17 minute read
Coke is still indispensable. We manufacture it using cutting-edge technology.
This spring, after seven years, Zdeněk Durčák left the position of Executive Director of OKK Koksovny. The manager, who has fundamentally transformed the company, wants to enjoy some well-deserved peace of mind. “I’d been there a long time,” he says with a smile. When handing over his position, he gave an extensive interview in which he describes the transformation of the company and the specifics of the coke business.
Zdeněk Durčák remains a member of the Board of Directors at OKK Koksovny and is also the Chairman of the Supervisory Board at MTX Group, to which the coking plant belongs. “I have been running the coking plant since 2014 and am leaving at my own request. I want to pass the baton to the younger generations,” he says, suggesting he is going to rest now. “But you never know, maybe I’ll get tired of it soon, so I wouldn’t call it a definitive retirement,” says the manager with more than thirty years of experience. He joined the coke plant after the company became part of the MTX Group. The group owners chose him as the ideal candidate to guide the company through a fundamental transformation.
How is a coking plant restructured? It was quite a complicated task, and we were sometimes surprised at how many things had to change. In a way, it was standard restructuring, but as always, with certain specific circumstances. And yes, we
Zdeněk Durčák
Photo: Barbora Mráčková
He has been working in the coal business for over 30 years, starting at OKD in the export team, and later also worked for METALIMEX. In 2014, at the request of the Otavas, he accepted the CFO and COO positions in OKK Koksovny when MTX Group took over the company. “I was supposed to stay here for about a year and make major changes, but in the end, it was longer,” he says commenting on his work at OKK. Under his leadership, the company underwent a fundamental transformation and, despite the traditional sector, it has become a modern and flexible company. He has always had a strict and tough management style, but he always wanted to play fair. “Today, it sometimes seems that decency is a handicap. But that‘s wrong,” he argues, outlining his principles.
had to lay people off. When I started, about 710 employees worked for the coking plant. Now the number is under 500. We are doing the same amount or even more work, just in a much more compact way. Of course, letting people go is never pleasant. Nobody likes to do it. Those employees have families, mortgages and other needs. But the coking plant in Ostrava was called “the last socialist company”; we had to change that. Positions that had been there from the start, such as sign painters, have no place in the 21st century. Of course, there were other changes as well. We had to change processes, and we introduced new, successful cost control measures. We replaced almost every manager. Some of the new people are very enthusiastic about the plant. A solid team, effective communication and broad knowledge. Those are the basic pillars of a functioning company, I believe. In the first year, we saved about 250 million Czech crowns in costs, which greatly helped stabilize the firm. We became a competitive company. Thanks to this restructuring, we survived the challenging times that the following seven years brought. Without it, OKK would no longer exist today. One thing that did not fundamentally change during the restructuring was production itself and the structure of our products.
Can you describe some specific changes in how the company operates?
We started purchasing using the Proebiz auction software, gradually introduced electronic tenders for all of our purchases, and concentrated on digitization and streamlining internal processes. We also focused on preventive maintenance. We made a reasonably detailed record of all devices in IS KARAT, and we track all (internal and external) costs associated with operating them. However, we are still working on improvements in this area. We are trying to understand why malfunctions arise and how to prevent them and intervene in time. And you know Murphy’s Law – when you are working at maximum capacity and you can’t meet customer demand anymore, something is definitely bound to break. We don‘t want that to ever happen and are trying to minimize these risks. Today, we are a modern company that, despite its tradition, follows modern trends and uses cutting-edge technology. Many visitors from abroad who come for a tour are often shocked by what they see in our coking plant: cleanliness, order and clear organization. We are a stable company, and our loans for acquisition have been paid.
Would you do anything differently today in the restructuring?
Yes, certainly. I would definitely be quicker in taking some steps.
Which ones?
I would introduce management changes even faster. Without people, you can try to do it all by yourself and go crazy, but you won’t push the company anywhere. For example, we have spent a lot of time on cargo loading, which used to be done the old-fashioned way, where you would load the coke on a wagon and take it to a stockpile. There, it would be loaded onto trucks. But this means a lot of extra handling which is not free of charge and compromises the coke, generating a loss. The investment in a new loading method completely on site, which the new production director initiated, was then paid for in eight months.
Was MTX Group looking for any synergies as part of the restructuring? Are they even possible for a coking plant, given the nature of other companies in the group?
We have synergies with METALIMEX, our “department store”, which buys coal for us, sells our coke, and deals with logistics. The company has an experienced sales team for this job, and it also supplies these services to other companies outside of the MTX Group, which is particularly important for the economy of OKK Koksovny.
OKK Koksovny
What does the coking plant product portfolio actually look like?
We are the largest producer of foundry coke in Europe, we have a capacity of 800,000 tons of full coke per year, and we have four coke oven batteries with 210 chambers. Our foundry coke is mainly used in foundries for the automotive industry and for the production of stone wool, which is now used as a high-quality and environmentally friendly thermal insulator. We are indirectly improving the environment. However, we also have other production programs – we produce blast-furnace and heating coke, too. In recent years, for example, we have become the largest supplier of heating coke for European sugar factories requiring coke for their sugar production technology.
What is your position on the global market?
Europe produces about 1.3 to 1.5 million tons of foundry coke, of which we produce about 20 to 25%. But the interesting thing is that we are the largest importer of foundry coke to the USA. For several years in a row, we have been exporting about 45,000 tons a year there, which is a significant volume for us. We have established ourselves very well on the American market. It helped us that, even under President Trump, coking plants in the U.S. have been shutting down for environmental reasons, because their plants applied, in comparison to us, very few environmental measures. They received deadlines for investing in greener production or they had to close their gates. Surprisingly, some coking plants in the U.S. have chosen the latter option, showing how challenging this business is. But for us, it was a boost, of course. But the Americans did not trust our coke at first and were testing it for a very long time. Our coke is smaller than theirs. And they were completely shocked that they needed less of it compared to their original one. They were constantly testing it and looking for a catch. But today, we have regular customers in the U.S., and we ship there frequently.
And what about the other side – where do you get your coal?
Coal is of course our main ingredient; it accounts for most of our production costs. But part of them also includes transport. There are many types of coal in the world, and those we need come from abroad. Currently, we import coal from America because we simply can’t buy such fuel in Europe. It’s not mined anywhere here. Basically, we are constantly looking for the optimal composition of the charge. For example, we’ve been testing coal from Australia or Russia, and now have coal from Mozambique, so we are constantly on the lookout. We keep adjusting the composition so we can come up with the best quality to cost ratio.
That sounds like alchemy...
Yes, it is an extremely interesting job. It starts with obtaining certain coal parameters from a potential supplier. Each parameter is important for a certain part of the production program. To put it simply, we need one type of coal to make foundry coke and another type to make blast-furnace coke. If we decide to try some coal based on these parameters, we order a sample that can weigh just a few dozen kilograms. We analyze the sample in our laboratory, verify the parameters and then order a train full of it for a test, and the figure is around a thousand tons. We then experiment with this coal in our coking plant and test different ratios, replace one type of coal with another, and so on. Of course, we monitor what it does to the final product and how the parameters correspond to what we need. I like to say it’s with almost pharmaceutical precision. In addition, it’s a job that we will do here forever – the pressure on quality from customers is high, and since coal is a natural product, its quality, albeit from one source, also changes over time. If this “disturbs” the parameters, we need to immediately react. So, it’s definitely not boring. Although coal is increasingly less popular, we make it a product with added value that is still an essential raw material for many industries.
But you’re facing pressure because of environmental protection. Is the coking plant environmentally unfriendly?
Of course, we pollute the environment to a certain degree. However, we have invested hundreds of millions of Czech crowns in making our operation greener, and we continue to invest in doing so. We are fully aware we are located near the city center, and we are trying to improve our operation way beyond what Czech and European regulations require from us. We meet all norms and requirements, we are far below the limits that apply to us, but this is still not enough for us. We closely cooperate with the Ostrava Municipality and have a “voluntary agreement” with the Moravian-Silesian Region, which go beyond our obligations. We contribute to cultural events, fund sport teams, and help recover various areas with a historically poor carbon footprint. We are not trying to redeem ourselves. We just want to be a good neighbor. But I do have to admit I sometimes don’t get some modern trends. People still want products made from our coke, whereas others want to completely stop coke production. However, we use cutting-edge technology, are a real leader in our field, and do everything we can to maintain our operation meaningfully and sustainably. Because it is very demanding. You can’t just relocate a coking plant. It’s a vast complex that runs 24/7 all year long. Our batteries need to maintain a certain operating temperature – as soon as it drops, that battery basically breaks down. Building a new coking plant from the ground up would be nearly impossible. Even though the carbon footprint is no longer so bad. For example, Ostrava recently has built a new measuring station behind the coke plant, in addition to the one in front of the coking plant. Since last February, the data shows the coking plant may not be such a problem as people see it after all. And that pollution will probably also come from different places. Times have changed. In the past, when it snowed in Ostrava, the snow would turn black in just a few minutes. We have made a tremendous progress in this regard. But that doesn‘t mean we are going to stop investing in making our operation even more environmentally friendly.
Coke production in a nutshell
The main step is mixing the right types of ground coal. The exact ratio is a secret recipe. This mixture is called coal charge, which then travels to the chamber. There, the coal mixture is carbonized, ideally for 32 to 36 hours, where it turns into coke, which is then pushed out in the form of different fractions. Anything up to 10 millimeters is called coke dust. Blast-furnace coke has a grain size of about 25 to 80 millimeters, and the best foundry coke has a grain size of over 100 millimeters.
What is the key to reducing environmental impact?
The maintenance mentioned above has an enormous impact. We invest a lot in repairs. Ideally, no leaks should occur, and no smoke should be emitted. Our 210 chambers are 210 potential leak risks. We have a great team headed by our CTO and production manager, who keeps an eye on potential risks and is ready to respond immediately. However, we are investing in other things, too. Recently, we modernized our dust collecting system and invested in our coarse and fine coke sorting plant, which in addition reduced the amount of particulate matter in the air. Thanks to automated riser cleaning, we’ve also eliminated occasional smoke. And we are trying to work with our byproducts a bit better.
What are the byproducts and how do you handle them?
Tar, sulfur, ammonium sulfate and benzol are formed during coke production. We sell all of these for further use. The most important byproduct is coke oven gas, which we reuse to heat our batteries; the surplus is burned in our customer’s heating plant near our coking plant. More importantly, coke oven gas has a high hydrogen content, over 50%, so we are looking into ways of using it.
And how would you like to use hydrogen?
Personally, I believe hydrogen is the fuel of the future, despite the current preference for electromobility. Therefore, we decided to explore the possibility of hydrogen production. We are a member of the hydrogen platform, and since last year, we have been working with the Technical University of Ostrava to research ways to separate hydrogen from coke oven gas. It is a three-year research project, and if it helps us find an economically viable way of separating hydrogen from the gas, we are open to it. While this would somewhat degrade the coke oven gas, we would obtain green fuel that has an interesting future in return. It is possible to make electricity from coke oven gas by cogeneration and to produce hydrogen using electrolysis, but these are more complicated. The advantage for us would be that we would have been able to offer hydrogen at the plant, which would eliminate complications with transport and storage, which are currently probably the biggest obstacles to this technology. Ostrava wants to become a “Hydrogen Valley” of sorts, so hydrogen-fueled buses could obtain their fuel directly at our plant.
But it would still be hydrogen from coal…
Yes, we aren’t pretending the hydrogen is clean and from renewable sources. On the other hand, it is one of our potential byproducts that can be further used in a very environmentally friendly manner, and we want to use our products in a meaningful way. If we produce hydrogen, why don’t we do so in the most environmentally friendly way possible? And of course, it would be another interesting source of income for us, that’s for sure.
Do you think this is also a way of extending the life of the coking plant?
I don’t think so. We can only make hydrogen if we produce coke. And as for the service life of the entire plant, that is a big question. It all depends on the service life of our batteries. We have a new one that can last for 40 years; three older batteries can have a shorter service life, but with good maintenance they, too, will last a long time. However, the service life is affected by a number of factors that we can’t completely control. It depends on the demand, for example. If it’s high, that’s good for the battery. But when it’s low, one way to slow down production is extending coking time from, say, the standard 36 hours to 50 hours. And that is not good for the wall of the batteries.
And has OKK ever had a “tough time” under your leadership? Yes, of course. After we finished restructuring, we struggled for a while and thought we would have to close shop in six months. The reason was the acceleration of the whole coal business over the past two decades. Back in the day, coal and coke prices were negotiated once a year. Today, the prices are negotiated quarterly, which is much more difficult, and it can mean unexpected fluctuations. At that time, at the end of the quarter, when we already had negotiated price of coke, the price of coal skyrocketed. There was a hurricane in Australia and a geopolitical shift, which jacked the prices up, even though we were not affected by what was happening in Australia. But in the end, we endured, the situation calmed down, and we came out of it more experienced and stronger. I am really pleased with the way OKK Koksovny works today and would like to thank our senior management and all other colleagues and coworkers. We have done a lot of good work. But we must not rest on our laurels and must keep working on further development.
Zdeněk Durčák
Photo: Barbora Mráčková
MTX Group through the eyes of Zdeněk Durčák
“First of all, I must emphasize that this is a Czech group with Czech capital and a completely transparent and responsible owner who has a clear vision. I think everyone at MTX Group can be proud of it, and I am incredibly happy and honored to be part of such a group,” says Zdeněk Durčák. He thinks the group is built on the traditions of its subsidiaries, and it also respects them. Durčák says that MTX Group prides itself on choosing its employees well. “I’ve always said business is all about people, and I know people in the MTX Group know that very well,” he says. In addition, he appreciates the group for trying to minimize its carbon footprint. “A number of projects are focusing on this, and it is good that the group is doing it. It’s not just about fulfilling obligations, it’s about the fact that the world has changed, and respecting nature has become one of the main pillars of business,” says Durčák.
