With much of its sector battered by the recession, Edward Machin meets one of the UK’s largest suppliers of construction materials, Hanson Cement, to discuss alternative fuels, business-wide maintenance, preparing for an upturn and the rolling Lancashire hills. Ee by gum…
Tracing its origins to 1929, Castle Cement became part of Hanson UK when its parent company, the German-based HeidelbergCement Group, purchased Hanson in 2007 — further establishing its position as a global leader in aggregates, cement, concrete and heavy building products, and employing approximately 57,000 staff across five continents. Rebranded and integrated within Hanson UK, Hanson Cement currently supplies 25% of Britain’s cement requirements from works in North Wales, Rutland, Avonmouth and Clitheroe, Lancashire.
Encompassing over 350 manufacturing sites, and with a headcount of more than 6,000, Hanson is delineated into four business lines: aggregates and asphalt, concrete, building products and cement. Operating as one of the UK’s foremost suppliers of ready-mixed concrete from a network of 200 fixed and site-based plants, the company’s quarry division simultaneously offers a national contracting business, specialising in road surfacing and infrastructure work.
Hanson’s building products arm is the largest producer of clay bricks and aircrete blocks in the UK, with a portfolio including wall cladding systems; aggregate blocks; concrete and clay pavers; decorative rocks and stones; bagged products; concrete flooring; and pre-cast concrete products. Lastly, as a leading producer of Portland cement and ground granulated blast furnace slag, the company’s cement unit includes its own hydrocarbon recycling business, SRM, producing alternative fuels for Hanson’s cement kilns.
Kiln or be kilned…
Indeed, the heart of the company’s manufacturing processes remains its kiln operations, due to the fact that, says plant manager Gary Young, “It has far and away the greatest impact in terms of safety, costing, environmental considerations and productivity across Hanson Cement.” Moreover, the staggering use of power associated with producing cement means that the unifying aspect of the aforementioned variables is energy: both electrical and as a source of heat.
Given that Castle Cement was the first UK-based company to utilise alternative fuels, Hanson continues to remain at the forefront of environmentally-friendly production methods, with its Ribblesdale site achieving a remarkable 70% replacement rate during 2009. Crucially, says Young, “Fuels can only be introduced with permission from the Environmental Agency of England & Wales after having demonstrated that the impact of any new fuel will be less than that of which you are seeking to replace.” With competitors increasingly keen to utilise sustainable technologies, the company has targeted a replacement rate of 72 – 74% in the near future. While such increments may appear slight to the casual reader, “Gaining additional energy replacement naturally becomes more difficult to achieve as we get closer to total fuel sustainability,” explains Young. As a result, Hanson identified the use of carbon-neutral materials as a key component in driving further improvements; bio-mass, for example. While such fuels have associated financial benefits, crucially, from an environmental standpoint, ash as a waste isn’t created during their combustion — being channelled into the production of cement instead.
Similarly, says Young, “Hanson engages in significant carbon trading, whereby every tonne of CO2 we can extract from our production processes results in a fiscal benefit.
That said, CO2 can never be eliminated completely from the cement-making process — it is part of the fundamental chemical reaction. What we can do, however, is strive to reduce the output of CO2 per tonne of cement, with our Ribblesdale facility’s current quota of CO2 per cement tonne being substantially below the industry average in the UK.”
While reduction of heat energy has long been a target for those producing cement, Hanson has set its sights on concurrently limiting the company’s use of electrical power per tonne of cement: “A major cost profile for the site,” says Young. “While older plants can be somewhat disadvantaged in that their conception and design were carried out when energy costs were greatly reduced, and prior to the onset of environmentalism, there does exist a silver lining — namely that older sites are more adaptable to making savings, given that you can simply replace inefficient technology with a proven modern alternative.” While the capital investment in such projects is substantial, Hanson nonetheless replaced — to the tune of £500,000 — the drive motor on one part of its process fans during the early part of 2010. The project was undertaken to both increase reliability on the fan and improve efficiency on the electrical motors themselves, with a view to effecting increased production savings but also reducing kilowatt hours used. Similarly, Hanson expects to replace (i) its existing damper control gears with variable speed induction motors and (ii) the company’s high-powered fans (2MW) with more efficient modern equivalents so as to drastically reduce power consumption.
“Although the electricity market is both highly complex and volatile, there are certain given facts of which we can be virtually certain: that there exists a pattern to the demand profile, for one,” says Young. Given that the relative price at any given part of the day/week can be predicted, Hanson’s production plan is based upon the relative energy costs at a particular time of day. Accordingly, each of the company’s five cement grinding mills consumes approximately 1.8MW of electrical power — in addition, the grinding mill for the kiln feed uses over 4.5MW alone.
Strict adherence to Hanson’s production schedule is, “Absolutely critical, as the price per MW/h can more than double the off-peak price during certain times of day. That said, there are clearly limits to what can be achieved by selective planning. While current market conditions allow for an increased degree of flexibility, it would be foolish to think that this will be the case forever.”
Key to Hanson’s strategy is, therefore, the co-ordination of its production advances with an ongoing maintenance push — thus ensuring that the company remains the construction industry’s leading UK supplier. Confirms Young, “Maintenance is a key factor on any cement plant, given the intensity of the production process; in terms of heat, chemical reactions, and wear and tear.” With an annual maintenance cost for Hanson’s Ribblesdale Works exceeding £7m, recent improvement projects have sought to deliver both enhanced manufacturing techniques and cost control methods across the organisation.
Driven largely as corporate-wide edicts by the HeidelbergCement Group, regular improvement projects are seen as vital is assisting Hanson’s plants to reduce their cost profiles while maintaining industry-leading performance in all aspects of the business: run factors, production methods and environmental compliance, to name but three.
“Initially, these efficiency drives are set down as benchmarks, with sites under the global umbrella monitored in order to ascertain whether a marker indeed exists,” says Young.
“Once completed, each subsidiary is given KPIs to ensure that improvement targets are achieved. I am delighted to report that Hanson UK’s sites perform exceptionally well across the gamut of performance improvement drives, especially considering the relative age of our facilities — when compared to other production plants, at any rate. Because it calls for an extremely robust maintenance practice, our machinery performs as well, if not better, than the majority of modern kilns.” To ensure such robustness of operation, Hanson employs a highly-specialised maintenance team operating effective preventative maintenance during a day shift pattern, thereby supporting the company’s 24 hour production process. These techniques, when coupled with current market conditions, “Allow for a significantly more intense scrutiny of maintenance tasks across the business,” says Young.
However, he cautions, “There is clearly a finite resource in terms of both manpower and finance. It is imperative that these are used as effectively as possible, with an increasing emphasis on pro-active maintenance, online analysis and periodic condition monitoring — with structural changes to our engineering departments adopted to assist in such advances.” When implementing further ‘run to failure’ for items which are not burdened by safety and/or environmental considerations, moreover, and where the cost of repair will not be compromised further, Hanson is thus going about its business in ways which have never previously been part of the psyche of cement plant operations.
Cementing the future
Production processes aside, Hanson retains an ongoing commitment to advancing the skills of its workforce.
Historically, a significant percentage of its systems were based on apprenticeships and promoting internally: 11 of the current 13 managers and supervisors having graduated through the company’s apprenticeship scheme.
“We are very much seeking to once again make the ‘apprentice to management’ model a cornerstone of Hanson Cement’s future successes,” says Young. “Indeed, with our industry having endured a lengthy period of contraction during the early 2000s, the age profile within the site is slightly more top-heavy than we would ideally have it.” As a result, Hanson is currently investing in the staff it will need in five years time, confident that a history of long service — 32 years on average — has existed at the company since its inception. “While remuneration and working conditions are a key factor in the company’s favour, I think there is also something to be said for Hanson’s being located in a beautiful part of the world. Never underestimate the impact of our Lancashire scenery!” says Young.
Going forward, Hanson has identified the renewed focus on its spare parts policy and management as representing a significant facet in the company’s long-term strategic vision. That the cement industry remains extremely capital-intensive — with equipment often bespoke, critical and expensive — is reflected in the amount of outlay inherent in spare parts. Confirms Young, “While traditional decision-making with regard to spares stock served its purpose at the time, keeping something ‘just in case’ is wholly more difficult in current conditions.” As such, KPIs for Hanson during 2011/12 will be largely associated with effecting improvements across the gamut of spare parts management: logistics, shared stocks, compatibility of spares and standardisation, for example.
Manufacturers of all shapes and sizes are trading their way through the worst recession in living memory, with the construction industry having perhaps been hit worst of all.
While this has meant taking difficult decisions in terms of manpower and capacity cutbacks, Hanson Cement continues to invest substantially in UK production and remains deeply committed to providing the best customer focus of any producer in the UK.
“We are hopeful that the worst is over,” says Young.
“With a stable orderbook for 2010, when the pickup does come — as it inevitably will — we can increase our production volumes without any hindrance whatsoever.
There exists a substantial amount of spare capacity within the system; indeed, the market would have to pick up an inordinate amount before we would experience difficulties in terms of production capabilities.” “Ultimately, recent trading conditions have presented us with an opportunity to become more proactive in things that perhaps we did not have as much time to do before.
By increasing our maintenance, training programmes and machine productivity, Hanson Cement is ideally placed to reap the rewards of looking inwards while ensuring that we continue to remain at the forefront of UK cement production.”