carib cement company...corporate profile . for the past fifty years, carib cement has been the...

CARIB CEMENT COMPANY

EXPANSION AND MODERNIZATION PROGRAMME

CARIB CEMENT GROUP OF COMPANIES

Corporate Profile Expansion and Modernization

Programme Post-Implementation Performance Stakeholder Relationship Management

Agenda

Caribbean Cement Company Limited includes itssubsidiaries,

Jamaica Gypsum & Quarries Limited;

Rockfort Mineral Bath Complex Limited

and Caribbean Gypsum Company Limited

The Group’s principal activities are the manufacture and saleof cement and the mining and sale of gypsum and pozzolan.

Corporate Profile

For the past Fifty Years, Carib Cement has

been the Cement Industry of Jamaica

Our Management Systems

EXPANSION AND MODERNIZATION

PROGRAMME

Local market is growing – CAGR of 5.1% The company needed to expand to drive

fixed costs down The company needed to modernize to drive

variable costs down Carib Cement is a Jamaican icon and a

significant contributor to GDP To ensure a sustainable enterprise

Why Expand & Modernize?

Expanded Plant

Clinker Manufacturing capacity to 1.3 million tonnes per annum – present capacity is 620 thousand tonnes.

Cement Manufacturing capacity to 1.8 million tonnes per annum – present capacity of 1.05 million tonnes.

Upstream and downstream plant to match the production capability of the major components

Improvements in Environmental Performance Emission levels (NOX, SOX and particulate) that

meet Jamaican and International standards. A reduction in the consumption of process water by

224 million litres

Improvements in Energy Efficiency Reductions in specific fuel and power consumptions

to bring them in line with world class levels.

Modernized Plant

Project Approach Considerations

CCCL is a publicly traded company and part of the TCL Group – also publicly traded.

There are formal procedures and guidelines for the procurement of services, i.e. tendering rules.

A philosophy that ancillary equipment are what determine the ultimate reliability of a plant.

Control of project execution is to be retained in the company for the purpose of quality and stakeholder approaches.

PROJECT DESIGNCCCL

Main Equip. Supplier

AUX. EQUIP. SUPPLIERS CONTRACTORS

Local Eng. Firm

PlantDesigner

EQU

IPM

ENT

SELE

CTIO

N

INSTALLATION DESIGNEQUIPMENT SELECTION

INST

ALLA

TIO

N D

ESIG

N

EQUIPMENT: SPECS, TENDERING, SELECTION, ORDERING, DELIVERY

INSTALLATION: DESIGN, TENDERING, SELECTION, CONTRACTS, CONSTRUCTION

EQUIPMENT SELECTION

EVALUATION METHODOLOGY

LIFE CYCLE COST

The performance rating along with the LCC will then be combined in a ratio.When cost is placed as the denominator then the factor represents the units ofvalue per dollar of cost. Hence, the proposal with the highest performance/costratio also has a superior expected performance.

• As such, the Performance/Cost Ratio takes into account:

• Operating Cost

• Maintenance Cost

• Utilities Cost

• Capital Allowance

EQUIPMENT LIFE CYCLE

• Physical: The physical life of a facility is the period from construction to the time when it is physically derelict.

• Economic: The economic life of a facility is the point in time at which continued occupation of a facility is considered to be the least cost effective option.

• Functional: The functional life of a facility is the period from occupation to when it ceases to be functionally efficient or ‘fit for purpose’. Many users/occupiers functional reuse/flexibility is a real issue. Functional and economic obsolescence are often closely related.

• Technological: This occurs when a facility or its components are no longer technologically superior to alternatives and replacement is undertaken because of expected lower operating costs or greater efficiency

• Social: Community values and fashion can lead to the need for facility renovation or replacement, such as environmental and social concerns which give rise to the obsolescence of processes and products.

• Legal: Revised safety regulations, facility standards, compliance issues or emerging case law may lead to legal obsolescence.

PERFORMANCE ELEMENTS

Operability - an assessment of the operating features of the different systems as regards its ability to meet thespecified performance parameters and provide a product of lasting quality over the long term. The main issuesconcerned with for this performance element are:

v Production Capacityo Rated capacityo Maximum operational capacityo Robustness of design - ability to meet desired output with varying inputso Production rates with new and worn componentso Operation dutyo Level of automation

v Energy Efficiencyo Specific energy consumption: fuel and electricity where applicableo Installed powero Cooling water requirementso Compressed air requirements

v Environmental Performanceo Levels of expected emissions – NOX, SOX, Particulateo Emission attenuation systems proposed by vendors if expected emissions are exceededo Safety protection systems – design

v Product/Process Characteristicso Solid and liquid (fluid) output materials temperatureso Product sizeo Product residueo Maximum material moistureo Input feed size limitationso Material recirculation system design

PERFORMANCE ELEMENTS

Durability/Reliability - the method and nature of construction, applicability to localconditions, degree of redundancy and other design philosophyconsiderations, technological and obsolescence levels. The main issues concerned withfor this performance element are:

v Life expectancy of componentso Life expectancy of bearingso Life expectancy of liners and wear coatingso Design and lining of feed and discharge chuteso Projected or guaranteed availabilityo Thickness of liners

v Suitability of design to conditionso Materials of constructiono Design of wearing componentso Design adherence to required standards

v Systems to provide operational efficiencieso Technological innovationo Use of automated systems e.g. Lubricationo Systems to deal with material blockageso Shutdown protection systems

PERFORMANCE ELEMENTS

Maintainability - the ease with which the system will be maintained in the future. Themain issues concerned with for this performance element are:

v Ease of carrying out maintenanceo Accessibility to wear componentso Use of built-in special toolingo Use of modular componentso Bearing types usedo Grinding forces employedo Types of joints – welded, boltedo Number of redundant systems, serviceable while system in operation

v Use of design to reduce maintenance requirementso Speed of rotating componentso Bearing types usedo Types of power supply systems proposed – clean powero Compatibility of electrical/instrumentation systems proposed with existing systems

v Maintenance informationo Standardization of spareso Manuals and Documentation

v Provisions for maintenance safetyo Ability to site platforms and cranes in close proximity to maintenance pointso Space around equipment for maintenance personnel and tools

PERFORMANCE ELEMENTS

Support - is concerned with transfer of technology and the future support and assistancethat is perceived from the supplier. The main issues concerned with for this performanceelement are:

v Equipment performance guarantees and warranteeso Vendo r warrantieso Vendo r guaranteeso Vendo r proposals for if warranties and guarantees are not meto Vendo r’s equipment testing proposals

v Technology transfero Vendo r’s training programso Vendo r’s proposed hand over programo Vendo r’s proposals for counterpart participationo Programs for technology transfer

v Vendo r Support Networko Service Centres – numbers regionally and globally, number of service personnelo Proximity of centers and personnel, with respect to travel or other communicationo Language of closest service centreso Delivery times for spares

COST ELEMENTS

Capital Costs

Capital costs shall include the following:

Purchase cost Civil foundation costs Erection and commissioning costs Training costs Cost of specialized tools and equipment Any other related cost to get the equipment into normal operating mode

Operating Costs

Operating costs shall include the following:

Cost of fuel/electricity Cost of oils and lubes Cost of personnel to operate Cost of maintenance labour and parts Cost for utilities, such as air, water Need for special service skills Cost of upgrades to meet future production requirementsAny other cost associated with the operation of the equipment

COST ELEMENTS (Life Cycle Costing, LCC)

Total life cycle cost (LCC) = Initial asset acquisition/capital costs (AC)

lessTax depreciation entitlements (TD)

plusOperating and maintenance costs (OC)

plusReplacement/disposal/upgrade costs (RC)

lessResidual/salvage value (RV)

= LCC

Typical LCC = (AC – TD) + (OC + RC) – RV

PYRO-PROCESSING EVALUATION

ELEMENTSupplier 1 Supplier 2

Proposal Four (4) Stage Preheater, XX Low NOx Calciner, Kiln - 3,250 MTD, 745 Kcal/Kg, Main Drive - 480

kW, Single Pinion & Girth Gear Main Drive.

Four (4) Stage Preheater, Low NOx Calciner, Kiln - 3,250 MTD, 740 Kcal/Kg, Main Drive - 450 kW.

Performance Evaluation Operability (x/10) 25% 6.64 7.18Durability (x/10) 25% 6.20 7.20Maintainability (x/10) 25% 7.00 7.00Support (x/10) 25% 7.00 7.00Overall Rating (x/10) 6.71 7.10

Cost Evaluation Equipment Cost $7,025,362 $7,133,000Freight $317,234 $317,234Estimated Installation $9,511,153 $8,553,078Total Installed Cost $16,853,749 $16,003,313LCC, 10 year $50,111,760 $48,483,903

Performance/Cost Rating (x 10^9) 134 146

VENDOR

CONSTRUCTION PLANNING

EVALUATION METHODOLOGY

Constructability Challenges

Jamaica is not an industrialized environment

There is not a supply of large, industrial contractors, equipment or tools

The plant is situated next to “inner-city” communities with low levels of “certified” workers and high levels of unemployment

The performance on prior expansion projects was dismal – schedules extended by years, work stoppages, loss of control of the site, army and national police required to complete the construction effort

Construction Concerns

Normal project concerns – time, cost and quality

Security concerns – personal and equipment/tools

Safety concerns – normal worksite ethics does not match the safety requirements for a construction site that would peak in excess of 800 people

Stakeholder concerns – expansion of a cement plant could be viewed negatively by some while criminal elements would view it as an opportunity to extort construction contractors or employees

Construction Planning

LOSS PREVENTION STRATEGIES

SAFETY AND SECURITY

Foundation of HSE Systems

Start

as you

want to

Finish

Demonstrated Leadership and Commitment Knowledge & Skills Training Promotion & Motivation Systems & Enforcement

PILLARS OF THE SAFETY PERFORMANCE

Safety & SecurityWe maintained a safe, secure site:

Pre-employment medical, drug and security screeningStrict adherence to safety policies on site to achieve

“NO ACCIDENTS, NO INCIDENTS” Strict enforcement of security policies on siteZero tolerance to safety and security breachesDaily discretionary searches (Metal Detectors included)

Job Safety Analyses and Lifting Plans for all jobs

Safety Strategies

JCF Representation JDF Representation Site Fencing Separate facilities for contract staff Separate access through the East

gate There continues to be no budget for

community policing

Security Strategies

Human Capital Development & Technology Transfer

Internal Skill Development Programme HEART Training programme for Artisans Professional programmes for Engineers Conferences/Seminars for Professionals Comprehensive Technology Transfer Programme

developed with FLS

Community Based Training Programme Programme developed with HEART Institute Provides skilled construction/erection workers for the

project Maximises local and community content

250+ Graduates 80% employed on the projectContinuing employment programme in place

Community Skills Building Programme

CONCRETE WORKS

FOUNDATIONS AND SUPERSTRUCTURE

Strength Mix design Maximum Temperature at placement Maximum core temperature during curing Maximum difference between core & exterior

Concrete Design Requirements

Planning for Concreting

Area

Proposed Date

Summary of Pour

Requirements

Details of Pour Plan

Concrete Control

Date & Time

Design Mix Specifications Actual Mix Specifications

Truck Number

Concrete Control28 Mpa

29

3728

7

Preheater Column B2

Carib Plus

The islands of the Caribbean are small

The effects of the Marine environment are seen throughout the islands

Coastal structures are subject to “sea blast”. Up to 50 miles from the sea the effects of sea spray are evident.

Typical negative effects of these phenomena on concrete structures

Regional Conditions

Addition of water to cement liberates lime

Carbon dioxide in air penetrates concrete and reacts with lime, forming Calcium carbonate

Calcium carbonate migrates to surface, as milky white material

Efflorescence

Passive layer formed on steel under normal conditions

Penetration of salts, particularly Chloride (Cl-) through matrix

Passive layer destroyed by reaction with Cl-

Steel now subject to corrosion.

Corrosion of internal steel

Usually as a result of expansion within the concrete

Results in cracks, stains, then spalling

Spalling of Concrete

Pozzolans - materials which contain constituents which combine with lime to form stable insoluble compounds with cementing properties:

Natural Pozzolans: silico-aluminate molten magma, diatomaceous earth

Artificial pozzolans : fly ash, rice hulls

What are Pozzolans?

Pozzolans Reaction and Concrete Performance

Pore SizeDistribution

28 90 360

Pore refinement fills the capillary space in concrete as the pozzolanic reaction proceeds.

After a year all the larger capillary voids in the pozzolan cement concrete are filled.

Concrete becomes increasingly impermeable and durability is increased.

Days

Concrete Strength Performance

Spec: 35Mpa7 Day: 34.94Mpa

28 Day: 42.97Mpa

Concrete Temp. Performance

Highest temp. under 65oC

ERECTION WORKS

STRUCTURAL STEEL, MEI AND REFRACTORY INSTALLATIONS

EXPANSION AND MODERNIZATION PROGRAMME

Clinker Expansion Project

Kiln No.5 Project

Main Equipment – FLS Supply:

FRM 38-190 VRM: 235 mtph

Four stage suspension low drop preheater

with inline low NOX calciner

Ø4.55m ROTAX-2, rotary kiln, 2,800 mtpd

SF 3x4 crossbar cooler

Kiln/Mill and cooler vent fabric filters

Kiln No.5 Project

Scope of Construction:

100,000m3 of excavation

19,000m3 of reinforce concrete

Over 5,000 tonnes of structural steel

and reinforcing bar

7,000 tonne raw meal silo

2 million man-hours worked

Jamaica Institute of Engineer - Project of the Year Award 2009 – Kiln No.5 Project

• Safety• Technical Input• Project

Approach• Engineering

Difficulty• Local

Engineering Input

• Social Impact• Schedule

Management• Cost

Management

Cement Expansion Project

Cement Mill No.5 Project

Main Equipment – Loesche Supply:

LM-46 2x2 VRM: 110 mtph

Cement mill main baghouse

Mill feed bin and material conveying

system

Main process fan

Hot gas generator

Photos

Photos

Photos

Photos

Photos

ClinkerManufacture

CementGrinding

PLANT PERFORMANCE

POST IMPLEMENTATION RESULTS

Plant Startup

Kiln 5 started in August 2008

Mill 5 started in August 2009

Both units quickly demonstrated their ability to

meet the efficiency targets

Kiln 5 has a record monthly production of 87K of

clinker (equivalent to 100% OEE)

First

1.497

1.309 1.313

1.241

1.334 1.334

1.235

1.036

893849 828 841 832 838

798

0,0

200,0

400,0

600,0

800,0

1.000,0

1.200,0

1.400,0

1.600,0

1.800,0

2.000,0

Jan-

08

Feb-

08

Mar

-08

Apr-

08

May

-08

Jun-

08

Jul-0

8

Aug-

08

Sep-

08

Oct

-08

Nov

-08

Dec

-08

Jan-

09

Feb-

09

Mar

-09

kCal/kg

Expanded & Modernized Plant

Specific Fuel Consumption down 30%

137,4 130,1

139,0 137,0 143,2

132,8

161,2

146,7

121,7

108,5 101,2

96,5 101,4 100,3 99,9

0,0 20,0 40,0 60,0 80,0

100,0 120,0 140,0 160,0 180,0

Expanded & Modernized Plant

Specific Power Consumption down 35%

0200400600800

1000

2006 2007 2008 2009

Resu

lts

mg/

l

Years

West Drain : Average Annual Total Suspended Solids Trend (TSS)2006 - 2010

Target Result

Actual Results

0,0

100,0

200,0

300,0

400,0

2006 2007 2008 2009

Resu

lts

mg/

l

Years

Central Drain : Average Annual Total Suspended Solids (TSS) Trend 2006 - 2009

Actual results

Target Result

STAKEHOLDER RELATIONS MANAGEMENT

PROJECT IMPLEMENTATION

Why Stakeholder Management?

Carib Cement’s Expansion Programme has attracted national attention

The experience of the last expansion demonstrated widely diverse interests – plant is located next to inner city communities

It represents best practice in project management

It can proactively assure project success and usefulness

What is a Stakeholder?

Stakeholders are individuals, groups, or organizations :

that have an interest in the project who may be positively or negatively

affected by the project who can mobilize resources to affect

its outcome in a positive or negative way.

What is Stakeholder Analysis?

Stakeholder Analysis is the formal, systematic, identification of a project’s stakeholders, an assessment of their interests in a project, and an assessment of their ability to impact the successful completion of the project.

What is Stakeholder Relationship Management?

Stakeholder Relationship Management was formally employed by CaribCement, utilizing the basic tenets of Stakeholder Analysis to bring a professional management approach to fostering positive relationships with the stakeholders of its Expansion and Modernization Program in order to promote successful completion of its initiatives.

Developing the Stakeholder’s Matrix

High Power

Low Power

Low Interest

HighInterest

In FavourOpposed

ISSUE

Low Interest

HighInterest

High Power

Low Power

Allies Sympathizers

Supporters Friends

High Power

Low Power

Low InterestHigh Interest

Stakeholder’s Matrix

Key Stakeholder Meetings

Listing of Key Stakeholders: Government and executive agencies Parliamentary Opposition Community Organization Leaders Statutory Agencies Employees Management and Shareholder Representatives Investors and Financiers

Stakeholder Planning

Stakeholder Plans were developed concentrating on the following:

Who to communicate toWhat information to communicateHow to communicate the information

Open House and Town Meeting

Carib Cement’s E&M has significantly improved operatingefficienies

The plant’s capacity now exceeds projected local marketdemand

Continued improvements will focus on making a variety ofproducts available to the customer, with increasingaccessibility for the customers

The strategies employed in the E&M Programme resulted ina very successful implementation despite a very challengingenvironment

Summary

Thank You