Supply Chain Digital - February 2015

w w w. s u p p l yc h ai n d ig i t al . c o m

F e b r u ar y 2 015

T O P Outso 10

urcin g Destin ations

THE CRUDE OIL ECONOMY

Procurement progress saves Subway over £184 million Our interview with EIPC’s Purchasing Manager explains the benefits

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EDITOR’S COMMENT

Food for thought for logistics companies issue of Supply Chain Digital. There has been plenty going on in the early stages of 2015, and we thank you for making it a record-breaking start to the year, with readership higher than ever. Our cover story this month sees us interview Mike Attwood, Purchasing Director for EIPC, which is the purchasing arm for Subway franchises in Europe.

He told us exactly how procurement progress had managed to help the franchisees to a ÂŁ184 million saving since 2001.

We also took a look at the current crude oil economy gripping the global economies at the moment, and posed the question of whether it was in fact good or bad news. Bringing up the rear is the trusty Top 10, which this month is a rundown of the best outsourcing destinations.

WELCOME TO THE FEBRUARY

As always, enjoy the read.

Sam Jermy

Editor

sam.jermy@wdmgroup.com

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CONTENTS

Features SUPPLY CHAIN MANAGEMENT

8

Crude oil economy

TOP 10

Outsourcing Destinations

PROCUREMENT

14 22

Procurement progress saves Subway over ÂŁ184 million

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W E

S U P P O R T T H E

L E A D E R S

s u b s e a | a c c o m m o d a t i o n | c a b l e | o ff s h o r e s e r v i c e v e s s e l s

Chartering Newbuilding Sale & Purchase Market Intelligence Consultancy / Advisory

Yo u r p a r t n e r i n o ff s h o r e s h i p b r o k i n g s e r v i c e s w w w. f e a r n l e y o ff s h o r e s u p p l y. c o m

CONTENTS

74

TRANSPESA DELLA VOLPE

32

Comarco

COMPANY PROFILES

84

VIABAHIA

58

Kings Transport & Logistics

AFRICA 32 Comarco Group

CANADA 50 Southeast Stoney Trail

AUSTRALIA 58 Kings Transport & Logistics

BRAZIL

50

Southeast Stoney Trail

74 TRANSPESA DELLA VOLPE 84 VIABAHIA

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S U P P LY C H A I N M A N A G E M E N T

CRUDE OIL

ECONOMY With the price of crude oil at its lowest point this decade, we ask what the ramifications to logistics companies and consumers in general are, and which country and territories will be affected the most Writ ten by: SAM JERMY

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February 2015

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SUPPLY CHAIN MANAGEMENT

Petrochemical plant EVERYWHERE YOU LOOK, for the past seven years you will have seen so much news about the 2008 recession, you will be forgiven for thinking it is still ongoing.

In fact it ended in quarter three of 2009 for the UK when the negative growth of GDP (Gross Domestic Product) ceased. It has almost become extreme hyperbole to mention the words recession, economic downturn or financial crisis in the developed world.

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February 2015

But what happens when the price of a hard commodity like crude oil, just starts to nosedive? More to the point, why has crude oil prices been falling in the first place? And is it actually good news or bad news?

For the first time in six years, a barrel of North Sea and US oil were both below the $50 mark. An unprecedented and unlikely situation a short time ago, with much of the Eurozone and indeed US still trying to recover from economic woes. Even

F E AT U R E A R T I C L E S H O R T E N E D H E A D L I N E

since mid-June 2014, oil prices have plunged over 60 percent; but there are both winners and losers in this.

Naturally the end-user, i.e. the ordinary man or woman in the street, is going to be extremely pleased to see the cost of a litre of petrol continue to drop. In the first fortnight of January this year, prices at some English service stations had dropped below ÂŁ1 per litre, meaning a hefty 35p per litre saving at the pump compared to a mere seven months prior. All this means an

alleviation on the cost of living crisis, and means the decline in crude oil price will make car-owners happy.

But then take a look at the fuel customers of a different, bigger scale and the benefits only multiply.

Any organisation which purchases large quantities of fuel will see its procurement practice become much more efficient if the crude oil price stays low; such as airlines, shippers and hauliers. Lufthansa for example, announced last month that it expected 11

SUPPLY CHAIN MANAGEMENT

“Lufthansa for example, announced last month that it expected its fuel bill for this year to be 13 percent lower than previously forecast, as a result of the low oil price” 12

February 2015

its fuel bill for this year to be 13 percent lower than previously forecast, as a result of the low oil price.

The two main reasons for this change are a weak demand in many countries due to flat economic growth, coupled with surging production from North American shale companies via methods such as fracking.

This is then compounded by a rising dollar compared to a range of other currencies, and the fact the Organisation of the Petroleum Exporting Countries (OPEC) is refusing to cut production as a way of re-establishing the supply and demand equilibrium. The main oil producing country, Saudi Arabia has supported OPEC’s stance too.

The conglomerate AP MollerMaersk is performing well overall despite the oil price drop which would seemingly adversely affect its Maersk Oil division. Its shares are up 14 percent since December 2014.

Looking at the biggest losers coming out of the price plunge, it is clear to see this is spelling very bad news for Venezuela and Russia in particular. The well documented rouble collapse which came to a head before Christmas, is a problem which

F E AT U R E A R T I C L E S H O R T E N E D H E A D L I N E

Eurasia Drilling, onshore oil conglamerate in Russia will not go away soon.

As a country which relies on oil and gas for 70 percent of its export incomes, it is constricted by a web of externalities. The BBC reports Russia loses about $2bn in revenues for every dollar fall in the oil price, and the World Bank has warned that Russia’s economy would shrink by at least 0.7 percent in 2015 if oil prices do not recover.

In short, there is no one answer to whether the price fall in crude oil is good or bad news, as there are big winners and losers. Those suffering, such as the Russian and Venezuelan governments will be eager for a swift return to high prices. Whereas many in the wider global economy will for now continue to benefit from the equivalent of a mammoth programme of quantitative easing.

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PROCUREMENT

PROCUREMENT

SUBWAY OVE Writ ten by: SAM JERMY

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February 2015

Since its formation in 2001, the Eur has delivered substantial benefits

T PROGRESS SAVES

ER ÂŁ184 MILLION

ropean Independent Purchasing Company to Subway Franchises throughout Europe 15

PROCUREMENT SUBWAY FRANCHISES HAVE saved over £184 million thanks to a sophisticated procurement approach that started in 2001 by forming an organisation to specifically serve the brand.

The European Independent Purchasing Company (EIPC), exists so franchises are able to secure greater financial and service discounts from purchasing and supplying products in large volumes and follows a similar business model to its North American counterparts.

With close to 2,000 stores in the UK and Ireland alone and more than 4,000 stores across 33 countries in Europe in total, EIPC co-ordinates a mammoth operation by dealing with suppliers of products and services, as well as distributors on behalf of Subway franchises. There are offices in Germany and France, and people work from home in Spain, Netherlands, Poland and Finland Mike Attwood, Purchasing Director for EIPC, said: “It’s one thing to develop new stores, but the supply chain aspect is a different ball game and also needs careful planning to support the overall company growth. EIPC is completely owned 16

February 2015

PROCUREMENT PROGRESS

“We have saved over £184 million from 2001 until the end of 2014.

We saw a growth surge with around 400 new stores added across Europe last year, and this growth is set to accelerate going forward”

Subway shopfront

by the franchisees and we are governed by an elected board who ensure we spend money wisely on important projects for them.

“The differing number of stores; from 40 in Spain to almost 2,000 in the UK and Ireland, makes the job exciting as from all corners of the continent we are helping franchisees to become the best they can be. We have saved over £184 million from 2001 until the end of 2014. We saw a growth surge with around 400 new stores added across Europe last year, and this growth is set to accelerate going forward. The Subway brand is getting a huge amount of development interest and it’s our job 17

PROCUREMENT to ensure we have the capacity and contingency to support that growth.”

Working under a relationship agreement with the Subway brand headquarters, which sets out how EIPC operates with the brand and does business, Attwood and his team have secured the services of global corporations, such as Unilever to supply soup and hot drinks, CocaCola has been a drinks partner in Great Britain for some years now and Bidvest 3663 is the GB distribution supplier.

Brand synergy In 1965 the company began when Fred DeLuca opened a sandwich shop to earn some additional money for his studies in Connecticut, USA, and by 1974 there were 36 stores and that is when the Subway brand founder started franchising.

From there the brand grew exponentially, and today has over 42,000 stores globally and DeLuca is still President of the group.

Attwood said: “At the end of the financial year anything left over goes back to the franchisees in the form of a dividend. We (EIPC) have about 80 staff altogether, 63 based in the UK and the others based around Europe.

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February 2015

Subway has about 43,000 stores glo “There’s lot of cross-team collaboration and continuous improvement training; three people in the Netherlands and UK are in my team so we are always travelling for that very purpose.

“We go to a lot franchisees’ meetings across Europe and present what we’re working on, services, food prices, what the future is looking like in the industries which affect our business

PROCUREMENT PROGRESS

obally and we share all the knowledge we can.

It builds the notion that we are there for the franchisees and it’s important to demonstrate the ways that can help franchisees to save money. They get surveyed every year and are very positive about the value we bring.�

One prominent example of how EIPC assists the Subway brand is the deal it secured to get WiFi for all UK stores for free. By funding the

whole programme centrally, it did a thoroughly efficient job with the supplier, O2, than if each store tried to reach its own deal individually.

Attwood points out an important factor in the ongoing success of EIPC is due to the seasoned individuals who come in with specialist knowledge of their sectors. Each employee is chosen for their specific industry experience and have come from 19

PROCUREMENT

Subway’s success is partly thanks to EIPC leading brands such as Sainsbury’s, Yum!, McDonald’s, Whitbread and Brakes. Most recently, two staff members who launched the Shell petrol loyalty scheme are now working to do the same for the Subway brand.

Future prosperity The success of the growing Subway brand is partly thanks to the more calculated procurement approach EIPC has undertaken to create a more co-ordinated supply chain, 20

February 2015

“They took the chance in 1992 and now Dawn Farm Foods and Evron Foods supply a significant share of cooked meats and bakery to stores across Europe”

PROCUREMENT PROGRESS

by making supplier agreements in higher volumes than in years gone by.

Standardising key ingredients across Europe was one way the company was able to consolidate its supply chain and become more efficient.

The first European store opened in Dublin in 1992, where the franchisee found a local baker and meat supplier to get the right quality of ham and bread. Those two companies are still supplying the Subway bread today and have grown with the system. But the firm still only has two companies manufacturing bread with one factory in Germany and another in the UK, so EIPC is currently looking and identifying where its new bread factory should be, to support the growth in demand for Subs.

Attwood said: “They took the chance at the time and now Dawn Farm Foods and Evron Foods supply a significant share of cooked meats and bakery to stores across Europe.

Because EIPC is not set up like a supermarket where you have a head office setting down the rules, everyone has to collaborate because we are all separate entities working towards a common goal, this is what makes the company exciting to work for.

Mike Attwood, Purchasing Director for EIPC

“The Subway brand is looking at doubling the size of the business by 2020, growing to about 8,000 European stores, so we need those suppliers to be able to grow with us. Anyone who plans doubling their volume in 5 years should know it’s a nice problem to have but requires good planning and supply chain management.

“We’ve got a great team who know how to break into new markets and once you can get a supply chain in place and get these gold-standard products to store it makes a huge difference.

One of the exciting things we do is buy globally; for example buying tuna from South East Asia and working with the other tuna buyers in the other IPC organisations in the worldwide group.

We build international relationships and that’s where the Subway brand can make the difference.”

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TOP 10

TOP10

Outsourcing Destinations Here, Supply Chain Digital details the foremost locations in the world in regards to outsourcing W R I T T E N B Y: S A M J E R M Y

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TOP 10

10

Shanghai, China

As a result of Dublin dropping down in the 2015 rankings to 12th, it has allowed Shanghai to move up one place and appear in the list of top 10 outsourcing destinations. The Chinese city has many years’ experience of outsourcing operations, stateof-the-art technology and a very skilled workforce. It could be difficult for Dublin to get back in the 2016 list.

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February 2015

09

Krakow, Poland

Krakow has recently become a popular place for investments for many outsourcing companies. It is estimated approximately 16,000 people in such organisations, mainly young, well-educated professionals from the city’s universities. The Polish location is also the highest ranking outsourcing destination in Central Europe.

NAME OF TOP 10 ARTICLE

08

Cebu City, Philippines

Not quite as prolific as an outsourcing destination compared to the Philippines capital city, but Cebu is really starting to make waves nonetheless. Cebu City is now the world’s number one emerging global outsourcing destination based on the latest industry surveys.

07

Pune, India

The outsourcing business in Pune has been thriving because of its proximity to Mumbai, urban infrastructure facilities and large availability of skilled resources. With nine universities and over 100 educational institutions, Pune has rightly been nicknamed as “The Oxford of the East�. With all this going for the city, Pune is likely to remain cemented in the top 10 of this list.

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TOP 10

06

Hyderabad, India

A number of IT outsourcing providers such as Wipro, Accenture, Infosys, Mahindra, IBM, TCS, iGate and Satyam are all based in Hyderabad, with many more setting up branches in the city. It possesses the infrastructure and facilities able to sustain this increased presence of global companies too; being labelled ‘India’s high-tech City’ goes some way to illustrating this.

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February 2015

05

Chennai, India

A relatively low cost of living and similarly reasonable operating costs has kept Chennai competitive as a top outsourcing destination in recent years. Companies such as Maersk, Phillips, Deloitte, Caterpillar, Red Hat, and Siemens have all set up in the Chennai vicinity of Tamil Nadu state and interest does not seem to be quelling. Another strong performing outsourcing destination from India here.

NAME OF TOP 10 ARTICLE

04

Delhi, India

High-quality and cost effective outsourcing solutions have been available in Delhi for a number of years now. The city’s attractiveness to large conglomerates and corporations lie in the fact it has excellent established resources and facilities and having a major international airport helps in a logistics sense too. This enviable reputation has seen software giants like Microsoft, Dell and Intel all flock to Delhi.

03

Mumbai, India

A range of Western banks and other multinational organisations have outsourced to Mumbai in the past decade, but the terrorist attacks of 2008 cast a dark shadow over the city’s future role in regards to outsourcing, as Western companies were said to be weighing up the risks of more attacks, not to mention the ongoing political volatility. Mumbai has weathered this storm well though, and comes in at number three.

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TOP 10

02

Manila, Philippines

With a literacy rate of over 94 percent and English being taught in all schools, it is little surprise Manila ranks so highly as an outsourcing destination.

Foreign companies that are now outsourcing to the Philippines estimate a minimum 30% to 40% business cost savings due to these labour savings.

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TOP 10

01

Bangalore, India

The undefeated location for outsourcing, Bangalore has been in the top eight in the world for a number of years now. Far from alone, amazingly there are another five Indian Cities that make up our list. The country as a whole has benefitted immensely from the Internet boom and with the highest number of multinational IT, research and development, electronics and software companies- Bangalore is referred to as India’s Silicon Valley.

Bangalore has shown the highest growth record since the early 1990’s, and with an embarrassment of employee talent available, it is no wonder why the city is an outsourcing hub of not only, but the entire globe. With the university and around 21 engineering colleges, there is highly skilled workers available annually. The sprawling metropolis does not seem to be slowing down in any sense either.

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Month 2014

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Comarco Group: looks to m

momentum with projects in E Written by: Tom Wadlow Produced by: Richard Deane

comarco

maintain growth East Africa and beyond 33

COMARCO GROUP

This leading marine and specialised contractor is broadening its industry portfolio while continuing to deliver firstclass turnkey and standalone services from its Mombasa heartland

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February 2015

T

he Comarco Group is expanding its industrial and geographical footprint as it looks to build on 44 years of experience in the industry.

Driven by work as far as Brazil, the company has a series of exciting projects in line for 2015, which include a renewed venture in Myanmar, alongside several others outside of oil and gas, allowing it to remain flexible and active in a period of industry uncertainty.

This said, Comarco is in a prime position to supply its unique services to the huge LNG projects ramping up in Mozambique, and Tanzania With continuing growth and corporate maturity, Managing Director Simon Phillips is expanding

E X P L O R AT I O N W O R L D

Kilindini Harbour, Mombasa, Kenya

the group’s Corporate Social Responsibility (CSR) activity beyond the valuable community-driven work already underway in Kenya.

“We would like to develop and foster our current growth path over the next five years, and this will mean we can boost our HSE and CSR activities,” he said. “We aim to reach the highest working practices which will have a positive impact on our work force, our customers and the community in which we work.”

Mombasa Hub Key to driving further growth is The Comarco Group’s flagship supply base adjacent to the Port of Mombasa, a crucial hub of activity for both the

Comarco has grown from a 2 to 16 acre mini port since 1975

w w w. c o m a r c o g r o u p . c o m

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COMARCO GROUP

COMARCO GROUP

AFRICA

company and clients, from small local operators to blue chip giants including British Gas (BG) and Anadarko.

Having started out as a two-acre site in 1975, it has now grown to a 16-acre facility with is own deep water quay for clients of all sizes, able to accommodate ships up to 130 metres long. The flexibility and control offered by this service hub is an important pull factor for customers.

“If, for example, a client such as BP or Anadarko have a drilling programme they will need a supply base with dedicated berthing, and we provide them with their own mini port so they can work independently of the main Port of Mombasa,” Phillips said.

“They rent the space and we provide the cranes, trucks, forklifts, people, open-air storage and jetty access, whatever they need” – Simon Phillips, Managing Director

The port in 1975

Salvage tug

w w w. c o m a r c o g r o u p . c o m

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COMARCO GROUP

Marine Construction, Kenya

Stanford Buzzard, seen alongside the Comarco Berth 38

February 2015

“It is a private facility which means they have control over their operations and can maintain the highest HSE standards, which is critical for these companies”.

“They rent the space and we provide the cranes, trucks, forklifts, manpower, open-air storage, warehousing and jetty access, whatever they need, so they can control their shore based operations and ensure they do not encounter delays on their drilling. The cost of offshore drilling

E X P L O R AT I O N W O R L D

can be around $1 million a day so it is paramount that delays and problems do not occur.�

The Comarco Group has embraced the importance of diversifying business away from oil and gas, with Mombasa also being used as a general cargo and logistics springboard for projects in and outside of East Africa. For example, the company helped to supply the World Food Programme, The Red Cross and other international agencies through its port. w w w. comarcogroup.com

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COMARCO GROUP

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February 2015

COMARCO GROUP

AFRICA

From Mombasa and further afield, Comarco, through its several divisions (construction, marine projects, vessels and logistics), can offer clients any number of its varied marine services and is able to provide these on a full turnkey solution, or on a standalone basis with selected component parts to suit the client’s individual requirements.

Marine and general contracting services include supply base management, marine construction, commercial diving services, vessel chartering and cargo haulage.

However, it is The Group’s marine and specialised logistics services which differentiate it from other operators and forms the core brand of Comarco, with Instant Ports, Beach Landings,

Comarco can offer clients any number of its varied marine services

280T P&H Crane Salvage, Canda, Mozambique (2011) w w w. comarcogroup.com

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COMARCO GROUP Stevedoring at Sea, and the patented EBOS for Exposed Beaching Operations leading the service Comarco offers.

Comarco is developing an instant port for the Palma project ‘Comarco and Copenhagen-based Thorco Shipping have established a dedicated subsidiary to provide turnkey solutions for transporting any size cargo to the remotest and most challenging areas accessible by sea.’

Instant Ports In the niche field of “Instant Ports”, Comarco and Copenhagen-based Thorco Shipping have established a dedicated subsidiary to provide turnkey solutions for transporting any size cargo to the remotest and most challenging areas accessible by sea.

Formed in September 2014, Instant Ports combines the expertise of both partners and can draw on a fleet of modern 5,000-20,000 DWT cargo vessels along with cargo barges, tugs, trucks, cranes, forklifts and an experienced workforce as well as the Industry Renowned EBOS. An Instant Port is ideal for oil and gas, exploration and other project-related operations that require an environmentally-friendly, rapidly deployable and removable, beach landing site, especially at remote locations in marginal sea conditions.

Specific services include beach and site surveys, bathymetric and geotechnical surveys, project management and engineering, handling of local permissions and the delivery of heavy lift and out of gauge cargo.

Diversifying A number of other notable projects set for 2015

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February 2015

AFRICA

showcases the scope of work the company is able to carry out, keeping the project book healthy through an uncertain period for oil and gas exploration and development.

A joint venture with multinational bunkering specialist Dan Bunkering has just been initiated, involving the purchase of an offshore bunkering vessel. The Comarco Pemba, 2,439 dwt, has been delivered to East Africa and is now in operation.

Phillips said: “Dan Bunkering is working in East Africa to help supply the growing number of offshore projects which need fuel, together with seismic and exploration work happening up and down the

Comarco offshore vessel

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44

February 2015

AFRICA

coastline, which this vessel can serve in addition to conventional shipping and fishing fleets.”

Comarco Group has also recently invested in a dedicated salvage tug, the CSC Nelson, which at 150t BP is currently the largest of its kind operating on the eastern coast of Africa The Nelson is currently in dry dock in Durban being prepared to be used for long distance towage and salvage. Nelson will be operated by Consolidated Salvage Company, associated with Sloane Marine, which played a significant part in the Costa Concordia salvage operation.

Geographically the company is also broadening its horizons, with Executive Chairman Peter Phillips, the founder of the Group, returning to Myanmar to establish a new fully incorporated unit of the business.

“We have spent a lot of time in Myanmar and believe there is great potential there,” the MD

Salvage tug

Offloading 235-ton portions, Mozambique

w w w. comarcogroup.com

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COMARCO GROUP

AFRICA

Comarco’s global footprint

added. “While there is the challenge of limited infrastructure, it also represents opportunities for us to get involved with development of the country and offer our services and experience.”

Other markets the group has already reached include Malaysia, Singapore and Indonesia, and Malawi and West Africa are possible target destinations for this year.

Giving back As the group continues to grow and have a greater impact in the communities in which it operates, Phillips hopes it can expand its CSR reach and impact.

“Our main CSR activities at the moment are in Kenya, sponsoring events, working with the community and neighbourhood to improve and upgrade the area...”

– Simon Phillips, Managing Director

w w w. comarcogroup.com

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COMARCO GROUP

Mombasa port, Kenya

Comarco is working with the communtiy in Kenya

“Our main CSR activities at the moment are in Kenya, sponsoring events, working with the community and neighbourhood to improve and upgrade the area, and developing schools and paying school fees for employees who qualify through a means test,” he said.

“The infrastructure and municipal resources in Kenya has been quite severely stretched in recent times due to urbanization and population growth.”

Comarco teams help to remove litter and clean roads, and are also building a park so children can play safely. A pilot canteen scheme is another initiative that has been received well, providing food, water and sanitation in parts of Mombasa

Company Information INDUSTRY

Exploration World HEADQUARTERS

Mombasa , Kenya FOUNDED

1971 EMPLOYEES

450 REVENUE

Not disclosed

lacking these facilities.

A new sponsoring initiative will see line managers of the 450 workers nominate the brightest company prospects, who in return for at least three years of commitment to Comarco will receive added high-quality training.

Growth will be key both to Comacro Group’s commercial and social success, and Phillips is carrying positivity into the new year on the back of new lines of business being generated from Mombasa and elsewhere as in Myanmar.

He concluded: “I am optimistic and believe that much of the current hesitancy surrounding industry will disappear as 2015 progresses.”

PRODUCTS/ SERVICES

Offshore Marine; Construction; Supply Chain and Logistics

w w w. comarcogroup.com

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The Southeast Stoney Tr

The benefits of being a P3

Garry Lamb, Southeast Stoney Trail (SEST) Project Manag discusses the final phases the project— how being a P3 pr what it will bring to the community upon completion.

Written by: Lindsey Ryan Produced by: Mike Magno

rail Project

ger at Alberta Transportation, roject has been beneficial and

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C O M PA N Y N A M E

SE Stoney Cranston Blvd Interchange - Photo credit to Keith Walker – Peak Experien

S

ince the 1970’s, bringing an additional road network to Calgary and Edmonton has been identified as a provincial priority. In 2003, construction of the provincial project officially began and the project has since been moving along sequentially 52

February 2015

around Calgary in four different quadrants. Starting in the west and moving to the east, the Northern half of the project is now complete and in 2009, the third quadrant of the Calgary Ring Road project, the Southeast Stoney Trail (SEST), was commenced.

SECTOR

nce Imagery

About the Trail The Southeast Stoney Trail consists of a six lane roadway which runs 25 kilometers from 17th avenue SE to just east of Macleod Trail. There are nine interchanges, 27 bridges, one road flyover and two rail flyovers. This $769M public private

partnership (P3) is the second largest highway project in Alberta.

The project was awarded to Chinook Roads Partnership (a jointventure between SNC-Lavalin Inc. and Acciona S.A.) in March 2010 and being a P3 project, the designbuild contract also includes a 30 year w w w. s estproject.ca

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THE SOUTHEAST STONEY TRAIL PROJECT

SE Stoney Deerfoot Tr Interchange Area - Photo credit to Keith Walker – Peak Experience Imagery

maintenance and operation agreement.

With a predicted traffic availability date of October 1, 2013, the project was only slightly behind schedule, opening on November 21st, 2013. The road has been open since then and is already improving the traffic flow in the area.

“We’re seeing traffic volumes in the upwards of 50,000 vehicles per day which shows that it is a much needed project for the area because it’s being well utilized already,” explains Garry Lamb, SEST Project Manager at Alberta Transportation.

Currently Stoney Trail is open to traffic, offering 70 kilometers of roadway, which is about 70% of the total project, and upon completion it will

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CANADA

offer approximately 100 kilometers of roadway.

Due to the harsh winter conditions, the project is temporarily on hold but Lamb expresses that the road is proving to handle the weather well.

He states, “We’ve gone through a full winter season last year and the start of winter season this year. Winter driving conditions are always challenging but I think this road is behaving well and it’s being well maintained. The public is being served appropriately by a high quality road that is operating well in both winter and summer conditions.”

P3 Benefits The SEST has experienced multiple benefits from being a P3 project. The contract was signed in March 2010 and only two and a half years later

by November 2013, the road was open to public traffic. According to Lamb, this is an impressively quick construction turn-around time for the size and scale of the project.

Additionally, Chinook Roads Partnership’s bid of $769M was well below the estimated $1.8 billion predicted for the project. And because there is only one contractor working on the project, all risks such as weather delays or inflation are assumed by the contractor.

In regards to the project’s funding, Lamb explains, “On this particular project the province has contributed over $200M during the construction phase, the federal government also contributed $100M during the construction phase and the contractor is paid the remaining costs

SE Stoney Chaparral Blvd Interchange - Photo credit to Keith Walker – Peak Experience Imagery

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THE SOUTHEAST STONEY TRAIL PROJECT

SE Stoney - Deerfoot Trail Looking West - Photo credit to Keith Walker – Peak Experience Imagery 56

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in monthly payments over 30 years plus their operation and maintenance costs over the 30 years.”

Community Improvement While it’s almost impossible to receive a positive response from everyone in the community surrounding a project, Lamb is proud to report that a majority of the Calgary citizens are happy with what the SEST means for the community.

Opening the SEST has certainly reduced congestion and improved traffic flow in the area for both individual and commercial users.

“We’re pleased that the road is open and its being well used by the public. That’s a sign of success in our world; it’s obviously meeting a need and its operating safely.”

Additionally, an Environmental Management System (EMS) has been implemented to manage the potential impact the SEST will have on the environment. There have been written procedures and regulatory requirements that have been met to ensure the protection of the wildlife surrounding the project.

Company Information INDUSTRY

Construction HEADQUARTERS

Calgary, Alberta, Canada FOUNDED

2003

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Kings Transport & Logistics

Kings Transport & Logistics Mapping Ro

Metropolitan Provider in Australia, Auckla Written by: Andrew Rossillo Produced by: Nick Ledue

oute to Most Successful

and and New Zealand

KINGS TRANSPORT & LOGISTICS

Krings Transport & Logistics Executives at the 2014 Sigma Gala Dinner.

T

he Kings Group is one of the top market leaders in the metropolitan transport and logistics market with offices across Australia in Melbourne, Sydney, Brisbane, Adelaide, Perth and Darwin as well as New Zealand in Auckland.

Kings Transport & Logistics specialises in local metropolitan urgent on-demand couriers and 60

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taxi trucks, 3PL warehousing and distribution, permanent vehicle placement and company-owned equipment solutions.

Kings was established with the ambition of providing the highest quality transport services.

Service is paramount to their success, which has allowed them to become one of the fastest

AUSTRALIA

growing transport companies in Australia and New Zealand. “Our goal is to be the biggest and most successful metropolitan transport and logistics provider in Australia, Auckland and New Zealand,” said Kings Transport & Logistics’ Executive Director and Chief Operating Officer Aaron Cole.

Among the most significant features of their business, Kings lists safety systems and processes, innovative technology and IT solutions, flexible partnership approach, blue chip experience, high level of senior management access and communication and structured account management.

Kings understands that every client has their own specific requirements and expectations when it comes to their transport and logistics. Kings’ commitment to excellence and their flexible partnership approach ensures that their clients can focus their attention on their own business needs rather than spending valuable time and resources on their transport. “We work very hard to build purpose-built solutions

for our customers. One of our primary focuses is on reducing transport consumption, which delivers a reduction in the actual unit rate of the transport costs.

You do have to address both, but companies have a deep desire to reduce their consumption.

That is accomplished through purpose-built solutions, specific vehicle designs and looking for deficiencies within their businesses to see where the waste is. This represents some of the more significant elements that comprise our competitive advantage,” said Cole. All these elements of applying continuous improvement to the work they do for their clients naturally improves their own business as well.

“We’re a very agile and flexible business, yet we’ve got the size and ability to inject capital into continuous improvement activities. That’s a really important point for where our business sits and where we’re positioning ourselves in the market.

Particularly from a logisticalsolution perspective there’s a lot of work that needs to go into

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KINGS TRANSPORT & LOGISTICS managing assets and designing vehicles to specific solutions.

And there’s a lot of capital that needs to go into this along with the IT and safety solutions of our various customers, continuously improving our internal systems for our offerings to our clients and harmonizing these elements along with the other programs that we have. A lot of the smaller players in the markets we play in don’t have the ability to inject capital into certain tasks. The bigger players that can inject capital tend to be slow and cumbersome businesses. Therefore, we feel that we are positioned in a sweet spot where we can do both with the ability to be agile and inject capital,” said Cole.

Focus on Quality and Safety The company is proud to service a cross-range of industries, many of which are household brands.

Kings is staffed with professional drivers, sales, administration and operational personnel who are focused solely on meeting their clients’ requirements. Kings

Group has a diverse fleet mix of over 1,500 subcontracted and company-owned vehicles, ranging from motorbikes to prime movers, plus an array of specialised vehicles, including power tailgates, crane trucks and an array of specialist trailing equipment. Their drivers deliver anything from a small envelope to a semi-trailer load of pallets or steel.

“Everything we’re able to accomplish is underpinned by the talent and quality of the people we have in our organisation.

We invest a lot of time into our people. This allows us to work on our competitive advantages in safety. We’re really strong in that area and have a terrific safety record. Our premium focus and execution of safety also proves to be a competitive advantage in promoting greater confidence for companies in deciding to work with us. In addition, we have very strong industry-leading initiatives for our learning and development processes,” said Cole.

“From our perspective, when you look at industry accreditation

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and quality systems, that’s just part of business. I’d like to think that the customers we’re doing business with would have the basic expectation that we’d have those accreditation and quality systems in place. For us, we’re looking at what else we can do in regards to specific solutions that we can provide in helping to reduce transport consumption and waste for businesses and do it safely,” said Cole.

“I challenge our safety and learning development area to assist the overall transport market, not just our own individual business. We look for ways to positively impact the entire industry. We want to share what we learn and develop because

we want to make the whole industry safer. There’s a real social responsibility here,” said Cole.

Video SOP Among Kings’ many significant points of difference that separate them from their competitors is their comprehensives dedication to safety education, especially as it relates to their drivers. In 2013, the Kings Group took the next step within its Learning & Development Team and commenced a project to convert many of the existing safety procedures (SOPs) into high-quality video SOPs (VSOPs). Through the use of available technology and utilising a dedicated YouTube training channel, the Safety and Learning

We’ve a very strong focus on delivering absolutely everything we say we’re going to deliver. We drive efficiency, improvements, consumption and cost reductions.”

– Aaron Cole, Executive Director & Chief Operating Officer

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KINGS TRANSPORT & LOGISTICS and Development Departments combined to produce role- and task-specific training on some of the key operations procedures.

Since the company’s introduction of VSOPs in 2013, these videos have continued to grow throughout the business. In addition, growing client collaboration also promotes increased effectiveness and reach.

“Our Video SOPs have been a really significant factor for both internal and external applications.

People learn in various formats,

and this allows them to learn through visual and audio aids, promoting a more comprehensive learning experience. Video SOP has been really strong, enabling us to improve the quality of service we can offer through driver training, safety protocols and specific operational requirements.

And from a customer’s perspective, we also put together customer-specific video SOPs. For example, if we’ve got a driver going to do a certain task, before they do that task, we can

Delivery

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program: “We’ve got 26 toolbox topics that we rotate weekly throughout the year. For example, our drivers within the steel industry will be toolboxed every week on a different topic,” said Most Outstanding Contractor - Cole. The company is careful to monitor this training, checking Safety and Environment for opportunities to reinforce Kings doesn’t just have the specific training topics as they programs, they have the proof. relate to certain times of year and They are the winners of the Most conditions that coincide. “As we Outstanding Contractor to the head into the Christmas season, steel industry for the ‘13/’14 year everyone’s extra busy, and in the safety and environment everyone’s in a rush. So, we look category. “This comes back to our comprehensive safety systems, and at this particular time and see that it’s especially important to remind the way the way that we audit our internal safety systems,” said Cole. our drivers to slow down, mind their safety protocols and apply In addition, Kings also conducts due diligence to their safety and auditing via external systems quality checklists,” said Cole. through the natural process that At all times, Kings applies the occurs when new and existing utmost responsibility towards customers review the company’s their safety policy referred to as systems, such as inquiries Deliver Zero. This policy enforces regarding driver induction, driver delivering zero injuries from both training and ongoing refresher inside and outside perspectives training. Kings’ strength in that regarding zero lost-time and space continues to promote the zero medical injuries. “We have company’s growth in the steel and construction industry and beyond. a zero tolerance for anything that jeopardizes the safety of our Cole went on to discuss a people and the public. So we cornerstone of their safety provide them with videos of route rides, including video of what’s happening on and off site, which helps with implementation and transitioning,” said Cole.

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strongly encourage the right safety behaviours in our business, and we reward those behaviours. We do everything we can to promote and encourage safety. And we want to attract people that have the same attitude toward safety and display the same behaviour,” said Cole. From attracting top talent to improving efficiency, there is a wide range of benefits that naturally flow from maintaining such comprehensive safety 66

February 2015

measures, pervading throughout the business internally and even attracting new outside business.

“Everything about safety in our business gets driven from the top down. Our Group Safety Manager reports through to me, the Director of the business. This means our safety messages come from the top. I think that’s a really important part of driving the right culture in a business. If you want to drive change or behaviors or

S U P P LY C H A I N

improve aspects of a business, it’s really got to come from the top down. These messages then carry a lot more weight. Our people really understand the priority and importance of these things in our business,” said Cole.

Furthermore, these programs and processes also aided in Kings’ receipt of the commendation from the Transport and Logistics Industry Skills Council at the annual Awards for

Excellence Dinner this past April for the ‘Return on Investment in Skills Award’.

“That was based on our driver induction program. Drivers have the ability to access materials via our Deliver Safe app that we created within our business.

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of safe behaviour. In addition, if we’re undergoing a task that we perceive has inherent risk, we’ll conduct a JSA [job safety analysis] prior to engagement of that task or contract. A lot of work goes into our processes before day one of the actual project even begins, significantly reducing the risk of injury,” said Cole.

Kings Transport & Logistics, winners of Outstanding Contractor, Safety & Environment in the steel industry

operating as they should be,” said Cole. Much of the company’s success with these programs is based on ensuring convenient, flexible and any-time access to helpful, multi-faceted information.

“When we talk about reduction of lost-time injuries, we need to prevent the accident from occurring in the first place. Much of that is achieved through our culture, increased awareness and encouragement and rewarding

Custom IT Solutions From an IT perspective, Kings have an in-house IT department with the ability to custom build highly effective solutions for their customers. “The systems that we put in place, they’re not off the shelf. We listen to what the customer has to say. We’ve created our own IT platform; particularly in permanent vehicle arrangements where there’s an EDI transfer between us and the customer. We take advantage of the opportunities to improve efficiency there,” said Cole.

“This includes bar-code scanning and taking photos of POD’s at delivery points. We also send out proactive alerts to customers to let them know

KINGS TRANSPORT & LOGISTICS exactly when their deliveries are coming. The point is whatever parameters or rules the customers want, we can build it into a solution that we’ve got. We really try to assist not just the experience our customer has with us, but also the experience of our customers’ customers. We feel that’s a really important part of the chain. We really work on that aspect of customer service and supply chain delivery process,” said Cole.

“Oftentimes, we find that our customers want exactly what we offer from our ProTrack System.

However, for example, with Sigma, a key customer of ours, we have a custom system built just for them, which is built off the back of our ProTrack system architecture, but with some significant modifications that truly suit their business,” said Cole.

“As another example, we have a very reliable geo-coder in our systems. So, when the driver crosses a certain boundary, for example, 5km out from the point of delivery, an automated SMS or email is sent to the customer, indicating exactly when

AUSTRALIA

the customer can expect their delivery,” said Cole. This provides a number of benefits, including making sure the customer is there to process the delivery and ready for the fastest and most efficient delivery processing possible.

Kings can customise based on distance, time, ability to deliver photo PODs, etc., to match the specific needs and wants of their customers, which tends to vary significantly between clients of different industries. “We clearly communicate what we have to offer to our clients, describe our flexibility regarding those offers, and conduct needs analyses to determine their exact needs and wants, determining how we can work together to deliver those solutions,” said Cole.

Furthermore, Kings looks for partners that match their own capacity to affect positive change with agility and strength. This made partnering with Leopard Systems and Fujitsu NZ a very natural choice. “We have great relationships with both of these partners who are leaders in their field. Both are large enough to

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support the Kings business and are agile enough to develop their systems to suit our changing needs,” said King’s General Manager of IT, Andrew Baker.

“Kings has always been ambitious when it comes to introducing new features and technology solutions– both Leopard and Fujitsu have helped us realise these ideas.”

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software which integrates with the Fujitsu-produced TMS that Kings also uses. Leopard has also developed specific systems for Kings, including dedicated client systems for customers such as Sigma Pharmaceuticals’ On-Track system. Kings has also made significant gains through the use of Leopard’s permanent vehicle management system called Net Track. “In the past 12 months,

AUSTRALIA

confirmation at work sites as well as increased confidence of recipient and Geo-Fencing (through Google API license) with built-in notifications to send customer updates at various stages of delivery.

Kings incorporates Fujitsu NZ’s TMS system called Despatch Master, which the company employs for job bookings, job despatching and monitoring, customer-based website portal for job viewing, GPS, invoice management and more. “Fujitsu also provides us with the GPS mapping for operators to track drivers. The GPS information comes from the Leopard-based Leopard has developed according driver mobility software,” said to our request to expand the Baker. Working closely with Kings mobility software to be compatible to develop custom solutions, with iOS Apple and Android Fujitsu delivers a comprehensive for smartphones and tablets, host of modifications, which enabling much quicker technology include Web Track, enabling compared to the PDT devices on customers to enter their job the market,” said Baker. Partnering number, date and city to track with Leopard has also granted their job live, available as a mobile Kings exceptional abilities such app, complete with strong privacy as: photo capture features, and security measures and EDI providing benefits such as delivery integration where Kings’ systems w w w. k i n g s t r a n s p o r t . c o m . a u

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KINGS TRANSPORT & LOGISTICS drive efficiency, improvements, consumption and cost reductions.

And all of that is underpinned by the staff. We have many Factors Contributing to Steady employees who’ve been with the company for a long time, bringing Growth a great deal of experience to the Among other solid factors, the acquisition success that Kings has table. Our staff genuinely care about their work, our company and enjoyed over the years continues to help promote the steady growth our clients. They treat this business of the company. In addition, Kings like it’s their own,” said Cole.

Furthermore, Kings develops continues to not only win new and maintains strategic business but also retain those partnerships with companies to clients. “In our business, our further strengthen, enhance and philosophy and our approach increase their client offerings. is that you don’t win a contract “We have very strong strategic until they ask you back. We don’t partnerships in the steel and consider ourselves successful construction industries. We work until they roll the contract over with OneSteel, BlueScope, CSR with us,” said Cole. Kings does and concrete pre-cast businesses. everything within their power to We also have partnerships with go above and behind to exceed Sigma, Schweppes and other client expectations, deliver a FMCG and retail clients. We really robust continuous improvement want to grow our business along program and deliver customised need-based solutions, preventing with the strategic companies we’re involved with. On top of their customers from ever feeling that, because we are a diversified the need to open back up to the business, we work to protect market after their initial contract. ourselves against risk from any “We’ve a very strong focus on one vertical market. Strategically, delivering absolutely everything we look at our business like a we say we’re going to deliver. We receive job orders from their customers’ systems via FTP or Web Services.

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Company Information

“Our goal is to be the biggest and most successful metropolitan transport and logistics provider in Australia, Auckland and New Zealand.”

– Aaron Cole, Executive Director & Chief Operating Officer

INDUSTRY

Supply Chain HEADQUARTERS

XNotting Hill Victoria, Australia FOUNDED

1991 EMPLOYEES

stock share portfolio, balancing our business over a number of different areas, featuring partnerships with a number of businesses across different industries. We’re very strong and stable because of this,” said Cole.

“The ability for our business to win The Most Outstanding Contractor for Safety and Environment in the steel industry, as well as our recent achievement of The Most Outstanding Services Supplier for the Sigma Pharmaceuticals business, and our ability to confidently service both of these distinct areas with completely unique needs validates the strength of our business,” said Cole.

800 REVENUE

$190 Million PRODUCTS/ SERVICES The Kings Group are one of the top market leaders in the metropolitan transport and logistics market with offices across Australia in Melbourne, Sydney, Brisbane, Adelaide, Perth & Darwin as well as New Zealand in Auckland.

They specialise in local Metropolitan Urgent on Demand Couriers and Taxi trucks, 3PL Warehousing & Distribution, Permanent Vehicle placement and Company Owned Equipment Solutions.

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TRANSPES Borde

Focusing efforts on t

SA DELLA VOLPE ers without limits

n safety and quality of its operations, the company specializes in transporting and moving heavy shipments throughout the globe Written by: Flรกvia Brancato Produced by: Sergio Ambrosino 75

TRANSPESA DELLA VOLPE

D Traler axles

Turbine unloading

“Between January 2012 and December 2014, Transpesa moved over 112,657 tons of super heavy cargo without any severe accident or serious damage to the client’s equity” – Commercial Director of Transpesa Della Volpe, Raphael Boaventura 76

February 2015

uring expansion of the energy sector, mainly the implementation of hydroelectric, thermoelectric, steel and petrochemical plants and industrial complexes in Brazil, for over 50 years Transpesa has been operating in the procurement of road transport in exceptional indivisible cargo. Specialized in the transport and mobility of heavy and super heavy cargo up to 500 tons (on highways) and above 1500 tons (in internal movements), from the start of the 1980s the company has been considered one of the major heavy cargo transport companies in Latin America.

In 1985, the company expanded its operations to the five continents, and began posting representatives in the main ports of the Americas, Europe, Asia and Africa, together with “Turn-key” operations for its clients.

Transpesa has one of the largest fleets of transporters for super heavy cargo such as gondolas, beams and especially modular axial lines with a capacity of 45 tons per axis.

PROJECTS From its foundation, the company has participated in the country’s largest infrastructure projects. Among these we can highlight the HEP Tucurui, HEP Itaipu, TEP Rio de Janeiro, TEP Norte Fluminense, TEP Bahia, TEP Fortaleza, among others. Meanwhile abroad, some projects conducted by Transpesa include Ralco, in Chile; La miel, in Colombia; and Caruach, in Venezuela.

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Recently also other large scale and complexity projects were conducted, including multimodal transport, as is the case of the CPTM projects and the São Paulo metro, where 780 passenger cars were transported in the modular hydraulic axis line for the CAF client.

Another event worth mentioning is the EI Madeira Project which included both the transportation of equipment by road, sea and river in national territory, and unloading and placement operations at the base of all units. The proud Commercial Director of Transpesa Della Volpe, Raphael Boaventura, quotes various other procedures conducted by the group: “We also conduct locomotive engine, router and rail attachment transport; the

198 tons traler leaving Ceasa Port – Manaus, AM w w w. t r a n s p e s a . c o m

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assembly of various ceramics plants including dam verticalization; as well as transformer transport by sea and road.”

OPERATIONS In a sector with a high risk of accidents due to the complexity of transport and cargo handling, one of the main benefits offered by Transpesa is a low rate of claims, because of the company focus on the safety of its employees and that of the transported parts. The Commercial Director states that the number of accidents is very low in relation to the volume of cargo transported. “Between January 2012 and December 2014, Transpesa moved over 112,657 tons of super heavy cargo without any severe accident or serious damage to the client’s equity,” he explains.

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Transformers road transportation from Santos (SP) to Araraquara (SP)

The evidence for quality and good results of the company was obtaining the ISO 9001-2000 certificate, which motivated the company even more to continue investing in the improvement of its processes and in keeping strategic 80

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collaborators and partners. Since the implementation of the quality management system (applied and managed by employees trained by the company), the institution is committed to the continuous improvement of its processes, always seeking to achieve the fastest possible customer service with safety, apart from the higher profitability of processes. w w w. t r a n s p e s a . c o m

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TRANSPESA DELLA VOLPE

GOLDHOFER HEAVY-DUTY MODULES

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Goldhofer products are the result of over 300 years of investment, development of new technologies, and perfection of our customer service. One thing is absolutely clear; Economy is ultimately a function of high resale value, long term durability, and safety. This is what we stand for and promise.

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14.01.2015 08:44:43

NEW BUSINESSES Transpesa continuously invests in light of the growth of the special cargo market with a focus on the Energy Sector (Hydroelectric, Thermoelectric and Wind Energy) and in the Oil and Gas market which are showing considerable businesses promise. With regard to growth forecasts, Boaventura is adamant: “the growth trend for the next three years is based on wind energy (transformers for wind farms and transmission lines). To a smaller extent, but also with great opportunities, we have large hydroelectric projects such as Tapajós and its transmission lines”.

In terms of technology and investment related to fleet management, the company developed specific software for controlling its operations.

With regard to equipment, there are continuous investments being made in STHP/SL hydraulic modular sets with a capacity of 45 tons/axis.

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Company Information INDUSTRY

Heavy transport and cargo handling of heavy duty HEADQUARTERS

Itaquaquecetuba, São Paulo - Brazil E S TA B L I S H E D

1963 PRODUCTS / SEVICES

Heavy transport by road, sea and inland waterway and lifting loads

When I ask: what about the future? Boaventura answers that: “we plan to double revenue from 2014 to 2017, maintaining a growth of 5 to 10 percent in the years 2018 and 2019. The main challenge in the sector is overcoming the crisis the country is experiencing in 2014 and in early 2015. Due to this factor, Transpesa has sought to work on a smaller number of projects, which are nevertheless projects of higher profitability and lower risk, since any failure during the crisis period may be crucial to the survival of the business.”

MANAGEMENT

Maria Cristina Zuppardo: Financial Administrative Director Antonio Carlos Zuppardo: Operacional Director Raphael Boaventura: Commercial Director

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VIA BAHIA:

A COMPANY TO WATCH AMONG THE THREE LARGEST HIGHWAY CONCESSIONARIES IN BRAZIL Adopting standards of quality, safety and comfort, the group is a reference for road management in the Northeast

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long with the mission of guaranteeing the top quality of infrastructure and services along the highways under concession, maintaining environmental awareness, maintaining an excellent relationship with users and collaborators, and meeting the expectations of its shareholders, VIABAHIA works as a stock company, created by two strong companies with extensive experience in highways and heavy engineering: the Spanish firm Isolux Corsán Concessiones S.A. (70 percent share) and the Brazilian company Infravix Participações Ltda. (30 percent share).

Considered one of the three largest road concessionaires in terms of size (680,6 km), VIABAHIA has managed, since October 2009, the stretch of BR 324 – between Salvador and Feira de Santana – and the section of BR 116, between Feira de Santana and the state line with Minas Gerais. The roads management includes provision of public services and conducting

BR-116, km 432 86

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Recovery work (before and after)

BR-116, km 658,2

works, covering the implementation of recovery, maintenance, surveillance, conservation, and operations services, together with highway expansions and improvements, as was presented in the Highway Exploitation Program – PER. CHALLENGES AND SAFETY Characterized as one of the most difficult concessions in terms of management from over 50 Highway Concessions in Brazil (including Federal and State concessions) VIABAHIA is always on the lookout for safety and quality.

The CEO, Engineer José Carlos Navas believes that, in addition to the large volume of works to be performed, the cultural issue of this region of Brazil also is a challenge for the process in its entirety. “In addition to having the largest expanse of single carriageway highways with a provision

BR-116, km 431,6 Before and after

BR-116, km 757,5 Before and after

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BR-116, km 428,4 after work was done. Bridge over JacuĂ­pe river.

of duplicating these in their entire length (520 kilometers), levying charges for provided services, conducted through toll collecting from users, is still a novelty. Truth be told, the Highway Concession program is still a rarity in the North and Northeast regions of the country,� he explains.

Apart from complying with the obligations established in the Concession Agreement, whose benefit is providing adequate conditions of comfort, fluidity and safety for its users, another fundamental objective of the concessionaire is reducing the number of registered accidents, especially those more severe accidents which result in victims (especially fatal accidents).

Within the works aimed at reducing accidents, apart from successive educational campaigns, other prominent examples include the construction of 37 pedestrian crossing bridges, distributed throughout the entire length of the concession; the installation of concrete barriers and lighting along the central strip of the BR-324 highway; the installation w w w. v i a b a h i a s a . c o m . b r

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BR-116, km 444,3

of metal fenders in the remaining recommended points as per Norm ABNT NBR 15486/2007; and the already finalized installation of electronic speed controllers in the entire System, aimed at reducing the excessive speeds which are responsible for the majority of the reported accidents.

Above all, the CEO stresses the positive results of all these important actions. “There was a 15 percent reduction in fatalities in 2012 as compared to 2011 and 26 percent in the number of fatalities for 2013 compared to 2012.

All this because of the quick service provided by rescue and pre-hospital care teams, plus all the

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BRAZIL

BR-116, km 428,7

improvements to the road conditions,” he said.

INTEGRATED MANAGEMENT SYSTEM - SGI VIABAHIA was approved by Germanischer Lloyd – GL (the Certifying Organization Accredited by INMETRO) for the certification of its Integrated Management System (IMS) – Quality and Natural Environment, in accordance with ISO 9001/2008 and ISO 14001/2004 in the management of operations on its concession highways, through the user support systems (light and heavy winch, traffic inspection, tank trucks, trucks for animal removal, rescue and pre-hospital care, ICU, toll, monitoring highways, engineering, road maintenance and road safety). w w w. v i a b a h i a s a . c o m . b r

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Operational Control Center

“This system is unheard of in Bahia and, apart from recycling of 1.5 to 2.5 kilometers of asphalt per day, reduces the extraction of natural resources” – CEO, Engineer José Carlos Navas 92

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From its founding, the company uses its IMS in order to guarantee the quality of the infrastructure and services. Furthermore, the company seeks to be the reference in road management of the Northeast, through the modernization of highways under its concession, the protection of the environment, and adopting quality, safety and comfort standards which address the interests of the related parties.

Regarding the application of the rules dealing

BRAZIL

with environmental quality management, safety, occupational and social responsibility systems the following programs have been established: change management; training, awareness and competence; document and data control; surveillance, conformity measurement and assessment; nonconformities, corrective and preventive actions, among others.

TECHNOLOGY, PROJECTS AND THE NATURAL ENVIRONMENT Continuing with the structural recovery services of the surfaces on highways BR-324 and BR-116, from October 2014, VIABAHIA has used the process of recycling asphalt paving. The method used in this stage of w w w. v i a b a h i a s a . c o m . b r

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VIA BAHIA

CEO, Engineer José Carlos Navas

“There was a 15% reduction in fatalities in 2012 as compared to 2011 and 26% in the number of fatalities for 2013 compared to 2012” – CEO, Engineer José Carlos Navas

Recovery work BR-116, km 907,9 94

February 2015

works consists of partial or total reutilization of existing materials in the redressing and/or base of the highways with the use of modern millingrecycling machines or recycling stabilizers.

“For the realization of this service, VIABAHIA

BRAZIL

uses an 80 meter long machine which weighs approximately 110 tons. This system is unheard of in Bahia and, apart from recycling of 1.5 to 2.5 kilometers of asphalt per day, reduces the extraction of natural resources,” Navas explains.

The equipment has the capacity to process up to 500 tons of recycled material per hour and it takes over 30 people to operate. The use of this method aims to minimize environmental impacts which result from traditional paving techniques and to improve the asphalt’s durability.

The main development which can be highlighted during these first five years of the Highway Concessions is the duplication of 76 kilometer stretch of the BR-116 highway. Out of this length, 63 km have already been finished and delivered for normal traffic circulation. The remaining 13 km are waiting legal decisions which will allow restarting the works. Altogether, the investment works are worth around R$300 million.

Navas confirms that the company’s plans for the next five years include as a main objective the continuation of the duplication process on highway BR-116. “Our investment is based on the Highway Exploitation Program, used as the basis for the Concession Agreement. The main focus of VIABAHIA investment is the continuous improvement of services provided to highway users. Investment in 2014 exceed R$ 330 million,” the CEO concluded.

Company Information INDUSTRY

Road management HEADQUARTERS

Salvador, Bahia - Brazil E S TA B L I S H E D

2009 EMPLOYEES

800 PRODUCTS/ SERVICES

Road management, works and services to users MANAGEMENT

José Carlos Navas Fernandes: CEO Pedro Achkar de Mendonça Pinto: Associate Director

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E20001-F150-M117-V1-7600

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