designing, manning and operating a world-class downstream business
TRANSCRIPT
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,
World-Class Dow
stream Business
Dr Tom Farle
Managing Director
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Summary of Presentation
Innoval Technology Back round
Desi nin an Efficient and Viable Downst
Market Analysis
Equipment Specification
Plant Design
Cost Modelling
Developing the Right Skills
Achieving World-Class Standards
eam Plant
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 2
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Innoval Technology Our Credentials
Innoval Technology is an independent coexpertise to the downstream aluminium in
Formed in 2003 as a result of closure
We are a group of 26 aluminium expertsaluminium knowledge
Metallurgy product expertise
Surfaces ex ertise
Our engineers have an abundance of pro
Most have been su ortin the indust
Many have held Senior Management
pany providing a unique resource ofdustry
f one of Alcans Global R&D centres
our strength is the breadth of our
uct and process experience
for over 20 ears
ositions in global aluminium companies.
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 4
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Innoval Technology Strategic Support
Innoval has undertaken the following typeinvestors in downstream fabrication busin
Technical Due Diligence on existing pl
Pre-Feasibility Studies and Greenfield
Plant investment and upgrade support
of strategic support work for potentialsses:
ants
plant design
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 5
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Methodical Approach
Market Analysis
Equipment Specification
Technical Confi uration
Technology Choices
Plant Design
Cost Modelling
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 7
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Market Analysis
Review all potential products for the plant
Home market
Export market
Gather data on product sales prices
Important to have understanding of marke
Some products cost more to produce
Anal se com etition in home and ex ort
Quality required to compete in chosen
Decide on which products to manufacture
t price vs. production costs
arkets
market
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 8
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Methodical Approach
Market Analysis
Equipment Specification
Technical Confi uration
Technology Choices
Plant Design
Cost Modelling
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 9
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Assess Technical Challenges for Chosen
Products vary in their complexity and in th
The products determine what equipment i
Type of rolling or extrusion equipment
Type of finishing operations
Example Can Body Stock (CBS)
A sin le can line manufactures 2 000 cans eminute (1 billion per year)
10,000 tonnes of aluminium per year (2 x 14tonne coils per day)
Some may think this is a simple product
BUT actually it is technically demanding
Products
eir difficulty of manufacture
required in the plant
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 10
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Can Body Stock - Thickness Reduction a
Coca-Colas First All Aluminium Can, 1967
(weight 21g)
d Tighter Control
Coca-Cola Aluminium Can, 2009
(weight 12g)
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 11
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Can Body Stock - Thickness Reduction a
Extremely tight specification for aluminiu
sheet thickness
achieved with state of the art thicknescontrol systems ...
-these systems
Unlikely to be achieved at start-up
Failure to meet specification will lead to cplant jams and can strength issues
Profile
(crown)
Al strip
~0.5%
Strip wi
d Tighter Control
n co eng
~10,000 m
250 +/- 5 microns
th ~ 1.8 m
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 12
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Can Body Stock The Challenge of Eari
Earing
by crystallographic texture
Sheet with earing that is out of specificawill
Risk jamming and stoppage of the canplant line
g
Ears
ion
can after re-draw and wall ironingwith severe earing
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 13
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Can Body Stock The Challenge of Eari
World-class earing can only be achievedthat includes a Hot Tandem Mill.
g
hen rolling DC ingot through a Hot Line
Source: SMS
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 14
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Summary of Sheet Rolling Process
DC
Caster Pre-heati
Furnaces FilterScalper
Furnaces
Cold finismill
Finalanneal
Coating
Doubling
(foil)
g
Hot reversing
mill
Hot tandem
millHot coil
FilterContinuous caster
o ro er
(Self-
anneal)
Cold millingCold coil
Cold roughing millInter-anneal
Cold millill
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 15
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Rolling Technology Configurations for Va
HRM + 4-stand HTM
Typical Capacity (tonnes pa) 700k
Can Body Stock (CBS)
Can End Stock (CES) & Tab Foilstock
Standards - Low Mg Standards - High Mg
ro
ducts
ur ace ens ve ro uc s
Thick Products Clad Products
Others
meets world can be mad cannot be m
ious Products
Hot Band Option
coil-to-coil HRM Belt Caster Roll Caster
150k 120k 20k
class quality requirements
but does not meet all quality requirements
de or fails to meet most quality standards.
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 16
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Making the Appropriate Technology Choi
Need to identify correct technology optionstandards
E.g. on-line measurement technologie
There are significant variations in perform
Consider future proofing the equipment to
Tightening of specifications
ncreas ng co we g s w an en
es
to achieve current customer quality
s
nce and price of equipment
meet evolving customer needs
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 17
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Methodical Approach
Market Analysis
Equipment Specification
Technical Confi uration
Technology Choices
Plant Design
Cost Modelling
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 18
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Plant Design Capacity Calculations
Correct sizing and multiples of equipment
E. . What size of furnace and how ma
Assessment of spare capacity within key
What other products could the plant m
Awareness of the magnitude of process l
To sell 1000 tonnes of final product th
Example Rolling Mill
A rolling mill represents a significant comvery carefully
type
n ?
ssets
ake to fill any spare capacity?
sses at every stage (recoveries)
rolling mill may need to roll 1200 tonnes
onent of Capex so must be specified
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 19
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Example Rolling Mill Capacity Calculati
Product One Two Thre
Finalgauge[mm] 0.1 0.22 0.5Percentofproduction 33% 23% 22Rollingtime[min] 54 18 10Handlingtime[min] 30 20 20
vera capac y onne yr
Product One
.Percentofproduction 39%Rollingtime[min] 54Handlin time min 30
Removalof heavy
gauge
product
Overallcapacity[ktonne/yr]
Product
Finalgauge[mm]PercentofproductionRollingtime[min]
10%
increasein pass
s eedsHandlingtime[min]Overallcapacity[ktonne/yr]
ns
e Four Five
0.8 2
9% 13%
6 3
15 10
Two Three Four Five
. . .
28% 26% 7%
18 10 6
20 20 15
83
One Two Three Four Five
0.1 0.22 0.5 0.8
39% 28% 26% 7%
49 17 9 6
30 20 20 15
87
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 20
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Plant Design Optimising Layout of Equi
Based on knowledge of world-class opera
Ensure efficient process flow
WIP Calculations (buffer sizes, WIP stora
,
ment
tions
e around plant)
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 21
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Methodical Approach
Market Analysis
Equipment Specification
Technical Confi uration
Technology Choices
Plant Design
Cost Modelling
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 22
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Cost Modelling
It is easy to build a simple Excel-based co
Need realistic model inputs based on exp Product recovery vs year from startup
Efficient staff levels
R&D costs (~0.5% of turnover typical)
a cu a on o ap a os s Inclusion of all key andancilliary equipment
Calculation of Operating Costs (OPEX) Requires a good understanding of the proces
Com uter models can be used to redict utilit
Useful to attribute costs correctly to differ
More complex tools can be used to analy
st model ... BUT
rience and expert calculation
usa e electricit as etc.
nt products
e the model (e.g. Monte Carlo)
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 23
C O
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Example of Cost Model Output
350,000
400,000
182,50212%
NPV [US$'000]IRR
250,000
300,000
S$'000]
100,000
150,000
200,000
CAPEX[U
0
50,000
2009 2014 2019 2024 2029 2034
YEAR
5,000,000
6,000,000
3,000,000
4,000,000
Flow[US$'000]
0
1,000,000
2,000,000
umulativeCash
-2,000,000
-1,000,000
C
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 24
P F ibilit St d Fl Di
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Pre-Feasibility Study Flow Diagram
Analysis Specifica
pro uc s
volumes
extra capacity
Viab
no
tion Design
equ pmen
capex & opex
Cost SalesIRR, NPV, etc.
Modelling prices
le?
Bankableyes
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 25
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Typical Staff Requirements for a Downstr am Plant
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Typical Staff Requirements for a Downstr
Typical 250,000 tonne rolled products pla
Per Shift 4 Shift
GraduateSkilled Labour 60 2
Unskilled Labour 15 6
am Plant
t operating in Western World
ystem Day Staff TOTAL
60 600 70 310
0 60
430
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 27
Typical Skills Requirements for a Downst eam Plant
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Typical Skills Requirements for a Downst
Managerial Planni
Sched
Sales HR Sales
Technical
Techni Metall En ine Chemi Materi
an an a n enance Engine Electri
Other Crafts Medic Fire pr Drivers
eam Plant
g
ling
anager for each major product group
al Representatives at customer plantsrgistserstsls scientists
ersal
enltection
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 28
Recruitment Issues
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Recruitment Issues
Graduates
Need a ood su l of the correct dis
They will need further development an
Experienced Staff
Internal transfer from other group ope
Access to early retirees from world-c
Head-hunt from competitors
Retention of Staff
Threat to both existing and new comp Ma come from a related industr , e
skills
Potential loss of knowledge
i lines
d training
ations (if they exist)
lass operations
niesteel and aluminium rollin need similar
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 29
Approaches to Graduate Development
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Approaches to Graduate Development
University-based Centres of Excellence
S ecialised focus e. . Aluminium, Ro
Sponsor students, projects and depart
In-house R&D Centre
Develop specific skills within R&D proj
Transfer R&D people to plants in oper
Ongoing Development of Staff
Use specialist training courses
entor ng rom exper ence pro ess o
Can be provided by independent exte
llin or Extrusion, Surface Science
ments
ects
tional roles
na s
nal organisations
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 30
Training Example Aluminium Rolling Te
hnology Course
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Training Example Aluminium Rolling Te
MONDAY 10 TUESDAY 11 WEDNE
Intro K Smith / T Farley
ALUMINIUM ROLLING TECHNOLOGY COURSE
Outline of Sheet Rolling Thermal Aspects Lubric
Process of
Rollng
The Business of Rolling Mark
Tom Farley COF
COFFEE Chris Davenport
COFFEE
Mechanics Thermal Aspects Surface Gof Rolling Workshop
Chris Davenport Chris Davenport Mark
Workshop Profile & Flatness enroute
Chris Davenport Kyle Smith
LUNCH LUNCH
Machinery of Rolling Control Systems
COURS
(JAG
Tom Farley Dan Miller
COFFEE COFFEE
Process Metallurgy
Control Systems
Gary Mahon
Dan Miller
Process Metallurgy
Worksho Rollin Process Models
Gary Mahon
Wrap up Session Chris Davenport
Free Social Event Fr
hnology Course
SDAY 12 THURSDAY 13 FRIDAY 14
Innoval Technology, Banbury 11-15th May 2009
ation Vibration Flatness
Control
Tom Farley
oster Flatness Control
FEE Condition monitoring Workshop
Tom Farley Dan Miller
COFFEE COFFEE
eneration Flatness
Gauge Control Control
oster
Jaguar Wrap up Session
Dan Miller
LUNCH
LUNCH
TOUR OF INNOVAL
Profile Measurement
E VISIT and Control
UAR)
Kyle Smith
COFFEE
Profile Measurement
and Control
Kyle Smith
Wra u Session
ee Social Event
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 31
Managing Knowledge Assets
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Managing Knowledge Assets
Important to maximise the knowledge that
Share knowledge of manufacturing to
eterm ne gaps n t e now e ge as
Loss of long-serving, knowledgeable
Standardise operations and develop
Knowledge Management using K-Maps
Team-based Workshop approach invo
Manufacturing
Technology
Sales
exists in employees
improve product quality
& programme
mployees
est Practice
lving
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 32
K-Map of Aluminium Extrusion Operation
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K Map of Aluminium Extrusion Operation
How to Build a K-Map
knowledge
Attributes
Stages
relationship
Intranet
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 33
K-Map Summary Level
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p y
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 34
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State-of-the-Art Equipment is Not Sufficie t
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q p
Realisation that investment in world class
class products.
Many examples in aluminium rolling mills
Return on investments taking longer t
Cannot match quality of world-class p Need expertise that equipment suppli
Equipment manufacturers looking tdeliver a com
equipment does not on its own give world
and extrusion plants.
an planned
oductsrs do not usually possess
o partner with product specialists toplete package
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 36
Benchmarking & Technical Audits
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World-class companies frequently use the
operations against their own Best Practic Team assembled for several days to r
Experienced operators
Technical experts
Host plant
Experienced facilitator
Output is a gap analysis of areas to be i
Action plan established Progress then reviewed at regular inte
Repeat visits to provide additional sup
For single-site companies the same functiconsultants
Can also be of benefit to large multi-n
ir internal resources to benchmark their
e.view and observe operations
proved.
rvals
port, as required
on can be carried out by external
tionals to get a fresh view
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 37
Typical Check-list for Technical Auditing Due Diligence
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Environment, Health & Safety
Accident recording and rates
Equipment Operation
Standard Operating Practices
se o a s c rocess on ro
Maintenance schedules and strategies
Investment plans
Operational Efficiency
Machine utilisation
ecover es
Product Quality
Test rocedures
Reject Rates
Technology System
Approach to problem solving
Product and Process improvement methods
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 38
Summary
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An efficient and viable downstream plant
approach based on >20 years working in Market Analysis
Equipment Specification
Plant Desi n
Cost Modelling
A key stage is matching equipment specifmaximise the financial returns from the pl
We have emphasised the need for a broa
equipment and technology but also inpu
an be designed using Innovals methodical
he industry
ication to the optimum product mix in order tont
range of technical skills and routes to
t from world-class expertise and know-how
Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 39
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Innoval T
expertise to the a
www.inno
chnology
luminium industry
altec.com