Aggregates Industry | 2021 PLI Report

AGGREGATES INDUSTRY MARKET AND PRODUCTION LINE INTELLIGENCE

Overview EPTDA was founded as the European Power Transmission Distributors Association in 1998 on the initiative of a group of power transmission and motion control (PT/MC) industrialists who believed in bringing together PT/MC distributors and manufacturers on one unique platform. It has since become the largest organisation of PT/MC distributors and manufacturers in EMEA and is one of the most powerful and respected B2B executive platforms for the industry worldwide.

EPTDA’s mission is to strengthen its members in the industrial distribution channel to be successful, profitable, and competitive in serving customers to the highest standards. The association takes great pride in its values which focus on being a premier community for qualified members through open dialogue and mutual respect; acting with integrity, honesty, and fairness; and ensuring continuous growth and learning.

EPTDA continually strives to develop relevant tools for its members, helping them stay competitive in a constantly evolving marketplace and business environment.

As part of the development of tools and resources for members, this document is designed to add value to their commercial understanding of specific markets and production line processes. This document, on the Aggregates industry, follows reports on the Soft Drinks industry, Confectionery, the Automotive industry, Material Handling, and most recently, Recycling in 2020.

Purpose of this document The purpose of this document is to provide distribution management and their sales forces with market and production line intelligence on the aggregates industry, primarily in crushed stone, sand, and gravel which is in turn used for cement. This document explores trends, identifies products used in the extraction of aggregates and production of cement, clarifies key challenges, and considers the opportunities and how they can be capitalised.

This document has been divided into three parts:

1.

Industry Overview

Pages 4-12

This first section provides an introduction and overview to the aggregates industry and gives key background information, market intelligence, and major players within the industry. It has been organised as follows: a. Definition, segments within the industry, and market share b. Market size and coverage c. European sales data and evolution d. Current and future market trends e. Overview of challenges f. Key producers g. Major machine & system builders

2.

Production Line Intelligence

Pages 13-23

This section illustrates the extraction and processing of aggregates for the production of cement with a fully detailed production line schematic on sand and gravel, so as to provide an understanding of what is involved and where the opportunities lie. Key customer challenges, major product groups, typical maintenance, and improvement projects are identified throughout the line, as well as highlighting potential areas of commercial opportunity for the distributor.

3.

Use of this Document

Pages 24-26

The opportunities within aggregates, both for MRO and OEM distribution, are significant – a minimum combined ‘scale of opportunity value’ (SOV) of 315m€ has been estimated as available for distribution of MRO Power Transmission products in the aggregates and cement aftermarkets. The final section proposes how the document could be used and provides open-ended questions that can be asked to prospective customers in order to reinforce the knowledge gained in parts one and two and to maximise the available opportunities.

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PART ONE

Aggregates Industry Overview Definition, segments within the industry and market share Aggregates are a collection of naturally occurring loose materials including sand, gravel, and crushed stone that are extracted from sources such as quarries, pits, and for some types of aggregates, taken from the sea.

rivers across the world, are used to build homes, schools, offices, foundations, and transportation infrastructure, providing stability, structural integrity, and added volume.

By volume, the consumption of aggregates is second only to the global consumption of water, with an annual production exceeding 50 billion tonnes globally. It is estimated that by 2060 this global figure will rise to 80 billion tonnes.1

Given the wide variety of uses and applications aggregates can have, the market can be difficult to segment. However, for the purposes of this PLI report, the market is best differentiated by type, and has been broken down into crushed rock, fine aggregates (sand), gravel, and secondary and recycled aggregates.

Aggregates are the base component of construction materials, that when mixed with adhesives such as cement or gypsum, form concrete or mortar. The sheer scale of global aggregate production is a direct result of their importance to the built environment.

These naturally occurring materials, taken from quarries, pits and

In addition to this, with sand and gravel being heavily in demand for the production of cement – a key binding ingredient for concrete, the focus of this latest report will be on these types of aggregates and their end use – construction material, primarily being cement.

Type of aggregates3 4

Source

Features & application

Formed from the rapid cooling of magnesiumrich and iron-rich lava.

Used in construction as building blocks or in the groundwork, making cobblestones and for decorative statues.

Crushed stone Igneous rock (solidified Basalt molten rocks) Granite

Best aggregate for high-grade concrete.

Powerful machinery and explosives are used One of the most popular types of dimension stone to mine granite out of (stone quarried for the purpose of creating blocks the earth. or slabs).

Comes in a variety of shades and so is often used for decorative purposes.

Sedimentary rock (created by settlement of particles or organic remains in seas)

Gritstones

Metamorphic rock (created by heat or pressure)

Quartzites

4

Sourced through the crushing of sedimentary rock.

Limestone

Can be used for millstones to mill flour, grind wood into pulp for paper, and used for grindstones to sharpen knives.

One of the most commonly used types of aggregate in road construction and reinforced concrete, aside from granite and gravel.

Formed when quartzrich sandstone or chert has been exposed to high temperatures and pressures to form a dense, hard rock.

A decorative aggregate that is harder and more resistant to aesthetic damage than granite.

Occasionally crushed quartzite is used in road construction.

Type of aggregates

Source

Features & application

Fine aggregates Sand

Sand is primarily sourced from shallow water such as lakes, rivers, and occasionally sea-beds.

It is a key part for filling in cement concrete, asphalt concrete, railway track slag, mortar, and other foundations.

These are sourced by sifting through quarried rock and crushing natural stone.

Gravel and ballast do not possess as much strength as their granite counterparts, but they are often cheaper to purchase.

Gravel Gravel / ballast

Gravel also has low radioactive content.

Used for foundations and concretes as well as other products used in road construction.

Secondary or recycled aggregates Secondary aggregates

Natural aggregates

Manufactured aggregates

Recycled aggregates

Aggregates sourced from mineral waste (generated during the extraction and beneficiation of ores and minerals).

By-products of industrial processes such as blast or electric furnace slags, or china clay residues.

Low-cost and effective, they are two times less expensive than granite, but not as strong.

60% of demolition and construction materials are recycled or secondary aggregates e.g. china clay waste used as mortar and concreting sands, or power station ash as a cement substitute with ready-mixed concrete.

Aggregates that are sourced from the processing of inorganic materials previously used in industries e.g. construction and demolition waste or engineering works.

Aggregates by type, 2018 5 Marine-dredged & Manufactured Aggregates

Did you know?

4%

12%

Recycled or Reused

46%

Sand & Gravel

38%

Crushed Rock

In 2018, Europe produced 3.3 billion tonnes of aggregates.

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Market size and coverage In 2018, the global aggregates market was valued at USD 432.5 billion (EUR 366.5 billion) and is expected to grow at a CAGR of 6.5% from 2019-25.6 This growth will most likely be driven by demand for usage in concrete and cement manufacturing, road base and coverings, and railway ballast.

To fuel its rapid and continued urbanisation, in three years, China consumed more cement than the United States did throughout the entire 20th century.8 The impact on China’s demand for aggregates is accordingly immense, with China consuming more than 20 billion tonnes of general aggregates in 2019 alone.

Of all global regions in 2018, Asia took a majority share accounting for 65%. Much of this can be attributed to the construction of roadways necessary to develop the region’s travel infrastructure and economy. India specifically, is expected to cover nearly 50,000 kilometres by the end of 2020.7 However, it is China that leads the region and, in turn, globally.

Distribution of global production of aggregates, 20179 Russia + CIS Central & South America

Aggregate end use by construction material, 201810 Armour Stone Railway Ballast 2% Architectural Concrete Products 3% 5% Asphalt 10% Products

Oceania 1%

Middle East

Europe Precast Concrete

40%

15%

Structural Materials

North America

Africa

25%

Ready-mixed Concrete

Asia

Global production of cement (million tonnes)11 3000 2500 2000 1500 1000 500 0

6

China

India

USA

Brazil

Turkey

2010

2014

Russian Federation

2018

Indonesia

South Korea

Japan

EU27 + UK

European sales data and evolution In Europe, aggregates remains by far the largest extraction industry. Throughout the region, production amounts to just over 3 billion tonnes of aggregates per year. The result is an estimated annual turnover of 15 – 20 billion euros, with Russia, Germany, Turkey, and France taking the top four places in terms of production by country.

On the supply side, the market is extremely fractured. Dominated by Small to Medium Enterprises (SMEs), with an average of only seven employees at every extraction site, they typically produce around 115,000 tonnes each.12 This may be in part due to the necessity for

close proximity of aggregates to the end user, where cement plants can even be connected via 2 – 4km long conveyor belts.

Given its prevalence in construction, demand for housing acts as a strong driving force for the aggregates industry throughout Europe. Yet in less densely populated countries, such as Finland or Sweden, a higher share of aggregates is used for road construction as opposed to other countries where housing is a greater priority. As such, whilst demand for aggregates is consistent, the end use is often influenced by the policies and priorities of governments across Europe e.g. better transportation, new housing, or other civil engineering services.

Production of aggregates, by country, in 2018 (million tonnes)13 800 700 600 500 400 300 200 100 0

Number of extraction sites, by country, in 201814 3500 3000 2500 2000 1500 1000 500 0

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Cement production (billion tonnes), 2005 – 201815

4.5

Did you know?

4 3.5

The average production cost for a single tonne of cement is 83€.

3 2.5 2 1.5 1 0.5 0 2005

2010

2012

2014

2016

2018

Current and future market trends Taking up nearly 60% of the market, residential and nonresidential buildings are the driving force behind need for the supply of aggregates for the production of cement and concrete.

This has all been propelled as Europe’s population has steadily increased year on year, contrasted with the number of people per household declining. In addition to increased need for housing, rising populations create further demand for non-residential buildings to support the societal infrastructure – from schools, offices, and shops to hospitals, for example.

to 30,000 tonnes of aggregates, roads and highways are heavily dependent on an uninterrupted supply of raw material and the availability of cement for making concrete.18 Consideration of where that supply is coming from is therefore a significant factor, whereby cost of transportation is directly related to distance from supply to end destination. Bulk shipping has made transportation of aggregates more accessible, whereas land transportation beyond 250km by road is often not considered economically viable.19 This is one of the reasons why the aggregates industry is so fragmented and dominated

by SMEs.

Furthermore, a correlation has been seen between the baby boomer population (those born between 1946 and 1964) as they have gotten older, and an increase in second homes and healthcare facilities to support the ageing demographic. The changing types of infrastructure and built environment required has therefore meant that demand for raw materials has only continued to accelerate as both new builds and updates to outdated infrastructure are needed to handle the increasing population with all of its consequences (houses, traffic, social services, trade etc.).16

Comparatively, there are significantly fewer cement plants than sites sourcing, or processing aggregates. It is estimated that there are just over 300 plants producing cement clinker in Europe.20 This is due to the vast quantity of clinker that can be produced on site by these cement plants, with an annual production of 0.5 million tonnes, creating strong competition between the European market leaders.

Alongside the growing population, increasing wealth and expenditure has meant now more than ever, car ownership has grown, with current road and transportation infrastructure struggling to keep up.17 With nearly 1km of roadway requiring up

Of the 26,000 sites across Europe producing aggregates, many are increasingly turning to the automation of machines used on-site. On their electric site project, Volvo CE (Construction Equipment) have been test-piloting new machines to electrify

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each transport stage in order to reduce on-site accidents, emissions, unplanned downtime, and ultimately improve overall efficiency.21 Other ways of introducing automation to extraction sites have been to adopt predictive maintenance in drilling to collate data for real-time analysis of minerals available, all whilst working under extreme and harsh environments. Equipment on-site must be able to cope and withstand extreme temperature variations, high-pressure water, dust, and fluctuating shocks and vibrations.22 Predictive maintenance enables operations to react to potential alarms and incidents quickly before machine damage or injury can take place, which could then in turn be more costly than identifying potential points of weakness before that part breaks, reducing the likelihood of downtime.

Another area of the aggregates industry that has been growing steadily over the last decade is demand for recycled or secondary aggregates. This is partly driven by EU directives to recycle around 70% of construction and demolition materials by 2025, increasing the availability of recycled supply.23 With increasing consumer preferences for environmentally friendly materials, and as natural resources deplete substantially, the recycled aggregates market is expected to see a CAGR market growth of 6% between 2020 and 2027.24

Aggregates by application, 201925 Infrastructure

Residential Buildings

Social Buildings (Hospitals, Schools etc.)

Roads, Runways, Railways, Waterways Commercial Buildings

Challenges Covid-19 Due to the nature of aggregates and a need for close proximity, the aggregates industry benefits from short transportation distances enabling the “European Aggregates Industry [to produce] in Europe and for Europe”.

However, adapting to the requirements Covid-19 has brought about with every-day operations (social distancing and new safety and hygiene protocols) has impacted the demand for aggregates. As a result countries across Europe have reported varying degrees of decline in their annual production tonnages.26

Whilst in 2019 new construction for housing was a key driving force for the construction market, as the shift moves to a need for non-residential buildings such as hospitals, it has been estimated that 2020 will have seen a fall in construction output by about 10%. Therefore the uncertainty of further lockdowns and changes to systems and processes impacting construction projects will further affect how the construction market, and in turn affected industries like aggregates, will rebound.27

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The environment and zero emissions in aggregates The sand that is found in most deserts is predominantly unsuitable for concrete and land reclaiming, as the wind erosion process forms round grains that do not bind well. On the other hand, marine aggregates need to be thoroughly washed to remove salt.

If the sodium is not removed, a structure built with it might collapse after a few decades due to corrosion of its metal structures. For concrete production, sand and gravel extracted in-stream requires less processing and produces high-quality material.28 The volume of aggregates extracted, particularly from land quarries, has an impact on biodiversity, land losses through erosion, change in water flows, flood regulation, water supply due to the lowering of the water table, and the climate – directly through transport emissions and indirectly through cement production.

Reducing the consumption of organic aggregates and looking at alternative sources such as recycled aggregates, has been one way that the industry is evolving and adapting to limit the effects extraction of aggregates and the production of concrete has on the environment. Consequently, demand for recycled or secondary aggregates is expected to rise. Germany, for example, recycles 87% of its waste aggregate materials.29 Another way in which the aggregates industry is implementing recycling into its processes is regarding the way that it consumes water. Nearly 60% of the 26,000 aggregates sites mentioned earlier have materials washing activities held on site, with it estimated that in 2017 the industry was accountable for just over 10% of total water use in Europe.30 31 As a result, the industry has come under heavy criticism with how it deals with the global issue of water scarcity, water efficiency, and wastewater management, which it so greatly contributes to.

One way that the industry has tried to respond is with the way it has re-purposed quarries that have been put out of action. For example in Dalarna County, in Sweden, a limestone quarry was transformed into a concert venue, whilst in Portugal, football club Sporting Clube de Braga’s stadium was carved out of a former granite quarry and is now known as ‘A Pedreira’ (The Quarry).32

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Global buildings material leader, Cemex, has looked to mitigate its contribution to global emissions through their FastCarb Project with the ambition to deliver net-zero CO2 concrete (reducing the impact of the CO2 trapped inside many concrete structures) by improving the quality of the recycled aggregates that are used.33 Another way some cement plants have tried to reduce their carbon footprint is through something known as ‘carbon capture and storage’. This is where the carbon generated is captured for storage or sharing with the chemicals industry, or for it to be converted into fuels. Examples of some projects include catch4climate by HeidelbergCement who in 2019 began researching ways pure oxygen can be used in clinker burning technology for heat generation.34 Cemex's FastCarb project and HeidelbergCement's catch4climate projects are just some of the ways that the European cement industry are looking to achieve the objective of carbon neutrality by 2050. In 2019, almost 8% of total EU emissions came from cement clinker production.35

Recycled and secondary aggregates Much like steel, from the Production Line Intelligence report on Recycling, concrete is 100% recyclable after demolition. With primary raw materials so heavily in demand, recycled concrete can be re-used as a recycled aggregate in the production of new concrete, or alternatively be used unbound in applications such as road construction.36 Although demand for recycled and secondary aggregates is set to rise over the next decade, with the credibility of recycled aggregates increasing, low confidence in the strength and capability of recycled aggregates is a reason why it still only has 12% market share. Furthermore, with the lack of infrastructure in place to encourage the use or demand for recycled concrete, the cost of processing followed by transportation costs further compound this meaning that many still favour natural over recycled or secondary materials.37

Waste production dependent on size of aggregates needed As will be seen in the extraction and processing schematic in this report, several stages of crushing may be needed to reach the desired end aggregate size. Waste-product or aggregates that do not meet the granularity needed are collected at each stage and must be stored or sold for non-construction end users.38 This can result in high storage-facility costs, as well as take up space on-site in areas that could be potential extraction-points.

Key producers Global key producers of cement The top ten global cement producers are ranked as:39 Value Rank (as of 2018)

Company

Total Cement Produced Primary (million tonnes, in 2018) Business Geography

No. of Plants (globally)

1

LafargeHolcim

345.2

Switzerland

220

2

Anhui Conch Cement

217.2

China

32

3

HeidelbergCement

185.4

Germany

141

4

China National Building Materials (CNBM) 176.2

China

94

5

Cemex

91.6

Mexico

61

6

UltraTech Cement

91.4

India

39

7

China Resources Cement

79.3

China

133

8

Votorantim Cimentos

70.8

Brazil

59

9

Taiwan Cement

69.0

Taiwan

30

10

InterCement

53.5

Brazil

42

Other leading cement producers include CRH (Ireland), Buzzi Unicem (Italy), Eurocement (Russia), and Dangote Cement (Nigeria).

11

Major machine & system builders Aumund | www.aumund.de | Germany

Gebr. Pfeiffer | www.gebr-pfeiffer.com | Kaiserslautern, Germany

A global leader in conveyor and storage technology for hot and abrasive bulk materials, Aumund develop custom systems for the cement production process, including the extraction and preparation of raw materials, clinker grinding and transportation and storage.40

With over 150 years’ experience, Gebr. Pfeiffer are specialists in plant solutions for cement, coal, lime, gypsum and ceramics. As the inventors of mill drives with more than 10,000 kW, they offer a wide range of machinery for grinding, separating, drying and calcining. Their ready2grind system provides a compact modular mill system to help bring cement closer to the end user with quick and easy transportation.46

Claudius Peters | www.claudiuspeters.com | Hamburg, Germany

Polysius | www.thyssenkrupp-industrial-solutions.com | Beckum, Germany

From pneumatic conveying, grinding, clinker cooling and mixing systems to raw material storage and bagging, Claudius Peters offer a wide range of technology suitable for cement, coal, alumina and gypsum plants.41

One of thyssenkrupp’s 650 subsidiaries, Polysius manufacturers cement mills, kilns and cement factory automation systems, particularly machines for crushing, grinding and processing raw materials.47

FLSmidth A/S | www.flsmidth.com | Copenhagen, Denmark

Promecon | www.promecon.com | Barleben, Germany

Working towards zero emissions in mining and cement, FLSmidth is a global supplier of crushers, vibrating screens and conveying systems for bulk materials. In 2019, FLSmidth generated revenue of DKK 20.6 billion.42

Promecon specialises in measurement and flow systems for the power, steel, waste and cement industries. Their technologies aim to lower emissions and energy output across the entire cement production process.48

KHD | www.khd.com | Cologne, Germany

Schenck Process | www.schenckprocess.com | Darmstadt, Germany

With sales of 146.3 million euros in 2019, KHD are a global supplier of cement plant technology, equipment and services.

They develop energy-efficient and environmentally friendly solutions for the grinding and pyro-processing stages of cement production, as well as complete new cement production lines.43

Schenck Process are leading engineers and suppliers of a variety of pneumatic and mechanical chain conveyors, industrial screens that are used in the cement, plastics and food and drink industries.49

Köppern | www.koeppern-international.com | Hattingen, Germany

thyssenkrupp Industrial Solutions AG | www.thyssenkrupp-industrial-solutions.com | Essen, Germany

Köppern specialise in high pressure grinding and roller press technology for industries including cement, minerals and metal working.44

thyssenkrupp Industrial Solutions specialises in the engineering, construction and service of all industrial plants and systems, and one of the few in the cement industry to supply a full range from crushing to storage, packing and loading.50

Loesche | www.loesche.com | Düsseldorf, Germany Operating in the cement, mining and power industries, Loesche pioneered spring-loaded air flow mills, known still today as Loesche mills. They are the global market leader for vertical and turnkey grinding mills.45

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Voith | www.voith.com | Heidenheim an der Brenz, Germany With expertise in energy generated by hydropower, paper production, drive components and digital applications, Voith produce drive solutions for bucket elevator systems, conveyors, milling machines and combinations of fabrics, rolls and roll covers. Voith reported sales of 4.2 billion euros in 2019.51

PART TWO

Cement production process – Market Intelligence Introduction This schematic describes the typical process used for the processing of aggregates such as sand, gravel and limestone for the production of cement.

With the high demand for cement, and the highly mechanical process underpinning the production of cement for use in concrete, this production line focuses on the extraction and processing of limestone used in cement.

This process, whilst being typical, does not represent all processing and extraction of aggregates. This is because actual plant processes may vary according to the type of raw materials and plant scale - for example large-scale blasting for limestone, and the dislodgment and removal of sand and gravel from the seabed - as well as the resulting end product.

The processing of aggregates such as granite that are used for decorative purposes will also have a greater emphasis on cutting (as opposed to crushing and grinding found in cement production) so to preserve and keep the raw material intact.

Nonetheless, the key stages described here will be common to most types of facilities and there will be similarities that can be seen and carried across many segments of the aggregates industry.

This section also highlights the key customer challenges specific to cement production. It describes the key product categories used in the process and typical projects in maintenance, repair and overhaul that are often undertaken in such a plant. Key sales opportunities are identified in relation to products and maintenance projects that are supported by distributors with real technical expertise.

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Cement Production Process Raw materials preparation

3

Other raw materials proportionally added: Dry process Additional raw material e.g. sand and clay, is proportionally added to the finely ground limestone to create a raw dry mix and crushed again.

2

3

Other raw materials proportionally added: Wet process The raw material is washed in a washing mill to remove any impurities before being sent to grinding mills where they are completely mixed to form a paste known as slurry before undergoing further grinding. The slurry is then fed into a collecting basin where the composition can be adjusted as required.

Limestone crushing & screening Jaw or cone crushers use compression and impact to break the rocks. These are then separated based on their size and may be crushed several times until they reach the desired size.

The stones are then washed to remove any remaining clay particle.

1

Grinding

(Jaw crusher)

Excavation Excavation of raw material e.g. limestone Taking place at the quarry, detonators are used to expose the limestone into smaller transportable pieces of rock. These may then be further crushed on site before being transported by road or via 2-4km of conveyor belt to the cement plant.

Bulk Boogie Container (BBC) Silos Bulk tanker

Transport

11

Transportation • Cement bag trucks • OPC bulk tanker • Bulk Boogie Container (BBC)

10

Ready-mix concrete Cement (10-15%), water (15-20%) and sand and gravel (60-75%) are added to a concrete mixer before being taken to a nearby site for use.

14

Cement bag trucks

Readymix concrete

Process Pyro processing

4

Pre-heating tower The fine powder (known as raw meal) is preheated through various chambers before being sent to the kiln.

5

Rotary kiln The lower part (clinkering zone) has a very high temperature causing the raw material to react and fuse together to form small and hard stones known as clinkers (varying between 5-10mm in size).

The kiln is supported by concrete columns and roller bearings in a slightly inclined position. The pre-heated raw meal from the dry process – or the slurry from the wet process – is injected into the kiln from the upper end.

Dry-processing mix

Vertical raw mill

Air is admitted at the base of the rotary kiln where the clinker is collected, before moving along a grate cooler so that the clinker can be cooled from 1200°C down to 100°C.

Rotary kiln Wet-processing mix

Grinding (Ball mill) The cooled clinker is ground finely in a ball or tube mill – using pressure and shearing forces – with powdered gypsum added as a retarding agent (to regulate the setting time).

Pre-heating tower

8 Grate coooler

Finish grinding (Cement roller press) The mixed clinker undergoes another round of grinding through a cement roller press where two rollers rotate in opposite directions, further grinding the cement powder through pressure force.

Bucket elevation Ball mill

9

Cement roller press

Cooling

Clinker treatment

7

Screening

6

Cement storage in silos The ground cement is conveyed, often using bucket elevation conveying systems, for storage in silos before being distributed in bulk or in bags to the sites where it will be used.

** Please note that all figures represent the estimated Scale of Opportunity value (SOV).

15

Cement Production Raw materials preparation

Grinding

(Jaw crusher)

Excavation

Explaining the opportunities and projects Key critical projects within the preparation stages of aggregates – or in the case of cement, primarily limestone – from the quarry and the initial steps at the cement plant, have been highlighted along the schematic to help make it easy to identify which areas of the process have the most opportunity. This includes the excavation and grinding, crushing and screening, and the creation of a dry or wet mix.

Excavation & grinding - key product groups • Bearings - axial roller bearings, pillow blocks, shaker screen bearings, spherical roller bearings • Belts - powerband belts, synchronous belts, toothed belts, v-belts • Double-layer jackets • Fans • Hose - hose assemblies and adapters

• • • • • •

Hydraulics - brakes and pumps Hydrostatic drive Lubricants Seals Tensioners Trommel

Excavation & grinding - critical projects • Replacement hoses for one backhoe truck.

SOV: 5k - 10k€.

• Replacement of bearings: SOV: 1.5k€.

• Bi-annual replacement for a large section of 1" v-belt (there may be up to 8 - 10 multi-banded belts per machine). SOV: 8k - 10k€.

• Pillow blocks used on conveyors. SOV: 400k - 500k€.

16

• Due to the dusty environment, double layering of jacket wrapping helps the belt become more resistant to wear and degradation, allowing for a margin of slip in case of damage from jamming.

• Where connected, there may be between 2 - 4km of conveyor belts between the quarry site and cement plant.

Raw materials preparation Dry-processing mix

Vertical raw mill

Screening

Wet-processing mix

Crushing & screening - key product groups

Crushing & screening - critical projects

• Bearings - axial roller bearings, ball bearings, cylindrical roller bearings, pillow blocks, spherical roller bearings, tapered roller bearings • Belts - synchronous belts, v-belts • Couplings • Hose and hose fittings • Hydraulics - motors and pumps • Lubricants • Fans and fan drives • Seals • Trommel

• Typically screen bearings are changed every 1 - 2 years depending on the age of equipment and how regularly lubricated they are. Annual replacement for a simple quarry. SOV: 5k - 10k€.

• Bearings for vibration screens must be shock and vibration resistant.

• Conveyors can be powered by a mixture of chain and rubber belts.

Dry & wet processing mix - key product groups

Dry & wet processing mix - critical projects

• Bearings - ball bearings, cylindrical bearings, spherical roller bearings, tapered roller bearings • Belts • Fans • Hose assemblies and adapters

• Replacement of two bearings per wheel, where there may be up to 6 wheels. SOV: 20k - 40k€.

** Please note that all figures represent the estimated Scale of Opportunity value (SOV).

17

Cement Production Pyro processing & clinker treatment Explaining the opportunities and projects Key critical projects within the pyro processing and clinker treatment stages have been highlighted along the schematic to help make it easy to identify which areas of the process have the most opportunity.

Rotary kiln - key product groups

Rotary kiln - critical projects

• Bearings - axial roller bearings, plain bearings, spherical roller bearings • Belts - synchronous belts, v-belts • Chain • Gearbox • Motor gear • Sprockets

• Replacement of rotary chain, sprockets and motor gear.

SOV: 22k€.

• Due to the slow speed and high torque, a high capacity and large, heavy-duty belt is required. SOV: 2k - 3k€.

Clinker treatment - key product groups

Clinker treatment - critical projects

Grinding in a ball mill or cement roller press • Bearings - cylindrical roller bearings, spherical roller bearings, tapered roller bearings

• Ball mills are more commonly found in smaller plants than vertical roller mills.

• Replacement of spherical roller bearings for at least two large rollers in the hydraulic roll press.

SOV: 10k - 30k€.

• Replacement of 2 pillow blocks for 1 shaft. SOV: 1k€.

• Replacement of conveyor chain, sprocket segments and hubs, and bearings. SOV: 45k€.

• Replacement of bearings often needs a production stop of 2 - 3 days.

Cement storage (silos) • Bearings - pillow blocks and spherical roller bearings • Belts - synchronous belts, v-belts • Chain • Conveying - bucket elevation • Electric motor • Fan drives • Gearbox • Hose assemblies & adapters • Pneumatics • Screw compressor • Sprockets

18

Silos

Pyro processing & clinker treatment

Pre-heating tower

Rotary kiln

Grate coooler

Bucket elevation

Ball mill

Cement roller press

** Please note that all figures represent the estimated Scale of Opportunity value (SOV).

19

Cement Production Transportation Explaining the opportunities and projects Key critical projects within the transportation stages have been highlighted along the schematic to help make it easy to identify which areas of the process have the most opportunity.

Transportation - key product groups • Agitator / mixers • Bearings - spherical roller bearings for conveyors, tapered roller bearings for vehicles • Belts - synchronous belts, v-belts • Conveying - bucket elevation • Chain • Electric motors

• • • • •

Gearbox Hydraulic drum Pumps Screens Screw compressor

Bulk Boogie Container (BBC)

Bulk tanker

Cement bag trucks

20

Readymix concrete

General

General - key product groups

General - key critical projects

• Air conditioning control • Belts - synchronous belts, v-belts • Chain

• Replacement of bucket elevator chain following 8 12,000 hours of operation. SOV: 80k - 100k€.

• Replacement of reclaim chain. SOV: 20k - 40k€.

• Replacement of rotary or off-set chain following 18 20,000 hours of operation. SOV: 10k - 15k€.

• Operating in highly contaminated environments requires regular greasing and maintenance.

• Scraper chain, which can be between 30 - 60m in length replacement. SOV: 80k - 150k€, including scrapes and sprockets.

• Drive chain, motor and gearbox replacement every 18 - 20,000 hours of operation. 1k - 2.4k€.

• Some sites have control rooms for labs or testing on-site.

• Often plants are not just looking for the parts, but also for the servicing and maintenance - typically a special safety license is needed in these cases.

• Long-term contracts for MRO needs are often favoured as when issues arise the problem needs to be fixed fast and within a few hours to reduce downtime.

** Please note that all figures represent the estimated Scale of Opportunity value (SOV).

21

Cement Production Cement production process – ‘Putting it all together’

115m€

22

The approximate value of PT aftermarket sales in the European cement production industry

200m€

The approximate value of PT aftermarket sales across the European aggregates industry

Proportion of replacement products in the cement production line Seals

Couplings

Drive - motors and gearboxes

Bearings

40m€

Fluid power (Hydraulics and pneumatics)

Approximate value of bearings aftermarket sales

Belt Chain

Production costs vs average selling price of cement With a big demand for aggregates in the production process of cement, in 2017 it was found that the average selling price of cement in Europe was around 60€ per tonne, compared with its production cost ranging from 35€ to 130€ per tonne.52 This was highly dependent on the individual plant and whether carbon capture technology e.g. post-combustion or oxy-combustion techniques were used.

Of the 309 cement production sites across Europe53, each site produces an average of just over 0.5 million tonnes of cement annually. This means that of the 22% spent on maintenance, the production cost for this can be anywhere between 3.8 – 14.3 million euros per site.

Estimated cement production costs, 201654 Raw materials

Energy

Maintenance Labour and fuel costs

** Please note that all figures represent the estimated Scale of Opportunity value (SOV).

23

PART THREE

Using this document to develop business The following provides the reader of this document, either General Management or Sales Team, with some template questions to help generate revenue from this Production Line Intelligence overview and so develop business in the aggregates and cement industries.

For many of these questions you may already know the answers.

Others might be used on a regular basis when you visit customers and prospects in other industry sectors. It is meant as a resource to act as a prompt and reminder allowing your business to fully capitalise on this market intelligence and production information.

There are three parts that deal with: 1.

Preparing (before any visit takes place) – this provides questions to think about and address before attending the company’s site. This further breaks down into two sections being: a. Detail of the company itself b. The people to be seen and which department 2.

The meeting – questions to ask during the meeting to understand the needs, requirements, and potential sales opportunities in the prospective customer 3. The follow up – questions to ask or to reflect on, at the end of the meeting or afterwards

Preparing – before the visit The 'Excavation Site' or 'Processing Plant'

The people to meet

•

What are you visiting?

•

Who are you going to see?

– An excavation site of raw materials with crushing and grinding capabilities?

•

– Is this then conveyed directly or transported by road or rail for processing?

What is their role or speciality (facility manager/ maintenance manager/technical manager and do they cover maintenance, repair and purchasing)?

•

– A cement processing plant - from crushing, screening, to cooling, storage, bagging and distribution?

What do you know about them already? (hint: search LinkedIn)

•

What is your initial summary as to the main challenges they face in relation to purchasing the types of products you can supply?

•

What do you already know about: – The size and throughput?

– Its scale in terms of capacity, output etc?

– The stages of the cement process it has (raw materials preparation, pyro processing, clinker treatment, storage and transportation)?

General •

– Exploratory

– Do the system suppliers provide aftermarket warranty service?

24

•

How old is the facility?

•

How many people do they employ?

•

What are your primary objectives for the meeting – what do you want to achieve?

– Presentation – Breadth of service

•

What are the fall-back objectives if the primary objectives are unachievable?

Do they have in-house maintenance engineers?

•

What is your proposed agenda?

•

Who decides on purchasing?

•

•

Does this company have other facilities in your region/ territory?

What kind of questions will you ask (in relation specifically to who will be seen)?

•

What is your plan for follow ups to this meeting (further meeting/proposal/meeting with other people)?

•

What kind of support material do you need to take with you?

The actual meeting 'Excavation Site' or 'Cement Processing Plant' (If not already known, any of the preparation questions can be asked during the meeting to establish site type, size, capacity, age, as noted).

The facility

•

Do they have existing projects carried out in relation to maintenance or energy management etc?

– Are existing partners – suppliers or distributors – assisting?

•

What are the key maintenance/industrial supplies objectives for the facility?

•

What sort of plant or facility is this e.g. excavation of aggregates or processing of raw materials?

•

What are the processes used from receipt to dispatch?

The most utilised products

– Grinding

•

– Dry or wet-processing mix

– What are the issues/challenges faced getting those parts?

– Pyro processing – Clinker treatment - grinding and storage – Transportation - distribution and ready-mix concrete •

Maintenance, planning and issues •

•

What are the main concerns in relation to type of production parts that are needed to maintain and improve the line (e.g. bearings, mechanical power transmission, pneumatics, etc.)?

•

Where is the process most prone to failure or maintenance problems?

How are the main machines maintained and repaired?

– Internal team, external team, machine builder service engineers?

What sort of regular maintenance does the plant undergo?

– Regular shut-down periods or other?

•

What is the estimated annual spend on maintenance?

•

What are the main issues in relation to maintenance?

•

What are the problems in the process that affect continuity?

– What are the main issues in relation to maintenance?

Suppliers •

What do you value most in relation to a supplier/ distributor like us?

•

What kind of support do you look for from your service providers in relation to on-going or emergency maintenance?

•

What is your biggest current problem with your parts suppliers?

– What are they caused by?

– Are there on-going projects to deal with this?

– Are they using partners – suppliers or distributors – to assist you in this process?

What parts are used most on an annual basis?

– How do you like your supplier partners to assist?

•

What are the next steps?

– Can we come back with a proposal to help you with some of this?

The follow up •

What were the main points you learned from the visit?

•

How will you complete these?

•

How are you going to store this information?

•

What other types of follow up will you undertake and why?

•

How are you going to use this information?

•

Who in your business do you need to share this information with?

•

What are the next steps you need to take and when?

– What have been the success stories?

– How can these be replicated?

•

How will you ensure that these follow ups are completed?

25

Acknowledgements Acknowledgements and a sincere thank you to the following manufacturer members of EPTDA for the generosity of the technical and commercial information and advice that they have supplied and which has given real authority to the document.

Also to a number of technical experts from distributor members of EPTDA operating in this sector, who have provided the concrete examples included in the text and without whose contribution the document would lack its operational and commercial relevance and power for distributors.

Finally to the individual members of the EPTDA Know Your Market Committee and particularly to its Task Group, who have freely given their advice, guidance and inputs throughout the process of producing this document.

Authored by: Disclaimer: The costed examples contained in this document are illustrations taken from real practice. They are, however, not predictions of future value achievable from various projects that can be undertaken in this sector. The authors, contributors and EPTDA do not accept any liability for any commercial decisions that may be taken as a result of these examples.

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Science Mag, ‘The World Needs to get Serious About Managing Sand says UN’ Marble, ‘How is Granite Mined’ Mineral Products Association, ‘Aggregates’ Grand View Research, ‘Aggregates Market Size, Share and Trends Analysis Report by Type’ UEPG, ‘Annual Review 2018-2019’ Grand View Research, ‘Aggregates Market Size, Share & Trends Analysis Report by Type’ Ibid.

Forbes, ‘China Used More Concrete in 3 Years than the Entire 20th Century’ Aggregates Business, ‘Global Aggregates Growth Examined by GAIN Convener Jim O’Brien’ UEPG, 'Annual Review 2018-2019' CEMBUREAU, ‘Main World Producer – The G20 Group Cement Production’ UEPG, ‘Annual Review 2018-2019’ UEPG, ‘Annual Review 2019-2020’ Ibid.

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