingredients. The company’s catering staff ensures all food is
expertly displayed and served hot and fresh from the pan. Service options range from selfservice cafeterias to retail coffee shops and seated, full service à la carte style. In terms of the company’s janitorial services, GSS’ satisfaction lies not only in making sure its clients reside in clean and comfortable surroundings, but also for them to experience the high quality services provided
“GSS has managed to successfully cater to the needs of major companies delivering quality services in the most rigorous locations in Africa”
GSS cleaning/janitorial services
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GSS
GSS laundry service
by its team. It is GSS’ goal to clockwork, its team provides door-to-door pick-up and pay attention to every single drop-off of laundry, handling detail and to keep its clients’ workplace tidy and their all clothes, uniforms and lodgings homely, to meet and linen with the utmost care. Tons of goods handled exceed their expectations. As GSS’ ultimate goal is continuously by GSS’ Through the years, GSS to ensure its clients get their major prepositioning has built its reputation work done in a safe and well warehouse protected environment, the on providing outstanding company is constantly looking cleaning services using state of-the-art equipment, environmentally to utilise advanced systems with customised preferred products and unique cleaning solutions to protect every aspect of its client’s processes to ensure clients’ facilities are company assets. Its services in this field range cleaner and healthier than ever before. from 24-hour security, entrance control and GSS’ complete range of laundry options central control to remote monitoring of CCTV includes Express, Same Day and Overnight and security system audits. services for guest and employee laundry. Like GSS has been actively supporting customers
30,000
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GSS can source temporary structures
“GSS truly believes that over the next few years it is likely to grow and continue to attract and retain clients in the oil industry� in Africa with major contract logistics capabilities for several years. An example of this is a major prepositioning warehouse operation in East Africa handling up to 30,000 tons at any point in time including receipt, warehousing and redelivery of bagged commodity items in support of humanitarian efforts in the Horn of Africa. In addition, GSS provides sourcing services for components, spare parts, repair engine
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parts or any FFE requirements. Preferred supplier agreements in all major markets allow its dedicated team to match up customer requirements with a manufacturer’s part number, sometimes within hours. The company then ships to remote locations, expediting the order within 48 hours. Its suppliers cover all aspects of technical supply and demand, no matter how big or small. Utilising a multi-model approach, GSS has
GSS
GSS contract logistics
supported rations in contingent and active war zones, while maintaining full product integrity throughout the supply chain so that it arrives fresh for troops. Furthermore, it has trading agreements in place with major suppliers and is able to process requirements through varied consolidation capabilities within a short span of time. GSS’ team is also capable of sourcing, shipping and fully integrating the provision of temporary structures for accommodation, kitchens, messing, recreation, offices and retail. During the past few years, GSS was faced with uncertainty driven by increased competition, geo-politics and economic indicators in the African region. However, with GSS’ solid experience and reputable
GSS camp design
name in the African market, it has managed to enter new countries, secure new contracts and enter new acquisitions and joint ventures this year. The future of Africa looks promising and therefore GSS truly believes that over the next few years it is likely to grow and continue to attract and retain clients in the oil industry. This high demand for its IFM solutions has been also driven by its exceptional services provided by its experienced and skilled technical staff across the industry. For more information about Global Sourcing & Supply (GSS) visit: www.gss-contracting.com
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The golden
touch
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Caledonia Mining Corporation Stefan Hayden, Chief Executive of Caledonia Mining Corporation, explains how a combination of exciting assets and a highly-skilled, passionate workforce and management team have created one of Africa’s leading low-cost gold producers
written by: Will Daynes research by: Robert Hodgson
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No 2 Conveyor discharging onto stockpile at twilight
Caledonia Mining
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ithout beating around interest in the Blanket mine in Zimbabwe, the bush, the gold which produced over 45,000 ounces of gold in industry as it stands 2012, and a 100 percent interest in the Nama in mid-2013 is under base metals exploration project in Zambia. The Blanket gold mine re-started pressure and not just when it comes to the recent falls in gold price. production in April 2009, following a This pressure also stems from issues including temporary six month shut-down during the resource nationalism, labour concerns, testing times before Zimbabwe changed political and legislative uncertainty, and its currency to the US dollar, and has been increased environmental requirements. With expanded since to significantly increase these factors having an increasing influence production capacity to 48,000 ounces on the financial performance of gold mining of gold per annum last year. Last year operations in core markets like Africa it is Blanket was the first mining company to all the more important to comply with the Zimbabwe Indigenisation Legislation. recognise the achievements of those businesses that are Meanwhile the recently not only weathering the reconstituted Blanket board have also approved a four storm, but prospering in difficult conditions. year growth strategy for Ounces of gold per “While the drop in the the mine. Estimated to annum achieved by gold price we have seen in cost a total of $37 million Blanket in 2012 recent times now appears the investment programme will be funded from to be recovering slightly, we have remained profitable at these Blanket’s internally generated cash considerably lowers levels, this at a time is expected to result in progressive when much of the industry has been sub- increases in gold production to approximately economic,” states Stefan Hayden, Chief 76,000 ounces in 2016. Executive of Caledonia Mining Corporation. As it stands at the time of writing the “We have done so by controlling our costs Blanket mine extends over three kilometres. and the efficient use of labour we have Current work on the asset includes the sinking trained and been able to retain. This has of the new No. 6 Winze shaft. This shaft will allowed to maintain our position as one travel down to the mine’s current production of the lowest, if not the lowest cost listed level of 750 metres and continue down to producer on the African continent and one approximately 1,080 metres below surface. of the lowest cost producers in the world.” While the No. 6 Winze will allow for more As an exploration, development and rapid access to the mine’s ore bodies below mining company focused on Southern Africa, 750 metres, it is only an interim measure, Caledonia’s primary assets are a 49 percent one that will remain in place while the
48,000
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Caledonia Mining company assesses its plans to sink a central shaft that could eventually descend to 2,000 metres. “One of the major advantages of our operations at Blanket is that we have 18 satellite properties all within trucking distance of our main plant,” Hayden continues. “Ever since we purchased the mine from Kinross Gold eight years ago we have been continuously investing capital to the point where our metallurgical plant now has a very substantial over capacity for what we are currently producing. Rather than this being a negative issue, we are now starting to take up
Blanket miners on their way to their workplaces
that over capacity by bringing these satellite properties into production as planned.” Work currently ongoing around the main Blanket mine includes shaft sinking and underground development on one property
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Leonard Light Industries (Pty) Ltd Manufacturers and suppliers of “KEEGOR”® branded Furnaces, Machinery, Equipment and Consumables for Precious Metal ASSAYING, SMELTING and REFINING CALCINING/DRYING OVENS (3-TRAY OR 6-TRAY): • Electric, Gas or Diesel Fired SMELTING FURNACES: • Diesel or Gas Fired Furnaces • Induction Furnaces • Arc Furnaces MOLTEN METAL AND SLAG HANDLING: • Bar Moulds • Slag Moulds • Slag Granulation (to suit client requirements) ASSAY FURNACES AND LABORATORY EQUIPEMENT • Fusion Furnaces (Electric, Gas or Diesel Fired) • Cupellation Furnaces (Electric, Gas or Diesel Fired) • Multi-Load and Multi Pour System for Crucibles • Assay Consumables (Cupels, etc.) NEW!!! Automated Fire Assay system… Load AND pour up to 84 pots (dependent on crucible size) in a single operation!! SAMPLE PREPARATION EQUIPMENT • Crushers • Pulverisers
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Caledonia Mining
Underground loading a Granby car
and the dewatering of an older mine that also saw Caledonia complete a comprehensive ceased production in the late 1950s. While drilling programme at its Nama Base Metals all of this is ongoing Caledonia continues to Projects in Zambia. This involved drilling some stockpile ore from these operations, rather 10,903 metres over 20 holes, the results of than truck it to the plant, the reason for which confirmed the existence of the copperwhich Hayden goes on to clarify. “At Blanket bearing mineralised zone identified in 2011. we run a huge, highly efficient metallurgical The 2013 drilling programme on the asset plant where we recover gold at better than will include shallow drilling on the identified 93 percent. With this in mind we are simply zone to improve resource definition. Initial not prepared to jeopardise exploration work will also be carried out on additional that recovery by simply throwing ore into it without zones of mineralisation having first carried out that have been identified to extensive test work to ensure the west and south of the that we can adapt a blend mineralised zone. of that ore so that we don’t Turning back to Zimbabwe, Gold recovery at Blanket affect our overall recoveries.� while Hayden does agree that metallurgical plant The 2012 financial year the market there does pose
93%
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(PTY) LTD Tel: (011) 826-6688 | Fax: (011) 826-3095 Email: raymie@global.co.za, annaleen@electrosales.co.za
Electrosales is an electrical supplier which has been in operation in Gauteng for 34 years. Our business is the supply of industrial electrical goods to various market segments. Products range from cables, motors, lighting, switchgear, distribution boards, circuitry, drives & electrical detection equipment. We supply to industry, construction companies, municipalities, mines and carry a range of domestic products.
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several unique challenges, it also possesses considerable benefits which often do not get the coverage or recognition they deserve. “The biggest advantage of working in Zimbabwe is that we are dealing with a very well educated labour force who collectively boast a strong work ethic in everything they do. What we have found as a result is that we are able to utilise this labour efficiently, to the point where we employ around a third of the amount of labour that one of our neighbours employs in order to produce four times as much gold. It goes without saying therefore that we have found it to be an absolute pleasure dealing with labour in Zimbabwe.� Leaving a positive legacy behind for Zimbabweans is also something that is at
Caledonia Mining
Aerial view of the Blanket operations
the forefront of Caledonia’s thinking when it comes to its operations in the country. This commitment runs right through the business right down to the fact that it is the only African signatory of the Cyanide Convention. By putting less than 30 parts per million of cyanide onto its tailing dams Caledonia is reaffirming that not only is it safeguarding the welfare of its employees,
but also that of surrounding communities and the region in general. In accordance with the Indigenisation and Economic Empowerment Act ten percent of the Blanket mine is actually owned by the local Gwanda community, with a further 16 percent held by the Sovereign Wealth Fund of Zimbabwe and ten percent by all of Blanket’s employees. Over and above its holding in the
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“Leaving a positive legacy behind for Zimbabweans is at the forefront of Caledonia’s thinking when it comes to its operations in the country” mine the Gwanda community has also been the recipient of $1 million donation from Blanket, which has also provided it with an advance dividend of a further $4 million to enable it to proceed with various community projects such as clinics, schools and the drilling of boreholes for water. Other projects that highlight the corporate social responsibility aspect of Caledonia’s business include the building and rehabilitating
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of approximately 130 kilometres of hard top and dirt roads around the mine, and the ongoing support the company lends to local schools located within a 20 kilometre radius of its operations. Additionally, Caledonia has to date donated $2 million towards Zimbabwe’s Presidential Scholarship Fund. This fund enables Zimbabwean students based outside of the country to continue their studies at various international institutions.
Caledonia Mining
Panorama view of the Blanket mine and surrounding area
“Skills generation is something we are equally dedicated to facilitating in Zimbabwe,” Hayden enthuses. “As well as the six engineers we graduate on average each year through the country’s School of Mines we also operate a training school at Blanket from which we run more than 1,000 courses per quarter for our employees.” It isn’t just the company’s employees who Caledonia have incentivised to improve their quality of life. Their dependents have also been encouraged to become more selfsufficient by growing vegetables. In order to help facilitate this the company pumps water from one of its smaller, out-of-use shafts to irrigate crops. “All the aforementioned work we are doing is being done because we want to
improve the quality of life of our employees and neighbouring communities,” Hayden concludes. “Our employees can see this and a measure of their satisfaction when it comes to working for Blanket can be seen in the fact that our staff turnover figure is low at 0.01 percent per annum. This means that not only are we developing talent but we are retaining it, and that is crucial for any successful mining operation, particularly one that like ours is actively looking to expand, both in Zimbabwe and further afield.” For more information about Caledonia Mining Corporation visit: www.caledoniamining.com
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Allied Mining Services Limited
Bringing the world to East Africa With a history of 13 years in the mining industry and two generations of experience in the procurement sector, Allied Mining Services Limited continues to be a key contributor to East Africa’s growth
written by: Will Daynes research by: Candice Nice
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Allied Mining Services Limited
A
s much of the Western world spent the latter years of the last decade and the first few of this battling the global recession, the economies of Tanzania, Kenya, Rwanda, Uganda and Burundi have flourished. With each country experiencing economic expansion of between five and ten percent during the years during and following the crisis it comes as little surprise that East Africa has since been considered the core of Africa’s growth. In recent years the prosperity of the region has benefited countless companies and businesses, particularly those that inhabit leading positions in their respective fields. Allied Mining Services Limited is a major supplier and stockist of mining, construction, industrial and agricultural products in and around East Africa. With a history of many years in the mining industry, not-to-mention two generations of experience in the procurement sector, Allied has achieved a strong foothold in the mining and construction market sectors. From what was once a small retail shop the company would go on to become one of the fastest growing businesses in Tanzania. “Thanks to the experience of two generations, as well as an apt and powerful team, and our ‘Yes’ mentality we have seen the business go from strength to strength,” states Managing Director, Ashish Pattni. “In that time our team has been able to gain extensive knowledge, expertise and understanding of the market which, when combined with their high degree of expertise, allows them to provide the type
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of service that drastically reduces the end user’s time and money.” Professionalism has always been the quality that Allied has considered to be its core strength, something which it ensures goes hand in hand with ensuring 100 percent customer satisfaction. “We pride ourselves in ensuring customer satisfaction is our number one priority, continuously striving for excellence,” Pattni continues. Allied’s excellent track record over the years has meant that it is today partners and distributes a wealth of major brands and products commonly used throughout the mining sector, a fact that allows the company to source solutions world-wide at an affordable price. Among the key product manufacturers that Allied can call itself a distributor of, one can list 3M, Uvex, Heckel, Hardox Wear Plates, Yale Lifting Equipment, Buccaneer Pumps, Ridgid Power Tools, Karcher to name but a few. More recent developments have seen the company agree partnerships with a number of other reputable players, specifically Heckel Footwear, Karcher High Pressure Cleaners and Ridgid Power Tools. In addition to this, the company has gained a fleet of vehicles that will now be used for transportation and leasing and hiring.
“Our manufacturers are carefully shortlisted and tested to ensure we provide the best quality products, abiding by ISO standards,” Pattni highlights. “Allied is a highly reputable and reliable company where the end user can be assured to be the recipient of paramount service that exceeds all expectations. This means that we are commonly referred to
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Allied Mining Services Limited
as the one-stop supplier and fact that we exist as one of the key players in one of the stockists for all requirements within the mining and country’s leading business construction sector.” sectors and that we continue Tanzania has long been to improve ourselves with Experience that the one of the major contributors each passing year.” company has of operating to East Africa’s growth and Allied has been the heart within the mining sector and soul of East African Allied has been operating in the country since its own development, boasting years inception, playing its part in of experience in the industry the development of the country, something and market sector. “We pride ourselves in that it has been justly recognised for. “In being one of the number one suppliers in 2011,” Pattni explains, “we were honoured Tanzania and one that has taken growth to to become the recipient of the “Second-Best another level,” Pattni explains. Tax Payers Award” by the Tanzania Revenue With the world’s eyes having increasing Authority. To us this further reinforces the turned to Africa in the last several decades
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“It does not matter in which area a business is located, sustainability should be the key core value of the company” in the pursuit of investment and business opportunities, the importance of the fact that Allied has been present in the market for so long is certainly not lost on Pattni. “The mining and construction markets have long been, and continue to be, hugely important to Tanzania’s growth as a nation. By being ever-present in the country we have enabled ourselves to remain ahead of
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the curve in comparison to a great many of our international competitors that are relatively new to the scene.” As well as contributing to the economic development of Tanzania, Allied also has a long track record of playing a role in improving the sustainable growth of the mining and construction sectors, something that has risen from the fact that the company
Allied Mining Services Limited
believes that sustainability should be the driving force behind any business, which is in turn incorporated into its core values. “In an ideal world, any company would like to sustain their business for a life-time,” Pattni explains. “Therefore it does not matter in which area a business is located, sustainability should be the key core value of the company and as such one should always work to ensure that this train of thought grows horizontally and vertically within their business model. We at Allied Mining believe this and always ensure we adapt to the market requirements to ensure sustainability is always achieved.” In much the same way as Pattni believes that sustainability should be a goal that all businesses strive towards, he also recognises
that for any business the ultimate goal should be to become the leading figure in its chosen field and sector. “In many ways,” he concludes, “Allied Mining has already achieved this goal in Tanzania and as such it is now our job to retain this position in the marketplace. Meanwhile, it is now our aim to focus towards the rest of East Africa and provide the same services to the mining and construction sector in countries across the region, doing so on the basis of what we have achieved in Tanzania.” For more information about Allied Mining Services Limited visit: www.alliedgroup.co.tz
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Ghana Rubber Estates Ltd
The substance
of tyres
With primary exports to the European market, and the main buyer being tyre manufacturer Michelin, Ghana Rubber Estates Ltd (GREL’s) international footprint and customer base is rapidly expanding
written by: John O’Hanlon research by: Paul Bradley
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Collecting rubber sap from tree
Ghana Rubber Estates Ltd
G
hana Rubber Estates Ltd. smallholders taking part in this scheme. (GREL) started life in 1957, The model is that each outgrower plantation the year Ghana declared its covers four hectares and is run by a single independence from Britain family, planting one hectare per year. The and became the first African reason for this planting strategy is to allow country to free itself from colonial rule. outgrowers to grow both a cash crop and a The company’s assets at the time of its food crop in parallel. It is a good deal for establishment consisted of a comparatively these families, who have the security of a small private plantation, known as Dixcove commitment from GREL to purchase their and owned by R T Briscoe. In those days it rubber output for up to 35 years – the entire covered an area of 923 hectares at Abura in producing life of a rubber tree. The phase four expansion is now complete the Western Region of the country, however it was nationalised only three years after and, like its predecessors, was supported independence, becoming a state farm. Since by Agence Française de Développement. then private interest has been It involved planting in the reintroduced with various region of 10,000 hectares of rubber. Phase five is now offtaking tyre companies, the end users of the product, well under way and will run taking a shareholding. The for three years during which time GREL will be working government of Ghana still Outgrowers supported has a 25 per cent holding. with over 4,000 outgrowers by GREL GR E L has g row n to plant a further 13,500 hectares. Managing Director progressively over the intervening years and today, with its Lionel Barre estimates that within three to headquarters at the western city of Takoradi, four years the scheme will cover around it farms the largest industrial rubber estate 40,000 hectares and that these farms will in Ghana, owning more than 18,000 hectares produce up to 70,000 tonnes of rubber per of rubber plantation, of which approximately year, once the trees have matured between half is made up of mature trees. GREL’s 2020 and 2023. Going forward GREL wants annual revenue is in excess of $80 million, to add 2,300 hectares to the outgrower generated from an output of more than estate each year. At the same time as expanding the 20,000 tonnes of granulated, or crumb rubber per year. In addition to the rubber it amount of land managed by outgrowers, processes from its own operations, GREL had as we reported last year GREL is also developed an outgrower programme since expanding and replanting its own estates. 1995. This programme has been expanded “We have a programme of investment of in three phases, with a fourth currently around €25 million for our entire estate in taking place. There are more than 5,600 terms of extension and planting over the
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• Internet Service Provider • Electronic Security Solutions • Communications Networks • IT Support Services • IT Procurement • Communications Convergence
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Ghana Rubber Estates Ltd
Worker on the plantation
“Out ICT platform has been upgraded, with all our remote sites hooked unto the head office network” coming five-year period,” said Barre. This expansion in the company’s assets is a reflection of increasing demand globally. “Today, worldwide consumption and production are almost the same, between 10.5 million and 11 million tonnes per year, but the demand is growing very fast: China is consuming basically 30 to 35 per cent of global production already and is growing very fast, as are India, Brazil, Turkey and Nigeria. But these countries, especially
India and China, are not really suited to producing their own rubber crops, so that is a big opportunity for us in Ghana.” So for the future, GREL’s focus is firmly on expansion. “By 2020 we will be tripling the size of our factory, which means that we will have the capacity to produce 50,000 to 60,000 tonnes per year, compared to 20,000 today, “ Barre said last year. As he predicted in 2012, an additional 4,000 hectares have since been added to the company’s own
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holding, and in addition, “The Rubber Outgrower Plantations Project, of which we are the Technical Operators, will assist 4,000 farmers to plant 12,000 hectares. In 2013 alone, the target is to assist 2,000 farmers to plant 4,000 hectares.” To cope with the anticipated increase in volume of the raw materials that will have to be processed, the expansion of the factory has been prioritised. Its capacity will grow
to 60,000 tonnes by 2018. Other investments such as housing, expansion of the factory buildings, new power generation plant, and the construction of warehousing are being carried out. The total cost of this will amount to about €6.5 million, he says. Nor have the ancillary services been neglected: “A new state-of-the-art laboratory to check the quality of our produce has been completed. Also we have trained four managers as industrial
“The Rubber Outgrower Plantations Project will assist 4,000 farmers to plant 12,000 hectares”
Out on the plantation
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Ghana Rubber Estates Ltd
A tapper at work
engineers so they will be qualified to conduct periodic studies to enable us improve on our current procedures and processes. Also we have introduced the NR standard in our factory and training is taking place on the shop floor to improve productivity.” Another important initiative has been to update the back office systems. “Out ICT platform has been upgraded, with all our remote sites hooked unto the head office network. A software program has been developed to enable us track our processes with great accuracy For example the remuneration system for rubber bought from farmers has been automated in such a way
that the speed of payment has improved: the target is to pay farmers within two hours from the time they drop the rubber at our factory. A sales module has also been developed to enable us to better monitor and track the information supplied to our outgrowers.” Working with partners like CTSL Africa, a Takoradi based company that is well versed in the implementation of large scale ICT and Integrated Security Solutions (ISS) projects to government, parastatal, corporate and NGO organisations throughout Africa, GSEL and its growers are today working on first-world level technology platforms. Improvement initiatives like these, and the
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CHEMICO LIMITED Q U A L I T Y P R O D U C T, Q U A L I T Y S E R V I C E
CHEMICO Ltd is a 100% Ghanaian-owned business. We are a leading importer of agrochemicals and fertilizers and also distributors of feeds and veterinary products in the poultry and livestock industry. • FERTILIZER BLENDING The first Company with a fertilizer blending plant in Ghana for providing specific fertilizer grades for specific crops. • AGROCHEMICAL FORMULATION CHEMICO is the only agrochemical formulator in Ghana, and formulates the following classes of products, Insecticides and Foliar fertilizers. • REPACKING Chemico also has facilities to repack agrochemical powders and liquids.
T: 233-303-202991, 202992, 202345, 206548 F: 233-303-202000 E: chemico@chemicogh.com
Ghana Rubber Estates Ltd
Head office
efforts the company has been always been important to making to refine the logistics GREL, and is very much and transition of materials encouraged by the culture between the plantations and of its parent group, SIFCA, the factory have already based in Abidjan, Cote Tonnes per year target started to show positive d’Ivoire and one of Africa’s factory capacity by 2018 results, adds Lionel Barre: biggest agro-industrial firms. The company runs an “We have cut down on the transport of labour and raw materials from apprenticeship scheme, aiming to recruit the plantations to the factory. We have been new graduates, many of them having able to predict our needs more accurately in already completed internships with GREL. terms of trucks, number of people, and other There are opportunities to gain experience infrastructural requirements especially where in other countries where the group operates, the newly acquired acreage is concerned. such as Nigeria, Liberia, Cote d’Ivoire and Training and the transfer of skills has Ghana itself. A training unit within the HR
60,000
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Collection of cup lumps
department circulates all departments at the beginning of each year to ascertain the skill enhancement appropriate to each individual, and based on this a mentoring and tutoring programme is drawn up and implemented. The automotive industry that is the main end user for the rubber supplied by GREL may not be the most environmentally friendly, but rubber production as practised in Ghana is a green industry. Plantations of rubber trees
sequestrate CO2. The plantations therefore act as a carbon sink. “Rubber trees have an economic life of 35 to 40 years,” Barre reminds us. “GREL has entered into an agreement with a company called Takoradi Renewable Resources Limited (TRELL) that is felling our old trees and processing them into chipboard. The field is then replanted.” By-products can be used as biofuel to produce green energy. Furthermore, as part of GREL’s
“As part of our environmental charter... we avoid ecologically sensitive zones where planting would disturb the ecology” 74 | be weekly
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Ghana Rubber Estates Ltd
Weed control at GREL plantations
contribution towards food security, it has a unit that provides technical assistance to farmers who want to adopt good agricultural practices, enabling them to increase their food output per unit area. GREL has signed an agreement with a social agricultural enterprise to use its premises as a learning centre for its rubber farmers in both animal and crop farming. This initiative will cost in the region of €80.000, he says. And as well as providing high levels of direct employment, and helping a huge number of farmers to achieve long term financial security, it directly supports a number of social initiatives. The communities affected by GREL’s activities have grouped together to form an association called ‘ACLANGO” (Association of Chiefs Land on which GREL
Collection of latex
Operates) through which all community developmental projects are channelled. Projects such as schools, clinics and water boreholes are undertaken for them and under a scholarship scheme GREL sponsors 14 children every year. “We have a charter on social, HIV/AIDS, Environment, Health and Safety which all employees strictly adhere to,” Barre concludes. “For example, as part of our environmental charter we have stopped planting in wet lands, and we also avoid ecologically sensitive zones where planting would disturb the ecology.” For more information about Ghana Rubber Estates Limited visit: www.grelgh.com
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Included The BE Mining Directory showcases leading mining organisations from across the world, ranging from big corporations to junior mines and their supply chains. Be seen throughout our portfolio of magazines: • BE Mining Directory • BE Mining • BE Weekly • BE Monthly •
To find out how to get involved contact: vincent@bus-ex.com