ISSUE 2006/2007

Innovation: First bio-diesel plant in Poland Internationalization: MAN Ferrostaal Strategy Industrial solutions: What’s new in the automotive sector

THE ECHO THE CORPORATE MAGAZINE OF THE MAN FERROSTAAL GROUP 2 THE ECHO 2006/2007 3 editorial

Dear Readers,

Many of you know us as an enterprise with a solid foundation in On the basis of our strong international position, we have international trade. In recent years, we have developed more and recently started to build up a sales and service platform for the more into a focussed industrial service provider in two main MAN Group. In cooperation with the other MAN subsidiaries we areas: the construction of large scale industrial plants and want to make our products more easily available to customers all services in the machinery, transport and automotive industries. over the globe. Therefore we pull together common activities within the MAN Group and systematize and develop them to In our industrial plants business we primarily concentrate take advantage of their potential synergies: First-class industrial on energy and fuels. In both markets high growth rates are products on the one hand, on the other a market presence expected in the years to come – in particular in regions where, in many countries and sound financing options – it is in the historically, we have a strong presence. Many countries in North interests of our customers that we bring together and manage Africa, South America, Eastern Europe and South East Asia have the competencies of each single company of the MAN Group. oil and gas resources which are used less intensively than Please read more about it in this magazine. they could be. When it comes to improving the appropriate industrial infrastructure – whether these are pipelines, Yours, compressor stations, refineries or petrochemical plants – we represent a reliable partner for our customers. Offering Matthias Mitscherlich various financing options to our customers in cooperation with international banks and insurance companies, has become a core competency of ours.

In many cases, our service business forms the basis for our strong international presence. We are the sales and service part- ner for many industrial manufacturers and therefore capable of building and maintaining entire industrial assembly lines. In the printing industry, for example, we have a large portfolio of manufacturers with whom we can cover the entire production process of printing products. We are able to offer a similar, comprehensive service to the transport industry. In both the commercial and personal transport sectors we are a systems supplier who not only sources and implements the best solution Dr. jur. Matthias Mitscherlich, Chairman of the Executive Board for each single operator, but also provides the relevant service at MAN Ferrostaal AG support. In the automotive industry we offer customized solutions for the manufacture of component modules. In the last few years we have very efficiently succeeded in supporting car manufacturers in the pre-assembly of single parts to complete modules. This has resulted in a win-win situation. Adapted to the production methods of our customers, we are contributing to reducing the complexity of the manufacture of cars and, in the future, of trucks as well. 4 contents

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03 EDITORIAL 04 CONTENTS 61 READERS’ SERVICE 63 TRADE FAIRS 2007 63 PUBLICATION DETAILS

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TITLE STORY (PAGE 42): MAN FERROSTAL PROVIDES SERVICES TO THE AUTOMOTIVE INDUSTRY IN TWELVE LOCATIONS IN EUROPE. THE ECHO 2006/2007 5

news 38 INDUSTRIAL JIGSAW PUZZLE The transfer of a steel plant from Mexico 6 THE FIRST TURF IS CUT, OLYMPIC MEDALS, TRADE FAIRS AND MORE to Saudi Arabia

40 GOOD PROSPECTS forum New projects in Saudi Arabia

12 “GET IN GEAR FOR QUALITY” Dr. Wolfgang Knothe, Member of the Executive Board services for Projects, explains the role of quality management at MAN Ferrostaal 41 FIRM FOOTHOLD IN CHILE What’s new in the field of printing machines 14 FROM TRADITIONAL TRADE ENTERPRISE in the South American market TO INDUSTRIAL SERVICE PROVIDER How MAN Ferrostaal is strengthening its position 42 EVERY SECOND COUNTS for the future How automotive industry problems are solved with one fell swoop and a new service company comes to life in Poland in record time MAN platform 50 TRANSPORT TECHNOLOGY 20 CHALLENGES IN DISTRIBUTION POWER The Company has been a player in the railroad Philipp Leckebusch, Managing Director at MAN industry for more than 75 years Ferrostaal Diesel Power GmbH, perceives market opportunities in the field of diesel-driven power stations 52 SERVICING AT 3,000 METERS HIGH 16 specialists are employed 24/7, 365 days of the year 22 “WE ARE THE FACE OF MAN TURBO IN MEXICO” to maintain locomotives for the world’s largest copper From representative to after sales service to producer sole agency – there are many forms of doing business with MAN 54 10,000 TONS UNDER THE SEA MAN Ferrostaal delivers steel pipes for an underwater gas pipeline in Azerbaijan projects

26 MILESTONES FOR THE FUTURE people The building of a bio-diesel plant in Poland paves the way for a share in the alternative fuel market 56 NEVER GIVE UP Uwe T. Schmidt, Managing Director of MAN Ferrostaal 32 POWER STATION BUILD EXPANSION IN VENEZUELA Incorporated, took part in the Chicago Marathon for The company is making an important contribution charity to society through a number of different projects 58 A NEW BEGINNING 34 FROM WOOD TO PULP Review – 2 years after the catastrophic Tsunami in The building of a new plant forms the basis for Indonesia, MAN Group’s help takes effect paper production in Estonia 6 news

INSTALLATION IN ARGENTINIAN MAJOR PRINTING WORKS

An MAN Roland R708P was successfully put into operation for “Casano Grafica”, based in Buenos Aires, in June of this year. A service team from the MAN Ferrostaal subsidiary in Argentina was tasked with ensuring the efficient use of the machine and training Casano employees on the job. The contract, which was awarded to MAN Ferrostaal in September 2005, is for the first 8 color printing machines, with 4/4 perfecting, to be sold in Argentina.

MAN FERROSTAAL POOLS MACHINE AND SERVICE SKILLS

MAN Ferrostaal is leading the worldwide solutions for the plastics, packaging and machine industry in the newly-established foodstuffs industries, as well as complete field of Equipment Solutions (ME). Its engineering solutions for metal process- aim is to create synergies in the 3 areas ing are all being offered under one roof. of graphics, packaging and plastics and The objective of bringing together these metals. business areas is to focus several decades of experience and skills, as well as being In addition to logistics and services for able to offer a broader range of services. the graphic industry, individual systems “MAGNUS” SETS SAIL

On September 11, 2006, MAN Ferrostaal delivered the tugboat “Magnus” on schedule to Stavanger in RYOBI REPRESENTATION FOR ALL OF SOUTH AMERICA Norway. “Magnus” is one of the most powerful tugs built in Germany and is MAN Ferrostaal’s Equipment Solutions stand out due to their reliability, and are the second of its type to be built for business area has been able to widen its seen as some of the leading offset print- Harms Bergung Transport & Heavylift territory for distribution of Ryobi print- ing machines in the segment of smaller GmbH. By the end of 2008, five further ing machines. Since the summer of this sheet-fed machines. In the current financial salvage tugs will have been handed year, the Company has been offering year, MAN Ferrostaal has been able to over to the customer. machines from the Japanese manufacturer report an increase of over 50 percent in to its customers throughout South the level of sales of Ryobi machines world- America. In addition to being fully auto- wide. mated and highly efficient, the products THE ECHO 2006/2007 7

“VALUE-ADDED PRINTING”

Under the motto Value-Added Printing Roland places considerable emphasis on the MAN Ferrostaal Equipment Solutions development of technology for the benefit (formerly known as Intergrafica Print & of its customers. The particular advantages Pack) has been holding regular conferences of the engines contribute to increasing the for customers, where the latest technology customer’s returns and reducing his costs.” and developments made by MAN Roland in Specific characteristics are pointed out at the printing and packaging sectors have the lectures, for example the possibility of been introduced. To date the seminars have being able to set the MAN Roland 700 taken place in Africa, Asia, South America, to obtain 3,150 different configurations. as well as in Turkey. The emphasis is to add Best practices in the production process, value to customers’ businesses. finished products, and in the entire work process and customer service are also The seminars are held by Thomas Kaup and discussed at the seminars. For further infor- an external lecturer, Tony Kenney. The aim mation about the seminars or products of the conferences is to explain and clarify please contact: the engine manufacturers’ strategy. “MAN [email protected]

NEW NAME: MAN FERROSTAAL AUTOMOTIVE

The MAN Ferrostaal subsidiary, MAN Ferrostaal Industrie-und Systemlogistik GmbH (FIS), in Essen is now called MAN Ferrostaal Automotive GmbH (MFA). The change of name is effective immediately. Please turn to page 42 for more informa- tion about which services will be offered to the automotive industry. “COLOMBIAN PESOS” ROLL OFF GERMAN MACHINES MAN FERROSTAAL ACQUIRES MINORITY INTEREST IN AN ENGINEERING MAN Ferrostaal in Bogota recently delivered 2 minting machines and blanking press from the company Schuler to the PARTNER IN CANADA Colombian central bank “Banco de la Republica” in Ibague. The new machines work four times as quickly as the current ones In April 2006, MAN Ferrostaal AG took over the pulp and paper and press coinage at speeds of 750 coins per minute. business of RWE Industrielösungen GmbH. It further strength- To ensure a smooth changeover and a successful operation, ened its position in this segment of plant construction sector 6 Schuler employees installed the minting machines and by the acquisition of a strategically important interest in KSH trained staff on the job on behalf of MAN Ferrostaal. Solutions Inc., based in Montreal, Canada. KSH employs around 250 people and is one of the largest providers of engineering, consulting and project management services for pulp and paper plants. MAN Ferrostaal and KSH have agreed a long-term and exclusive partnership deal. 8 news

3,000 PARKING SPACES IN RECORD TIME

REPAIRS TO ARC “TAYRONA” IN COLOMBIA

MAN Ferrostaal in Bogota recently delivered 2 minting machines and blanking press from the company Schuler to the Colombian central bank “Banco de la Republica” in Ibague. The new machines work four times as quickly as the current ones and press coinage at speeds of 750 coins per minute. To ensure a smooth changeover and a successful operation, 6 Schuler employees installed the minting machines and trained staff on the job on behalf of MAN Ferrostaal.

OLYMPIC MEDALS FOR 2008

The Olympic Games are taking place in China in 2008. Many of you will ask what MAN Ferrostaal has to do with the Games. The Alongside the increase in low-cost flights, we are also Company will ensure that the gleaming trophies that each par- seeing a rise in the number of passengers and therefore an ticipant eagerly competes for, will be ready and waiting. The increase in the demand for car-parking space at German medals to honor the winners will be manufactured by machines airports. that MAN Ferrostaal delivers to the Chinese minting industry. With the exception of collectors and commemorative coins, to Düsseldorf airport approached the MAN Ferrostaal which medals also belong, new coinage in circulation is being headquarters in Essen with this very problem in seeking minted in China, which will replace the old aluminum coins by a partner for the building of a further parking lot with a the time of the Olympic Games in 2008 at the latest. In addition capacity of at least 2,500 parking spaces. to the blanking presses and minting machines, MAN Ferrostaal is delivering numerous machines for use in the production and The Company awarding the contract, the Filana processing of coinage. Grundstücksvermietungsgesellschaft mbH & Co. Objekt Düsseldorf KG, did so on the basis of MAN Ferrostaal’s The considerable demand for minting machines started in 2003, proficient design to optimize the use of space through and continues today. Further capital spending is planned for 2 trapezium-shaped buildings. In a record time of just 2007. In the last 4 years MAN Ferrostaal has delivered 12 blank- 6 months, parking lot P5 was built and 3,014 new parking ing presses and 30 minting machines to the Middle Kingdom. spaces were created, which have been available to The Company represents well-known, mainly German manufac- passengers since September 29, 2006. turers according to the sales principal of “everything under one roof” which has proved its worth in China and is now being adopted in other sales regions. THE ECHO 2006/2007 9

A RESOUNDING SUCCESS

FIRST BRICK LAID FOR SOLAR POWER STATION

In the coming months, MAN Ferrostaal will continue to build a solar thermo- dynamic research and development facility in Almeria, Spain. Building began in November 2006. A new 2,000 square meter and 9 meter high power station will be built by May 2007. The demonstration facility will contribute to the devel- opment of solar-powered power stations and will be financially supported by the German Federal Department for the Environment, Conservation and Nuclear Reactor Safety. This support is part of an initiative with which the German Government is sponsoring German companies in developing competitive products in the field of renewable energy.

The facility in Almeria will be built On November 2, 2006 partners and customers were invited by MAN Ferrostaal to enjoy using Fresnel technology, which an evening of classical music at the Philharmonie in Essen. uses moveable and modular reflec- tive fields to concentrate the energy The “Orchestre de Paris” opened the concert of euphonic delight with an overture from from the sun into an absorber pipe, “Le nozze di Figaro” under the direction of Christoph Eschenbach. On the 250th birth- located several meters above the day of Wolfgang Amadeus Mozart, the audience witnessed Christoph Eschenbach not mirrors. Water is heated to tem- only as one of the most famous conductors, but also as an experienced pianist peratures of up to 450 degrees and musical director in a romantic piano concert in A Major. In addition to Mozart Celsius in the absorber pipe, where it pieces, the Paris Orchestra played works by Maurice Ravel and Albert Roussel. Both the turns to steam and drives a steam- orchestra and conductor brought the concert to a lively finale with an impressive powered turbine with which power performance of Ravel’s “Bolero” which was received with standing ovations. is generated. 10 news

MAN DIESEL, MAN FERROSTAAL AND MAN TURBO AT TRADE FAIR FIRST-EVER PRESENTATION OF HIGHLY EFFICIENT SOLAR THERMO-DYNAMIC POWER STATION

Europe’s most important trade fair in the innovation in the field of renewable ener- energy sector, the POWER-GEN Europe gies, so-called clean coal technologies trade fair took place for the fourteenth (CO2 free power stations) as well as techni- time from May 30 until June 1, 2006. cal developments in combined power and MAN Ferrostaal was represented together heat, power stations. MAN Ferrostaal with MAN Diesel and MAN TURBO in a explained its new technology for highly- 180 square meter booth at the fair visited efficient solar thermo-dynamic power by 10,000 people from 90 different stations. Currently there are a number of countries. The combination of both ongoing projects in which the develop- product and project skills of the ment of this technology is being put into MAN Group were demonstrated by the practice. MAN Ferrostaal will be back next appearance of the 2 companies together. year with its sister companies at the trade Important themes at this year’s POWER- fair in Madrid. GEN Europe fair were energy efficiency,

SUCCESS AT “ARGENTINA GRAFICA”

MAN Ferrostaal was able to acquire 3 new orders at the graphics trade fair “Argentina Grafica” in Buenos Aires between October 23 and 28, 2006.

The subsidiary in Argentina negotiated con- tracts for the supply of 2 MAN Roland R200Es, our Bolivian colleagues agreed the sale of an MAN Roland R204E. In addition to numerous international representatives amongst MAN Ferrostaal’s suppliers, there were also guests and customers from Chile, Uruguay, and Bolivia among the 18,000 visitors to the trade fair. The four-color sheet fed press R204E from MAN Roland was a particular attraction on the stand and was also sold to “Lama Grafica” at the trade fair in Buenos Aires. Just 10 days later the machine was put into operation for the customer by staff from MAN Ferrostaal, Argentina. THE ECHO 2006/2007 11

PRINTING INDUSTRY PINS ITS HOPES ON INNOVATION

From May 31until June 6 over 30,000 people visited ExpoPrint in Sao Paulo, one of the biggest South American trade fairs for the printing industry. Equipment Solutions in Brazil (formerly now Intergrafica Print & Pack), a subsidiary of MAN Ferrostaal demonstrated and explained the manufacturer’s latest technologies, among them the model 784 from Ryobi. This four-color printing machine is characterized by its simple handling, mechanization and minimal proportions. MAN Ferrostaal demonstrated a web-fed printing machine on the stand from the Cityline Express series, for its customer Manugraph. Many Brazilian newspapers have already bought machines from this series. To illustrate the internal workings of a printing machine to the public, a longitudinal section of an original printing press of the MAN Roland sheet-fed press R500 was exhibited on the stand. Mario Barcelos, responsible for the graphic business in Brazil, spoke very optimistically about the business generated at the trade fair. “The graphics industry invests very heavily in innovation, to achieve better quality and results. Our business clearly benefits from this development.” 12 forum

>INTERVIEW: “GET INTO GEAR FOR QUALITY”

Quality management at MAN Ferrostaal is an important tool for the successful development of projects. Dr. Wolfgang Knothe, Member of the Executive Board for the Projects business division, explains the characteristics of the quality management system in an interview.

that particularly for our younger and newest employees, the quality management system is immensely helpful in enabling them to understand our business processes.

MAN Ferrostaal is operational in different business areas. Is the quality management system generally applicable? Yes. Our objective is to apply the system to both divisions. Firstly, we’ll be concentrating on the Projects division and then on Equipment Solutions. However, for supply chain solutions different conditions apply. But later we’ll also be integrating this area into our quality management system.

You’ve been Member of the Executive Board of the Projects division since January 2006. How has quality management developed since this date? MAN Ferrostaal has traditionally worked with very flat management structures, short decision-making paths and little Dr. Knothe, what added value do you place on the quality formality. We want to retain this. At the same time, however, management system at the MAN Ferrostaal Group, with we need to recognize that all large organizations, particularly if respect to our competitive position and the increasing they work with complex tasks, need a certain number of rules complexity of projects? for daily work. These rules were of course already in place at We have found ourselves, for some time now, at MAN Ferrostaal MAN Ferrostaal, in many cases however they were unwritten in a change process from traditional trade enterprise to rules. Using the quality management system, we document complex service provider. The need to add value increases, these unwritten rules and add certain aids. Of course we’re not both in our Projects and our Services business division. At the able and would not wish to document everything. By docu- same time, increasing globalization intensifies the need to menting the most important points, we retain our efficient, remain competitive. We must therefore understand the threats entrepreneurial culture and, at the same time, demonstrate and opportunities to our business and manage them in a our processes to our customers and partners in a well organized professional manner. Here lies the value of a good quality fashion. The continued development of our quality management management system: With the aid of an exact description of system is therefore on track. work processes, a clear definition of tasks, skills and respon- sibilities of those involved in a project as well as with well- What effect does it have on the operation of the business? thought out aids such as check-lists and standards, we are The quality management system is an important tool for com- able to work more efficiently and effectively. I am convinced munication between head office and our companies overseas. It THE ECHO 2006/2007 13

helps us to better select projects, to put together first-class, will always depend on the experience of those negotiating to reliable offers and to fulfill our orders successfully. correctly weigh up the threats and opportunities. A quality Finally the quality management system makes a direct con- management system cannot replace this. But it can offer tribution to the achievement of our company objectives. And assistance, for example, provide a tool for the assessment of last but not least it makes work on the shop floor more fun, risk in a project. if mistakes can be avoided. What significance does a good quality management system Reliability is an essential criterion in the implementation have for the recognition of mistakes at an early stage? of projects. What characterizes reliable processes at A good quality management system will, above all, help to MAN Ferrostaal? avoid mistakes from the beginning. Our aim is not to recognize Reliable processes need to be understandable to everyone and mistakes through 100 percent inspection. But as mistakes are lead rapidly to the right results. These processes have to be not completely unavoidable, checklists are of course a part of robust when the going gets tough. We are able to ensure exactly the quality management system and allow us to check our own this using our quality management system. work and that of our partners and sub-contractors at specific milestones. In much the same way as a pilot checks certain What synergetic advantages result from this for functions of his aircraft per checklist, before take-off and MAN Ferrostaal and the customer? landing. Our customers and partners expect us to implement a quality management system. They make it a pre-requisite in many Does the economic and social environment of the target cases for the award of a contract. Of course a contract, in par- country influence the quality of our service? ticular a complex project, can be negotiated between partners Our goal should of course be to offer the same level of service in a much more relaxed way, if the most important procedures, throughout the world. The level of effort that we have to bring for example the auditing of suppliers, progress controls and to the definition of work procedures and the control of results quality checks at installation, are agreed upon at the outset. The will of course be dependent on the legal framework of the advantage is therefore a very efficient way of handling a project respective country and attention to detail of the local work- to achieve objectives relating to cost, quality and timing. force.

Who at MAN Ferrostaal is responsible for quality? Quality management is defined as a support process at Every employee in his own area of responsibility. MAN Ferrostaal. Where do you see interfaces to our core strengths? Is teamwork an important component of the process? Our quality management system helps us to get into gear. As the process itself in our business controls the co-operation We can only use our core strengths to maximum effect if the of the various project members (from project selection to quality of our work is right. I think this is true of all our core product acceptance), good teamwork is essential. As I have said competencies. Just think of the quantum leap made by Ferrari previously we are not able and do not wish to regulate every- in Formula 1 using a distinct quality management system. thing using a quality management system. As we do not fulfill But you’re right – quality management is a support process. our contracts on an assembly line, but rather in project teams, Only in combination with a good strategy, well-trained and most of the co-operation has to take place within the team highly-motivated staff will we be able to continue our success. itself. The conclusion is: good teamwork is the beginning and the end.

To what extent does quality management play a role in the choice of projects? Experience shows us that 70 to 80 percent of the mistakes made in complex projects occur before the ink has had a chance to dry. One of the most important decisions is whether it is possible in the first place to handle the project. Here it 14 forum

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STRATEGIC DEVELOPMENT FROM TRADITIONAL TRADING FIRM TO INDUSTRIAL SERVICE PROVIDER MAN Ferrostaal is changing from a traditional trading enterprise to a strategically orientated industrial service provider with a focus on industrial plants and the international equipment and automotive businesses. The Projects and Services divisions will be aimed at future markets and extended. With the MAN Ferrostaal Sales and Service Platform we will be promoting the internationality of the MAN Group further. THE ECHO 2006/2007 15

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01. The oil and gas business: huge potential for MAN Ferrostaal 02. In its Projects division MAN Ferrostaal acts as a general contractor for large scale plant construction. 03. In the Services division the company focuses its activities on the machinery, transportation and automotive industries.

Turning Ideas into Reality. With regard to realizing industrial Dr. Matthias Mitscherlich, Chairman of the Executive Board of projects, MAN Ferrostaal’s guiding principle is a short but exact MAN Ferrostaal, describes the sale of these fringe activities as a description of what characterizes the company. Due to the fact necessary step in order to concentrate on the core business. “The that the demands on MAN Ferrostaal as an industrial service companies that we have sold are sought-after specialists in their provider are changing over time, the company is changing too. own field and are therefore well-placed for future growth. The possibility of continued growth no longer existed with us, as the Between 2004 and 2006 MAN Ferrostaal has sold companies core strengths of our company are not relevant for their with a total turnover of 400 million euros and around 2,200 business models. As a general contractor, MAN Ferrostaal is good employees to Best Owners, who already have relevant business at developing and implementing large, industrial projects activities as their core. The companies sold include and creating innovative financing packages. We continue DSD Dillinger Stahlbau Gruppe, TAKRAF GmbH, the materials to develop those businesses, where we can make use of these handling manufacturer and Delitzsch and Gommern, an assembly capabilities.” These businesses benefit from its knowledge of company, as well as companies from the area of nuclear international markets, and our know-how in organizing supply technology. chain solutions and the execution of countertrades.” 16 forum

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MAN Ferrostaal has continued to strengthen itself in the As a first step along this route, MAN Ferrostaal brought together Projects division, the core business of building large scale plants. its German steel businesses in August 2006 and formed an inde- In May 2006, the company took over the pulp plant business pendent, new company, Ferrostaal Metals GmbH. The next step from RWE, with whom it had already had a close working is to integrate this company, together with the North-American relationship for a number of years. and Brazilian steel businesses into the newly-founded Ferrostaal Metals Group. >>>Two pillars. MAN has reduced the number of business divisions from three to two, to focus the business in the divisions of The new direction is a necessary prerequisite for future growth, Projects and Services. The Projects division consists of business says Mitscherlich. “We believe that the opportunities for growth, activities relating large scale plant construction. The Services which steel logistics as a business sector offers, can be better division focuses on industrial services in the automotive, trans- realized in a partnership. It’s for this reason that we are seeking portation, and machinery sectors as well as governmental a partnership with a major steel company or a company from business. The MAN Service and Sales Platform is managed by the the ‘down-stream sector’.” Growth opportunities essentially arise Services division, which supports MAN Nutzfahrzeuge, MAN from expanding the customer and supplier base, as well as the Diesel and MAN TURBO in their continued globalization. use of the synergies of products, services and markets. “The objective of this new group,” says Mitscherlich, “is to assume a >>>New direction for steel. MAN Ferrostaal is restructuring its leading role in the steel sector and to drive this position of steel business. The intention is to form a partnership with a strength still further.” strong majority shareholder to bring the trading and logistics of steel products together. The objective is to considerably improve >>>Large scale plant construction: Focus on energy and fuel. The core the volume of business of the new group. Currently MAN businesses are being refocused and expanded. On the basis of Ferrostaal has a world market share of 1.5 percent, with regard to the company's role as a project developer and general con- freely traded steel. With the help of the partnership, this market tractor, it increasingly focusses on power and fuel in the Projects share is to be considerably increased. division. In addition to the company’s activities in the field of THE ECHO 2006/2007 17

03 01. The petrochemical industry has become Raw Material MAN Ferrostaal Portfolio Product a key market area for MAN Ferrostaal. Sun Solar Power 02. The company has had a firm footing Combined Cycle Power in the transport sector from the very

Diesel Power start, 75 years ago. 03. MAN Ferrostaal focuses on energy Syngas CTL Coal Production and fuel in the field of world-scale plants. Coke

Direct Other Reduction Products

Gas Compressor- Syngas Ammonia Urea Melamine Stations Production Fuel Methanol Oil Oil / Gas Biodiesel Separation Bio-Oils Water / CO2 Reinjection Bioethanol

Syngas BTL Biomass Production

Pulp & Paper

Business Units: Power Industry Metallurgy Petrochemicals Oil & Gas Renewables/ Forestry

petrochemicals, in the oil and gas industry as well as in the In connection with this, the businesses relating to industrial building of power stations, solar thermo-dynamic plants and machines and printing machines were brought together under bio-fuels such as bio-ethanol move into focus (picture). The one umbrella, Equipment Solutions, so that customers in both company is pursuing relevant projects worldwide (please see divisions can be serviced more flexibly and efficiently. page 26 “Alternative Solutions”). >>>Internationalization of the MAN Group. There are four main con- The growth markets for the supply of energy and the production siderations in the development and organization of the Service of fuel are regions in which MAN Ferrostaal has had a firm and Sales Platform for MAN: the co-operation with MAN foothold for many years: South America, South-East Asia, the Nutzfahrzeuge as sales and service partner, a partnership with Near and Middle East, as well as Europe. In many cases, the MAN Diesel for building diesel-driven power stations, joint company can use MAN products in these projects, for example, work on projects with MAN TURBO and the development of compressors and turbines from MAN TURBO as well as diesel MAN entities worldwide. engines from MAN Diesel. The newly created Service and Sales Platform within MAN >>>Services: Development of international sales and distribution. Ferrostaal draws on support from within – specialist depart- The sales and service activities in the Services division are ments and overseas companies, current market know-how and being developed mainly overseas, as this is where the company contacts – to prepare for market entry, in co-operation with other identifies the greatest potential for its customers and for itself. major players, in those countries where there has hitherto been Overseas, the company renders advisory services, sales, financ- no representation. In this way, MAN Ferrostaal is supporting the ing, project management, assembly and installation, spare parts sale of MAN products in those countries in which MAN’s market and other technical services. On the other hand, in Germany, the position can be further developed. company essentially focuses on project management, financing and logistics. The sale of products from MAN sister companies is to be extended first of all in South America and South-East Asia and then at a 18 forum

later date in the countries of Eastern Europe and Central Asia, Indonesia for 100 years – previously as GHH. Just under 300 Africa, USA, the Near and Middle East. The cooperation with employees work in offices and workshops in Surabaya, Medan, other MAN companies further integrates MAN Ferrostaal into Bandung and Semarang. They cover the full range of the group. customer services for MAN Ferrostaal, from purchasing and consulting through to engineering, financing, project manage- >>>Sales and service partner for MAN Nutzfahrzeuge. The working ment, and after sales support. partnership with MAN Nutzfahrzeuge varies according to the region in which it is operating. In Mexico and Indonesia, for >>>Partnership with MAN Diesel in large-scale plant construction. In example, MAN Ferrostaal is general agent, in Colombia and Peru the Projects division, the partnership between MAN Ferrostaal the company is developing its sales and distribution projects AG and MAN Diesel SE, is being actively pursued and has already according to its own business model. Worldwide MAN Ferrostaal taken shape. The companies put together a business develop- operates as a sales partner and places trucks and buses, with the ment plan and are currently engaged in its implementation. exception of the EU 25. With the founding of the new MAN Ferrostaal Diesel Power GmbH in the middle of September 2006, a highly competent team was >>>Sole agency in Mexico and Indonesia. MAN Ferrostaal, Mexico, is put in place to concentrate on the area of turnkey power stations. exclusively responsible for the sales and service of NEOMAN/ The team started work in Essen and new manpower will continue NEOPLAN products as well as MAN Trucks in the Mexican to be added until the end of this year. market. This arrangement gives MAN Ferrostaal a new business modus which does not just involve supply, but also a consistent Together with MAN Diesel, the objective of the team is to establish sales business with full responsibility for sales, service and spare MAN as a world leader in the construction of stationary turnkey parts supply. By this approach, MAN Nutzfahrzeuge has obtained diesel power stations. The focus will be on markets in South access to a very large market within a short period of time where America, South East Asia, Eastern Europe as well as the Near there had been no previous market presence. Following the and Middle East. A considerable demand already exists in these successful market entry of buses alongside the establishment of markets for decentralized energy generation, which demands structures for sales and service in Mexico, the sales in the truck tailor-made solutions for customers. sector in the Mexican and in other South American markets have already started. As a result of the work as a team, MAN Diesel and MAN Ferrostaal are able to bring their core competences to bear when faced with A similar partnership to that which exists in Mexico between common challenges. In this way existing strengths can be MAN Nutzfahrzeuge and MAN Ferrostaal, is foreseen in South- harnessed and new business approaches developed. A particular East Asia. Concentrating on Indonesia, both companies wish to characteristic of the partnership is the fact that both partners develop the bus and truck market in the ASEAN countries still possess considerable complementary abilities. MAN Diesel further. In Indonesia MAN Ferrostaal will be assuming the role of brings in its product and development skills as well as its market an importer and sole agent. In co-operation with MAN Ferrostaal knowledge; MAN Ferrostaal contributes, in addition to its world- Indonesia and the Headquarters in Essen, a sales and service wide sales network, its project development and management structure is currently being established. The company is also know-how as well as its turnkey plant and process skills. An addi- well-placed in South-East Asia, to generate additional markets tional advantage is MAN Ferrostaal’s strength in growth markets. for MAN Nutzfahrzeuge. MAN Ferrostaal has been present in Turning the plans into reality has already begun. Together THE ECHO 2006/2007 19

with colleagues from MAN Diesel in Augsburg and MAN three from MAN Ferrostaal. The number of MAN Ferrostaal Ferrostaal Diesel Power GmbH in Essen, the teams are already employees is planned to be increased to five. The moving date working on projects in the Middle East, Africa and South for MAN TURBO is planned to coincide with the move into the America. final office building.

>>>MAN Houses. The building of MAN Houses is also progressing. The Houses in Teheran and Peking being planned, the MAN House in Dubai started work in July 2006. After temporary facilities had been rented, the move into the final building is planned for the first half of 2007. In the long term, all activities of the MAN Group in the Middle East are going to be managed from this House. Currently there are fifteen employees working in Dubai, twelve of whom are from MAN Nutzfahrzeuge and

01

02 01. MAN Service and Sales Platform. In Mexico, MAN Ferrostaal is exclusively responsible for the sales and service of MAN Trucks and Buses. 02. MAN Ferrostaal offers diesel power stations worldwide, in partnership with MAN Diesel. 20

01 Mr. Leckebusch, what are the specific advantages of the partnership between MAN Ferrostaal and MAN Diesel for MAN’s customers? Leckebusch: In addition to the traditional engine business there is increasing demand for turnkey solutions in the pro- “CHALLENGES IN vision of decentralized energy services. In many countries our customers do not have the know-how to tender for POWER SUPPLY” diesel power stations and neither do they know how to build them. It is here that MAN Ferrostaal can make an im- portant contribution from project Philipp Leckebusch, Managing Director of development right through to the MAN Ferrostaal Diesel Power GmbH talks operation of power stations. As a result of the partnership with MAN Diesel we about market opportunities in the field of now have a core product in-house and diesel-driven power stations, about the are no longer dependent on other engine partnership with MAN Diesel and what it suppliers. In this way we can pursue the means for MAN’s customers. continuous improvement of standards in a reliable way. All these initiatives are of direct benefit to our customers: customized, competitive solutions for energy provision from one source only – MAN.

Which markets are MAN Ferrostaal and MAN Diesel tackling together? Our markets have always been those which either lack the infrastructure for the supply and distribution of electricity nor easy access to the classical, fossil fuels, such as coal, oil and gas. In other words, countries which are unable to secure their power supply from the operation of central, large power stations alone. This includes markets such as some of the larger South American countries, the Caribbean Islands, the THE ECHO 2006/2007 21 MAN platform

01. San Pedro Diesel Power Station in the Dominican Republic, built by MAN Ferrostaal 02. MAN Diesel engines in the San Pedro Power Station. inadequately supplied countries of 02 Africa or areas of South-East Asia which are difficult to reach.

Why are these markets so promising for MAN Ferrostaal and MAN Diesel? In the last three years, we have experienced dramatic growth in the developing coun- tries. All of these countries are faced with considerable challenges in the future development of their power supply, in order to keep pace with economic growth. Decades of missed opportunities in the development of the power supply and the infrastructure that goes with it, need to be redressed within a very short period of time. It is here where we see the best opportunities for our products and services. What is it that both companies bring in is the main focus of our efforts and I am terms of added value as far as the devel- convinced that we possess the necessary What do these markets have in opment of these markets is concerned? market knowledge, know-how and the common, what is so special about In addition to those competencies already products, in order to operate as a pre- these markets? listed, MAN Ferrostaal offers the following ferred provider of total solutions in the What is missing in many growth areas important strength: MAN Ferrostaal is a market-place. are technical know-how and money. worldwide sales organization, which has There are not enough local companies to some extent already been operating who possess the experience and the for decades in the target markets. We financial strength to build turnkey possess excellent market and customer diesel power stations. Many projects can knowledge which enables us to react only come to fruition using intelligent quickly to the needs of our customers financing solutions. Even in the highly worldwide. industrialized countries of the West, there are new opportunities. Power What is your personal goal in the Philipp Leckebusch, stations built on the basis of using development of these markets? Managing Director, renewable energies, such as bio-fuel, are If we can implement our plans quickly MAN Ferrostaal Diesel Power GmbH gaining greater significance. It’s here and obtain confirmation from our cus- that MAN Ferrostaal together with MAN tomers that they are able to realize their Contact: Diesel can offer effective solutions from own plans more efficiently with MAN – Phone +49. 201. 818-5233 fuel processing to network supply and then we know we’re on the right track. E-mail: Philipp.Leckebusch@ the operation of plants. Ultimately, the benefit to our customers manferrostaal.com 22 MAN platform

EFFICIENT EXPLOITATION OF OILFIELDS: “WE ARE THE FACE OF MAN TURBO IN MEXICO“

For more than 20 years MAN Ferrostaal has been representing the interests of MAN TURBO in Mexico. As the representative of the company it has attracted significant business from many different industries. Among its customers are the biggest industrial groups in Mexico, such as PEMEX (oil and gas/refineries and petrochemistry), Grupo Alfa (petrochemistry/food and car industry), Grupo Vitro (glass, sodium and calcium), Mittal Steel (steel), SICARTSA (steel), AHMSA (steel) und CNC (a joint venture of The Linde Group and Marubeni to supply nitrogen to the Cantarell oilfield.).

01 THE ECHO 2006/2007 23

02

01. Turbo engines from MAN TURBO for one of the world’s largest nitrogen production plants in Mexico 02. A look inside: the Cantarell power house

“Every day we are in close contact with our customers. Therefore The success of his agency speaks for itself: With three major we have a thorough knowledge of the market and the technical orders for the supply of compressors and turbines for requirements of our customers“, says Stefan Deuster, head of the Cantarell, Samaria and Jujo-Tecominocán oilfields, MAN MAN Ferrostaal Mexico. Those who want to do business in the Ferrostaal succeeded in making MAN TURBO the undisputed areas of energy and power engineering will find a competent market leader for nitrogen injection into oilfields in Mexico. partner with Mr Deuster. He and his team are a sales and service Stefan Deuster sums it up: “We are the face of MAN TURBO in platform not only for MAN TURBO but also for the affiliated Mexico“. groups MAN Diesel and MAN Nutzfahrzeuge and for brands outside the group. With his staff of eight in the energy and One example for the use of air and nitrogen compressors that power engineering department he is also responsible for after are needed for the injection of nitrogen can be found in Mexico’s sales services such as repairs or the provision of spare parts. most important oil field, the Cantarell complex. It is located in Hence he sees to a long-term co-operation with his customers. the Gulf of Mexico in the Bay of Campeche. 24 MAN platform

DIFFERENT FUNCTIONS OF VALUE ADDED

Added Value Sales and service partners, Function own distribution and service networks, partnerships, product concepts,oncepts, for exampleexamp MAN Nutzfahrzeugeahhrzeuge

Sales and serviceervicrvice partners,s,, for example MAN RoRoland

Salesess platform and sparepareare parts supply,supplsupp for example MAN TURBO,TUTUR MAN Diesel Long term protection and potential of business fields

THE CANTARELL OILFIELD EXPANSION OF THE PLANT About two thirds of the Mexican oil production come from one After several years of continuous operation of the machinery of the largest offshore oilfields in the world, the Cantarell oil installed, MAN TURBO received the order to supply a further line field. In the past few years the average production amounted to of turbo machinery with an extensive train of pipes to increase 2.2 million barrels of crude oil per day. In order to maintain and the capacity of the existing plant to supply the KMZ oil field. even increase the output of this oil field, PEMEX, the national oil The enlargement of the plant resulted in many new challenges. company of Mexico, injects nitrogen to maintain the reservoir’s On the one hand the experience gained so far with the ongoing underground pressure. The air and nitrogen compressors operation was supposed to be taken into consideration for the needed for this purpose were supplied by MAN TURBO. This design of the new equipment, on the other hand the scope of plant has been in continuous operation since July 2000 with a supply and the resulting engineering work increased. total compressor output of 400 megawatts. Seawater, which is The use of state-of-the-art technologies and the inspection and pumped over a distance of 4.5 kilometres from the coast to the analysis of the location in a virtual space made a precise recon- cooling towers and condensers, is used to cool the plant. struction of the existing plant possible.

Due to the extension the total compressor output of this plant was increased to 500 megawatts, the absolute production of nitrogen amounts to 1,500 million cubic feet per day. THE ECHO 2006/2007 25

RECOVERY TECHNIQUES

The crude oil available in an oil reservoir cannot be fully recovered. Proven oil reserves are the portion of crude oil that can be extracted economically. The extraction rate varies depending on the oil field and the quality of the crude oil. On average the extraction rate is currently between 35 and 40 percent world-wide.

PRIMARY RECOVERY A part of the crude oil can be extracted using the natural underground Primary recovery pressure in the oil reservoir. This is called primary oil recovery. A maximum of 25 percent of the reservoir’s crude oil can be recovered that way. Additional measures that are used to increase the natural yield of an oil field include the use of pumps as well as secondary and tertiary recovery methods.

SECONDARY RECOVERY Secondary oil recovery uses mainly the injection of water or gas into the oil reservoir. This maintains or even increases the oil reservoir’s pressure to aid in recovering oil.

TERTIARY RECOVERY Secondary recovery Tertiary recovery (Enhanced Oil Recovery – EOR) includes those methods that enable the remaining oil to be extracted after the injection of cold water. Examples are in particular thermally enhanced oil recovery methods such as the injection of steam or hot water. Moreover chemical substances such as polymers or surfactants can be used. Tertiary oil recovery techniques are extremely expensive. Hence their profitability very much depends on the price of crude oil

HORIZONTAL DRILLING The improvements made in recovery techniques resulted in the development of directional drilling. This method is used within an oil reservoir and increases the rate of exploitation. Furthermore there are extended reach drillings; with Tertiary recovery these inclined drillings oil reservoirs can be reached which could not have been recovered without this technique.

Recovery techniques/Source: Wirtschaftsverband Erdöl- und Erdgasgewinnung e. V. Horizontal drilling 26 projects

ALTERNATIVE SOLUTIONS FOR ENERGY AND FUEL: MILESTONES FOR THE FUTURE

Nuclear reactor accidents, nuclear power phase-out, depletion of fossil resources, consistently high energy costs as well as the problem of climate change – these are all headlines with which the media confront us on a daily basis. Europe needs to show its commitment to renewable energy. And in view of the ever-increasing depletion of fossil energy reserves and the resulting increase in energy and fuel prices, both the economy and politics are focused on the development of high quality bio-fuels. THE ECHO 2006/2007 27

>>> “THE FUEL OF THE FUTURE IS GOING TO COME FROM FRUIT LIKE THAT SUMACH OUT BY THE ROAD, OR FROM APPLES, WEEDS, AND SAWDUST – ALMOST ANYTHING”. (HENRY FORD)

In the new energy market the way forward is slowly becoming CONTRACT FOR FIRST BIO-DIESEL PLANT apparent. The German Renewable Energy Law, development In May 2006 MAN Ferrostaal reached a milestone in signing a programs for projects dealing with both research and develop- contract for a bio-diesel plant in Poland. The Polish Lotos Group, ment into renewable energies and regulations for the legal the second largest petroleum company in the country, requirement to add bio-fuels to traditional fuels, form the basis of employed MAN Ferrostaal as a general contractor of the this new energy market. turnkey implementation of the project. The customer invested 23 million euros in the project. Lotos Biopaliwa, a subsidiary of MAN Ferrostaal is positioning itself in this market as a partner the Lotos Group, and MAN Ferrostaal plan to start building in for the development of new industries. Years of experience as a the beginning of 2007. The bio-diesel plant is designed to general contractor in the building of petrochemical plants and achieve a capacity of 100,000 tonnes annually and, if all runs power stations, as well as a considerable degree of financial according to plan, should be finished in the beginning of 2008. competence, characterize the company. These features are a pre- A major part of the bio-fuel produced will be used as an additive requisite for the energy market of tomorrow. Correspondingly to traditional fuels in the Polish market. A further part of this MAN Ferrostaal has broadened its competencies. In the field of premium fuel is foreseen for export within Europe. “renewables”, specialists of the company concentrate on the development and implementation of projects in the fields of bio-diesel, bio-ethanol and solar energy. 28 projects

DEVELOPMENT OF PRODUCTION CAPACITIES BIO-DIESEL IN GERMANY 1,000 t 2,200

2,000 1,900 1,800 1,600 1,400 1,200 1,200 1,100 1,000 800 730 600 460 400 200 200 140 50 0 1998 1999 2000 2001 2002 2003 2004 2005–2006* Estimation

Bio-diesel production in Germany/Source: UFOP

WORLDWIDE LICENSE FOR SUCCESSFUL from rapeseed oil. Experts predict that this trend shows the CONNEMANN PROCESS potential for further growth. In the year 2005, 5.5 percent of the MAN Ferrostaal has a worldwide license for bio-diesel production German market for diesel based on mineral oil was replaced from the Ölmühle Leer Connemann GmbH (part of the by bio-diesel, and in total 1.8 million tonnes were sold on the ADM Group) for the use of the so-called CD process (continuous market throughout Germany. The “Union for the Promotion of deglycerolization) which will also be used in the plant in Poland. Oil and Protein Plants e.V.” (UFOP) predicts in an EU-wide com- This technology was developed in the 1990s by a German engineer, parison that the requirement for bio-diesel lies at 11 million Dr. Joosten Connemann, and is considered to be one of the most tonnes per year at a forecasted consumption of 165 million important technical large-scale processes in the mass production tonnes. In view of the increasing demand for bio-diesel, the of bio-diesel. Around five million tonnes of bio-diesel will be contract to build a bio-diesel plant represents an important step produced annually in 30 plants worldwide using this process for MAN Ferrostaal into a forward-looking market. Experts before the year 2007. assume that at least 15 percent of fossil fuels will be replaced by renewable resources by the year 2020. THE MARKET FOR BIO-DIESEL Around ten million tonnes of oil in the form of diesel and gaso- GROUP-WIDE SYNERGIES line are used daily throughout the world for transportation. MAN Ferrostaal and MAN Diesel SE have joined forces in the Until now, bio-diesel and bio-ethanol have formed only a small bio-fuel market. MAN Diesel SE is already successfully marketing portion of this. Political and economic solutions for substitutes engines running on bio-fuels and MAN Ferrostaal is able to meet of the same quality are being sought for the future. the demands for quality through the use of efficient processes in the refining of bio-fuels. In this way both companies are able Germany is playing a pioneering role in the production of bio- to offer total solutions to the customer from a single source. diesel – in fact Germany is the number one producer for fuel MAN Ferrostaal takes MAN Diesels’ ideas into account in its own THE ECHO 2006/2007 29

Methanol- Methanol- Catalyst Catalyst Steam

Oil in Condensate Glycerin Glycerin refining process and prepares cooking oil in such as way as to ensure its optimal use in diesel engines. While diesel engines Water Water Vacuum heat up, they generate waste heat, which evaporates unused in Steam most of the traditional processes. However, in combination RME out with MAN Ferrostaal’s refining plant, the heat can be used in the refining process – thereby reducing energy costs. Condensate Glycerin- Glycerin- Washing Washing In a joint study group, experts from MAN Nutzfahrzeuge and MAN Ferrostaal are developing scenarios for entry into new markets. For example, the group is currently evaluating what BIO-DIESEL MANUFACTURE ACCORDING TO THE CD PROCESS: opportunities there may be for the MAN Group in South-East To be able to use bio-diesel in diesel cars, the structure of Asia in respect of the production and use of bio-fuels on the the raw material has to be changed. This is accomplished by basis of palm oil. using a simple chemical reaction in the manufacture of bio-diesel. In this process, known as transesterification, methanol is added Worldwide, MAN TURBO delivers compressor assemblies for GTL to the base product. With the help of a catalyst the mixture (gas-to-liquid) plants and works with MAN DWE (formerly warms, glycerin and methanol change places, and three single Deggendorfer Werft and Eisenbau GmbH), a worldwide provider fatty acids – methylester chains and a free glycerin molecule of reactor systems. MAN DWE develops synthetic gas reactors are produced. Finally the surplus methanol is removed again by according to the Fischer-Tropsch process for use in GTL and BTL distillation in a series of washing steps. This process is necessary (biomass-to-liquid) plants. to achieve optimum viscosity of the bio-diesel and to develop its full capacity. The next edition of this magazine will feature an article about SOLARTHERMIE in the series “renewable energies”. Your contact Bio-diesel plants achieve on average a production rate of at MAN Ferrostaal for all matters concerning bio-diesel is: 330 working days per year. The CD process makes it possible [email protected]. to achieve a production rate of up to 360 days per year – an additional financial advantage. Centrifuges with a self-cleaning function are used in the process. This means that the production process is not interrupted and maintenance time is reduced.

Independent of the process itself, other advantages result from the production of bio-diesel through the closed circuit of sub- stances. One of these is that the manufacture of rapeseed oil in the oil mill produces a by-product, coarse colza meal, which can then be used as a protein in animal feed. In addition, the by-product glycerin occurs in the production of bio-diesel through the transesterification process, which is then used in the chemical and pharmaceutical industries. 30 projects

>INTERVIEW WITH DR.-ING. JOOSTEN CONNEMANN: INCREASING DIVERSITY OF ENERGY SOURCES

Dr.-Ing. Joosten Connemann is the inventor of the CD process (Continuous Deglycerolization) for the manufacture of bio-diesel. In 1991, he built the first pilot project plant for bio diesel in Germany.Before the year 2007, 30 plants will have been built using his process.

Mr. Connemann, you come from a family which has been How long did it take to develop the CD process from interested in the use of flax and rape since 1750. Were you concept through to production? already interested in this material as a child? As a process engineer, chemist and entrepreneur, the develop- Definitely. When I was only four years old, I was allowed to help ment of this process, using tried and tested machinery and in the production of soap. For example I held the steam valve equipment from the oil-milling business, especially that used of a huge soap pot and had to make sure that the soap didn’t in cooking-oil refining, wasn’t so difficult. We were used to work- boil over! ing with platoons, heat exchangers, pumps, separators, with distillation and rectification as well as with steam, vacuum and How did your interest in bio-diesel develop? Did you think condensation. Every day, between 500 and 1,000 tonnes of oil at the time that there was a future for alternative fuel? ran through our production facilities.

Many chemists and engineers were already working on alterna- Our task was to convert the whole thing using another chemical tive fuels in the oil crisis of 1973. However, they recognized reaction. After only four years the third plant was already a major very quickly that pure vegetable oil wasn’t suitable for a diesel industrial mass-production facility. engine, while, as an ester, through chemical transformation with alcohol, it develops the optimal characteristics. If you look at the market today and the sharp increase in production, what are your predictions for the next ten years? When the Gulf War broke out in 1990, it was clear to me straight-away that oil mills with rape, sun-flowers and soybeans The demand for energy and fuel will continue to rise. Therefore offered a great opportunity for the bio-diesel market. The first it’s necessary to find and optimize alternatives. We’ll witness few years were very hard work and we had to place consider- an increasing variety of energy sources. Among these the able three conviction behind it. The increases in the price of oil bio-fuels will quickly develop to a volume of 100 million tonnes in the last 3 years provided the impetus we feel worldwide now. annually. THE ECHO 2006/2007 31

Which raw materials are available for manufacture now and further milestone was achieved with the implementation of the in the future? EN 14214 bio-diesel standard.

There are many raw materials which can be considered for the Since 1995 we have been working with the automotive and manufacture of bio-diesel. Above all there are the biogenic fatty mineral oil industries to develop the European quality standard raw materials, such as oils and fats from rape, soybeans, palm, EN 14214 for bio-diesel, in order to establish minimum require- cotton, rice, corn, tallow and lard, which are particularly suitable. ments for its quality. Today it has worldwide recognition and Experts continue to source other kinds of additional plants which sets the direction for other regional and international standards. flourish even in poor soil conditions, for example in the sub-tropical Even the US standard ASTM D6751 is being developed further dry regions. Interesting are oil trees, such as the Jatropha, which along the same lines. has already been planted in Egypt and Mali, and the Pongamia which has been used for some time now in India as a sun shade Is there a continual partnership between engine manufac- and along river banks as a decorative tree. turers and bio-diesel producers?

In addition to cooking oil, other raw materials that can be used in We have been working with the automotive industry since the manufacture of bio-diesel are extracts from the residue of bio- 1990. Even manufacturers of tractors are showing interest in ethanol production and tall oil, a by-product of the pulp industry. bio-diesel, but what is more important is the close cooperation On the whole we need to remain modest, as the total current with automotive suppliers such as Bosch, Stanadyne or requirement for fuel cannot anywhere near be met using bio- Delphi, because it is the manufacturers of injection systems diesel plants, even if 25 million tonnes (achieved in 2007), 100 or who are responsible for the most important in the drive line of 500 million tonnes could be achieved worldwide. automobiles.

How important is adherence to quality standards for bio- With additive levels of 5 percent, these important companies diesel? have declared themselves in support of bio-diesel worldwide and they take it into account in the development of their tech- Immensely important! This idea led to the founding of the AGQM nologies. Any further increase still meets with, in my opinion, (Arbeitsgemeinschaft Qualitätsmanagement Biodiesel e.V./Society unfounded concerns on the part of the manufacturers. for the Quality Management of Bio-diesel) in April 2001 with the assistance of UFOP (The Union for the Promotion of Oil and A new set of problems is posed by the necessary regeneration Plants e.V.), which since then has been responsible for quality of adapted particle filters. The deregulation of refitted particle control in Germany. filters certainly applies to miscellaneous suppliers, but unfor- tunately does not apply to standard built-in types. That means The diligent work of the AGQM has led to a remarkable improve- that there’s still a lot to do. ment year over year in the average quality of bio-fuel at the pumps. Strict demands made for a uniformly controlled quality manage- ment system ensure that the quality of the fuel remains high and consistent. Today only five years after introduction of the principle, its extension throughout Europe is being discussed. A 32 projects

WITH PROSPECTS: POWER STATION EXPANSION IN VENEZUELA

With the expansion of the Termozulia gas power station, MAN Ferrostaal makes an important contribution to the future provision of power in Venezuela. The sponsorship of elementary schools in Maracaibo is a forward looking venture.

October 2006: The Venezuelan National for further power station projects in the Not long to go then before we’ll be hear- Anthem resounds from the mouths of over country,” explains Dietmar Pracht. ing the Venezuelan National Anthem 150 children in Maracaibo, the second again in Maracaibo. The new gas and largest town in the country. The occasion is HIGH DEGREE OF INTERNATIONALI- steam turbine power station is going to be the handing over of new computer rooms ZATION IN THE PROJECT connected to the network with a power in the first of three elementary schools Boiler pressure test passed, coolant plant supply capacity of 508 megawatts. The near the site of the power station. MAN flooded, switchgear connected – the power output has been increased by Ferrostaal is sponsoring this project. An expansion of the power station is well around 182 megawatts. An increase in the effective investment: training for teachers underway, only 24 months after the efficiency of around 55 percent goes hand ensures that the PCs are used correctly in hiring of MAN Ferrostaal. All essential in hand with this, and Termozulia will be lessons and even systems maintenance is systems are in place and are being put able to make an invaluable contribution ensured for one year. The computers into operation. A milestone in this inter- to the supply of power in Venezuela. provide the students with access to the national 137 million euros project. MAN The economy and the population of the worldwide-web for the first time. “The Ferrostaal bought the components from country currently have to live with severe connection with Venezuela and the town suppliers in four continents and during bottlenecks, as power generation – princi- of Maracaibo extends beyond the power assembly is responsible for ensuring that pally from thermal and water-powered station project of Termozulia. Supporting the work from companies in many differ- stations – is not able to cover all load the students lies close to our hearts. We ent countries runs smoothly. More than scenarios. However, this is to change very are promoting the project together with one third of the building and installation soon, according to the intentions of the ENELVEN and other suppliers and thus work was placed with Venezuelan com- Venezuelan government: Further power continue our successful cooperation in this panies – an important impetus for the station projects are currently being power station project,” stresses Dietmar local industry. planned and offer good prospects for Pracht of MAN Ferrostaal Power Industry, MAN Ferrostaal in the acquisition of who has been the project manager of the IMPORTANT CONTRIBUTION future contracts. expansion of the power station in the last TO POWER SUPPLY two years. The test run for the new gas and steam turbine power station is in February 2007. MAN Ferrostaal’s job as general contractor The steam turbine and generator will is to turn the existing gas power station of be synchronized and for the first time Termozulia into a working modern gas and electricity will flow into the power supply steam turbine power station and to hand it network for a short while. The workings of over as a turnkey plant. “Alongside projects all essential components of the new gas such as those in China and the Dominican and steam turbine power station are Republic, Termozulia is our showcase in being tested. After that, the finishing Venezuela. Particularly in engineering as touches will be added: well as in procurement and project man- agement we want to show what we can The process control equipment will be re- achieve, in order to be recommended adjusted and various load scenarios tested. THE ECHO 2006/2007 33

01

02

01. MAN Ferrostaal supports three elementary schools in Venezuela. 02. The expansion of the Termozulia power proceeds on schedule. 34 projects

ESTONIA: FROM WOOD TO PULP

The demand for paper products is increasing worldwide at around 2.5 percent a year. In addition to waste paper, pulp is the most important base material for paper manufacture. The high demand necessitates the building of new pulp plants, the most recent of which went into production in Kunda, Estonia. Recently the plant was handed over to the customer, Estonian Cell. THE ECHO 2006/2007 35

The car journey from the Estonian capital of Tallin to the small town of Kunda, which lies in Eastern Estonia in the Gulf of Finland, takes around two hours. The dead straight street runs past sweeping forests that are an essential part of the country’s economy. It’s very apt therefore that Edgar Savisaar, Economic and Communications Minister of Estonia, made the journey at the beginning of September 2006 from Parliament to celebrate the opening of a new pulp plant in Kunda. Just like the other guests he followed the production of wood to pulp.

WOOD CHIPS As if electrified two to three meter long tree trunks, mainly aspen wood, dance through the narrow bark-peeling drum. In rotation the bark is ground from the trunks and then, after a couple of meters moved on to the chopper. In just a few seconds the chopper reduces each tree into centimeter-sized wood chips. A long conveyor belt transports them to the large main building of the plant.

ROTATING DISKS Here the bondings between the wood fibers are mechanically separated. The raw material consists of 40 to 50 percent cellulose fibers, which are responsible for the rigidity of the wood. These are held together by the mastic materials lignin and hemicellulose which work as bonding agents.

In this part of the process it is important to dissolve the lignin in order to free the wood fibers. Counter-rotating disks of the two refiners grind the wood chips to produce a pulp. The mastic materials remain adhered to the fibers. 36 projects

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BLEACHED PULP materials, so that the wood substance breaks down into its fiber It is only after bleaching that the pulp becomes white, and this components. white mass is the thermomechanical pulp. Following drainage and drying, it leaves the plant in Kunda as bales for finishing. The The energy from the raw material, wood, not used for the manu- main buyers of pulp are manufacturers of paper and hygienic facture of pulp, is also utilized. The waste liquor from the boiling products. process is evaporated with the non-pulp elements – around 50 percent of the wood mass – and burnt in the so-called lye boiler. CHEMICAL PULPING The organic wood elements are transformed into energy and In the future, MAN Ferrostaal will also be focusing on pulp produce steam. The inorganic pulp chemicals, on the other manufactured by a chemical process, in contrast to thermo- hand, are reused when the process is repeated. A subsequent mechanical pulp. Projects in Stendal, Germany, and Musi, processing plant turns them into fresh boiling lye. Indonesia are pointing the way ahead. DEMAND REQUIRES NEW BUILDING For the chemical manufacture of pulp, the bonds between the In contrast to used paper, the paper industry uses more cost wood fibers are separated. 400 cubic meter boilers containing a intensive pulp, as many products require the improved non-tear chemical alkaline solution heat the small wood chips with steam characteristics of pulp. The demand for pulp and available pulp – for three to four hours, at very high temperatures and pressure. i.e. pulp which is not manufactured within an integrated paper The chemicals in the alkaline solution dissolve the mastic plant – will rise annually by two or four percent, respectively. With THE ECHO 2006/2007 37

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the plant in Estonia, MAN Ferrostaal has proved again its 01. Tree trunks being fed into the plant. The wood used competence in the project management of complex pulp plant in the manufacture of pulp comes from sustainable, construction. As the chemical manufacture of pulp requires farmed forests. considerable investment, the financial project management 02. The wood is ground into pulp in the heart of the plant. capabilities of MAN Ferrostaal will become increasingly important 03. Inspection at the plant: (from left to right) Margus in this market segment. Just as in Estonia, the forests in the Kohava (Mill Manager Estonian Cell), Edgar Savisaar subtropical areas of South America and Asia are an important (Economic and Communications Minister, Estonia), economic factor. There trees grow rapidly on the plantations, Jüri Raidla (of the Law Firm Raidla & Partnerid and producing raw material excellent prospects for further major projects. Presiding Judge at the Estonian Constitutional Court). 04. Up to 1,250 rolls of toilet paper can be manufactured from 250 kilograms of pulp. 38 projects

DISMOUNTING AND RECONSTRUCTION OF 5,000 TONNES OF PLANT COMPONENTS INDUSTRIAL JIGSAW PUZZLE

The dismounting and reconstruction of a complete piping and tubing plant is an achievement which relies on a high degree of precision and efficient time management. Which parts are disassembled, labeled and packed, in which sequence they are loaded, and where, how they are stored on arrival, requires a air-tight and complex working plan. This is the story of the successful relocation of a UOE piping and tubing plant from Mexico to Saudi Arabia by MAN Ferrostaal.

In 2002, Arabian Pipes bought a used UOE piping and tubing because workers are unable to access certain parts or because plant in Mexico and wanted to relocate it to Saudi Arabia. In heavy parts are in the way, additional costs are incurred. Once October of the same year, the company tasked MAN Ferrostaal the machines and plant parts had been overhauled and repaired, with the project – a task to which MAN Ferrostaal was able to the reconstruction was completed in nine months. At times, the bring decades of experience in plant build and assembly. First of assembly team had to work in temperatures of over 50 degrees all the complete plant was inspected and analyzed piece by piece Celsius. on paper. Careful planning of the logistics would be essential here. The success of the project also depended on a good working rela- FROM COMPLETE MACHINES TO THE SMALLEST SCREW tionship with the customer’s representatives on site and other Altogether the project involved around 5,000 tonnes of material. participating companies. MAN Ferrostaal’s flexibility also played The objective was to pack the plant in components which were as a part in achieving rapid solutions, for example by flexibly large as possible – this was not always possible, however. From applied assembly steps. complete machines to plant parts to small screws – the task was to label, pack and store everything on arrival in such a way as to Later on, a team managed by MAN Ferrostaal was used as a task ensure a smooth and problem-free reconstruction. It is easy to force on the building site, providing support in preparing for imagine that with thousands of small parts, something could be the final activation of the plant. Three engineers from missed, unless everything is planned with the utmost care and MAN Ferrostaal managed and supervised the dismounting and precision. MAN Ferrostaal succeeded in completing the decon- reconstruction, each with around 50 workers from a local struction in just seven months. The machines and plant parts company. were loaded into 421 crates in total; the shipment was managed by the customer himself. FROM IDEA TO REALITY Arabian Pipes intends to supply the Arabian oil and gas industry IN JUST NINE MONTHS with the steel pipes manufactured at the UOE piping and tubing The plant parts arrived at their destination in Saudi Arabia – the plant. A pipe coil plant and a coating plant are currently being industrial area of Al Jubail – in July 2003. They were stored there planned as a further extension to the piping and tubing plant. temporarily in accordance with a floor plan developed by MAN They are designed to raise the quality and increase the market Ferrostaal. Careful planning at this stage is also critical for a value of the product range. problem-free and rapid reconstruction. If time is wasted, THE ECHO 2006/2007 39

01 PARTICULARS OF THE ASSEMBLY OF PLANTS AND MACHINES IN DETAIL

PMT Plants: U and O presses 2,200 t Factory cranes 500 t Hydraulic test bench 300 t Front face machining 100 t Expander 300 t Inner/Outer welding machine 350 t Steel sheet feed 20 t Pipe cleaner 130 t X-ray and ultrasound tester 180 t Pipe conveyor system 600 t Laboratory and auxiliary equipment 320 t

New Machines: Bending machine 340 t Root welding machine 170 t Pipe conveyor belt 40 t

UOE PROCESS

The production process for straight-beaded piping is called the UOE process. In this a steel plate is pressed first into a U form and then an O form, before being internally and externally beaded.

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01. Assembly of the bottom half of the pipe press 02. A look at the factory: a pipe welding machine 40 projects

GOOD PROSPECTS FOR SAUDI ARABIA

In Saudi Arabia another substantial project is emerging for MAN 01 Ferrostaal. The project is to build a pickling, cold rolling and metal coating facility along with the corresponding side plants in the industrial area of Yanbu. MAN Ferrostaal has already won the order for providing the basic engineering and preparing the specifications for the local construction and assembly. Contract conclusion with the customer – the Attieh Group – is scheduled for the first quarter of 2007. Only 24 months later the plant is planned to be put into operation.

One reason why MAN Ferrostaal was able to win the tender was the successful reference project Lilama in Vietnam, Hanoi. Since 2005 they have been operating a galvanization and color coating plant and running it at full capacity.

MAN Ferrostaal’s experience will be put to good use in the pro- ject in Yanbu in Saudi Arabia. The Yanbu industrial area covers 02 several square kilometers and is situated on the Red Sea. Just like the vast Jubail industrial zone, Yanbu is characterized by the oil and petrochemical industry. While Jubail is located on the Strait of Hormuz, Yanbu’s great port in the west of Saudi Arabia opens another door to international trade. “By means of the Arabian Pipe Project (see page 38) and the designated order for a strip rolling mill and cold rolling facility we will be continuing our long lasting good relationship between MAN Ferrostaal and Saudi Arabia,” says Howard R. Barnes, responsible for this business at MAN Ferrostaal.

01. Mohammed N. Joukhdar (first row, right), Attieh Group, and Howard R. Barnes (first row, left), MAN Ferrostaal, are signing the engineering contract. 02. Preview on the project in Yanbu THE ECHO 2006/2007 41 services

PRINTING MACHINE MARKET IN LATIN AMERICA: FIRM FOOTHOLD IN CHILE

Every week more than one million Chileans after-sales service going beyond the instal- “We were easily convinced of the Ryobi read “El Mercurio”, the oldest newspaper lation by supplying materials, procuring technology for UV colors. We are now able of the world written in Spanish which was spare parts and providing a 24/7 service. to offer our customers a completely new first published in 1827. MAN Ferrostaal range of products and an outstanding has a fair share especially in printing INNOVATION IN LATIN AMERICA added value thanks to this technology,” the supplements of the newspaper. The MAN Ferrostaal introduced an innovation says Felipe Bàez, Managing Director of company has enjoyed a long standing on the Latin American market at the B&B Impresores. business relationship with “El Mercurio” beginning of 2006: They sold a Ryobi which became even more tight when a offset-printing machine model 755 XL E ADTL – XXIII. ANNUAL MEETING mail-room plant was installed and a fully to “B&B Impresores” in Chile. It is the first The annual meeting of the Latin American automatic MAN Roland reel loading device of its kind in Latin America. Due to the newspaper printing industry took place in “Aurosys” was supplied. A successful co- customer’s far reaching requirements in Santiago de Chile in September this year. operation also exists with the jobbing terms of technology and combination This meeting is primarily a venue for the offices “Gràfica Quilicura” and “Morgan options of the machine, MAN Ferrostaal exchange of technical experience. Along Impresores”, both subsidiary companies of had to provide extensive advisory service with specialists of renowned printing “El Mercurio”. "Gràfica Quilicura" prints in advance. MAN Ferrostaal staff took the machine manufacturers MAN Ferrostaal magazines and supplements for the most customer on a visit to the Ryobi plant in introduced the customers to state-of-the- popular daily in Chile, and MAN Ferrostaal Japan to have a thorough look at the art technologies and market trends. has been there right from the start. Sheet- technical properties and specifications of fed printing machines, gather stitchers and the machine. The customer uses the adhesive binders as well as rotary printing machine for the 3-dimensional printing machines have been supplied since 1997. on PVC materials (polyvinylchloride). The machine is also used for different On top of that “Gràfica Quilicura” placed process technologies on the basis of UV an order with MAN Ferrostaal for the printing colors (ultra violet). UV printing delivery and installation of three MAN colors stand out due to the fact that Roland heatset rotary machines – a the colors harden immediately when Cromoman, a Rotoman and a Uniset 70. exposed to UV light. The product is much The advantage for “Gràfica Quilicura”: glossier. 42 services THE ECHO 2006/2007 43

SERVICES FOR THE AUTOMOTIVE INDUSTRY EVERY SECOND COUNTS

In the automotive industry, the number of different vehicle models and types has been rising dramatically for years. Not only is the same production line used for various models, but each model is equipped differently complying with the customer’s individual specifications: with or without sunroof, air-conditioning, board computer, DVD player – the list of items seems endless. On top of that, lead times and product cycles are becoming shorter all the time, thus increasing the complexity of the automotive business. Service providers for the car industry are therefore also facing entirely new challenges.

MAN Ferrostaal has long been well positioned to meet the tion stays up and running. Castro explains, “We take care of an continuously growing challenges. For more than two decades, entire field of operation for the customer and run this operation its subsidiary MAN Ferrostaal Automotive (MFA), located in ourselves. Our package is total service – and this does not mean Essen, has been supporting the automotive industry pro- that it’s just a one-off! We provide this for the entire production viding a large variety of services – they understand their life cycle of a vehicle.” Thus automakers and their first tier customers' needs very well. “We feel at home in the same world suppliers are able to focus on the development, final assembly as our customers”, says Detlef Castro, Managing Director of MAN and distribution of their products. “We are going where our Ferrostaal Automotive. The company provides logistics, just-in- customers are, which ensures extremely brief response times time delivery, sequencing and assembly as well as a wide range and direct contact to the customers,” Castro adds. of additional services. Its 3,000 workers employed at 12 sites in Europe ensure that the required components are delivered on THE ADVANTAGE OF INDEPENDENCE time and cost effectively. At all times they focus on the uninter- MAN Ferrostaal can offer another advantage to the automotive rupted production process in the car manufacturing plant. industry thanks to its independence from specific suppliers in Every second counts. the preassembly of vehicle components. It does not matter to an independent service provider if e.g. a spring strut for the Astra MORE THAN MERE LOGISTICS consists of components made by Bosch, Delphi, Valeo or other The company’s range of services goes far beyond planning, man- suppliers. All that matters is to be able to guarantee the seamless aging and controlling the entire commodity supply and the con- assembly chain and the most favorable solution for all parties trol of the flow of the associated information. Complex assembly concerned. and sequencing processes are also organized in-house. Beginning with the process and layout design, they continue with the LISTENING TO THE CUSTOMER required infrastructure, the equipment for assembly, recruit- In line with the philosophy “listening, planning, acting and pro- ment and training processes and ensuring that the entire opera- gressing”, the company invests plenty of time and energy in the 44 services

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01. Warehouse for press parts at the SILS Centre in Gliwice 02. Sequencing of cooling modules 03. Glass screen assembly THE ECHO 2006/2007 45

MORE WORK FOR AUTOMOTIVE SUPPLIERS Development of in-house volume for each brand Audi (+1,2 bill.) +30% from 2002 to 2015 (estimated) BMW (+1,2 bill.) +15% Fiat (+0,4 bill.) +7% Mercedes (+0,4 bill.) +4% other premium car manufacturers (+1,3 bill.) +5%

Increase by 4.5 bill. euros

–3% Toyota (– 0,6 bill.) –6% Opel (– 0,3 bill.) –8% Volkswagen (–1,0 bill.) –11% Honda (–1,2 bill.) –12% Peugeot (– 0,8 bill.) –13% Renault (–1,1 bill.) –16% Nissan (–2,1 bill.) –24% Citroën (–1,1 bill.) –28% Ford (–6,4 bill.) –33% Chrysler (–1,2 bill.) –20% other volume producers (–14,4 bill.) Decrease by 30.2 bill. euros Changes in percent (changes in company in-house volume in billion euros) Source: Mercer Management Consulting; Frauenhofer Association

>>> ACCORDING TO OUR PHILOSOPHY WE SET EXTREMELY strategic and technical development of standard concepts to plan the information and commodity flow. 60 employees HIGH QUALITY STANDARDS. work in engineering to optimize results: they develop improved infrastructures, state-of-the-art working environments and tailor-made devices, such as demand-oriented sequencing racks according to the customers’ specifications. IT management is explains Castro, adding “According to our philosophy we set another area of the company’s services, developing software extremely high quality standards – just like our customers. We solutions that create suitable IT structures. reduce the complex control structures of our customers. And at the same time we reduce the cost risks commonly involved, by OPERATING ENTIRE SILS CENTERS AND SUPPLIER PARKS turning traditional fixed costs into variable costs.” How this is The company plans, builds and operates it own, independent done, remains the company’s secret – of course. complex SILS (Supply in Line Sequence) Centers. “Relying on these centers, we develop solutions for the handling of goods within a plant and provide the required – sometimes highly specialized – handling facilities as well as the staff needed. On this basis, we are able to provide our partners with a complete, highly efficient delivery infrastructure that we operate ourself”, 46 services

>AN EXAMPLE: SILS CENTRE GLIWICE: MISSION POSSIBLE

MAN Ferrostaal operates a service center for General Motors in Gliwice, Poland. At two sites of approx. 25,000 square meters about 650 workers assemble and sequence 290 modules for the vehicle types Agila, Astra Classic and Zafira. The modules are delivered in line sequence. The opening of a second SILS Center proved the success of the turnkey solution strategy developed to meet the customer’s requirements.

Since 1999, MAN Ferrostaal has been working for General Motors INTERNATIONAL AND INTERDISCIPLINARY PROJECT TEAM Manufacturing Poland (GMMP) in Poland. Until 2004 MAN Precise and efficient project management, however, was the key Ferrostaal operated one SILS Center of about 10,000 square factor to the success of this project. An international and inter- meters. It was situated on the customer’s premises and disciplinary team of experts was formed: coming from logistics, employed around 200 staff working in two shifts. 105 modules production, technology, and engineering, they worked on the for the Astra and Agila were preassembled and sequenced. Due project together, never losing sight of the high quality to the fact that the customer wanted to expand its production standards of MAN Ferrostaal. Due to the high complexity and volume, the center was soon working to full capacity. As further extreme time pressure an efficient interface management investments were restricted, GMMP started looking for another was required, too. “Everybody’s interests, the customer’s, the solution outside the existing company grounds. The automaker suppliers’ and our own, had be reconciled,” says Pflüger. did not have to look too far: a 70 year-old hall of a tank factory, 10 kilometers away from the customer’s premises, NO DOWNTIMES – SUCCESSFUL START OF THE CENTER turned out to be perfect. “When we first caught sight of the The success speaks for itself: precisely within the given time building, none of us was able to figure out how we could possibly frame and budget, the new SILS Center started in early April open a second SILS Center there,” says Hinnerk Pflüger, the 2005 and has been running ever since. According to Pflüger the former project manager in Poland. The building required major circumstances were absolutely challenging, “Normally – if the renovation work and the necessary infrastructure was missing. word normal may be used in this context at all – the start of a However, bearing in mind MAN Ferrostaal’s philosophy “Turning SILS Center takes place during a vacation close-down of two to Ideas into Reality”, the company accepted the challenge. In three weeks. Or production is put on hold especially for that October 2004 they signed an agreement with the customer. purpose. First there are test runs, then the IT system is checked and finally production starts with small batches. This time it was FROM ZERO UP TO FULL SPEED WITHIN SIX MONTHS completely different: we managed this enormous change over One of the major challenges was the extremely short time given the weekend while production was running at full capacity. That to make the new SILS Center fully operational. It was expected has never been done before! Even our customer GME confirmed to be finished and running within six months. Immediately, that it was the first time in their company’s history that a new MAN Ferrostaal started negotiations with the owner of the SILS Center was started so smoothly virtually overnight.” old tank factory, a public corporation. This partner first had to become familiar with the special needs of the automotive industry, particularly the time-critical services such as logistics, assembly and sequencing. THE ECHO 2006/2007 47

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02 01. The team focusing on quality. 02. Factory hall before renovation conducted by MAN Ferrostaal 03. The very same hall today: a modern SILS Center

OVERVIEW OF TASKS TO START THE NEW SILS CENTER WITHIN SIX MONTHS >> Renovation of a 70 year-old tank factory covering 13,000 square meters >> Establishing a road infrastructure 03 (private and public) >> Installing an IT structure to support and connect the SILS operations at the other site >> Setting up a new logistics supply chain including road haulage in line sequence over a 10 kilometer distance >> Developing and constructing more than 500 new SILS racks for the supply in line >> Doubling the number of modules >> Organizing a third shift >> Recruiting and training 400 new staff >> Starting the new SILS Center with the customer’s production running at full capacity 48 services

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BRIEF LOGISTICS DICTIONARY: SILS CENTRE GLIWICE OF MAN FERROSTAAL: FACTS AND FIGURES

SILS = Supply in Line Sequence 2004 2006 to supply parts and assembly groups in sequence Production volume of vehicles per annum 116,000 185,000 direct to the assembly line Vehicle models Agila, Astra Agila, Astra, Zafira Floor area 10,000 qm 25,000 qm OEM = Original Equipment Manufacturer Site 1 2 the manufacturer of complete products, i.e. cars Workforce 200 650 Maximum distance from assembly site 550 m 11,000 m First Tier Supplier Number of trucks 0 7 (MAN TGA 18 350) supplies systems directly to the OEM, as opposed to Number of modules 105 297 the sub-supplier which supplies the First Tier Supplier Number of critical operations 45 180 (not the OEM) with modules or materials Output of modules per day 26,400 84,200 Quality certification QS 9000 ISO TS 16949

01. Spring struts assembly line 02. Quality right from the start THE ECHO 2006/2007 49

>>> WE TAKE CARE OF ENTIRE PROBLEM AREAS FOR OUR Again, both projects were realized successfully on time and within budget. CUSTOMERS. OUR PHILOSOPHY MAN Ferrostaal sees a bright future for the company. Pflüger IS LISTENING, PLANNING, ACTING says, “We are going to continue expanding our business AND PROGRESSING. in Gliwice. Despite the fact that there were no new projects in the first half of 2006, we are convinced that in the future the market will offer an interesting potential for our business here”.

MORE PROJECTS Following the successful start of the SILS Center, the order volume kept increasing steadily. Only two months later a new project was negotiated: the assembly of spring struts and rear axles. The project was perfectly in line with MAN Ferrostaal’s SERVICES FOR THE AUTOMOTIVE INDUSTRY strengths: providing turnkey assembly service including design, engineering and planning of the required investments in the >> Planning, managing and controlling commodity and assembly equipment at two sites, i.e. Gliwice and Antwerp information flow (Belgium). For GM the project was of high political importance >> just-in-time delivery as it was closely connected with reducing capacities at the >> Developing and operating assembly and sequencing production sites in Bochum. services according to the company’s own process and plant design MAN Ferrostaal focused on its core strength, which means to >> IT management establish a turnkey concept including the management of >> Building and operating SILS Centers projects and the design of the necessary lean structures. The company placed the order for the supply of the assembly For more information visit us at equipment with DÜRR. Engineering teams from Essen, Genk www.manferrostaal-automotive.com (Belgium) and Gliwice as well as Rüsselsheim were responsible for establishing an assembly concept. Considering so-called “critical operations” they defined the requirements the assembly lines had to meet. Critical operations refer to the assembly of vehicle parts which are critical for the security of the vehicle and its passengers. After the contract had been signed there were Detlef Castro, only three months left to start the project in January 2006. General Manger of MAN Ferrostaal Automotive MAN Ferrostaal also won the order for the installation of an assem- bly line to produce anti-roll bars in Gliwice. GM had decided to transfer the production of about 800,000 “stabibars” annually for Contact: the GM Delta platform from Antwerp to Gliwice. This assembly Phone +49. 201. 818-2941 line was also supposed to be running in January 2006. E-mail: [email protected] 50 services

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TAILOR-MADE SOLUTIONS: INDUSTRIAL SERVICES IN TRAFFIC ENGINEERING

What is a general contractor’s part in the field of rail-bound transport and railways? An overview of MAN Ferrostaal’s services for public transportation companies showing the potential and impact of optimized traffic solutions. THE ECHO 2006/2007 51 services

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01. Local trains for Hungary 02. Freight trains for copper mines in Chile 03. Streetcars in Budapest, Hungary

Offering optimized solutions within limited budgets: MAN During the project development stage, the company often takes Ferrostaal plays this role acting as a general contractor for its the role of an independent consultant developing customized customers in the rail sector. For more than 75 years the company solutions in close co-operation with the customer. A prerequisite has been doing business in the sector of rail-bound traffic. to being able to identify the actual requirements and to design a concept, is not only in-depth knowledge of the technologies Since the company was founded, the railway business has played available worldwide but also a high level of intercultural skills. an important role. Until the end of the 1960s, MAN Ferrostaal Such skills are essential throughout the project and during its was also known as manufacturer of railcars. The “Ferrobus”, a different stages: project planning, preparing the offer, setting up popular diesel railcar in South America, originates from that the contract, delivery, payment, securing of claims, financial period. Even then, the most important questions were: “What engineering up to commissioning and, finally, the return of all product does the operator need in his country?”, “What type of bank guarantees. railway system will they be able to operate and service?”, “What product matches his infrastructure?” and “What can he afford?” Having these skills at its disposal enables the company to develop and implement a “tailor-made solution” for each indi- It goes without saying that in a time of increasing globalization, vidual case. Whether a completely new system with new vehicles a general contractor’s role is definitely not the same as 75 years is required, or, alternatively, one with second-hand, overhauled ago. The basics, however, haven’t changed much. “What is the vehicles which comply with the respective operator’s wishes and best cost-performance ratio?” The answer to this question has requirements, needs to be decided on a case-by-case basis. been the central theme of the company’s business and continues to demonstrate the added value MAN Ferrostaal is able to realize The advantages for operators and public local transport are in the transport business. obvious: they are provided with an optimized, tailor-made solution package including attractive financing. MAN Ferrostaal MAN Ferrostaal closely cooperates with its over 60 subsidiaries has realized such projects successfully in many cities and located in Latin America, Asia, Central and Eastern Europe and in countries. They included extensive overhauling and servicing of the CIS. At the center of the company’s worldwide activities is vehicles and rehabilitation of the infrastructure supported by the effort to perfectly balance its customers’ needs or require- the public transport operators as well as the delivery of second- ments and the available technologies at an appropriate price – hand field-tested railcars. often including customized financing solutions. 52 services

MAINTENANCE OF LOCOMOTIVES AT 3,000 METERS HIGH PARTNER OF LARGEST COPPER PRODUCER WORLDWIDE THE ECHO 2006/2007 53

As a service provider to large scale industry, MAN Ferrostaal can look back on a long tradition of dealing with special conditions and challenges in nearly all countries in this world. The company was in search of a team of experts for maintenance work on loco- motives in Chile used to transport the ore extracted from the world’s biggest underground copper mine. This team had to meet the most complex technical requirements combined with extreme physical challenges.

The maintenance team MAN Ferrostaal appointed for this high- ly challenging task consists of 16 specialists, mainly electronics engineers and electricians working 24/7 in three shifts all year round in the Codelco Teniente mine. Since 2003 they have been taking care of the maintenance and repair service of eight electric locomotives (manufactured by the German company Schalke) supplied by MAN Ferrostaal in 2003. MINING VILLAGE OF TENIENTE, UNESCO WORLD HERITAGE SITE These locomotives transport the daily ore production of 135,000 tonnes below and above ground, which makes them Today, the workers of the Teniente Mine come from the indispensable to Codelco. As seven locomotives have to be nearby village of Rancagua. At the beginning of the last running simultaneously at all times, the maintenance service century this was no the case. When copper extraction needs to be done inside and outside without interruption. This is started in 1905, the then operator – the North American quite a challenge for the service team as the Codelco Teniente Braden Copper Mine Co. – erected a tent camp for the mine is situated south of Santiago, Chile’s capital, in the Andes at workers close to the mine at 3,000 meters above sea level. an altitude of 2,000 to 3,000 meters. Perfect physical fitness is a To establish proper and comfortable living for the workers must for working in these altitudes. The extreme climatic con- and their families in the long run, the camp was eventually ditions don’t make things any easier: high temperatures and turned into a real town named Sewell. The mining company extremely low humidity levels in summer, violent snowstorms built picturesque homes and provided for a good infrastruc- and icy temperatures combined with poor visibility in winter. ture: sports facilities and cultural institutions, shops and restaurants, a hospital and an indoor swimming-pool were It comes as no surprise that Codelco considers the MAN Ferrostaal built. Later on, schools, more shops and restaurants were team to be a partner than just a service provider or contractor. added. In 1978, the village was closed down. In 1998 This is why Codelco wants to continue to rely on MAN Ferrostaal Sewell was declared a national monument and is now in the years to come. open to visitors. The village has become one of the UNESCO World Heritage Sites. (For more information refer to http://www.sewell.cl) 54 services

WELDED STEEL TUBING FOR SUBMARINE GAS PIPELINE 10,000 TONS UNDER THE SEA

MAN Ferrostaal supplies the public Azerbaijani oil association with tubes for an oil pipeline running through the Caspian Sea. The pipeline is to be installed 130 meters under the water surface and will have to withstand a pressure of no less than 100 bar. THE ECHO 2006/2007 55

turers of quality tubes. The tubes are produced by means of high-frequency induction welding.

In September the first tubes were ready for visual inspection by AZNEFT SOCAR and McDermott, the company responsible for the piping, the tubes were delivered in November, and EUPEC will be applying the cement coating in Baku by January 2007. In February 2007, McDermott will start laying the tubes in the Caspian Sea using a special tube-piping ship.

MAN Ferrostaal will also supply all other tube accessories that are needed, such as fittings and flanges, a special “submarine radial flange system”, ball valves, the pig The public oil association of Azerbaijan, SOCAR had been highly satisfied with the station and the cleaning pigs. All products SOCAR, is building a pipeline network project management, a regular business are made either in Western Europe or as to supply the country with gas and oil relationship developed that has now for the radial flanges, in Houston, USA. and to feed the big pipelines of Baku – resulted in the second order. The accessories and equipment will be Ceyhan and Baku – Erzerum. This project delivered by April 2007. The first gas is was initiated by Azerbaijan’s President, In May a contract was concluded for the supposed to flow through the pipeline in Ilham Aliyev. Aliyev strives to become as delivery of 52 kilometers of steel tubing. summer 2007. independent as possible from foreign The tubes have a diameter of 20 inches influences, again taking up existing plans and a thickness of 15.9 mm. They are made with the help of SOCAR, to build oil and of special steel based on API 5 L X60, coated gas networks around Azerbaijan. with a special rough PE layer that allows for an additional cement coating on the Within the framework of this project, the outside. Due to the fact that the tubes are extension of the former pipeline from laid at a depth of 130 meters, under the Neft Dashlary to Güneshli was initiated: water surface they have to withstand a MAN Ferrostaal is going to handle this pressure of 100 bar. The production of the project. The contract is based on a project tubes needs to meet complex technical the company carried out five years ago: requirements. This is the reason why they delivered a first submarine gas MAN Ferrostaal relies on Mannesmann pipeline running over 68 kilometers from Fuchs Rohr in Hamm. This company is Neft Dashlary all the way to Bakhar. As known to be a pioneer among manufac- 56 people

104,000 US DOLLARS RAISED AT CHICAGO MARATHON NEVER GIVE UP

For many years, the LaSalleBank Chicago Marathon has belonged to the world’s “Big Five” with about 40,000 runners and 1.5 million spectators. Every year, there is a team of runners representing the world’s biggest aid organization for leukemia and lymphoma (the Leukemia & Lymphoma Society) to raise money for the cause. The team took part again this year, in the 28th marathon on October 22, 2006. This time, however, the President and CEO of MAN Ferrostaal Incorporated was among the runners – Uwe T. Schmidt and his wife Marilyn. It wasn’t so much the marathon’s lure which made the two of them take part. “We came to think about it on New Year’s Eve 2005 when we were together with our family and where it’s a tradition for everyone to set both personal and professional goals to be reached in the new year. It was that night that my wife and I decided to run the marathon with the sports team of the Leukemia & Lymphoma Society,” says Uwe Schmidt. A lot of colleagues and their families as well as customers supported their efforts. MAN Ferrostaal AG alone donated 10,000 US dollars.

This sports event raised 2.5 million US dollars altogether. The fund raising cam- paign of the Schmidt family reached the sum of 104,000 US dollars making it the highest donation collected by a private party.

Uwe Schmidt underlines the importance to find the time helping others despite his highly demanding job and a tight schedule. He does not deny, though, that taking part was also a lot of fun. THE ECHO 2006/2007 57

“It took over half an hour to get every put their mind to is and was out of the runner started. The atmosphere was question,” Uwe and Marilyn Schmidt wonderful. We were running through the confirm in unison. various colorful parts of the city such as And so they hope that their efforts and “Little Italy” and “Chinatown”. People were the help of so many other people will celebrating, cheering, playing music – it contribute to reaching the final goal – a was a great feeling,” Schmidt remembers cure for cancer. fondly. Nevertheless, Uwe Schmidt and his wife had to grit their teeth at times. It’s The Leukemia & Lymphoma Society is no walk in the park to be running five based in Chicago. Their mission is to fight hours non-stop. But giving up was out leukemia and other kinds of blood cancer. of the question. “Of course, knees and The society invests the available means tendons were sore. But that’s nothing not only in research but also in the compared to people’s pain when they improvement of the quality of patients’ have cancer. We have had the privilege of and their families’ lives. many several people who have beat cancer in recent years, and have been deeply impressed by their determination and spirit. Giving up in anything one has 58 people

HELP FOR TSUNAMI VICTIMS IN ACEH A NEW BEGINNING

The aftermath of the tsunami is a picture of destruction on Indonesia’s coast line. Even two years after the catastrophic wave hit them, many people living in the region suffer – as some family members are still missing. The earthquake caused the deaths of more than 200,000 people. MAN Ferrostaal started and promoted a relief project for fishermen’s families providing expert knowledge and deploying field helpers. The company raised funds of 500,000 euros together with its sister companies MAN Diesel SE, MAN TURBO and MAN Roland. THE ECHO 2006/2007 59

„INDOGERM-DIRECT“ The Indonesian-German Disaster Relief Committee (INDOGERM-direct) initiative was founded by german and indonesian businesses and various other parties, such as the German-Indonesian Chamber of Commerce in January 2005. This platform was primarily sup- posed to coordinate and administrate the funds raised for Tsunami victims as efficiently as possible.

Life is gradually getting back to normal for the inhabitants of After the devastating Tsunami catastrophe at Christmas 2004, Peudadas, a small fishing village near Bireun Sumatra. After the the whole world collected and sent billions into the affected events of December 26, 2004 the surviving inhabitants didn’t region. Relief organizations took immediate measures on know where their families had gone – if they had survived at all – site and established concepts for sustainable projects. MAN and how they were supposed to earn their living on their own. Ferrostaal, which has been doing business in Indonesia for many Today, they are navigating their fishing boats out to sea in the years, reacted fast as well. A task group was founded under the early hours as they used to do before. At midday, they are patronage of “INDOGERM-direct”. It was agreed to establish a spreading their nets out to leave them to dry in front of their project to support fishermen, as many fishing villages had been huts. Again, they are preparing their meals with fresh drinking destroyed. The boats, with which most of the inhabitants earn water. Slowly they are starting new lives. MAN Ferrostaal AG and their living, had been swept away by the wave. their sister companies support the people of Peudada extensively. 60 people

The boats were officially handed over on August 31 during a celebration in Bireun. Everyone was present: delegates of the fishing ministry of state, the government of Aceh, the local governments of Bireun and Meulaboh, the Panglima Laot of Aceh, Bireun and Meulaboh, the navy headquarters of Aceh and Ekonid.

As early as February 2005, the officials met: the head of the known and respectable shipyard and the knowledge of the local Indonesian fishing cooperative Panglima Laot of the province fishing cooperative. They finally agreed to build new fishing of Aceh, the Managing Director of the Indonesian foreign boats for two communities: Bireun in the north and Meulaboh subsidiary of MAN Ferrostaal, Franz-Josef Zieroff, Reinhard in the west of Sumatra. The task group found out the actual Dombrowski of the Luerssen Shipyard and Wisnu Widjaya of number of fishing boats needed in the communities. They Cluster Industries. It was difficult to find out where help could be placed an order for six boats, made of wood according to the given most efficiently as misery seemed so great everywhere, traditional Acehnian design. In August 2006, three boats were documents of the fishing cooperative had been destroyed and a handed over each to each community. Additionally, they super-ordinate relief project management on behalf of the supplied a plant to treat drinking water, an icing-machine to government or non-governmental organizations was missing. cool the fish and a diesel generator. This was the first step in the The idea of MAN Ferrostaal, MAN Diesel SE, MAN TURBO and right direction: life goes back to normal. MAN Roland was to promote and assist in a project that would have a lasting effect. The companies raised 500,000 euros. The profits made by the fishermen of Bireun and Meulaboh are being used by the fishing cooperative to help other fishermen’s The task group combined comprehensive experience in ship- families: to buy more boats or offer favorable loans, thus building project management, the competencies of a well- sustaining the relief effort. Fax +49. 201. 818-3525 Sender

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PUBLICATION DETAILS

INTERNATIONAL TRADE FAIRS: Publisher: MAN Ferrostaal AG Hohenzollernstrasse 24 > POWER GEN MIDDLE EAST, BAHRAIN, MANAMAR 45128 Essen/Germany January 22 – 24, 2007 Responsible for the contents: > UPAKOVKA, RUSSIA, MOSCOW Daniel Reinhardt January 30 – February 2, 2007 Editors: Angela Kanders (Managing Editor) > IREE-RAILWAY EQUIPMENT, INDIA, NEW DELHI Clemens Pawlak, Anna Fontaine February 13 – 16, 2007 Authors of this issue: Hans-Joachim Andres > IDEX, VAE, ABU DHABI Dieter Baetzel Ulrich Bange February 18 – 22, 2007 Mario Barcelos Rolf Bernhard > TECHTEXTIL ROSSIJA, RUSSIA, MOSCOW Holger Boy Thomas Buschmann February 27 – March 1, 2007 Ricardo Camargo Rainer Döllefeld > PRINT EXPO, SOUTH AFRICA, JOHANNESBURG Klaus Eusterwiemann Roberto Hahn March 13 – 16, 2007 Fernando Kochems Sylwia Krawczynska > PRESCA SUR 2007, CHILE, CONCEPTION Bernd Kunze Irena Kusnierz March 21 – 24, 2007 Wolfgang Marschewski Hinnerk Pflüger > 10TH CHINA INTERNATIONAL MACHINE TOOL SHOW, CHINA, BEIJING Dietmar Pracht April 9 – 15, 2007 Carmen Sack Gabriele Schaumburg Sandra Scheidemann > LAAD – LATIN AMERICA AERO & DEFENSE, BRAZIL, RIO DE JANEIRO Heinz Scholbrock April 17 – 20, 2007 Manfred Schreier Georg Schwinning Jörg Sommer > PACK PRINT INTERNATIONAL, THAILAND, BANGKOK Franz-Josef Zieroff April 26 – 29, 2007 Jaime Zubillaga Picture Credits: > EXPO GRAFICA, MEXICO, MEXICO CITY Karsten De Riese May 4 – 7, 2007 Manfred Erich Dirk A. Friedrich Bernd Hoff > PRINTPACK BRASILPLAST, BRAZIL, SÃO PAULO Frank Mohn May 7 – 11, 2007 Catrin Moritz Andreas Pohlmann Corbis: Page 54 and 56 > IMDEX ASIA, SINGAPORE Getty Images: Page 26 and 27 May 15 – 18, 2007 Layout and execution: Werbeagentur adtention, Essen > FEIMAFE, BRAZIL, SÃO PAULO May 21 – 26, 2007 Printed by: Woeste Druck, Essen

> UDT EUROPE, ITALY, NAPLES Printed with a MAN Roland- June 5 – 7, 2006 four-colour-sheet-fed offset press on Galaxi Supermat from Papier Union. > POWER GEN EUROPE, SPAIN, MADRID This paper is chlorine-free. June 26 – 28, 2007 This magazine is issued: Twice a year Turning Ideas into Reality

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