Reducing risk in Africa

January 27, 2016 JENS TOFTEGAARD ANDERSEN

Demand for aftermarket EPC projects in Africa is growing

Plant repairs, modifications, upgrades and similar aftermarket projects are an inevitable part of maximising the lifecycle of cement plant operations. Yet they are not without their risks. Each project requires not only sourcing of the equipment and access to people with the competencies to install the equipment, but also detailed and careful project management. This can be a big distraction from focusing on the core business of running the cement plant.


Replacement of a kiln shell is an example of an aftermarket turnkey project

Fuelled by an increase in commercial projects, housing developments and infrastructure projects, demand for cement in Africa has increased rapidly in recent years, which has seen cement producers focus on extending the lifecycle of their cement plant equipment.

According to Nicklas Lionett, Area Sales Manager at FLSmidth, this development is changing the way many African cement plants are approaching their retrofit installation and spare part replacement projects. He says: “We are seeing an increased interest in EPC (Engineering Procurement and Construction) solutions in Africa, where the customer outsources the entire project to one supplier, including engineering, manufacturing, installation, commissioning and supervision. We see this as a perfect fit to FLSmidth’s One Source philosophy.”

At present time, FLSmidth has completed and is currently underway with EPC projects in different parts of Africa, with several others in the pipeline. These include installations of kiln shells, girth gears, hydraulic thrust devices, complete ball mills and coolers.

Shifting the focus
Nicklas Lionett puts the reason for this increase in interest down to risk mitigation. For many plant owners, there is always some risk attached to major plant modifications, such as retrofits and spare part installations. He says it is an advantage for companies to be able to place the bulk of that risk onto a supplier. “Plant owners and their staff want to be able to place risk on one supplier rather than multiple contracting companies or their own resources,” he says. “Many simply do not have the time, let alone the experience, to handle these projects in the most efficient manner.”

FLSmidth offers retrofits and spare part installations as EPC contracts from its Customer Services division. This includes engineering, designing, manufacturing and supplying the equipment according to the required specifications as well as installation and commissioning of the equipment. In addition to reducing risk, this saves time as it’s not necessary first to source the equipment and service suppliers and then to manage them.

“A non-EPC project carries significant risk. First, the company has to enter into negotiations with suppliers and make all the necessary arrangements and plans. Then, if there are any conflicts, they need to manage these, too. But when FLSmidth handles the project as an EPC project, we take the responsibility on our shoulders, so our customer doesn’t need to manage several suppliers. The customer gets one point of contact, which is FLSmidth’s project manager.” - Nicklas Lionett , Area Sales Manager at FLSmidth

Risk mitigation
Such EPC projects, which typically take three to five weeks, still carry a certain amount of risk, warns Jens Toftegaard Andersen, Department Manager in Customer Services at FLSmidth. He explains that FLSmidth’s aim is to reduce the risk for the cement plant owner. He says: “With our range of competencies covering all departments of cement plant equipment, and our history in the industry, we are well-placed to assume the risk on our customers’ behalf.”

He explains that a unique element of FLSmidth’s offering is the ability of the engineering team to work closely with the installation team in designing the solution. The solution is designed specifically to the conditions of the customer’s cement plant, meaning a much more efficient commissioning process. “You can only do this when you have a company that can do the complete job, working together with the customer’s interests in mind,” says Jens Andersen.

Jens Andersen also stresses safety as the highest priority. “We place particular emphasis on minimising safety risk, during installation. All FLSmidth employees are trained in safety, as ensuring that safety stays top of mind is a part of FLSmidth’s commitment to Corporate Social Responsibility and being a reliable business partner.”

Fixed-price planning
Detailed project planning is key to success, from making sure the correct parts are onsite at the right time, to the prompt execution of tasks throughout the project and effective utilisation of resources. Yet the actual task of project planning can interfere with the day-to-day running of the plant. FLSmidth can take responsibility for project planning, handling all the intricate details, and it’s based on a fixed price.

The solution is tailor-made to the specific cement plant

Nicklas Lionett says: “We want to cover all contingencies to make sure that all the expected work is included in the project from the outset. We go to great lengths to document the scope of the project fully, including detailed project plans with associated timelines showing what we’re going to do and when we will do it – and of course how much it will cost.”

In this respect, inter-company teamwork is vital. FLSmidth works closely with the customer’s planning department to ensure both parties’ project plans are fully integrated into one holistic schedule for the entire plant shutdown. This means that resources required throughout the shutdown can be well managed and effectively maintained, thus optimising costs, shortening installation time, and reducing costly delays. For FLSmidth, EPC projects are about collaborating across its global organisation and using the strengths of its huge knowledge base and vast experience.

Global-local supplier
FLSmidth Customer Services in Denmark manages the contracts and overall customer relationship and is responsible for equipment design and manufacturing quality. The contract installations are managed by FLSmidth South Africa and FLSmidth Oelde.

Rob Fellows, Manager – Rotary Kilns, highlights the strengths of the FLSmidth South Africa Site Service Department: “FLSmidth South Africa has a wealth of resources and technical knowledge on hand to support installation projects of any size. We supply dedicated FLSmidth-employed personnel along with specialised tooling, cranes, lifting apparatus, test-work equipment and more. Combining the resources of our Danish and South African offices, we provide the very best that both have to offer customers.”

“The key thing,” points out Nicklas Lionett, “is that our customer shouldn’t have to worry about micro-managing details and project management resources.”

“Our job is to reduce their risk and take the load off their shoulders so they can focus on plant performance,” he says.

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