world cement - · pdf fileof the lm 46.2+2 cs loesche mill, which is still in operation. in...

TWO PROVEN TECHNOLOGIESIN ONE SINGLE SYSTEM.

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DeCONOx: TWO SOLUTIONS IN ONE PLANT

At the Kirchdorf cement plant, Scheuch is implementing an innovative

process for industrial exhaust air cleaning: nitrogen oxides (NOX) and

organic carbon compounds (VOCs) are reduced at the same time in a

single plant. An additional advantage of this is that the new process uses

waste heat and does not require additional energy.

CONTENTS FEBRUARY

Palladian Publications Ltd15 South Street, Farnham, Surrey GU9 7QU, ENGLAND

Tel +44 (0)1252 718999Fax +44 (0)1252 718992

Email: [email protected]: www.worldcement.com

Volume 47: Number 02

February 2016

ISSN 02636050

THIS MONTH’S COVER

TWO PROVEN TECHNOLOGIESIN ONE SINGLE SYSTEM.

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25 29WORLD CEMENT REGULARS

03 Guest Comment

05 News

11 Keynote: Beyond TrainingJohn Kline and Charles Kline, Kline Consulting, LLC, US, outline how to ensure that training delivers the maximum return on investment.

REGIONAL REPORT: SOUTHEAST ASIA

18 A Positive Outlook for Southeast AsiaRebecca Bowden takes a look at the cement industry in the countries of Southeast Asia.

25 Tuban Projects Prove a SuccessRamiro Velasco, Holcim Indonesia, Indonesia, and Gregor Wulff, thyssenkrupp Industrial Solutions, Germany.

GENERAL INTEREST

29 Explosion ProtectionJohannes Lottermann, Rembe GmbH, Germany.

35 Remote Maintenance Systems: Part TwoDominik Aufderheide & Luigi Di Matteo, Di Matteo Group, Germany.

BURNERS, KILNS, PREHEATERS, PRECALCINERS, THERMOGRAPHY

41 Fuel-Mix ChallengesTahir Abbas and Michalis Akritopoulos, Cinar Ltd, UK.

49 Manual or Automatic Monitoring?Gildas Chauvel, HGH Infrared Systems, France.

FILTERS, ESPs, BAGHOUSES

53 DeCONOx: Two Solutions in a Single SystemAlois Hermandinger, Scheuch GmbH, Austria.

57 Facing Tougher RegulationsGiuliamaria Meriggi, Redecam Group.

VRMs, ROLLER PRESSES AND CEMENT GRINDING

63 A Rolling SuccessHirofumi Kasai and Tatsuya Hinauchi, UBE, Japan.

69 Model Predictive Control for SAG MillingMichael Tay, Rockwell Automation, USA.

75 Industry-Specific Energy Management SoftwareDirk Löbbering, KIMA Automatisierung GmbH, Germany.

POWER AND AUTOMATION

78 Mill Efficiency OptimisationChristophe Latchoumanin, Ibitek Group, France.

BAGGING AND PACKING

83 Bagging and Packing Roundup

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On 2 December 2015, the European Commission launched its circular economy package: ‘Closing the loop – An EU action plan for the Circular Economy.’ Many of the proposals put forward will have an impact, one way or another, on the cement and concrete industry. When looking at it from the cement perspective, the package contains

several elements which we can support. First of all, the recognition granted to energy recovery as a solution for non-recyclable waste and the material recycling which occurs at the same time as energy recovery. This is particularly important for our sector as, not only do alternative fuels and biomass account for 39% of our fuel mix, the mineral component of the waste is also recycled in our production process as a raw material. Indeed, by taking into consideration material recycling in the cement industry, it is possible to boost the recycling rate of certain municipal waste. In recent years, about 5% of raw materials used in the production of clinker in Europe consisted of recycled alternative raw materials and ashes from fuel.

When it comes to concrete, we fully support the call for sorting systems for construction and demolition waste. Fortunately for concrete, recycling is not technically difficult, but better processes for the demolition, collection and sorting of C&DW will help to provide a consistent supply of good quality material from C&DW. After this waste material is sorted, the concrete waste can be recycled either in road construction or

back into new concrete, depending on which is the most sustainable option.

One area which we do believe needs more attention is the landfilling of waste. The cement industry supports a ban on the landfilling of recyclable and recoverable waste. Today, large disparities do exist between Member States with respect to their waste management performance. However, banning landfills would require capacity building to implement waste collection, separation and pre-treatment systems, in order to be able to divert waste from landfill.

Whilst we do recognise that EU funds could contribute to a reduction in landfilling by encouraging other waste treatment options, it is important to ensure that full use is made of existing waste management capacity. This is where co-processing in the cement industry has a clear role to play, as it can provide a solution for a certain amount of the waste currently being landfilled. There are currently around 210 kiln-operated cement plants distributed across the EU, with at least one cement plant in virtually all Member States. Existing cement plants that co-process waste should thus be taken into consideration, as a waste treatment solution for residual waste from landfills, before funding and developing unnecessary, excessive capacity.

Clearly, our sector has much to offer in terms of helping the EU achieve its circular economy goals. We fully support any proposal which aims to make the most of Europe’s resources. At the same time, policymakers must recognise and make the most of what is already taking place in many industries. As such, all forms of recycling should be encouraged, whilst at the same time assessed, in order to ensure that the best environmental, social and economic outcomes are achieved.

Koen Coppenholle, CEMBUREAU Chief Executive

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WORLD NEWS FEBRUARY

NEWS HIGHLIGHTS

To read more about these articles go to:

• FLSmidth awarded contract by CRH Group

• Ohorongo Cement awards bursaries

• Six cement makers fined for price fixing

• UltraTech announces Q4 financial results

• Hanson UK appoints new CEO

February 2016 / 5World Cement

India 14th NCB International Seminar successful

Worldwide Loesche supplies mills in Turkey and China

Loesche has won the order from Batisöke Söke Cimento Sanayii TAS for a new 500 tph LM 56.4 VRM to grind raw material at a fineness of 12% R 90 µm. The Turkish cement company has ordered the mill for its Söke Cimento Sanayii TAS cement plant, having had success with Loesche mills ordered for a project some 25 years ago. The plant is installing a new kiln line in an existing plant, presenting a particular challenge for the contractors.

The new mill has a 3400 kW gearbox and the scope of supply includes magnetic separators, metal detectors, refined parts for the mill fan and the engineering of the cyclone. The lead time for this vertical roller mill is 10 months.

The new kiln line will also be fitted with an LM28.3 D coal mill and a LM 53.3+3 CS cement mill. The coal mill will grind 40 tph at a fineness of 5% R 90 µm and has a 700 kW gearbox. The LM 53.3+3 CS mill has a capacity of 200 tph CEM 1 with a fineness of 3500 Blaine and a 4700 kW gearbox. The commissioning of the new mills in the Batisöke

Söke Cimento Sanayii TAS cement plant is planned in 2Q17.

Additionally, Loesche has announced that Tianjin Cement Industry Design & Research Institute Co. Ltd. has ordered two LM 53.3+3 CS Loesche mills for grinding clinker for the PT Semen Baturaja cement plant. Both of the mills have been designed with a capacity of 175 tph and material is ground to a fineness of 3400 Blaine. Each mill is fitted with a 4200 kW gearbox.

The lead time for the main components of the mill is 9 months and the gearboxes are supplied within 12 months. The commissioning of both vertical roller mills is planned for the end of next year.

The order follows a previous delivery, in 2012, of the LM 46.2+2 CS Loesche mill, which is still in operation.

In 2013, Loesche GmbH established the subsidiary company PT Loesche Indonesia with an office in Jakarta.

The 14th NCB International Seminar on Cement and Building Materials, held from 1 – 4 December 2015 at the Manekshaw Centre, New Delhi, was a great success, in terms of both participation and presentations, as well as the technical exhibition.

The seminar registered participation of over 1050 delegates from 15 countries. More than 180 papers were presented across 25 technical sessions, with two invited lectures by internationally renowned experts. The authors emphasised issues related to all areas of cement manufacture, blended and special cements, the performance and durability of concrete and emerging trends in building materials and construction practices.

They covered technical advancements in research and technology, and included case studies showcasing the opportunities and challenges presented by these, particularly regarding the co-processing of alternative fuels and the engineering properties of concrete. The technical exhibition included 122 stalls that showcased the latest technological developments.

At the event, National Awards for ‘Energy Efficiency’, ‘Environmental Excellence’ and ‘Quality Excellence’ in the Indian Cement Industry, as well as the awards for ten best technical papers, were presented by Shri Shailendra Singh.

EVENTS

February 20166 \ World Cement

FLSmidth has been awarded a contract by SOBOCE for an OK™ 36-4 cement grinding system to be installed at their Viacha cement plant, located 22 km outside the capital city of La Paz, Bolivia.

The scope of the supply contract includes cement grinding system equipment, engineering, and site advisory services.

This will be the first vertical roller mill for cement grinding in Bolivia, and will produce high strength cement with 5000 Blaine. At 4000 m above sea level, it will also have the highest installed elevation for any OK mill in the Americas. Additional scope of supply includes a longitudinal stacker, a sizer for gypsum and pozzolan, Airtech filter, Ventomatic® silos and packing plant.

Once installed, the new cement mill-grinding system and packing plant will allow SOBOCE to increase their production capacity to meet the demand for cement consumption in Bolivia.

FLSmidth installed the existing line at Viacha in the late 1990s and in 2010 an expansion project that enabled the plant to double their capacity. The awarding of the contract is evidence of the strong business relationship between SOBOCE and FLSmidth,

and the continued close collaboration and partnership between the two parties.

Commissioning of the project is set to be completed in 1Q17.

FLSmidth has also been awarded a contract by Lehigh Hanson Materials Ltd. for an OK 30-4 cement vertical mill to meet the increasing demand for cement in Canada. The mill will be installed at their existing Edmonton cement plant. Additional scope of supply includes a cement powder cooler, related process engineering and site advisory and commissioning services. Commissioning is scheduled to be completed in 2Q17.

A third contract, with Cementos Argos S.A, has also been awarded to the company for a new OK 33-4 cement mill system, which is to be installed at their plant in Sogamaso, Colombia, just 233 km from Bogotá. This contract marks the fourth OK mill purchased by Argos, and was awarded due to strong customer preference for the OK mill technology. The mill system will include cement storage, Ventomatic packing plant, MAAG gear, Airtech filters and auxiliary equipment. The project is expected to be commissioned in 3Q17.

Americas FLSmidth awarded three contracts

15 – 16 March 2016

8th Africa CemenTrade Summit

Kigali, Rwanda

www.cmtevents.com

11 – 17 April 2016

Bauma

Munich, Germany

www.bauma.de

19 – 21 April 2016

POWTECH

Nürnberg, Germany

www.powtech.de

12 – 14 May 2016

Cementtech

Nanjing, Jiangsu Province, China

www.cementtech.org

15 – 19 May 2016

IEEE-IAS/PCA Cement Industry Technical Conference

Dallas, Texas, USA

www.cementconference.org

20 – 22 June 2016

CBCi

São Paulo, Brazil

www.7cbci.com.br

HeidelbergCement has successfully issued debt certificates in the amount of y625 million.

Due to high demand, it was possible to significantly increase the issue volume from initially t400 million to g625 million. The newly issued debt certificates, with a maturity date of 20 January 2022, consist of two tranches: one tranche with a floating rate and the other with a fixed rate. The fixed rate tranche yields at 1.85% p.a. and the floating tranche at 1.5% p.a. over 6 months Euribor.

The proceeds will be utilised to pre-fund the upcoming Italcementi acquisition and thereby reduces the volume of the bridge financing from y3.3 billion to

g2.7 billion. The refinancing needs in the bond market decline to below g2 billion, correspondingly.

Issuance of the debt certificates was secured with the assistance of Landesbank Baden-Württemberg, Landesbank Hessen-Thüringen, and Raiffeisen Bank International.

As already communicated in the announcement of the Italcementi acquisition, the bridge financing should be refinanced by free cash flow, the sale of production sites and the issuance of bonds. The reduction in the volume of bridge financing thus also reduces the need for refinancing in the bond market by the same amount.

Europe Refinancing needs for Italcementi aqcuisition reduced

EVENTS


Construction projects across the South East of England will benefit from new operations being opened by Hope Construction Materials.

On the anniversary of its third year in business, Hope has announced advanced plans to open new depots – and extend existing sites – in Dagenham, Southampton, Stratford (East London), Theale (Berkshire) and Woodham (Buckinghamshire).

Use of the railway network features heavily in Hope’s plans, with four of the five sites able to receive raw materials (aggregates and cement) by rail. This follows the success of Hope’s new rail-linked cement, aggregates and concrete depot at Walsall in 2015.

Details of the latest developments – all of which are expected to be open for business during the first quarter of 2016 – are:

1. Dagenham: A new rail-linked cement distribution depot and state-of-the-art packing facility.

2. Southampton: A new ready-mix concrete plant and rail-linked aggregates depot to receive concreting

aggregate for this site and Hope’s other concrete plants in Hampshire.

3. Stratford: A new rail-fed aggregates depot adjacent to the Olympic park which is the result of a partnership with rail freight operator DB Schenker. Hope is bringing high quality crushed rock to the East London market as well as supplying its own depots in the area.

4. Theale: Already a rail-linked cement depot, the site is now home to a rail-fed aggregates facility and a ready-mix concrete plant supplying both materials to the Reading market.

5. Woodham: Part-way between Aylesbury and Bicester, Hope’s Woodham depot will supply ready-mix concrete across North Bucks.

Located in the Hope Valley, in the Derbyshire Peak District, Hope cement works originally opened more than 80 years ago and has played a major role in UK cement production ever since. Today the twin-kiln plant supplies more than 15% of the UK’s cement consumption.

UK Hope celebrates third anniversary

According to VDZ, the recently published ‘Environmental data of the German Cement Industry 2014’ is further proof of the efforts made by the German cement industry over the past year to make production as resource-efficient as possible and to further reduce emissions of relevance to the environment and the climate.

In 2014 the specific energy-related CO2 emissions per t of cement produced amounted on average to 170 kg of carbon dioxide, a figure slightly lower than in the previous year (2013: 173 kg). This latest reduction can be attributed to further process technology optimisation and a lowering of the clinker content of the cement thanks to the use of other main constituents such as blast furnace slag (granulated slag).

The increasing use of alternative fuels is of particular importance for the cement industry: the proportion of the fuel energy requirement accounted for by these rose again in 2014, reaching a figure of more than 63%. Substitute products were employed in place of approximately 2.2 million t of coal, thus saving around 2.1 million t of CO

2 as compared to the use of conventional hard coal. In this way, the German cement industry again made a contribution to the preservation of natural resources and the practical utilisation of substances from other processes in keeping with the German Recycling and Wastes Act in 2014.

A further reduction in the dust emissions of the cement works has been achieved over the past few

years, with today’s average figure being in the region of 10 to 20 mg/m³. Thanks to the stabilisation and ongoing optimisation of plant operation it also proved possible to again lower the level of nitrogen oxides (NOX).

In 2014 there were also ten plants with staged combustion in operation, as well as 36 employing SNCR processes and 2 using SCR technology. New, tighter limit values for nitrogen oxides and ammonia will nevertheless represent a substantial challenge for the German cement manufacturers over the next few years.

The regularly published ‘Environmental data of the German Cement Industry’ are based on the results of continuous emission monitoring and around 2000 single measurements each year. Collection of the data is supported by all member companies of VDZ, making it representative of the entire German cement industry.

20 German cement manufacturers with a total of 50 cement works are members of the German Cement Works Association. The sector generates an annual turnover of around t2.5 billion in Germany and employs approx. 7900 people. Since the association was established more than 135 years ago, its research work has helped to make cement production both competitive and ecological and contributed towards the development of high-quality concrete construction methods.

Germany Reduced emissions thanks to alternative raw materials and fuels according to VDZ

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IN BRIEF


Her Majesty the Queen has appointed Bestway Group Chief Executive, Zameer Choudrey, Commander of the Order of the British Empire. He was awarded his BCE as part of the Queen’s New Year 2016 Honours List, in recognition of his contributions to advancing Britian through his services to the UK Wholesale industry and the philanthropic work he engages in, both in the UK and abroad.

Lehigh Hanson’s Princeton Quarry has donated US$65 000 to Habitat to Humanity, to cover the costs of Johnston County’s next homebuilding project in Princeton. With employees having volunteered numerous hours on two previous project for the charity, the 2016 project, which is taking place on South Smithfield Street, is the third home project that quarry employees have been involved with.

In November, Menzel Elektromotoren helped to resolve a problem at a cement plant in Cambridge. Following the failure of both the mill drive and the existing reserve motor, the plant operators faced a full-scale production shutdown. They turned to Menzel with a request for a replacement motor. Three days later a new, identical motor with customised modifications was dispatched, avoiding a costly shutdown.

HeidelbergCement has started its Aggregates-CI programme (Continuous Improvement) in order to continuously optimise the operational and commercial working processes in the area of aggregates (sand, gravel and crushed rock). The new programme follows the margin improvement programme, CLIMB Commercial, that successfully concluded at the end of 2015. Aggregates-CI will be implemented at all of the more than 500 production sites worldwide. The process enhancements shall lead to sustainable result improvements of €120 million by the end of 2018.

The predecessor programme, CLIMB Commercial, which was started at the end of 2012, focused on margin improvement through optimisation of the product and customer mix in aggregates. The original target of g120 million result improvement by the end of 2015 was substantially exceeded.

Germany HeidelbergCement’s Aggregates-CI programme

Fire officials are investigating what caused coal igniting inside a mill at the Essroc Cement plant in Lower Nazareth Township.

The fire ignited on 10 January as 10 employees were working at the plant. It was controlled within minutes by firefighters from the Hecktown Volunteer Fire Company.

Firefighters were at the scene for over two hours ensuring all the electricity had been turned off and the plant was secured.

There were no reported injuries to Essroc employees or firefighters. Officials remained on site the following day estimating how much damage the mill sustained during the blaze.

USA Essroc Cement mill suffers fire damage

Cementir Holdings has announced that it has been notified by its subsidiary, Cementir Italia SpA, that the Board of Directors of Sacci SpA has decided to include Cementir Italia’s offer for the acquisition of one of Sacci’s business divisions as an integral part of Sacci’s composition with creditors. This replaces a previous offer made by another industry operator. The offer covers Sacci’s operations in the cement, ready-mixed concrete and transport sectors, and was submitted by Cementir Italia on 26 November. It was declared to be binding on the condition that it was formally made an integral part of Sacci’s composition with creditors by 31 December 2015.

Sacci’s composition with creditors will be submitted to the vote of creditors at the hearing, which was originally set for 18 January 2016, but has since been postponed to 21 March 2016. If the vote is favourable, then it will be subject to endorsement by the Court of Rome. The price for the acquisition has been set at u125 million, and includes an initial component, which will be paid by Cementir Italia upon closing when the business division transfer is made, and a deferred component, which will be paid 24 months after the closing. The closing of the transaction is expected to take place by the first half of 2016. The transfer of the assets and liabilities is limited to a number of specifically identified operational items that are reflected in the price agreed, without assuming any financial debt or debt towards suppliers. The transaction is conditional upon several events including the endorsement of the composition with creditors and authorisation from the Italian Anti-Trust Authority.

The potential acquisition of the business division from Sacci will enable the Group to shift its main focus of production and distribution towards central and northern Italy, covering new market areas offering higher growth potential in the medium to long-term and greater profitability.

Italy Cementir Italia to acquire business division from Sacci

KEYNOTE

February 2016 / 11World Cement

FEBRUARY

Beyond Training

Most organisations believe that training is good, but few organisations know how to deliver good training. There are several key principles that organisations

need to focus on to ensure that training delivers the maximum return on investment:

l Training is a continuous process.

l Training needs to be linked to job expectations and accountabilities.

l Skills are best learned through doing, competencies through coaching.

l Training should be focused on business needs and results.

l Trainees should understand why they are being trained.

l New skills and knowledge need to be put to use quickly.

Paying attention to these principles will ensure the maximum return on the training investment.

Training is more important today than it has been in the past. The cement industry in developed countries is facing a large retirement bubble. This is leading to a growing knowledge gap as retirees take their many years of knowledge and experience with them when they retire. At the same time, new employee hiring has been slowed down due to the economic situation.

In developing countries, new plants are being built faster than the work force can be trained and developed. New entrants to cement manufacturing will often seek well-trained employees from their

John Kline and Charles Kline, Kline Consulting, LLC, US, outline how to ensure that training delivers the maximum return on investment.

”


established competitors. Therefore, both new entrants and established producers need to step up their training and development efforts. Companies that can establish a well-designed and executed training program will be able to create a sustainable competitive advantage.

Training is a continuous processTraining is often looked at as a onetime event. A group of new employees need to be trained, or an organisation realises they are behind in a certain area and need to catch up. Sometimes training is linked to a new process or new equipment that is being implemented. At other times training is provided based on what is available. A company may send employees off site to attend training sessions that sound interesting or seem appropriate. These are haphazard approaches that will probably not deliver sustainable results.

Taking a step back allows us to see that new employees are coming on board all of the time. Understanding the current and expected employee turnover rates is a good starting point when considering how to establish a corporate wide training and development program. Employee turnover is often tracked by Human Resource departments and can range from 3% to 10% of the workforce and even higher under special circumstances. If we consider that an average career lasts approximately 40 years, then it can be calculated that 2.5% of the work force on average will retire every year. This does not account for people who are terminated or leave the company for personal reasons. (High employee turnover should be understood and resolved as a separate matter as this often carries a high financial cost as well.)

Employee turnover is only one element that defines training needs. Usually employees are brought into an organisation at a lower level and gradually move up in the organisation over time. This internal movement amplifies the external turnover rate and can easily double the number of employees that are moving into new positions within the organisation. For example, when a master fitter/mechanic retires, an apprentice fitter may be put into the vacant position, then another employee may be selected from the labour pool to become a new apprentice fitter. The open position in the labour pool may then be filled with an outside hire. In this manner, the retirement has created

three moves, even if only one person was hired and the total head count has not changed.

It is recommended that companies develop an ‘in and out’ analysis to define the total number of position changes that can be expected in a given time period. The analysis starts with the current staffing situation that includes the total number of employees within the manufacturing organisation, excluding headquarters and out of plant functions, such as sales, etc. The number of employees is typically broken down by group including hourly and staff, but can also include subgroups, such as mechanics, coordinators, supervisors, etc.

Next the ‘out’ analysis is considered, indicating how many people are expected to leave within the time period. Retirements can often be estimated, but other numbers such as people leaving and being let go should probably be based on historical numbers. The sum of people who are retiring, leaving on their own and let go is the total number of ‘outs’ in the organization. This number of people will have to be

replaced to maintain a constant head count. An average number for ‘outs’ would be around 5% of the workforce, but will be location specific.

Once we have estimated the number of people leaving, the number of new hires needs to be estimated. The inbound analysis is more difficult and requires more customisation to the organisation’s actual situation. Bench positions are personnel that are on board and ready to be moved into open positions. Bench positions are used to fill gaps where a high level

of experience is needed and the gap is foreseen. For example, a Maintenance Manager plans to

retire next year. A person is identified to replace the Maintenance Manager a year in advance and placed in a position where they can be groomed for the new role. In this manner the new Maintenance Manager can be fully prepared for quickly taking over the retiring Maintenance Manager’s position. Bench positions may or may not be replaced in the total headcount.

Not all ‘outs’ will be replaced with new hires. Often most of the more senior positions are planned to be filled from within. Normally these people are identified and groomed through a succession planning process. This means that additional people will be changing positions. However, to maintain the total headcount, all open positions will be covered by ‘external’ or new hires. The new hires will just be at lower levels in the

Effective training has a proven return on investment

Pioneering technology.With more than 150 years of experience, we have unique know-how in the field of cement technology. We offer the entire process chain from a single source: from the quarry to the cement loading facility, and from engineering, procurement, erection and commissioning to after-sales service. One example of our expertise is this 10,500 tpd kiln line of Eren-Holding in Silifke, which is the largest cement plant in Turkey. www.thyssenkrupp-industrial-solutions.com

Industrial Solutions for the cement industry

tk_Zement_Tuerkei_Blue_Stripe_1-1_210x297mm.indd 1 04.12.15 14:55


organisation. Consider that the majority of the retirees will be replaced internally as a rule of thumb.

It is often found that 5 – 10% of the workforce are changing positions every year. This is a much more dynamic situation than many companies realise. People that are entering new positions need to be brought on board and up to speed as quickly as possible in order to maintain the enterprise momentum.

The main driver for new hires, in developed countries, is a high level of retirement. These companies are losing a large amount of accumulated knowledge in retiring workers. New companies in developing countries have younger work forces and less of a retirement issue, for the present. These companies, however, lack the many years of knowledge that has been gained by a seasoned work force. They have a greater need for training, even though they do not face the retirement issue.

The above analysis demonstrates that a large amount of training is required for both developed and developing countries on a continuous basis. Once an ‘in and out’ analysis has been performed, the organisation needs to consider what training is required.

Linking training to accountabilities and expectationsMost new employees entering an organisation want to quickly understand what they need to do to perform their job. Position descriptions are often used in hiring salaried or staff employees, but seldom used when hiring hourly employees. Even when position descriptions are available, they usually focus on required skills and seldom spell out the work processes and competencies that are required to achieve the desired results.

The specific accountabilities for a position are those items that the position will be evaluated against. This is often best thought of as what would not happen if the position was not filled. Whenever possible, specific accountabilities should be linked to those business goals and objectives that the position impacts. In the lowest level of the organisation it is more difficult to link positions to specific business goals and therefore departmental goals can be substituted.

All position/job description documentation should be updated to ensure that it covers the specific accountabilities and expectations of the position/job.

Skills and competenciesAccountabilities and expectations are result based and should not be confused with skills. Specific skills or learned abilities, such as reading and math, may be necessary to perform a function. These need to be identified. The proficient application of the skills in the work context is what generates results, or competency, in an endeavour. For example, a person may know how to measure the vibration of a bearing (skill) but not be able to predict the bearing condition (competency).

A fundamental in training is the 70-20-10 rule. This rule states that 70% of the knowledge and skills required to perform a job are learned on the job through doing the work. 20% of the employee development comes through coaching, and 10% is actual specific training interventions. Another way to think about this is that 70% is doing, 20% is supervision, and 10% is training.

In many situations the new person is linked up with an ‘old timer’ that shows him ‘the ropes’.

That is a new entrant is paired with an experienced employee that demonstrates how the job is performed. ‘The ropes’ may refer to specific job tasks, how to utilise special equipment, or the work processes at the site. The danger with this approach is that bad habits and poor work practices can also be passed along.

While supervision and coaching can be used to reinforce and improve a skill, it is more commonly used to put the skill into the context of the work place. That is an employee may know how to use a computer, but that

skill may need to be honed to be effective in entering coherent work orders. Thus competency, the consistent use of skills and knowledge to achieve the desired results within the work context, is often achieved through supervision and coaching.

The 70-20-10 rule indicates that supervision and coaching is twice as important as training, and a necessary element in turning skills into competencies. Organisations need to ensure that good supervision and coaching is occurring at all levels. Coaching is often associated with the more elusive ‘soft skills’ but essentially entails recognising and reinforcing good behaviours and practices, while driving poor behaviours and practices out of the organisation.

Training programOnce it has been determined what training is required and the frequency of the training. The organisation

Knowledge – recognising and knowing the meaning of words.

Skills – reading comprehension and communication (verbal and

written).

Competency – using communications to effect the

desired result.

needs to decide on how that training will be accomplished. The options typically include: on your own, in house, or outside. Obviously, there can be several variations of each.

On your own is training where the employee is expected to complete the training by themselves. It is often self-scheduled and may or may not be completed on company time. On line training courses are becoming increasingly used for on your own training. However, this type of training could also include attending classes and/or seminars off site as well as other activities such as shadowing an existing employee. Some companies have established requirements for proof that the training was completed satisfactorily, such as passing on-line tests or achieving certain grades or scores from external classes and seminars.

In house training is probably the most common training occurring in the industry today. This is where a trainer travels to a facility to train a specific group of individuals, usually on a specific topic. In house training is often less expensive than off site training as the trainers are brought on site as opposed to paying travel expenses (and losing the travel time) for a group of employees to attend an offsite training event. In this situation, the trainees are freed up from normal

responsibilities and allowed to attend the onsite training.

Onsite training can be a lower cost option when a large number of employees need to be trained in the same area. It also allows training close to the source, so that specific examples from the work place can be included in the training activity. As it is lower cost, more employees can attend. The downside of onsite training is that it can often be interrupted by work emergencies and the trainees are often expected to perform their daily responsibilities as well as attend the training. This leads to interruptions and lack of attention.

Onsite training is often expanded to include additional personnel that do not need that specific training. The rationale being that the costs are fixed and adding additional people ‘can’t hurt’. However, this is a bad practice in several aspects, first the ‘additional trainee’ may not see the connection between the training and his job, second it costs the company money as the employee is not performing his normal responsibilities, and lastly it lowers the level of the training. The trainer often needs to ‘dumb down’ his topics to the lowest level of knowledge among the trainees.

Offsite training is typically the most expensive, but overcomes a few of the issues described above. Once

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an employee is off site, it is realised that they should not be disturbed and will not be performing their daily responsibilities. It also allows them a break from the work and can enable a new perspective on the job. Often, offsite training is used when a critical mass of trainees are not available or required. For example, if a company only employs one or two diesel mechanics, it would make sense to send them offsite to attend a larger class than to bring diesel mechanic trainers onsite.

In summary, ‘on your own’ training is a growing area that can be used successfully for background and general training purposes. There are many on-line training programs already available in many subject areas. Onsite training should be used when there is a critical mass of need-to-know employees available for the training. Onsite training should be conducted as though it were off site. That is, no interruptions allowed and all trainees should be excused from daily responsibilities during the training, so that they can concentrate on the training. Offsite training should be utilised when there are an insufficient number of need-to-know trainees available. Offsite training can often be scheduled in conjunction with other companies and organisations. Effective trainingEffective training has a proven return on investment. This is easier said than demonstrated. All training is an expense to the organisation and the effectiveness of the training should be demonstrated in the business results. If the proper amount of training is performed in the right areas, then the business results should improve under stable conditions.

The best way to maximise the return on investment is to ensure that:

l The training is in line with the organisation’s goals and objectives.

l The training is linked to the trainee’s specific accountabilities.

l The trainees understand why they are attending the training and how the training is to be put to use.

l The trainees are given specific assignments to practice the new skills and knowledge before attending the training and the time to accomplish the assignments after the training.

l The training is formally evaluated as to its return on investment.

The last bullet is the hardest, but goes beyond the simple question of whether or not the trainee enjoyed the training. Was a new skill or knowledge learned and put to use? Did the use of the new skill and knowledge improve the trainee’s performance in their specific work area? Did the improved performance within the trainee’s specific work area improve the organisation’s results? If the answer to the last question is no, then the training may not have a return on investment.

Summary Training and development should be managed as a continuous process in the organisation. Performing an analysis of future departures helps to define the expected number of new hires and position changes, which provides insight into new position training needs. Thinking about how to capture and reuse training activities can save an organisation time and money.

Employees should clearly understand the job expectations and what they are accountable for. These

are the criteria against which their performance will be evaluated. Performance evaluations should look for areas that need improvement and identify specific development needs. One simple test is the will versus skill test:

l Does the employee know how to perform the task (skill – training & doing).

l Does the employee want to perform the task (will – coaching).

Goal and objective setting should consider the skills and competencies required for achieving

them. Skill and competency gaps should be considered as a means to achieve new goals and objectives. Training is most effective when employees can see a direct link to achieving personal, departmental, and/or organisational results.

Training interventions are most effective when linked to a position’s accountabilities and put into practice as quickly as possible. Learning new and complex tasks should be accomplished in small steps with each step being demonstrated on the job. Start complex training with general concepts and work towards specifics.

Training can be very motivating when linked to the job performance and business results. Employees often appreciate the opportunity to learn useful skills. However, as seen here, effective training requires a comprehensive approach that encompasses the entire workforce and that links training to accountabilities and business results.

Competency development is 70% doing, 20%

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A POSITIVE OUTLOOK FOR SOUTHEAST ASIA

IntroductionPoor infrastructure investment along with difficult socio-political environments in key countries, most notably Thailand and Myanmar, have meant that the cement industry in Southeast Asia has not flourished as much as it might have over the past decade. In the last two years however, increased foreign and government investment, along with a gradual stabilising of the political situation, has allowed the rest of the region to follow in the footsteps of the Philippines, whose economy, and construction industry alongside it, has been rapidly expanding. Throughout 2015, and on

into 2016, the outlook for the cement industry in Southeast Asia is predominantly positive.

The Philippines: continued growthThe economic outlook for the Philippines in the coming years is optimistic, with inflows of remittances from outside the country, particularly from the US, creating a current account surplus that has made the country’s economy particularly resilient to external shocks, such as the contraction of the Chinese market. As of November 2015, the Philippines has seen 66 consecutive quarters of economic expansion, with

18 \

Rebecca Bowden takes a look at the cement industry in the countries of Southeast Asia, investigating the impact of key socio-political events on their economies over the past year.

an average growth rate of 6% per annum under the current administration.

Perhaps the biggest concern for the Filipino economy revolves around infrastructure, particularly roads, the public mass transport system, seaports and airports. Despite the expectation that the construction boom seen in the last decade will continue into the foreseeable future, according to the Philippines Constructors Association Inc. infrastructure remains one of the central issues around which the upcoming 2016 election revolves. Presidential candidate Grace Poe has criticised

President Aquino for his failure to complete more of the infrastructure projects needed to boost economic growth, particularly as poor infrastructure is known to be one of the biggest deterrents against investment in the country. Despite accusations, the current administration has been taking steps to accelerate infrastructure spending, increasing spending on projects including airports, roads and flood control projects. Before the pre-election ban comes into force at the end of March, Aquino’s administration aims to have awarded at least 60% of the US$7.6 billion public works planned for 2016

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by the end of 1Q16. November 2015 also saw the signing of an order to make deals worth at least US$64 million more accessible to foreign contractors by allowing them to apply for a permanent license to work on multiple projects, removing the need to apply on a project-by-project basis. It is hoped that this will help to fast-track projects, thereby addressing gaps in the country’s infrastructure and further boosting economic growth.

This is good news for the cement industry, with demand for cement reaching record levels in 2015, triggered largely by this increased government spending on infrastructure projects. Having increased steadily over the past few years, cement demand was healthy nationwide, being strongest in the Visayas and Mindanao, with projects under the private-public sector partnership and rehabilitation following Typhoon Yolanda in 2014 furthering the impact of government spending. Cement sales had grown by 9.6% during 1Q15, increasing to 18.6% by 3Q15, according to CeMAP.1 In response, an increase in cement plant capacity and expansion is needed to meet the continued expected growth in domestic demand.

It is therefore unsurprising that a number of companies have undertaken increased investment in the region over the last year. The Filipino conglomerate San Miguel Corp began its aggressive expansion into the power, mining, oil refining and infrastructure sectors in 2008, and has announced that it is increasing its investment in the cement manufacturing industry to almost US$1 billion. In July 2015 the company announced that it is constructing two cement plants in the country, one at Northern Cement Corps’ existing facility, where San Miguel holds a 35% stake, and the second to be built in Quezan province, each with a 2 million tpy production capacity. In September a third cement plant was announced. The company hopes that the new plants will help meet the country’s increased cement demand.

In May Cemex announced that it would build a 1.5 million tpy cement production line at its Lyzon plant, an investment of US$300 million. The line will double the plant’s capacity and increase the company’s cement production within the Philippines by 25%. Further expansion was also completed at Cemex’s APO plant in Cebu, costing a total of US$80 million. This makes it the largest cement plant in the Philippines and, along with additional terminals in Iloilo and Darao, has helped improve the company’s distribution capabilities. A further US$18.6 million has been invested in a waste heat-to-energy power plant, to produce stable electricity.

In April 2015 Lafarge Republic Inc. inaugurated a P892 million grinding mill at its Teresa plant in Rizal Province, which increased its production

capacity by over 50%. This followed an increase in capacity at the company’s Norzagaray plant in Bulacan province. The investments increased the company’s cement production capacity in the Philippines to over 7 million t. It is CRH Plc., however, that will benefit from these developments, as the Irish company acquired both assets when they were divested by Lafarge Republic in May 2015 in order to meet the competition requirements associated with the LafargeHolcim merger.

Eduardo Sahagun, President of Holcim Philippines, has also indicated that the company is planning to revive a number of projects in the country, in order to meet the ever increasing demand for cement.

Overall the outlook for the cement industry in the Philippines continues to appear positive, and is likely to remain so well into the future, hopefully with little interruption from policy discontinuity following the upcoming elections in May.

Indonesia: difficulties finally overturnedThe same cannot be said for the cement industry in Indonesia, where financial developments have proved less than smooth over the last 14 months.

With its rapidly growing population and underinvestment in infrastructure development, Indonesia has thus far lacked the quality and quantity of infrastructure necessary to further enable economic growth. At the start of the year, heavy government spending on infrastructure was expected to begin, leading many Indonesian cement suppliers to increase their production capacity in anticipation of the higher demand for cement that would accompany such government manoeuverings.

As part of a US$4.3 billion expansion plan, Semen Indonesia wants to increase its production capacity by 13 million tpy. The company has two plants under construction at Padang and Rembang, both due to be completed by 2017. Additionally, at the start of November it announced a US$360 million investment into a plant in Aceh in 2016, along with the potential construction of a 3 million tpy cement plant in Pidie, dependant on discussions with a local partner. Plants in West Java, Kupang and Papua are also in the works. Together these investments will increase the company’s production capacity to 43 million tpy.

Even companies based outside of the country were eager to capitalise on the sales associated with the anticipated increase in government spending. Thailand’s Siam Cement, for instance, opened a plant in Indonesia, as well as acquiring a local ready-mix concrete manufacturer at the start of 2015, while Anhui Conch Cement Co. Ltd., a Chinese company, constructed a plant in Kalimantan, and began the process of setting up a second in Papua.

Unfortunately for those involved, the infrastructure projects promised by the government

were slow to materialise. Spending on roads, bridges and ports was delayed by bureaucratic red tape, and public spending overall was disturbed by the late approval of the revised state budget for 2015, along with government reorganisations. This then led to massive overcapacity within the country, heightened by competition from new players, and causing significant problems for Indonesia’s cement makers. Most major companies saw their shares plummet during the first half of 2015, with those of Semen Indonesia dropping by 51%, Holcim Indonesia’s by 57% and Indocement shares decreasing by 33% between January and June. Overall cement consumption dropped by 4.3% during the period, reaching the lowest the industry had seen since 2009.

The situation was further exacerbated by the introduction of a government imposed price cut on cement sold by state-owned companies in January 2015. These cement producers were ordered by President Joko Widodo to lower their selling prices by IDR3000 per bag, in an attempt to boost the infrastructure and property sectors. This resulted in a 6% fall in the average selling price as a price war ensued, with private cement producers forced to lower their prices in turn in order to remain competitive. Further price cuts were threatened if the budgeted infrastructure projects continued to

underperform against government expectation. The outlook by mid-2015 did not bode well for those involved.

It was not until August 2015 that things began to look up for the cement industry in Indonesia. Government capital spending accelerated significantly in 3Q15, doubling what was spent in 1Q15. This meant a significant rise in cement demand, which had been lacking in 1H15, leading to cement sales increasing by 10.7% y/y in October 2015 according to the Indonesian Cement Association.2 Sales in Salawesi increased by 29%, and by 18% in Maluku and Papua. A 17% rise in sales in Sumatra can be attributed to significant projects, such as the Trans-Sumatran highway in October. In fact, the only area in Indonesia that did not benefit from the increase in government spending was Kalimantan, which saw a decrease in sales of 12%. It is interesting to note that bulk sales exceeded bagged between September and October 2015, suggesting that it was indeed the bigger projects undertaken by the government that turned the tide for the cement industry.

Unfortunately, despite this sudden increase in demand and further expected increase in the final quarter of 2015, at the time of writing economic growth has not been boosted enough to meet expectations, and more will need to be

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done in order to push growth above the 7% that President Widodo promised when he came into office.

This is reflected in the results of Semen Indonesia, one of the largest cement producers in Indonesia. Despite the fact that the company’s sales in October increased by 10%, to 2.7 million t, sales are not expected to increase much further by the end of 2015. Although the company will be in a good position to improve its performance in 2016, it will continue to feel the 0.9% drop in its market share caused by the difficulties at the start of the year, for a while longer.

Thailand: increased investmentThe outlook for the cement industry in Thailand is also finally looking up.

Although socio-political unease limited the growth rate of the country to -0.23% y/y between 2010 – 2014, the military coup that took place in May 2014 has since stabilised the situation. More significant for the revival of the economy are the measurements implemented by the military government in mid-2015, including the relaxation of martial law in some areas in order to boost tourism, tax incentives to attract foreign investment and investments of up to THB1.8 trillion in infrastructure, particularly new harbours, airports, roads and railways. According to Fitsch Ratings, these measures should help to provide the cement industry with moderate growth during 2016.3 Although economic and structural factors, especially underdeveloped transport infrastructure and lack of skilled labour, may slow potential growth, the overall outlook for the construction industry in the coming year appears positive.

Myanmar: a bright future?With expectations in early 2015 suggesting that the economy in Myanmar would grow by 7.7%, combined with an anticipated period of heavy investment in projects – particularly plans to upgrade and build roads, bridges, seaports and airports – following the elections in November, interest in the country at the start of the year was high. Semen Indonesia for example, despite difficulties finalising its agreement with its local joint venture partner, in January 2015 emphasised that it would attempt to look for another partner in the country, while Siam Cement Group planned the opening of two construction retail stores in order to take advantage of the forecast increased demand for building materials in the country.

Following a landslide victory for the NLD in the national elections on 8 November, it is hoped that foreign investment in the country will drastically increase, as the remaining international sanctions are removed. Despite anticipation that the new government will allow the country to pull further

away from the shadow of the military and continue to move towards a more open society, as it has been since 2011, there are a number of difficulties which may prove problematic for the country’s economic outlook. Thus far Aung San Suu Kyi has remained vague on economic matters, and with a new president unlikely to be elected before March, clarity on the subject is unlikely to be found quickly. This could become further aggravated by lack of governing experience on the part of the NLD, combined with the need to collaborate with the military, something which could both cause incoherency in policy-making, and limit the party’s technical capacity to implement reforms. Whether the hoped for boost in Myanmar’s economy will finally come to fruition, or if the feared barriers to prosperity will manifest, remains to be seen – along with any impact it will have on the cement industry.

ConclusionOverall, the outlook for Southeast Asia appears positive, with considerable economic improvements in Indonesia and Thailand, along with increased government investment in infrastructure in the Philippines, providing an economic atmosphere in which the cement industry is already beginning to thrive. Although the forecast for Myanmar is, at this point, not entirely certain, it is hoped that a boom in government investment in the wake of the historic election will allow its economy to follow suit.

References1. CeMAP (www.cemap.org.ph).2. Indonesia Investments (www.indonesia-investments.

com).

3. Fitsch Ratings (www.fitchratings.com).

Sources y Company reports and press releases. y Bloomberg. y Business World. y CNN Indonesia. y Financial Times. y Fitsch Ratings. y Focus Economics. y Indonesia Investments. y Jakarta Globe. y Manila Bulletin. y Manila Standard. y Manila Times. y Moody’s Investors Services. y Myanmar Times. y Reuters. y ROSETE, A., Survey, University Santo Tomas, 2014. y The Bangkok Post. y The Diplomat. y The Philippine Star. y The Standard. y Timetric.

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