The Echo the Magazine of the FERROSTAAL Group

DAS ECHO Dezember 2009 1 the echo the Magazine of the FERROSTAAL group

December 2009

Regenerative Sustainable Established Worldwide How to 30 years boom in solar successfully of business technologies avoid accidents in Libya Cover picture: parabolic trough collector

The largest individual investment on Trinidad, the new AUM complex which Ferrostaal is constructing in Point Lisas, will be handed over to the customer MHTL in early 2010. THE ECHO December 2009 3

Editorial

Dr. jur. Matthias Mitscherlich, Chief Executive Officer, Ferrostaal AG

Dear Readers,

This is the first edition of THE ECHO to feature our new large order for the construction of a commercial parabolic logo. Our change of name and corporate image represents trough power plant in Spain. Our role here is not simply the visual confirmation of the selling of MAN’s majority limited to that of contractor: We have also made substan- stake in Ferrostaal to the International Petroleum Invest- tial contributions to the project development so that CO2- ment Company (IPIC). We are grateful for the opportu- free power can soon be produced by this power plant. We nities created by the commitment of IPIC and we are have willingly taken on a large portion of the interim fi- already demonstrating that we can be instrumental in nancing. Our committed involvement provides a further implementing large projects derived from orders gained boost to climate protection. by our global group. We have made significant progress with our Health, Safety Ferrostaal has been a permanent fixture in many regions and Environment System this year. In more specific terms, for years and is now an established player in the market, we have built up a holistic system and implemented it on for instance in Libya and Trinidad. In Libya, Ferrostaal has a worldwide scale, while also constantly introducing im- already implemented over 100 projects for the oil and gas provements. We want to achieve the highest levels of safety industry and is the first-choice partner in the market. In on our international construction sites while also pursuing Trinidad, the soon-to-be-completed new AUM complex – a a responsible policy of environmental and human protec- project boasting the largest individual order volume in the tion. The success achieved by our HSE Management is re- history of our company, worth 838 million euros to us – flected in the array of awards given to us by our customers – will bring the number of petrochemical plants completed for both previous and current projects. here up to 13. Another large project that we are currently executing in the country is the construction of a combined Our sustainable economic business approach encompass- cycle power plant. In order to further our commitment, we es ecological, social and health aspects. The numerous ex- recently set up a company based in Trinidad – because we amples presented here in this edition prove that corporate are convinced that we can contribute further to the eco- responsibility is not something we simply pay lip service nomic development of this Caribbean country. to – it forms the cornerstone of our company strategy.

Our activities in the Solar Energy business segment prove Yours sincerely, Dr. Matthias Mitscherlich that we have set early markers for sustainable, ecologi- Chief Executive Officer cal power production. We have already received our first 4

Contents

16 12 46

Projects 6 news 16 The sun – power for the 21st century Corporate news: joint venture launched in Abu Dhabi; Whether constructing a parabolic trough power plant, new office officially opened in India; new logo designs; developing Fresnel technology, opening markets in anniversary of Marlog Marine Logistik; award for the USA or examining whether Desertec could be a Ferrostaal Air Technology; donations and sponsoring promising model for the future: Ferrostaal is very for Palestine and more. much involved where regenerative power generation is concerned. Forum 12 Improved efficiency through synergies

28 In-house expertise can be used profitably for customers in plant construction.

Projects 18 Construction of the solar power plant Andasol 3 has begun First large order in the Solar sector to construct a parabolic trough power plant.

21 Solar boom in the land of unlimited opportunity Outstanding opportunities are available in the solar sector of the growing US power market. Projects 28 Protecting people and the environment 24 Desertec – the power strategy of the future? Valid worldwide and holistic – Ferrostaal’s HSE Man- Solar power from the Sahara could soon cover part of agement System. Information on strategy and on Europe’s demand for electricity. major features, individual planning for each project, concrete measures and successes achieved. 26 Fresnel technology ready for market launch The Fresdemo II project on the Plataforma Solar in Almería is designed to prove the marketability of Fresnel technology. THE ECHO December 2009 5

50 54 60 70

30 Holistic HSE Management System 54 New: assembly services for the locomotive and rail Principles, strategies and specific measures, developed industries on the basis of Ferrostaal’s many years of experience, The Automotive business unit is expanding its assem- result in an HSE Management System which is applica- bly services to the locomotive, railway carriage and ble to all corporate processes and project phases. tram sectors.

36 TRINIDAD: ECONOMIC UPSWING 58 Shipyards create thousands of jobs IN THE ISLAND STATE Ferrostaal is investing in a repair shipyard in Cape 38 Largest order in the company’s history nearing Town harbour. completion Ferrostaal is constructing an AUM complex on Trinidad for the further refinement of natural gas. countries and people 60 COUNTRY SPECIAL: LIBYA 42 Work proceeding apace at Trinidad power plant 62 First choice in the oil and gas sector construction site Successful on the Libyan market for 30 years: Ferrostaal The combined cycle power plant at the La Brea loca- Libya is today a “preferred first-choice contractor” for tion is scheduled to begin operating in 2011. The con- the oil and gas industry. struction work is proceeding at full capacity. 70 Business etiquette guide: China – part 2 46 MILESTONES IN PICTURES: Thomas Buschmann is Head of Ferrostaal in China Secure fuel supply for Chile and has lived there for the past twelve years. He gives The construction of a delayed coker in Concón, Chile, his own personal tips on making business trips in the in eight pictures. Middle Kingdom a success.

Services Standards 50 Strategies for successful machine business 3 Editorial In this interview Hans-Jürgen Böwe explains how he 4 Contents wants to refocus the machine business in the packag- 72 Trade fair calendar ing, plastics and food sectors. 73 Imprint 6

NEWS

Foundation of the joint venture IPIC Ferrostaal Contracting

n order to concentrate the joint business activities of IFerrostaal and the majority shareholder International Petroleum Investment Company (IPIC), the joint venture IPIC Ferrostaal Contracting was founded in June. The joint venture, of which IPIC owns a 60 percent stake and Ferrostaal 40 percent, is designed to acquire and implement large projects in the MENA region, in particular in Abu Dhabi. The emirate is planning numerous investments in technologies of the future and also expansion in the petrochemical sector in order to establish itself on Al Bateen Towers; IPIC Ferrostaal Contracting has its offices in the office a broader foundation for the period after the oil boom. tower on the right. In Ferrostaal, Abu Dhabi has found a partner with know- how in the core areas of renewables and petrochemicals. which will be erected in Abu Dhabi over the coming years. Employees from both Ferrostaal and the joint venture are The activities of IPIC Ferrostaal Contracting will cover the currently working on the Tacaamol sub-project. This in- petrochemical, power, oil, gas and infrastructure sectors, cludes not only handling the infrastructure measures, but as well as the Services business. At the end of the year the also planning and implementing an AUM plant complex,” Services business will be moved from Dubai to Abu Dhabi. says Dr. Stephan Reimelt, member of the Executive Board The cooperation with IPIC will open up a wide range of at Ferrostaal and also Chief Executive Officer (CEO) of IPIC business opportunities for Ferrostaal and the joint ven- Ferrostaal Contracting. As Chief Operating Officer (COO), ture IPIC Ferrostaal Contracting: The latter will function Dirk Demtröder is also in charge of the joint venture. as a regional competence centre. “The most important large project in which IPIC has a 40 percent share is the The symbiosis of Ferrostaal’s global skills and the local construction of the chemical complex ChemaWEyaat, base offered by the joint venture will now also be symbol- ised by a separate homepage. The website provides an overview of the structure of the business segments and the range of services which are able to make full use of Ferrostaal’s many years of experience in the fields of project development and management.

You can obtain more detailed information on the joint venture’s activities at: www.ipic-ferrostaal.ae The strategic focus of the joint venture was discussed at a workshop in Abu Dhabi in June. THE ECHO December 2009 7

With Ganesha’s blessing

ince June of this year the opening ceremony. “The new office is generally involves blessings for and SFerrostaal office in India has had in an excellent location for us to po- prayers to Ganesha, a Hindu god. a new address: It is located in busy sition ourselves well on the market Ganesha is represented as a child or Gurgaon, on the southwest city and to expand our business further. as a pot-bellied man with an ele- boundary of New Delhi. Gurgaon is One project we are involved in is to phant’s head. not only one of the most modern In- produce railway wheels in coopera- dian cities: It is also one of the fast- tion with GHH,” says Dr. Lesker. est-growing economic hubs on the entire sub-continent. Puja ceremonies have a long tradition in India and are part of the Hin- Dr. Klaus Lesker, member of the Ex- du faith. They are designed to ensure ecutive Board at Ferrostaal and re- comprehensive support and gener- sponsible for the Asia region, took ate a positive karma for particularly part in a Puja ceremony at the official important projects. The ceremony

Dr. Klaus Lesker (left), member of the Executive Board, and Dr. Gurnad Sodhi, Head of the Indian office, at the opening ceremony; centre: the new address on the 16th floor

Do you have any questions about Ferrostaal’s business in India? Dr. Gurnad Sodhi, Head of the Indian office, will be pleased to answer them.

Contact: Ferrostaal AG Liaison Office 16th Floor, Building No. 9, Tower B New Delhi DLF Cyber City, Phase – III Hindan River Gurgaon – 122002, India Najafgarh Nodia Phone +91. 124. 482-00 00 [email protected]

Gurgaon Ferrostaal Ganges Yamuna River 0 10 km office Greater Nodia Faridabad usa

MEXICO Cuba

8 Dominican Republic haiti belize puerto rico Honduras guatemala Nicaragua el salvador

costa rica Venezuela guyana panama suriname NEWS French Guiana Columbia

ecuador

Latin America: Brazil a key region for Ferrostaal Peru

Bolivia atin America is an area of major America which was set up in 1988 by Limportance for Ferrostaal. The the Essen Industrie- und Handels- PARAGUAY company’s key performance indica- kammer (IHK) [Essen Chamber of tors verify this: for example, each Commerce and Industry] and which year 40 to 50 percent of Ferrostaal’s convenes every six months. Members CHILE annual order intake stems from include experts on Latin America this region alone. The company has mainly from companies and institu- Uruguay therefore maintained long-estab- tions that are based in North-Rhine Argentina lished relations with Latin American Westphalia. The aim here is to en- Pacific Atlantic countries. This includes meeting hance market knowledge, discuss Ocean Ocean prominent political and economic current developments in individual representatives, while dialogue at countries and to foster contacts. work level also plays a major role. Ferrostaal has, for example, head- 0 1 000 km ed up the working group on Latin

Anniversary: 30 years of MARLOG Marine Logistik

ARLOG Marine Logistik, Kiel, a subsidiary of and the mobile workshops of the Chilean and Peruvian MFerrostaal and Howaldtswerke-Deutsche Werft navies, which it constructed on-site on a turnkey basis. (HDW), Kiel, celebrated its 30th anniversary in June. The official celebrations took place on the schooner “Regina The after-sales services include not only the provision of Maris” as part of the Kieler Woche sailing event. logistical solutions, but also technical assistance and training. For around two years, MARLOG has also provid- MARLOG was founded as a service and logistics partner ed crews for testing submarines from HDW. “Our business of the two shareholders in 1979 and has since provided success is based on many years of personal contact and services for navies and naval arsenals in 22 countries. the fact that we supply everything reliably from a single MARLOG Marine Logistik began its business by provid- source. We cooperate with more than 350 subcontractors ing supplies for the submarines and surface vessels de- and consequently cover almost all aspects of shipbuild- livered by HDW. As a contact for warehouse supply, repair ing under one umbrella. This enables us to offer our cus- and modernisation, MARLOG coordinates the procure- tomers not only the traditional after-sales service, but ment and supply of spare parts, materials and equip- also a comprehensive range of products,” says Hubertus ment. MARLOG offers comprehensive and specialist serv- von der Decken, who, together with Jan Krabbenhöft, has ices and, for example, designed the propulsion system been managing MARLOG’s business for 26 years. for the Columbian navy’s training sailing ship “Gloria” THE ECHO December 2009 9

The Ferrostaal headquarters in Essen with the new logo.

Established name, new look

ince November of this year Ferrostaal has had a new Scorporate image, using the name ‘Ferrostaal’ which is respected worldwide and a new, separate logo and cor- Changes to the name and logo in Ferrostaal’s history porate design. This is the company’s way of underlining its own course on which it has embarked with the new 1930: The company is entered in the commer- majority owner, the International Petroleum Investment cial register in Essen as Ferrostaal AG. Company (IPIC). There is good reason for retaining the old name and displaying it in a new design: “Our company name ‘Ferrostaal’ is extremely well-known on the global markets and stands for successful and customised solutions in the international machine and plant business,” 1986: Gutehoffnungshütte (GHH) and MAN explains Dr. Matthias Mitscherlich, Chief Executive Of- merge to form MAN AG. The logo is adjusted to ficer of Ferrostaal. The new logo is a figurative mark, in the new parent company and includes the MAN other words it combines text and graphics. The logo’s arc; the name is retained. arc symbolises not only that Ferrostaal has built many bridges in its history, but also that it will repeatedly build 2002: To underscore the affiliation to the new bridges in the present and in the future, both to new MAN Group more clearly, the appearance of markets and new partners. the Ferrostaal logo is adapted and the name MAN is included. The company is still called Ferrostaal AG. Ferrostaal no longer uses the typical MAN colour anthra- cite, but presents itself in two new corporate colours, logo blue and metallic silver. However, familiar aspects are re- 2004: Implementation of a uniform corporate tained, such as the corporate font and the basic defini- design for MAN and all its subsidiaries. Name changed to MAN Ferrostaal; the MAN logo is tions of the layout. The Ferrostaal-specific corporate de- adopted as the new logo. sign is currently being introduced step by step in all the subsidiaries and foreign offices, and it conveys reliability 2009: The name and logo are changed when and expertise. Since being entered in the commercial reg- IPIC becomes the majority shareholder. The ister in Essen in 1930, the name has been changed twice company is once again called Ferrostaal, and and the logo four times. the logo is redesigned to make it Ferrostaal- specific. 10

NEWS

Official AREVA awards ceremony in Berlin in July: (l. to r.) Hans-Jörg Zimmer, Project Manager at Ferrostaal Air Technology; Anne Lauvergeon, Chief Executive Officer of AREVA, and Karl-Heinz Kaspar, Managing Director of Ferrostaal Air Technology

Ferrostaal Air Technology: “TOP AREVA Supplier”

n July of this year Ferrostaal Air Technology received The award stands for competitive and innovative capa- Ithe “TOP AREVA Supplier” award in a ceremony in Ber- bility, long-standing business relationships, compliance lin. AREVA is a leading global player in the field of power with the strict sets of rules and safety guidelines, and engineering. In Germany alone the company has 8,800 quality and punctuality. “Winning this prize is the result supplier companies with which it has a turnover of 1.1 of our strategy of focussing our activities on the custom- billion euros. Of these supplier companies, 141 were pre- er and on reliable implementation of the customer’s sented with an award in Berlin by the Chief Executive project,” says the Managing Director of Ferrostaal Air Officer Anne Lauvergeon. One of these was Ferrostaal Air Technology, Karl-Heinz Kaspar. Technology.

State-of-the-art technology from Ryobi in use

n early July this year Ferrostaal the world. They feature impressive IArgentina invited around 100 cost effectiveness, excellent print customers and employees from quality and high machine speed,” seven South American subsidiar- explained Osvaldo Balzano, who is ies and offices to a presentation of responsible for the machine busi- Ryobi printing machines in Buenos ness at Ferrostaal Argentina. Aires. The agenda of the two-day event included visits to renowned printing houses, which showed their Ryobi machines in operation. “Ryobi Director Osvaldo Balzano (front) and his team machines are amongst the best in THE ECHO December 2009 11

Reconstructing the only cinema Working on the cinema roof

n July this year Ferrostaal supported the reconstruc- gee camp to provide them with an alternative to life on Ition of a cinema in the Palestinian refugee camp Jenin the street. When the young people began to make their with a donation of 20,000 euros. Through the medium own short films, they realised that there was nowhere of film, this project, called “Cinema Jenin”, is aiming to to show them. This led to the idea that the destroyed bridge the deep chasm that exists between Israelis and cinema should be reconstructed. Through its wide range Palestinians. The project’s importance is reflected by of films, the cinema is to counteract the cultural and the dramatic circumstances surrounding the rebirth of social isolation of the refugee camp and serve as a centre the only cinema in the region that had been destroyed for dialogue. when the first Intifada broke out in 1987. It is the story of Ismael Khateeb, a 42-year-old man whose son Ahmed “It is a central concern of Ferrostaal to bring partners to- was shot dead by the Israeli army while he was playing. gether across borders, both in business and social terms. Despite his grief he decided to donate his son’s organs to Our donation is motivated by this thought,” explains Dr. Israeli children. In doing so Mr Khateeb created a sym- Klaus Lesker, member of the Executive Board at Ferrostaal. bol for peace. The news spread all around the world. One In addition to Ferrostaal, the German Foreign Office and year later, with the help of international donations, he the initiative “Cinema for Peace” were also involved in re- opened a culture centre for young people in the refu- building the cinema.

Solar heating system for Palestinian school

n the town of Beit Jala, near Jerusalem, the Talitha Kumi bears a large proportion of the total costs for the plant, Ischool acts as a broker of democratic values and consid- which amount to some 170,000 euros. The project will be erate treatment of members of different religious com- implemented as part of the dena solar roof programme munities. The sponsorship of the Berliner Missionswerk for opening up markets abroad and is co-financed by the enables some 900 pupils to take advantage of a high- Federal Ministry of Economics and Technology (Bundes- quality school education through to officially recognised ministerium für Wirtschaft und Technologie – BMWi). It high school graduation, thus permitting them to go to offers Ferrostaal the opportunity to show what is possible university. The school relies on regular donations to fi- with this promising technology on a small scale. The solar nance its operations. heating system at the Talitha Kumi school is scheduled to be officially commissioned at the end of the year. Ferrostaal and Deutsche Energie-Agentur (dena) together supported the school by constructing a solar heating sys- With its solar roof programme, dena is supporting ex- tem. This enables the school to reduce its annual oper- port-oriented companies in the sectors of photovoltaics, ating costs by around 20,000 euros. “Our cultural com- solar thermal power and solar cooling. The “lighthouse mitment helps young people from this difficult region projects” promoted by BMWi as part of the Renewable to receive a good education in a school which teaches Energies Export Initiative are aimed at demonstrating how all confessions can exist peacefully side by side,” the quality of German products and making it easier for says Dr. Matthias Mitscherlich, Chief Executive Officer participating companies to become involved in opening of Ferrostaal. The Essen-based industrial service provider up foreign markets on a sustainable basis. 12

forum

Improved efficiency through synergies

Ferrostaal covers a wide range of plant construction services with its portfolio. For example, the company not only offers project development and management for the construction of turnkey plants: it is also the expert and sales partner for a wide variety of components and services which are required for implementing complex plant projects. Concentrating skills in a single company provides decisive benefits for the customers.

Ferrostaal is supplier-independent and can utilise the expertise of its own units when purchasing and planning components. THE ECHO December 2009 13

s an experienced general contractor Ferrostaal of- Quantity discounts through high sales volume fers services along the entire value added chain “Utilising synergies in the company enables us to design A when it handles large projects. However, in con- more efficient processes and to reduce costs,” says Dr. Klaus trast to its competitors, the company is not tied to particu- Lesker, Executive Board member at Ferrostaal, in explain- lar technologies or suppliers, but selects the best solutions ing the approach. Reinhard Scheller, Head of the Piping for a project – independently of the supplier. The indus- Supply business unit, adds: “Let’s take piping as an exam- trial service provider from Essen is increasingly making ple: the fraction of the value of piping in a project is rela- use of its own in-house offering, for example for pipes and tively low compared to the other components. But the pip- pipe accessories, air-conditioning systems and construc- ing package can very quickly account for the majority of tion services. But the company always operates under the the order items and is consequently extremely labour-in- premise that the in-house solution has proved its worth in tensive. A partner who is active on the market each day and competition with other companies in terms of price, ad- has a large sales volume can achieve better prices than an herence to deadlines and quality. This procedure has many engineering firm. Added to this there is the technical ex- advantages for the customers: Ferrostaal is not only more pertise which Ferrostaal can make use of as early as in the flexible with regard to project handling, the company can quotation phase: enormous savings can often be made by, also save time and costs. for example, reducing the wall thicknesses or the selection

There is generally an enormous requirement for pipelines in large projects. 14

forum

of the pipes. In addition, at the start of a project it is not al- work within the company. The decision-making processes ways clear precisely what quantities of pipes with particu- are frequently quicker. “However, the interface risk is a de- lar dimensions will be required. Due to our physical prox- cisive factor,” explains Jean-Claude Hecht, Head of the Con- imity, we can clarify technical and logistical questions more struction Services business unit. “This is reduced as soon easily and achieve time and cost savings.” Ferrostaal also as overall responsibility for a project lies in the hands of a saves costs by centralising purchasing for the various busi- single service provider. Factors such as cost control and ness units. Quantity discounts are incorporated in the in- deadline monitoring can then be defined more effectively.” dustrial service provider’s quotations. One example in which Ferrostaal employs this procedure Shorter response times and relies on internal know-how is a power plant project Internal cooperation also enhances flexibility. This is clear- on Trinidad which Ferrostaal is currently handling as the ly the case in the Construction Services business unit: as general contractor for Trinidad Generation Unlimited an in-house construction partner, Ferrostaal has a pool of (TGU) in La Brea (more information is provided from page well-qualified construction site personnel to whom the 42). Ferrostaal is responsible for all the EPC services. In ad- company can quickly have recourse in the course of a dition, the company takes advantage of internal services project. This shortens the response time. The procedures with regard to air-conditioning, ventilation and refrigera- are simpler to handle as the same systems are used for tion systems, pipes and pipe accessories and construction

Utilising synergies within our company when purchasing the many components for a large plant saves time and money – and benefits the customer. THE ECHO December 2009 15

site management. The Air Technology business unit of the Essen-based company is consequently supplying all the air-conditioning, ventilation and refrigeration systems worth a total of several million euros, and is also implementing the detail engineering, assembly and commissioning for these plants. The pipes and fittings are supplied by the Piping Supply business unit. All construction site management is performed by the company’s own Con- struction Services competence centre.

Customers profit from this procedure, not only because of the know-how which the Essen-based company can offer along the entire value added chain but also through syner- gy effects that contribute to the overall success of the project thanks to the cost and time benefits.

Section of a pipeline in the utilities sector of the AUM complex on Trinidad 16

Projects THE ECHO December 2009 17

The sun – power for the 21st century

The solar market is booming: the USA, the most important energy market on earth, is pumping subsidies worth billions into generating renewable energy. With Desertec, standing for electricity from the desert, the largest solar investment in human history is being discussed. At the same time, Ferrostaal is constructing its first commercial parabolic trough power plant in Spain, while Fresnel technology is about to be introduced onto the market. The climate for solar power could not be better. 18

Projects

Construction of the solar power plant Andasol 3 has begun

Ferrostaal, together with Solar Millennium and the Spanish company Duro Felguera, was awarded the contract to construct the parabolic trough power plant Andasol 3. It is scheduled to be completed in 2011. 210,000 mirrors will then collect the sun’s rays in the Spanish province of Gra- nada each day and supply around 200,000 people with environmentally- friendly electricity.

The parabolic trough power plant Andasol 3 is currently being built on an area of approx. 2,000,000 square metres. 19

SPAIN Andasol 3 location

Granada

37th parallel

Mediterranean Sea Almería

Málaga 0 20 km Marbella

he power plant will begin operating with an output of tariff security that this will entail will make Andasol 3 sig- 50 megawatts. This makes it one of the largest solar nificantly more attractive for additional investors to be- Tthermal power plants in Europe. The Essen-based in- come involved in.” dustrial service provider has taken on a leading role in constructing Andasol 3. As the general contractor, the company Tried and tested business model will perform the EPC services amounting to an order volume Thus Ferrostaal’s well-tried business model will be em- of over 300 million euros and is responsible for the turnkey ployed for Andasol 3: developing a plant together with part- construction. In addition, Ferrostaal is also co-owner. ners and investing in it with the company’s own capital. The company is consequently project developer, constructor Ferrostaal plays a key role in the interim financing of the and co-owner. The advantage is that not only the profits but solar power plant. The reason for this is the Real Decreto also the risks are distributed fairly to all partners, and there 6/2009 which was passed in May in which Spanish legisla- is a greater focus on the plant’s overall lifecycle: whereas tors re-regulated the prerequisites for obtaining the legal- other plant constructors withdraw from a project after the ly guaranteed feed-in tariff of around 30 euro cents per kilo- handover, the Essen-based industrial service provider re- watt hour. This demands, for example, proof of major au- mains involved. thorisations, ordering key components and proof that at least 50 percent of the investment sum can be financed in Andasol 3 will be constructed in the immediate vicinity of order to ensure pre-registration of the project and conse- its two partner projects Andasol 1 and 2 – the first parabol- quently ensure the feed-in tariff. In order to permit pre-reg- ic trough power plants in Europe. In technical terms Anda- istration, the Essen-based plant constructor and industrial sol 3 will differ slightly from its predecessors. “We’re trying service provider committed itself financially and, through to integrate the lessons we’ve learned and to implement a holding company, took over the majority share in a the potential for improvement,” explains Mr Kistner. “The project company which is the owner of the power plant. A differences are to be found first and foremost in the detail consortium consisting of German power companies plans engineering, in the storage strategy and in the solar field it- to take over a majority share in the project company at a self. We will also use a different turbine for the power plant.” later date, as soon as Andasol 3 has been registered (status as at the editorial deadline in October). The receipt of the Reliable and predictable feed-in tariff would then be ensured if the power plant is The main special feature of a parabolic trough power plant placed in service within 36 months of its being registered. is that it will continue to drive the turbines for around sev- Dr. Rainer Kistner who, together with Tom Koopmann, is en and a half hours at night: the large salt storage system responsible for the Solar Energy business unit at Ferrostaal, which the sun heats up to a maximum of 390 degrees Cel- says of this: “Without Ferrostaal, Andasol 3 would not have sius will also enable the power plant to generate electricity been built. Through our commitment with regard to the reliably after sunset. This means that the plant will generate interim financing, we have established a clear position on considerably more power than a solar power plant without the market and proved that we believe in sustainable pow- a storage system – a criterion which gives solar thermal power generation. The upcoming registration and the increased er plants enormous potential for the future. “They are 20

Projects

environmentally friendly, reliable and predictable because are constructed has also been built. The first collectors are they are independent of the fluctuating oil and gas prices,” currently coming off the assembly line there. One after the says Mr Kistner. other, these will be attached to the foundations. The solar field will be gradually built up in this manner by the sum- The construction of Andasol 3 is already at an advanced mer of next year. The start of commercial operation is stage. The excavation work has been completed, the foun- scheduled for the summer 2011 – a sea of cambered mir- dations for the collector supports have been cast, and the rors, installed with millimetre precision, will then generate positions of the fixing screws have been measured and green electricity on an area covering around 2,000,000 marked in the foundations. The hall in which the collectors square metres.

The construction of Andasol 3 is progressing in leaps and bounds. It is planned that 200,000 people will be supplied with solar power by spring 2011. THE ECHO December 2009 21

Solar boom in the land of unlimited opportunity

In the USA the indicators for solar thermal power point to growth. Sub- sidies in the triple-digit billion range will produce greater dynamism in the largest energy market on earth than has ever been known before. As a leading company for the construction and development of solar thermal power plants, Ferrostaal will also profit from the favourable economic climate for solar power.

n the US market Ferrostaal focuses on three segments To enable the greatly increased demand for solar thermal through its 100 percent subsidiary Ferrostaal Incorpo- power to be met, in the middle of the year Ferrostaal In- Irated: the construction of solar thermal power plants corporated concentrated its activities in the solar power that use parabolic trough technology, the production of plant sector in a joint venture with Solar Millennium AG. process steam using Fresnel technology, and solar heating Ferrostaal Incorporated owns 30 percent of this company, and cooling of buildings. All three segments hold enor- which is named Solar Trust of America (STA), while Solar mous growth potential: since the government changed Millennium owns 70 percent. STA covers the entire value hands, the pursuit of energy independence and the efforts added chain for the construction of solar thermal power to reduce CO2 emissions have combined with increasing plants with its Project Development, Supply Chain Man- energy requirements to drive the market in the USA at an agement, Financing, Engineering, Procurement, Construc- unprecedented speed. tion, Operation and Maintenance departments. Uwe T. Schmidt, member of the Management Board of Ferrostaal 22

Projects

“We are the only company in the USA which offers the development and construction of solar power plants from a single source. This is how we stand out decisively from our competitors.”

linchpin for successful project development for companies from the solar power sector.

Solar Trust of America already has PPAs for constructing up to three parabolic trough power plants in Califor- nia, each with an output of 242 megawatts. The EPC con- tracts are currently being drawn up. The power plants are scheduled to be commissioned in 2013 and 2014. The PPAs regulate the usage of the electricity produced in the solar power plants for a period of 20 years. Each of these power plants will supply 80,000 households per Uwe T. Schmidt, member of the Management Board of Ferrostaal and year with electricity. Furthermore, the company has also Chairman and Chief Executive Officer of Solar Trust of America signed a declaration of intent with NV Energy, the largest power provider in the state of Nevada. The prospects and also Chairman and Chief Executive Officer of STA has for intensifying the solar power business in the USA are the following to say about this: “We are the only compa- therefore bright. ny in the USA which offers the development and construction of solar power plants from a single source. This is how Government subsidies in the triple-digit billion range we stand out decisively from our competitors. With Solar The general political conditions for financing are also fa- Trust of America we will promote project development in vourable, because the Renewable Energy Portfolio Stand- the southwest states of Nevada, Arizona, California, Colo- ards which already exist in some states in the southwest rado and New Mexico. The solar radiation and availabili- oblige the energy providers to obtain a proportion of ty of land are ideal in these states. It is possible there to their power from renewable energy sources. This pro- generate six times as much energy as the entire US mar- vides additional impetus for the solar power market. By ket can consume in a year.” 2020, solar power plants generating 20,000 megawatts are scheduled to be installed in the southwest states of Gigantic proportions the USA. Mr Schmidt comments: “Now is a particularly The special feature of the solar thermal power plants in good time to implement solar power projects on a large the USA is their size. With an output of 240 megawatts scale. Tax depreciation allowances – what are known as they are considerably larger than solar power plants in Investment Tax Credits – make investments in solar ther- Spain or other parts of world. However, although the size mal power plants more attractive. In addition, the Obama reduces the relative power generation costs, the absolute government’s programme to stimulate the economy has investment costs for construction are appreciably higher. created further incentives. Government subsidies Innovative financing strategies and power purchase agree- amounting to 30 percent of the investment amount and ments (PPAs) with local energy providers are therefore the government guarantees for credits set a clear sign for THE ECHO December 2009 23

environmentally-friendly electricity. However, since The market for solar cooling and heating in the USA is also we’re dealing here with something that is in a different particularly promising. Currently, 3.5 million public build- league from Spain, it is essential to guarantee the financ- ings are cooled using electrical cooling systems. At the ing. We’re currently checking out various options for ac- same time President Obama’s government is attempting cessing the capital market ourselves to permit us to de- to double the capacity of environmentally-friendly pow- velop and implement several large projects in parallel.” er in the next three years. Replacing electrical cooling systems is therefore merely a logical step in doing this. In the Fresnel segment, Ferrostaal Incorporated focuses on plants with capacities ranging from 30 to 75 megawatts “Finally the right economic climate exists to permit which are to be developed in conjunction with the tech- above-average growth of the solar power industry in the nology affiliate Solar Power Group. The potential applica- USA. The coming years will give the industry an unbe- tions for Fresnel plants are very varied. They are envisaged lievable boost. Ferrostaal Incorporated will play its part primarily for extending conventional power plants and in generating the power of the 21st century,” concludes for use in enhanced oil recovery. Here the plant’s process Mr Schmidt. heat helps to flush the crude oil from the wellheads. The hot steam is pumped into the wellhead and releases the encrusted oil reserves which can then be opened up.

The power requirements in the rapidly growing and most densely populated cities in the USA are increasing. Solar power offers a future-oriented alternative to power from fossil sources. 24

Projects

Concentrating solar power Photovoltaics Biomass Source: Hydro Wind Geothermal www.desertec.org

The vision: This is what the infrastructure for sustainable power generation from renewable power sources such as sun, water, wind, biomass and geothermal energy could look like in 2050. Desertec – the power strategy of the future?

What sounds utopian today could become reality in just a couple of decades: utilising the solar power in the Sahara to cover the energy requirements of nearby Europe. This project is undoubtedly visionary, but not impossible. A group of companies now wants to work together with the Desertec Founda- tion, the ambassador and promoter of the concept, to check feasibility – including Ferrostaal through its joint venture MAN Solar Millennium.

he project bears the name of “Desertec”, a combina- electricity. The concept behind the power plant parks is that tion of the words “desert” and “technology”. The ob- they will supply the countries in North Africa and the Mid- Tjective of Desertec is to construct giant solar thermal dle East with power as well as covering 15 percent of Europe’s power plants in the Sahara. These will utilise the enormous electricity requirements. Desertec will have an estimated energy of the sun, which in the summer produces maxi- investment volume of 400 billion euros and is planned to mum temperatures of 50 to 60 degrees Celsius, to generate already begin supplying power in ten years. 25

Source: www.desertec.org

It is planned that giant solar thermal power plants should supply the MENA region with electricity and at the same time cover 15 percent of Europe’s power requirements.

According to expert opinion the project is technically fea- Thousands of kilometres through the Mediterranean sible; the solar radiation in the Sahara is also ideal to gen- The solar power could be transported via high-voltage DC erate power on a large scale. According to a study of the power networks. In contrast to alternating current power German Aerospace Centre (Deutsches Zentrum für Luft- networks, these are extremely efficient: Only three percent und Raumfahrt – DLR), three thousandths of the world’s of the electricity which is fed in would be lost when it is 40 million square kilometres of desert are sufficient to sat- transported across the Mediterranean. The opportunities isfy the global hunger for energy. However, it is essential which Desertec offers are enormous: in view of global warm- to create the basic conditions for implementing this ing and the fact that fossil resources are finite, the project project. For example, Desertec requires a gigantic electric- provides an alternative to power generated in convention- ity grid to be constructed. For this reason Ferrostaal, al power plants – without producing CO2 and in a way that through its joint venture, the Desertec Foundation and is harmless to the environment. Solar thermal power plants eleven other leading enterprises such as Münchener Rück, also promise stability for countries in Africa. Energy is re- Siemens, Deutsche Bank and RWE, have signed a Memo- garded as a basic requirement for economic growth and randum of Understanding to establish the Desertec Indus- competitiveness on the global markets. The production trial Initiative in order to examine the technical, econom- costs for industrial and consumer goods, for example, are ic, political and ecological feasibility of the project. In re- directly dependent on access to energy. Desertec could pre- gard to this, Tom Koopmann, Head of the Solar Energy pare the ground for a sustainable basis for living. business unit at Ferrostaal, says: “With Desertec we see a way of re-inventing our entire power strategy. The project “The project offers enormous potential for the whole is in its early stages. It is a vision which must be checked world,” confirms Mr Koopmann. “We very much welcome for its feasibility over the coming years. We think it makes the Desertec initiative. Ferrostaal is one of the few compa- sense to be involved in defining how the general conditions nies which offers all the services for constructing solar pow- are to be implemented.” er plants from a single source. We will play an active part in order to translate the Desertec vision into reality.” 26

Projects

Fresnel technology ready for market launch

Test operation of the demonstration plant Fresdemo I on the Plataforma Solar in Almería finished at the end of last year. The collector proved its technical maturity. The costs of the plant are to be reduced in the follow- up project Fresdemo II. The objective: to prove the marketability and feasibility of the first commercial Fresnel plant in 2011.

The demonstration plant Fresdemo I on the Plataforma Solar in Almería has proved that it is technically mature. THE ECHO December 2009 27

he follow-up project, Fresdemo II – which Ferrostaal Significant cost reductions wishes to implement jointly with its affiliated com- The findings from Fresdemo I demonstrated the great po- Tpany Solar Power Group (SPG), Schott Solar, the tential for reducing costs. These will now be integrated into Fraunhofer Institut Solare Energiesysteme and the Ger- Fresdemo II. Ferrostaal and SPG not only want to increase man Aerospace Centre (Deutschen Zentrums für Luft- und the efficiency of individual components, such as the ab- Raumfahrt – DLR) – is designed to prove the high cost- sorber pipes, the receiver and the secondary concentrators, effectiveness of Fresnel technology. The test operation but also to reduce the power generation costs, to enhance is scheduled to last two years and is aimed at optimising the mirror control and to gather more experience in oper- Fresnel technology. The prospects are promising, since ating and maintaining the plant. When the test run has Fresnel technology has already demonstrated its enor- been completed, a reliable cost basis will be available for mous potential. Leading experts assume that the technol- constructing future solar thermal power plants. Dr. Rainer ogy will obtain a large share of the market for generating Kistner, Head of the Solar Energy business unit at solar thermal energy in the long term. Ferrostaal, comments: “We’re very optimistic that we will reduce the costs for the entire system considerably with the With the previous project, Fresdemo I, Ferrostaal and the help of Fresdemo II and thus significantly reduce the costs Solar Power Group were already able to prove that Fresnel for generating electricity. We anticipate that the first com- technology is a competitive option for use in solar thermal mercial plant will be operational in 2011.” power plants. “The demonstration collector passed the performance test and demonstrated its suitability for every- Ferrostaal only recently increased its share in the Solar day use under typical conditions,” confirms Count Jacques Power Group from 25 to 42.8 percent. In this way the Es- de Lalaing, Managing Director of SPG. “Fresnel plants do sen-based company is supporting further research work achieve lower efficiency rates than parabolic trough pow- at SPG while at the same time sending out a clear signal er plants, but the simpler structure of the collector allows for a rapid market launch of Fresnel technology. both the investment and operating costs of a plant to be reduced. As a result, the costs for generating electricity are lower than for parabolic trough power plants,” explains the solar power expert.

The know-how of the Solar Power Group: Fresnel technology with direct evaporation Dr. Rainer Kistner, Head of the Solar Energy business unit 28

Projects

Protecting people and the environment

People at Ferrostaal are aware that not only economic interests contribute to corporate success. Sustainable and responsible actions, the safety and health of all the employees of the company and its partner companies, and protection of the environment play an equally important role. A comprehensive HSE policy which applies worldwide is an expression of this responsibility.

The interplay of uniform international HSE standards and guidelines with individual HSE planning for each individual project creates the best prerequisites for preventing accidents. THE ECHO December 2009 29 30

Projects

Safety has top priority for Ferrostaal. THE ECHO December 2009 31

Holistic HSE Management System

HSE stands for Health, Safety (technical and organisational) and Envi- ronment. Ferrostaal’s HSE Management System consists of principles, strategies and specific measures which have been developed on the basis of the many years of experience in the various business segments. As an integral part of all business processes it forms the basis of all entrepre- neurial activities.

andling large and complex projects for con- sions for employees, systematic risk analyses, protec- structing industrial plants is one of our most tive measures for a safe and healthy working environ- “H important activities. In this context we have to ment, targeted and comprehensive emergency and identify and assess risks professionally. Dealing respon- damage prevention as well as compliance with the rel- sibly with our employees, the people affected directly evant national and international laws and standards. or indirectly by our projects and also the environment In order to satisfy these requirements, the HSE Man- is of particular concern for us. HSE Management is a agement System must be continuously enhanced, also major part of our integrated Management System by integrating current standards and regulations. “Our which overlaps with Quality and Risk Management. HSE strategy is harmonised with the structure of the The HSE Management System applies to all Ferrostaal company and has grown from the interplay of princi- employees worldwide,” says Dr. Matthias Mitscherlich, ples, strategies and measures. It is implemented in all Chief Executive Officer of Ferrostaal. HSE is extremely areas,” explains Volker Pils, Ferrostaal’s worldwide HSE important in the company and is consequently the re- Representative. “The topics of health, technical and or- sponsibility of the Executive Board. Strictest standards ganisational safety and environment are particularly in the fields of technical and organisational safety and important when a project is awarded and implement- environmental protection form the basis of Ferrostaal’s ed (both in the planning phase and during realisation), HSE policy. Current legal regulations and generally ap- not just for us but also for Ferrostaal’s customers. A plicable standards such as OHSAS 18001:2007 and DIN professional HSE Management System is thus a key EN ISO 14001:2004 are applied here. factor for our corporate success,” adds Arnd Bartsch, Coordinator for HSE Management at Ferrostaal. Targeted strategy The cornerstones of Ferrostaal’s HSE policy are the ze- Individual HSE planning for each project ro-accident strategy, the targeted emergency provi- Ferrostaal’s HSE Management System offers not only gen- 32

Projects

erally applicable standards and guidelines which apply to all corporate activities. It also specifies that an individual package of HSE measures is developed for each project. This includes the HSE plan which, as a major part of project management, refers to all project phases, which comprise engineering (technical planning and processing), procurement (supply chain consisting of expediting, inspection and shipping), construction and commissioning. Specific measures are included in the HSE plan which correspond to individual general conditions, such as local legislation or particular customer specifications. “When developing project-specific HSE management tasks, we ensure that all the parties working on the project are involved as early as possible. Usually the process be- gins with a risk analysis of the engineering phase to identify any potential risks. This is followed by studies, for example HAZID and HAZOP studies, to elaborate measures Safe work procedures, health protection, daily briefing sessions and regu- for eradicating or minimising risks in the construction lar training courses are important elements in the HSE measures package. and commissioning phases and for the safety of the plant during productive operation,” says Arnim Schneider, Head of the Quality and Process Management service unit, to which HSE belongs in organisational terms. “In this way Concise Lexicon of Terms we ensure that we can draw up a holistic HSE plan taking into account all those involved in the project.” The same HAZID: A “Hazard Identification”, HAZID for holds true for the largest project currently underway at short, is a tool for assessing possible Ferrostaal; construction of a combined cycle power plant reasons for and consequences of dan- in Trinidad for Trinidad Generation Unlimited (TGU). Ac- gerous events in the project environ- cording to Project Director Andrew Foote: “As an EPC con- ment and in planned industrial plants. It tractor, it is our responsibility to design a plant that will is performed at any early point in the be failsafe, both at the construction stage and later on, project and is based on brainstorming. once the plant is in operation. Since HSE is a subject that affects all parties involved in project management, we HAZOP: A “Hazard and operability study”, also communicated our HSE strategy to our clients and con- referred to as HAZOP, is a systematic, sulted with them before laying down individual guide- structured, team-oriented assessment of lines specific to the project at hand.” Sustainability of all the planning for an industrial plant, with HSE measures is ensured when – both on the construc- an estimate of the consequences of de- tion site and during plant operation – any risk of accidents viation from the product process under and incidents is avoided, the emission of dangerous sub- normal conditions. stances is prevented and other interference factors such as noise are reduced to a minimum. THE ECHO December 2009 33

HSE Project Representative Manager

QA/QC Commercial Engineer Project Manager

HSE Project Engineer Controller

Engineering Procurement Site Commissioning Manager Manager Manager Manager

Site HSE Organisation

For Andrew Foote, Director of the TGU projects, HSE has top priority. Standard project organisation with HSE posts at Ferrostaal

Safe construction with qualified specialist personnel to be unsafe or not in compliance with the guidelines in To implement the HSE plan and its specific package of effect at the construction site,” Andrew Foote points out. measures, Ferrostaal establishes an HSE organisation on “Construction staff receive safety briefings during our the construction site. This remains active until the con- regular HSE meetings and daily briefing sessions from struction site has been closed. Ferrostaal’s Project Man- their own HSE Officers. HSE Supervisors for all of the agers and HSE engineers are responsible for controlling partners involved regularly inspect our construction and implementing the project-specific specifications. As sites, meet with employees and conduct audits. This a rule, these contain risk analyses, measures for avoiding gives them a picture of the current status, they hold re- risks, safe working procedures and workplaces, health view meetings with employees and provide regular train- protection, environmental protection, first aid and emer- ing. Compliance with all of the HSE guidelines is our top gency planning, construction site safety, fire and explo- priority – we don’t tolerate violations.” All activities and sion protection, orderliness on the construction site, incidents which are relevant to HSE are documented. In waste management, measures against drug abuse, han- every project it is absolutely vital for Ferrostaal that the dling dangerous materials and dealing with radioactive company’s high safety standards should be implement- materials, as well as protection against noise and vibra- ed by partners, suppliers and subcontractors – to protect tion. “In consultation with the site HSE Engineer, the HSE people and the environment. Supervisors at our construction site review all activities for compliance with HSE regulations and make sure that all of the rules are being followed. Under the rules in place, sub-contractors’ HSE Supervisors in our project oversee an average of 30 employees and have complete authority to bring all activities to a halt if they are found 34

Projects

Awards for accident-free construction

The zero-accident strategy is central to the Ferrostaal HSE Management System. The two awards that Ferrostaal Lda, a wholly owned subsidiary of Ferrostaal, has received from its client PEEGT for 3.2 million and for 3.8 million man-hours of accident-free construction is further evidence of the success of the company’s HSE policy.

As a plant constructor which operates around the world, Ferrostaal complies with strict HSE guidelines. THE ECHO December 2009 35

onstruction workers are exposed to dangers in the workplace each and every day. Arduous physical C labour and working with heavy loads or hazard- ous materials can pose serious risks to employees. Tar- geted HSE precautions ensure that each employee has a safe environment in which to work. The success of these preventive steps is shown in the prestigious awards given to Ferrostaal Lda by the Syrian Public Establishment of Electricity for Generation and Transmission (PEEGT). Between 2005 and 2007, Ferrostaal Lda, a subsidiary of Ferrostaal, completed work on two power plant ex- tensions in Syria. The projects involved expanding the open-cycle power plants in Al Nasserieh and Zayzoun to create combined-cycle plants for the client, PEEGT.

A total of 3.2 million accident-free man-hours in Al Nas- serieh and 3.8 million in Zayzoun are proof of the worth of strict safety standards, quality assurance and control, and targeted further training in HSE. “We were able to achieve such a high proportion of accident-free man- hours because a safe working environment was the top priority for everyone involved in the project. We take our responsibility for our employees and services very seri- ously,” explains Jean-Claude Hecht, Managing Director at Ferrostaal Lda and Head of the Construction Services business unit. “During the assembly phase of our projects, the goal we pursue is to prevent risks and damage to individuals, the environment and equipment. Our Strict safety measures while constructing the combined-cycle power guiding principle is prevention, combined with ongoing plant in Zayzoun reviews and improvements – starting with the selection of qualified staff, subcontractors and consortium part- In addition to the certificates from PEEGT, Ferrostaal Lda ners, providing our local employees with information has received numerous other awards for outstanding safe- and technical training, through to regular HSE training ty and quality standards during project management, for sessions for everyone involved in assembly.” This ap- example by PowerGen Projects Consultancy Limited for proach permits long-term and sustained reliability in the construction of the Tapada do Outeiro power plant in project management by Ferrostaal Lda. “The certificates Portugal, and the two awards presented to Ferrostaal Lda awarded to us by PEEGT are recognition of the hard work in April and August of this year by Alstom Power Nether- by our skilled team and the consistent safety strategy in lands for the construction of the gas-steam power plant place at Ferrostaal Lda. This is great motivation to con- in Flevo, the Netherlands. These honours are not only mo- tinue pursuing our strategy.” tivation for the company’s own employees, but also promote a positive image to the clients. 36

Projects

Loading methanol on a tanker in the harbour of Point Lisas, Trinidad THE ECHO December 2009 37

Economic upswing in the island state

Large natural gas reserves off the coast have enabled the economy of the island state of Trinidad and Tobago to flourish in recent years. Today the country has become a significant industrial hub – an economic wonder in which Ferrostaal played a role. 38

Projects

Largest order in the company’s history nearing completion

The road between Trinidad’s capital, Port of Spain, and Point Lisas, which is some 50 kilometres away, is regularly congested in the morning and evening. The reason for this is an industrial park, which has sprung up here in just a few years, providing work for a large number of people. This is where the Caribbean state refines its natural gas and has built up a remarkable petrochemical industry for this purpose which is still growing. Ferrostaal is also playing a major part in this success.

View of the entire downstream area of the AUM plant complex – when completed, the entire complex will consist of seven individual plants; picture on the right: the UAN storage tanks THE ECHO December 2009 39

ince the early 1990s, Ferrostaal has been building Methanol Holdings Trinidad (MHTL) and two ammonia plants for producing two synthetic gas products plants – including M5000, currently the largest metha- Son Trinidad: methanol and ammonia. By 2006 nol plant in the world. As a result, MHTL has become the the company had constructed four methanol plants for second-largest methanol producer in the world.

Currently, Ferrostaal is constructing an AUM (ammonia, urea, melamine) complex with an investment volume of 1.6 billion US dollars. The plant will consist of a total of seven individual plants and three sub-plant complexes in which natural gas will be refined further into ammonia, urea and ammonium nitrate (UAN) and melamine. Pro- duction is aimed primarily at the markets in North Amer- ica and Europe.

Production already started successfully in sub-plant As the general contractor Ferrostaal is responsible for the entire plant being completed on schedule. This includes project management, coordinating the engineering work around the world, supplying all components and constructing the plants together with the company’s long- standing partner company Proman. Construction complies with state-of-the-art environmental and safety 40

Projects

guidelines. Parts of the complete plant have already be- Petrochemical Industry business unit at Ferrostaal. “In ad- gun operating. “Since the expansion of the plant is in step dition, the plant produces more than the agreed target with the intensity of the real net output ratio, we have volume. The Provisional Acceptance Test, in other words been able to commission one plant complex, the ammo- the official acceptance by the customer, confirmed this,” nia production. We’re very pleased with the progress of he continues. Everything is proceeding according to plan the project. As with the plants we have already construct- in the construction of the UAN and melamine plants, too. ed on Trinidad, we have once again exceeded our targets. “We’re right on track to hand these over to our customer Specifically, we completed the ammonia plant before the on schedule in early 2010,” says Mr Graff. official acceptance date,” says Adalbert Graff, Head of the Premium quality in our own interest Adalbert Graff, Head of the Petrochemical Industry business unit at The high quality standards of the general contractor are Ferrostaal not the only reason why construction and production of the plants are so successful. With Ferrostaal contributing to MHTL’s own capital, it is in the company’s very own interest to deliver on-schedule completion, compliance with the budget and problem-free, high-capacity production. This fact also helps when mobilising the high investment sums as this is regarded by the banks as an important in- dicator for the creditworthiness of the projects. The Kre- ditanstalt für Wiederaufbau (the German federal develop-

Picture on the left: part of the melamine plant; the melamine reactor, the heart of the plant, can be seen in the background on the left. Picture on the right: the urea plant THE ECHO December 2009 41

ment bank) in Frankfurt financed 85 percent of the invest- The demand for fertilisers – whether liquid or solid – is de- ment sum for the new AUM complex. The project involves veloping disproportionately to the population. The con- not only the largest order volume in Ferrostaal’s history: stantly growing demand for agricultural raw materials re- It is also the biggest single private investment in the Car- sulting from the population growth, the change in food ibbean state of Trinidad and Tobago. patterns and the use of renewable raw materials for generating bio-energy leads to an increase in the areas uti- Liquid fertiliser and melamine lised for agriculture and intensified cultivation. This in However, this is not the only reason why the new plant com- turn results in greater use of fertilisers. The prices for fer- plex is extremely important for the operating company tilisers have risen continuously over the past few years, MHTL. First and foremost, it permits the range of products and production of them is thus a worthwhile business. to be enhanced. Previously, the holding company’s activities were mainly restricted to the product methanol, but with the The worldwide demand for melamine is also growing by production of ammonia, UAN and melamine it is entering a five to six percent annually. The markets have been affect- new market. Above all, UAN can be used more efficiently as ed by some turbulence in recent years, but experts fore- a liquid fertiliser in irrigation systems. As a consequence, it cast stable demand for the coming years. Melamine is an is particularly interesting for developed agricultural systems important raw material for the furnishings industry. It is with the corresponding infrastructure, such as those in the used for impregnation and in producing glues and wood USA and France. These new products also mean that the nat- composite panels. Melamine is also employed in the elec- ural gas is refined to a higher level. This is good not only for trical, textile and automotive industries. Producers are the company MHTL, but also for the country, because addi- also of the opinion that the application areas for mela- tional jobs are also created as the net value added increases. mine have by no means been exhausted. Melamine and melamine resins are particularly versatile because they are not only UV-resistant, but also fireproof, waterproof, impact-resistant and scratchproof.

Contribution to industrialisation When Ferrostaal has completed the two last plants in the AUM complex in early 2010, the number of petrochemical plants it will have constructed will have increased to 13. The company will quite rightly be able to claim that it has played a major role in industrialising the island state. In addition, the new complex will support the government’s efforts to further strengthen the downstream industry and consequently also enhance the local value added in the country. Growth in the energy sector and the overall favourable economic development on Trinidad have helped to reduce the unemployment rate to under five percent. This puts the country in a special position in the region. 42

Projects

Work proceeding apace on the Trinidad power plant construction site

Steel reinforcements are a major component in the foundations and give the concrete the necessary strength. THE ECHO December 2009 43

Impressive moments during the groundbreaking ceremony. Picture on the left, (r. to l.): Dr. Matthias Mitscherlich, Chief Executive Officer of Ferrostaal; Patrick Manning, Prime Minister; Conrad Enil, Energy Minister; Paula Gopee-Scoon, Foreign Secretary; Fitzgerald Jeffrey, Minister of State; Alison Lewis, Permanent Undersecretary in the Ministry of Finance; Howard R. Barnes, member of the Management Board at Ferrostaal. Picture on the right: After Mr Barnes’ address, the children’s choir from a neighbouring school in La Brea sang.

Construction of the 765-megawatt combined cycle power plant on the La Brea site on Trinidad is progressing rapidly: In January 2009, Ferrostaal won a major contract to supply the complete EPC package for Trinidad Generation Unlimited (TGU). The contract represents a volume of over 700 million US dollars. With the progress of construction, the site looks different every day and is gradually revealing how the power plant will look on completion in 2011.

he progress of construction was already clearly vis- Management Board at Ferrostaal. Along with the tremen- ible at the groundbreaking ceremony, which was dous progress of construction, the quantity of materials is Theld on the Caribbean island in June 2009. High- impressive: By 2011 some 44,000 cubic metres of concrete ranking representatives of government and private indus- will have been consumed and around 25,000 tons of steel try attended the official inauguration of the construction installed in the construction of the power plant. site – including the Prime Minister of Trinidad and Tobago, Patrick Manning. When the contract became effective in A solid basis: the foundations mid-January, Ferrostaal immediately commenced prepara- Once the site mobilisation and the preparatory works were tory works at the construction site: the 160,000-square- completed in June, ground stabilisation operations could metre site was levelled and work on the infrastructure begin. Piles were installed in order to create a stable base commenced. Much has been achieved on the construction for the foundations. Soil dynamics experts analyse the soil site in a short period of time: This rapid development is conditions to determine where bored or driven piles must the result of Ferrostaal’s many years of experience in plant be used; these are installed to a depth of at least twelve me- engineering and construction. “It is contractually agreed tres. To stabilise the ground for the power plant equipment that the turnkey combined cycle power plant will be ready the project requires some 3,500 piles in all. In Trinidad and for commissioning and handover to our customer by mid- Tobago, it is particularly important to take natural condi- 2011. A 30-month construction period is an ambitious tions such as earthquakes, strong winds and heavy rainfall timeline for such a plant, but with our technical expertise into consideration. These natural phenomena must be and local know-how we are confident that we will deliver counteracted by stable foundations. on schedule,” emphasises Howard Barnes, member of the 44

Projects

The groundbreaking ceremony had “Energy for the Future” as its theme. Hearty welcome before the official celebrations of the groundbreaking ceremony in June: Chief Executive Officer of Ferrostaal Dr. Matthias Mitscherlich (l.) and Prime Minister Patrick Manning

Sophisticated time management sive local network of local business partners. “The engage- Along with the foundations, installation of the first ma- ment of local organisations and labour is a very impor- jor components began in September – components such tant aspect,” says Howard Barnes. “Our commitment to as the first gas turbine and the structural steel for the local employment and training makes a considerable con- substation. By the end of the year, Ferrostaal will erect tribution to the economic growth of Trinidad and Toba- the pipe bridges, the first bypass stacks and the heat re- go.” In August 2009, some 460 people were employed at covery steam generators (HRSG) that will enable the re- the site, 425 of whom were from the local community and use of heat that is generated. “We will be able to meet the surrounding areas. When construction work peaks in ear- 30-month construction deadline through our intelligent ly 2010, the site will have as many as 1,000 local employ- scheduling and management,” says Project Director An- ees over a period of several months. drew Foote. “At this point we’re ahead of schedule. This is because rather than completing civil construction Flexible power work first and then handing the entire site over for me- The new plant will have a high degree of operational flex- chanical and electrical installation work, we operate in ibility in order to cope with the fluctuating demand of parallel.” The timing also reflects local conditions such the local grid. With six gas and two steam turbines it will as tropical rainfall, which might interrupt work. “That has be able to be operated in “open” (without steam turbine) to be part of the planning process. In this regard, we have or “combined” (with steam turbine ) cycle when complet- the benefit of having carried out projects in Trinidad and ed. “With this combined cycle power plant, Ferrostaal is Tobago for many years now – which means we’re already making a major contribution to the energy security of familiar with the challenges we face,” explains Ab de Trinidad and Tobago because after it has been commis- Jong, Resident Project Manager with Ferrostaal in Trini- sioned the country’s power generating capacity will be dad und Tobago. increased by around 50 percent,” says Andrew Foote. In addition, the innovative air cooling system and other Adding value locally components in the plant will ensure compliance with the Ferrostaal has already established an excellent reputation stringent environmental requirements. on Trinidad and the region over the course of many years of experience there. Through successfully executed petrochemical projects, the company has built up an exten- THE ECHO December 2009 45

Piling machine at the construction site: the bored piles are driven to a depth of up to 18 metres.

The 160,000-square-metre site for the future combined cycle power plant in La Brea seen from the air 46

Projects

Series Milestones in pictures

Refinery plant for ENAP There are many steps involved in progressing from the initial idea for a project to the completed plant. This edition of the series “Milestones in pictures” focuses on the construction of the delayed coker in Concón, Chile.

November 2005: The preparatory work began on the construction site in June 2006: After the site had been drained, the ground stabilised with 72 Concón, Chile. The area seen here has been prepared for the assembly piles and the foundations laid, it was already possible to begin construc- of the heart of the plant, the delayed coker process unit. The order also tion work in March 2006 on the steel-reinforced concrete coke deck for included constructing all auxiliary plants, such as a desulphurization the coke drums. In June, this construction stage had largely been com- plant, a waste water treatment plant, a flare stack, a compressor station pleted. Here you see the roof girders being installed. and two more processing plants, as well as a belt conveyor system on the site which covers a total of 50,000 m².

Secure fuel supply for Chile

n 2008, Ferrostaal and their partners completed a refin- natural gas, thus achieving significant savings in trans- ery plant for the state oil company Empresa Nacional del port costs. Ferrostaal and further partners formed a IPetróleo (ENAP) in Concón, Chile. The refinery plant – consortium which performed all the EPC services in this a delayed coker – enables heavy crude oils from nearby project, which had an investment volume of 430 million countries to be converted to diesel, petrol and liquefied US dollars. THE ECHO December 2009 47

November 2006: The two coke drums, which for transport reasons were December 2006: The 34-metre-high coke drums were installed using a each supplied in two parts from Japan, are being prepared for assem- heavy-duty crane from DSD which has a capacity of 650 tons. First the bly here. These containers each weigh 340 tons and are nine metres in lower part of each coke drum had to be installed and fixed in place on the diameter. Due to their enormous weight and dimensions they could not be coke deck. Then the upper part was positioned so that it could be welded transported in one piece by road from the harbour to the construction site. onto the lower part of the container. Installation of the two drums, including The two pieces were welded together on site. all the welding work, was successfully completed in just 28 days.

The company also played a leading role in developing the to operate. This process took a total of 36 months to com- financing model for mobilising the investment sum. Reu- plete. The coke drums, with their considerable wall thick- ters’ renowned magazine “Project Finance International” ness, were each delivered in two parts, welded together at ranked it as the “Latin America Deal of the Year 2005”. the construction site and installed using special cranes. Today the delayed coker supplies 40 percent of the coun- The project demanded top performances from the try’s fuel and at the same time represents an important 100-percent Chilean Ferrostaal subsidiary DSD Construc- step forward in enhancing Chile’s real net output ratio. ciones y Montajes, which was responsible for performing the construction and assembly work. For example, the entire plant, including the numerous auxiliary plants, had to be constructed while the existing refinery continued 48

Projects

March 2007: The mechanical assembly of coke heater B-3001 can be August 2007: The last access platforms were installed before the upper seen here. Interconnections were installed at the same time. These con- steel structure could be assembled as the derrick for the drilling lances. nect the coker plant and all the auxiliary plants with the existing refinery. By this time, the coke drums as well as the most important components and the large process columns (right) had all been installed. The construction then measured around 70 metres in height. THE ECHO December 2009 49

February 2008: The delayed coker is now almost mechanically com- June 2008: The delayed coker was ready for commissioning and, follow- plete. Final work ahead of commissioning and the handover had been ing a successful performance test, was able to begin continuous opera- implemented on site. The complete 100-metre-high structure of the coke tion six weeks later. drums had been completed, including the derrick for the two drilling lances which are driven into the containers vertically from above in order to break up the hardened coke. 50

Services

Ferrostaal has been successful in the machine business for many decades – and also in the fields of packaging, plastics and food. THE ECHO December 2009 51

Strategies for a successful machine business

Some six months ago the 52-year-old salesman and mechanical engineer Hans-Jürgen Böwe changed his workplace from Beijing to Essen and has since been responsible for the machine business in the packaging, plastics and food sectors at Ferrostaal. He expanded the business and ensured that customers can obtain everything from a single source – a complete production line, if they so wish. With an eye on the emerging markets and sophisticated strategies up his sleeve, he is capturing new markets and customers. 52

Services

Mr Böwe, you’ve been at Ferrostaal now for a good six months. What’s changed in this time? First of all I’d like to state that I have had a very good basis to work on, with an excellent strategy and highly skilled employees. My job was to implement the existing strategy more fully and to enhance it.

How did you achieve this? We concentrate on a few exclusive suppliers and further suppliers from the food, plastics and packaging sectors. These suppliers do not always have to have a big name, but the quality must be first-class. They have to produce high-quality, stable and reliable machines and plants. We have outstanding suppliers all around the world whom we represent. At the moment we provide all the machines required by large industrial bakers, and machines in the fields of plastics, extrusion, and packaging.

Does commercial business on its own still have a We’re currently expanding teamwork and work across in- future? ternational borders in order to offer our customers first- Yes, because complex production lines and plants can- class technical service. not be sold over the Internet – well, perhaps a single machine could, but whenever consulting is called for, then That also means that the existing employees must be direct personal communication is required and also, willing to learn. naturally, professional expertise. We must demonstrate They are. People are looking forward to the professional new quality here and provide a greater real net output expertise they will obtain and the upcoming training ratio. We must also be in a position to provide consult- units. The experts we’ve taken on so far are also involved ing services, and to answer the technical questions in the market and are no strangers to our employees. Our which customers have in the packaging, plastics and employees welcome these investments. food sectors on our own. That’s how we’re currently re- organising ourselves. What still distinguishes us from other providers? Well, a number of things. First, we know our markets very How do you plan to achieve this? thoroughly. We’ve been present in most countries for By employing specialists who will in turn train our em- many decades with subsidiaries or our own offices. We’re ployees. Concentration enables us to have experts in eve- also supplier-independent and can provide end custom- ry region who can also work in other regions, because of ers with complete production lines tailored to their indi- course we can’t afford a specialist for packaging machines, vidual wishes and requirements. A line can comprise ma- for example, in every country. But we check out which chines from ten to 15 different suppliers. It’s a great ad- country offers the greatest potential for which sectors and vantage to obtain everything from a single source and deploy our resources accordingly. In Southeast Asia alone, saves the customer a great deal of effort in terms of re- for instance, we will take on at least nine qualified people. search and negotiations. In addition, we will continue to THE ECHO December 2009 53

“We’re steering a new course with a long-term partner. With a tailor-made financing model we’re giving a company in China the opportunity to establish a new production centre. In return we will receive authorisation rights for countries in which our company was previously not active, and at the same time an extremely competitive and technically high-quality product made in China.” be available to provide services for the customer after the has resulted in short-time work and dismissals, and in the plants have been sold and installed. Another key service worst cases companies have had to close. which we offer is financing of the plants. How have we repositioned ourselves? Financing is a service which business enterprises We have large and interesting projects – by our standards normally don’t provide. large projects worth many millions – in the pipeline in That’s right. But of course customised financing strategies all corners of the world. For example, we also buy estab- are an excellent opportunity for many customers to even lished companies when we are convinced that they fit implement their projects at all and to make investments – into our portfolio and our network. This grants us imme- naturally all the more so for customers from the markets diate entry into a market in a new region. We’re current- in which we operate. We’re active in a large number of ly in the process of negotiating various takeovers. We’re emerging industrial markets. This enables us to give good consequently in a good position to face the future, and products and companies a fair chance and to help them the business in the fields of packaging, plastics and food establish themselves on a solid foundation. will be an important part of the overall portfolio in the machine sector. Could you explain that more precisely? I’ll give you an example. We’re steering a new course with a long-term partner. With a tailor-made financing model, Do you have any questions about the machine we’re giving a company in China the opportunity to es- business at Ferrostaal? tablish a new production centre. In return we will receive authorisation rights for countries in which our company Contact: was previously not active, and at the same time an ex- Hans-Jürgen Böwe tremely competitive and technically high-quality product Phone +49. 201. 818-52 80 made in China. [email protected]

So you’ve utilised the crisis to reorganise. Yes we have. We’re in a good position. We did have to ac- cept a decrease in sales to some degree, but compared with other companies we’ve remained largely unaffected by the crisis. Other companies have not fared so well. We have suppliers who’ve lost 60 percent of their sales. This 54

Services

New: assembly services for the locomotive and rail industries

The Automotive business unit has been a successful partner for the automobile industry for over 20 years now. The unit carries out the assembly of complete modules such as driver’s compartments, axles, suspension, traction systems and cooling systems. It also operates assembly lines and plants in an independent capacity for high-profile customers such as Opel and Ford.T he unit is now planning to extend this concept to other areas and to offer assembly services to locomotive, railway carriage and light-rail vehicle manufacturers.

errostaal is taking competencies from both the cur- and we can look back over many successful projects and a rent Automotive business unit and what was formerly long-standing tradition. Although the old business unit’s FTransportation and integrating this expertise into the activities were performed as commercial trading business recently created Railway business unit. The aim here is to for Ferrostaal, the unit in fact also undertook value-added reposition the company in this area of activity. In addition projects itself that involved, for example, modification to railway (conventional rail), the unit will also handle light- of old carriages or refurbishment of light-rail vehicles. rail projects. The new unit will be managed by Detlef Castro Ferrostaal was also responsible for the entire planning, im- and Dr. Ralf Becker, who are also jointly in charge of the Au- plementation, approval and licensing during this time. This tomotive business unit. Dr. Becker gives the following expla- new concept enables us to incorporate expertise in series nation of the concept: “The employees who were previously production from Automotive in our capacity as a supplier- employed in Transportation now work in the Railway unit. independent service provider with a high real net output They bring with them comprehensive railways expertise ratio due to our status as a full service provider, while trans- and extensive experience acquired over many years. Trans- ferring the concept to the railway and light-rail sector.” The portation is one of the oldest business areas at Ferrostaal, new business unit thereby offers a fully comprehensive as- THE ECHO December 2009 55

aim to address customer wishes and production-specific requirements. Dr. Becker explains the multiple benefits for potential customers: “The Railway and Automotive business units both offer customers cost-effective production. The opportunity to exploit synergies also presents itself here. We can run production for several manufacturers in our own assembly plant. Pursuing the theory of lean production will gain us a foothold in this sector. In our view, there is great potential here to create leaner structures.” One aspect that is clear to Mr Castro and Dr. Becker here is that value added measures and production concepts differ between the two sectors. No two locomotives are constructed in the same way, but nevertheless both executives see the potential for streamlining, for instance in material supply and inventory management as well as for the supply chain. For example, locomotive manufacturers can also perform small assembly runs using series-production methods. “In addition, as an independent company, we are in a position to act as a service provider and can thereby offer an all-round after-sales services package: This means, for example, that the benefits provided by this type of package to the customer increase with the number of locomotives that are in use,” says Dr. Becker, illustrating the extensive value to the customer.

Exceptional quality as a top priority As is the case in the Automotive business unit, Railway at- sembly service package, from the planning stage through taches the utmost importance to delivering the highest to after-sales service. However, infrastructure provisions no quality. Quality leadership in Automotive means that the longer form part of our range of services. unit now leads the market as a supplier-independent service provider that creates added value. Day-to-day top per- New production approaches formance has been the basis of the business for years. And We want to focus on the construction of shunting or main- neither of the managing directors will settle for anything line locomotives, carriages and light-rail vehicles. Locomo- less for the new unit. “All assembly services must work per- tives are today commonly produced in modular systems. fectly. We have to set ourselves up in the best possible way This would mean that we could take on the entire assem- to ensure that our services provide the customer with the bly process. The pre-assembly of individual modules, such ultimate in speed of delivery and flexibility while ensuring as engines, cooling systems, driver’s cabs and hydraulics lead times are kept as short as possible. Key factors here are would also be a possible area for us. Many components of course honouring delivery times and all-round expertise could be assembled on-site. Others, such as electrical com- regarding the product. We have to ask ourselves which area ponents, must be. This is where Mr Castro and Dr. Becker of application the product is aimed at and what follow-up 56

Services

What does the Ferrostaal Automotive business unit do?

Ferrostaal Automotive has been successfully running steel magazines for various motor-vehicle manufacturers since 1983. The so-called system logistics approach began in 1996. This provides just-in-time delivery to customers of other materials and also sequential- ly assembled systems. Outstanding reference projects include a SILS (Supply In Line Sequence) Centre for Opel in Rüsselsheim and the complete setting-up of work units for Ford in Cologne, Saarlouis and Genk.

New portfolio additions: assembly services from planning through to after-sales service for the rail industries. THE ECHO December 2009 57

activities are relevant. Naturally, all these things have to be alone that more stringent emissions regulations now ex- dealt with,” says Dr. Becker. “However, we cannot manage ist will compel many operators to refurbish their fleets. this on our own. Naturally, we will be enlisting the services And the need for refurbishment does not only apply to of partner companies, as was previously the policy with the western Europe but also to south-east Europe and Russia. former Transportation unit, for example for the modifica- Market experts are assuming that investment volumes tion or refurbishment of rail vehicles.” solely for locomotives will reach quantities of 1,000 in western Europe and 2,000 in eastern Europe. While some High market potential for the new services may consider these figures as low, the opposite is in fact The concept looks promising. The plans for the initial true. An automobile plant typically produces between projects, for instance, are already well advanced. One of 250,000 and 400,000 vehicles annually, whereas a com- these projects is a locomotive plant in Germany – for Mr parably sized locomotive production plant would manu- Castro and Dr. Becker, this market is where initial focus is facture a quantity of 30 to 50 shunting or mainline loco- aimed. “This sector is naturally one that has felt the full motives in the same period. The reason is that production force of the economic crisis. As a result of downward trends times for locomotives are significantly longer than for cars. in sales volumes in other industries, transport volume has “So if we were to produce one locomotive per week, then significantly declined and therefore locomotives and the that would already constitute an extremely good achieve- use of carriages is lower than in times of economic growth. ment,” says Dr. Becker. The date when business activities This means that repeat orders for transport vehicles are will really begin is therefore still uncertain. But both expe- postponed. However, this situation is not permanent. “The rienced executives are fully convinced that success will first orders will definitely come,” remarks Dr. Becker. At any come within one to two years. It all depends on the orders rate, the potential is enormous. A large proportion of situation at the manufacturing companies. But one thing shunting and mainline locomotives currently in use in is clear: The key elements are already in place. western Europe is obsolete. Despite investment projects being put off as a result of the economic crisis, the fact

Do you have any questions regarding the new Railway area of activity or about Automotive?

Contact: Dr. Ralf Becker Phone +49. 201. 818-10 15 [email protected]

Detlef Castro Phone +49. 201. 818-29 41 [email protected] 58

Services

Shipyards create thousands of jobs

Ferrostaal continues to support the expansion of the South African oil and gas industry. A shipyard for building new modules for offshore platforms started operating two years ago. In August this year the company signed a contract to build a shipyard for carrying out repairs in Cape Town harbour.

n Cape Town harbour Ferrostaal is financing the con- A-Berth project the company is discharging offset obli- version of an old shipyard into a service and repair gations from the sale of three submarines to the South Icentre for maintaining offshore platforms. “There are African Navy. “The A-Berth is yet another facet of our very already a number of local companies in Cape Town which varied offset business,” sums up Mr Pietsch. With its com- work as suppliers for the oil and gas industry, but they mitment to offset business, the company is one of the were extremely fragmented to date. With our commit- largest foreign investors in South Africa. ment we want to help the industry to consolidate. The aim is to make the local companies more competitive interna- The demand for African oil has increased sharply in re- tionally and to permit large orders to be posted,” says the cent years. Around one tenth of the reserves known to Head of the Governmental Business unit, Christian-Max exist worldwide are located on the black continent or be- Pietsch, in describing Ferrostaal’s role in this business. neath the adjacent oceans. However, the construction and The company is investing in the A-Berth project together maintenance of offshore platforms in this region is prob- with the local project developer Atlantis Marine Systems. lematic. Previously the floating plants had to be towed to North America, Europe or even Asia for necessary repairs. Upon completion, the shipyard is to be operated by the And time is money: each day that a platform is not oper- local company DCD Dorbyl Heavy Engineering. Ferrostaal ating costs between 400,000 and 500,000 US dollars in will be the lessor. In 2007 the company, also together with loss of rent. But the shipyards in the aforementioned re- its partner Atlantis Marine Systems, had already placed gions are currently so booked out that waiting times regu- in service a shipyard for constructing new modules for larly amount to years. The proximity to the West African platforms in Saldanha Bay, to the north of Cape Town. oil fields therefore makes South Africa an ideal location With the two shipyard projects the Essen-based company for such platforms. has created thousands of new jobs, 1,500 of these directly connected with the shipyards. In view of an estimated unemployment rate of 30 percent, this investment is also helping to combat poverty in the country. With the THE ECHO December 2009 59

Ferrostaal is financing the expansion of a shipyard in Cape Town harbour to maintain offshore platforms. 60

COUNTRIES AND PEOPLE

Laying a trunk line in the Libyan desert THE ECHO December 2009 61

The changing face of a desert state

Thanks to its wealth of oil and gas, Libya is an extremely attractive business partner. The constantly growing economy and continuing liberalisation of the economic system make the North African country a location with considerable potential. 62

COUNTRIES AND PEOPLE

First choice in the oil and gas sector

Ferrostaal has been active on the Libyan market for over 30 years. In this time the plant constructor has implemented over 100 projects for the oil and gas industry in the Arab country and is regarded on the market as a “preferred first-choice contractor”. The country-specific know-how is an important prerequisite to remaining successful in the context of new general economic conditions.

“A100” water treatment plant in Bu-Attifel THE ECHO December 2009 63

t all began in the late 1970s when a small camp was set up in Es Sider on the Libyan coast. Here, on the I site of a giant oilfield, a small team of ambitious employees laid the foundation stone for the successful development of Ferrostaal in Libya. “Initially it was dif- Karl-Heinz Hennchen, Senior Site Manager and long-term employee of ficult to establish ourselves on the Libyan market. We Ferrostaal in Libya felt a bit like adventurers, because our equipment was only simple,” remembers Karl-Heinz Hennchen, who has in wells to be increased and oil production to be en- been employed by Ferrostaal in Libya for many years. hanced. In order to process oil and gas, Ferrostaal Libya “No modern communication equipment or technolo- constructs, among other things, gas oil separation plants gies were available to us: there was no phone, no In- (GOSPs), pipelines for transporting the two raw materials ternet and naturally no GPS. But we still succeeded in as well as pump and compressor stations. “As an estab- establishing ourselves very quickly and were gradually lished EPC contractor we now have, in contrast to previ- able to manage the major oilfields.” Over the years the ous years, an extremely broad basis and a range of con- number of projects in the oil and gas sector grew con- tracts which reflects the changing market. We maintain stantly, enabling the industrial service provider and plant business relationships with all the oil and gas companies constructor from Essen to develop comprehensive mar- which operate in Libya and are present with our own ket expertise and a comprehensive business structure. camps in almost all the productive oil and gas fields,” Ferrostaal Libya today consists of the head office in Tripo- says Carsten Arlt, Head of Ferrostaal Libya, by way of ex- li, the logistics and construction centre in Marsa El Brega plaining the current market position. “One important and the mobile camps (currently 15) which are situated factor for project acquisition is the great flexibility directly in the oilfields and are only set up for as long as which we achieve through our own construction centre a construction site exists. The Libya Task Force in Geisen- in Marsa El Brega. This is an important requirement to heim, Germany, headed by Volker Kenschke, supports be successful on the Libyan market,” emphasises Mr Arlt. the business activities of Ferrostaal on site and, among “Our customers value the good infrastructure which we other things, covers the engineering disciplines which have built up in the country over the course of 30 years.” are not available in Libya as well as global procurement. Marc Neumann, Head of the Oil and Gas business unit, The number of employees has grown from a small team adds: “In Libya we concentrate on medium-sized orders. in the early years to over 940 currently. Many of them – This enables us to implement several projects simulta- like Karl-Heinz Hennchen – have been involved for years, neously, thus satisfying the requirements of the coun- know the country and the people and are familiar with try’s oil and gas industry.” the working conditions in the desert. Projects in the oil and gas sector Established market position Among other things, Ferrostaal Libya is currently han- Because the company has been present on the Libyan dling an EPC order for Mellitah Oil & Gas, Gas Division, at market for many years, Ferrostaal is today able to offer the Wafa field. This giant oil and gas field is located in its customers a comprehensive range of services: In the West Libya, near the Algerian border and some 500 kilo- context of opening up oil and gas fields, for example, the metres south of Tripoli. The project involves extending company supplies and installs piping systems, collection an existing oil and gas production plant by integrating systems, processing plants, oil and gas production plants, three new flow lines. The flow lines will connect three new and water injection systems which permit the pressure wells to the existing manifold on the Wafa field. Work is 64

COUNTRIES AND PEOPLE

scheduled to be completed by the end of the year. In an- GOSPs are also planned. In El Sharara, AOO operates two other project which is currently being handled, Ferrostaal oilfields and is planning to increase the capacity of these is planning future wells at the El Sharara field for Akkakus two fields through this project. Oil Operations (AOO) and the subsequent infrastructure measures which will be required to establish a link to the Ferrostaal Libya has already demonstrated their great ex- existing plants. This will include, for example, flow lines, pertise in the oil and gas sector before. For example, in 2007 trunk lines and pipelines, as well as high-voltage cables the plant constructor was awarded a contract to construct to supply power in the field. Water injection plants and a turnkey water treatment plant, “A100 Produced Water Re- Injection”, for Mellitah Oil & Gas, Oil Division, at Bu-Attifel in Eastern Libya. The plant fulfilled all the requirements for commissioning at the end of July 2009. It filters all the Concise Lexicon of Terms oil from 22,000 cubic metres of water each day to a dilu- tion of up to ten parts per million. The produced water re- Flow Line: pipe which connects the wellhead to injection technique is one of the most demanding terti- the next manifold (small nominal diame- ary production measures to maximise residual oil remov- ters or pipe diameters) al at the field. Trunk Line: pipe which goes from the manifold to the GOSP (gas oil separation plant) One problem particularly connected to fields from which (medium-sized nominal diameters or oil and gas has been produced for many years (such as the pipe diameters) one at Bu-Attifel which has been producing since 1972) is Pipeline: pipe which goes from the GOSP in the that they experience a gradual reduction in pressure, and desert to the tank farm or, for loading onto a ship, to the coast (large nominal Employees of Ferrostaal Libya aligning and welding pipes for a trunk line diameters or pipe diameters) THE ECHO December 2009 65

as a result the output decreases. The pressure build-up which can be achieved by injecting water enables the oil Details of infrastructure measures for increasing oil production at the El Sharara field production to be maintained or even increased. In addition, the process is safe for the environment because the used water is treated and returned to the field. In the case 6“ flow lines (oil, water) 388 km of smaller fields which are located close together, the wa- 18“ trunk lines 30 km ter which is injected is frequently controlled from a large 12“ pipelines 75 km treatment plant. Ferrostaal Libya has implemented such Oil wells 110 items a plant in the “Water Injection Project Farrud”, in which Water injection plants 50 items twelve injection points are supplied using high-pressure Equipment for water wells 18 items pumps that inject the water into the Farrud field with a Overland line approx. 780 power poles pressure of 100 bar.

Ferrostaal Libya has not only implemented water treatment plants to increase the amount produced, but also 54 wells at the Tazerbo location between 2002 and 2004. drinking water purification plants, for example in the Deaerators and filter plants here ensure that the carbon Great Man-Made River Project in which fossil ground wa- dioxide, iron and manganese which are dissolved in the ter from the southeast desert is transported over 1,000 fossil water are reduced and that the water is transported kilometres to the densely-inhabited coastal regions in the to the coastal region via a pipe system. north of the country. In the context of this project Ferrostaal Libya constructed water treatment plants for

Excavations for installing a connecting pipeline for the newly-constructed A100 Produced Water Injection Plant in Bu-Attifel 66

COUNTRIES AND PEOPLE

Another major project in recent years was the construction of a GOSP on what is known as the Elephant Field in the Murzuq Basin between 2002 and 2004. This plant is located in the southwest Libyan desert approximately 1,200 kilometres from the coast. In the gas oil separation process, gas, water and pollutants are separated from the crude oil. In this plant the crude oil is pumped through a pipeline to the coast, where it is stored temporarily before it is pumped on board a ship. The natural gas is transported and compressed in the pipelines using gas compressors, which are also included in Ferrostaal Libya’s portfolio. For example, the company supplied the gas compressor stations in Zelten, Brega, Messla and Sarir. Since fric- tion results in pressure being lost in the pipelines during transportation, the compressors must compensate for this pressure loss.

Liberalisation and developing economy Fiscal metering skid at the Ras-Lanuf tank farm In the last six years far-reaching changes have taken place in Libya. A change in foreign and economic policies was The plans by the Libyan government to raise gas produc- introduced in 2003 when, after almost 20 years of isolation levels and increase oil production to three million tion, the Arab country sought to re-enter the internation- barrels per day by 2012 offer good potential for Ferrostaal al community of states through its declared renunciation to expand its business activities in the country. Current of weapons of mass destruction. “The re-integration into economic data underline this: In 2007 Libya had proven the world economy and political re-orientation open up oil reserves of 41.5 billion barrels. In 2008, mineral oil and great opportunities for German companies, especially derivates accounted for 95 percent of exports, and these Ferrostaal,” stresses Marc Neumann. Since 2004 the coun- accounted for 90 percent of the Libyan economy. Germa- try has been undergoing economic reforms which were ny is one of Libya’s main trading partners, and the North introduced by the passing of new economic laws and are African country is Germany’s third-largest oil supplier. designed to move the country away from a government- The planned increase in oil and gas production will also controlled economy to a market economy. In this context, increase the demand for refineries and petrochemical an intensification of the bilateral relations between Ger- plants in Libya. many and Libya can be seen: The completion of the par- liamentary ratification process in April 2009 saw an Good prospects agreement come into force to promote and mutually pro- The measures which are required to cover this demand tect investments. These general political conditions exactly match the portfolio of Ferrostaal Libya. For exam- create the ideal prerequisites for continued successful de- ple, gas oil separation plants, compressor and pump sta- velopment of Ferrostaal in Libya. tions, water/gas injection plants, the expansion and con- version of existing plants, repair work and pipelines will continue to be needed in the future. THE ECHO December 2009 67

Section (nutshell filter skid) of the “A100” project

Due to their flexibility, Ferrostaal Libya is an attractive partner. “We’re well positioned on the Libyan market and look forward to continued business success there on a long-term basis,” says Carsten Arlt. “To organise ourselves as well as possible for future projects, we are extending our activities for quotation preparation and order processing still further in the engineering and procurement business areas.” The business units Petrochemical Industry and Industrial Plants (e.g. desalination plants) have good prospects for the future, as do the Power and Solar Ener- Would you like more information on Ferrostaal gy business units. At the moment, Ferrostaal Libya is fo- Libya or our Oil and Gas business unit? cusing the expansion of their business activities on new oil companies, for instance RWE Dea, Shell and Statoil. Contact: Ferrostaal Libya already has an excellent reputation with Marc Neumann existing customers such as Harouge Oil Operations, Ara- Phone +49. 6722. 501-351 bian Gulf Oil Company, Zueitina Oil Company, AKAKUS [email protected] Oil Operations, Wintershall Holding, Mellitah Oil & Gas, Al Nahr Company and the Sirte Oil Company. Carsten Arlt Phone +218. 215. 63 47-60 until 63 [email protected] 68

COUNTRIES AND PEOPLE

Facts and figures LIBYA

Form of government Great Socialist People’s Libyan Arab Jamahiriya (popular government) Area 1.76 million km² Capital city Tripoli

2007 2008* Population in millions 6.2 6.3 Total GDP (at market prices) US$ 58.6 bill. US$ 68.2 bill. GREECE GDP per capita of the population (purchasing power parity) US$ 15,335 US$ 16,431 Real growth 6.8% 6.3% Inflation rate 7.0% 11.0% Athens National budget US$ 39 bill. US$ 51 bill. Import US$ 18.6 bill. US$ 25.1 bill. Export US$ 44.5 bill. US$ 60.2 bill. Trade balance US$ 23.9 bill. US$ 32.9 bill. Percentage of GDP 40.8 48.2 Exports to Germany € 4.2 bill. € 5.5 bill. Imports from Germany € 0.67 bill. € 1.04 bill. Mediterranean Source: Germany Trade & Invest; 2007 figures: Foreign Office; * estimated: Economist Intelligence Unit, March 2009/IMF

1 Misurata Benghazi 0 250 km TUNISIA Tripoli Tobruk Sirt 15 MFO CAMP FACILITIES IN LIBYA 4

3 1 MFO head office Tripoli 2 Sahara 2 MFO Operations & Logistics Marsa El Brega Ghadamis 5 6 3 Ras Lanuf (Harouge) 4 Zueitina (Zoc) 7 5 Amal (Harouge) 10 16 14 6 Jakira Nafoora (Wiag, Agoco) 13 7 Bu-Attifel (Mellitah Oil) Sabha 8 12 8 Messla (Agoco) 9 Sarir (Agoco) EGYPT 11 9 10 Shatirah (OmY) 17 11 En Naga (HAROUGE) 12 Sabah (ZOC) 13 Tibisti (HAROUGE) LIBYA 14 Ghani (HAROUGE) 15 Nalut (AL NAHR COMPANY) ALGERIA 16 Wafa (MELLITAH GAS) 17 El Sharara (AKAKUS)

MALI Niger CHAD Sudan THE ECHO December 2009 69

Country information on Libya

ibya is the fourth-largest country in Africa. In the Lnorthwest it borders on Tunisia, in the west on Algeria, in the south on Niger and Chad, in the southeast on Sudan and in the east on Egypt. To the north is the Mediterra- nean coast. 95 percent of the country are covered by the Sahara. 88 percent of the people live in the narrow coastal strip in the north, where the largest cities are also located. This is the only region where a Mediterranean climate, similar to that of southern Italy, prevails. Everywhere else has tropical temperatures and is arid. The Libyan population consists primarily of Arabs and Berbers, but Italians, Egyptians, black Africans and other ethnic groups are also to be found in this Arab country. The desert is inhabited only by the few nomads and Tuaregs (less than one percent). The official language is Arabic, while English is one of the most frequently spoken foreign languages. Some older people speak Italian. The reason for this is that Libya once belonged to the Italian empire. The state religion in Libya is Islam, and the population consists predominant- ly of Sunni Muslims.

The Libyan coast was inhabited by Greeks and Phoeni- cians from the seventh century before Christ. The Greeks settled in the eastern part of today’s Libya and founded the cities of Cyrene and Euesperides (Benghazi), among others. In the western part of what is today Libya the Phoenicians founded the cities of Sabratha and Oea (Tripoli), and the port of Leptis Magna. Under Roman rule, in the first centuries after Christ, Leptis Magna had almost 100,000 inhabitants and was at that time the largest city on African soil. 70

COUNTRIES AND PEOPLE

Business etiquette in China – part 2

The first part of the business etiquette guide to China in the previous ECHO edition provided general information on rules of conduct for business meetings and business meals. However, an instructional guide cannot cover all situations. It takes several years spent living within a different culture and interacting with local people before anyone is fully familiar with the country and its customs. Those who rely on the support of local partners have the best chances of success. In this second part of our guide, Thomas Buschmann, Head of Ferrostaal China, who has lived for the past twelve years in the Middle Kingdom, gives us his own personal tips. THE ECHO December 2009 71

e are always very happy to welcome customers represented in large numbers. This makes it difficult for for- and Ferrostaal partners here in Beijing from all eign business parties to bring up and discuss sensitive top- “Wover the world. In order to ensure that our visi- ics with the right people in meetings, such as points of com- tors’ stay here is as pleasant and profitable as possible, a promise that are connected with a dispute, for example. A local Chinese Ferrostaal employee always accompanies sense of diplomacy is vital here, as is an awareness of how guests to appointments with Chinese business partners to internal relationships and hierarchy work within the cus- act as a translator. You should take time to get to know this tomer’s company. Opportunities for discussion often arise employee on the day before the appointment, describe the spontaneously, for example during a business meal, on the project to them and explain the aims of the negotiations. way to a meeting or during the time it takes for the meet- By doing this, translations are certain to be accurate and ing to gradually break up. If, as a guest of honour at a meal, target-oriented. Our experience has taught us that better you are seated directly next to someone who is responsi- results are achieved if unusual or very technical topics are ble for making decisions, a suitable moment will possibly e-mailed to us at least one week in advance so that the em- present itself to discuss any points of a sensitive nature. It ployee acting as translator can gather the relevant techni- is important then to have the employee who is acting as cal vocabulary. For extremely important topics, we are also translator with you and to have already informed them of in a position to involve the local Managing Directors and the situation. Alternatively, following the meeting, you can discuss negotiation strategies. run your approach to solving a problem by our Chinese employees and get them to inform you of the Chinese part- There are certain rules of conduct for business meetings, ner’s initial reaction to it. negotiations and business meals in China and visitors should familiarise themselves with these conventions in Private invitations are regarded as a very great honour in advance. The information that was given in the first part of China. However, they should only be accepted if extended the business etiquette guide for China will prove very help- repeatedly and also only after a definite date has been set. ful in doing this. Our local expert knowledge means we can On the issue of choosing a suitable gift for the host, our lo- offer reliable advice in regard to specific issues. This allows cal employees can always be relied upon for advice here.” for optimal preparation for meetings with business partners. After all, it must be taken into account that not all customers are the same: state institutions, large state-owned companies, successful private companies or municipally owned companies and their business executives can differ greatly from each other in their practices and expectations.

Regarding business meeting communication, it is important to know that repetition is a classic communication technique used by the Chinese. We are therefore also always careful to restate the same message in meetings in order to be sure that our opposite number has sufficiently un- derstood our position. This is particularly vital when rais- ing considerations that are not common practice or with which Chinese business partners tend to be unfamiliar. At Thomas Buschmann, Head of Ferrostaal in China business meetings in China, the Chinese party is very often 72

appendix

International trade fairs January to June 2010

Fispal Tecnologia Trade fair for packaging and processes World Future Energy Summit Tube for the food and beverages industry UAE, Abu Dhabi International tube and pipe trade fair Brazil, São Paulo 18/01–21/01/2010 Germany, Düsseldorf 08/06–11/06/2010 12/04–16/04/2010 World Future Environment Power-Gen Europe Exhibition Clean Energy National Conference and exhibition for UAE, Abu Dhabi Conference and Exhibition the European energy industry 18/01–21/01/2010 Australia, Adelaide Netherlands, Amsterdam 03/05–05/05/2010 08/06–10/06/2010 Upakovka/Upak Italia 2010 International trade fair for Industrietag Bingen Expopack packaging machinery, packaging Industry day Bingen International Exhibition for the production and packaging material Germany, Bingen Packaging Industry Russia, Moscow 04/05/2010 Mexico, Mexico City 26/01–29/01/2010 22/06–25/06/2010 Metalloobrabotka Gulfood International trade exhibition for ExpoPrint The gulf food, hotel and equipment equipment, instruments and tools for International trade fair for printing, exhibition and salon culinaire the metalworking industry photography and packaging UAE, Dubai Russia, Moscow Brazil, São Paulo 21/02–24/02/2010 24/05–28/05/2010 23/06–29/06/2010

TECHMEI 2010 Feria Internacional del Bonding Hochschulmesse Technology trade fair for industrial Medio Ambiente University networking fair machinery and equipment International exhibition Germany, Bochum Brazil, São Paulo on the environment 28/06–29/06/2010 15/03–18/03/2010 Columbia, Bogotá 02/06–05/06/2010 Inglemash ProPak Vietnam 2010 International trade exhibition for Trade fair for processing, filling and Bonding Hochschulmesse equipment and technical processes packaging technology University networking fair in the supply industry Vietnam, Ho Chi Minh City Germany, Karlsruhe Russia, Moscow 18/03–20/03/2010 07/06–09/06/2010 Dates to be confirmed THE ECHO December 2009 73

IMPRINT

Publisher: Ferrostaal AG Hohenzollernstr. 24 45128 Essen Germany

Member of Initiativkreis Ruhrgebiet

Responsible for the content: Picture credits: Daniel Reinhardt Hauke Dressler: cover picture, p. 26 (centre); Karsten de Rie- se: pp. 2, 12-15, 26 (l.), 27 (l.), 30, 32, 34, 36/37, 38-42, 45 (below), Editors: 46-49 (background), 49 (r.), 59, 60/61, 62-66, 67 (above), 67 Angela Kanders (Managing Editor) (below), 69; Frank van Groen: pp. 3, 27 (r.), 40 (above), 57, 67 Carmen Eckenroth, Katja Ifland (centre); Teja Finkbeiner: p. 6; A. V. Singh: p. 7 (centre); Contact: [email protected] Shearman & Sterling: p. 8; Manfred Ehrich: p. 9; Areva: p. 10 (l.); Fernando Litosella: p. 10 (below); Cinema Jenin e.V.: p. 11; Other contributors to this issue: Getty Images: pp. 16/17, 21, 23, 24/25, 50 (below), 54, 56; Cat- Thomas Buschmann, Julia Scholtyssek rin Moritz: p. 22; Solar Millennium AG: p. 25 (r.); Henning Maier-Jantzen: pp. 33 (l.), 51, 52; Dominic Chung: pp. 43-44; Fotolia: p. 50 (above); Thinkstock: p. 70

Design and layout: Would you like to order THE ECHO in German, Eng- BOROS lish or Spanish, or do you have any requests, ideas or suggestions for topics? Printing house: Woeste Druck, Essen We would be delighted to receive your contributions: Galaxi Supermat (chlorine-free bleached), Papier Union [email protected] Fax +49. 201. 818-35 25 Frequency: half-yearly THE ECHO and other publications, such as company reports and brochures on the different business segments, are also available on the Internet to download at www.ferrostaal.com www.ferrostaal.com