EMEA-Jan-2012

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ACHIEVING BUSINESS EXCELLENCE ONLINE

EMEA EDITION Jan/Feb 2012

British American tobacco: Responsible tobacco

Coca-cola:

Bottling a brand

L’Oréal:

India’s best ever makeover

puts sustainability

of its business Five steps to a sustainable future



Editor’s letter

A new direction

CONTRIBUTORS Huw HilditchRoberts

Huw Hilditch-Roberts is director in charge at the Institute of Consulting and director of Membership & Business Development at the Chartered Management Institute.

Rocco Magno

Rocco Magno is general manager of American Express FX International Payments at American Express Global Foreign Exchange Services, assisting clients with international payments.

Richard Schooling

Richard Schooling is chief executive officer of Alphabet, the multi-marque car leasing and fleet management company owned by BMW.

Jean Cox-Kearns

Jean Cox-Kearns is director of Compliance for Dell Global Take Back and is co-chair of Dell’s Global Take Back Compliance Council.

W

elcome to our first magazine of 2012 and the very first glimpse of our brand new vision for Business Excellence. We’ve been working hard to produce what we think is an inspiring and fresh reflection of the very best in business today—and we hope you enjoy reading it as much as we enjoyed creating it. This is only the first step in bringing a whole new look and feel to our magazines and website over the coming weeks and months, and we’d love to know what you think, so please don’t hesitate to get in touch with your feedback. One thing won’t be changing, though, and that’s our ongoing dialogue with inspiring and exciting businesses from all over the globe. This month we’ve been talking to British American Tobacco Nigeria and L’Oréal India; and we’ve been finding out about Qatar’s extensive preparations for the FIFA World Cup in 2022. Keep reading, keep in touch, and we’ll keep bringing you fascinating accounts of business excellence from all four corners of the globe. Enjoy!

B. Done Becky Done managing Editor bdone@bus-ex.com

January 2012 | 3


A fresh approach in 2012

in touch EDITORIAL

Becky Done managing editor bdone@bus-ex.com Martin Ashcroft Editor In Chief mashcroft@bus-ex.com

autifully different

DESIGN

Matt Johnson Art Director mjohnson@bus-ex.com Louise Culling Production Designer lculling@bus-ex.com

BUSINESS

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 info@bus-ex.com

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contents 12 COMMENT: THE YEAR AHEAD

Predictions and hope for 2012

Some predictions on what 2012 might hold for the UK, Europe, the US, the rest of the world and more.

12

14 COMMENT: IT

Gamification and business software Some people think gamification is a fad too far, but the concept of using games in business software is not new.

16 COMMENT: TELECOMMUTING

Extreme telecommuting

Could you live abroad and keep your job? Read this firsthand account from Barry Frangipane, who did just that.

26

18 STRATEGY:

How to source credible consultants One way of enhancing your business in 2012 is to hire a consultant—but you need to shop around.

26 OPERATIONS:

Minimising risk from currency fluctuations

Thoughts and advice to UK companies on how to manage their international payments and minimise risk during a volatile European Market.

32 SUPPLY CHAIN:

Meeting the energy challenge

The global transport system has been asked to go on a diet—and an expensive one at that—but innovation can help to keep the supply chain moving.

40

40 SUSTAINABILITY:

Dell puts sustainability at the heart of its business

There are five key areas organisations must address to ensure a sustainable future.

January 2012 | 5


business showcase

48

48 British American Tobacco Nigeria

Tobacco and responsibility

British American Tobacco’s Nigerian subsidiary has achieved a near-monopoly, commanding 80 per cent of the market.

62 Image Resources Buried in the sands

70

This exploration company is poised to become not only a minerals producer, but a major global force in zircon and titanium production.

70 L’Oréal India

India’s best ever makeover

Though market leadership is critical to this global brand, it also excels in sustainability and social responsibility at local level.

78 Coca-Cola Bottling Egypt

78

Bottling a brand

The Coca-Cola Company’s 300 worldwide bottling partners are the powerhouse behind its famous name.

86 Beton WLL Making ready

Qatar’s leading ready-mix concrete company is preparing for significant growth ahead of the 2022 FIFA World Cup.

6 | January 2012


contents

104

94 Qatar National Cement Company

Cementing development

This cement producer will be helping to ensure that the sky-rocketing demand for construction materials in Qatar is met.

104 Foulath

Heart of steel

This investment holding company has established itself as one of the most comprehensive steel producers in the Middle East.

114

114 Kenya Meat Commission A prime cut

A producer of top quality meat cuts and processed products that is determined to resume its leading position in East Africa.

122 Maputo Port Development Company An attractive port of call

The port of Maputo in Mozambique is undergoing an investment programme that will help to drive trade for the whole country.

130 Evraz Highveld Steel and Vanadium Limited

122

A striking transformation

South Africa’s second largest steel producer is working towards becoming a more responsive and forward-thinking operation.

January 2012 | 7


business showcase 140 Debswana Diamond Company

Sparkling success story

Diamonds might be a girl’s best friend but they are also the best friend of an entire African country.

148

148 CLYDEUNION Pumps Pumping up the profits

Business dynamics continually demonstrate that success breeds change, as is the case with this pump manufacturer.

156

156 Konecranes

Heavy lifting champion

One of the largest crane manufacturers in the world ironically comes from one of the smallest countries in the world.

164 Imperial Group Investing in Africa

A restructure in 2008 has completely transformed the fortunes and profile of one of South Africa’s biggest companies.

172 Altech UEC South Africa

Technology that touches lives

172 8 | January 2012

This digital technology specialist’s new Mount Edgecombe site is Africa’s most advanced facility of its type.


contents

188

180 Blendwell Chemicals Cleaner and greener

After cleaning and greening South Africa, this manufacturer is extending its reach across the African sub-continent and beyond.

188 IPP Resources Leading by example

Tanzania’s largest diversified resources group is also the country’s only wholly indigenous mining and exploration entity.

200 Meikles

200

From recovery to growth

In the aftermath of hyperinflation in Zimbabwe, one business has been unearthing new opportunities and making plans for growth.

210 Gold Fields: South Deep project History in the making

A massive improvement and development programme is set to create one of the world’s most productive gold mines.

220 MineRP

Ahead of the pack

210

A unique approach and a resistance to being pigeon-holed is leading to success in a competitive marketplace.

January 2012 | 9


A fresh approach in 2012

autifully different

Discover how we can make a difference for your business by viewing our Media Guide CLICK HERE


business showcase

226

contents

226 Water Corporation: SSDP expansion Planning ahead

Expansion of the Southern Seawater Desalination Plant in Western Australia will reduce dependency on climate sensitive rainfall.

240 Qatar Concrete Company A cooler mix

240

A pioneering concrete mixing technology may well revolutionise production of this essential construction material in hot countries.

248 Qatar Technical

Masterminding product engineering

This one-time industrial refrigeration company has transformed into a knowledge-based engineering and manufacturing institution.

256 Technip Asia Pacific Expanding expertise

With a number of new subsea oil and gas mega-projects on the horizon in the Asia Pacific region, this company is gearing up for growth.

266 Coca-Cola Bottling Company of Jordan Fizzing with pride

256

This beverage bottler in Jordan has racked up many environmental and social achievements in its role as a good corporate citizen.

January 2012 | 11


Predictions and hope for 2012 by: Stephen Archer


comment: the Year ahead

E

very pundit and futurologist I have met or heard has said that 2012 is the hardest year to call. I agree and that’s my letout when this is reviewed in 12 months’ time. So here goes: UK: Growth will return after a technical recession in the first half of the year. The UK economy will increasingly look like the more attractive of Europe

for expelling Greece (they will not volunteer to leave) will be in place. The ECB will buy sovereign bonds having bought private bank bonds in 2011 to the tune of half a trillion Euros. Italy will have a torrid year and suffer the effects of austerity measures—large-scale public disorder. And maybe a new opera and Ferrari. The Eurozone will then achieve

“Obama will just be re-elected—even if he is pitted against Romney” aside from Germany and Scandinavia. Inflation will fall to three per cent; the pound will gain strength against the dollar and Euro by about five per cent. Unemployment will peak at 2.9 million. We will have a ball with the Queen’s Golden Jubilee and the Olympics where the UK will win 26 gold medals. Europe: The Eurozone will go into a minor recession but will emerge again by the year-end. The debt crisis will only just have a clear resolution by Easter by which time the mechanism

some stability and the crisis will have passed. USA: The economy will continue to recover, though the electorate will continue to feel less welloff. Depending on the Republican nomination, Obama will just be re-elected in November—even if he is pitted against Romney. The debt will reach $16 trillion but few will care—much. The

US recovery will help Obama be re-elected and the global economic confidence to lift. World: Assad of Syria will be gone by June and there will be a quiet revolution in Iran that will depose Ahmadinejad. Pakistan will continue its bad relations with the US and be more isolated in the region. The new Chinese premier will preside over growth—but not double digit—in 2012. Other: There will be a flood/earthquake/tsunami/ volcanic eruption. Perhaps, just perhaps, an improvement in national matters will give us back the capacity to be shocked by these events. Cyber attacks, commercial and geopolitical, will rise and be a cause of rising international tensions. The Artist will win Best Picture at the Oscars. That dog deserves its own Oscar! So there are some predictions but no one will be less surprised than me if they are all wrong!

Stephen Archer

Director of UK business and leadership consultancy, Spring Partnerships. www.spring-partnerships.com

January 2012 | 13


Gamification G and business software: a fad too far? by: andrew kinder

iven that gamification is so clearly based in consumer technology, it can be difficult to make the leap to how it may work for the likes of an ERP system or operational control software. When one looks at ‘typical’ gamification elements— virtual currencies, badges, competitions and progress bars—they seem more Facebook than factory floor. But look again. Some, though not all, of these elements fit incredibly well into modern business computing and solve real issues. Firstly, the concept of including games as part of business software— especially end user training—is not new. Infor has used a game to train people in supply chain network design modelling for quite some time. It is a great way to instantly see the cost, customer service and environmental impact of your decisions on where to locate plants and distribution centres, without a university lecturer in logistics standing by. Secondly, techniques such as leaderboards, trophies


comment: IT or badges are already in place in many departments. It is simple enough to transport these techniques to operations and begin to rank suppliers—publishing those rankings to encourage hea lthy competition. These leader boards can be based on a wide range of characteristics, rather than just on time delivery. For example, the ability

ERP systems to develop components that are then integrated into a finished product. Each co-manufacturer’s ERP has different levels of ‘completion’—because they have different levels of comprehensive, accurate data that impacts upon the quality of the output. Progress bars showing that level of completion could

“Boundaries are blurring and in some cases have already come down” to provide advanced shipping notices, offer vendor managed inventory programmes or exchange order and supply information electronically via the web, could all be rewarded with a higher ranking. What business wouldn’t want its suppliers striving for recognition and pushing its way up the leader board? And incentives for those suppliers who look like they’re not going to make the cut? Progress bars also offer low hanging fruit. Take the example of co-manufacturers who may be using different

become a quick visual reference that highlights the source of delays or problems. While most finance departments would groan under the weight of managing a virtual currency, the development of a points system that can be used to secure rewards is commonplace in many industries. Chances are you carry an example— the Tesco Clubcard or other

reward card, in your wallet. Many larger companies with extensive travel already participate in such schemes via frequent flyer miles or hotel rewards systems which benefit both employees and the business. However, there is very little to stop this initiative being extended to other departments. And in this case, points might not make prizes, but they definitely lead to collaboration as teams come together to bargain and barter. If this all sounds a little far-fetched, consider that the consumerisation of business computing is already underway. Businesses are demanding that the software they use is as easy, quick and intuitive as the software they have on their laptop, iPad or PC at home. Boundaries are blurring and in some cases have already come down. Gamification is just another example of those dividing lines being rubbed out.

Andrew Kinder

EMEA director of Solutions Marketing at global ERP software provider Infor www.infor.com

January 2012 | 15


Extreme telecommuting by: Barry Frangipane

Y

ou don’t have to tell Barry Frangipane that the internet has made the world a little smaller. Frangipane, a software engineer, was used to telecommuting from his home in Tampa Bay, Florida, but he didn’t realize how far telecommuting could reach until he read Under the Tuscan Sun, a book about an American who chucked it all to live in Italy. “The key about Under the Tuscan Sun was that they had a ton of money,”

16 | January 2012

said Frangipane, author of The Venice Experiment, a memoir that chronicles his year living in Europe while he telecommuted to his software job in the States. “Anyone could move to a foreign country with a ton of money. We wanted to see if a typical middle-class couple could do it, with a job. We looked at the realities of it, and theorised it could work. On the downside, my wife Debbie wouldn’t be able to keep her job, as she did not telecommute. On the upside,

we could sell both cars and eliminate the monthly tab for two car payments and the associated insurance. Further, we both prided ourselves on being great cooks, so we’d be able to experiment with European dishes in our own kitchen— in Europe!” They settled on Venice, and lived 13 months, sending emails to their friends about their experiences. Those emails served as the inspiration for the book. Through their experience,


comment: TELECOMMUTING “Anyone could move to a foreign country with a ton of money. We wanted to see if a typical middle-class couple could do it, with a job” they devised the following tips on how others could make an American living while living abroad. Telecommuting The changes over the past 10 years for telecommuters have been subtle, but together they have produced a tipping point making the idea of extreme telecommuting a reality. Advances in the quality of videoconferencing make meetings as effective as they would be in person. Google and Facebook have both launched free high quality videoconferencing in the past year. I was gone for 13 months, and most of my clients never even knew I had left. Housing Accept the fact that living quarters are a little smaller, and a little older. American housing, like just about everything else in

America, is big compared to the rest of the civilised world. Having said that, you’ll wind up spending your non-work time seeing sights and exploring your new hometown. Cars Choose a place in which travel by car is not necessary. In Venice, everything is connected by the small tributaries and waterways that thread through the city. Most everything you need— shopping, groceries, business services—was a brisk walk or gondola ride away. Cook You could spend a small fortune eating in the tourist

trap restaurants, or you could buy fresh groceries every day and live as the locals do, creating your own meals and stopping by the smaller, lesser known eateries and cafés frequented by the locals. “For those of us who telecommute to work, we can now live out our dreams, and live most anywhere in the world,” said Frangipane. “And I have heard all the excuses, with people saying, ‘I can’t just up and move to another country.’ Well, ask yourself. Do you have any real concrete reasons you can’t go? Or is it just that you’re afraid you might like it too much?”

Barry Frangipane

Barry Frangipane is an author and blogger from Florida. His first book, The Venice Experiment, was published in August, 2011. www.veniceexperiment.com

January 2012 | 17


How to source credible consultants One way of enhancing your business in 2012 is to hire a consultant—but you need to shop around, as Huw Hilditch-Roberts, director in charge at the Institute of Consulting, explains

18 | January 2012


strategy

January 2012 | 19


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Huw Hilditch-Roberts

20 | January 2012

it h lead ing economists predicting a technical recession in the UK—two consecutive quarters of negative growth—it seems inevitable that businesses are facing a tough year ahead. To survive, they will need to differentiate, innovate and certainly be more competitive than ever—and for many of them, this will require change. A common problem facing organisations is they tend to lack people internally who are experienced in leading and managing change as well as individuals who can bring new perspectives and smarter ways of working that will enhance productivity and performance. One solution that works well for large organisations and SMEs is hiring experienced, independent consultants with specialist skills on a project basis who can handle their most pressing business challenges. However, with significant pressure on budgets, companies will be cautious about hiring consultants and will want to make the


strategy

“Detailed planning is linked to project success and it needs to be meticulous” right decisions and avoid costly mistakes. Lately there has been significant debate about the value consultants deliver, as well as their cost, so how can organisations ensure they hire professional and credible consultants that deliver? Pre-planning Firstly, let’s look at the pitfalls for companies to avoid—there are many, but the biggest is the failure to plan. Detailed planning is

linked to project success and it needs to be meticulous. In the planning phase, businesses need to ask themselves a series of questions including whether they actually need consultancy support or if it could be a case of requiring additional resources. Also, is there actually someone within the company who might be capable of undertaking the project? If an external consultant is required, then every

aspect of the project needs to be scoped out, including the expected outcomes. This level of detail will ensure that expectations are set from the outset and that the project brief is clearly defined and understood by everyone. Shop around for consultants My next piece of advice is that companies should shop around for consultants and never appoint the first

Every aspect of the project needs to be scoped out

January 2012 | 21


Businesses need to check and double-check experience and CVs

22 | January 2012


strategy

“At the interview stage, candidates should be able demonstrate a full understanding of your issues based on the brief” candidate. Quotes, tenders or formal proposals should be invited from a number of consultants which will enable a business to get a clear understanding of who is out there, how they would respond to the brief and what they would charge. Testing the market is the secret to getting a consultant at the best price! Interviews At the interview stage, candidates should be able demonstrate a full understanding of your issues based on the brief and explain how they might approach and deliver the project within the deadline. Obviously, this is also the time to quiz candidates about their specific experience and to ask them to demonstrate a track record of solving similar business problems. Businesses also need to check and double

check experience and CVs by getting references from clients and colleagues. A successful consultancy project is one that is supported by the business, so project owners should secure buy-in from all project stakeholders. Agreement needs to be reached on all key elements of the project to ensure the consultant is working to a clear and tightly defined brief that is aligned to the business goals from day one.

The Certified Management Consultant (CMC) award is the only globally-recognised ‘kite mark’ of professionalism in consulting

Look for professional qualifications There are other considerations too. According to the analyst group IDC there are four key qualities clients need to look for in the consultants you hire—integrity, an analytical mind, clarity of expression and empathy. I would add to this: a sign of a good consultant will be their commitment to professional development so they can give their clients the most informed and upto-date strategic advice and best practices. Competence-based accreditation by professional bodies is a useful indicator of a consultant’s ability to deliver and, in management consultancy, the Certified Management Consultant (CMC) award is the only globally-recognised ‘kite mark’ of professionalism in consulting. You may also like to think about how they will

January 2012 | 23


fit into the existing team. A good consultant will be deft at building relationships quickly with all employees. If possible, introduce the interviewing consultants to the people they will be working with and get the staff’s feedback on each interviewee before making a final decision.

There should also be no surprises when it comes to costs. Be clear from the start what the consultant will charge and what they will deliver for this money and make sure you understand if the consultant’s fees include expenses or not. Agree project boundaries and limits and an exit plan so that

if the project needs to be extended there is a contractual framework in place to support this. A successful consultancy project is one that is meticulously planned and managed so businesses should regularly review project progress and how the consultant is working. It is also sensible to

“Be clear from the start what the consultant will charge and what they will deliver for this money” 24 | January 2012


strategy

A good consultant will be deft at building relationships quickly with all employees

appoint a project manager who is responsible for managing and liaising with the consultant, to ensure that the project stays on track. The Institute of Consulting (IC) will soon be launching a National Register of professional consultants who have demonstrated successful experience and practice in consultancy. This will be an essential starting point for any company considering hiring a consultant. We (the IC) have also

developed a guide to buying consultancy services to help companies ensure project success and obtain the best value for money. The guide covers checklists for hiring consultants, best practice behaviours and key considerations for each stage of the procurement that will make the difference between success and disappointment in a consultancy engagement. They can be found at www.iconsulting.org.uk. With a tough year ahead,

businesses need to be able to buy in specialist skills when required without being daunted by the process and the costs. We hope that by following our simple checklist, businesses will hire consultants this year that will make a genuine difference to their business success. For more information about The Institute of Consulting (IC) visit: www.iconsulting.org.uk

January 2012 | 25


26 | January 2012


Operations

Rocco Magno, general manager of American Express FX International Payments, offers his thoughts and advice to UK companies on how to manage their international payments and minimise risk during a volatile European Market

January 2012 | 27


It’s essential that companies look ahead as much as possible when managing international payments


Operations

A

ccording to our resea rch, over half (56 per cent) of UK small and midsized companies say their confidence in international trade has decreased over the last year as a result of the volatility of the Euro. This is hardly surprising as the headline-dominant ‘Eurozone crisis’ is front of mind for many UK business leaders trading internationally. In fact, the top concern when importing or exporting is fluctuations across all currencies. Indeed, the last year has been tempestuous for exchange rates: for example, since the end of April 2011, sterling has weakened by over eight per cent against the US dollar. Despite the concerns, the majority of UK SMEs do not protect themselves from the risk of currency volatility and as such, the average UK SME risks losing over £19,000 a year, equating to £20.4 billion across the market as a whole. These fluctuations are not only affecting confidence but also the bottom line for many companies, due to

a knowledge gap on how businesses can protect themselves from these fluctuations. As 2012 looks set to be another year of uncertainty, it ’s important that companies understand there are a number of tools and methods available which can help minimise their risk. Planning ahead If I could give just one piece of guidance to a UK business

£20.4 BillioN

Potential loss across the market as a whole if UK SMEs do not begin to protect themselves from the risk of currency volatility owner operating in the international marketplace, it would be to plan ahead. It’s essential that companies look ahead as much as possible when managing international payments in order to effectively protect themselves from currency fluctuations.

The purchase of forward contracts is an example of a simple currency hedging strategy, providing pr ot e c t ion against movements in exchange rates. Similar to purchasing a fixed rate mortgage, a forward contract allows a business to lock in an exchange rate for a chosen period of time. Locking in the exchange rate means the risk is minimised by fixing future costs—hence, increasing control over budgets and forecasts. The forward contract means a business is able to make payments at the pre-agreed rate, regardless of the actual market rate. With forward contracts, as with other instruments to protect against risk from currency fluctuations, it’s important for a company to look at its individual requirements for international trade. With this at the epicentre of a company’s strategy, the business can take a tailored approach with the tools and services available. For example, American Express FX International Payments offers two types

January 2012 | 29


Rocco Magno

of forward—fixed or window. A window contract is more f lexible, still allowing customers to buy an amount of currency at a fixed rate over a specified time period, but also allowing draw down on this sum at any time from inception to maturity, thus providing a significant cash flow benefit. These are just examples of instruments which are available to businesses, the main takeaway being that companies can talk to experts and find out what works best for their business needs.

exchange rates In a market where uncertainty is the name of the game, there have been some bold fluctuations recently—certainly with the sterling paired against the Euro or the US dollar. In addition, we are regularly reading about problems in the European market, which can paint a worrying picture; but what in reality is the impact on exchange rates? With this in mind, it is more important than ever for companies to familiarise themselves with exchange rates and any variations when trading in the international marketplace. Foreign exchange providers can help in this area, contacting customers when rates may be favourable, warning them if there are events that could negatively impact rates. Daily updates from providers can help

“It is more important than ever for companies to familiarise themselves with exchange rates” 30 | January 2012

build knowledge on a certain market and currency. This knowledge should be shared across all areas of the business from the finance department to the sales team: finance so they can understand any implications on the bottom line; and the sales team so they can understand what margins they can play with. In addition, increasing your knowledge on currency fluctuations in the relevant markets can help build confidence in the international marketplace. Speak to the experts With this increased knowledge and confidence, companies can confidently discuss their international payments strategy with their provider. The core service of a central foreign exchange provider is to help protect the customer’s business from foreign exchange risk and manage their budgets. We acquire a deep understanding of the customer and with them build a strategy on how to manage their foreign exchange risk, offering the best instruments


Operations

Increase your knowledge on currency fluctuations to help build confidence

for their business. With these factors met you can build a trusted relationship with that service provider and ensure your time is spent on your core business. With the international marketplace growing and becoming more common practice for UK businesses during this ‘export-led recovery’, it is important to seek the right guidance, not only to minimise risk against factors outside of your immediate control but also to enable you to plan and grow your business effectively.

Streamline payments The world is getting smaller, and companies need to move money around it faster than ever before— giving you the competitive edge and service which suppliers and customers can come to rely on. International payment specialists focus 100 per cent on their core business

of foreign exchange, leaving businesses to concentrate on what they do best. This helps streamline operations and gives the opportunity to pass the rewards of these efficiencies on to customers. The ability to make fast, efficient payments overseas can be a significant contributor to a company’s success.

Business owners can contact the American Express FX International Payments team on 0800 73 11 366 (representatives are available to answer Monday to Friday, 24 hours a day) or can visit the recently upgraded website: www.americanexpress.co.uk/fxip

January 2012 | 31


Meeting the energy challenge Richard Schooling, chief executive of multi-marque car leasing and fleet management company Alphabet, explains how companies can leverage innovation to fuel the supply chain

32 | January 2012


Supply chain

January 2012 | 33


L

iquid f uel oils the wheels of the global supply chain. Worldwide, transportation burns through 8.5 billion litres of petroleum products a day, using up 62 per cent of the world’s oil production and 25 per cent of its total energy consumption. Around a third of this fuel is used to move freight; and while passenger journeys account for the rest, many of them are for the purpose of delivering business products and services—so they can justifiably be included within the supply chain. It’s a vast, intricate and incredibly proficient machine which, despite its overwhelming dependence on a single source of energy, has so far proved to be reassuringly resilient to sudden shocks. Of course there were inevitable disruptions to just-in-time deliveries after the Icelandic

volcano and Japan’s tsunami. But natural phenomena on that scale are rare: it seems that nothing can slow the machine down as long as its fuel tank is kept topped up. However, fuelling the supply chain is becoming increasingly problematic. In recent years, the Parisba sed Inter nat iona l Energy Agency (IEA) has cut its forecast for future oil production by 20 per cent. Although the IEA maintains that supply will meet demand for the next 20 years, there is also no shortage of indications that economies, as well as individual businesses, are struggling with unexpectedly high energy costs, especially for liquid fuels. Indeed, it’s become clear that the global supply of conventional crude oil peaked and went into decline four or five years ago, leaving a gap that’s being filled with

“Fuelling the supply chain is becoming increasingly problematic” 34 | January 2012

by-products like natural gas liquids (NGLs) or from nonconventional resources such as Canadian tar sand. But while NGLs provide volume, they deliver less energy per barrel than conventional oil. Tar sand liquids are extremely expensive to produce; they deliver a lot less ‘net’ energy than even NGLs; and they will never be available in large volumes. In effect, the global transport system has been asked to go on a diet—and an expensive one at that. Nor is oil production the end of the story: as every purchaser knows, what matters isn’t how much of something is produced but how much of it is actually available to buyers. When it comes to liquid fuels, the critical factor is net exports—what gets on to the market after oil producing countries have taken out what they need for domestic consumption. Jeffrey Brown, a Texan geologist, and Samuel Foucher, a physicist, have been researching the issue for several years. They point out that total oil production


Supply chain

20% Percentage amount the Paris-based International Energy Agency (IEA) has cut its forecast by for future oil production

The oil export market is running increasingly lean


40% by 2020 Amount net available exports to the rest of the world could decline by, if China and India maintain their current rate of consumption


Supply chain

“In effect, the global transport system has been asked to go on a diet—and an expensive one at that”

A transition away from liquid fuels could take many decades

from the top 33 oil-exporting countries has been flat since 2005, while their internal consumption has been rising by 2.7 per cent per year. Brown and Foucher estimate that if China and India— the two fastest-growing oil importers—maintain their current rate of oil consumption growth, net available exports to the rest of the world could decline by as much as 40 per cent by 2020. Even the US isn’t immune. Despite the American public’s antipathy to high gasoline prices, the US became a net exporter of refined petroleum products (not crude oil) for the first time in 62 years in October, as overseas buyers in more buoyant economies outbid domestic consumers. With the oil export market already running increasingly lean, 2011 is shaping up to be the most expensive year in

history (in inflation-adjusted terms) to buy oil. So far, transport users and providers have mitigated this huge run-up in oil costs by increasing the efficiency of their equipment and processes. For example, the average new company car in the UK now uses 25 per cent less fuel per mile than its 2005 counterpart, which has helped to offset much of the increase in road fuel prices. At sea, as high fuel costs have eroded the commercial advantages of rapid shipment, ship owners introduced ‘slow steaming’ to cut fuel use—albeit at the cost of longer delivery times. These changes have impacts beyond supply management itself. Last year, the insurance giant Lloyds warned in a white paper that less reliable and more expensive energy supplies mean that “businesses run an increasing risk of

January 2012 | 37


“Above all, it’s about enabling businesses to get more productivity from their vehicles and from their people”

Richard Schooling

38 | January 2012

vulnerability to reputational damage and potential profit losses resulting from the inability to deliver products and services.” Meeting these challenges calls for out-of-the-box thinking by both suppliers and customers. Transport is only just beginning to transition away from its reliance on liquid fuels, and such transitions take many decades. One energy expert, Canadian professor Vaclav Smil, believes that 70 per cent of transport will still rely on high-cost oil in 2050. This has profound implications for supply chains—whether we’re talking about materials or people. But businesses are already learning to be more agile in the way they manage mobility. For example, one of the world’s biggest software businesses saved $97 million over a year by holding meetings online instead of having its executives travel 100 million miles by air. And a major pharmaceutical business replaced 38 million flight miles with teleconferencing, saving £60,000 on one meeting alone.


Supply chain

$97 million Amount saved by one of the world’s biggest software companies by holding meetings online

But physical movement often can’t be avoided. That’s why, in my business, we’re combining IT and automotive technologies to offer companies smarter mobility options. It’s all about creating innovative alternatives to the traditional ‘one driver, one car, one key’ approach to car schemes—for instance by giving employees an app that lets them easily hire unused fleet cars at the weekends, so that vehicles carry on earning their keep even when staff aren’t working. It’s also about looking beyond an either/or choice between new-style virtual meetings and old-style travel. There are brilliant new communications technologies that can be leveraged into entirely new mobility solutions

Companies can replace flight miles with teleconferencing

designed for tomorrow’s cost-reducing, increasingly flexible, working practices. Above all, it’s about enabling businesses to get more productivity from their vehicles and from their people. Nobody can wave a

magic wand and transport the world of travel back to the days of cheap oil. The future, for fleets of all kinds, will be very different from the past. And it belongs to those who prepare for it today.

Alphabet is a multi-marque fleet funding company and part of the BMW Group. Operating in 18 countries, the company manages a fleet of over 100,000 vehicles in the UK and more 530,000 vehicles worldwide. Alphabet has unrivalled and award-winning experience of delivering sophisticated company car and employee ownership solutions for some of the UK’s largest companies, such as the BBC, McDonald’s Restaurants, Oracle, Royal and SunAlliance, Yell, Shell and Unilever. www.alphabet.co.uk

January 2012 | 39


Dell puts sustainability at the heart of its business There are five key areas organisations must address to ensure a sustainable future for their business, says Jean Cox-Kearns, director of Compliance for Dell Global Take Back

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Sustainability

January 2012 | 41



Sustainability

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usinesses today are coming under more pressure than ever before from stakeholders, as those looking to purchase shares or invest in a business will choose those organisations with values they believe in, as well as focusing on the standard financial criteria. However, this isn’t a pressure exclusive to firms listed on the stock market. Becoming environmentally sustainable is a responsibility everyone should take on board, and many will frown on those not accepting their part in meeting green objectives.

Power management programmes automatically power off machines at night and during inactive periods

Entrench sustainability into the heart of your business strategy Building sustainability i nto core bu si ness strategy is key to success and every aspect should be considered, from a product’s lifecycle to how a business is operating and the environment in which it is doing business. It is only when sustainability is treated with the same focus and importance as other key business

priorities that long-term value can be really gained. There are several benefits of approaching sustainability as a core business priority. A green strategy is a tested method of driving brand favourability; it can provide differentiation from competitors; and it is synonymous with high performance. At Dell, sustainability is embedded into the foundations of the organisation and is an important part of global strategy, covering four core fundamentals: • Energy efficiency • Carbon neutrality • Recycling • Direct engagement with customers and suppliers Through these four core fundamentals, Dell has saved more than $3 million through various initiatives and achievements, including: • U si ng a p ower management programme that automatically powers off machines at night and during inactive periods • Powering eight facilities in the US and Europe with 100 per cent clean, renewable energy

January 2012 | 43


• Banning export of waste to developing countries and regular third party audits of material disposition through its recycling programme, ensuring minimisation of landfill globally • I mplement ing new ideas through direct eng a g em ent w it h customers and suppliers. How can you embed sustainability into every aspect of your organisation? When ‘green’ initiatives and strategies are being

considered, businesses should address every touch point of their organisation. This will help to better understand and optimise the environmental performance of a business, its services and products. A good example of this ‘lifecycle approach’ to sustainability is the materials and processes Dell uses to reduce the environmental footprint of its product portfolio. As part of a shared goal to find new ways to help preserve the planet’s natural resources, Dell provides practical but innovative

packaging solutions. For example, in 2009, Dell began shipping its netbooks in packaging made from bamboo, a highly renewable alternative to the moulded paper pulp, foams and corrugate often used in packaging. Dell’s bamboo packaging has been certified compostable, making responsible disposal of the packaging easier. Dell was the first major computer manufacturer to ban the export of e-waste to developing countries, giving businesses peace of mind that e-waste is

Giving employees the option to work remotely can save significant amounts of travel time, cost and carbon footpri

44 | January 2012


int

Sustainability

“Becoming environmentally sustainable is a responsibility everyone should take on board” recycled responsibly. The organisation can also help businesses recycle, recover or resell used computer equipment in a secure and environmentally conscious manner that complies with local regulatory guidelines. Employees must be green ambassadors A not her key a rea organisations need to

address when embedding sustainability into their business is actively encouraging employees to consider their own environmental impact and to take an active role in helping to ensure a greener future. Initiatives could include energy and waste reduction programmes and employee recycling events; for example, employees could take part in local focus events for Earth Day and World Environment Day. In addition, giving employees the option to work remotely can save significant amounts of travel time, cost and carbon footprint. Ensure your sustainability strategy doesn’t lose impact outside of the company To ensure your sustainability strategy doesn’t lose impact outside of the company, businesses should not only take into account the impact

of company operations, such as the impact of owned buildings, but also those of supplier operations and customer product use. One of the ways that Dell has addressed these issues is by making it a requirement for primary suppliers to sustainably manage and publicly disclose their carbon emissions during quarterly business reviews. Dell was

2009 Year Dell began shipping its netbooks in packaging made from bamboo the first IT company to join the Carbon Disclosure Project’s Supply Chain Leadership Collaboration to help suppliers with emissions reporting. Dell is also a founding member of the Electronic Industry Code of Conduct and

January 2012 | 45


requires its suppliers to be ISO 14001 registered. Yet despite all this positive progress with the extended supply chain, some challenges remain— most notably suppliers not sharing the same green values or priorities. To overcome this, businesses could enforce guidelines both through business reviews and external audits, putting in place a range of penalties for failing to meet these requirements. Legislation such as WEEE (Waste Electronic and Electrical Equipment) supports businesses in driving green objectives across the supplier base, placing responsibilities on producers, distributors and retailers related to the eventual disposal of goods. It is not only the suppliers that businesses need to

consider when implementing a sound sustainability strategy: they must also bear in mind the customer product use. It is essential for businesses to make it easy for customers to minimise their impact on the planet to ensure the sustainability strategy doesn’t lose impact outside of the company. One of the ways that businesses can do this is by making sure products are more energy efficient, helping customers to reduce their energy consumption. All the above points help to expand businesses’ commitment to a sustainable strategy by extending it to customers and making it easy for them to take part. Measure your sustainability efforts There isn’t always an easy

“It is important to frequently update the sustainability strategy to reflect any new business dimensions” 46 | January 2012

way to measure the results of a sustainability strategy but very often, businesses can look at developing their own measurement tools. For example, when Dell looked at its packaging and the impact it was having on the environment, it found there wasn’t an industry standard to measure, so it created the three Cs: • Cube: the size of the package • Curb: is it easily recyclable? • Content: what is it made of?


Sustainability

It is essential for businesses to make it easy for customers to minimise their impact on the planet

It is important to frequently update the sustainability strategy to reflect any new business dimensions and to continue to develop a sustainability strategy, as the future will bring new ideas

on how to reduce our impact on the environment. Being environmentally sustainable is something everyone should take seriously. Not only is it a social responsibility for everyone, it is a good way to plan for

Jean Cox-Kearns serves as director of Compliance for Dell Global Take Back. In this role, Jean co-chairs the Global Take Back Compliance Council supporting a number of regional initiatives, and specifically for the Europe, Middle East and Africa region (EMEA) is responsible for all electronics recycling

the future and can help alleviate some of the costs for businesses and its customers. By entrenching sustainability at the heart of a business strategy, businesses can position themselves for longterm growth and success.

related legislative compliance, driving the implementation of computer recycling initiatives in compliance with the WEEE (Waste Electrical and Electronic Equipment), Battery and Packaging legislations and Dell’s policy on Producer Responsibility. www.dell.com

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48 | January 2012


British American Tobacco Nigeria

January 2012 | 49



British American Tobacco Nigeria

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BAT Group runs 45 cigarette factories in 39 countries

hough British American Tobacco Nigeria (BATN) was incorporated as an indigenous entity only 10 years ago in 2002, we are now coming up to the centenary of the parent company BAT’s presence in Nigeria. So 2012 will be the occasion for a double celebration among the 14,000 or more Nigerians employed, directly or indirectly, through BATN’s activities from leaf growing to distribution. Because BATN doesn’t just make cigarettes, though manufacturing is a core part of the business. The group runs 45 cigarette factories in 39 countries. Two of these factories are in Nigeria: a state-of-the-art, NIS ISO 9001:2008-accredited plant in Ibadan completed in May 2003 and an older facility at Zaria in Kaduna State which has been operating since 1978. The Ibadan plant cost $150 million to build and has recently been extended and improved with a $70 million investment in new production and packaging machinery. The decision to invest in localised cigarette production and to manufacture in Nigeria international brands that were previously imported from Europe or South Africa—including Benson and Hedges, St. Moritz, Rothmans, Consulate, London, Pall Mall and Royal Standard—was taken in 2002. Today almost all brands— 22 in all—sold in West Africa’s ECOWAS markets are manufactured in Nigeria: only Dunhill is imported. The many challenges that face the tobacco industry including image, counterfeiting and competition from unregulated and contraband manufacturers, are manifest in

January 2012 | 51



British American Tobacco Nigeria

BAT is the only international tobacco group with a significant interest in tobacco leaf growing

Nigeria. Enormous progress has been made in meeting these challenges, says Sade Morgan, BATN’s legal director. “BAT made a decision to face any problems, not by firefighting but by defining, sharing and promoting best practice in the industry.” This approach is

embedded in the business model, whereby the company controls the entire supply chain. BAT is the only international tobacco group with a significant interest in tobacco leaf growing: it provides direct agronomy support to farmers covering all aspects of crop production and environmental best practice. A good example is found in BATN’s approach to child labour. Though BAT will not employ children directly, there were indications

“BAT made a decision to face any problems not by firefighting, but by defining, sharing and promoting best practice in the industry”

January 2012 | 53



British American Tobacco Nigeria that under-age labour was present among spot checks for child labour on the farms the 10,000 people directly involved in the in its supply chain. In 2004, BATN established a scholarship tobacco growing operation at Iseyin in Oyo State, where more than 2,000 tonnes scheme primarily aimed at the children of leaf is grown annually. BATN has met of tobacco farmers. The scheme provides candidates aged 18 and this challenge head-on by emphasising the distinction above with grants to study between the traditional agriculture or related courses attitude that a child should in any Nigerian tertiary education establishment. assist its parents and the To date, 76 students have reality that where work Year BATN established impedes a child’s welfare, received scholarship grants. a scholarship scheme safety or educational “It’s a co-operative model,” primarily aimed at the development, it is considered says Morgan. “The farmers children of tobacco child labour. The company are also supported with farmers interest-free loans and carries out unscheduled

2004

Scholarship awards beneficiary

January 2012 | 55



British American Tobacco Nigeria

Oyo state governor’s visit to Ibadan factory

encouraged to go in for the Best Farmer of the Year awards in which they can win tractors or other machinery.” Nor is best practice is all about addressing abuses, Morgan points out. “We have a good working relationship with the National Office for Technology Acquisition and Promotion (NOTAP), which regulates technology transfer and development throughout the country.” A recent visit to

the Ibadan factory by the director-general of NOTAP, Dr Umar Buba Bindir, led to the lauding of BATN’s leaf growing system as a benchmark technology. During 2012 BATN will be extending its growing operations— and its skills base—to another state to increase its percentage of home-grown leaf and reduce its dependency on the Global Leaf Pool. In this centenary year, BATN is

“The farmers are supported with interest-free loans and encouraged to go in for the Best Farmer of the Year awards” January 2012 | 57


Domestications: the ultimate in interior decoration SuiteS 9/11 Ground Floor, PeeS Galleria ShoPPinG Mall, 2a oSborne road, ikoyi. laGoS. niGeria. WeSt aFrica. tel: +234803 800 2106 | +234803 304 2106 | +234 1271 4863 e Mail: OtOOla2000@yahOO.cO.uk


British American Tobacco Nigeria stepping up its focus Domestications on training, Morgan We at Domestications are interior decorators. We continues. “The technical specialise in turning the four walls of a house into stunning training programme is comfortable homes and your dull offices into attractive outstanding. We tend to work spaces. Our services range from window covering to identify students at the supply of furnishing requirements for every room in the Ordinary National Diploma house and office. Our services are turnkey, to ensure your stay is stress-free and memorable. level rather than students Domestications: the ultimate in interior decoration. with higher degrees, and otoola2000@yahoo.co.uk put them through our nine months of training prior to employing them in the organisation. That way we develop a core of employees with the technical skills we require in our operations, right through from marketing to production.” It’s an approach supported by the Nigerian government, which sets a high priority on job creation and indigenous skills development. A major challenge over the last 10 years has been the illegal importation of cigarettes. Tackling this was not easy, says Morgan, but the success of BATN’s strategy of education is shown in the figures. Illicit trade dropped from over 80 per cent in 2001 to around 20 per cent of the total market in 2009. “In Mali for example, consumers are being educated on the ills of illicit products: if demand dries up, then the traffickers will turn their attention to something else.” It’s largely a problem of perception, she says: consumers must realize that by buying Distributor supplying goods to a retailer

“A major challenge over the last 10 years has been the illegal importation of cigarettes” January 2012 | 59


“It’s actually in our commercial interests to have effective and orderly regulation of the tobacco market� duty-evaded cigarettes they are directly damaging the country, and cutting the revenues that can be spent on things they value, like education and healthcare. The message has been put across via the press, radio and television, and it has had a huge effect, linking cross-border trafficking of cigarettes with the negative associations of people, drugs or arms trafficking. A particularly intransigent problem,

60 | January 2012

Morgan adds, has been to counteract a certain in-built prejudice against locally produced materials: the idea that if a product is imported, it must be better. The absence of any regulatory framework for the tobacco industry in Nigeria threw the onus of defining standards on BATN, and the company has been in the enviable position of leading the development of legislation in consultation with the


British American Tobacco Nigeria

Tree planting campaign, Jabata, Oyo State

government. As a result, the appearance of the National Tobacco Control Bill in 2009 presented no problems—after all, the BAT Group has for many years actively supported the restriction of cigarette advertising to under 18s and a responsible approach to smoking on the part of adults. “It’s actually in our commercial interests to have effective and orderly regulation of the tobacco market,” says Morgan. “As people realise that ‘made in Nigeria’ equates to quality standards as high as anywhere in the world, they also realise that illicit trade harms legitimate business and increases the likelihood of more underage smoking, and cheap unregulated products that can

pose a much greater risk to health.” This attitude is complemented by the BATN Foundation, established in 2002 to promote sustainable agricultural development, drinking water, environmental protection, poverty alleviation and skill acquisition. The Foundation has been twice nominated for the Africa Investors Award and has received further awards and recognition for its work in all regions of Nigeria. For more information about British American Tobacco Nigeria visit: www.batnigeria.com

January 2012 | 61


Perth-based Image Resources is poised to move from an exploration company to minerals producer. George Sakalidis talks to Gay Sutton about the prospects that could transform the company into a major global force in zircon and titanium production

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Image Resources

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A

ustralian mining is renowned the world over for its rugged nature. Dry, inhospitable locations make the fly-in fly-out lifestyle of its hardy workforce an absolute necessity. The North Perth Basin is a region that conspicuously bucks this trend. Located within an hour’s drive of all the comforts of Perth, the region benefits from easily accessible utilities and a well established transport infrastructure. Mine workers in this region can commute easily from their homes in Perth while power, gas and water are readily available, and road and rail access are good. “In fact many of our deposits straddle the main highway,” says George Sakalidis, managing director of Image Resources, which has just initiated feasibility and environmental studies of promising valuable mineral sand deposits in the North Perth Basin. Launched over 12 years ago and listed on the ASX stock exchange in July 2002, Image Resources has acquired a portfolio of mining licences based on a unique method for analysing and interpreting paramagnetic data. “Using exploration techniques unique to ourselves we have been able to unravel the geology, topography and magnetics to identify new resources. And this approach has come up trumps,” he says. Image Resources’ holdings in the North Perth Basin are located in two areas— Cooljarloo and Gingin—covering an area of around 2,000 square kilometres. Some 145,000 metres of exploratory drilling has taken place across the properties and more is scheduled. “So far, we have identified 11 mineral resources, six of which have been

64 | January 2012

George Sakalidis


Image Resources


put to a five-month scoping study,” explains Sakalidis. In Cooljarloo there are three deposits: Atlas, Hyperion and Helene, which lie close to the surface within the top 15 to 20 metres of sand. And all are fully explored and have been defined in the measured category. “Atlas is probably our most valuable deposit to date,” says Sakalidis. “It doesn’t have much overburden, so we will be going straight into ore material.” Moreover, that material is so rich the $84 million capital required to bring it into production and build the plant will be paid back within just 13 months. In the Gingin region, there are currently four deposits that lie a little deeper, within the top 30 metres of sand. Exploratory drilling has been completed at Gingin South, is still in progress at Red Gully, and has yet to be initiated at Gingin North. The aim is to bring all the resources to the measured category. The scoping study estimated that the holdings could produce between 16,000 and 230,000 tonnes of concentrate per year, if mined consecutively over a period of around 12 years. This works out at a total of 2.5 million tonnes of concentrate made up of zircon and the titanium oxides ilmenite, rutile and leucoxene. Based on these findings, the company has initiated a full feasibility and environmental

study at the Atlas deposit. If all goes according to plan, mining will commence in 2014 at the Atlas deposit, before transferring to Red Gully and from there to other sites in the portfolio. Meanwhile, exploration is also underway at a number of other locations including Atlas South and Boonanarring in the Gingin region. Although not part of the

“There is a big gap between demand and supply, and it’s a gap that we hope to fill” 66 | January 2012


Image Resources

Drilling in bush near Gingin

original scoping study, both are displaying promising results and may be brought forward to replace some of those in the original study. “We’re finding that the Boonanarring deposit, for example, has an average zircon content of around 15 per cent—higher than Atlas, which stands at 10.6 per cent. Internally, however, we are seeing zircon levels reaching 40 per cent or higher at Boonanarring.” In the longer term, the aim is to identify the areas where the higher concentrations of zircon and rutile can be found and prioritise the mining plan to exploit those first. To date, exploration and survey costs

have been internally financed through share issues. However, once the company moves to production, an investment of $84 million will be required to fund the purchase of plant and equipment. The specifications for the plant will be decided by bulk testing of the ores found at Atlas, Red Gully and a few other sites, and this will take place during 2012. With the deposits lying up to 200 kilometres apart across the North Perth Basin, the intention is to acquire mobile wet plant and separation plant technology which can not only be moved from site to site but also moved within the confines of a single

January 2012 | 67


deposit which can extend over a distance of up to 10 kilometres. All in all, the outlook for mineral sands is very good. Last year, zircon was priced at around $800 per tonne but has trebled in value and now stands at $2,400 per tonne. “And this is mainly down to demand in China and the fact there are not many emerging suppliers. So there is a big gap between demand and supply,” he comments, “and it’s a gap that we hope to fill.” Rutile prices, meanwhile, are also on the increase and are predicted to rise from around $500 per tonne in 2010 to $2,400 per tonne by

2012, while ilmenite is expected to jump from $100 per tonne to $300 per tonne over the same period. “These price trends are expected to continue beyond 2014 when we will be going into production. So we’re hoping our timing is going to coincide with peak prices.” With the economics looking so favourable, it may also pay for the company to take advantage of another technology that is unique to Western Australia. This consists of huge and very expensive kilns capable of upgrading the lower valued ilmenite into synthetic rutile, increasing the titanium

“We have a pipeline of 100 kilometres of other targets that we haven’t begun to work on yet”

Atlas zircon-rutile concentrate

68 | January 2012


Image Resources

Logging at Cyclone deposit

content from 60 per cent to 90 per cent. Three of the kilns are conveniently located in the North Perth Basin. “And as some of the material we will be producing will be suitable for that process, there is an opportunity for us to do that too,” Sakalidis says. The story of Image Resources’ development, however, is ongoing. In the North Perth Basin, exploration is continuing to reveal new and high-grade resources. “And we have a pipeline of 100 kilometres of other targets that we haven’t begun to work on yet,” Sakalidis says. “Meantime our competitors are running out of materials. So we’re in a good position to take the mines into production.” In the more remote Eucla Basin which

lies inland on the Western Australia/South Australia border, the company owns the southern portion of the Cyclone deposit. “This deposit has two million tonnes of zircon and one million tonnes of rutile. The world production of zircon is about 1.3 million tonnes, so this one deposit is potentially very valuable and could almost double world production. However, because of its remoteness it will cost a great deal to put it into production,” he concludes. “That’s something for the future.” For more information about Image Resources please contact us: www.imageres.com.au

January 2012 | 69



L’Oréal India

India’s best ever makeover Though market leadership is a critical element in L’Oréal India’s strategy, the firm also excels in sustainability and social responsibility

January 2012 | 71


L’Oréal India has 24 per cent women on its shopfloor


L’Oréal India

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n business, as in life, it is important to be in the right place at the right time, and that has clearly been the aim of French cosmetics giant L’Oréal in India. For nearly two decades, the owner of brands like Garnier, Maybelline, L’Oréal Paris and Lancôme has tried and tested a variety of innovative and marketing strategies that appear to have paid off. The company has now decided to give back to society in what is being dubbed its best makeover yet— by going beyond the face and hair of the consumer to truly empower the populace. Keen to create a more sustainable community, the company has launched 100 citizen projects globally which are designed to assist and support the most vulnerable communities on a local level through concrete initiatives. “Maintaining good relations with all our neighbours is very important. It is not just a corporate social responsibility activity: success is based on strong ethical principles, which provide a framework of values. It is also based on a genuine sense of responsibility in utilising the resources that are available and giving back to the wider community,” explains Vishal Sahgal, L’Oréal’s Asia director of Environment, Health and Safety. L’Oréal India is a proponent of green practices and has donned the colour with pride, employing various means to cut its

greenhouse gas emissions, check its carbon footprint, cut plastic content in packaging and use renewable energy. “Consumers are getting more aware these days. There are companies which are clearly spelling out their carbon footprint on the back of the product. We are in the beauty business and want to be good citizens of the world,” says Sahgal. The cosmetics giant has decided to reduce its carbon dioxide emissions, water consumption and waste levels to grow sustainably along with the communities around it. “Environment protection and corporate social respon sibi l it y a re imperative. Taking 2005 as a base year, we want to reduce water and waste levels by 50 per cent in per unit terms by 2015,” says Sahgal. The company also uses solar technology at its manufacturing and distribution plants in India. “We have 320 solar panels at our plants. Presently 25 per cent of water in our Pune factory is heated by solar energy,” says Sahgal. He adds that the company is planning to buy wind power for its electricity needs. “This will help us to reduce our CO2 footprint due to use of electricity based on fossil fuel.” L’Oréal India is among a handful of Indian firms that has managed to successfully put in place a roadmap for the gradual reduction of emissions. In 2011, the Green

“Maintaining good relations with all our neighbours is very important”

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Business Survey—a platform for Indian businesses to tackle climate change and sustainability issues—placed L’Oréal at the number two slot just behind Tata Coffee and ahead of Unilever at number three, out of 52 companies. The win was just one of many accolades bagged by the company. “In 2009, we won the Best Project Award in the Environment category for our vermiculture project. In 2010, L’Oréal’s Pune facility won the best initiative for CSR and the Citizen of the World Award, for the best initiatives in social services across its plants and distribution centres. And in the same year we bagged an award from the Maharasthra State government for excellence in energy saving facilities,” says Sahgal, who has just been promoted and is to assume his new role in Shanghai, where he is keen to carry on the initiatives. L’Oréal India’s factory in Chakan, Pune, has had great success with its solar water heating system installed in 2006 and is set to add further capacity to supply new facilities. The Chakan factory meets 85 per cent of demand of the hair care, skin care and hair colouration market in India. Around 15 per cent of production at the factory is destined for the export market. The plant currently

produces 450 different products across consumer products and professional products. “The majority of production at Pune is for Garnier,” says Sahgal. “We have recently commissioned a second unit in the same plot which will be dedicated for hair care. This will double the capacity of the overall site.” From the current 200 million units, the total capacity of the Pune site will jump to 500 million units. “With this upgrade,

“We have been growing at 30 per cent for the past three years and had a similar compound annual growth rate for the last six to seven years” 74 | January 2012


L’Oréal India

The Chakan plant produces 450 different consumer and professional products

we will be able to cater to the demands of the market. We have been growing at 30 per cent for the past three years and had a similar compound annual growth rate for the last six to seven years—and we see a similar kind of growth in the coming years.” For the cosmetic multinational, gender empowerment continues to be one key to success. “We have 24 per cent women on our shopfloor,” says Sahgal. “We try to maintain a good diversity ratio and provide them with all the facilities like transportation from nearby villages to work. Women have stayed with L’Oréal because they have understood the company cares for its employees.” When L’Oréal India decided to shift base from Umargaon in Gujarat to Pune in 2003, all employees were invited to make the move.

“About 30 women moved with their families and set up camp in Pune,” says Sahgal. In July 2011, L’Oréal India organised a small programme at its factory that included an interactive session with the manager of a counselling centre for domestic violence. “The session was so successful, we asked her to conduct a counselling camp in the nearby villages, due to high demand from the employees,’’ says Sahgal. He adds that such initiatives allow the firm to play a larger role than simply that of a supplier of beauty products. The company’s CSR activities have also included the addition of two classrooms and school benches to a municipal school in Pune from the planks and implements available at the Pune factory construction

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A training programme for engineers began in January 2012

site. “Many of the kids did not have benches. To ensure that the kids did not have to study on the floor, we thought of the benches. The idea was well appreciated by the families. The response was so overwhelming that we took all the old equipment from the factory such as computers and lab equipment and donated it to a nearby school,” says Sahgal. The company also conducted several safety training camps for villagers,

wherein they were advised about issues such as snake bites and fires at home. “We also conduct health check-up camps in association with the Birla Hospital. Women and senior citizens can go in for a free check-up for their eyes and general health,” says Sahgal. In 2011, the company started five vermiculture plants in nearby villages which provide sustainable employment to the villagers, either by giving them manure for Vasantha Tool Crafts Pvt Ltd Vasantha Tool Crafts was established in 1989 and has so their farm or providing far successfully designed & manufactured more than 1,000 them the means to sell the precision moulds, including fully hot runner moulds & inmanure in the open market, mould closing moulds of high productivity and high cavitation with all expertise provided for various applications such as switch gear, electronics, by L’Oréal India. home appliances, medical, writing instruments, caps & The company is now closures for the pharma, cosmetics & health care segments. looking at a training and www.vasanthatools.com development programme for

76 | January 2012


L’Oréal India young engineers. “Loyalty to the company is very high. For many of our management committee members, this was their first job. Though we have an attrition rate well below 10 per cent, we commenced a training programme on January 6 2012 for our fresh lot of engineers—be it mechanical, chemical or production,” says Sahgal. “We noticed that for most engineers, there is a strong urge to do a degree in Business Management and they would quit every two to three years due to this. Rather than lose them, we tied up with an educational firm, the Symbiosis Institute of Management in Pune, and created a two-year programme, with classes on the

weekends.” L’Oréal India therefore provides these youngsters with a business degree and retains them for a longer duration to develop them as future managers. From moisturisers and hair colourants to upscale eau de toilettes, the L’Oréal stable has a scope and depth that’s hard to match. Filling retail shelves with global products as well as brands developed locally will help the company pole-vault to the number one position. For more information about L’Oréal India visit: www.loreal.co.in

Vasantha Tool Crafts aims to become the leading supplier in its chosen markets and acknowledges that only through the highest level of commitment, providing the best quality and at the best price can this goal be achieved and maintained. VTC has gained expertise in making moulds for a variety of industrys, ranging from Caps & Closures for Pharma, Medical to Electrical items such as MCBs and Handles to the Electrical Switch Gear industry and Sockets, Thumb Wheel and Connectors to the Automobile industry to host of other industry segments like the Packaging, Health Care & Medical, Home appliances, Food Grade and Writing Instruments items etc. Telephone: +91-40-44613333 | Fax: +91 40 23097023 www.vasanthatools.com

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Coca-ColaBottling Egypt

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Coca-Cola Bottling Egypt

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here can be very few people left in the world who are unfamiliar with Coca-Cola. From its almost casual creation in 1886, the company’s iconic red scripted logo is now famous all over the globe, thanks to the power of its immense brand presence. Coca-Cola beverages sell in over 200 countries under a vast umbrella of more than 500 brands, so no matter the time of year or occasion, your location or lifestyle, it’s likely you’ll recognise CocaCola as a household name. However it could be said that the brand itself is just one part of the picture. Most consumers opening a bottle of, say, Sprite, probably wouldn’t give much thought to its back-story, but it is Coca-Cola’s 300 bottling partners worldwide who largely drive the company’s ultimate success, transforming the beverage from its base form into the final product. The Coca-Cola Company manufactures and sells its concentrates, beverage bases and syrups to bottling operations, owns the brands and is responsible for consumer brand marketing initiatives. It then hands over the baton to its bottling partners, who manufacture, package, merchandise and distribute the final branded beverages to customers and vending partners, who sell the final products to the consumer—at a rate of 1.7 billion servings a day. All bottling partners work closely with customers; that is, virtually

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anywhere that might sell a soft drink, from supermarkets, sporting venues and restaurants to cinemas, music venues and theme parks. The Coca-Cola Company and its bottling partners form what is termed The Coca-Cola System: and this alone is acknowledgment that the bottling companies play no small part in the global success of the Coca-Cola brand. Like anywhere else in the world,

We produce an extensive range of returnable and non-returnable glass containers; both green and flint in colour. 90% of the current production is to leading international food and Beverage companies based in Europe and MENA. Contact: Youness Moussallak | Sales & Marketing Manager 12, Almokaiam Daem St.6 industrial Zone - Nasr city - Cairo, Egypt

Tel: 202-22624303 | Fax: 202-22624302 Email: younessm@meg.com.eg

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the Middle East is thirsty for Coca-Cola products; and Coca-Cola Bottling Egypt (CCBE) is the largest soft drinks bottler in the region. A joint venture between the CocaCola Company and the MAC Beverages Group, the company employs 11,500 people across eight manufacturing plants and 27 strategically located distribution centres throughout Egypt. The company bottles Coca-Cola, Sprite, Fanta and DASANI (a premium natural water), in addition to Schweppes and Schweppes Gold (a nonalcoholic malt beverage). “Our passion to meet consumer needs is reflected in our uncompromising commitment to total quality for our brands,” states CCBE’s president and chief operating officer, Salam El Hammamy. “We are pleased to say that we have recently launched our latest innovative product, Cappy Juice with fruit pieces. Our vision is to be the number one beverage company in Africa and the Middle East.” CCBE bottles and packages the carbonated and non-carbonated beverages that make up its portfolio before distributing them to the Egyptian market, either via its direct distribution fleet or a third party (indirect sales distribution). “The synergy of operations along the supply chain is one of our major keys to success, as all the pillars in the system achieve harmonious dynamics,” says El Hammamy. “The operation umbrella includes utilization and effective performance, in addition to the technical support function that gives assistance to production and maintenance in terms of logistical and production planning,


Coca-Cola Bottling Egypt

spare parts assessments and availability. It also includes attentive quality control on products and packaging, with a strict quality assurance system.” The Coca-Cola Company itself focuses effort on protecting and preserving the planet, which encompasses areas such as water, energy use, packaging and emissions—and it encourages its bottling partners to do the same. In line with this, all of CCBE’s new machinery and equipment is environmentally friendly, and is operated

in accordance with high safety standards. One of the company’s mega plants has been awarded Best Performing Plant 2010 for Environmental Management within the Eurasia and Africa arm of the group. This was achieved in part by a mediumterm plan set up in 2005 to replace all old lines and under-utilized assets, which saw almost 75 per cent of old lines

“All internal training programmes are conducted in our Coca-Cola Academy” January 2012 | 83


and old machinery replaced with brand new equipment. “We do strive to have the latest production lines and equipment installed in our plant,” confirms El Hammamy. “Our Upper Egypt plant, inaugurated in 2009, is state-of-the-art among all CocaCola plants in the Middle East region. Our main equipment suppliers are European

companies—predominantly German— which are ranked very highly worldwide within the beverage sector, and they supply us with the latest technology and updates on all of our equipment.” Suppliers provide anything from machinery and plant equipment to logistics, glass, labels and glue. Of course, highly skilled operatives are always needed to drive maximum return on investment from the latest equipment. “Generally, we don’t have trouble finding skilled labour at most organizational levels, especially as most of our vacancies are filled through internal hiring or through sourcing and interviewing carried out by our designated HR staff. We don’t tend to refer to external recruitment agencies or head hunters,” comments El Hammamy. However, he admits that a consistent challenge facing CCBE’s hiring managers is the sourcing of front-line sales executives— sales representatives and sales drivers—due to very high local market demand as well as the fact that Egypt is considered an attractive candidate pool for Gulf hiring managers targeting such positions. “Another challenge that we share along with many companies operating in Egypt is the shortage of Rexam female talent at executive Rexam is a leading global consumer packaging company. We work with some of the world’s most famous and level, which is one of the successful consumer brands, as well as young, development priorities that entrepreneurial start-ups. And we don’t just stop at making CCBE is currently working our products—our local teams are dedicated to working to address.” with our customers, supporting their brands through the CCBE is proud of its entire manufacturing and supply chain process. diversified portfolio of www.rexam.com training and development

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Coca-Cola Bottling Egypt programmes. “Due to the unique nature of our company and the beverage industry, this portfolio consists of a lot of internal training programmes that are carefully designed by our senior managers with the support of our Capability Building team, and delivered by certified internal trainers from within CCBE. And all internal training programmes are conducted in our CocaCola Academy,” explains El Hammamy. That said, the company is always seeking to enrich its people development programmes with additional content from other areas within The Coca-Cola System as well as via collaboration with a number of local and international

well-known and highly-regarded training and development providers. For now, CCBE is targeting steady growth, and is focusing on expanding its sustainability projects across all plants and distribution centres. “Our company is committed to its corporate social responsibility programme, with values that are directed to serve and benefit the wider community in Egypt. These principles are embedded in our dayto-day business,” he concludes. For more information about Coca Cola Bottling Egypt visit: www.cocacolaegypt.com

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Making ready Robert Tarazi, managing director of Qatar’s leading ready-mix concrete company Beton WLL, talks to Gay Sutton about preparing the company for significant growth

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Beton WLL

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Beton WLL

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Batching plant and KTI ice and chiller plant

atar is undergoing a remarkable period of construction and development as it prepares to host the world’s most prestigious sporting event—the 2022 FIFA World Cup. Millions of visitors from around the world will flock to this iconic Arab state and already the first wave of World Cup-oriented construction is underway. Over the next few years construction will begin on the football stadiums and hotels to house the influx of sports people and visitors. “The football World Cup in 2022 is certainly a booster for development, but is only one of many,” explains Robert Tarazi, managing director of Beton WLL, Qatar’s leading supplier of ready-mix concrete for the construction industry. A subsidiary of the Lebanese ready-mix concrete company Liban Beton, Beton WLL has been in Qatar for more than 12 years. Its origins were small. “Our parent company, Liban Beton, was originally awarded a contract to build the Four Seasons Hotel in Doha in the year 2000. We built a manufacturing plant on the beach for that project which lasted for two years. But then we stayed.” Over the intervening years, the company has grown to become one of the largest and most highly respected players in the field, working on such prestigious projects as the Ras Laffan common cooling seawater project (which included building a temporary concrete plant on site for the duration of the three-year project); the Khalifa stadium and sports city; the massive Heart of Doha project; and the Barwa Financial District.

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Today, Beton has moved beyond being simply a supplier of ready-mix concrete, and is now a tier one contractor and service provider to the Qatari construction industry, employing some 400 staff including a team of high calibre engineers and technicians. Concrete is currently produced at three concrete production plants strategically located close to major ongoing construction projects. The newest production site is located at Al Rayyan and consists of two batching plants producing a total of 225 cubic metres of concrete per hour. Opened just three months ago, it was installed to supply all the concrete required for the Dukhan Highway Project, and is another example of the company’s capacity to locate production alongside a major project. “This plant is only temporary and will be closed in two or three years’ time, once the project is completed.” The two other Beton plants, however, are permanent facilities and their output is transported for use around the country. The Mesaieed plant occupies a 20,000 square metre site in Mesaieed Industrial city, a rapidly expanding industrial region clustered around the deepwater harbour to the south-east of the country—a location that is often referred to as the ‘gateway’

to southern Qatar. Capable of producing 250 cubic metres of concrete per hour, it supplies ready-mix for projects in Mesaieed, Al Wakra and the Doha Airport area. The second permanent plant is in the northeast at Lusail, some 15 kilometres north of central Doha. It is ideally located to supply up to 260 cubic metres of concrete per hour for a wide range of current and future projects associated with the construction

“Over the past two years we have been focusing on developing infrastructure across the State of Qatar” 90 | January 2012


Beton WLL

Beton operates 24 hours a day, seven days a week

of a completely new planned city of Lusail which will eventually occupy some 38 square kilometres of waterfront. “Lusail City will be huge,” says Tarazi. “At the moment we are working on the infrastructure, but it will eventually include marinas, business centres, an energy city, a media city, a golf course and a range of retail and residential properties to house 200,000 inhabitants.” All of these will require concrete, and the projects will be a tremendous growth opportunity for Beton. In the short-term, there are several major projects on the horizon. These include a light railway for Lusail—a 28.8 kilometre four-line light rail transit network, with 7.6 kilometres and eight of the 32 stops underground. There will be connections

with the planned national rail network at two stations on Al Khor Highway, eventually linking Lusail with destinations across the Emirate. The second major project is the Doha Metro, an 85 kilometre railway network linking central Doha with Lusail, Education City and West Bay as well as the new international airport and the football stadiums. “And these will be very large projects for us.” Beyond Lusail, Beton is deeply involved in the Qatar Development Programme. “It’s a fast-moving situation here at the moment,” Tarazi comments. “Over the past two years we have been focusing on developing infrastructure across the State of Qatar.” And the volume of work is set to increase: considerable investment is being ploughed

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Beton is a tier one contractor and service provider to the construction industry

into upgrading the network of highways across the country, and these are either in the planning or construction phase. New harbours and ports are in progress, a new international airport is under construction and a new sewerage system is being laid. In a few years, once the infrastructure is completed, construction will begin on

new industrial, retail, academic, tourism and leisure facilities as well as football stadia and hotels for the World Cup and the growing tourist industry. The opportunities for Beton are enormous, and the company is already gearing up in preparation. “We have been investing considerably in equipment, manpower and training so that we will be able Qatar International Automobiles to meet the increase in Qatar International Automobiles (QIA) is the sole demand over the coming distributor of MAN Truck & Bus in Qatar. With Qatar’s growing construction sector, MAN has become a strong years,” Tarazi says. In player especially in the Beton Ready-Mix business, both 2010 and 2011 the supplying chassis as well as complete vehicles inclusive company spent around $5 of mixer bodies and pumps. QIA’s highly trained sales and million on new equipment aftersales staff as well as constant vehicle availability and plant, bringing in and short delivery times guarantee the most effective the latest technology in customer support. mixers, truck-mounted and www.fahedgroup.com stationary pumps, cement

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Beton WLL bulkers, silos, chillers and ice machines, and expanding the company’s operational capacity. “We recently bought the largest mobile pump in the Middle East: a 68 metre boom pump,” he continues. “And we plan to invest a further $3 million in 2012.” The pressure for speed and quality on all these projects is intense and in tandem with the rest of the construction industry, Beton operates 24 hours a day, seven days a week, to comply with this demanding schedule. However, the company has built its reputation on delivering a high quality and reliable service, and is committed to exceeding its customers’ expectations. ISO 9001-compliant, Beton is continuously

striving to improve its processes and standards. As an example, Beton’s large maintenance department has developed and implemented a stringent and highly complex preventive maintenance system across all the batching plants and equipment. With well planned expansion and investment alongside continuously improving processes, Beton has maintained its position as a major player in Qatar’s ongoing development and dynamic growth. For more information about Beton WLL visit: www.betonqatar.com

MAN knows what makes the world go around. When it comes to transporting concrete from the mixing plant to the construction site, money on, go with MAN. Whether it‘s an extremly light chassis with optimum payload speed and reliability are crucial: after all, the concrete has to be delivered just in time that you want, a truck with high load reserves, or a havy duty vehicle with maximum if the construction work is going to progress. If you‘re looking for a safe bet to put your transport capayity, we have the solution you‘re looking for. Qatar International Automobiles P. O. Box: 23550 - Doha, Qatar - Tel.: 44503930 mandoha@qatar.net.qa - www.fahedgroup.com

.I.A.

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Qatar National Cement Company

Winning the bid to host the 2022 FIFA World Cup has generated a construction boom in Qatar. One company that will be ensuring that demand for construction materials is met is Qatar National Cement Company

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Qatar National Cement Company

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QNCC offers prompt and efficient delivery

nvestment in infrastructure in Qatar is set to boom over the next few years as the Middle Eastern state prepares to welcome the world onto its soil for the FIFA 2022 World Cup. The event might yet be a decade away, but Qatar has already announced it expects to complete its first stadium by 2015—just three short years from now. The state’s $4 billion stadium building programme will see the construction of nine new eco-friendly football stadiums in total, as well as the expansion of three existing stadiums. Add to this projects such as the creation of the $3 billion Doha Metro, and it is clear that no time is being wasted in getting infrastructure programmes off the ground. One company that will benefit hugely from all the construction activity is Qatar National Cement Company (QNCC). Established in 1965 by the Qatari government to produce sufficient ordinary Portland cement to meet demand, QNCC is now a major producer of ordinary cement, washed sand and lime. It manufactures and distributes ordinary Portland cement (OPC), sulfate resistant Portland cement (SRC), Portland pulverised fuel ash cement and hydrated and calcined lime. If production figures are impressive now, they can only improve as 2022 approaches. The company’s production in both OPC and SRC reached 3.8 million tons during 2010, with production of washed sand reaching 5.6 million tons. Both calcined and hydrated lime production reached 18.6 thousand tons. Sales of all types of cement (OPC, SRC, slag blended cement and fly ash blended

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Qatar National Cement Company

“The company has now started taking primary steps to increase cement production capacity” cement) reached 3.8 million tons during 2010. Sales of washed sand amounted to 4.7 million tons and sales of lime in both categories amounted to 17.2 thousand tons. QNCC has said it now wishes in particular to improve its sales of washed sand to maximise profitability within that particular segment. QNCC’s manufacturing facility is situated at Umm Bab, 82 kilometres from Doha—an ideal location when you consider the rich raw material deposits on the Western coast of Qatar. The facility is equipped with raw materials testing laboratories and water desalination plants processing 3,000 cubic metres of water per day to cater for the water needs of the cement plant and the residential employee compound. Other New cement plant QNCC sites include a sand plant at Al-Rakiya, a gypsum IBITEK Group quarry at Abu-Samra and a IBITEK Group is composed of three sister companies: head office in Doha. IBITEK-France in Marseilles, CA2E-Maroc in Casablanca In 2011, QNCC began and IBITEK-Czech, with a worldwide network of trial operations of its QR22 partners. We offer solutions for industry in the electricity million calcium carbonate & automation and business intelligence fields, for plant at the Umm Bab construction, revamping, maintenance and optimization of industrial processes. We provide a complete range facility. Specialising in of skills to ensure the success of your industrial project the production of calcium and our vast experience to maintain the performance of carbonate for use in water your installation throughout its lifetime. We are currently treatment operations, the focused on the Middle East market, where we have already plant has a production spent the first semester of 2011 promoting our services. capacity of 250 tonnes per www.ibitek-group.com day, with operations to be

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Why Qatar National Cement Co. trusts in Fives FCB Fives FCB, 70 years of experience in managing turnkey contracts

Fives FCB is recognized by both major world cement manufacturers and regional producers as a general contractor and innovative equipment supplier capable of adapting to their specific needs anywhere in the world, while respecting delivery times, performances and safety requirements. From 1995 to 2006, Qatar National Cement Co. and Fives FCB developed a high level of cooperation leading to the turnkey supply of three complete production lines (2,000 tpd, 4,000 tpd and 5,000 tpd) in Qatar. Thanks to Fives FCB’s experience and know how, the Umm Bab plant is one of the largest and most modern cement plants in the Gulf region, producing up to 15,000 tpd of cement. www.fivesgroup.com

Driving progress


Qatar National Cement Company supported in part by the Ras Fives FCB Girtas power station at Ras Fives FCB is a French company with 70 years of experience Laffan. dedicated to the cement industry and mineral grinding QNCC general manager applications. It provides efficient and reliable industrial Mohamed Ali al-Sulaiti said solutions to producers for both new production lines and the company had entered the revamping of existing plants. into an agreement with Fives FCB designs and supplies turnkey cement plants integrating reliable and sustainable proprietary equipment Kahramaa, who will buy for grinding and pyroprocessing. Innovative technologies the calcium carbonate for a such as the Horomill® grinding mill, the Zero-NOX period of 25 years. “QNCC precalciner, the low-pressure drop cyclones and the is carefully growing and TSVTM classifier enable customers to reduce energy and expanding to play its national water consumption, gas emissions and the carbon footprint role in supporting the of their plants. infrastructure development In Qatar, where Fives FCB supplied the Umm Bab no.2 (2,000 tpd), no.3 (4,000 tpd) and no.4 (5,000 tpd) complete in the state, especially after production lines to Qatar National Cement Company, the use Qatar won the bid for hosting of the unique Fives FCB Zero-NOx precalciner enables the the 2022 FIFA World Cup,” plant to be among the most environmentally friendly plants he commented. with reduced NOx emissions. The company has now www.fivesgroup.com started taking primary steps to increase cement production capacity by replacing the old cement mills of plant 1 with a new cement mill, in order to meet the expected requirement of cement for the development of infrastructure needed for the hosting of the World Cup. Cement plant 4, completed in 2010, already has a capacity of 5,000 tons

“QNCC is focused on encouraging Qatari nationals to join the company”

Pre heater

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Water plant

Reclaimer

“At the heart of QNCC’s activities will always remain the principle of providing good quality products at reasonable prices” of clinker and around 5,500 tons of cement per day, with the company’s total production remaining at around 12,000 tons of clinker per day and around 15,500 tons of cement per day. QNCC may yet further expand its cement production capacity, having declared its intention to focus all its efforts on enabling Qatar to become self-dependent in cement production in the near future.

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QNCC has a firm reputation in the local area for its competent management, dedicated and professional staff and its support of the Qatari government and associated infrastructure plans. QNCC employees are well looked after, taking part in the various social upliftment activities of the Qatari government and regularly attending training and seminars to ensure


Qatar National Cement Company

Kiln

they remain at the cutting edge of their industry. Excellent working conditions are maintained in plants, and sport facilities are provided to ensure employees remain in optimum health, along with a clinic and canteen facilities for use by all workers. QNCC is also focused on encouraging Qatari nationals to join the company, in line with the state’s policy of targeting nationals for employment in the workforce. QNCC contributes towards and supports national activities as part of its commitment towards the community, commensurate with the state policy, by contributing 2.5 per cent of its annual net profits towards social upliftment programmes. However the company wishes to

maximize its position as a supplier of construction materials during the construction boom, at the heart of QNCC’s activities will always remain the principle of providing good quality products at reasonable prices. Its fleet of tankers will continue to provide prompt and efficient delivery and distribution of products to its customers—and the crucial role the company will ultimately play in the country’s biggest ever sporting occasion will be clear for the world to see. For more information about Qatar National Cement Company visit: www.qatarcement.com

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Investment holding company Foulath is one of the most comprehensive steel producers in the Middle East, and has developed a unique business model that it is now transferring to Egypt and Oman. Ben Sansom reports

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Foulath

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Foulath aims to develop the steel sector in GCC countries


Foulath

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hen the Gulf United Steel it describes as ‘mine to metal’. All these Holding Company, Foulath, capabilities have been co-located on the was formed in Bahrain in June Foulath Steel Complex in Bahrain, which 2008 its aim was to strengthen and develop is not only one of the Middle East’s largest the steel industry in the Gulf Cooperation state-of-the-art industrial facilities, Council (GCC) countries and to create but also the world’s first fully integrated stability and security of supply of steel steel complex. products to the construction industry. Occupying a 1.3 million square metre According to chairman Hisham A site in the Hidd Industrial Area, the Al-Razzuqi: “The importance and necessity complex is not only home to Foulath’s of steel in the ongoing development of three main subsidiaries, but it also houses the region cannot be overemphasised a range of other utilities and facilities, and among the primary aims of Foulath, making it almost self sufficient. These as an investment vehicle and holding include power generation and water desalination units that company for the regional steel sector, is to ensure provide 40 per cent of the that the industry develops power and water required so as to achieve greater for the complex, and a jetty and stockyards that independence from outside provide port and storage sources and enhance the million square facilities for the import stability of steel supplies metres to the Middle East markets and export of raw material Size of Foulath Steel and products. where infrastructure, Complex site in Bahrain construction and industrial Gulf Industria l Investment Compa ny applications and projects all require adequate and (GIIC) is the most mature uninterrupted access to steel if they are to of the Foulath subsidiaries on the site. continue their dynamic growth unabated.” With a pedigree dating back to 1984, The region is undergoing rapid GIIC is wholly owned by Foulath and expansion and development across all operates two iron ore pelletizing plants markets, from infrastructure construction capable of producing 11 million tonnes of through to commercial, industrial and iron oxide pellets per year. One of only residential property development. To three merchant pelletizing plants in ensure security of supply to this market, the world, the Bahrain facilities largely Foulath has invested across the entire produce direct reduction-grade pellets for steel value chain, from the primary customers in the Middle East, India, the raw material processing through to the Far East and South East Asia. However, manufacture of finished product in what when required, they can also produce

1.3

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SANGHO INTERNATIONAL INC. Mechanical Equipments & Spare parts for • Iron & Steel Works • Iron Ore Pelletizing & DRI Plant

SangHo International Inc., 304 Gayang-Technotown, Gayang-dong 1487, Gangso-gu, Seoul 157-793, South Korea

Tel : +82-2-2668-5624 | Fax : +82-2-2668-5622 | e-mail : mail@sanghokorea.com


Foulath blast furnace-grade pellets ASIC for customers in India, ALMOAYYED Safety & Industrial Centre (Bahrain) & Gulf China and Japan. Safety and Security Systems Company (Saudi Arabia) Using the highly effective provides complete solutions for fire protection and safety grate-kiln technology, high needs. Our wealth of experience and expertise makes us quality pellets are tailored the best choice for private sector companies, oil fields, to suit the individual government bodies, manufacturing units, service industries and commercial and domestic segments of the market. specifications of each www.almoayyedintl.com ind iv idua l customer. However, the quality of the product and reliability of delivery to the customer is dependent on continuous updating and improvement at the plant and excellent supply chain management. With 26 years of experience in the industry, the company has worked hard to identify the best suppliers in the field, developing long-term contracts with them to ensure on-time delivery of the highest quality iron ore. The second wholly owned subsidiary located on the steel complex is USCO (United Stainless Steel Company). USCO began commercial operations in the fourth quarter of 2008 and is the first plant of its type in the Middle East, capable of producing 100,000 tons of cold rolled stainless steel per year in wide and slit coil or sheet form. The primary product is 304 stainless steel. Used across a wide range of construction applications, it has good Quality inspection at United corrosion and thermal resistance, good Stainless Steel Company

“Foulath has given its investee companies a unique competitive cost advantage” January 2012 | 109


Many opportunities. One address. www.kanoogroup.com

Post Box Number 37, Kanoo Tower, Dammam 31411 Phone: 00 966 3 8356000 | Fax: 00 966 3 8355747 | Email: info@kanoosa.com

inspired Your weekly digest of business news and views www.bus-ex.com


Foulath mechanical properties Kanoo Group and streng th at low The Kanoo Group is a Gulf-based multinational group temperatures. However of companies with over 100 years of entrepreneurial the plant also produces experience. 316 stainless steel, which Kanoo provides a diverse range of quality products and contains molybdenum and services to high standards across selected growth markets, has superior corrosion and through investment in technology; investment in people; investment in national development; providing a high level pitting resistance, and high of quality support to our divisions and joint ventures; and temperature strength. systematic review of our business activities to enable rapid The final company adaptation to market forces. located on the Foulath Kanoo is guided by its commitment to embrace and value Steel Complex is SULB community, diversity and the environment. Kanoo’s vision (United Steel Company), is to sustain growth and continue to drive future initiatives a joint venture between that reflect our core values of caring, global teamwork and continuous improvement. Foulath, with a 51 per cent www.kanoogroup.com share of the company, and Yamato Kog yo—a world-leading beams and structural sections producer from Japan with a 49 per cent shareholding. Currently at an advanced stage of construction, the SULB facilities are scheduled to go into commercial production during the second half of 2012 and comprise a direct reduced iron (DRI) plant capable of producing 1.8 million tons DRI per year, and a melt shop

“Once up and running it will be the first fully integrated facility of this nature in the region”

Steel is used across a wide range of applications

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and medium and heavy section rolling mill capable of producing 850,000 tons per year of medium and heavy beams and sections. Once up and running it will be the first fully integrated facility of this nature in the region, and will be able to supply approximately 14 per cent of the medium and heavy beams and structural sections that are currently imported into the Middle East. “Having made the decision to strategically locate the three companies together,” said vice chairman and managing director Khalid Al Qadeeri, “Foulath has given its investee companies a unique competitive cost advantage. Through the use of state-of-the-art technologies, strategic planning and the synergies achieved at the Foulath Complex we are on our way to securing Foulath’s long-term profitability.” In September last year, SULB acquired the United Gulf Steel Mill Company (UGS), based in Saudi Arabia (now Saudi SULB). Commenting on the deal, Al-Razzuqi said: “UGS being part of Foulath will benefit from the integration by securing raw material (billets) from SULB on a continuous basis at a very competitive price, enabling it to penetrate the market, ensuring its sustained profitability.” The last three years have been a sharp

growth curve for Foulath. But the success of the Bahrain Steel Complex initiative has resulted in a rich pool of knowledge and experience, and the company is now working to replicate this business model in other areas of the Middle East and North Africa. “We are currently developing new large scale projects in Egypt and Oman,” said Al Razzuqi. “This transfer of technical know-how and expertise within the region is one of the most important

“We are currently developing new large scale projects in Egypt and Oman” 112 | January 2012


Foulath

A worker at United Stainless Steel Company

contributions Foulath is making.” At the Steel Complex in Bahrain, one of the primary focuses has been on supporting the economic and social advancement of the communities in which it operates. All three subsidiaries are actively involved in initiatives in key areas such as health, education, and environment. Meanwhile, a considerable investment is being made into skillsbased development and training. Of the 450 people currently employed at GIIC, 70 per cent are Bahraini nationals and at USCO the figure is even higher, standing at 85 per cent of the 125-strong workforce. SULB is likely to follow suit. From the environmental perspective,

the company and its subsidiaries have invested in excess of $20 million to date on environmental technologies, projects and procedures to preserve the surrounding air, land and waterways. “We are effectively deploying new technologies with long-term benefits, training and developing local talent and, importantly, supporting the further strengthening of the region’s industrial base and diversification,” Al Razzuqi concluded. For more information about Foulath please visit: www.foulathholdingcompany.com

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Kenya Meat Commission

A prime cut Kenya Meat Commission is determined to resume its leading position in East Africa as a producer of top quality meat cuts and processed products. Julia Smith reports

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C

attle-farming has been a staple the Kenyan government recognised its element of the Kenyan economy potential to contribute to the nation’s for decades. The livestock sub- economic development. The site belonging sector accounts for about 10 per cent of to KMC, which had previously been closed the agricultural gross domestic product for a number of years following earlier (GDP) and employs over 50 per cent of the privatisation initiatives, already had largeagricultural labour force. It makes both scale facilities in place that simply required a direct and indirect contribution to food upgrading. With the capacity to slaughter security and the sustainable development 1,000 head of large stock per day as well as of the country, contributing to household 1,500 smaller animals, this is far in excess income at many levels through the sale of any other slaughterhouse in the country. of livestock and livestock products. It also Moreover, in its earlier days, KMC had provides raw materials established a clear leadership and by-products for agrorole in the region and a industries, in addition to reputation for excellence, which, despite years of generating foreign earnings through exports. closure, the government felt could be recaptured. Although much of the Year KMC re-opened country’s herd, which It was decided that for business when the numbers in the region of a reinvigorated KMC Kenyan government recognised its potential 15 million, remains in the could play a key role in to contribute to the hands of pastoralists and complementing government nation’s economic subsistence farmers, the efforts to revive the livestock development domestic market is booming sector and turn Kenya into and becoming increasingly a major exporter of highprofessional in character. Urbanisation quality beef and other livestock products. and the healthy appetite of the growing Targeted livestock development is underway middle class is giving rise to a new wave throughout Kenya based on a series of of commercialisation as standards and strategically placed zones, which have been expectations steadily rise. certified as disease-free and are subject to However, Kenyan meat is not only prized the strictest control of animal movements. at home. It has a fine reputation for taste Meanwhile, the Ministry of Agriculture and succulence which extends far beyond is engaged in an extensive programme to the country’s borders, with animal cuts and build skills and knowledge in animal health, related products traditionally sold as far production and the quality assurance of afield as the Middle East. value-added animal products. Kenya Meat Commission (KMC) KMC has a mandate to purchase cattle re-opened for business in 2006 when and small stock and to acquire, establish and

2006

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Kenya Meat Commission


Partial list of instruments stocked and supplied on order: • Process control instruments; testing and calibration instruments; HVAC solutions; pressure/temperature transmitters; level instruments; gas detection analysis equipment; tank gauging equipment; electrical measuring equipment; timers, sensors and controllers; hand-held equipment to measure humidity airflow, velocity, sound and lighting; data loggers; flow meters for steam, water and oil; combustion management equipment; flue gas analysers; ultrasound flow meters; tube fitting equipments; needle valves and accessories. Instrumentation Engineers (EA) Ltd enjoys the full support of suppliers both locally and internationally who have made it possible for us to stock a variety of spare parts for: • Steam Boiler; Rotary cup burners and pressure jet burners of all makes.

Partial list of spares for the above equipment: • RTD assembly; industrial heaters; thermocouples; oil fuel pumps; mechanical seals; flexible couplings; pump couplings; flexible oil pipes; quick release couplings; sequence controllers; ignition transformers; photocells; diffuser plates; thermostats; hot oil filters; solenoids; electrodes; damper motors; HP pumps; mechanical seals; Mobrey floats and switches; fusible plugs; boiler glass tubes; asbestos tapes and ropes. Instrumentation Engineers (EA) Ltd has at its disposal a competent team of specialized engineers and technicians equipped with all the relevant skills to execute any project within the East Africa region. We undertake turnkey projects for the design, supply, installation, erection, commissioning and after sales service of Instrumentation and Automation of your plant, steam boiler, Air Compressors and its accessories. This includes detailed engineering, civil construction, and fabrication assembly on-site.

Engineers (EA) Limited P.O. Box, 18986-00500, 1st Floor ABC Bank Building, Dar Es Salaam Road, Industrial Area, Nairobi, Kenya Tel: +254-20-2108606 Mobile: +254 731384111 Email: info@instrumentation-engineers.com


Kenya Meat Commission

Carcasses are held for five to seven days to give the most tender and juicy meat cuts

operate abattoirs, meat works, cold storage canned products and other value-added concerns and refrigeration works. The products. The focus on quality—competitors operational focus is on animal slaughter, are major meat exporters such as Brazil and the processing of by-products, preparing Australia—has enabled KMC to penetrate hides and chilling, freezing, canning and a diverse range of markets which already storing beef, mutton, poultry and other takes in several destinations in the Middle meat products. The chilling facilities have East including the United Arab Emirates, a capacity to hold 1,750 carcasses operating Kuwait, Qatar and Saudi Arabia. In North at temperatures of between zero to 2°C and Africa, a foothold has been established the carcasses are held at these temperatures in Sudan and Egypt and closer to home, for five to seven days to give the most tender KMC serves markets across East and and juicy meat cuts. Central Africa. Although most output KMC now operates the is destined for domestic single largest and most technica lly adva nced consumption, approximately export abattoir in the 1,000 tonnes of fresh and East, Central and Horn of frozen goat, lamb and beef is Approximate amount exported each year. Export Africa and the management in tonnes of fresh and consignments cover the team are proud of the frozen goat, lamb and whole spectrum of entire exceptional attention to beef exported each year carcasses, primary cuts, detail in ensuring that all

1,000

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“KMC is now determined to increase further its export market and sees scope for many more products� products are prepared in accordance with the highest international standards. All livestock are inspected on arrival by veterinary officers and repeated inspections are carried out prior to slaughter, a process which adheres to strict halal guidelines. Animals are bled along the conveyor for approximately seven minutes before carcasses are eviscerated and then split, washed, weighed and graded. A fullyequipped in-house laboratory ensures stringent quality monitoring standards are

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kept and samples of all final products are analysed for compliance before dispatch. This takes place through carefully selected logistics partners with a proven capability to maintain the vital cold chain during transit. Both domestic and export markets offer a clear opportunity to gain further market share and the main challenge confronted by KMC is how to win back its former market leadership position. ISO 22000:2005 certification is seen as fundamental in gaining customer confidence. This is already


Kenya Meat Commission

KMC buys livestock from individual livestock owners, traders, ranchers and organized livestock trading groups

in place and is seen as a vital cornerstone in the battle to regain market leadership. “This ISO certification will give the Commission a competitive edge that will ensure greater market reach both locally and internationally,” stated Dr Mohamed Abdi Kuti, minister for Livestock Development, adding that it would augment KMC’s role in providing a market to the livestock industry which will give a major boost to the economic dynamics of the country’s pastoral communities. Looking to the future, KMC is now determined to increase further its export market and sees scope for many more products, particularly in the value-added category: a team of food scientists and technicians are at work on an innovative range

of processed chicken and camel products. A number of opportunities have been identified for canned corned beef and production is expected to increase dramatically in 2012 when a new one-acre beef chilling facility will also become operational. Most importantly of all, KMC’s achievements are radiating out to the wider Kenyan economy. Government officials have repeatedly praised the operational efficiency of the plant and are delighted at the contribution it is making towards Kenya’s development efforts. For more information about Kenya Meat Commission visit: www.kenyameat.co.ke

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Maputo Port Development Company

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The total number of ships calling at Maputo is expected to rise to 1,500 a year


Maputo Port Development Company

I

n recent times, Mozambique has been making great strides in improving its situation—and the port of Maputo is playing a significant role. Exports from the eastern half of South Africa could be despatched through the home port of Durban; but Maputo in Mozambique is nearer—not all that much by rail, but once cargo is loaded on board, there is enough of a saving to be made to make Maputo a more attractive proposition. Maputo Port Development Company (MPDC) is a national private company which holds the rights to finance, rehabilitate, construct, operate, ma nage, ma inta in, develop and optimise the entire port concession area. The company also holds the powers of a Port Authority, being responsible for maritime operations, piloting, tow ing (t ug boat s), stevedoring, terminal and warehouse operations, as well as the port’s planning development. There is a strong focus on the regulatory and legislative areas of the port; and the Port Authority is also responsible for the maintenance and development of port infrastructure, including quays, roads, warehouses and channel areas. The crucial functions of health, safety, environment and security also fall under the Port Authority’s remit. “We handle a good slice of the mineral exports from the Witwatersrand,” said

Capt. Ken Shirley, Port Authority director. “And shipping lines want continuity rather than chopping and changing all the time. As such, once we’ve secured a route, we would have to do something catastrophically bad to lose it.” A nice situation to be in; but when the current management took over operations at the port eight years ago, things were very different. Mozambique was still reeling from the effects of a long, debilitating civil war that despite having been settled a decade earlier, was still starving funds from every part of the economy. “ The por t wa s being administered as efficiently as it could be,” explained Shirley, “but maintenance—let alone expansion—suffered from a lack of money.” As such, the government invited bids for the concession to run the port. MPDC formed a consortium comprising Mersey Docks (operators of Liverpool docks in the UK), the Swedish construction giants Skanska and the Portuguese terminal operators Tertia. Today, though, Mersey and Skanska have sold their interests to other equally experienced operators in DP World and Grimrod. Bidding was a slow process, said Shirley, who was involved from day one. The process started in 2000 and the licence to operate was granted from April 2003. “There was so

“We handle a good slice of the mineral exports from the Witwatersrand”

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Maputo Port Development Company

Many commodities are loaded and offloaded by hand

“The economy of the region is developing at a rapid pace and we need to have all the resources in place to meet demand” much to do,” he said. “Apart from a schedule of repairing or replacing hardware, the number one priority was to dredge the channel back to its advertised depth of 9.4 metres.” Today, thanks to the dredging works carried out in 2010 and 2011, the channel has a minimum depth of 12 metres and is able to cater for Panamax-sized ships. But providing the largest ships with round-the-clock opportunities to enter the port has been just part of a wider plan to

improve productivity and find the capacity needed to accommodate the present level of traffic. “The economy of the region is developing at a rapid pace and we need to have all the resources in place to meet demand,” Shirley said. Mozambique is barely recognisable compared with 20 years ago and huge strides have been made, albeit from a very low base. Despite having considerable resources, it remains one of the poorest

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Tonnage is predicted to increase to 16 million tons per annum

countries in Africa and depends on foreign aid to balance the books. Nevertheless, after the end of the civil war, mining companies have begun to explore the country’s mineral reserves and there is now a sizeable amount of coal exports going through the port. On the whole, though, Mozambique

imports more than it exports and the nature of the port is highly mixed. Part of the set-up that MPDC inherited when it took over the port were four sub-concessions for coal, containers, sugar and citrus fruits. There is now an extra one with the introduction of a new car terminal. Each of these is run autonomously and outside of MPDC’s day-to-day remit. While the above specialise Trans African Concessions on one single cargo, MPDC Trans African Concessions (TRAC) is the proud has responsibility for the concessionaire of the N4 toll route, which links the engine highly divergent remainder. room of the wealth-producing interior of South Africa (Gauteng) with the nearest ocean-going port in Maputo. Different cargoes need This route has undoubtedly increased trade efficiencies in widely different techniques. the region. TRAC is a respected member of the technical, It may seem a little out civic, business and financial community in Southern Africa, of place for the 21st and remains steadfast in its commitment to help create century but not altogether wealth through road infrastructure development. surprising under the www.tracn4.co.za circumstances that many

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Maputo Port Development Company bagged commodities are still loaded and offloaded by hand. But despite the mountain of work to be done, Shirley is bullish about the future. “There is now an excellent rail connection with South Africa,” he explained, “which can take the heavy loads and release pressure on the road system. But it is like all things here—the full potential will have to wait until the rolling stock is up to the right levels.” The original concession to MPDC from the government was for a period of 15 years—hardly enough to encourage significant investment, considering that the concession is already in year eight.

However, it has since been extended for a further 15 years; and with that comes plans for capital investment of $740 million over the next 20 years. “We have the advantage of spare land,” said Shirley, “enabling new quays and terminals to be planned. Within the next few years we expect tonnage to have increased to 16 million tons per annum, while the number of ships calling should rise to 1,500 a year.” For more information about Maputo Port Development Company visit: www.portmaputo.com

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South Africa’s second largest steel producer is continually working towards becoming a more responsive and forward-thinking operation —and it is receiving recognition for its efforts along the way

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Evraz Highveld Steel and Vanadium Limited

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art of Russia’s Evraz Group, South Africa-based Evraz Highveld Steel and Vanadium Limited is a vertically integrated steel and vanadium slag producer, mining titaniferous magnetite ore at its Mapochs Mine located at Roossenekal, Limpopo; and producing iron and steel products and vanadium-bearing slag at its eMalahleni, Mpumalanga-based steelworks and headquarters. There was a time when vertical integration among steel makers was the norm, before the industry went through a phase of focusing simply on core activities, with steel producers divesting their iron ore mining interests. But Highveld has always processed the ore it has mined itself—and has benefited considerably in the process. In 2006, Highveld attracted the attention of Evraz, a Russian steel producer every bit as vertically integrated as Highveld but much more global in outlook. In 2008, the sale of Highveld from Anglo American to Evraz was completed to go with its other world interests in the UK, the Czech Republic, Italy, Canada, the US and Russia. There are fundamental differences between South Africa and Europe in the relative relationship between steel and concrete. In the UK, for example, 25 years ago concrete accounted for 65 per cent of the raw material used in construction projects, compared with 35 per cent for steel. Today, thanks to effective marketing by steel producers, that ratio has reversed completely. But in South Africa, concrete remains dominant; so one of Evraz Highveld’s long-term goals

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Unique processes are used to smelt and refine the iron ore


Evraz Highveld Steel and Vanadium Limited


B&S are proud to be a valuable partner to Evraz Highveld Steel and Vanadium Limited, since 1990.

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Evraz Highveld Steel and Vanadium Limited is to convince architects Bouwer & Scrooby Ltd and developers with the B & S stands for ‘best service’, as we aim to provide same sort of arguments high quality and consistent service to our customers, used in Britain, which develop long-term symbiotic working relationships and would have a considerable constantly look for new expansion opportunities through impact on sales. which we could improve upon existing services That’s something of an delivered in our industry. vincent@bsmh.co.za understatement because Highveld is already South Africa’s primary producer of medium and heavy structural sections and thick plate, as well as a substantial contributor to the global vanadium feedstock market. It is also the secondlargest steel producer in the country. In the first half of 2011, the company’s domestic steel sales volumes increased by two per cent and export steel sales volumes increased by 51 per cent, compared with the first half of 2010. With revenue up 17.5 per cent to R2.9 billion, the company was able to report a very healthy EBITDA profit of R169 million in the first half, against a R81 million loss in the first half of 2010. It’s 52 years this year since magnetite iron ore was discovered at Evraz Highveld’s Mapochs mine, 140 kilometres north-east of eMalahleni (previously known as Witbank). The high titanium content of the magnetite ore has meant that Evraz Highveld has had to develop unique processes for smelting and refining the iron ore; but parts of the Flash smelting

“In 2011, the company committed a substantial amount of funding to invest in major improvement projects” January 2012 | 135


The plate mill

“We strive to make our corporate structure reflective of the country’s demographics” plant were beginning to get long in the tooth. In 2011, the company committed a substantial amount of funding to invest in major improvement projects, including R175 million for the conversion of Furnace 7; R24 million for process improvements at Mapochs; and R145 million towards major maintenance projects. It is hoped that these projects will have a positive impact on productivity with

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a relatively short payback period. The construction industry is very traditional and works today much the way it has for decades; but Evraz Highveld knows that everyone involved with the supply and consumption of steel needs to modernise. Maybe it will never match the automotive way of working; but the company’s aim is to satisfy customers’ needs within days, not weeks or months.


Evraz Highveld Steel and Vanadium Limited

Employee operating machinery

But is not just within its production processes that Evraz Highveld is forwardthinking. A major achievement in September last year was that the company was awarded the Level 5 Broad-Based Black Economic Empowerment (B-BBEE) contributor rating by the South African National Accreditation System (SANAS)accredited agency, BLogic. This followed an intense focus on transformation within Evraz Highveld, which was previously rated as a Level 8 contributor. Recognising the importance of B-BBEE as a business and national strategy, the company took a number of measures aimed at increasing diversity across all levels.

This involved improving representation of historically disadvantaged people in senior management structures; the provision of advancement opportunities to previously disadvantaged groups across various management structures; implementing education programmes aimed at skills development; carrying out preferential procurement, particularly among black-owned SMMEs (small-, micro- and medium-sized enterprises); and the development of local blackowned businesses within the eMalahleni community to become preferred suppliers. A number of external projects were implemented to target the economic

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Substantial investment has been made in major upgrades


Evraz Highveld Steel and Vanadium Limited

“We are looking forward to moving further on and increasing our B-BBEE results” empowerment of communities, on both social and business levels, through education, health, housing and supply chain initiatives. “Evraz Highveld aims to develop and support transformation both nationally as well as within the company,” commented CEO Michael Garcia. “We strive to make our corporate structure reflective of the country’s demographics and to ensure that the principles of transformation are also reflected in the communities of Evraz Highveld’s operations. In Evraz Highveld we strongly believe that transformation needs to be taken into consideration at all levels of the organisation as part of the business strategy. B-BBEE is part of our business philosophy and we are looking forward to moving further on and increasing our B-BBEE results.” In addition to its B-BBEE achievements, Evraz was certified as a Best Employer South Africa 2011 by the CRF Institute. The award cited the reasons for excellence as being the company’s adaptability, predictability and stability; employees having job security; and the company encouraging creativity and innovation. Social upliftment activities in 2011 included Evraz Highveld launching its

‘HIV & Me’ programme at the Mapochs Mine, with a total of 30 primary schools due to benefit from the initiative. It also implemented an agricultural hydroponics project and in-house nursery at Mapochs Mine and took part in a number of sponsorships within local communities close to the steelworks and Mapochs. The Evraz Highveld eMalahleni community forum had already been established during July 2010, the purpose of which is to create a diverse representative forum at which CSR initiatives for the immediate community are discussed, approved and implemented. Michael Garcia began his role as director and chief executive officer of the company in May 2011. Announcing his appointment, the company said that his vision was to create an environment that would foster the involvement of all employees to their maximum potential and to develop the business to create outstanding value for the customer. The company added that this would involve development of the customer base, growth opportunities, world class manufacturing, supply chain management and continuous improvement. The evidence to date is certainly that Evraz Highveld is living up to its promises. For more information about Evraz Highveld Steel and Vanadium Limited visit: www.evrazhighveld.co.za

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Debswana Diamond Company

Diamonds might be a girl’s best friend but they are also the best friend of an entire African country, as Jeff Daniels discovers

January 2012 | 141



Debswana Diamond Company

T

Jwaneng Mine commands high prices per carat

he people of Botswana must be exceedingly poetic—at least if their place names are anything to go by. The most valuable diamond mine in the world, for example, goes under the ironically modest name ‘Place of small stones’. Names of neighbouring mines include ‘Water for a tortoise’ and ‘Resting place for lions’. Collectively, though, the diamond mines of Botswana are the lifeblood of the country and have turned it from an impoverished former protectorate of Britain into one of the wealthiest countries in Africa in terms of gross domestic product, far outstripping its dominant neighbour, South Africa. Botswana, though, needed a little luck. A totally landlocked country with 70 per cent of the area taken up by the Kalahari desert, the traditional farming way of life was never going to get it out of the mire. Consequently, when it gained independence in 1966, it had a GDP per capita of just US$70. The most current official figure puts GDP at $14,000. The search for diamonds began in the 1950s after a few small diamonds were discovered. Had the geologists found anything sooner, then maybe independence would have been slower in coming. As it was, it took over a decade of searching before a team of De Beers geologists found abundant quantities of elmenite and garnet—the two chief indicators of diamondiferous kimberlite. In April 1967, the pipe at Orapa was found. At 117 hectares, this was to be the largest of all the kimberlite pipes which

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Jwaneng mine

were eventually located in the area. But because of the size of the pipe and the variable grade, it took two years before sampling and evaluation were complete. As it was, the wait was worth it. The results were exciting: the Orapa pipe showed considerable potential and the development of the mine was affirmed by De Beers shareholders with the De Beers Botswana Mining Company being formed in June 1968. Encouraged by what they had already found, geologists began prospecting further south, where the rock formations are generally covered by a layer of sand 20 to 50 metres thick. Prospecting operations using systematic solid sampling techniques

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covered the area. The pipe that was to become Jwaneng Mine was eventually found in 1972 beneath a 40 metre layer of sand and calcrete in another poetically named region, ‘Valley of stars’, otherwise known as the Naledi River Valley. At the time, the 160 kilometres to the south-west of the Botswana capital of Gaborone could only be negotiated by 4WD although with the advent of a tarred road, the journey today is much more comfortable. In May 1978 Debswana Diamond Company was created as a 50/50 partnership between De Beers and the government of Botswana in order to develop the Jwaneng Mine, which came into full production in July 1982. At the time, the president of Botswana made the point that while Jwaneng would bring immediate benefits to the south of the country, the foreign exchange it attracted would have a lasting effect throughout the entire country. In fact, Debswana accounts for over 70 per cent of Botswana’s export earnings, 30 per cent of GDP and 50 per cent of government revenue. It’s also the largest non-government employer. Playing such a key role as it does


Debswana Diamond Company

The pipe that was to become Jwaneng Mine was eventually found in 1972

in Botswana’s economy, Debswana recognises it has both social and economic responsibilities to the country and its citizens. As such, since 2000, it has operated a Business Development unit within its supply chain management activities in order to create local supply capacity. As well as encouraging foreignbased suppliers to set up operations in Botswana—preferably in partnership with existing local businesses—it fosters an entrepreneurial spirit among the local

community aimed at promoting citizen economic empowerment. To date, 50 foreign companies have been attracted to Botswana and 37 of them are in local joint ventures. So far, nigh on 2,000 jobs have been created this way. In addition, 44 local companies have been identified as having potential to grow and develop and have received tangible assistance resulting in the creation of a further 2,100 new jobs. As part of the overall De Beers strategy, production at the mines is closely linked to

“In terms of value, Jwaneng is said to be the richest diamond mine in the world” January 2012 | 145


“Debswana is the largest single contributor to Botswana both in terms of revenue and jobs” diamond sales on the High Street. In 2007, Botswana produced 34 million carats—a figure that was slashed to just half that amount in 2009 at the depths of the world recession. Since then, demand has recovered somewhat and in 2011, output was up to 25 million carats. While Debswana has a portfolio of four

146 | January 2012

active mines, the flagship and by far the most important is Jwaneng. In terms of value, it is said to be the richest diamond mine in the world. Compared to the others, it commands higher prices per carat by possessing three of the 4Cs—carats, colour and clarity. It alone contributes about 60 to 70 per cent of Debswana’s total revenue.


Debswana Diamond Company

Botswana’s diamond output in 2011 was 25 million carats

Thanks to a quirk of nature, three volcanic vents converged at this point 245 million years ago, depositing their riches. All the Debswana mines are open-cast and so far, Jwaneng is mining to a depth of 350 metres—although expansion plans at the mine will eventually see it assume super-pit status by taking production to 800 metres in depth. Going completely against the tradition of colourful names, this project has been dubbed ‘Cut 8’. It’s a $4 billion expansion plan that will extend the life of the mine to 2024. It has already increased the normal payroll of 2,500 by an additional 1,400 positions—most of which have been filled by Botswana nationals.

Debswana is the largest single contributor to Botswana both in terms of revenue and jobs, and there is every scope for this contribution to continue well into the future. Its licence to operate the mines has been extended until 2029, while the Diamond Trading Company (DTC)—De Beers’ international sales and marketing arm— has had its sales agreement extended for a further five years. Plenty of time for more colourfully named finds to be made. For more information about Debswana Diamond Company visit: www.debswana.com

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Business dynamics continually demonstrate that success breeds change, as Jeff Daniel discovered when investigating CLYDEUNION Pumps

148 | January 2012


CLYDEUNION Pumps

January 2012 | 149


CLYDEUNION Pumps provides superior solutions to oil & gas companies


CLYDEUNION Pumps

T

hese days, there is such a lot of media individuals—now a little wealthier still, focus on the UK’s financial sector having recently sold CLYDEUNION to the that the country’s manufacturing American company SPX, headquartered successes are often overlooked. True, in North Carolina with annual revenues of manufacturing has been eclipsed by the $5.5 billion and a worldwide staff of more contribution from banking and insurance; than 15,000 people in 35 countries. nevertheless, Britain retains some truly In the past, McColl has resisted numerous world-class engineering institutions. offers to buy CLYDEUNION, in the belief In the month when Rolls-Royce that he could continue to grow the business announced it had sold more cars than at without outside involvement. This strategy any time in its entire history, our interest has been amply demonstrated, with joint goes north, across the border into Scotland, ventures created in Brazil to satisfy the where another venerable old business is bourgeoning economies in South America beginning a new chapter in its story. and in India, Indonesia and China to serve Among global pump the relentless expansion manufacturers, the company throughout the East. Clyde Pumps can trace its In the end, McColl was persuaded by SPX’s roots back to the 1870s when commitment to continue the brothers Weir set up shop expanding the Scottish near the River Clyde, which flows through the city of operation—which Glasgow. At around the same already employs 950 of Sales revenue in 2011 CLYDEUNION’s total time, on the other side of the workforce of 2,000—while Atlantic, Union Pump was beginning its own illustrious engineering maintaining the same Scottish facilities story. In 2008 the two came together and and management team that has served the created CLYDEUNION—a design and brand so well in the past. manufacturing business competing in all The structure today within of the heaviest and most technologically CLYDEUNION is made up of seven business demanding sectors there are. units focused on both upstream and Much of the success that the company downstream oil applications, conventional has achieved must be credited to Jim and nuclear power generation, water and McColl, who started with Weir Pumps as other industrial applications, plus minerals an apprentice, working his way up through and mining. the ranks to the point where he was able In addition, there is an important to buy the pump business from Weir plc aftermarket division which, among other and rename it Clyde Pumps. In the process roles, intends to service and maintain in he became one of Scotland’s wealthiest operation the numerous heritage brands

£400 million

January 2012 | 151


Huddersfield based specialist designers of Automation Systems, incorporating Condition Monitoring, PLC’s, HMI’s, SCADA and DCS interfaces, for monitoring and control of fixed and variable speed pump packages, with specific application knowledge of the Oil and Power Generation Industries. Industry sectors served include: • Industrial Gases • Packaging • Oil • Chemical and Pharmaceutical Unit 4, Trident Business Park, Leeds Road, Huddersfield, England. HD2 1UA

TEL: 01484 533527 | FAX: 01484 512058 | www.pesystems.co.uk

Engineering the Future TECO ELECTRIC EUROPE has been established in the UK since 1993 and is a wholly owned subsidiary of the multinational Teco Electric and Machinery Co. Ltd. of Taiwan. Having acquired Westinghouse Motors in 1995 we are the 3rd largest electric motor manufacturer in the world. Our association with Clydeunion Pumps is such that we have provided many MV engineered motor solutions since 1993, and have worked on projects such as Krishnapatnam Power Plant and Ivanpah Solar Plant. TECO UK are based Salford, Manchester where we hold vast stocks of Low Voltage European Designed aluminium and cast iron motors as well as a full range of Variable Speed Drives. Our Salford facility also houses our projects division providing capability to design and project manage the manufacture of MV & HV motors and large motor/drive combination projects. Our projects team also have the experience to provide motors for safe and hazardous area environments to IEC or NEMA standards. TECO design, manufacture and supply motor power ranges from fractional horsepower to 22MW. Our UK stock is backed up by European stocks held in Germany and The Netherlands as well as being supported by 8 manufacturing plants in the Far East and USA. Whatever your motor and drive requirement our experienced engineering team can help and advice on the most appropriate products to suit your applications.

enquiries@teco.co.uk www.teco.co.uk

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CLYDEUNION Pumps that have been acquired Pneumatic & Electrical Systems along the way—names such Our key activities are the design and manufacture of as Mather & Platt, David process control instrumentation, motor control and Brown and DB Guinard from PLC systems, and the manufacture of on-site nitrogen France—over and above generators, gas mixing and oxygen skid assemblies. Weir and Union products. Currently the company employs approximately 17 personnel Last year, the Aftermarket with sales exceeding £2 million per annum. Our client base is small and diversified. business unit moved into www.pesystems.co.uk its own fully refurbished, self-sufficient factory in Glasgow, fully equipped with some of the most advanced work centres on the market. Here, pumps can be inspected, stripped, cleaned and rebuilt for another long period of active duty. Despite accounting for 14 per cent of the world’s electricity, nuclear generation continues to be both controversial and divisive but undeniably important. Consequently, expertise in this area of industry speaks volumes about the quality of engineering and manufacturing. Although we tend to hear more about their coal-powered stations, the Chinese are major players in the construction of new nuclear installations and CLYDEUNION is a significant supplier of pumps for this programme. McColl acknowledges the part played by the British government in assisting its campaign in China. When prime minister Asquith horizontal floor borer

“CLYDEUNION’s pumps incorporate proven best-in-class technology that exceeds the most stringent of nuclear standards” January 2012 | 153


David Cameron led a trade mission to China in November 2010, McColl was part of the delegation. Through the government’s export credit guarantee scheme, CLYDEUNION was able to get funds through its banking partner HSBC which led directly to the order for six advanced main feed water pumps and associated equipment for the Fuqing nuclear power plant units 3 and 4 in Fujian Province in south-west China, a contract worth £15 million. The pumps are high temperature and high pressure units and require superior design and manufacturing integrity.

CLYDEUNION’s pumps incorporate proven best-in-class technology that exceeds the most stringent of nuclear standards. The pumps incorporate a unique safety design, referred to as the TWL, which requires no external services and thereby makes it much more robust, even to the extent of being able to deal with catastrophic events such as the recent Japanese tsunami. Although nothing can match the nuclear need for safety, it could be argued that the oil and gas industry brings more operational challenges to pump manufacturers. These days all the easy oil and gas has been found

“The three years to the end of 2010 saw turnover increase from £45 million to £260 million, with an almost tenfold corresponding increase in profit”

High pressure test booth

154 | January 2012


CLYDEUNION Pumps

Machinery at the Glasgow facility

and what remains lies in some of the most inhospitable environments in the world—in remote land regions or at the bottom of cold, deep seas. Often, the precious hydrocarbons are at low pressures and have to be coaxed out by involved processes such as ultra-high pressure water injection, CO2 injection and subsea pumping. Similarly, the platforms on which work is carried out are also changing, placing new demands on the machinery installed there while the demand for absolute reliability remains constant. As such, nothing stands still and CLYDEUNION’s engineers must anticipate trends in both exploration and production techniques in order to stay ahead of the game. After a lifetime of involvement with Weir and then Clyde, McColl will no longer have

any involvement in running the business— but his legacy remains. After buying the business from Weir for £45 million, the £750 million paid by SPX reflects the growth in CLYDEUNION under McColl’s stewardship. The three years to the end of 2010 saw turnover increase from £45 million to £260 million, with an almost tenfold corresponding increase in profit (EBITDA) from £4.5 million to £40 million. Revenue last year continued the upward trend, with sales of over £400 million: a solid base for the new owners to build upon. For more information about CLYDEUNION Pumps visit: www.clydeunion.com

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Konecranes

Alan Swaby looks at one of the largest crane manufacturers in the world—which ironically comes from one of the smallest countries in the world

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W

atch any strong man competition and the odds are there will be a Finn in the final. For a country with a population of far less than Greater London, Finland manages to create some of the biggest and strongest specimens in the world. It’s only fitting, then, that one of the most important crane manufacturers in the world is also from Finland. Within the industrial sector, Konecranes believes it is in first place while in the port handling sector, it ranks as either third or fourth. “Within the sectors where we operate,” says vice president Mika Mahlberg, “we estimate that our market share globally is about 15 per cent.” Even for those not in the crane business, the name might sound familiar. Konecranes used to be part of Kone Corporation— manufacturers of lifts, escalators and automatic doors, products that all of us will have ridden in or walked through many times. But in 1994, the crane division was the subject of a management buyout and went public just two years later. To give some perspective to the company, Konecranes is just putting the finishing touches to the world’s largest goliath crane, being supplied to the Ecovix-Engevix shipyard in Brazil. This monster has a span of 210 metres and can pick up ship sections weighing 2,000 tons. At the other end of the scale, many thousands of family-run workshops around the world make their lives lighter with Konecranes chain hoists. Alongside industrial cranes such as these are port cranes—the division headed by Mahlberg. “Cranes to handle containers

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Konecranes

Rail mounted gantry crane at BNSF Railway, Seattle, Washington, US


Rubber tyred gantry crane at Valencia, Spain

160 | January 2012

account by far for most of the machines we make,” he says, “but we still need to have the full spectrum of options so that we can provide equipment to suit every specialist activity that an individual port or shipyard performs. These past 12 months have been our busiest for some years and output has been higher than it was before the recession in 2008. In 2010, sales exceeded €1.5 billion.” Mahlberg puts the success that Konecranes has achieved down to several factors: “We are not typically the cheapest manufacturer in the industry,” he says, “but generally the orders that we want to win come from clients who are making a more rounded assessment of whole-of-life costs and for whom the highest levels of productivity are the key to better value. Therefore, we put considerable effort into maintaining technological superiority and pushing the boundaries of what can be achieved. Having said that, though, customers know that the designs we provide are well proven and more than reliable.” Cranes might be bigger and reach further than they used to do in order to satisfy the bigger vessels in service these days but on the whole they don’t look much different to how they did 20 years or more ago. On the other hand, the way they operate has changed enormously: the speeds at which they accelerate and travel, as well as the speed at which objects are lifted and lowered, are all significantly faster than they were. “The crane design plays a major role in this: the steel structure has to cope with the millions of changes in stress that a crane has to contend with in its life as loads are


Konecranes

Ship-to-shore crane at Terminal De Contenidors Barcelona, Spain

lifted and lowered,” explains Mahlberg. “But equally important is the contribution that comes from advances we have made in control systems. All Konecranes designs share similar technology and components. As well as the software we have developed, the volume of cranes we make justifies having our own manufacturing facilities rather than being obliged to buy proprietary products from others. This represents a major technological difference between ourselves and our competitors.” Commonality of design also makes life easier to provide service for any Konecranes

product. With close to 5,000 technicians in 578 service locations across 46 countries, a service engineer is never far away from a customer. Additionally though, by having no distinction in the way any of the products operate, a service engineer taking care of an overhead ladle crane in a steel mill can just as easily service the same client’s bulk iron ore and coal handling cranes. The most common types of crane found in a port are likely to be rubber tyred gantry cranes (RTGs) or rail mounted gantry cranes (RMGs). These are the bread and butter machines of any installation handling

“Customers know that the designs we provide are well proven and more than reliable” January 2012 | 161


Straddle carrier at Kotka, Finland


Konecranes containers, with RTGs giving complete freedom of movement while RMGs are to be found at container terminals or inter-modal junctions—loading containers onto trains, for example. Over the years, operators and crane designers have tried to squeeze the last drop of productivity from these machines by making them work harder and at greater levels of safety. The limiting factor, as always, has been the human component. Some drivers are more skilled than others and some work harder, while no-one likes working in rain or high winds. When incidents and accidents occur, schedules go out of the window. So the holy grail has been to have a completely driverless scenario: and this option is getting ever closer. Already, Konecranes produces automated stacking cranes (ASC) that can follow pre-programmed instructions to a very large degree, although in practice—and not dissimilar to automatic airline pilots— touch downs are generally carried out by human operators, albeit working from a remote location. “The advantages are enormous,” says Mahlberg. “By working in a cleared environment, safety issues are virtually eliminated. Machinery can work around the clock with no diminishing of performance. Rain or shine—it makes no difference to an ASC. Productivity is appreciably higher.” These machines carry a hefty price premium over a manually operated equivalent but since Konecranes sold its first ASC five years ago, the number of sales has been rising rapidly. Recent significant

16-wheel rubber tyred gantry crane at MassPort, Boston, US

investments in ASCs have been made in Abu Dhabi and Barcelona, where 30 and 36 ASCs respectively are under delivery. Developments in crane engineering are gradual and evolutionary so don’t expect quantum leaps. Mahlberg is content to work hard to retain the company’s leadership in technology while maintaining the huge investments in labour and resources constituting the high level of customer service Konecranes provides. Just like the strong men of Finland, he knows that only those who work hardest will ultimately win the prizes. For more information about Konecranes visit: www.konecranes.com

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Imperial Group

A restructure in 2008 has transformed the fortunes and profile of one South African organisation completely, as Alan Swaby reports

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Imperial’s logistics businesses account for one third of all sales


Imperial Group

T

he name is the same. Many of the business sectors and activities are the same. But the profile and vision of Imperial Holdings has undoubtedly changed from what it was five years ago. With a turnover last year of R65 billion, Imperial is South Africa’s 12th largest company by turnover. It employs over 40,000 people but it’s a much smaller and more focused organisation than it once was. “For decades,” explains Mohammed Akoojee, executive responsible for investor relations and corporate strategy, “Imperial was run by Bill Lynch—one of the most dynamic entrepreneurs South Africa has ever seen. Bill took the business from a small motor dealership in downtown Johannesburg and power-housed it into one of SA’s premier industrial companies. He focused on growth—both of new ventures and also dominance within each market sector. Eventually, though, the balance sheet could no longer sustain the ambitions of the organisation.” When Lynch died in 2007 and was succeeded by Hubert Brody, a process was already underway to divest some of the more asset-heavy parts of the company. By then, Imperial had its own bank and was also involved with aircraft leasing. Luckily for Imperial, both these capital-intensive businesses were sold before the financial crisis shook the world. “Today,” says Akoojee, “the requirement for maximising returns on capital weigh heavier than before, when growth was the main driver for our business managers. We are looking for a better sustainable return

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on our capital rather than sheer market volume as we believe it is the best way of giving greater value to shareholders. At one stage, our gearing (debt/equity ratio) was in excess of 100 per cent; these days it is around 30 per cent. Cash flow is strong, though, and none of the divisions are anywhere near as asset-heavy as things were in our aviation days.” The underlying theme to virtually all Imperial’s activities is transportation. Its more than 200 car dealerships represent virtually every vehicle brand sold in the SA market. It also has the exclusive distribution rights to Hyundai and Kia, two car brands that have grown their market share significantly over the last two years in South Africa. In its drive to maximise profit throughout the value chain, not only does Imperial sell cars and commercial vehicles, it can insure them through its own insurance company, provide service and maintenance plans and is also involved, through the 420-strong chain of Midas spares and accessories stores, in keeping older vehicles going. Prospects for all Imperial’s divisions are exciting, especially Imperial’s logistics businesses, which account for one third of all sales. “Our expansion into logistics is

typical of Imperial’s entrepreneurial style,” says Akoojee, “and came about as a natural extension of truck sales and then rental of trucks and vans.” It’s now a multi-brand business in its own right and split into five divisions: transport and warehousing; consumer products; specialised freight; integration services; and Africa (more of which later). Despite being very much an

“We are looking for a better sustainable return on our capital rather than sheer market volume” 168 | January 2012


Imperial Group

Imperial Holdings is South Africa’s 12th largest company by turnover

African-centred business, chemicals not only gives Imperial does generate us a better spread but it’s a business that tends to be eight per cent of profit from resilient in difficult times. its International Logistics Due to the extent of its business in Germany. This Number of Imperial value-added services and figure is expected to rise Holdings employees significantly next year after specialisation in hazardous investing €270 million in the goods, it can take advantage purchase of Lehnkering—a of attractive growth specialist logistics company serving many opportunities in niche markets.” of Germany’s industries. The real potential, though, will come from “Imperial has a significant logistics unlocking the rapid growth that is taking business in Germany,” says Akoojee, “where place throughout the African continent. its activities include inland waterway Compared with its neighbours, the South shipping and operating terminals along African growth rate of three per cent per the Rhine. Prior to Lehnkering, we were annum looks more like a mature market weighted towards the steel and automobiles than an emerging one. Many in South industry. Lehnkering’s involvement with Africa believe that the occasional debate

40,000

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The underlying theme to nearly all Imperial’s activities is transportation

“CIC was a valuable addition to our existing logistics activities in Africa” about nationalisation discourages inward investment. “Even the mining industry,” says Akoojee, “hasn’t enjoyed the full benefit of Asia’s boom. Our rail infrastructure simply doesn’t have the capacity needed to shift the volume of ore and coal that could be sold. Consumer demand is there with 30-year low interest rates and a population growing ever more affluent but there is much to be done on the supply side.” So while growth in South Africa remains organically steady, Imperial has taken a

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long hard look at the rest of Africa. Here, Akoojee’s past experience as an equity analyst and investment banker is being put to work. “There is no one single magic deal that will open Africa for us,” he says. “Nor can we expect to grow a business from grass roots. Rather, it will be a case of many strategically selected acquisitions that can be threaded together, linking the various countries in an ever expanding network.” As well as two or three acquisitions over recent years of specialist transportation


Imperial Group

neska intermodal terminal

companies, the acquisition of CIC Holdings in November 2010 has given Imperial an extended base and a stronghold in FMCG distribution—the first area where increased wealth is spent. CIC acts as principal for blue chip brands such as Procter & Gamble, Tiger Brands and Cadbury in various African countries—a warehouse-based business already very familiar to Imperial. “CIC was a valuable addition to our existing logistics activities in Africa,” says Akoojee, “as it provides a ready-made network on which the rest of our expansion plans can be based.” Expansion will be cautious and won’t come cheap. There are a number of small and mid-sized companies already operating in Africa that could be potential targets; but

Imperial’s 200-plus car dealerships represent almost every vehicle brand in the SA market

acquisition prices will be high due to the good growth prospects of these companies. Then there are the ever-present political and cultural complications that make investment in Africa always something that needs to be carefully considered. With his corporate strategy hat on, Akoojee is taking a cagey approach to African expansion; but that isn’t slowing down his mission to reinforce to investors and the financial community that the Imperial Group is far more than the motor dealership business it once was. For more information about Imperial Group visit: www.imperial.co.za

January 2012 | 171


As 2012 begins, Jannie Viljoen, manufacturing director of the new Mount Edgecombe site of Altech UEC South Africa, is presiding over the African continent’s most advanced facility of its type. Jayne Alverca reports

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Altech UEC South Africa

January 2012 | 173


Advanced testing to ensure quality is maintained


Altech UEC South Africa

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he digital migration across Africa is particularly customised set-top boxes, finally gaining in momentum. After innovative software solutions and services, years of deliberating, the South and systems integration capabilities, as well African government has decided on a way as global logistical support services, supplied forward and analogue technology will via Altech Global Decoder Logistics (GDL). soon be consigned to the history books. The subsidiary was formed to facilitate a South Africa is opting for a revised and complete service offering, including afterupdated version of the European Digital sales support and decoder repair capability. Video Broadcast-Terrestrial (DVB-T) 2012 is literally the start of a new standard. Now the race is on to implement era for manufacturing director Jannie DVB-T2, not only in South Africa but also Viljoen, as the company gears up in across the SADC region and in many other preparation for double-digit sales growth African countries. in Africa over the next five years. Six The potential total television household months ago, manufacturing operations switched to a new 13,500 market in sub-Saharan square metre, worldAfrica is approximately 60 class facility at Mount million sets, and all must Edgecombe, dedicated to upgrade by June 2015. In South Africa, there is the manufacture of digital an even more ambitious set-top boxes. It is Africa’s timeline, with December first high-tech facility of 2013 set as the cut-off its kind and will extend Potential total television point. This translates into the company’s reach household market in suba pressing requirement for throughout Africa and Saharan Africa the Middle East with the set-top boxes; and no-one on capacity to manufacture the continent can compare to Altech UEC when it comes to expertise more than three million television set-top in their design and manufacture. boxes each year. The company is a leading developer and “Our manufacturing operations are now manufacturer of digital technology for consolidated in a single entity, giving us the the African broadcast industry, operating platform and the capability to significantly under the umbrella of the listed Altech ramp-up production, with numerous group of companies, which provides global operational benefits,” states Viljoen. services to the converged multimedia and He explains that manufacturing used electronics market. Altech UEC focuses to take place across a number of different on the international converged broadcast sites, a situation that had arisen by accident and broadband industry, specialising in as a legacy of previous organic growth. the provision of fully-integrated solutions, “Each time demand increased we would

60

million sets

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Truth Electronic Manufacturing offers effective solutions based on the modern equipment that helps manufacturers to achieve success. We encourage our customers to look at our innovative technology and proven products and solutions that enable them to maximize their long-term benefits by focusing on total cost of ownership. Truth Electronic Manufacturing prides itself on associations with leading global manufacturers in their respective fields. We commit ourselves to working closely with our valued customers and suppliers to provide leading-edge products, systems and solutions. We offer a wealth of experience from our past 16 years in the electronic industry specializing in the latest manufacturing techniques and expertise in process engineering.

Truth Electronic Manufacturing cc Tel: +27 31 822 8555 Fax: +27 31 563 8555 Cell: +27 83 284 4457 Email: terence@truthelectronics.co.za

www.truthelectronics.co.za

Flexible Manufacturing Solutions


Altech UEC South Africa simply find a new corner. Truth Electronic Manufacturing Over time, we became more Truth Electronic Manufacturing is a BEE company founded and more inefficient, so the in 2009 that provides a range of services in the field of decision was made to make electronic production. We offer flexible manufacturing a substantial investment solutions for electronic production with any level of in a single, ergonomically complexity, and aim to help domestic manufacturers designed facility equipped succeed in the competitive electronic production market. This is achieved through the implementation of new w ith state-of-the-a rt technologies and optimal selection of equipment, as well robotics and automation.” as planning and implementing service and technological The investment was support that allows increased quality and reduced cost envisaged as part of price of manufactured products. a relentless drive to Our strength is in the relationships we have with our suppliers eliminate non-value added and customers and in the effort we make to understand their activities. Already though, technical and economic requirements. We offer individual solutions taking into account the type of manufactured it has introduced a wholly products, production volume and available funds. new revenue stream. www.truthelectronics.co.za “The new facility led to a decision that we would not only manufacture products designed by ourselves but also by some of the fiercest competition in the for third parties on a contract basis; and world, so how does Altech UEC compete on we started on our first partnership with a price? “That is a hurdle we addressed several multinational electronics and information years ago, when we initiated a process to technology company in October 2011 to automate various aspects of our operations produce flat panel LCD TVs on their and train our staff, as well as implement behalf,” he comments. strict quality controls.” Viljoen joined the The electronics market is characterised company four years ago, along with most

The DSD4121 is a full-feature, high-definition, DVB-S2 satellite decoder delivering market leading performance with the additional benefits of enhanced security

January 2012 | 177


of the current senior management team, who possess a shared heritage of years of experience working with top automotive and electronics OEMs. This insight led to the development of a carefully crafted plan to systematically drive out every scrap of non-value added activity. “Three years after we began implementation of the plan, the cost of our products is now in line with similar offerings produced in China on a landed basis,” he continues. “This is largely due

to the massive investment we have made in mechanisation, which has enabled us to streamline our operations to ensure efficiency and quality is maintained throughout our manufacturing process.” Securing a competitive advantage through technology does not come cheap. There is an annual sum of R20 million to R30 million allocated simply to ensure that the company can keep pace with technological advances in the industry and is not left with either a price or quality disadvantage

“The cost of our products is now in line with similar offerings produced in China on a landed basis”

State-of-the-art plastic moulding machines

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Altech UEC South Africa

Automation machines installed

through the method of manufacture. “Surface mount technology is the most capital-intensive area for a company such as ours, but we have also spent a great deal on the final assembly process. Another area we have heavily automated is testing, where we have improved the man-machine interface to make the process more cost effective,” he adds. Altech UEC also exhibits an unusually high degree of vertical integration which offers the advantage of superior quality control and a capacity to support total end-to-end solutions. “It is something that sets us apart—we are able to offer plastic moulding, printing and electronic assembly as well as final integration, all from a single source. Each of these areas have been highly

automated to a world-class standard.” However, despite his pride in the company´s achievements to date, he is keen to sound a cautionary note. “I see us positioned on just the first step of a continuous journey. Demand in our export markets is very strong, but here in South Africa we suffer from an inflationary economy and a very volatile exchange rate. We can never afford to sit back and relax but have to respond with a constant stream of new ideas and new ways to add value and cut costs,” he concludes. For more information about Altech UEC South Africa visit: www.uec.co.za

January 2012 | 179


Cleaner and greener After cleaning and greening South Africa, Judy Nankervis, managing director of Blendwell Chemicals, talks to Jayne Alverca about extending the company’s reach across the African sub-continent and beyond

180 | January 2012


Blendwell Chemicals

January 2012 | 181


Blendwell has the capacity to manufacture both liquid and powder cleaning chemicals


Blendwell Chemicals

I

n a host of industrial, commercial and manufacturer,” states managing director manufacturing settings, cleanliness Judy Nankervis. has vital implications for employee and More recently, Blendwell has moved into customer safety and satisfaction. Grease and contract manufacturing in partnership dirt is not only unsightly, it can harbour all with two European clients, and initial manner of unpleasant micro-organisms and feedback has been extremely encouraging. easily lead to litigation, especially in food Delphis Eco in the UK is a rapidly handling industries. expanding company marketing ecological Blendwell Chemicals has a simple cleaning products, and was the first message: whatever the operating such enterprise in the UK to achieve the environment, the Blendwell way is the prestigious EU Ecolabel, an independently cleanest way. Supporting higher standards certified accreditation. Its EU Ecolabelof cleanliness has been core to its operations accredited Multi Purpose Cleaner has just since the company began been awarded ‘Best in Class’ trading 21 years ago as an by Tomorrow’s Cleaning magazine, having been industrial cleaning chemical manufacturer. Since then, trialled against all the major Blendwell Chemicals has UK brands. Delphis Eco worked tirelessly to improve has also won the award for Length of time and refine its wide portfolio being the Greenest Business Blendwell Chemicals of products to offer a onein Wandsworth—the largest has been trading stop solution to all the needs borough of London. of trade resellers, cleaning “We are delighted at the chemical wholesalers and contract cleaners contribution we were able to make to the who want the highest quality assurance. success of Delphis Eco and hope it sends Today, the Blendwell ranges encompass out all the right signals to other companies industrial chemicals, laundry washing looking for a contract manufacturing chemicals, home and office cleaning partner. Delphis Eco was confident that we products, kitchen and bathroom cleaning, had the technical skills and the procedures all types of floor cleaning chemicals, food and systems in place to manufacture industry cleaning products, car cleaning products on its behalf that would meet the products and disinfectants, as well as highest standards,” she comments. cleaning accessories. Nankervis explains that Blendwell “We are the only business in this sector Chemicals offers two types of contract to manufacture exclusively for the resale manufacturing service. “Firstly, we can sector. It is a niche we have chosen because manufacture according to a formulation people who want to buy our products do specification that has already been not want to compete with us head-on as a developed. Alternatively, clients can come

21 years

January 2012 | 183



Blendwell Chemicals to us to outline the type of CIM Chemicals product they want and we With over 30 years of experience in the chemical industry, will do the rest. Not all raw CIM Chemicals is well positioned to meet South Africa’s materials available in Europe industrial chemical requirements. CIM Chemicals boasts can be found so readily a technical team which offers customers advice on the here, but we are expert best products to meet their needs and sources green at making modifications alternatives, where available. CIM Chemicals’ wide product range services the following and finding substitutes or industries: detergents; hair care; personal care and cosmetics; even improving on existing food; animal feeds; water treatment (including swimming formulations.” pools); bitumen additives; emulsion polymerisation; textile and Needless to say, one of the leather; and technical applications. company’s greatest assets CIM Chemicals is ISO 9001:2008 accredited and is a BEE is its lead chemist, who level 7 contributor. is widely recognised and www.cim.co.za respected for his expertise in detergent chemistry. Nankervis would love to showcase this formulation expertise and contract manufacturing capacity with a partner of the magnitude of Walmart, which will soon be establishing a retail presence in South Africa. With the capacity to manufacture both liquid and powder cleaning chemicals, Nankervis is proud of the company’s track record in product innovation—something which she feels gives Blendwell a solid first mover advantage. Similarly, the company

“This is a very exciting time in our company’s history”

Blendwell has expertise in detergent chemistry

January 2012 | 185


works to anticipate legislation, rather than react to it afterwards. “We are very forward-looking and lean towards Europe and the US for our inspiration. Our environmental range of cleaning products and the range we have developed specifically to meet the needs of the food industry are well ahead of the current market in South Africa, which tends to be much more conservative,” she explains. “At the moment there is a premium for environmental products and not everyone is prepared to pay it, but the situation is evolving all the time and increasingly we see large corporations in South Africa driving demand from the top downwards as they seek to implement their environmental policies,” she adds. Nankervis stresses that, at present, Blendwell’s heritage is that of a manufacturer, not a marketing or branding enterprise. The company’s manufacturing operations extend back over more than two decades and she feels its operational processes are very robust. The business is accredited to the ISO 9000 standard with BVQI and is a member of all relevant trade associations in South Africa. However, she is very open to new ideas and would like to see the company expand the refill and dispenser

side of the business as well as extend its own range of brands. At present, just one range dedicated to the food industry—known as the ‘H’ range—is branded, a move that was made in response to the specific labelling and regulatory requirements of the sector. “Despite the global economic downturn, our sales actually improved last year and now is the time for us to look more closely at our marketing options, possibly in

“We are very forward-looking and lean towards Europe and the US for our inspiration” 186 | January 2012


Blendwell Chemicals

Products are manufactured exclusively for the resale sector

association with a partner who has specific expertise in that area. We know we have a very strong formulation capacity and we would like to find a way to build value in the business without harming our existing customer base,” she adds. Another option under consideration is to extend Blendwell’s geographical reach into new parts of the African subcontinent. Exports currently account for approximately 10 to 15 per cent of sales, but there is scope for considerable growth. “Zimbabwe has great potential when the political position stabilises and there are many other neighbours such as Namibia, Mozambique, Botswana, Zambia and Angola where we already have a footprint that could be increased. Our online presence

is much more visible than it was a year ago and we know that the web will play a key role in achieving visibility and accessibility for a business such as ours.” Blendwell is ramping up for considerable expansion over the next five years and Nankervis is already considering a move to a larger manufacturing facility. “With so many options open to us, we need to work to clarify our growth strategy over the next year, but however we choose to move forward, this is a very exciting time in our company’s history,” she concludes. For more information about Blendwell Chemicals visit: www.blendwell.co.za

January 2012 | 187


IPP Resources is not only Tanzania’s largest diversified resources group, but also Tanzania’s only wholly indigenous mining and exploration entity

188 | January 2012


IPP Resources

January 2012 | 189


Tanzania is East Africa’s largest state by land size


IPP Resources

T

anzania, East Africa’s largest state by land size, is blessed with a Pandora’s Box of natural resources. Gold takes the spotlight, with output increasing tenfold in the 10 years leading up to 2007, when the country’s annual output of 50 tonnes per annum elevated it to the position of Africa’s third largest producer after South Africa and Ghana. The gold rush began in earnest in the mid 1990s, and Tanzania now hosts operations by some of the world’s largest mining companies, including Barrick of Canada, AngloGold Ashanti of South Africa and Australia’s Resolute. However, the largest diversified resources group in Tanzania, IPP Resources, is not a subsidiary of one of these mining megaenterprises: it is a wholly-owned Tanzanian group which forms part of one of East Africa’s leading business conglomerates. IPP was founded by the renowned Tanzanian entrepreneur Reginald Mengi in the 1980s. Mengi has also been heavily involved in many social development activities, especially in the areas of health, environmental management and poverty alleviation; and has been a leading advocate of the role of the private sector in the prevention and treatment of HIV/AIDS. IPP Resources currently holds the country’s largest portfolio of primary mining licences and prospecting licences. Gold is the main focus, but IPP’s operations encompass a broad spectrum of other metals and minerals, including platinum, uranium, coal, bauxite, magnesite, nickel, diamonds and a wide variety of gemstones, including rubies, emeralds and tanzanite

January 2012 | 191


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IPP Resources (this is the blue/purple Geospec International variety of the mineral Geospec provides geophysical contracting and consulting zoisite and is unique to services worldwide, based from southern Africa. Services Nor thern Ta nza nia). range from survey planning, data acquisition and QC/ In total, IPP Resources QA, processing, analysis, inversion, visualisation and has acquired over 150 interpretation, to integration with data from related concessions, most of which disciplines. Geospec utilises the latest geophysical equipment technologies, e.g. EMIT and Zonge, to acquire are located in the country’s quality field data suitable for advanced processing and richest mineralised belts. interpretation. The latter is achieved with the latest The group’s focus is on available mapping, modelling and inversion software. the acquisition of mineral Currently, Geospec is supporting IPP with its exploration and metal properties and efforts in Tanzania, providing critical advice to the assets that are deemed to exploration manager regarding the siting of drilling targets have a high potential for in very complicated geological terrains. cas.spectral@gmail.com success, then exploring these assets with a view to developing an internal mining capability, potential joint ventures, sale to other companies or the realisation of royalty payments. Operations are directed from the company’s headquarters at Dar Es Salaam and a small regional office has been established in Mwanza to manage gold interests in the Lake Victoria gold area. IPP Resources acts as a holding company beneath which dedicated subsidiaries operate according to the nature of the

“The group’s focus is on the acquisition of mineral and metal properties”

Workers in action

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Founded over 100 years ago Layne Christensen Company’s Mineral Exploration Division has developed into one of the largest exploration drilling companies of it’s kind. We provide a full range of drilling services for the global mineral exploration industry, through our wholly owned operations and our Latin American Affiliates (The Geotec Group). Our combined fleet exceeds 300 drill rigs and we provide services on 4 continents. We aim to provide the best, most innovative and reliable drilling services, using state-of-the-art equipment and technology. Layne Drilling Tanzania - employs a team of experienced Expatriates and Tanzanians to meet client

requirements. The majority of staff is employed as drillers and heavy duty plant mechanics, supported by a strong administration division and an experienced management team. Most of the employees have extensive experience drilling at various sites throughout Tanzania. This has enabled Layne Drilling the ability to develop an excellent understanding of the region’s ground and climatic conditions. The company has a strong commitment to the ongoing training and development of the local workforce including the maintenance of international standard occupational health and safety for all employees. International standard safety reviews and safety audits are a normal part of the company’s operations.

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IPP Resources

Operations encompass a broad spectrum of metals and minerals

activity, such as IPP Gold, IPP Gemstones, since 2005, it is a source of great pride that IPP Energy and IPP Base Metals. an enterprise of this scale is also a truly A tanzanite mine is already operational indigenous operation, wholly owned by in the Merelani area, supported by a Tanzanian nationals. “There are many other gemstone cutting centre; and the group’s indigenous exploration companies, but we eight exploration teams are involved in are the only one to operate on such a major numerous projects across the country. The scale and to have extended our reach into most promising sites to date exploration, drilling and include the Handeni Gold actual mining,” he states. Project and the Bukwimba While many foreign operators have become Gold Project, which are mired in land disputes both at an advanced stage and clashes with smallof exploration. Number of scale miners, Scheepers For Dr Reyno Scheepers, concessions acquired believes the advantages of IPP Resources’ president by IPP Resources being a domestic operator and managing director

150+

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inspired Your weekly digest of business news and views www.bus-ex.com


IPP Resources are readily apparent. “We Fugro have a unique insight into Fugro flew its helicopter borne, time domain the operating environment electromagnetic system HELITEM, the most powerful time and the law. This is a big domain electromagnetic system currently available on the operational advantage as market, for IPP Resources over its Haneni project. Using we work almost exclusively the HELITEM system along with Fugro’s technical expertise with Tanzanian people and experience allowed IPP Resources to identify further potential gold targets, map their underlying geology and and their land interests. increase the Haneni properties’ market value. When we acquire a licence www.fugroairborne.com to explore, there are almost invariably people located there. We understand how local people think, speak their language, share their culture and can much more easily negotiate agreements that are acceptable to all parties,” he comments. “For example, our tanzanite mine is located in a traditional Massai homeland with an important burial site on the property. We arrived at an amicable settlement giving the Massai access to water across the area that are vital for their cattle and promised we would never disturb the graveyard area. In seven years of operation, we have had no issues or problems at all.” He explains that each subsidiary has its own operating arm and wherever possible, local contractors are used or IPP will utilise its own exploration capacity. “Sometimes though, it is simply not possible to source the technology we need in-country. For example, local provision of geophysical IPP works closely with local people

“We work almost exclusively with Tanzanian people and their land interests” January 2012 | 197


data is difficult to obtain because the provider of some sophisticated geophysical expertise and equipment is state-owned and simply does not have the resources to meet demand, so we also work with teams from South Africa and Botswana who can give us access to this sort of expertise.” Scheepers’ future vision for IPP

Resources is clear. “We want to become the first black wholly-owned Tanzanian gold mining operation. In September 2010, we acquired a majority shareholding through a reverse merger of Douglas Lake Minerals, registered on the New York OTCBB, which added a series of very exciting prospects to our portfolio. It was the first example of

“Other Tanzanian companies will surely follow our example and, we hope, indigenous operators in other African countries”

Local contractors are used wherever possible

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IPP Resources

Exploration teams are involved in numerous projects across Tanzania

such a takeover by a Tanzanian company in this industry, and we achieved very positive feedback from many levels of society for showing how Tanzanians can take control of their own resources and destiny.” Meanwhile, the Bukwimba gold prospect in the Kahama greenstone belt in the Lake Victoria gold field is one of IPP Resources’ most exciting prospects. It has been systematically explored for a period of approximately five years and to date, drilling at the site has discovered gold values of up to 59.8 grams per ton. Within two or three years, he envisages it can be brought into medium scale production. Scheepers wants the success of IPP

Resources to empower and inspire others to follow suit. In Tanzania and many other mineral-rich countries, African people and companies have not traditionally participated in the exploration process, or derived any value from it. He hopes that the lead taken by IPP Resources will change this. “Other Tanzanian companies will surely follow our example and, we hope, indigenous operators in other African countries too.” For more information about IPP Resources visit: www.ippresources.com

January 2012 | 199



Meikles

From recovery to growth Zimbabwe-based Meikles has spent three years rebuilding its retail, hotel and tea growing business in the aftermath of devastating hyperinflation. Executive director Mark Wood talks to Gay Sutton about new business opportunities and plans for growth

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The Victoria Falls Hotel

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Meikles

M

eikles is a household name in Zimbabwe: 17 Meikles-branded department stores and a luxury five-star Harare hotel form the face of a company that has extensive experience in retail, hospitality and agriculture dating back to 1892. The operations are divided into four divisions. The supermarket division encompasses the leading TM Supermarket chain with more than 50 stores spread across all the major urban areas nationwide. The hotel division includes not only the 360-bed Meikles Hotel in Harare, but also the splendid and historic Victoria Falls Hotel and the Cape Grace Hotel in South Africa. Meanwhile the Meikles department stores countrywide have been augmented by the acquisition of Greatermans and the two Barbour stores in Harare. The final division of the business is the Tangada Tea Company, a tea growing enterprise comprising five tea estates. Today, Meikles is in the process of change. Not only is it fighting to rebuild the business after the devastating cycle of hyperinflation that has ravaged Zimbabwe over the past 10 years, but it’s also reshaping each area of the business to take advantage of the upturn and the emergence of new markets. For most of us, the global economic difficulties of the last few years have been challenging enough. For businesses in Zimbabwe, the sheer scale of inflation over the last 10 years and the hardship caused is hard to grasp. “To give you an example of how bad it became,” explains executive director Mark Wood, “if we received a quote to buy something, the price was good for

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Meikles just a couple of hours and Probrands then went up again. Goods Probrands is one of three strategic business units sold one day could not be making up Progroup Holdings and was established in replaced the next day at 2009. Probrands are food specialists in basic household the price we had received consumable goods, focused on delivering value to the for them. By 2009, through consumer. We currently distribute our product to over 150 a combination of inflation leading retail outlets country-wide in Zimbabwe! We value our business relationships and our approach is a nd imposed price based on building mutually beneficial relationships with controls, our departmental our trade partners. We would like to take this opportunity stores were empty and the to congratulate Meikles Ltd (TM Supermarkets) on their supermarkets only stocked achievements to date. We will continue to align ourselves with locally produced meat, with and support them in their future growth plans. vegetables and bakery www.progroup.co.zw goods. We had shops with virtually nothing to sell and a full array of staff to pay.” By the time dollarisation occurred in February 2009—the Zimbabwean dollar was replaced by the US dollar—and inflation abruptly came to a halt, “it had wiped out the entire group’s liquid working capital,” Wood continues. Through a series of hard-won short term loans from the cash-starved national banks, the company has worked hard to fully restock both the supermarkets and department stores. “On a day-to-day trading basis we have recovered,” Wood says. “And

“We believe there is huge potential for expansion in the tourist sector”

Tea plantation

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Tel +263 660589/ 668410/668419 Fax +263 660728 Cell Noel Jackson 0772 204 699

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www.bus-ex.com 206 | January 2012

we now have plans for all four divisions of the company. For example, we see massive potential for growth in the supermarket side of the business.” Working with business partner Pick n Pay, a large South African retailer, Meikles is updating and refurbishing the TM Supermarket chain and two new stores will be opened in the next four months. In the longterm, the aim is to derive synergies of scale with Pick n Pay by taking part in combined purchasing, and tapping into the company’s expertise and experience across Africa. “We also believe there is huge potential for expansion in the tourist sector,” Wood continues. The iconic Victoria Falls Hotel is currently in the process of being refurbished. Standing on a unique 13-acre


Meikles

Meikles’ flagship supermarket in Borrowdale suburb, Harare

site overlooking the falls and the railway bridge, it has already enjoyed a tremendous recovery in tourist interest. Occupancy levels have risen from just 10 per cent five years ago to 60 per cent today; and that trend looks set to continue. “It’s a prime location, and the only hotel in the area with views of the falls,” Wood says. “At the moment we’re examining possible options for expansion, and we’re currently bouncing ideas off our partner, African Sun Hotels.” Meanwhile, the Meikles Hotel in Harare,

although largely reliant on business clients, is also to be refurbished. One of the most interesting areas of diversification and expansion within Meikles is taking place in the tea business. Currently some 2,500 hectares of land are cultivated for tea across the company’s five estates, and by marshalling underutilised land on the existing properties, the company is planting 200 hectares of coffee, 600 hectares of macadamia nuts and 400 hectares of avocado pears. The avocados and

“Our aim is to establish new supermarket partners and provide packaged tea for their in-house brands” January 2012 | 207


macadamia nuts will be exported to Europe while the coffee—top quality Arabica—will not only be exported but also sold locally. “All three crops will take three to four years to reach a fully productive state. So we’re planting during quiet times when we can utilise our spare staff for land clearance and planting,” Wood says. “However over the next three years we expect to create maybe 400 new full-time jobs and invest in plant and equipment for sorting, grading and packaging.” Changes are also on the cards for the tea-producing side of the business. “Traditionally we’ve exported 70 per cent of our tea as bulk tea and blended and packaged the remaining 30 per cent for sale locally. But we believe it will be far more profitable for us to turn those percentages around and process and pack 70 per cent of our tea. To achieve that we are busy developing markets in Zambia, Botswana and Namibia, and in a couple of months we’ll be looking at Angola. Our aim is to establish new supermarket partners and provide packaged tea for their in-house brands.” The department store division of the business has been the slowest to revive. “Historically the stores have survived on credit sales, and sourcing funding for the debtors’ book is still very difficult. We’ve done

a lot of work on pricing and we’re certainly competitive in the market but we’re basically in a holding operation until liquidity in the local market improves,” Wood says. However, the company is currently examining its business model for the department stores, and evaluating the prospects of migrating to a destination store model and retailing well-known brands. “By working with some of the big brand names and using the size of their orders to reduce purchasing costs, we believe we can get a much better deal

“We’ve done a lot of work on pricing and we’re certainly competitive in the market” 208 | January 2012


Meikles

Zimbabwe’s economic situation is improving

for ourselves and a lot better deal for our customers,� Wood reveals. Finally, the company is looking to its logistics and supply chain operations to improve efficiency and reduce costs. Centralisation of purchasing has already increased accountability and financial control of the business; meanwhile, the company has recently embarked on a huge $10 million to $15 million project to create a central distribution centre to handle goods for all divisions of the business. Within the one 22,000 square metre warehouse complex there will be a 12,000 square metre hypermarket, a packaging plant for fresh produce, and a diesel-powered bakery to supply bakery products for the Harare area which should help overcome the problems

caused by an erratic power supply. If the project proves a success, it may well be replicated in Bulawayo. As things have improved in Zimbabwe, Meikles has not only striven to recover from the disastrous effects of hyperinflation, but to position itself at the forefront of business development. If the energy and business acumen displayed over the past few years is continued into the future it will be interesting to chart the company’s course as it expands its horizons and develops its footprint in the wider region. For more information about Meikles visit: www.meiklesinvestor.com

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Gold Fields: South Deep project

Gold Fields’ South Deep mine in South Africa is undergoing a massive improvement and development programme, and is now on track to become one of the world’s most productive gold mines

January 2012 | 211


South Deep comprises approximately 3,566 hectares of land


Gold Fields: South Deep project

A

ccording to Gold Fields, the Johannesburg-based international gold mining company with interests in South Africa, Australia and South America, the Witwatersrand Basin remains the most significant gold depository in the history of mining and has a great deal still to offer. The Witwatersrand is a low range of hills running in an east-west direction through the state of Gauteng in South Africa, and is legendary in the global story of gold mining. The Witwatersrand Gold Rush of 1886 was just the beginning of a series of events that established the region as one of the world’s most productive, responsible for some 40 per cent of the gold mined worldwide. Often referred to as the Rand, the region has also become deeply woven into the fabric of South Africa’s national identity, so much so that it has even given its name to the country’s currency. Witwatersrand is an Afrikaans word meaning ‘Ridge of white waters’, and although its hills are modest in size, they are geologically rich and complex, and form an important continental divide. Rain runoff to the north drains into the Limpopo River and the Indian Ocean, while to the south it flows into the Orange River and the Atlantic Ocean. Gold Fields is currently heavily involved in developing the South Deep project, which it believes is one of the greatest underdeveloped ore bodies in the world. The property comprises approximately 3,566 hectares of land and is located on the north-western rim of the Witwatersrand

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GMSI is a Mine Technical Systems and Services company that trades in a number of countries across the world, managed from hubs in Australia, Canada and South Africa. Our company is adopting a twofold strategy: i. Mine Technical Services (MTS) products ii. Enterprise systems We are revising our business partnerships and relationships in line with our Company strategy.

MTS Product Strategy

Mine Planning with Mine2-4D, MineCAD and EPS MineRP, recently rebranded from GMSI, still owns Mine2-4D, mineCAD and EPS – the complete, automated mine planning and scheduling system that delivers cost and performance improvements through efficient and solution driven features. Producing fully integrated long and short-term mine plans, gantt schedules linked to 3D designs, 3D animations and complete reconciliation is fully supported through the integrated, interactive process – and has never been this easy!

www.minerpsolutions.com


Gold Fields: South Deep project

De-stress mining is employed on-site

basin, tapping into two rich gold-bearing specialised de-stress mining methodology. mineralisations—the upper Elsburg Reefs “It is estimated that the use of this and the Ventersdorp Contact Reef (VCR). methodology will significantly speed up the The latest exploration results from the area rate at which we open up the ore body, and confirm mineral resources of 81.5 million we are planning to apply it to more than ounces, reserves of 34.5 million ounces and 60 per cent of our production area at South a mine life currently estimated at 54 years. Deep,” the company said. “Historically this Of the two ore bodies, the main target was done through conventional mining is the Upper Elsburg Massives zone which techniques, but due to low face advances, lies at a depth of 2,500 to de-stress mining is now 3,500 metres. In order to also done using mechanised mining techniques.” extract ore safely, efficiently and cost effectively at these A key element of the development strategy is depths—in other words from large excavations at close therefore to migrate from South Deep current proximity—the company traditional mining methods estimated mine life has elected to employ to full mechanisation. And

54 years

January 2012 | 215


as part of this strategy, Gold Fields set up a specialist on-site training facility equipped with simulators to up-skill the workforce, with mechanised production beginning in 2007. Since acquiring the mine in December 2006, Gold Fields has taken significant strides to improve and develop the site. Firstly, a major surface exploration programme at the South Deep Phase 2 and at the adjacent Uncle Harry’s Ground commenced in 2007, along with underground drilling and seismic remodelling, and these efforts have been increasing year-on-year. Comprehensive and intensive remodelling of the ore body has significantly improved the grade and tonnage definition for the project, and as a result the company has been able to improve the design and scheduling of the mine. In parallel with this, a comprehensive development and construction plan was launched to ensure that production is ramped up to a maximum annual output of between 700,000 and 750,000 ounces of gold by the end of 2014, with mining carried out at a rate of 330,000 tonnes per month. It is currently estimated that South Deep will be able to maintain this profile until 2052, with the life of the mine expected to extend to 2068.

To facilitate these plans, expansion of the existing gold processing plant, which has been operational since the mine opened in 1990, has been carried out, and improvements are also being made to the two shaft systems which provide access to the ore bodies and are linked underground. The main shaft of the flagship Twin Shaft complex is fully operational and has a massive single drop of nearly three kilometres, making it one

“A key element of the development strategy is to migrate from traditional mining methods to full mechanisation� 216 | January 2012


Gold Fields: South Deep project

Commercial production is projected to last well beyond 2050

of the deepest mine shafts in the world. Meanwhile the ventilation shaft is currently being deepened to the same level and should come into operation for July this year. Work is 80 per cent complete, on budget and on time: rock winder installation is progressing to plan, and all major components have been manufactured and delivered to the mine. All conventional mining at the VCR ore body, meanwhile, was suspended in 2008. But the plan is to return the reef to production at a later date, once the mine design and mechanisation plans have been completed. In 2011, investment into South Deep was in the range of R2 billion (US$273.2 million). And this level of capital investment is set to continue over the next two years as

Staff have been trained at a specialist facility

January 2012 | 217


“Comprehensive and intensive remodelling of the ore body has significantly improved the grade and tonnage definition” production ramps up to capacity. “The scale of the South Deep ore body cannot be underestimated,” the company said. “The addition of this mine to our production portfolio will help secure South Africa’s long-term role in our overall production portfolio—with commercial production expected to last well beyond 2050.” Aside from operational issues, Gold Fields is a benchmark in the industry for

218 | January 2012

its commitment to the environment and to the local communities in which it operates. “Sustainable development is not new to us,” commented Philip Woodhouse, head of Sustainable Development. “We have been investing in things like environmental education, socio-economic development and communities since the 1980s.” From the corporate governance perspective, Gold Fields complies with two


Gold Fields: South Deep project

Life of mine is expected to extend until 2068

international standards: the King Report on Corporate Governance in South Africa 2002 and the Sarbanes Oxley act. The main thrust of the company’s ethics and corporate governance policy, though, has been to set up its own code of ethics. “This has been in place for quite a few years,” Woodhouse explained. “It spells out the behaviour we expect from our employees and aims to ensure they act in a manner beyond reproach.” The code provides user-friendly guidance on how employees should deal with all issues to ensure ethical behaviour. On the subject of human rights, Gold Fields has developed a range of general practice guides on issues as wide ranging as freedom of association and upholding

the right for cultural difference. Many of the guides are also aimed at issues that are pertinent to specific locations. In Ghana, for example, illegal artisanal mining is prevalent, so a guide has been developed to provide ways of dealing with this. The efforts of the last few years to formalise a diverse range of policies and processes into an integrated sustainable development strategy have certainly paid off. “Sustainable development is not a just a concept in Gold Fields—it is the way we do things,” Woodhouse concluded. For more information about Gold Fields visit: www.goldfields.co.za

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Ahead of the pack Alan Swaby talks to a South African mining software company that is resisting being pigeon-holed and, in the process, carving out a successful path for itself

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MineRP

January 2012 | 221


Empie Strydom


MineRP

I

s it a mining-savvy IT company or an Gijima Technologies (then the AST Group)— IT-savvy mining company? At one time it one of South Africa’s largest IT suppliers might have been the first; but these days, with 4,000 employees—and is now a whollyMineRP is very much a rounded supplier of owned subsidiary of Gijima. The company’s mining solutions and actually wants to get current workforce of around 230 is split about much rounder. 50-50 between mining and IT specialists. It might be that the name MineRP is not Armed with these and more IT solutions, that familiar. The reason is a fairly recent MineRP has expanded its presence into name change from the previous Gijima all five continents, currently running eight Mining (or GMSI if you were in South offices that service clients in 52 different Africa) in order to better reflect the broader countries. In the process, it has developed scope of work the company is now doing, some unique ways of working. “R&D is a over and above the software side of things. major part of who and what we are,” says Prior to 1997, GMSI was an in-house service vice president marketing Empie Strydom, “to at AngloGold, providing the extent that as much as 15 backroom assistance with per cent of growth revenue is mining technical software invested in new products and such as CADSmine, which renewal of existing products. combined many of the But none of this is done disciplines needed during in a vacuum. Much of the Number of countries direction our development valuation, reconciliation and where MineRP has takes comes from a group sampling of mining assets. a presence of ‘grey heads’ we have That year, the decision was assembled—respected and made to spin the department off as a freestanding company and GMSI revered mining authorities who may or was established, pushing CADSmine, PEGs may not be retired but who have the time and MRM, its very successful software and capacity to consider what is happening suites written and tailored specifically for within the mining industry and to identify South African conditions. trends almost before they have started.” In 2000, the company spread its wings Nor does MineRP try to build a wall overseas and bought ACMS—a South between itself and the competition. “Rather African and Canadian business—and with than simply competing,” says Strydom, “we it, a very complementary software package, prefer to ‘co-pete’. We have good relations Mine2-4D. Later on, MineRP also acquired with many other mining consultancy an equal share in EPS (Enhanced Production firms who are both our opposition and Scheduler), through a partnership with Crest customers for our software. Some of the Software, its original developers. Along the ideas incorporated into products are even way, the company attracted the attention of influenced by their input!”

52

January 2012 | 223


“R&D is a major part of who and what we are” In fact MineRP’s openness goes further, through active participation in industry groups such as the Mining, Metals and Mineral Forum of the Open Group, and technological alignment with the Open Geospatial Consortium, which is setting global standards for interfaces or encodings of spatial information. “At our most recent international mine planning,” says Strydom, “we even invited two of our major competitors to share the platform with us—something we are not aware of happening anywhere else in the world. In the long run, though, collaboration to support standardisation— rather than developing purely proprietary products—is in the interests of the mining industry as a whole.” One of the focuses of attention within the mining industry is how best to integrate the numerous engineering disciplines that make up any mining enterprise. “Specialists such as geologists, mining engineers and surveyors,” says Strydom, “often work in their own silos, and moving information between departments is not nearly as integrated and seamless as it is on the commercial side of the business. We have developed a product known as SpatialDB which can accept mining technical data from a variety of operational sources and store this data in an open and accessible

224 | January 2012

format for others to use.” Not surprisingly, though, Strydom thinks that MineRP is well ahead of the pack when it comes to product development. “The open standards part is easy,” he says. “What’s more difficult is working within these standards to create something which operates effectively and adds real value to mines. Having developed enterprise mining products shaped by mining experts who understand the business of mining, we consider that we are years ahead of the rest when it comes to enterprise integration.” With a solid base in both mining software and consultancy, MineRP has established a three-pronged strategy for future growth. Firstly, MineRP wants to support more disciplines across the horizontal mining value chain. This will be achieved


MineRP

MineCAD screenshots

through a dual approach of expanding in-house offerings as well as establishing relationships with third party suppliers who want to benefit from the MineRP Enterprise Integration Framework. Secondly, the company is expanding its consulting and software capabilities to assist mines with moving information ‘from the planning room to the boardroom’—a simple way of referring to turning operational data into visual, understandable information appropriate at every level of the organisation. Says Strydom: “MineRP’s SpatialDash software breaks new ground by enabling executives of mining houses to access and collect data from any location in the world and on any platform they care to use in a consistent and meaningful way.” Despite being a South African company,

an important part of MineRP’s plans is to expand its global presence. This is the third element of the three-pronged growth strategy. With most R&D work performed in South Africa and Australia, new consulting and sales offices are being opened wherever there is a hub of mining activity: the most recent being in Chile and Turkey, which will soon be joined by a US base. With new versions of popular products such as Mine2-4D and MineCAD due for release in 2012, mining companies can expect to see a lot more of MineRP in the years to come. For more information about MineRP visit: www.minerpsolutions.com

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226 | January 2012


Water Corporation: SSDP expansion

January 2012 | 227


An aerial shot of the plant in July 2011Â


Water Corporation: SSDP expansion

W

estern Australia is one of the world’s driest places and it’s indisputably getting drier. During the 1970s the state’s water supply was fed mainly from rain runoff collected and stored in a network of dams in addition to a small amount from underground aquifers. At that time, the average annual rain runoff into the dams amounted to around 320 gigalitres (GL) and was more than sufficient for the state’s needs. But by 2001, runoff had decreased to just 70 GL a year—in other words, the water resource had shrunk to just 20 per cent of its 1970s level. To provide security of water supply to this vast and arid region, the state’s water provider, the Water Corporation, has been restructuring its operations and installing a range of new and often ground breaking technologies, particularly for the south-western region around Perth where the recent decline in rainfall has been the most dramatic. Today, only one third of water needs is supplied from the dams: the remainder is supplied by underground aquifers and two seawater desalination plants. The Water Corporation’s Perth Seawater Desalination Plant was the first large-scale project of this nature in Australia, and has been producing 50 GL of water a year continuously since coming online in 2007. A second similar project quickly followed and the Southern Seawater Desalination Plant (SSDP) came into operation in September 2011. Work is now underway to expand the plant, doubling its output.

January 2012 | 229


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Left: The HGM-RO high pressure water pump


Water Corporation: SSDP expansion “Expansion was already KSB Australia foreseen when we began KSB Australia, formerly Ajax Pumps, is one of the leading planning the first phase suppliers of pumps, valves and systems for the water, of SSDP,” explains project waste water, mining, building services, energy and industry director Nick Churchill. “So sectors in Australia. It is part of the worldwide KSB Group, we completed all relevant which is one of the leading suppliers of pumps, valves and assessments and approvals systems in the world. Over 140 employees from eight sales offices and six service centres around the country serve for a second plant at the the Australian market. KSB is a trusted supplier of pumps time we did the first, a for Water Corporation in WA and is involved in some of the process that has now saved large water projects to date. us two years.” www.ksb.com.au Two master plans were also created at the early planning stage of phase I. The first covered the development in hand, and a second was a plan for a possible second phase. “When we undertook the risk assessment, we also looked carefully at the plan for the expanded site. Where there was a risk that work for phase II could involve shutting down the existing plant or that it would be cheaper to install phase II infrastructure during phase I, then we did the work right away.” The major water intake pipes connecting the plant to the pumping station and the highly sensitive and complex marine work into the ocean are an example of this. All the tunnelling and engineering for both

“Expansion was already foreseen when we began planning the first phase of SSDP”

Construction underway at the SSDP

January 2012 | 231


An innovative berm, used to conceal the plant and reduce noise and lighting nuisance


Water Corporation: SSDP expansion phases were completed during phase I, leaving just the installation of additional pumping equipment and the infrastructure for connecting the pipe work to the new plant to be completed in phase II. The construction and engineering work that has just been initiated will have a lot to live up to. Phase I earned the team a number of prestigious industry awards including two Australian Institute of Project Management Awards, Project of the Year at the International Tunnelling Awards and the Western

“The construction and engineering work that has just been initiated will have a lot to live up to” Australia Engineering Excellence Awards 2011—no mean feat as industry and business in Western Australia is heavily engineering-oriented. Moreover, phase I was delivered three months ahead of schedule and slightly under budget, an achievement that Churchill attributes to the knowledge and experience gained on the construction of the Perth plant. “One of the most effective things we did at that time was to bring together everyone from the first desalination project and engage in a huge brain dump session looking at all the risks, what worked well

January 2012 | 233


and what did not. Then we were able to tackle all these issues early for SSDP.” This focus on continuous improvement has resulted in a considerable bank of expertise among the Water Corporation team, knowledge that they are happy to share with others in the industry. Many of the lessons learned during phase I are now being applied and developed in the second phase. The contracting strategy, for example, is being honed to improve efficiency and effectiveness. “With multiple contractors on Phase I it took a lot of time to manage the different interfaces between contractors, so we’re combining

70 gl WA’s average annual rain runoff into dams in 2001 the mechanical and electrical installations as their work is so closely interdependent. On phase II we’ll be going for two major contractors—AJ Lucas for the civils package and the mechanical & electrical contractor is yet to be announced.” Desalination technology has also moved forward significantly, and one of the major innovations being incorporated into phase II is a microfiltration seawater pretreatment process which will pre-treat the water for both plants. Another innovation, which at this stage is exclusively for the new plant, is the use of a hybrid reverse

234 | January 2012


Water Corporation: SSDP expansion

Safety was a number one priority for all employees on site


“We had to shut the work down for two-and-a-half months while we worked with the army and contractor to clear the entire site and make it safe�


Water Corporation: SSDP expansion

Machinery on site at the SSDP site in Binningup

osmosis membrane which operates at a lower pressure and is therefore more energy efficient. The Southern Seawater Desalination projects, of course, have not been without their challenges. Perhaps the most curious occurred when construction began on the water storage tank overlooking the site. “It turned out that this was the location for a World War II bombing range, and we found a number of unexploded ordnance in the ground,” he says. “We had to shut the work down for two-anda-half months while we worked with the army and contractor to clear the entire site and make it safe.” A more difficult challenge came when the decision to go ahead with the project was announced by the Premier, and the local communities had not been prepared for it. “At the time we were progressing a major ground water source,” Churchill recalls. “The new desalination plant was the alternative water source strategy, which made the announcement a shock for the local community.” The reaction among local communities was angry and vocal, and action groups were formed against the project. “The critical part for us was that the approval process incorporated public comment. So we had to engage with these communities and spent a lot of effort making the process as transparent as possible, providing information and enabling the community to comment on it.” Long-term noise and the visual appearance of the site were two of the major

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concerns, and from an early stage the plans were adapted to incorporate a berm—an eight-metre high embankment to reduce noise and visibility—around the plant. Another concern, particularly as this was a fishing and holiday area, was that the beach might be closed for a three-year period while the marine works were undertaken linking the plant with the sea. “That certainly raised a lot of angst,” Churchill says. “But by choosing tunnelling methods we only closed the beach for a week, as a safety precaution, each time we tunnelled beneath. In the end, by meeting our commitments and following through on what we said we’d do, we’ve turned the situation around in a spectacular way. The community is now completely supportive of the project.” Construction of phase II began in September 2011 immediately after the announcement had been made. And if all goes according to plan, the new plant will be commissioned and put into operation at the end of 2012. “Phase II will be variable flow,” Churchill says. “The output will depend on the volume of rainfall and surface water available. So when the dams are full the plant will only run to top up capacity. This will make us independent of rainfall.” Such security of supply will certainly be appreciated in the dry and arid region. For more information about Water Corporation visit: www.watercorporation.com.au

238 | January 2012

“By choosin we only clos as a s

A welder working inside a pipe on the SSDP project


Water Corporation: SSDP expansion

ng tunnelling methods sed the beach for a week, safety precaution�


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Qatar Concrete Company

January 2012 | 241


Site deliveries


Qatar Concrete Company

Q

atar is currently being furnished concrete and to contribute to the state of with much needed infrastructure Qatar’s effort to promote products and such as harbours and ports, a new solutions for sustainability,” states executive international airport, a metro system and director Antoine Abboud. rail network, thanks to recent and projected QCC is an innovative hybrid concrete future growth in the construction industry. producer that is adopting a new European But this is just the prelude to a further phase cooling system developed by an Austrian of construction that includes truly ambitious company. “We are investing in acquiring this developments such as the new city of Lusail new green technology to realise our vision along with residential, commercial, retail, to support the Green Building concept,” sports, industrial, tourism and leisure explains Abboud. This new green cooling projects throughout the country. Much has technology reduces the consumption been learned from the experiences of 2005 of energy, chemicals and other natural and 2008 when the previous boom resulted resources such as water by an average of 25 in a shortage of raw materials per cent, while improving the quality of the concrete and resources; and now in terms of consistency, forward resource planning and a focus on supply chain durability and sustainability. management has established Furthermore, it ensures the continuity of the greater security of supply Maximum advised construction process, even throughout the region. temperature for the during the hottest months Qatar Concrete Company laying of concrete (QCC) is a pioneering of the year. company carrying a new “The climate in Qatar technology that supports the Green Building can be described as a hot desert, with concept, ensuring continuity of supply, temperatures exceeding 50oC during the fulfilling market demand and helping to summer months, stretching from April to raise the concrete industry to new heights. September,” explains Abboud. “That’s no Established in 2007 as part of leading good for concrete, which should be laid at a Lebanese construction group SEG, QCC temperature of less than 31oC.” As concrete has a head office in Lebanon and offices hardens, due to a chemical reaction between in Qatar, Dubai, Abu Dhabi, Morocco and the cement and water, heat is produced. The Saudi Arabia. With a capacity of 3,500 cubic hotter the concrete mix, the less the concrete metres production of concrete per day from strengthens. This leads to uncontrollable two batching plants situated in the Lusail cracking, and this can be a major concern area, north of Doha, QCC has a futuristic for contractors and consultants, leading to vision: “We are determined to be a major the rejection of supplied concrete with all player in establishing a new era of ‘green’ the related consequences of discontinuation

31 C o

January 2012 | 243


inspired Your weekly digest of business news and views

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CONSISTENT QUALITY DEDICATED SERVICES & RELIABLE PRODUCTS Qatar Technical comprises of four divisions: Industrial Refrigeration, Standard Products, Steel Fabrication and Machining. In each division, we provide our customers with a wide range of complete solutions tailored to their requirements.

Tel: +974 44 606 999 Email: info@qatartechnical.com www.qatartechnical.com

244 | January 2012

of construction on-site, in addition to the financial implications. To avert this catastrophic outcome, the process of cooling the concrete should start as it is mixed, and the curing continued on-site while it’s hardening. The conventional method for cooling the fresh concrete, so that it can be used at higher ambient temperatures, is to add ice flakes and chemical additives to the mix. “Our technology doesn’t use ice flakes. We cool the coarse aggregate component of the concrete, which accounts for around 40 per cent of the mix, reducing its temperature to around 10oC,” Abboud says. “The mixed concrete leaves our plant at 24oC under any ambient circumstances allowing a significant lead time to sustain a longer


Qatar Concrete Company

On-site production

delivery to the construction sites.” The plant’s location at Lusail, which is within easy access of projects at West Bay and the Heart of Doha, as well as the new city of Lusail, does not limit QCC delivery to destinations around the capital. “We are also delivering further afield to places like Dukhan and Al Khor, where we are achieving excellent results,” Abboud says. This method of cooling has several other

engineering benefits. The concrete used in major construction projects of this nature is produced to very exact specifications, which are defined at the engineering design stage. As part of its business practice, QCC offers consultancy and advice on the mix design. Another benefit is the treatment of coarse aggregate. It is usually covered in dust or fines, which introduces an element of uncertainty to the mix design. QCC’s

“We are delivering further afield to places like Dukhan and Al Khor, where we are achieving excellent results” January 2012 | 245


new cooling system works by passing chilled water over the coarse aggregate so the fines are washed away, leaving pure and uncontaminated aggregate. “This gives us much greater control over the qualities within the mix, and consistency of production. Although the new technology is a bit expensive, we could see its economic viability through the saving of energy and other natural resources by approximately 25

per cent compared to conventional systems, so it is indeed a green process.” The last—but not the least—benefit is seen on the construction site rather than in the factory. The hardening process starts taking place as a result of a chemical reaction between cement and water, resulting in heat being generated. The concrete is then cured on-site to reduce the heat and prevent uncontrollable cracking. By using a

“Our intention is to be the marketing and technical arm for the new cooling technology ”

Batching plant and cooling system

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Qatar Concrete Company

Concrete pumps

significantly cooled concrete mix, less curing is required while the concrete hardens. “We are still in the process of accumulating the data to have evident records to prove that to contractors and consultants. It will take several years before we can demonstrate this definitively. But I believe we can reduce the number of curing days from seven to five, and therefore reduce the amount of water used. So the environmental benefits will not be ours alone.” Environmental sustainability is certainly a primary focus for construction projects, and this is especially true for Qatar. “I see this process creating a shifting paradigm in

concrete production as we move to producing better concrete with better sustainability and durability,” Abboud declares. “We are now ready to implement this new technology elsewhere: our intention is to be the marketing and technical arm for the new cooling technology and I believe we will be able to make it the new standard in concrete production for hot countries,” he concludes. For more information about Qatar Concrete Company visit: www.qatar-concrete.com

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Qatar Technical

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Lintel beam in production


Qatar Technical

F

or those with the ambition and vision to rise to new challenges, a new era in development within Qatar is creating infinite opportunities. One such enterprise is Qatar Technical. Take a look at some of the impressive new projects that have risen from the ground over the last few years—the Diplomat Tower, the Movenpick Hotel, and the Golden Bay Tower to name just a few. The stainless steel works such as decorative hand rails and guard rails, design elements, kitchen equipment, cladding and skirting— essentially anything the architect cares to imagine—have all been manufactured in Qatar and installed by this family owned and run business. The company dates back to 1992 when the current managing director, Gabi Mitri, established Alfa Industrial Refrigeration, continuing in the family tradition of industrial refrigeration. “Then in 2004, we recognised that there was an increasing demand for engineered products that were manufactured locally rather than imported,” explains deputy managing director Michel Mitri. “And that was the beginning of our expansion and diversification into a knowledge-based, quality-oriented manufacturing and service business.” Significant investment has gone into expanding Alfa Industrial Refrigeration, developing new areas of expertise and capability, upgrading existing production lines and adding new ones. A skilled workforce has been drawn from around the world, and the very latest technology imported and installed. All of this has been moved to an impressive new 10,000 square metre facility

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at the New Industrial Area. With the opening of the plant early in 2011, the business was relaunched as Qatar Technical. The vision is to continue growing the company, to offer exceptional product quality and reliability, and to further develop staff skills, exceeding technical achievements to encompass development in other nontechnical aspects of human potential. This will be a long-term process realised through the provision of knowledge and awareness towards achieving an advanced, safer and greener work environment. “We will do this in line with His Highness’s vision for 2030, to shift Qatar’s economy to non-oil exports,” says Mitri. “One year from now, we hope to begin exporting to the GCC [Gulf Cooperation Council] countries. Then after a period of reflection, if the venture has gone well, we will start targeting the Middle East, North and South Africa and possibly the Mediterranean countries. But there are possibilities around the globe.” The business is currently managed through four divisions. The original Alfa business has become the Industrial Refrigeration Division, and continues to design and install cold rooms and refrigeration units such as refrigerated boxes for the logistics industry and cold rooms for different business sectors, the Hassad Food and Mawashi companies

being just two examples. The division also supports its customers by offering ongoing maintenance services for its products. The Steel Fabrication Division adds to Qatar Technical a wide range of services and products that are constantly in demand. Almost any architectural drawing can be transformed into final products—many of them works of art, believes Mitri. Among the division’s many achievements have been decorative items, door and elevator architraves, customised rails and stainless

“One year from now, we hope to begin exporting to the GCC countries” 252 | January 2012


Qatar Technical

Mass production of custom accessories

steel kitchens for some of Qatar’s iconic new developments, such as the Aspire Zone. The Machining Division, with its stateof-the-art machines and skilled engineers, designs and fabricates custom manufactured skids and moulds of up to 6,000 kilos in weight to meet the everyday needs of a variety of industrial facilities. Services provided include repairing steel moulds, tools and mechanical machine parts. Finally, the Standard Products Division, including one of the largest automatic powder coating plants in Qatar, manufactures a wide range of items including cable support systems, interior fixtures, cabinets and enclosures, and structural support systems. “The Industrial Refrigeration and Steel Fabrication Divisions are both project-based,

so we manufacture, supply and install,” says Mitri. “However, as we currently only provide maintenance services for our Refrigeration Division customers, we’re working to expand that side of the business. We’re currently looking to provide mechanical and electrical maintenance services for joineries, carpentries, business towers, industrial and water treatment facilities. All those maintenance activities will then become a fifth division of the company.” Qatar Technical currently has a workforce of 55 people and assets comprising over 120 of the latest machines ranging from laser cutting and water jet machines through CNC production lines. Quality and reliability are the company’s hallmarks, and work is underway to verify this through

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A new product—aluminium ceiling air diffuser

Stainless steel kitchen equipment and decorative elements

“There is a lot for us to do, so we are currently just scratching the surface” international certification of all the products. 2012 is likely to be another landmark year in the company’s development from a management perspective. “I am currently restructuring the organisation,” Mitri explains. “Within the coming months, I shall be launching a new corporate structure. By then, we will have training programmes in place across all levels of the company, including technical, health and safety, and environmental training.” The company is fully committed to

254 | January 2012

becoming a green organisation. “It’s something we all have a duty to do,” Mitri says. “But we are really just at the beginning of the environmental process. We have started by providing orientation for our employees regarding the disposal of harmful waste products such as lubricants, oil and refrigerant gas.” Some recycling initiatives are already in place. Waste steel is segregated into zones, depending on the type of raw material. This is then collected by contractors hired from


Qatar Technical

Qatar Technical’s best-selling product—Kahramaa water service cabinet

s

the government, recycled where possible or disposed of. And there are more initiatives at the development stage. Refrigerant gases, containing CFCs, have a very damaging effect on the environment, and the company is in the process of implementing a system to recycle refrigerant gases and prevent leakage into the atmosphere. “When we install refrigeration units for a cold room, for example, one of the steps in the installation process is to charge the system with refrigerant,” Mitri explains. “We have acquired the equipment to recycle the refrigerant, and we’re working with the government to get the necessary training.” In a similar way, the company is working with the Ministry of the Environment to identify ways to safely dispose of waste oil and lubricants.

Looking to the future, there are some megaprojects currently out to tender in Qatar. There is the Heart of Doha project which is an urban renewal initiative for the residential centre of Doha. The new city of Lusail is a massive project that will include luxury residential, commercial and leisure facilities, occupying some 37 square kilometres of waterfront, and there is a new Metro system planned for Doha. “There is a lot for us to do, so we are currently just scratching the surface,” Mitri concludes. “This is just the start.” For more information about Qatar Technical visit: www.qatartechnical.com

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Expanding expertise With a number of new subsea oil and gas mega-projects on the horizon in the Asia Pacific region, Technip is gearing up for growth. Hallvard Hasselknippe, COO of Technip’s Asia Pacific Subsea Division, talks to Gay Sutton about building people, assets and technology

256 | January 2012


Technip Asia Pacific


Technip, in a consortium with Samsung Heavy Industries, will provide engineering, procurement, construction and installation for Shell’s first FLNG facility


Technip Asia Pacific

Š shell

T

he Asia Pacific region is changing fast. Not only is the rapid pace of industrialisation buoyed up by economies that appear reassuringly resilient to the current spate of global economic convulsions, but there are promising new resources of one of the world’s most precious and sought after commodities: energy in the form of oil and gas. As a world leader in the field of engineering, technology and project management for the oil and gas sector, Technip has a unique global footprint and a strong presence across the Asia Pacific region that dates back some 30 years. The company has regional offices in Perth, New Plymouth, Shanghai, Jakarta, Singapore, Bangkok and Ho Chi Minh City, and its operations are separated into three business segments. The onshore segment provides engineering, technology, construction and project management for gas treatment and liquefaction (LNG), gas-to-liquid (GTL) and oil refining facilities, onshore pipelines and the petrochemical industry, and has recently diversified into biofuels, renewable energy and non-oil activities such as metals and mining. The offshore segment specialises in engineering and fabrication of fixed shallow water platforms and floating deep water platforms including spar, semi-submersible, TLP, FPSO and floating liquefied natural gas (FLNG) units. And finally the subsea business segment designs, manufactures and installs all the pipework and fixtures between the underwater well and the topside, from the

January 2012 | 259


Swee Bee Co Pte Ltd was established in 1972 and is today recognised as a premium fabricator for the Oil & Gas industry. Over the past 40 years we have through our high level of performance and “ON TIME, EVERY TIME” completion, gained many worldwide customers who repeatedly award contracts to us. Technip has been one of our most valued customers for the past 10 years. Our field of capability and expertise are briefly as follows: • PLETs and PLEMs • Pipe and Tie-In Spools • Overboarding Arch • Suction Piles • Flowline Riser Clamps and Pulling Heads • Mid Water Arch and Gravity Base • Reel Cradles • Installation Aids We are an ISO 9001:2008 company and this is our commitment to quality and excellence. For enquiries please contact: Yeo Chew-Hock, Managing Director Email: hock@sweebee.com.sg | www.sweebee.com.sg

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Technip Asia Pacific

Asiaflex Products, Technip’s flexible pipe manufacturing plant in Tanjung Langsat, Johor, Malaysia made its first delivery on 29 September 2011, in a handover ceremony to Petrofac E&C Sdn Bhd

initial design stage through manufacture “It is less mature here in the Asia Pacific. and construction to commissioning. It However, there is a huge market opening, is the continuous development of this particularly with the emerging deepwater underwater technology that is making oil fields in Indonesia and Malaysia. There are and gas development possible in deepsea big fields in the tendering and construction locations, particularly in areas that would phases in Australia such as the Ichthys previously not have been considered and Gorgon gas fields off the north-west feasible. And this is an area of the business coast; and we are expecting deepwater that is growing rapidly. projects off the coast of Brunei in the future. We “The Subsea Division believe the region could cu r rent ly represent s potentially become the between 40 per cent and biggest subsea market 45 per cent of the group business globally,” explains globally. Therefore we are Employees gained Hallvard Hasselknippe, strategically building our following Global COO of Technip’s Asia resources, developing our Industries merger Pacific Subsea Division. people both in numbers

2,300

January 2012 | 261


Hallvard Hasselknippe, COO Subsea Division, Technip Asia Pacific

262 | January 2012

and competencies, and building our assets and technology.” Technip Asia Pacific’s Subsea Division already has the capacity to manage complete mega-projects in addition to many smaller ones, and is able to leverage on the expertise, assets and financial strength of the group globally. In terms of large-scale preparations for growth, the company has made one of the biggest investments in recent years into the Asia Pacific region with the construction of the Asiaflex Products manufacturing plant at Tanjung Langsat, Malaysia. Production at the new facility is project oriented: flexible pipe and umbilicals can be designed and engineered for specific projects and manufactured to a high specification using processes that have been developed by Technip globally over the last 35 years. “We have been ramping up the plant over the past year, and we’re now very close to where we want to be with efficiency and productivity,” states Hasselknippe. Prior to this, the Asia Pacific region relied on products imported from the company’s other manufacturing sites around the globe. Today, the plant not only produces products for the local region, but exports them to Technip operations in Brazil, India and West Africa and is beginning to market flexible pipes as a cost effective alternative to rigid pipes. Officially opened in November 2010, the plant sits alongside a new offshore logistics base that will become the hub of the region’s subsea operations. Located on 20 hectares of waterfront with direct


Technip Asia Pacific

The production of flexible pipes at Technip’s plant

access to all the major shipping routes to Asia and the rest of the world, the site also houses a fabrication yard producing subsea structures, and a dedicated quay equipped to accommodate and load most subsea construction vessels and barges. A more recent addition to the company’s assets and knowledge base came with the acquisition of Global Industries, the Houston-based subsea pipe laying company, in December last year. The merger increased Technip’s fleet of vessels from 20 to 33 (with two under construction) globally, and expanded the workforce by

some 2,300 people. “We’re very excited about the merger,” Hasselknippe says. “Global Industries has strong resources and expertise in Singapore and Batam, and one of the primary assets we will benefit from with the merger in this region is Global 1201, a newly built vessel with S-lay and heavy lift capabilities.” One of the challenges that lies ahead for the Asia Pacific Subsea Division, particularly as the deepwater mega-projects come on-stream, is to increase its workforce ahead of the increase in demand, and to ensure it has the full array of skills and experience to

“We have been ramping up the plant over the past year, and we’re now very close to where we want to be with efficiency and productivity” January 2012 | 263


The Global 1201, a subsea rigid S-lay and heavy lift vessel, is one of the primary assets in Asia Pacific acquired through the Global Industries acquisition


Technip Asia Pacific operate to the highest standards. “For me, it’s important that we are able to forecast our needs so that we can stay ahead. It’s too late to begin recruiting when you have a job to start, so we have been working on this for a while now,” says Hasselknippe. The recruitment, training and staff retention initiative is wide ranging, and includes taking on graduates, identifying suitably skilled and experienced expats, bringing in people from other parts of the organisation and working on training and team building. One of the major areas of recruitment and training over the past 18 months took place as the Asiaflex Products plant was prepared for production. “Today, we employ more than 350 people at the plant, after starting from scratch 18 months ago. That involved a great deal of internal training— sending people to other plants in the group and bringing trainers to Malaysia from other areas of the group.” This expansion of the assets and expertise within the Asia Pacific Subsea Division has been progressing at a steady pace for a number of years, strategically driven in preparation for an expected rapid growth in demand in the future. If the region does indeed become the biggest subsea market globally, Technip will be well prepared to supply the products and services required. For more information about Technip Asia Pacific visit: www.technip.com

January 2012 | 265


266 | January 2012


Coca-Cola Bottling Company of Jordan

The Cola-Cola Bottling Company of Jordan not only sates the thirst of millions of consumerswith its range of well-loved beverages; it has also racked up all manner of environmental and social achievements in its role as a good corporate citizen

January 2012 | 267


Coca-Cola is offered in 10 different packages and sizes


Coca-Cola Bottling Company of Jordan

I

n 2011, brand consultancy Interbrand and Syria, as well as operations exporting named Coca-Cola the world’s most valuable to Tajikistan. CCI has a total of 20 plants and offers a brand, ahead of multinational giants IBM, Microsoft and even Google. With wide range of beverages to a consumer base beverages now sold in over 200 countries of more than 360 million people. In addition and an employee headcount of more than to sparkling drinks, the product portfolio 139,000 across the globe, the popularity of includes juices, waters, sports and energy Coca-Cola—the soft drink invented in 1886 drinks, tea and iced tea. by pharmacist John Pemberton in Atlanta, CCI is currently pursuing what it calls its Georgia—is showing no signs of receding. 2020 Vision and Strategic Framework, which There are now over 3,500 drinks in the defines its strategy for the next 10 years and Coca-Cola stable, and it takes a vast network outlines the growth opportunities that lie of operating partners to get ahead. The company’s vision them onto the shelves ready is to be an “outstanding beverage company leading for sale to the consumer. In fact, it is not the Cocathe market, inspiring people Cola Company itself but and adding value through its bottling partners who excellence”. Goals and key actually manufacture, strategic priorities have been package, merchandise and identified in commercial CCBCJ annual leadership, people and distribute the final branded production capacity, beverages to customers and organisation, supply chain, in cases vending partners. Colaoperational excellence and Cola owns the brands, and sustainability, in order for manufactures and sells the concentrates, the company to achieve its ambitions. beverage bases and syrups, as well as carrying CCI’s operations in Jordan—the Coca-Cola Bottling Company of Jordan out consumer brand marketing initiatives. The Coca-Cola Company and its bottling (CCBCJ)—will undoubtedly be playing a partners form what is termed the Coca- key role in helping the company to meet its Cola System, and the sixth-largest bottler objectives. In 2005, two years after CCBCJ in the System, in terms of sales volume, was established, CCI acquired a 90 per is Turkey-based Coca-Cola Içecek (CCI). cent share and took over the management. CCI’s core business is to produce, sell and The company, which is the largest bottling distribute sparkling and still beverages of company in Jordan, has an operational the Coca-Cola Company. Employing close plant and a sales warehouse in Madaba, to 9,000 people, CCI has operations in Hanina, which is located 30 kilometres Turkey, Pakistan, Kazakhstan, Azerbaijan, south of Jordan’s capital Amman, and serves Kyrgyzstan, Turkmenistan, Jordan, Iraq a population of around seven million across

27

million

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Our renowned organization is engaged in the supplying of packaging material for protective packaging. The range that we offer includes Stretch Film, Shrink Film, BOPP Labels, Air Bubble Rolls, Preforms and Closures For Carbonated Soft Drink and Mineral Water, Tape, Disposable Items, and Copacking.

Masader Investment Company Ltd. Tel.: +962 6 5523152/3 Fax: +00962 6 5523154 e-mail: bassems@masader.com.jo www.masader.com.jo

YO U R PAC K AG I N G S O L U T I O N PA RT N E R


Coca-Cola Bottling Company of Jordan

“CCBCJ is the largest bottling company in Jordan” the kingdom, with a production capacity of 27 million physical cases. The company has three other warehouses in the regions of Hizam, West Amman and Aqaba. CCBCJ’s portfolio includes classic CocaCola, which is offered in 10 different packages and sizes; Coca-Cola light, which comes in a range of sizes from 0.33 to 1.25 litre bottles and 0.25 to 0.33 litre cans; Fanta, which is available in Orange, Strawberry, Apple, Citrus and Blackcurrant flavours; Sprite, the world’s leading lemon-lime flavoured soft drink, in the form of classic Sprite or Sprite Light; and Cappy Orange, Grabs and Cappy Mango. Riwa, one of the major brands in the

The world’s no.1 lemon-lime soft drink

Middle Eastern water market, is offered in both 0.5 and 1.5 litre PET bottles. CCBCJ does far more than simply quench the thirst of local consumers, however. In line with CCI’s own objectives, CCBCJ has in place a number of ongoing corporate responsibility initiatives, for which it has received a Masader raft of accolades. In 2010, Masader was established in 1997. Incubated in a very the company was named small research & development department, Masader has the first runner-up out of blossomed into an independent enterprise with a vision to 62 competing companies serve the local industry and service in the field of packaging across 12 countries in the and packaging supplies. Masader is now one of the leading packaging suppliers serving many local and multinational Medium Company category industries in various sectors of business and specialties. at the Arabia Corporate Masader is now proud to represent many prominent partners Social Responsibility Awards which are classified among the top of their professions 2010, for its holistic view on worldwide. Masader is located in Jordan but is open to sustainability together with international collaboration and partnership for the supply a thorough understanding of and representation of packaging and related products. CSR policies, processes and www.masader.com.jo goals. The Arabia Corporate

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Fanta is available in Orange, Strawberry, Apple, Citrus and Blackcurrant flavours

272 | January 2012

Social Responsibility Awards programme, which is instituted by the Arabia CSR Network and supported by the United Nations Global Compact, is considered the most significant award scheme for CSR best practices in the Arab world. CCI itself signed up to the United Nations Global Compact in October 2009. The platform pursues two complementary objectives: firstly, adhering to the 10 principles in business activities around the world under the categories of human rights, labour, the environment and anticorruption; and secondly, catalyzing actions in support of broader UN goals, including the Millennium Development Goals (MDGs). As a demonstration of its commitment to preserving the environment, CCBCJ sponsored the first International Conference on Environmental Management and Technologies (ICEMT) in 2010. ICEMT 2010 brought together an international and interdisciplinary audience to address many of the issues connected with environmental management, zero emissions, pollution, waste management and sustainable development. Of particular interest for the conference was environmental management in the Arab world—and it provided a unique forum for scholars, researchers, academics and practitioners to examine and discuss solution-oriented methods for environmental management and engineering; to share and exchange experiences and research findings; to stimulate more ideas and useful insights regarding current best practices and future directions in environmental management and the legal, social and political components


Coca-Cola Bottling Company of Jordan

CCBCJ is the largest bottling company in Jordan

related to it; and to debate their views on future research and developments. In 2007, CCBCJ succeeded in the implementation of a structured quality management system for the first time, with the assistance of the Coca-Cola Company. The company has now been awarded certification to ISO 9001:2000, ISO 9001:2008, ISO 14001, OHSAS 18001 and ISO 22000 standards. In 2009, CCBCJ was recognised by the Coca-Cola Company for its ongoing commitment in the areas of ​​workplace rights and social responsibility; and in 2009 and 2010, the Jordanian Social Security Corporation granted CCBCJ with two awards (Encouragement and Excellence) for sustainability in the environment and occupational health and safety. In 2009, CCBCJ was nominated for the Coca-Cola Company Group President’s

Environmental Awards for Best Country Operations. Competing with eight other country operations, the company was nominated for its sustainability in the fields of water supply, climate change, energy saving, carbon footprint, recycling and waste water management. CCBCJ understands that none of its impressive achievements to date would have been possible without the dedication and commitment of its 376 staff members; and they are rewarded for their efforts with a package of benefits that include health insurance, transportation, social security, training courses, career development and annual salary increments. For more information about Coca-Cola Bottling Company of Jordan visit: www.cci.com.tr

January 2012 | 273


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