Designing, Manning and Operating a World-Class Downstream Business

8/14/2019 Designing, Manning and Operating a World-Class Downstream Business

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,

World-Class Dow

stream Business

Dr Tom Farle

Managing Director


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Summary of Presentation

Innoval Technology Back round

Desi nin an Efficient and Viable Downst

Market Analysis

Equipment Specification

Plant Design

Cost Modelling

Developing the Right Skills

Achieving World-Class Standards

eam Plant

Commercial-in-Confidence, Innoval Technology LtdIP08-006, Slide 2


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Innoval Technology Our Credentials

Innoval Technology is an independent coexpertise to the downstream aluminium in

Formed in 2003 as a result of closure

We are a group of 26 aluminium expertsaluminium knowledge

Metallurgy product expertise

Surfaces ex ertise

Our engineers have an abundance of pro

Most have been su ortin the indust

Many have held Senior Management

pany providing a unique resource ofdustry

f one of Alcans Global R&D centres

our strength is the breadth of our

uct and process experience

for over 20 ears

ositions in global aluminium companies.



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Innoval Technology Strategic Support

Innoval has undertaken the following typeinvestors in downstream fabrication busin

Technical Due Diligence on existing pl

Pre-Feasibility Studies and Greenfield

Plant investment and upgrade support

of strategic support work for potentialsses:

ants

plant design



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Methodical Approach

Market Analysis


Technical Confi uration

Technology Choices

Plant Design

Cost Modelling



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Market Analysis

Review all potential products for the plant

Home market

Export market

Gather data on product sales prices

Important to have understanding of marke

Some products cost more to produce

Anal se com etition in home and ex ort

Quality required to compete in chosen

Decide on which products to manufacture

t price vs. production costs

arkets

market



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Methodical Approach

Market Analysis



Technology Choices

Plant Design

Cost Modelling



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Assess Technical Challenges for Chosen

Products vary in their complexity and in th

The products determine what equipment i

Type of rolling or extrusion equipment

Type of finishing operations

Example Can Body Stock (CBS)

A sin le can line manufactures 2 000 cans eminute (1 billion per year)

10,000 tonnes of aluminium per year (2 x 14tonne coils per day)

Some may think this is a simple product

BUT actually it is technically demanding

Products

eir difficulty of manufacture

required in the plant



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Can Body Stock - Thickness Reduction a

Coca-Colas First All Aluminium Can, 1967

(weight 21g)

d Tighter Control

Coca-Cola Aluminium Can, 2009

(weight 12g)



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Can Body Stock - Thickness Reduction a

Extremely tight specification for aluminiu

sheet thickness

achieved with state of the art thicknescontrol systems ...

-these systems

Unlikely to be achieved at start-up

Failure to meet specification will lead to cplant jams and can strength issues

Profile

(crown)

Al strip

~0.5%

Strip wi

d Tighter Control

n co eng

~10,000 m

250 +/- 5 microns

th ~ 1.8 m



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Can Body Stock The Challenge of Eari

Earing

by crystallographic texture

Sheet with earing that is out of specificawill

Risk jamming and stoppage of the canplant line

g

Ears

ion

can after re-draw and wall ironingwith severe earing



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Can Body Stock The Challenge of Eari

World-class earing can only be achievedthat includes a Hot Tandem Mill.

g

hen rolling DC ingot through a Hot Line

Source: SMS



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Summary of Sheet Rolling Process

DC

Caster Pre-heati

Furnaces FilterScalper

Furnaces

Cold finismill

Finalanneal

Coating

Doubling

(foil)

g

Hot reversing

mill

Hot tandem

millHot coil

FilterContinuous caster

o ro er

(Self-

anneal)

Cold millingCold coil

Cold roughing millInter-anneal

Cold millill



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Rolling Technology Configurations for Va

HRM + 4-stand HTM

Typical Capacity (tonnes pa) 700k

Can Body Stock (CBS)

Can End Stock (CES) & Tab Foilstock

Standards - Low Mg Standards - High Mg

ro

ducts

ur ace ens ve ro uc s

Thick Products Clad Products

Others

meets world can be mad cannot be m

ious Products

Hot Band Option

coil-to-coil HRM Belt Caster Roll Caster

150k 120k 20k

class quality requirements

but does not meet all quality requirements

de or fails to meet most quality standards.



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Making the Appropriate Technology Choi

Need to identify correct technology optionstandards

E.g. on-line measurement technologie

There are significant variations in perform

Consider future proofing the equipment to

Tightening of specifications

ncreas ng co we g s w an en

es

to achieve current customer quality

s

nce and price of equipment

meet evolving customer needs



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Methodical Approach

Market Analysis



Technology Choices

Plant Design

Cost Modelling



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Plant Design Capacity Calculations

Correct sizing and multiples of equipment

E. . What size of furnace and how ma

Assessment of spare capacity within key

What other products could the plant m

Awareness of the magnitude of process l

To sell 1000 tonnes of final product th

Example Rolling Mill

A rolling mill represents a significant comvery carefully

type

n ?

ssets

ake to fill any spare capacity?

sses at every stage (recoveries)

rolling mill may need to roll 1200 tonnes

onent of Capex so must be specified



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Example Rolling Mill Capacity Calculati

Product One Two Thre

Finalgauge[mm] 0.1 0.22 0.5Percentofproduction 33% 23% 22Rollingtime[min] 54 18 10Handlingtime[min] 30 20 20

vera capac y onne yr

Product One

.Percentofproduction 39%Rollingtime[min] 54Handlin time min 30

Removalof heavy

gauge

product

Overallcapacity[ktonne/yr]

Product

Finalgauge[mm]PercentofproductionRollingtime[min]

10%

increasein pass

s eedsHandlingtime[min]Overallcapacity[ktonne/yr]

ns

e Four Five

0.8 2

9% 13%

6 3

15 10

Two Three Four Five

. . .

28% 26% 7%

18 10 6

20 20 15

83

One Two Three Four Five

0.1 0.22 0.5 0.8

39% 28% 26% 7%

49 17 9 6

30 20 20 15

87



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Plant Design Optimising Layout of Equi

Based on knowledge of world-class opera

Ensure efficient process flow

WIP Calculations (buffer sizes, WIP stora

,

ment

tions

e around plant)



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Methodical Approach

Market Analysis



Technology Choices

Plant Design

Cost Modelling



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Cost Modelling

It is easy to build a simple Excel-based co

Need realistic model inputs based on exp Product recovery vs year from startup

Efficient staff levels

R&D costs (~0.5% of turnover typical)

a cu a on o ap a os s Inclusion of all key andancilliary equipment

Calculation of Operating Costs (OPEX) Requires a good understanding of the proces

Com uter models can be used to redict utilit

Useful to attribute costs correctly to differ

More complex tools can be used to analy

st model ... BUT

rience and expert calculation

usa e electricit as etc.

nt products

e the model (e.g. Monte Carlo)


C O


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Example of Cost Model Output

350,000

400,000

182,50212%

NPV [US$'000]IRR

250,000

300,000

S$'000]

100,000

150,000

200,000

CAPEX[U

0

50,000

2009 2014 2019 2024 2029 2034

YEAR

5,000,000

6,000,000

3,000,000

4,000,000

Flow[US$'000]

0

1,000,000

2,000,000

umulativeCash

-2,000,000

-1,000,000

C


P F ibilit St d Fl Di


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Pre-Feasibility Study Flow Diagram

Analysis Specifica

pro uc s

volumes

extra capacity

Viab

no

tion Design

equ pmen

capex & opex

Cost SalesIRR, NPV, etc.

Modelling prices

le?

Bankableyes



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Typical Staff Requirements for a Downstr am Plant


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Typical Staff Requirements for a Downstr

Typical 250,000 tonne rolled products pla

Per Shift 4 Shift

GraduateSkilled Labour 60 2

Unskilled Labour 15 6

am Plant

t operating in Western World

ystem Day Staff TOTAL

60 600 70 310

0 60

430


Typical Skills Requirements for a Downst eam Plant


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Typical Skills Requirements for a Downst

Managerial Planni

Sched

Sales HR Sales

Technical

Techni Metall En ine Chemi Materi

an an a n enance Engine Electri

Other Crafts Medic Fire pr Drivers

eam Plant

g

ling

anager for each major product group

al Representatives at customer plantsrgistserstsls scientists

ersal

enltection


Recruitment Issues


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Recruitment Issues

Graduates

Need a ood su l of the correct dis

They will need further development an

Experienced Staff

Internal transfer from other group ope

Access to early retirees from world-c

Head-hunt from competitors

Retention of Staff

Threat to both existing and new comp Ma come from a related industr , e

skills

Potential loss of knowledge

i lines

d training

ations (if they exist)

lass operations

niesteel and aluminium rollin need similar


Approaches to Graduate Development


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Approaches to Graduate Development

University-based Centres of Excellence

S ecialised focus e. . Aluminium, Ro

Sponsor students, projects and depart

In-house R&D Centre

Develop specific skills within R&D proj

Transfer R&D people to plants in oper

Ongoing Development of Staff

Use specialist training courses

entor ng rom exper ence pro ess o

Can be provided by independent exte

llin or Extrusion, Surface Science

ments

ects

tional roles

na s

nal organisations


Training Example Aluminium Rolling Te

hnology Course


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Training Example Aluminium Rolling Te

MONDAY 10 TUESDAY 11 WEDNE

Intro K Smith / T Farley

ALUMINIUM ROLLING TECHNOLOGY COURSE

Outline of Sheet Rolling Thermal Aspects Lubric

Process of

Rollng

The Business of Rolling Mark

Tom Farley COF

COFFEE Chris Davenport

COFFEE

Mechanics Thermal Aspects Surface Gof Rolling Workshop

Chris Davenport Chris Davenport Mark

Workshop Profile & Flatness enroute

Chris Davenport Kyle Smith

LUNCH LUNCH

Machinery of Rolling Control Systems

COURS

(JAG

Tom Farley Dan Miller

COFFEE COFFEE

Process Metallurgy

Control Systems

Gary Mahon

Dan Miller

Process Metallurgy

Worksho Rollin Process Models

Gary Mahon

Wrap up Session Chris Davenport

Free Social Event Fr

hnology Course

SDAY 12 THURSDAY 13 FRIDAY 14

Innoval Technology, Banbury 11-15th May 2009

ation Vibration Flatness

Control

Tom Farley

oster Flatness Control

FEE Condition monitoring Workshop

Tom Farley Dan Miller

COFFEE COFFEE

eneration Flatness

Gauge Control Control

oster

Jaguar Wrap up Session

Dan Miller

LUNCH

LUNCH

TOUR OF INNOVAL

Profile Measurement

E VISIT and Control

UAR)

Kyle Smith

COFFEE

Profile Measurement

and Control

Kyle Smith

Wra u Session

ee Social Event


Managing Knowledge Assets


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Managing Knowledge Assets

Important to maximise the knowledge that

Share knowledge of manufacturing to

eterm ne gaps n t e now e ge as

Loss of long-serving, knowledgeable

Standardise operations and develop

Knowledge Management using K-Maps

Team-based Workshop approach invo

Manufacturing

Technology

Sales

exists in employees

improve product quality

& programme

mployees

est Practice

lving


K-Map of Aluminium Extrusion Operation


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K Map of Aluminium Extrusion Operation

How to Build a K-Map

knowledge

Attributes

Stages

relationship

Intranet


K-Map Summary Level


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p y



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-

State-of-the-Art Equipment is Not Sufficie t


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q p

Realisation that investment in world class

class products.

Many examples in aluminium rolling mills

Return on investments taking longer t

Cannot match quality of world-class p Need expertise that equipment suppli

Equipment manufacturers looking tdeliver a com

equipment does not on its own give world

and extrusion plants.

an planned

oductsrs do not usually possess

o partner with product specialists toplete package


Benchmarking & Technical Audits


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World-class companies frequently use the

operations against their own Best Practic Team assembled for several days to r

Experienced operators

Technical experts

Host plant

Experienced facilitator

Output is a gap analysis of areas to be i

Action plan established Progress then reviewed at regular inte

Repeat visits to provide additional sup

For single-site companies the same functiconsultants

Can also be of benefit to large multi-n

ir internal resources to benchmark their

e.view and observe operations

proved.

rvals

port, as required

on can be carried out by external

tionals to get a fresh view


Typical Check-list for Technical Auditing Due Diligence


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Environment, Health & Safety

Accident recording and rates

Equipment Operation

Standard Operating Practices

se o a s c rocess on ro

Maintenance schedules and strategies

Investment plans

Operational Efficiency

Machine utilisation

ecover es

Product Quality

Test rocedures

Reject Rates

Technology System

Approach to problem solving

Product and Process improvement methods


Summary


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An efficient and viable downstream plant

approach based on >20 years working in Market Analysis


Plant Desi n

Cost Modelling

A key stage is matching equipment specifmaximise the financial returns from the pl

We have emphasised the need for a broa

equipment and technology but also inpu

an be designed using Innovals methodical

he industry

ication to the optimum product mix in order tont

range of technical skills and routes to

t from world-class expertise and know-how



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Innoval T

expertise to the a

www.inno

chnology

luminium industry

altec.com

Documents

Designing, Manning and Operating a World-Class Downstream Business