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Different approaches to applying O&M services: Hossam Darwish, ASEC Engineering (Egypt)

Filmed at Cemtech MEA 2015, 8-11 February, Grand Hyatt Dubai, UAE

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Good afternoon, ladies and gentlemen. As you can see from the title of our presentation, of my presentation that we are going to talk about a service that started almost 30 years from now, or little bit more. With a very increasing and rapid increasing demanding in the market, especially in our region. We have seen this morning in one of the presentation, I think it was a first one, that since 1970 and going on coming to now, there is a very rapid increase in the market and the capacities, many cement plants are coming in the region.

So with this rapid expansion and very increased expansion, start the need or the market for this kind of service. So why it comes? In our region many of the plants for a very recent time, it was built and owned by the government and for very obvious reasons we cannot or we don't want to talk about it here.

So the performance of these plans over times becomes a little bit slow and you start to need some help from experts or from somebody to improve or help the performance of the plants and then later on some investors out of the industry start to invest in cement and also they start to need somebody to help them running the plants, operating the plants, maintaining plants, and then very obvious also is that doing that, holds the government and investors start to need to contribute to the local market or to the local people.

Each plant, many of the plants are built in some developing countries, you need to find jobs for the local people, you need to train them to teach them how to do the things perfectly, so they need some experts, some people who have accumulation of experience to help the people and to start to transfer the know how.

Plus also if we're offering this service to some investors, then they could leave the day to their work, can't stop everyday has a problem, they give this headache to somebody else and they start to go on with new investment, second line or something like that.
So this is where we find the people looking for after this kind of service in the region. So the traditional approach as a title, the title is different approaches, traditional approaches started with a complete or overall or what we call technical plant management, that means a manager or the contractor is coming to the plant, he bring a full team from his own, responsible for spare parts, responsible for full guarantees, annual production, energy consumption, some other KPI's, but after a while we found ASEC that not all the customers need this kind of let's say turn key service or full service because of different needs, because of different countries regulations or whatever they may need something else. So we start to think about kind of what we call it multiple solution, we don't go to the customer who is only one solution, we could adapt our solution on his needs so what we're going to talk about in the next few slides a different kind of O & M.

One is O & M contracts excluding spare parts and we'll see why we could do that or we need to do that, O & M management contracts, so it's only in management on them and in other places or other and if different title, we'll call it a technical assistance, and improving production to achieve the designed capacity, or just a specific technical assistant service as part of operation or part of maintenance service.

So let me first talk to you about my company, my company ASEC is started over 40 years 1975, it's an Egyptian company, and we start to go to O & M business since 28 years. During this 28 years we run 33 production line in 24 different plants in the region with more than 250 million ton of grey cement and 27 million ton of white cement because fortunately we operate white and grey cement in the region.

Well, so far we have been putting our foot print in operation and maintenance in this nine countries, Syria, Bangladesh, Algeria, Jordan, Sudan, Saudi Arabia, Emirates, Mozambique and Ethiopia. One of our big advantage is that we are not following a certain kind of equipment, so actually during this 28 years and all over these countries, we run all kind of equipments FLS, Polysius, SKET, Sinoma, Gebr Pfieffer, KHD, FCB,may be the list could be longer, so this give us a very wide experience over different equipment because equipment differs, process differs, and when you go to our client with a problem that he didn't see it before, fortunately we will have somebody in ASEC sees that before, did it before, solve it before. So where we are today? ASEC today is running seven plants in Egypt 10 lines with a total production of 13.5 million tons per year, which is 25% of nominal capacity in Egypt. This is a total production of Egypt which is almost 50 or 52 million tons at the moment.

The self managed with a lot of multinational companies in Egypt as now or some plant even still owned by, these one plant still owned by the government, so they are self managed and this is what ASEC is managing and this is the plants managed by others NLS, Sinoma and RHI. So for me you could say that we are running 25% Egypt production but out of the market share, the full O & M contracts, ASEC is running almost 60% of the plant that is run by others. Also in the region, we have two other plants with five production lines with a total capacity of 3.5. This is in Jordan and Syria and some other operation management contracts in Saudi Arabia, U. A. E, Ethiopia, Mozambique with a total work force of permanent 3000 people available to move around all these kind of projects. So what is the other approach?

What other approach we could do, or we did before? So in some countries, if you are not the owner of the plant due to some regulations, due to some custom issues, due to some cost needs, it's better that the owner orders his papers by himself not through ASEC or through certain party and some countries also give benefits for the investors with lower custom fees or something like that. So that's why we find it in some cases it's better to leave this spare parts excluded from O & M contracts, especially if it's the government alone because then the benefits that the owner will get will be much higher than if a private sector or company do that. Second, it's what we call technical assistance or we call the O & M management, in this case the owner already have his own team, so he don't want a full team, he don't want to give the full plant to the people, but still he need some support for his team to guarantee that he will get the right output of his plan with the right cost with minimum problems.

So at this case, we could send something between 40 and 60 people, it depend on the country, it depend on the plant, process, manpower. We have to study the manpower itself to see where it need really support. These people run the plant using the local people, which is a very important for them, we transfer the know how to them, so it's not only an operation, O & M contract is also a kind of on-job training because we have to guarantee, even in this case we have to guarantee the output of plant with only 40 people and a lot of local people which may not have enough industrial background before we arrive.

Where we did that, so this is some example, where we did that? We did that in Qatrama in Jordan, Al-Badia in Syria which is a very good to know that [xx] is from Badia, I just know that a few minutes ago, CNL in Mozambique, National Cement Shares in Ethiopia. So, in all this we have to depend on or rely on the local people and to manage them and get the best out of them and for should we succeed in all these cases. So there's another approach also which is improving productivity.

This is mainly coming for old plants, what we talked about was mainly on the last slide or the last option was, it's a new plant that investor stuff his plant that need to make us more start up for this plant. But there's some old plant also over the time, productivity get down 70-60% of the nominal capacity and the plant itself or the company itself or the team itself cannot bring it back to where it was. So here we could involve something like plus or minus 10 people again depending on the condition of the plant, depending on the process, they stayed for a while and when I say for a while sometimes it's only three, four months.

Analyze the bottlenecks, analyze the problems, bring the plant again to the productivity without investment or with the minimum investment. So it's not an upgrading project, it's not an investment project, it's just optimizing process, optimizing maintenance, optimizing the ways the people are running the plants, or inspecting it, or make some fine tuning.

We've got two contracts out of these in Syria as well. It's in Hama and Chahba and in most plant we achieved the nominal capacity, or even higher than nominal capacity on the second case. Number four, or the fourth one is specific technical assistance service. Some people they don't think that they have a big problem with operation, but they have some problem with maintenance, or they have very good maintenance team, but they have some process problems or they need to implement PM system in the plants and that's all that we need. So we think that we still here be one advantage or a good support for this kind of owners or clients. So that's why we start to tailor our service depending on the need or the place that all these client need us to involve our self. We did that with Lafarge in Bangladesh for commissioning with [xx], when spare parts coding in Mozambique, and SCP in Iraq, rehabilitation of Tartous where was a plant need just rehabilitation, we sent the teams that plan and prepare how to bring the condition of the equipment to its original case. To do that during this 28 years, more and more we found that we need to make some kind of what I call here supplementary services. First we start with training, so with increasing number of plants, increasing number of people, with the need that our people transfers their know how to answer people.

We start to find that we need to have an academy, so we start in the 1996 to give training to our people first, and then people in Egypt and then it expand until now where we are having a full training program and we serve during these period 15, 000 trainee from Egypt, from the region, from Arab countries, 50% of them is non-ASEC team and our yearly program or annual program is very well known around the region and many of the people in the plants in the Arab world and African countries participate on that already.

More over, maybe it's not on the slide we just had with American university, a joint diploma certified by American university in Cairo and ASEC for managerial and technical diploma. So, we think that in the future this diploma will be very important for people that need to get managerial position in Egypt all around and it's already growing up demand for this diploma.

We start to establish an x-ray analyzer maintenance team, one of the very small items in the plant but when it stop, if you need to get service from abroad then it's a hell for process and production and quality control people. So we are having an x-ray service that not only cover Egypt almost 100% of Egyptian plants is served by our team ASEC.

But a lot of Arab countries and African countries are relying on our maintenance contracts for the x-ray maintenance. Hot kiln alignment also with the increasing number of kilns we are responsible of, all new coming from everywhere, mechanical problems that could appear lead to a problem and we need service. So establish also our own department to make a hot kiln alignment and to do also grinding for kiln rollers and tires, also again it's like training we start this service for our self, for our kilns but then now we are serving, we have along many contracts in Saudi Arabia, Iraq, Syria, Yemen and Libya with different companies.

So it's kind of service that really support our operation. Overhauling with ten plants, we are running in Egypt and two outside of Egypt, also we found that we could have complete overall teams that could be busy all the year. So we've established this service about five or six years before and some other owners in Egypt or outside the Egypt start also to ask for this kind of services,

which started at the beginning as internal service and like the others and now we are selling the service. HR consultancy, this is a new service that we established one year ago and we are astonished that many people are asking this service now. Normally if you need to rearrange your organisation in a cement plant or be sure that you have the right people in the right place, you have the right organisation, you go for a HR consultant which is not really of a cement business. So maybe they will not give you the right advice, so we built our own HR system and when we start to introduce it to others we found that it's really interested and we already signed two contracts so far to give consultancy for other cement plants, how they could optimize their organisation, how to reduce the number, how to have the right and healthy organisation and the plants which at the end, it increase the production as well and reduce shut downs and problem with their plants. Predictive maintenance, we have also a special team for predictive maintenance, that means vibration analysis, seismography, also we do that for ASEC and for our people outside ASEC through short term contract or long term contracts on a yearly basis.

So to summarize this, this is our reference all over the years, was started in 1987 in Umbria cement plant in Egypt, this was our first contract. So here you will find a number of contracts or the plants we are run. So we started with one plant at the beginning then it's increased and now we are exist in certain plants.

Here we put the average of, we have been in each plant on each contract, this is a duration of each contract. All this contracts ended because all this plants during the privatization system or privatization policy in Egypt moved to multi national, which they could rely on themselves so they start to run their plants alone.

Some of them still getting some services from us like x-ray, like hot kiln alignment but of course they don't need somebody to operate names like Lafarge [xx] Cement, they could do that themselves. But then start as I said, the new comers, investors coming here, so most of this new contracts which is still on going as in green here, they are owned by private sector and fortunately we are having an average of 10 years per client, so which reflect how our clients are satisfied with our services so far.

So this a quick reference which is a, this is a translation of this chart. So this is our list, with the name, country and dates and kind of contracts, so and this our footprints, our operation and maintenance contract in the region. You will find on our booth outside, another map with more blue because we include also, this is only for operational maintenance, the other one is for all our contracts which will include of course much more countries in the region.

So I know it's a long day and I hope I make myself short, I'm not letting anyone to sleep, so thank you.

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