DAS ECHO Dezember 2009 tHE ECHO - Ferrostaal Group · project boasting the largest individual order volume ... it forms the cornerstone of our company strategy. ... The construction

1DAS ECHO Dezember 2009

tHE ECHOthe Magazine of the feRRoStaaL gRoup

December 2009

SustainableHow to successfully avoid accidents

RegenerativeWorldwide boom in solar technologies

Established30 years of business in Libya

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.

Cover picture: parabolic trough collector

3tHE ECHO December 2009

EditoRial

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

This is the first edition of THE ECHO to feature our new logo. Our change of name and corporate image represents the visual confirmation of the selling of MAN’s majority stake in Ferrostaal to the International Petroleum Invest-ment Company (IPIC). We are grateful for the opportu-nities created by the commitment of IPIC and we are already demonstrating that we can be instrumental in implementing large projects derived from orders gained by our global group.

Ferrostaal has been a permanent fixture in many regions for years and is now an established player in the market, for instance in Libya and Trinidad. In Libya, Ferrostaal has already implemented over 100 projects for the oil and gas industry and is the first-choice partner in the market. In Trinidad, the soon-to-be-completed new AUM complex – a project boasting the largest individual order volume in the history of our company, worth 838 million euros to us – will bring the number of petrochemical plants completed here up to 13. Another large project that we are currently executing in the country is the construction of a combined cycle power plant. In order to further our commitment, we recently set up a company based in Trinidad – because we are convinced that we can contribute further to the eco-nomic development of this Caribbean country.

Our activities in the Solar Energy business segment prove that we have set early markers for sustainable, ecologi-cal power production. We have already received our first

large order for the construction of a commercial parabolic trough power plant in Spain. Our role here is not simply limited to that of contractor: We have also made substan-tial contributions to the project development so that CO2-free power can soon be produced by this power plant. We have willingly taken on a large portion of the interim fi-nancing. Our committed involvement provides a further boost to climate protection.

We have made significant progress with our Health, Safety and Environment System this year. In more specific terms, we have built up a holistic system and implemented it on a worldwide scale, while also constantly introducing im-provements. We want to achieve the highest levels of safety on our international construction sites while also pursuing a responsible policy of environmental and human protec-tion. The success achieved by our HSE Management is re-flected in the array of awards given to us by our customers – for both previous and current projects.

Our sustainable economic business approach encompass-es ecological, social and health aspects. The numerous ex-amples presented here in this edition prove that corporate responsibility is not something we simply pay lip service to – it forms the cornerstone of our company strategy.

Yours sincerely, Dr. Matthias MitscherlichChief Executive Officer

Dear Readers,

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PRojECtSThe sun – power for the 21st centuryWhether constructing a parabolic trough power plant, developing Fresnel technology, opening markets in the USA or examining whether Desertec could be a promising model for the future: Ferrostaal is very much involved where regenerative power generation is concerned.

PRojECtSProtecting people and the environmentValid worldwide and holistic – Ferrostaal’s HSE Man-agement System. Information on strategy and on major features, individual planning for each project, concrete measures and successes achieved.

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nEwSCorporate news: joint venture launched in Abu Dhabi; new office officially opened in India; new logo designs; anniversary of Marlog Marine Logistik; award for Ferrostaal Air Technology; donations and sponsoring for Palestine and more.

FoRumImproved efficiency through synergiesIn-house expertise can be used profitably for custom-ers in plant construction.

PRojECtSConstruction of the solar power plant Andasol 3 has begunFirst large order in the Solar sector to construct a para-bolic trough power plant.

Solar boom in the land of unlimited opportunityOutstanding opportunities are available in the solar sector of the growing US power market.

Desertec – the power strategy of the future?Solar power from the Sahara could soon cover part of Europe’s demand for electricity.

Fresnel technology ready for market launchThe Fresdemo II project on the Plataforma Solar in Almería is designed to prove the marketability of Fresnel technology.

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5THE ECHO December 2009

Holistic HSE Management SystemPrinciples, strategies and specific measures, developed on the basis of Ferrostaal’s many years of experience, result in an HSE Management System which is applica-ble to all corporate processes and project phases.

TRINIDAD: ECONOMIC UPSWING IN THE ISLAND STATELargest order in the company’s history nearing completionFerrostaal is constructing an AUM complex on Trinidad for the further refinement of natural gas.

Work proceeding apace at Trinidad power plant construction siteThe combined cycle power plant at the La Brea loca-tion is scheduled to begin operating in 2011. The con-struction work is proceeding at full capacity.

MILESTONES IN PICTURES:Secure fuel supply for ChileThe construction of a delayed coker in Concón, Chile, in eight pictures.

ServiceSStrategies for successful machine businessIn this interview Hans-Jürgen Böwe explains how he wants to refocus the machine business in the packag-ing, plastics and food sectors.

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New: assembly services for the locomotive and rail industriesThe Automotive business unit is expanding its assem-bly services to the locomotive, railway carriage and tram sectors.

Shipyards create thousands of jobsFerrostaal is investing in a repair shipyard in Cape Town harbour.

countrieS and peopleCOUNTRY SPECIAL: LIBYAFirst choice in the oil and gas sectorSuccessful on the Libyan market for 30 years: Ferrostaal Libya is today a “preferred first-choice contractor” for the oil and gas industry.

Business etiquette guide: China – part 2Thomas Buschmann is Head of Ferrostaal in China and has lived there for the past twelve years. He gives his own personal tips on making business trips in the Middle Kingdom a success.

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In order to concentrate the joint business activities of Ferrostaal 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 imple-ment large projects in the MENA region, in particular in Abu Dhabi. The emirate is planning numerous invest-ments in technologies of the future and also expansion in the petrochemical sector in order to establish itself on a broader foundation for the period after the oil boom. In Ferrostaal, Abu Dhabi has found a partner with know-how in the core areas of renewables and petrochemicals.

The activities of IPIC Ferrostaal Contracting will cover the petrochemical, power, oil, gas and infrastructure sectors, as well as the Services business. At the end of the year the Services business will be moved from Dubai to Abu Dhabi. The cooperation with IPIC will open up a wide range of business opportunities for Ferrostaal and the joint ven-ture IPIC Ferrostaal Contracting: The latter will function as a regional competence centre. “The most important large project in which IPIC has a 40 percent share is the construction of the chemical complex ChemaWEyaat,

which will be erected in Abu Dhabi over the coming years. Employees from both Ferrostaal and the joint venture are currently working on the Tacaamol sub-project. This in-cludes not only handling the infrastructure measures, but also planning and implementing an AUM plant complex,” says Dr. Stephan Reimelt, member of the Executive Board at Ferrostaal and also Chief Executive Officer (CEO) of IPIC Ferrostaal Contracting. As Chief Operating Officer (COO), Dirk Demtröder is also in charge of the joint venture.

The symbiosis of Ferrostaal’s global skills and the local 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.

Foundation of the joint ventureIPIC Ferrostaal Contracting

Al Bateen towers; IPIC Ferrostaal Contracting has its offices in the office tower on the right.

the strategic focus of the joint venture was discussed at a workshop in Abu Dhabi in June.

You can obtain more detailed information on the joint venture’s activities at: www.ipic-ferrostaal.ae

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Since June of this year the Ferrostaal office in India has had

a new address: It is located in busy Gurgaon, on the southwest city boundary of New Delhi. Gurgaon is not only one of the most modern In-dian cities: It is also one of the fast-est-growing economic hubs on the entire sub-continent.

Dr. Klaus Lesker, member of the Ex-ecutive Board at Ferrostaal and re-sponsible for the Asia region, took part in a Puja ceremony at the official

opening ceremony. “The new office is in an excellent location for us to po-sition ourselves well on the market and to expand our business further. One project we are involved in is to produce railway wheels in coopera-tion with GHH,” says Dr. Lesker.

Puja ceremonies have a long tradi-tion in India and are part of the Hin-du faith. They are designed to ensure comprehensive support and gener-ate a positive karma for particularly important projects. The ceremony

generally involves blessings for and prayers to Ganesha, a Hindu god. Ganesha is represented as a child or as a pot-bellied man with an ele-phant’s head.

With Ganesha’s blessing

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 Office16th Floor, Building No. 9, tower BDLF Cyber City, Phase – IIIGurgaon – 122002, IndiaPhone +91. 124. 482-00 [email protected]

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MARLOG Marine Logistik, Kiel, a subsidiary of Ferrostaal and Howaldtswerke-Deutsche Werft

(HDW), Kiel, celebrated its 30th anniversary in June. The official celebrations took place on the schooner “Regina Maris” as part of the Kieler Woche sailing event.

MARLOG was founded as a service and logistics partner of the two shareholders in 1979 and has since provided services for navies and naval arsenals in 22 countries. MARLOG Marine Logistik began its business by provid-ing supplies for the submarines and surface vessels de-livered by HDW. As a contact for warehouse supply, repair and modernisation, MARLOG coordinates the procure-ment and supply of spare parts, materials and equip-ment. MARLOG offers comprehensive and specialist serv-ices and, for example, designed the propulsion system for the Columbian navy’s training sailing ship “Gloria”

and the mobile workshops of the Chilean and Peruvian navies, which it constructed on-site on a turnkey basis.

The after-sales services include not only the provision of logistical solutions, but also technical assistance and training. For around two years, MARLOG has also provid-ed crews for testing submarines from HDW. “Our business success is based on many years of personal contact and the fact that we supply everything reliably from a single source. We cooperate with more than 350 subcontractors and consequently cover almost all aspects of shipbuild-ing under one umbrella. This enables us to offer our cus-tomers not only the traditional after-sales service, but also a comprehensive range of products,” says Hubertus von der Decken, who, together with Jan Krabbenhöft, has been managing MARLOG’s business for 26 years.

Anniversary: 30 years of MARLOG Marine Logistik

Latin America is an area of major importance for Ferrostaal. The

company’s key performance indica-tors verify this: for example, each year 40 to 50 percent of Ferrostaal’s annual order intake stems from this region alone. The company has therefore maintained long-estab-lished relations with Latin American countries. This includes meeting prominent political and economic representatives, while dialogue at work level also plays a major role. Ferrostaal has, for example, head-ed up the working group on Latin

America which was set up in 1988 by the Essen Industrie- und Handels-kammer (IHK) [Essen Chamber of Commerce and Industry] and which convenes every six months. Members include experts on Latin America mainly from companies and institu-tions that are based in North-Rhine Westphalia. The aim here is to en-hance market knowledge, discuss current developments in individual countries and to foster contacts.

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Latin America:a key region for Ferrostaal

Since November of this year Ferrostaal has had a new corporate image, using the name ‘Ferrostaal’ which is

respected worldwide and a new, separate logo and cor-porate design. This is the company’s way of underlining its own course on which it has embarked with the new majority owner, the International Petroleum Investment 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 solu-tions in the international machine and plant business,” explains Dr. Matthias Mitscherlich, Chief Executive Of-ficer of Ferrostaal. The new logo is a figurative mark, in other words it combines text and graphics. The logo’s arc symbolises not only that Ferrostaal has built many bridges in its history, but also that it will repeatedly build new bridges in the present and in the future, both to new markets and new partners.

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-tained, such as the corporate font and the basic defini-tions of the layout. The Ferrostaal-specific corporate de-sign is currently being introduced step by step in all the subsidiaries and foreign offices, and it conveys reliability and expertise. Since being entered in the commercial reg-ister in Essen in 1930, the name has been changed twice and the logo four times.

established name, new look

2004: Implementation of a uniform corporate design for MAN and all its subsidiaries. Name changed to MAN Ferrostaal; the MAN logo is adopted as the new logo.

1986: Gutehoffnungshütte (GHH) and MAN merge to form MAN AG. the logo is adjusted to the new parent company and includes the MAN arc; the name is retained.

2002: to underscore the affiliation to the MAN Group more clearly, the appearance of the Ferrostaal logo is adapted and the name MAN is included. the company is still called Ferrostaal AG.

the Ferrostaal headquarters in Essen with the new logo.


Changes to the name and logo in Ferrostaal’s history

1930: the company is entered in the commer-cial register in Essen as Ferrostaal AG.

2009: the name and logo are changed when IPIC becomes the majority shareholder. the company is once again called Ferrostaal, and the logo is redesigned to make it Ferrostaal-specific.

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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”

In July of this year Ferrostaal Air Technology received the “TOP AREVA Supplier” award in a ceremony in Ber-

lin. AREVA is a leading global player in the field of power engineering. In Germany alone the company has 8,800 supplier companies with which it has a turnover of 1.1 billion euros. Of these supplier companies, 141 were pre-sented with an award in Berlin by the Chief Executive Officer Anne Lauvergeon. One of these was Ferrostaal Air Technology.

The award stands for competitive and innovative capa-bility, long-standing business relationships, compliance with the strict sets of rules and safety guidelines, and quality and punctuality. “Winning this prize is the result of our strategy of focussing our activities on the custom-er and on reliable implementation of the customer’s project,” says the Managing Director of Ferrostaal Air Technology, Karl-Heinz Kaspar.

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

In early July this year Ferrostaal Argentina invited around 100

customers and employees from seven South American subsidiar-ies and offices to a presentation of Ryobi printing machines in Buenos Aires. The agenda of the two-day event included visits to renowned printing houses, which showed their Ryobi machines in operation. “Ryobi machines are amongst the best in

the world. They feature impressive cost effectiveness, excellent print quality and high machine speed,” explained Osvaldo Balzano, who is responsible for the machine busi-ness at Ferrostaal Argentina.

Director Osvaldo Balzano (front) and his team

tHE ECHO December 2009

In July this year Ferrostaal supported the reconstruc-tion of a cinema in the Palestinian refugee camp Jenin

with a donation of 20,000 euros. Through the medium of film, this project, called “Cinema Jenin”, is aiming to bridge the deep chasm that exists between Israelis and Palestinians. The project’s importance is reflected by the dramatic circumstances surrounding the rebirth of the only cinema in the region that had been destroyed when the first Intifada broke out in 1987. It is the story of Ismael Khateeb, a 42-year-old man whose son Ahmed was shot dead by the Israeli army while he was playing. Despite his grief he decided to donate his son’s organs to Israeli children. In doing so Mr Khateeb created a sym-bol for peace. The news spread all around the world. One year later, with the help of international donations, he opened a culture centre for young people in the refu-

gee camp to provide them with an alternative to life on the street. When the young people began to make their own short films, they realised that there was nowhere to show them. This led to the idea that the destroyed cinema should be reconstructed. Through its wide range of films, the cinema is to counteract the cultural and social isolation of the refugee camp and serve as a centre for dialogue.

“It is a central concern of Ferrostaal to bring partners to-gether across borders, both in business and social terms. Our donation is motivated by this thought,” explains Dr. Klaus Lesker, member of the Executive Board at Ferrostaal. In addition to Ferrostaal, the German Foreign Office and the initiative “Cinema for Peace” were also involved in re-building the cinema.

Reconstructing the only cinema

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Working on the cinema roof

solar heating system for Palestinian school

In the town of Beit Jala, near Jerusalem, the Talitha Kumi school acts as a broker of democratic values and consid-

erate treatment of members of different religious com-munities. The sponsorship of the Berliner Missionswerk enables some 900 pupils to take advantage of a high-quality school education through to officially recognised high school graduation, thus permitting them to go to university. The school relies on regular donations to fi-nance its operations.

Ferrostaal and Deutsche Energie-Agentur (dena) together supported the school by constructing a solar heating sys-tem. This enables the school to reduce its annual oper-ating costs by around 20,000 euros. “Our cultural com-mitment helps young people from this difficult region to receive a good education in a school which teaches how all confessions can exist peacefully side by side,” says Dr. Matthias Mitscherlich, Chief Executive Officer of Ferrostaal. The Essen-based industrial service provider

bears a large proportion of the total costs for the plant, which amount to some 170,000 euros. The project will be implemented as part of the dena solar roof programme for opening up markets abroad and is co-financed by the Federal Ministry of Economics and Technology (Bundes-ministerium für Wirtschaft und Technologie – BMWi). It offers Ferrostaal the opportunity to show what is possible with this promising technology on a small scale. The solar heating system at the Talitha Kumi school is scheduled to be officially commissioned at the end of the year.

With its solar roof programme, dena is supporting ex-port-oriented companies in the sectors of photovoltaics, solar thermal power and solar cooling. The “lighthouse projects” promoted by BMWi as part of the Renewable Energies Export Initiative are aimed at demonstrating the quality of German products and making it easier for participating companies to become involved in opening up foreign markets on a sustainable basis.

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Improved efficiency through synergiesFerrostaal covers a wide range of plant construction services with its port-folio. 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.

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As an experienced general contractor Ferrostaal of-fers services along the entire value added chain when it handles large projects. However, in con-

trast to its competitors, the company is not tied to particu-lar technologies or suppliers, but selects the best solutions for a project – independently of the supplier. The indus-trial service provider from Essen is increasingly making use of its own in-house offering, for example for pipes and pipe accessories, air-conditioning systems and construc-tion services. But the company always operates under the premise that the in-house solution has proved its worth in competition with other companies in terms of price, ad-herence to deadlines and quality. This procedure has many advantages for the customers: Ferrostaal is not only more flexible with regard to project handling, the company can also save time and costs.

Quantity discounts through high sales volume“Utilising synergies in the company enables us to design more efficient processes and to reduce costs,” says Dr. Klaus Lesker, Executive Board member at Ferrostaal, in explain-ing the approach. Reinhard Scheller, Head of the Piping Supply business unit, adds: “Let’s take piping as an exam-ple: the fraction of the value of piping in a project is rela-tively low compared to the other components. But the pip-ing package can very quickly account for the majority of the order items and is consequently extremely labour-in-tensive. A partner who is active on the market each day and has a large sales volume can achieve better prices than an engineering firm. Added to this there is the technical ex-pertise which Ferrostaal can make use of as early as in the quotation phase: enormous savings can often be made by, for example, reducing the wall thicknesses or the selection

there is generally an enormous requirement for pipelines in large projects.

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of the pipes. In addition, at the start of a project it is not al-ways clear precisely what quantities of pipes with particu-lar dimensions will be required. Due to our physical prox-imity, we can clarify technical and logistical questions more easily and achieve time and cost savings.” Ferrostaal also saves costs by centralising purchasing for the various busi-ness units. Quantity discounts are incorporated in the in-dustrial service provider’s quotations.

Shorter response timesInternal cooperation also enhances flexibility. This is clear-ly the case in the Construction Services business unit: as an in-house construction partner, Ferrostaal has a pool of well-qualified construction site personnel to whom the company can quickly have recourse in the course of a project. This shortens the response time. The procedures are simpler to handle as the same systems are used for

work within the company. The decision-making processes are frequently quicker. “However, the interface risk is a de-cisive factor,” explains Jean-Claude Hecht, Head of the Con-struction Services business unit. “This is reduced as soon as overall responsibility for a project lies in the hands of a single service provider. Factors such as cost control and deadline monitoring can then be defined more effectively.”

One example in which Ferrostaal employs this procedure and relies on internal know-how is a power plant project on Trinidad which Ferrostaal is currently handling as the general contractor for Trinidad Generation Unlimited (TGU) in La Brea (more information is provided from page 42). Ferrostaal is responsible for all the EPC services. In ad-dition, the company takes advantage of internal services with regard to air-conditioning, ventilation and refrigera-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.


Section of a pipeline in the utilities sector of the AUM complex on trinidad

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 imple-menting the detail engineering, assembly and commis-sioning 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.

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The sun –power for the 21st centuryThe 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.


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Construction of the solar power plant Andasol 3 has begunFerrostaal, 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.

The power plant will begin operating with an output of 50 megawatts. This makes it one of the largest solar thermal power plants in Europe. The Essen-based in-

dustrial service provider has taken on a leading role in con-structing Andasol 3. As the general contractor, the company will perform the EPC services amounting to an order volume of over 300 million euros and is responsible for the turnkey construction. In addition, Ferrostaal is also co-owner.

Ferrostaal plays a key role in the interim financing of the solar power plant. The reason for this is the Real Decreto 6/2009 which was passed in May in which Spanish legisla-tors re-regulated the prerequisites for obtaining the legal-ly guaranteed feed-in tariff of around 30 euro cents per kilo-watt hour. This demands, for example, proof of major au-thorisations, ordering key components and proof that at least 50 percent of the investment sum can be financed in order to ensure pre-registration of the project and conse-quently ensure the feed-in tariff. In order to permit pre-reg-istration, the Essen-based plant constructor and industrial service provider committed itself financially and, through a holding company, took over the majority share in a project company which is the owner of the power plant. A consortium consisting of German power companies plans to take over a majority share in the project company at a later date, as soon as Andasol 3 has been registered (status as at the editorial deadline in October). The receipt of the feed-in tariff would then be ensured if the power plant is placed in service within 36 months of its being registered. Dr. Rainer Kistner who, together with Tom Koopmann, is responsible for the Solar Energy business unit at Ferrostaal, says of this: “Without Ferrostaal, Andasol 3 would not have been built. Through our commitment with regard to the interim financing, we have established a clear position on the market and proved that we believe in sustainable pow-er generation. The upcoming registration and the increased

tariff security that this will entail will make Andasol 3 sig-nificantly more attractive for additional investors to be-come involved in.”

Tried and tested business modelThus Ferrostaal’s well-tried business model will be em-ployed for Andasol 3: developing a plant together with part-ners and investing in it with the company’s own capital. The company is consequently project developer, constructor and co-owner. The advantage is that not only the profits but also the risks are distributed fairly to all partners, and there is a greater focus on the plant’s overall lifecycle: whereas other plant constructors withdraw from a project after the handover, the Essen-based industrial service provider re-mains involved.

Andasol 3 will be constructed in the immediate vicinity of its two partner projects Andasol 1 and 2 – the first parabol-ic trough power plants in Europe. In technical terms Anda-sol 3 will differ slightly from its predecessors. “We’re trying to integrate the lessons we’ve learned and to implement the potential for improvement,” explains Mr Kistner. “The differences are to be found first and foremost in the detail engineering, in the storage strategy and in the solar field it-self. We will also use a different turbine for the power plant.”

Reliable and predictableThe main special feature of a parabolic trough power plant is that it will continue to drive the turbines for around sev-en and a half hours at night: the large salt storage system which the sun heats up to a maximum of 390 degrees Cel-sius will also enable the power plant to generate electricity reliably after sunset. This means that the plant will generate considerably more power than a solar power plant without a storage system – a criterion which gives solar thermal pow-er plants enormous potential for the future. “They are

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environmentally friendly, reliable and predictable because they are independent of the fluctuating oil and gas prices,” says Mr Kistner.

The construction of Andasol 3 is already at an advanced stage. The excavation work has been completed, the foun-dations for the collector supports have been cast, and the positions of the fixing screws have been measured and marked in the foundations. The hall in which the collectors

are constructed has also been built. The first collectors are currently coming off the assembly line there. One after the other, these will be attached to the foundations. The solar field will be gradually built up in this manner by the sum-mer of next year. The start of commercial operation is scheduled for the summer 2011 – a sea of cambered mir-rors, installed with millimetre precision, will then generate green electricity on an area covering around 2,000,000 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.

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In the US market Ferrostaal focuses on three segments through its 100 percent subsidiary Ferrostaal Incorpo-rated: the construction of solar thermal power plants

that use parabolic trough technology, the production of process steam using Fresnel technology, and solar heating and cooling of buildings. All three segments hold enor-mous growth potential: since the government changed hands, the pursuit of energy independence and the efforts to reduce CO2 emissions have combined with increasing energy requirements to drive the market in the USA at an unprecedented speed.

To enable the greatly increased demand for solar thermal power to be met, in the middle of the year Ferrostaal In-corporated concentrated its activities in the solar power plant sector in a joint venture with Solar Millennium AG. Ferrostaal Incorporated owns 30 percent of this company, which is named Solar Trust of America (STA), while Solar Millennium owns 70 percent. STA covers the entire value added chain for the construction of solar thermal power plants with its Project Development, Supply Chain Man-agement, Financing, Engineering, Procurement, Construc-tion, Operation and Maintenance departments. Uwe T. Schmidt, member of the Management Board of Ferrostaal

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 cli-mate for solar power.


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and also Chairman and Chief Executive Officer of STA has the following to say about this: “We are the only compa-ny in the USA which offers the development and construc-tion of solar power plants from a single source. This is how we stand out decisively from our competitors. With Solar Trust of America we will promote project development in the southwest states of Nevada, Arizona, California, Colo-rado and New Mexico. The solar radiation and availabili-ty of land are ideal in these states. It is possible there to generate six times as much energy as the entire US mar-ket can consume in a year.”

Gigantic proportionsThe special feature of the solar thermal power plants in the USA is their size. With an output of 240 megawatts they are considerably larger than solar power plants in Spain or other parts of world. However, although the size reduces the relative power generation costs, the absolute investment costs for construction are appreciably higher. Innovative financing strategies and power purchase agree-ments (PPAs) with local energy providers are therefore the

linchpin for successful project development for compa-nies from the solar power sector.

Solar Trust of America already has PPAs for construct-ing 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 year with electricity. Furthermore, the company has signed a declaration of intent with NV Energy, the larg-est power provider in the state of Nevada. The prospects for intensifying the solar power business in the USA are therefore bright.

Government subsidies in the triple-digit billion rangeThe general political conditions for financing are also fa-vourable, because the Renewable Energy Portfolio Stand-ards which already exist in some states in the southwest oblige the energy providers to obtain a proportion of their power from renewable energy sources. This pro-vides additional impetus for the solar power market. By 2020, solar power plants generating 20,000 megawatts are scheduled to be installed in the southwest states of the USA. Mr Schmidt comments: “Now is a particularly good time to implement solar power projects on a large scale. Tax depreciation allowances – what are known as Investment Tax Credits – make investments in solar ther-mal power plants more attractive. In addition, the Obama government’s programme to stimulate the economy has created further incentives. Government subsidies amounting to 30 percent of the investment amount and government guarantees for credits set a clear sign for

“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.”

Uwe t. Schmidt, member of the Management Board of Ferrostaal and also Chairman and Chief Executive Officer of Solar trust of America

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environmentally-friendly electricity. However, since we’re dealing here with something that is in a different league from Spain, it is essential to guarantee the financ-ing. We’re currently checking out various options for ac-cessing the capital market ourselves to permit us to de-velop and implement several large projects in parallel.”

In the Fresnel segment, Ferrostaal Incorporated focuses on plants with capacities ranging from 30 to 75 megawatts which are to be developed in conjunction with the tech-nology affiliate Solar Power Group. The potential applica-tions for Fresnel plants are very varied. They are envisaged primarily for extending conventional power plants and for use in enhanced oil recovery. Here the plant’s process 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 market for solar cooling and heating in the USA is also particularly promising. Currently, 3.5 million public build-ings are cooled using electrical cooling systems. At the same time President Obama’s government is attempting to double the capacity of environmentally-friendly pow-er in the next three years. Replacing electrical cooling sys-tems is therefore merely a logical step in doing this.

“Finally the right economic climate exists to permit above-average growth of the solar power industry in the USA. The coming years will give the industry an unbe-lievable boost. Ferrostaal Incorporated will play its part in generating the power of the 21st century,” concludes Mr Schmidt.


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.

Concentrating solar power

Hydro

Biomass

Geothermal

Photovoltaics

Wind

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The project bears the name of “Desertec”, a combina-tion of the words “desert” and “technology”. The ob-jective of Desertec is to construct giant solar thermal

power plants in the Sahara. These will utilise the enormous energy of the sun, which in the summer produces maxi-mum temperatures of 50 to 60 degrees Celsius, to generate

electricity. The concept behind the power plant parks is that they will supply the countries in North Africa and the Mid-dle East with power as well as covering 15 percent of Europe’s electricity requirements. Desertec will have an estimated investment volume of 400 billion euros and is planned to already begin supplying power in ten years.

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.

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.

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Source: www.desertec.org

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According to expert opinion the project is technically fea-sible; the solar radiation in the Sahara is also ideal to gen-erate power on a large scale. According to a study of the German Aerospace Centre (Deutsches Zentrum für Luft- und Raumfahrt – DLR), three thousandths of the world’s 40 million square kilometres of desert are sufficient to sat-isfy the global hunger for energy. However, it is essential to create the basic conditions for implementing this project. For example, Desertec requires a gigantic electric-ity grid to be constructed. For this reason Ferrostaal, through its joint venture, the Desertec Foundation and eleven other leading enterprises such as Münchener Rück, Siemens, Deutsche Bank and RWE, have signed a Memo-randum of Understanding to establish the Desertec Indus-trial Initiative in order to examine the technical, econom-ic, political and ecological feasibility of the project. In re-gard to this, Tom Koopmann, Head of the Solar Energy business unit at Ferrostaal, says: “With Desertec we see a way of re-inventing our entire power strategy. The project is in its early stages. It is a vision which must be checked for its feasibility over the coming years. We think it makes sense to be involved in defining how the general conditions are to be implemented.”

Thousands of kilometres through the MediterraneanThe solar power could be transported via high-voltage DC power networks. In contrast to alternating current power networks, these are extremely efficient: Only three percent of the electricity which is fed in would be lost when it is transported across the Mediterranean. The opportunities which Desertec offers are enormous: in view of global warm-ing and the fact that fossil resources are finite, the project provides an alternative to power generated in convention-al power plants – without producing CO2 and in a way that is harmless to the environment. Solar thermal power plants also promise stability for countries in Africa. Energy is re-garded as a basic requirement for economic growth and competitiveness on the global markets. The production costs for industrial and consumer goods, for example, are directly dependent on access to energy. Desertec could pre-pare the ground for a sustainable basis for living.

“The project offers enormous potential for the whole world,” confirms Mr Koopmann. “We very much welcome the Desertec initiative. Ferrostaal is one of the few compa-nies which offers all the services for constructing solar pow-er plants from a single source. We will play an active part in order to translate the Desertec vision into reality.”

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.

Source: www.desertec.org

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Fresnel technology ready for market launchtest 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 feasi-bility 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.

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The follow-up project, Fresdemo II – which Ferrostaal wishes to implement jointly with its affiliated com-pany Solar Power Group (SPG), Schott Solar, the

Fraunhofer Institut Solare Energiesysteme and the Ger-man Aerospace Centre (Deutschen Zentrums für Luft- und Raumfahrt – DLR) – is designed to prove the high cost-effectiveness of Fresnel technology. The test operation is scheduled to last two years and is aimed at optimising Fresnel technology. The prospects are promising, since Fresnel technology has already demonstrated its enor-mous potential. Leading experts assume that the technol-ogy will obtain a large share of the market for generating solar thermal energy in the long term.

With the previous project, Fresdemo I, Ferrostaal and the Solar Power Group were already able to prove that Fresnel technology is a competitive option for use in solar thermal power plants. “The demonstration collector passed the per-formance test and demonstrated its suitability for every-day use under typical conditions,” confirms Count Jacques de Lalaing, Managing Director of SPG. “Fresnel plants do achieve lower efficiency rates than parabolic trough pow-er plants, but the simpler structure of the collector allows 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.

Significant cost reductionsThe findings from Fresdemo I demonstrated the great po-tential for reducing costs. These will now be integrated into Fresdemo II. Ferrostaal and SPG not only want to increase the efficiency of individual components, such as the ab-sorber pipes, the receiver and the secondary concentrators, but also to reduce the power generation costs, to enhance the mirror control and to gather more experience in oper-ating and maintaining the plant. When the test run has been completed, a reliable cost basis will be available for constructing future solar thermal power plants. Dr. Rainer Kistner, Head of the Solar Energy business unit at Ferrostaal, comments: “We’re very optimistic that we will reduce the costs for the entire system considerably with the help of Fresdemo II and thus significantly reduce the costs for generating electricity. We anticipate that the first com-mercial plant will be operational in 2011.”

Ferrostaal only recently increased its share in the Solar Power Group from 25 to 42.8 percent. In this way the Es-sen-based company is supporting further research work at SPG while at the same time sending out a clear signal for a rapid market launch of Fresnel technology.


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

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Protecting people and the environmentPeople 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 com-prehensive 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.


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Safety has top priority for Ferrostaal.


holistic hse Management systemhse 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.

“Handling large and complex projects for con-structing industrial plants is one of our most important activities. In this context we have to

identify and assess risks professionally. Dealing respon-sibly with our employees, the people affected directly or indirectly by our projects and also the environment is of particular concern for us. HSE Management is a major part of our integrated Management System which overlaps with Quality and Risk Management. The HSE Management System applies to all Ferrostaal employees worldwide,” says Dr. Matthias Mitscherlich, Chief Executive Officer of Ferrostaal. HSE is extremely important in the company and is consequently the re-sponsibility of the Executive Board. Strictest standards in the fields of technical and organisational safety and environmental protection form the basis of Ferrostaal’s HSE policy. Current legal regulations and generally ap-plicable standards such as OHSAS 18001:2007 and DIN EN ISO 14001:2004 are applied here.

Targeted strategyThe cornerstones of Ferrostaal’s HSE policy are the ze-ro-accident strategy, the targeted emergency provi-

sions for employees, systematic risk analyses, protec-tive measures for a safe and healthy working environ-ment, targeted and comprehensive emergency and damage prevention as well as compliance with the rel-evant national and international laws and standards. In order to satisfy these requirements, the HSE Man-agement System must be continuously enhanced, also by integrating current standards and regulations. “Our HSE strategy is harmonised with the structure of the company and has grown from the interplay of princi-ples, strategies and measures. It is implemented in all areas,” explains Volker Pils, Ferrostaal’s worldwide HSE Representative. “The topics of health, technical and or-ganisational safety and environment are particularly important when a project is awarded and implement-ed (both in the planning phase and during realisation), not just for us but also for Ferrostaal’s customers. A professional HSE Management System is thus a key factor for our corporate success,” adds Arnd Bartsch, Coordinator for HSE Management at Ferrostaal.

Individual HSE planning for each projectFerrostaal’s HSE Management System offers not only gen-

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erally applicable standards and guidelines which apply to all corporate activities. It also specifies that an individu-al 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 process-ing), procurement (supply chain consisting of expediting, inspection and shipping), construction and commission-ing. Specific measures are included in the HSE plan which correspond to individual general conditions, such as lo-cal 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 iden-tify any potential risks. This is followed by studies, for ex-ample HAZID and HAZOP studies, to elaborate measures for eradicating or minimising risks in the construction 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 we ensure that we can draw up a holistic HSE plan taking into account all those involved in the project.” The same holds true for the largest project currently underway at Ferrostaal; construction of a combined cycle power plant in Trinidad for Trinidad Generation Unlimited (TGU). Ac-cording to Project Director Andrew Foote: “As an EPC con-tractor, it is our responsibility to design a plant that will be failsafe, both at the construction stage and later on, once the plant is in operation. Since HSE is a subject that affects all parties involved in project management, we communicated our HSE strategy to our clients and con-sulted with them before laying down individual guide-lines specific to the project at hand.” Sustainability of all HSE measures is ensured when – both on the construc-tion site and during plant operation – any risk of accidents and incidents is avoided, the emission of dangerous sub-stances is prevented and other interference factors such as noise are reduced to a minimum.

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Concise Lexicon of Terms

HAZID: A “Hazard Identification”, HAZID for short, is a tool for assessing possible reasons for and consequences of dan-gerous events in the project environ-ment and in planned industrial plants. It is performed at any early point in the project and is based on brainstorming.

HAZOP: A “Hazard and operability study”, also referred to as HAZOP, is a systematic, structured, team-oriented assessment of the planning for an industrial plant, with an estimate of the consequences of de-viation from the product process under normal conditions.

Safe work procedures, health protection, daily briefing sessions and regu-lar training courses are important elements in the HSE measures package.


Safe construction with qualified specialist personnelTo implement the HSE plan and its specific package of measures, Ferrostaal establishes an HSE organisation on the construction site. This remains active until the con-struction site has been closed. Ferrostaal’s Project Man-agers and HSE engineers are responsible for controlling and implementing the project-specific specifications. As a rule, these contain risk analyses, measures for avoiding risks, safe working procedures and workplaces, health protection, environmental protection, first aid and emer-gency planning, construction site safety, fire and explo-sion protection, orderliness on the construction site, waste management, measures against drug abuse, han-dling dangerous materials and dealing with radioactive materials, as well as protection against noise and vibra-tion. “In consultation with the site HSE Engineer, the HSE 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

to be unsafe or not in compliance with the guidelines in effect at the construction site,” Andrew Foote points out. “Construction staff receive safety briefings during our regular HSE meetings and daily briefing sessions from their own HSE Officers. HSE Supervisors for all of the partners involved regularly inspect our construction sites, meet with employees and conduct audits. This gives them a picture of the current status, they hold re-view meetings with employees and provide regular train-ing. Compliance with all of the HSE guidelines is our top priority – we don’t tolerate violations.” All activities and incidents which are relevant to HSE are documented. In every project it is absolutely vital for Ferrostaal that the company’s high safety standards should be implement-ed by partners, suppliers and subcontractors – to protect people and the environment.

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

HSE Representative

Project Manager

Commercial Project Manager

QA/QC Engineer

Project Controller

HSE Engineer

Engineering Manager

Procurement Manager

Site Manager

Commissioning Manager

Site HSE Organisation

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Awards for accident-free construction

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As a plant constructor which operates around the world, Ferrostaal complies with strict HSE guidelines.

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.


Construction workers are exposed to dangers in the workplace each and every day. Arduous physical 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 giv-en 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 dam-age to individuals, the environment and equipment. Our guiding principle is prevention, combined with ongoing reviews and improvements – starting with the selection of qualified staff, subcontractors and consortium part-ners, providing our local employees with information and technical training, through to regular HSE training sessions for everyone involved in assembly.” This ap-proach permits long-term and sustained reliability in project management by Ferrostaal Lda. “The certificates awarded to us by PEEGT are recognition of the hard work by our skilled team and the consistent safety strategy in place at Ferrostaal Lda. This is great motivation to con-tinue pursuing our strategy.”

In addition to the certificates from PEEGT, Ferrostaal Lda has received numerous other awards for outstanding safe-ty and quality standards during project management, for example by PowerGen Projects Consultancy Limited for the construction of the Tapada do Outeiro power plant in Portugal, and the two awards presented to Ferrostaal Lda in April and August of this year by Alstom Power Nether-lands for the construction of the gas-steam power plant in Flevo, the Netherlands. These honours are not only mo-tivation for the company’s own employees, but also pro-mote a positive image to the clients.

Strict safety measures while constructing the combined-cycle power plant in Zayzoun

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Loading methanol on a tanker in the harbour of Point Lisas, trinidad


economic upswing in the island stateLarge 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.

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Largest order in the company’s history nearing completionthe 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 grow-ing. 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

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Since the early 1990s, Ferrostaal has been building plants for producing two synthetic gas products on Trinidad: methanol and ammonia. By 2006

the company had constructed four methanol plants for

Methanol Holdings Trinidad (MHTL) and two ammonia plants – including M5000, currently the largest metha-nol plant in the world. As a result, MHTL has become the 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-plantAs 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 con-structing the plants together with the company’s long-standing partner company Proman. Construction com-plies with state-of-the-art environmental and safety


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guidelines. Parts of the complete plant have already be-gun operating. “Since the expansion of the plant is in step with the intensity of the real net output ratio, we have been able to commission one plant complex, the ammo-nia production. We’re very pleased with the progress of the project. As with the plants we have already construct-ed on Trinidad, we have once again exceeded our targets. Specifically, we completed the ammonia plant before the official acceptance date,” says Adalbert Graff, Head of the

Petrochemical Industry business unit at Ferrostaal. “In ad-dition, the plant produces more than the agreed target volume. The Provisional Acceptance Test, in other words the official acceptance by the customer, confirmed this,” he continues. Everything is proceeding according to plan in the construction of the UAN and melamine plants, too. “We’re right on track to hand these over to our customer on schedule in early 2010,” says Mr Graff.

Premium quality in our own interestThe high quality standards of the general contractor are 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 in-terest 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

Adalbert Graff, Head of the Petrochemical Industry business unit at Ferrostaal


ment bank) in Frankfurt financed 85 percent of the invest-ment sum for the new AUM complex. The project involves not only the largest order volume in Ferrostaal’s history: It is also the biggest single private investment in the Car-ibbean state of Trinidad and Tobago.

Liquid fertiliser and melamineHowever, this is not the only reason why the new plant com-plex is extremely important for the operating company MHTL. First and foremost, it permits the range of products to be enhanced. Previously, the holding company’s activities were mainly restricted to the product methanol, but with the production of ammonia, UAN and melamine it is entering a new market. Above all, UAN can be used more efficiently as a liquid fertiliser in irrigation systems. As a consequence, it is particularly interesting for developed agricultural systems with the corresponding infrastructure, such as those in the USA and France. These new products also mean that the nat-ural gas is refined to a higher level. This is good not only for the company MHTL, but also for the country, because addi-tional jobs are also created as the net value added increases.

The demand for fertilisers – whether liquid or solid – is de-veloping disproportionately to the population. The con-stantly growing demand for agricultural raw materials re-sulting from the population growth, the change in food patterns and the use of renewable raw materials for gen-erating bio-energy leads to an increase in the areas uti-lised for agriculture and intensified cultivation. This in turn results in greater use of fertilisers. The prices for fer-tilisers have risen continuously over the past few years, and production of them is thus a worthwhile business.

The worldwide demand for melamine is also growing by five to six percent annually. The markets have been affect-ed by some turbulence in recent years, but experts fore-cast stable demand for the coming years. Melamine is an important raw material for the furnishings industry. It is used for impregnation and in producing glues and wood composite panels. Melamine is also employed in the elec-trical, textile and automotive industries. Producers are also of the opinion that the application areas for mela-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 industrialisationWhen Ferrostaal has completed the two last plants in the AUM complex in early 2010, the number of petrochemi-cal 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 govern-ment’s efforts to further strengthen the downstream in-dustry 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.

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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.

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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.

The progress of construction was already clearly vis-ible at the groundbreaking ceremony, which was held on the Caribbean island in June 2009. High-

ranking representatives of government and private indus-try attended the official inauguration of the construction site – including the Prime Minister of Trinidad and Tobago, Patrick Manning. When the contract became effective in mid-January, Ferrostaal immediately commenced prepara-tory works at the construction site: the 160,000-square-metre site was levelled and work on the infrastructure commenced. Much has been achieved on the construction site in a short period of time: This rapid development is the result of Ferrostaal’s many years of experience in plant engineering and construction. “It is contractually agreed that the turnkey combined cycle power plant will be ready for commissioning and handover to our customer by mid-2011. A 30-month construction period is an ambitious timeline for such a plant, but with our technical expertise and local know-how we are confident that we will deliver on schedule,” emphasises Howard Barnes, member of the

Management Board at Ferrostaal. Along with the tremen-dous progress of construction, the quantity of materials is impressive: By 2011 some 44,000 cubic metres of concrete will have been consumed and around 25,000 tons of steel installed in the construction of the power plant.

A solid basis: the foundationsOnce the site mobilisation and the preparatory works were completed in June, ground stabilisation operations could begin. Piles were installed in order to create a stable base for the foundations. Soil dynamics experts analyse the soil conditions to determine where bored or driven piles must be used; these are installed to a depth of at least twelve me-tres. To stabilise the ground for the power plant equipment the project requires some 3,500 piles in all. In Trinidad and Tobago, it is particularly important to take natural condi-tions such as earthquakes, strong winds and heavy rainfall into consideration. These natural phenomena must be counteracted by stable foundations.


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.

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Sophisticated time managementAlong with the foundations, installation of the first ma-jor components began in September – components such as the first gas turbine and the structural steel for the substation. By the end of the year, Ferrostaal will erect the pipe bridges, the first bypass stacks and the heat re-covery steam generators (HRSG) that will enable the re-use of heat that is generated. “We will be able to meet the 30-month construction deadline through our intelligent scheduling and management,” says Project Director An-drew Foote. “At this point we’re ahead of schedule. This is because rather than completing civil construction work first and then handing the entire site over for me-chanical and electrical installation work, we operate in parallel.” The timing also reflects local conditions such as tropical rainfall, which might interrupt work. “That has to be part of the planning process. In this regard, we have the benefit of having carried out projects in Trinidad and Tobago for many years now – which means we’re already familiar with the challenges we face,” explains Ab de Jong, Resident Project Manager with Ferrostaal in Trini-dad und Tobago.

Adding value locallyFerrostaal has already established an excellent reputation on Trinidad and the region over the course of many years of experience there. Through successfully executed pet-rochemical projects, the company has built up an exten-

sive local network of local business partners. “The engage-ment of local organisations and labour is a very impor-tant aspect,” says Howard Barnes. “Our commitment to local employment and training makes a considerable con-tribution to the economic growth of Trinidad and Toba-go.” In August 2009, some 460 people were employed at the site, 425 of whom were from the local community and surrounding areas. When construction work peaks in ear-ly 2010, the site will have as many as 1,000 local employ-ees over a period of several months.

Flexible powerThe new plant will have a high degree of operational flex-ibility in order to cope with the fluctuating demand of the local grid. With six gas and two steam turbines it will be able to be operated in “open” (without steam turbine) or “combined” (with steam turbine ) cycle when complet-ed. “With this combined cycle power plant, Ferrostaal is making a major contribution to the energy security of Trinidad and Tobago because after it has been commis-sioned the country’s power generating capacity will be increased by around 50 percent,” says Andrew Foote. In addition, the innovative air cooling system and other components in the plant will ensure compliance with the stringent environmental requirements.

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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


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

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PRojECtS

SERIES Milestones in pictures

Refinery plant for ENAPthere are many steps involved in progressing from the initial idea for a project to the completed plant. this edition of the series “Milestones in pic-tures” focuses on the construction of the delayed coker in Concón, Chile.

In 2008, Ferrostaal and their partners completed a refin-ery plant for the state oil company Empresa Nacional del Petróleo (ENAP) in Concón, Chile. The refinery plant –

a delayed coker – enables heavy crude oils from nearby countries to be converted to diesel, petrol and liquefied

natural gas, thus achieving significant savings in trans-port costs. Ferrostaal and further partners formed a consortium which performed all the EPC services in this project, which had an investment volume of 430 million US dollars.

November 2005: the preparatory work began on the construction site in Concón, Chile. the area seen here has been prepared for the assembly of the heart of the plant, the delayed coker process unit. the order also included constructing all auxiliary plants, such as a desulphurization plant, a waste water treatment plant, a flare stack, a compressor station and two more processing plants, as well as a belt conveyor system on the site which covers a total of 50,000 m².

June 2006: After the site had been drained, the ground stabilised with 72 piles and the foundations laid, it was already possible to begin construc-tion work in March 2006 on the steel-reinforced concrete coke deck for the coke drums. In June, this construction stage had largely been com-pleted. Here you see the roof girders being installed.

secure fuel supply for Chile


The company also played a leading role in developing the financing model for mobilising the investment sum. Reu-ters’ renowned magazine “Project Finance International” ranked it as the “Latin America Deal of the Year 2005”.

The project demanded top performances from the 100-percent Chilean Ferrostaal subsidiary DSD Construc-ciones y Montajes, which was responsible for performing the construction and assembly work. For example, the en-tire plant, including the numerous auxiliary plants, had to be constructed while the existing refinery continued

to operate. This process took a total of 36 months to com-plete. The coke drums, with their considerable wall thick-ness, were each delivered in two parts, welded together at the construction site and installed using special cranes. Today the delayed coker supplies 40 percent of the coun-try’s fuel and at the same time represents an important step forward in enhancing Chile’s real net output ratio.

November 2006: the two coke drums, which for transport reasons were each supplied in two parts from Japan, are being prepared for assem-bly here. these containers each weigh 340 tons and are nine metres in diameter. Due to their enormous weight and dimensions they could not be transported in one piece by road from the harbour to the construction site. the two pieces were welded together on site.

December 2006: the 34-metre-high coke drums were installed using a heavy-duty crane from DSD which has a capacity of 650 tons. First the lower part of each coke drum had to be installed and fixed in place on the coke deck. then the upper part was positioned so that it could be welded onto the lower part of the container. Installation of the two drums, including all the welding work, was successfully completed in just 28 days.

March 2007: the mechanical assembly of coke heater B-3001 can be seen here. Interconnections were installed at the same time. these con-nect the coker plant and all the auxiliary plants with the existing refinery.

August 2007: the last access platforms were installed before the upper steel structure could be assembled as the derrick for the drilling lances. By this time, the coke drums as well as the most important components and the large process columns (right) had all been installed. the con-struction then measured around 70 metres in height.

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February 2008: the delayed coker is now almost mechanically com-plete. Final work ahead of commissioning and the handover had been implemented on site. the complete 100-metre-high structure of the coke 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.

June 2008: the delayed coker was ready for commissioning and, follow-ing a successful performance test, was able to begin continuous opera-tion six weeks later.


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


strategies for a successful machine businesssome six months ago the 52-year-old salesman and mechanical engi-neer 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.

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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 ba-sis 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 re-quired by large industrial bakers, and machines in the fields of plastics, extrusion, and packaging.

Does commercial business on its own still have a future?Yes, because complex production lines and plants can-not be sold over the Internet – well, perhaps a single ma-chine could, but whenever consulting is called for, then direct personal communication is required and also, naturally, professional expertise. We must demonstrate new quality here and provide a greater real net output ratio. We must also be in a position to provide consult-ing services, and to answer the technical questions which customers have in the packaging, plastics and food sectors on our own. That’s how we’re currently re-organising ourselves.

How do you plan to achieve this?By employing specialists who will in turn train our em-ployees. Concentration enables us to have experts in eve-ry region who can also work in other regions, because of course we can’t afford a specialist for packaging machines, for example, in every country. But we check out which country offers the greatest potential for which sectors and deploy our resources accordingly. In Southeast Asia alone, for instance, we will take on at least nine qualified people.

We’re currently expanding teamwork and work across in-ternational borders in order to offer our customers first-class technical service.

That also means that the existing employees must be willing to learn.They are. People are looking forward to the professional expertise they will obtain and the upcoming training units. The experts we’ve taken on so far are also involved in the market and are no strangers to our employees. Our employees welcome these investments.

What still distinguishes us from other providers?Well, a number of things. First, we know our markets very thoroughly. We’ve been present in most countries for many decades with subsidiaries or our own offices. We’re also supplier-independent and can provide end custom-ers with complete production lines tailored to their indi-vidual wishes and requirements. A line can comprise ma-chines from ten to 15 different suppliers. It’s a great ad-vantage to obtain everything from a single source and saves the customer a great deal of effort in terms of re-search and negotiations. In addition, we will continue to

SERviCES


be available to provide services for the customer after the plants have been sold and installed. Another key service which we offer is financing of the plants.

Financing is a service which business enterprises normally don’t provide. That’s right. But of course customised financing strategies are an excellent opportunity for many customers to even implement their projects at all and to make investments – naturally all the more so for customers from the markets in which we operate. We’re active in a large number of emerging industrial markets. This enables us to give good products and companies a fair chance and to help them establish themselves on a solid foundation.

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, we’re giving a company in China the opportunity to es-tablish 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 ex-tremely competitive and technically high-quality product made in China.

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

has resulted in short-time work and dismissals, and in the worst cases companies have had to close.

How have we repositioned ourselves?We have large and interesting projects – by our standards large projects worth many millions – in the pipeline in all corners of the world. For example, we also buy estab-lished companies when we are convinced that they fit into our portfolio and our network. This grants us imme-diate entry into a market in a new region. We’re current-ly in the process of negotiating various takeovers. We’re consequently in a good position to face the future, and the business in the fields of packaging, plastics and food will be an important part of the overall portfolio in the machine sector.

“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.”

Do you have any questions about the machine business at Ferrostaal?

Contact:Hans-Jürgen BöwePhone +49. 201. 818-52 [email protected]

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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 independ-ent capacity for high-profile customers such as Opel and Ford. the 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.

Ferrostaal is taking competencies from both the cur-rent Automotive business unit and what was formerly Transportation and integrating this expertise into the

recently created Railway business unit. The aim here is to reposition the company in this area of activity. In addition to railway (conventional rail), the unit will also handle light-rail projects. The new unit will be managed by Detlef Castro and Dr. Ralf Becker, who are also jointly in charge of the Au-tomotive business unit. Dr. Becker gives the following expla-nation of the concept: “The employees who were previously employed in Transportation now work in the Railway unit. They bring with them comprehensive railways expertise and extensive experience acquired over many years. Trans-portation is one of the oldest business areas at Ferrostaal,

and we can look back over many successful projects and a long-standing tradition. Although the old business unit’s activities were performed as commercial trading business for Ferrostaal, the unit in fact also undertook value-added projects itself that involved, for example, modification of old carriages or refurbishment of light-rail vehicles. Ferrostaal was also responsible for the entire planning, im-plementation, approval and licensing during this time. This new concept enables us to incorporate expertise in series production from Automotive in our capacity as a supplier-independent service provider with a high real net output ratio due to our status as a full service provider, while trans-ferring the concept to the railway and light-rail sector.” The new business unit thereby offers a fully comprehensive as-


sembly service package, from the planning stage through to after-sales service. However, infrastructure provisions no longer form part of our range of services.

New production approachesWe want to focus on the construction of shunting or main-line locomotives, carriages and light-rail vehicles. Locomo-tives are today commonly produced in modular systems. This would mean that we could take on the entire assem-bly process. The pre-assembly of individual modules, such as engines, cooling systems, driver’s cabs and hydraulics would also be a possible area for us. Many components could be assembled on-site. Others, such as electrical com-ponents, must be. This is where Mr Castro and Dr. Becker

aim to address customer wishes and production-specific requirements. Dr. Becker explains the multiple benefits for potential customers: “The Railway and Automotive busi-ness 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 pro-duction 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 construct-ed in the same way, but nevertheless both executives see the potential for streamlining, for instance in material sup-ply 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 of-fer an all-round after-sales services package: This means, for example, that the benefits provided by this type of pack-age to the customer increase with the number of locomo-tives that are in use,” says Dr. Becker, illustrating the exten-sive value to the customer.

Exceptional quality as a top priorityAs is the case in the Automotive business unit, Railway at-taches the utmost importance to delivering the highest quality. Quality leadership in Automotive means that the unit now leads the market as a supplier-independent serv-ice provider that creates added value. Day-to-day top per-formance has been the basis of the business for years. And neither of the managing directors will settle for anything less for the new unit. “All assembly services must work per-fectly. We have to set ourselves up in the best possible way to ensure that our services provide the customer with the ultimate in speed of delivery and flexibility while ensuring lead times are kept as short as possible. Key factors here are of course honouring delivery times and all-round expertise regarding the product. We have to ask ourselves which area of application the product is aimed at and what follow-up

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What does the Ferrostaal Automotive business unit do?

Ferrostaal Automotive has been successfully running steel magazines for various motor-vehicle manufactur-ers since 1983. the so-called system logistics ap-proach began in 1996. this provides just-in-time deliv-ery 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.

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activities are relevant. Naturally, all these things have to be dealt with,” says Dr. Becker. “However, we cannot manage this on our own. Naturally, we will be enlisting the services of partner companies, as was previously the policy with the former Transportation unit, for example for the modifica-tion or refurbishment of rail vehicles.”

High market potential for the new servicesThe concept looks promising. The plans for the initial projects, for instance, are already well advanced. One of these projects is a locomotive plant in Germany – for Mr Castro and Dr. Becker, this market is where initial focus is aimed. “This sector is naturally one that has felt the full force of the economic crisis. As a result of downward trends in sales volumes in other industries, transport volume has significantly declined and therefore locomotives and the use of carriages is lower than in times of economic growth. This means that repeat orders for transport vehicles are postponed. However, this situation is not permanent. “The first orders will definitely come,” remarks Dr. Becker. At any rate, the potential is enormous. A large proportion of shunting and mainline locomotives currently in use in western Europe is obsolete. Despite investment projects being put off as a result of the economic crisis, the fact

alone that more stringent emissions regulations now ex-ist will compel many operators to refurbish their fleets. And the need for refurbishment does not only apply to western Europe but also to south-east Europe and Russia. Market experts are assuming that investment volumes solely for locomotives will reach quantities of 1,000 in western Europe and 2,000 in eastern Europe. While some may consider these figures as low, the opposite is in fact true. An automobile plant typically produces between 250,000 and 400,000 vehicles annually, whereas a com-parably sized locomotive production plant would manu-facture a quantity of 30 to 50 shunting or mainline loco-motives in the same period. The reason is that production times for locomotives are significantly longer than for cars. “So if we were to produce one locomotive per week, then that would already constitute an extremely good achieve-ment,” says Dr. Becker. The date when business activities will really begin is therefore still uncertain. But both expe-rienced executives are fully convinced that success will come within one to two years. It all depends on the orders situation at the manufacturing companies. But one thing is clear: The key elements are already in place.

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

Contact:Dr. Ralf BeckerPhone +49. 201. 818-10 [email protected]

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

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Ferrostaal continues to support the expansion of the south African oil and gas industry. A shipyard for building new modules for offshore plat-forms 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.

shipyards create thousands of jobs

In Cape Town harbour Ferrostaal is financing the con-version of an old shipyard into a service and repair centre for maintaining offshore platforms. “There are

already a number of local companies in Cape Town which work as suppliers for the oil and gas industry, but they were extremely fragmented to date. With our commit-ment we want to help the industry to consolidate. The aim is to make the local companies more competitive interna-tionally and to permit large orders to be posted,” says the Head of the Governmental Business unit, Christian-Max Pietsch, in describing Ferrostaal’s role in this business. The company is investing in the A-Berth project together with the local project developer Atlantis Marine Systems.

Upon completion, the shipyard is to be operated by the local company DCD Dorbyl Heavy Engineering. Ferrostaal will be the lessor. In 2007 the company, also together with its partner Atlantis Marine Systems, had already placed in service a shipyard for constructing new modules for platforms in Saldanha Bay, to the north of Cape Town. With the two shipyard projects the Essen-based company 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

A-Berth project the company is discharging offset obli-gations from the sale of three submarines to the South African Navy. “The A-Berth is yet another facet of our very varied offset business,” sums up Mr Pietsch. With its com-mitment to offset business, the company is one of the largest foreign investors in South Africa.

The demand for African oil has increased sharply in re-cent years. Around one tenth of the reserves known to exist worldwide are located on the black continent or be-neath the adjacent oceans. However, the construction and maintenance of offshore platforms in this region is prob-lematic. Previously the floating plants had to be towed to North America, Europe or even Asia for necessary repairs. And time is money: each day that a platform is not oper-ating costs between 400,000 and 500,000 US dollars in loss of rent. But the shipyards in the aforementioned re-gions are currently so booked out that waiting times regu-larly amount to years. The proximity to the West African oil fields therefore makes South Africa an ideal location for such platforms.

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

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CountRiES and PEoPlE

Laying a trunk line in the Libyan desert


the changing face of a desert statethanks to its wealth of oil and gas, Libya is an extremely attractive busi-ness partner. the constantly growing economy and continuing liberalisa-tion of the economic system make the North African country a location with considerable potential.

First choice in the oil and gas sectorFerrostaal 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 gen-eral economic conditions.

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“A100” water treatment plant in Bu-Attifel


It all began in the late 1970s when a small camp was set up in Es Sider on the Libyan coast. Here, on the 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-ficult to establish ourselves on the Libyan market. We felt a bit like adventurers, because our equipment was only simple,” remembers Karl-Heinz Hennchen, who has been employed by Ferrostaal in Libya for many years. “No modern communication equipment or technolo-gies were available to us: there was no phone, no In-ternet and naturally no GPS. But we still succeeded in establishing ourselves very quickly and were gradually able to manage the major oilfields.” Over the years the number of projects in the oil and gas sector grew con-stantly, enabling the industrial service provider and plant constructor from Essen to develop comprehensive mar-ket expertise and a comprehensive business structure. Ferrostaal Libya today consists of the head office in Tripo-li, the logistics and construction centre in Marsa El Brega and the mobile camps (currently 15) which are situated directly in the oilfields and are only set up for as long as a construction site exists. The Libya Task Force in Geisen-heim, Germany, headed by Volker Kenschke, supports the business activities of Ferrostaal on site and, among other things, covers the engineering disciplines which are not available in Libya as well as global procurement. The number of employees has grown from a small team in the early years to over 940 currently. Many of them – like Karl-Heinz Hennchen – have been involved for years, know the country and the people and are familiar with the working conditions in the desert.

Established market positionBecause the company has been present on the Libyan market for many years, Ferrostaal is today able to offer its customers a comprehensive range of services: In the context of opening up oil and gas fields, for example, the company supplies and installs piping systems, collection systems, processing plants, oil and gas production plants, and water injection systems which permit the pressure

in wells to be increased and oil production to be en-hanced. In order to process oil and gas, Ferrostaal Libya constructs, among other things, gas oil separation plants (GOSPs), pipelines for transporting the two raw materials as well as pump and compressor stations. “As an estab-lished EPC contractor we now have, in contrast to previ-ous years, an extremely broad basis and a range of con-tracts which reflects the changing market. We maintain business relationships with all the oil and gas companies which operate in Libya and are present with our own camps in almost all the productive oil and gas fields,” says Carsten Arlt, Head of Ferrostaal Libya, by way of ex-plaining the current market position. “One important factor for project acquisition is the great flexibility which we achieve through our own construction centre in Marsa El Brega. This is an important requirement to be successful on the Libyan market,” emphasises Mr Arlt. “Our customers value the good infrastructure which we have built up in the country over the course of 30 years.” Marc Neumann, Head of the Oil and Gas business unit, adds: “In Libya we concentrate on medium-sized orders. This enables us to implement several projects simulta-neously, thus satisfying the requirements of the coun-try’s oil and gas industry.”

Projects in the oil and gas sectorAmong other things, Ferrostaal Libya is currently han-dling an EPC order for Mellitah Oil & Gas, Gas Division, at the Wafa field. This giant oil and gas field is located in West Libya, near the Algerian border and some 500 kilo-metres south of Tripoli. The project involves extending an existing oil and gas production plant by integrating three new flow lines. The flow lines will connect three new wells to the existing manifold on the Wafa field. Work is

Karl-Heinz Hennchen, Senior Site Manager and long-term employee of Ferrostaal in Libya

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scheduled to be completed by the end of the year. In an-other project which is currently being handled, Ferrostaal is planning future wells at the El Sharara field for Akkakus Oil Operations (AOO) and the subsequent infrastructure measures which will be required to establish a link to the existing plants. This will include, for example, flow lines, trunk lines and pipelines, as well as high-voltage cables to supply power in the field. Water injection plants and

GOSPs are also planned. In El Sharara, AOO operates two oilfields and is planning to increase the capacity of these two fields through this project.

Ferrostaal Libya has already demonstrated their great ex-pertise in the oil and gas sector before. For example, in 2007 the plant constructor was awarded a contract to construct 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 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-injection technique is one of the most demanding terti-ary production measures to maximise residual oil remov-al at the field.

One problem particularly connected to fields from which oil and gas has been produced for many years (such as the one at Bu-Attifel which has been producing since 1972) is that they experience a gradual reduction in pressure, and

Concise Lexicon of Terms

Flow Line: pipe which connects the wellhead to the next manifold (small nominal diame-ters or pipe diameters)

Trunk Line: pipe which goes from the manifold to the GOSP (gas oil separation plant) (medium-sized nominal diameters or pipe diameters)

Pipeline: pipe which goes from the GOSP in the desert to the tank farm or, for loading onto a ship, to the coast (large nominal diameters or pipe diameters)

Employees of Ferrostaal Libya aligning and welding pipes for a trunk line


as a result the output decreases. The pressure build-up which can be achieved by injecting water enables the oil production to be maintained or even increased. In addi-tion, the process is safe for the environment because the used water is treated and returned to the field. In the case of smaller fields which are located close together, the wa-ter which is injected is frequently controlled from a large treatment plant. Ferrostaal Libya has implemented such a plant in the “Water Injection Project Farrud”, in which twelve injection points are supplied using high-pressure pumps that inject the water into the Farrud field with a pressure of 100 bar.

Ferrostaal Libya has not only implemented water treat-ment plants to increase the amount produced, but also drinking water purification plants, for example in the Great Man-Made River Project in which fossil ground wa-ter from the southeast desert is transported over 1,000 kilometres to the densely-inhabited coastal regions in the north of the country. In the context of this project Ferrostaal Libya constructed water treatment plants for

54 wells at the Tazerbo location between 2002 and 2004. Deaerators and filter plants here ensure that the carbon dioxide, iron and manganese which are dissolved in the fossil water are reduced and that the water is transported to the coastal region via a pipe system.

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

Details of infrastructure measures for increasing oil production at the El Sharara field

6“ flow lines (oil, water) 388 km

18“ trunk lines 30 km

12“ pipelines 75 km

Oil wells 110 items

Water injection plants 50 items

Equipment for water wells 18 items

Overland line approx. 780 power poles

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Another major project in recent years was the construc-tion 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 transport-ed and compressed in the pipelines using gas compres-sors, which are also included in Ferrostaal Libya’s portfo-lio. For example, the company supplied the gas compres-sor 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 In the last six years far-reaching changes have taken place in Libya. A change in foreign and economic policies was introduced in 2003 when, after almost 20 years of isola-tion, the Arab country sought to re-enter the internation-al community of states through its declared renunciation of weapons of mass destruction. “The re-integration into the world economy and political re-orientation open up great opportunities for German companies, especially Ferrostaal,” stresses Marc Neumann. Since 2004 the coun-try has been undergoing economic reforms which were introduced by the passing of new economic laws and are designed to move the country away from a government-controlled economy to a market economy. In this context, an intensification of the bilateral relations between Ger-many and Libya can be seen: The completion of the par-liamentary ratification process in April 2009 saw an agreement come into force to promote and mutually pro-tect investments. These general political conditions create the ideal prerequisites for continued successful de-velopment of Ferrostaal in Libya.

The plans by the Libyan government to raise gas produc-tion levels and increase oil production to three million barrels per day by 2012 offer good potential for Ferrostaal to expand its business activities in the country. Current economic data underline this: In 2007 Libya had proven oil reserves of 41.5 billion barrels. In 2008, mineral oil and derivates accounted for 95 percent of exports, and these accounted for 90 percent of the Libyan economy. Germa-ny is one of Libya’s main trading partners, and the North African country is Germany’s third-largest oil supplier. The planned increase in oil and gas production will also increase the demand for refineries and petrochemical plants in Libya.

Good prospectsThe measures which are required to cover this demand exactly match the portfolio of Ferrostaal Libya. For exam-ple, gas oil separation plants, compressor and pump sta-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.

Fiscal metering skid at the Ras-Lanuf tank farm


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 process-ing still further in the engineering and procurement busi-ness 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-gy business units. At the moment, Ferrostaal Libya is fo-cusing the expansion of their business activities on new oil companies, for instance RWE Dea, Shell and Statoil. Ferrostaal Libya already has an excellent reputation with existing customers such as Harouge Oil Operations, Ara-bian Gulf Oil Company, Zueitina Oil Company, AKAKUS Oil Operations, Wintershall Holding, Mellitah Oil & Gas, Al Nahr Company and the Sirte Oil Company.

Would you like more information on Ferrostaal Libya or our Oil and Gas business unit?

Contact:Marc NeumannPhone +49. 6722. [email protected]

Carsten ArltPhone +218. 215. 63 47-60 until [email protected]

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

68


MFO CAMP FACILITIES IN LIBYA

1 MFO head office tripoli

2 MFO Operations & Logistics Marsa El Brega

3 Ras Lanuf (HAROUGE)

4 Zueitina (ZOC)

5 Amal (HAROUGE)

6 Jakira Nafoora (WIAG, AGOCO)

7 Bu-Attifel (MELLItAH OIL)

8 Messla (AGOCO)

9 Sarir (AGOCO)

10 Shatirah (OMY)

11 En Naga (HAROUGE)

12 Sabah (ZOC)

13 tibisti (HAROUGE)

14 Ghani (HAROUGE)

15 Nalut (AL NAHR COMPANY)

16 Wafa (MELLItAH GAS)

17 El Sharara (AKAKUS)

LIByA

tripoli1

23

4

56

7

8

9

10

11

12

13

14

15

16

17

NIGeR

tuNIsIA

eGyPt

suDAN

ALGeRIA

MALI ChAD

Athens

Benghazitobruk

Misurata

Ghadamis

sirt

sabha

GReeCe

Mediterranean

Sahara

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.

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%

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.

Source: Germany trade & Invest; 2007 figures: Foreign Office; * estimated: Economist Intelligence Unit, March 2009/IMF

0 250 km


Libya is the fourth-largest country in Africa. In the northwest 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 popula-tion 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 per-cent). 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 al-most 100,000 inhabitants and was at that time the larg-est city on African soil.

Country information on Libya

70

COUNTRIES AND PEOPLE

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.

Business etiquette in China – part 2


We are always very happy to welcome customers and Ferrostaal partners here in Beijing from all over the world. In order to ensure that our visi-

tors’ stay here is as pleasant and profitable as possible, a local Chinese Ferrostaal employee always accompanies guests to appointments with Chinese business partners to act as a translator. You should take time to get to know this employee on the day before the appointment, describe the project to them and explain the aims of the negotiations. By doing this, translations are certain to be accurate and target-oriented. Our experience has taught us that better results are achieved if unusual or very technical topics are e-mailed to us at least one week in advance so that the em-ployee acting as translator can gather the relevant techni-cal vocabulary. For extremely important topics, we are also in a position to involve the local Managing Directors and discuss negotiation strategies.

There are certain rules of conduct for business meetings, negotiations and business meals in China and visitors should familiarise themselves with these conventions in advance. The information that was given in the first part of the business etiquette guide for China will prove very help-ful in doing this. Our local expert knowledge means we can offer reliable advice in regard to specific issues. This allows for optimal preparation for meetings with business part-ners. After all, it must be taken into account that not all cus-tomers 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 impor-tant 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 business meetings in China, the Chinese party is very often

represented in large numbers. This makes it difficult for for-eign business parties to bring up and discuss sensitive top-ics with the right people in meetings, such as points of com-promise that are connected with a dispute, for example. A sense of diplomacy is vital here, as is an awareness of how internal relationships and hierarchy work within the cus-tomer’s company. Opportunities for discussion often arise spontaneously, for example during a business meal, on the way to a meeting or during the time it takes for the meet-ing to gradually break up. If, as a guest of honour at a meal, you are seated directly next to someone who is responsi-ble for making decisions, a suitable moment will possibly present itself to discuss any points of a sensitive nature. It is important then to have the employee who is acting as translator with you and to have already informed them of the situation. Alternatively, following the meeting, you can run your approach to solving a problem by our Chinese em-ployees and get them to inform you of the Chinese part-ner’s initial reaction to it.

Private invitations are regarded as a very great honour in China. However, they should only be accepted if extended repeatedly and also only after a definite date has been set. On the issue of choosing a suitable gift for the host, our lo-cal employees can always be relied upon for advice here.”

“

thomas Buschmann, Head of Ferrostaal in China

aPPEndix

72

International trade fairsJanuary to June 2010

World Future Energy SummitUAE, Abu Dhabi18/01–21/01/2010

World Future Environment ExhibitionUAE, Abu Dhabi18/01–21/01/2010

Upakovka/Upak Italia 2010International trade fair forpackaging machinery, packagingproduction and packaging materialRussia, Moscow26/01–29/01/2010

GulfoodThe gulf food, hotel and equipment exhibition and salon culinaireUAE, Dubai21/02–24/02/2010

TECHMEI 2010Technology trade fair for industrialmachinery and equipmentBrazil, São Paulo15/03–18/03/2010

ProPak Vietnam 2010Trade fair for processing, filling andpackaging technologyVietnam, Ho Chi Minh City18/03–20/03/2010

TubeInternational tube and pipe trade fairGermany, Düsseldorf12/04–16/04/2010

Clean Energy NationalConference and ExhibitionAustralia, Adelaide03/05–05/05/2010

Industrietag BingenIndustry day BingenGermany, Bingen04/05/2010

MetalloobrabotkaInternational trade exhibition for equipment, instruments and tools for the metalworking industryRussia, Moscow24/05–28/05/2010

Feria Internacional delMedio AmbienteInternational exhibition on the environmentColumbia, Bogotá02/06–05/06/2010

Bonding HochschulmesseUniversity networking fairGermany, Karlsruhe07/06–09/06/2010

Fispal TecnologiaTrade fair for packaging and processesfor the food and beverages industryBrazil, São Paulo08/06–11/06/2010

Power-Gen EuropeConference and exhibition for the European energy industryNetherlands, Amsterdam08/06–10/06/2010

ExpopackInternational Exhibition for the Packaging IndustryMexico, Mexico City22/06–25/06/2010

ExpoPrintInternational trade fair for printing,photography and packagingBrazil, São Paulo23/06–29/06/2010

Bonding HochschulmesseUniversity networking fairGermany, Bochum28/06–29/06/2010

InglemashInternational trade exhibition forequipment and technical processesin the supply industryRussia, MoscowDates to be confirmed

Publisher:Ferrostaal AGHohenzollernstr. 2445128 EssenGermany

Member of Initiativkreis Ruhrgebiet

Responsible for the content:Daniel Reinhardt

Editors:Angela Kanders (Managing Editor)Carmen Eckenroth, Katja IflandContact: [email protected]

Other contributors to this issue:Thomas Buschmann, Julia Scholtyssek

Picture credits: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), 46-49 (background), 49 (r.), 59, 60/61, 62-66, 67 (above), 67 (below), 69; Frank van Groen: pp. 3, 27 (r.), 40 (above), 57, 67 (centre); Teja Finkbeiner: p. 6; A. V. Singh: p. 7 (centre); Shearman & Sterling: p. 8; Manfred Ehrich: p. 9; Areva: p. 10 (l.); Fernando Litosella: p. 10 (below); Cinema Jenin e.V.: p. 11; Getty Images: pp. 16/17, 21, 23, 24/25, 50 (below), 54, 56; Cat-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:BOROS

Printing house:Woeste Druck, EssenGalaxi Supermat (chlorine-free bleached), Papier Union

Frequency:half-yearly

IMPRINT

73

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THE ECHO December 2009

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DAS ECHO Dezember 2009 tHE ECHO - Ferrostaal Group · project boasting the largest individual order volume ... it forms the cornerstone of our company strategy. ... The construction