THE ECHO July 2009 THE ECHO - Ferrostaal...THE ECHO July 2009 5 Outstanding construction competence MAN Ferrostaal is a reliable partner for its custom-ers, supervising project development

1THE ECHO July 2009

THE ECHOTHE MAGAZINE OF THE MAN FERROSTAAL GROUP

JULY 2009

ComprehensiveOn assembly expertise for large projects

InnovativeOn re-positioning in the service business

AspiringAll about China’s growing economy

A giant made of pure steel: the Zayzoun combined cycle power plant in Syria has a cooling tower measuring 140 metres high and 110 metres in diameter.

Cover picture: MAN Ferrostaal supplies special pipes to the oil & gas industry.

EdItorIAl

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

Despite the economic crisis, we have got off to a good start in 2009. Our order books have never been fuller, which means that the prospect of continuing the recent years’ positive trend is bright. But more than that: We are set for growth. Further large orders will come our way, due to our modified ownership structure in which the new owner, IPIC, is the majority stakeholder with a share of 70 percent. Because MAN Ferrostaal is a core business of IPIC, we are ideally placed to realize our ambitious turnover target of four billion euros in 2013. For instance, IPIC is planning to include us in a multi-billion project in Abu Dhabi. This in-volves a chemical city which, in its final manifestation, will be similar in magnitude to BASF in Ludwigshafen. Also on the agenda are joint projects in Central Asia and Northern Africa. As a way of perpetuating this trend, we are pres-ently establishing a joint venture in Abu Dhabi together with our parent company.

We are glad to have remained relatively unaffected by the recession so far, and hope our luck will persist. Region-ally and in terms of sectors, we are well-positioned and focussed on areas such as power, petrochemicals, solar and services which will continue to be a high priority in future. So far, our diversified structure has enabled us to more or less offset the current losses made in particular by our Automotive business unit and machine business. In both areas, we have introduced measures to ensure greater stability during any future slumps. Providentially, we have

started widening our base and supplementing our portfo-lio with additional products and services along the value added chain already two years ago.

Whereas many companies are currently being forced to dis-miss staff, we were fortunate enough to recruit about 200 new employees last year and presently have 40 job vacan-cies. Because we pursue a model of high yield by relatively small numbers of experienced employees, it is important to us to hire proven professionals. Consequently, we pro-vide training and further education which ranks alongside the best internationally. Amongst all the German plant engineering companies, for instance, we have the largest number of independently certified project managers. This explains our appeal both as a partner for customers, and as an employer for staff.

Yours sincerely,

Dr. Matthias MitscherlichChief Executive Officer

Dear Readers,

3THE ECHO July 2009

CoNtENtS

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SErvICESBasis of a strong foreign organisationThe signs for our service business show a promise of growth: Products for the future have been added to the portfolio, services have been extended along the value added chain, and our international presence has been re-inforced. The focus here is on the needs of the customer.

ProjECtSTailored projects from a single sourceEvery large project is planned and executed on an in-dividual basis. Having acquired international renown in this field, MAN Ferrostaal is the industrial services provider for customers seeking complete solutions, in many cases ranging from financing and project devel-opment through to project management right up to independent design and construction.

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NEWSInteresting company news at a glance: Topics this time include financial closing, a sponsorship project in Palestine, Ferrostaal’s printing machine business, the new Supervisory Board and a higher share in the Solar Power Group.

ForUMAdaptability will determine future success In an interview, Executive Board member Dr. Klaus Lesker describes the opportunities that the new own-ership structure presents in terms of large orders and cooperative ventures.

It’s all about peopleProgrammes for human resources development such as project management certifications in line with international standards are given the highest consideration at MAN Ferrostaal.

ProjECtSHeading for success together The IPIC Ferrostaal Contracting joint venture is to implement future complex plant construction projects in the petrochemical, oil & gas, power and solar sectors in the MENA region.

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THE ECHO July 2009 5

Outstanding construction competenceMAN Ferrostaal is a reliable partner for its custom-ers, supervising project development and project management while also taking on overall responsi-bility for complete construction for a great number of its projects.

MIlesTOnes In pIcTures: power plant extension in Iran Project development for a power plant extension in Bandar Imam Khomeini in Iran, presented in eight pictures.

SErvICESAmbitious orientation with attractive portfolioMAN Ferrostaal’s new Service Platform stands for growth and opportunity in the machinery busi-ness. In a short interview, Executive Board member Joachim Ludwig also talks about the significance of the service business for IPIC.

Innovative concepts are in demandMAN Ferrostaal has to be flexible and innovative for the demanding global machinery business. Heads of subsidiaries from five continents report on their mar-kets and their opportunities.

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CoUNtrIES ANd PEoPlEcOunTry specIAl: cHInATechnology to and from china The Chinese market is regarded as a sheet anchor in the economic crisis. MAN Ferrostaal has long been an im-portant player in the machinery trade in this market.

The versatility of a lightweightIn China, there is great potential for growth in alu-minium foil production. As a supplier of rolling mills, MAN Ferrostaal is making a significant contribution.

Business etiquette guide: china – part 1 In order to avoid mishaps when doing business in China, a number of rules should be observed: the most important tips for a perfect business meeting.

rEgUlArSeditorialcontentsTrade Fair calendarImprint

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NEWS

Since March 25, 2009, International Petroleum Invest-ment Company (IPIC) from Abu Dhabi has owned a 70

percent stake in MAN Ferrostaal; the majority share was ac-quired retroactively from January 1, 2008. MAN continues to own a share of 30 percent. The share purchase contract became effective following approval by international car-tel authorities and the EU commission. Call and put op-tions are available for the remaining 30 percent. Until such time as these are realised, the name MAN Ferrostaal can be retained. The portfolio will remain unchanged and the company will continue to be managed independently.

IPIC is a sovereign wealth fund based in Abu Dhabi and engaged in long-term investments, especially in the MENA region, Europe and Asia. As part of expanding its sphere of influence, this fund intends to benefit from MAN Ferrostaal’s general portfolio and international net-

work. In this connection, however, IPIC sees itself not only as a new owner, but also as a client. Promising, large-scale projects have been planned for MAN Ferrostaal, includ-ing participation in the construction of ChemaWEyaat, a huge petrochemical plant in Abu Dhabi. MAN Ferrostaal will also play a leading role in other major projects in the areas of petrochemicals, power and renewables. “MAN Ferrostaal is a core business of IPIC. This is the best pos-sible precondition for further growth. Investing in petro-chemical and power plants itself, IPIC is an ideal partner for our businesses involving large-scale facilities”, states Dr. Matthias Mitscherlich, CEO of MAN Ferrostaal, with regard to the takeover.

IPIC becomes majority stakeholder

Signing of the contract was celebrated officially in Abu Dhabi in January of this year. From left to right: Prof. Dr. h.c. Karlheinz Hornung, CFO of MAN, Dr. Matthias Mitscherlich, CEO of MAN Ferrostaal, Håkan Samuelsson, CEO of MAN and H.E. Khadem Al Qubaisi, Managing Director of IPIC.

7THE ECHO July 2009

MAN Ferrostaal sponsors an initi-ative entitled “A future for Pal-

estine”. The industrial services provid-er based in Essen is helping finance the construction of a solar heating system for the Talitha Kumi school situated in the community of Beit Jala, twelve kilo-metres south of Jerusalem. Compris-ing grades one to twelve, this school is visited by roughly 900 students striv-ing to obtain the Tauwjihi, the equiv-alent of a British A-level qualification. The private school is affiliated with a girls’ boarding school, preschool and college of higher education.

Under the financial responsibility of the Berlin Mission, the school relies on regular donations in view of the coun-try’s struggling economy. Up to now, water and room heating have made up a significant portion of annual fixed

costs. This will change through the in-stallation of a solar facility for supply-ing the necessary heat. Mounted on the school’s roof, the solar heating sys-tem will save several thousand litres of diesel fuel in future. Implementing this project in cooperation with sys-tem supplier Vaillant, MAN Ferrostaal is bearing most of the costs. The facil-ity is to be commissioned as early as September 2009.

Founded in 2008 by German Foreign Minister Steinmeier and Palestinian Prime Minister Fayyad, the “A future for Palestine” initiative is meant to provide the Palestinian populace with a new incentive. Quickly realizable, highly visible projects are to directly benefit Palestinians and improve their living conditions.

Helping build Palestine’s future

The Talitha Kumi school in Palestine will receive a solar facility for water and room heating.

Performance by students on open day

NEWS

As of September 2009, the long-standing partners MAN Ferrostaal and manroland will go separate

ways. MAN Ferrostaal will thus lose a major international printing machine manufacturer. As the world’s largest, supplier-independent service provider for the printing industry, however, MAN Ferrostaal has represented other renowned partners such as Ryobi (Japan), Kolbus (Germa-ny) and Manugraph (India) for a long time. Furthermore, MAN Ferrostaal sells products made by more than 30 companies in the areas of pre-printing and finishing.

MAN Ferrostaal is expanding and continues to open up new markets in the printing sector. The company’s dense, international distribution network is unique. In the print-ing sector, this network encompasses about 700 employ-ees operating in over 40 countries. MAN Ferrostaal’s prod-uct portfolio covers the printing industry’s entire value chain, ranging from pre-printing through to web and sheet-fed printing machines as well as digital and flexo-graphic printing technology right up to final processing. Essential services include delivery and maintenance of machines, consumables and spare parts. Among other im-portant tasks is the seamless integration of all delivered machines into the customer’s production systems. Fi-nancing solutions can be tailored to each customer’s indi-vidual requirements.

“We are optimistic about the future”, says Joachim Ludwig, the Executive Board member responsible for this area at Ferrostaal. “In the area of printing machines, we are able to distribute a very extensive and differentiated product port-folio which tremendously strengthens our market pres-ence. Also of appeal to many manufacturers is our distri-bution network which we have built up over several years with a focus on the printing sector.” Mr Ludwig sees the new situation as an opportunity and is confident of soon being able to find a new partner as a substitute for manroland: “Even though the sector is still suffering from a global eco-nomic crisis, we are certain that business will boom again in the future. Our new majority shareholder, IPIC, is very interested in our machine business, especially in the area of printing.” The international nature of the Essen-based Group has been an important factor for IPIC from the be-ginning. Thanks to its presence over many years and its high level of regional expertise, MAN Ferrostaal is able to open doors to IPIC in many nations. The company’s own plant engineering business has also profited enormously from the international sales organization for printing ma-chines. Mr Ludwig states: “By using the network infrastruc-ture that we have built up for the machine business, we can react instantly and implement large international projects which would not have been possible without this network. As a result, we are consistently expanding our global pres-ence”. (More information on MAN Ferrostaal’s machine business can be found from page 36 onward.)

MAN Ferrostaal to continue printing machine business

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MAN Ferrostaal sells Kolbus products very successfully all over the world.

9THE ECHO July 2009

MAN Ferrostaal has had a new Supervisory Board since March 2009. The takeover by the Interna-

tional Petroleum Investment Company (IPIC) was ac-companied by a reshuffle of this Board. Chairman of the Board will be Dipl.-Ing. Rainer Wieltsch, formerly member of the Executive Board at the Austrian Indus-try Holding plc. (ÖIAG) and presently Chairman of the Supervisory Board of the Austrian Mineral Oil Author-ity (OMV). Alyazia Ali Al Kuwaiti, Investment Manager at IPIC, originally appointed Vice Chairperson of the founding Supervisory Board has now left this office to assume new responsibilities in IPIC. She is succeeded by Murthada Al Hashemi, Chief Financial Officer (CFO) of IPIC and member of management and control commit-tees at Compañía Española de Petróleos (Cepsa), Aabar Investments PJSC and Baynuna Islamic Finance. Georg F. Thoma, partner from Shearman & Sterling in the area of Mergers & Acquisitions, was elected as a new member to the Board. MAN remains represented by former Super-visory Board Chairman Håkan Samuelsson, now CEO of MAN, and Prof. Dr. h.c. Karlheinz Hornung, CFO of MAN.

Also still present is Jürgen Chrobog, CEO of the BMW’s Herbert Quandt Foundation. Ingetraud Gudzian has been appointed from the Works Council. Together with Jürgen Hahn, Chairman of MAN Ferrostaal’s Works Council, and Stefan Breuer, she will represent the interests of employ-ees on the Supervisory Board.

New Supervisory Board

MAN Ferrostaal’s founding Supervisory Board, seated from left to right: Jürgen Chrobog, Håkan Samuelsson, Alyazia Ali Al Kuwaiti, Dipl.-Ing. Rainer Wieltsch, Georg F. Thoma. Standing: Ingetraud Gudzian, Jürgen Hahn and Stefan Breuer. Not present: Prof. Dr. h.c. Karlheinz Hornung

In January 2009, MAN Ferrostaal re-ceived a large order for the turnkey

installation of a 765-megawatt gas-steam power plant in La Brea, Trinidad. Worth 708 million US dollars, the con-tract covering all EPC (Engineering, Pro-curement and Construction) services was awarded by the project company Trinidad Generation Unlimited (TGU). Commissioning of the last phase and commencement of fully commercial operations at the power plant are planned for the end of May 2011.

In addition to its high flexibility in meeting the country’s variable energy demands, the power plant is also char-acterized by its environmentally com-patible operation based on air cooling and through dispensing entirely with water as a cooling medium.

The construction site’s opening cere-mony was held in La Brea on June 10. Attendees included Prime Minister Patrick Manning, other high-ranking government officials and important

personalities from the Caribbean is-land. “For quite some time now, we have run a successful enterprise in Trinidad and been closely involved in establishing a petrochemical industry for the island state. We are happy to support the country in the energy sec-tor as well”, stated Dr. Klaus Lesker, Ex-ecutive Board member responsible for MAN Ferrostaal’s energy business.

Power plant for Trinidad

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“Pegasus” launched

The anchor-handling tug “Pegasus” was christened at the end of March at Mützelfeldt shipyard in Cux-

haven. This ship is the first of four new tugs whose con-struction is to be completed by the Mützelfeldt shipyard and MAN Ferrostaal by the end of 2009. As the shipyard’s general contractor and client, the industrial services pro-vider based in Essen was represented by Executive Board member Joachim Ludwig at the launching ceremony.

The Pegasus has a length of 48.87 metres, is 13.8 metres wide and has a draught of 5.2 metres. A total of 820 tons of steel were used to build the tug, which weighs in at 1,400 tons and is faster than originally expected with a speed of 15.2 knots. Developing a tractive force of 100 tons, the new powerhouse has already proven its versa-tility during trial runs and a pile towing test in Stavanger, Norway. The ship was handed over to Harms Shipping & Salvage, a Hamburg-based customer, in mid-April.

The anchor-handling tug is named after a winged horse sired by sea-god Poseidon and foaled by Medusa from Greek mythology. Also to be completed at Mützelfeldt this year are anchor handling tugs “Centaurus”, “Ursus”, and “Orcus”. In previous years, the shipyard and MAN Ferrostaal have jointly delivered further tugs named “Primus”, “Magnus”, “Taurus”, and “Janus”.

Able to perform a wide variety of tasks, tugs are used mainly to tow large marine vessels, besides components for drilling platforms and ships. Tugs equipped with suf-ficiently powerful propulsion units can also be used for salvaging operations.

The “Pegasus” at its berth at Stavanger harbour in Norway (top); final preparations for the pile towing test which confirmed the “Pegasus” powerhouse’s tractive force of 100 tons (bottom).

11THE ECHO July 2009

MAN Ferrostaal increased its share in the Solar Power Group (SPG)

from 25 to 42.8 percent in April this year. SPG is specialized in the techno-logical development, engineering and supply of key parts for solar thermal power plants based on Fresnel tech-nology. By increasing its share in the company, MAN Ferrostaal is support-ing further research and development at SPG. Test operation of a Fresnel collector on the Plataforma Solar in Almería, southern Spain, which SPG and Ferrostaal had developed and in-stalled with other partners, for exam-ple the German Aerospace Center and the Fraunhofer Institute for Solar En-ergy Systems, and with the financial support of the Bundesumweltminis-terium (Federal Ministry for the Envi-ronment), was completed at the end

of last year. The results of this plant, which is referred to as FRESDEMO, have now been evaluated. “We’re very satisfied with the results, because they confirm that the efficiency rates measured under actual operating con-ditions correspond to those obtained in simulation,” says Count Jacques de Lalaing, Managing Director of SPG. “We were able to prove that we can reach temperatures of 450 degrees Celsius and that the individual mirror facets can be controlled very accurately.” The Fresnel technology is superior to parabolic trough technology in these aspects. Maximum temperatures of 400 degrees Celsius can be obtained with the latter, and only whole mir-rors can be moved, which makes it more difficult to control the power output. In addition, thermo oil is re-

quired as a heat transfer medium in parabolic trough plants; Fresnel tech-nology, in contrast, generates steam directly from water. Ultimately it will primarily come down to the question of which technology offers the lower total power generation costs. “We still haven’t got everything we can out of the technology,” comments Dr. Rainer Kistner, Head of the Solar business unit at MAN Ferrostaal. “In the next demonstration plant, which is already being planned, we want to reduce costs and prove its marketability.” In its annual report for 2008 the Fraun-hofer Institute states it is convinced that the cost targets can be reached with the Fresnel approach and that, in the medium term, the technology will make a decisive contribution to solar thermal power generation.

Investment in Solar Power Group increased

FRESDEMO facility at the Plataforma Solar in Almería, southern Spain

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Dr. lesker, financial closing is now complete following approval by cartel authorities in March. How do you feel about this?We are very happy with the change in ownership. We were able to find a trustworthy owner who has adhered strict-ly to agreements from the first day. With this owner, we will continue growing despite the current economic cri-sis. Our objective of doubling turnover to more than four billion euros by 2013 is now within close reach. Success-ful financial closing has finally allowed us to return to our daily business. Having lasted for more than one year, the process cost the management a great deal of time. So I’m quite relieved that it’s over now.

What was your role in the change of ownership?A team comprising colleagues from the Executive Board observed the process of ownership transfer. Naturally, each Board member represented the interests of their respective domains and had a number of specialized assignments. A great deal of information had to be compiled, for instance, in the form of appendices to contracts. We held two major meetings with the owners in Abu Dhabi and with consult-

ants here in Germany. In my opinion, we were an efficient team able to achieve the desired results quite rapidly.

How will the change of ownership influence the vari-ous business areas of the company, especially yours, and which opportunities will present themselves?I think the change in ownership will have a positive ef-fect on nearly all our areas of business. Almost all busi-ness areas of the company will be able to grow with sup-port from the new owner. Take solar energy, for instance. The Gulf region was one of our prospective markets al-ready before transfer of ownership: This region offers tremendous potential for growth due to its abundance of the necessary solar radiation and presence of interest-ed investors who are aware of the potential of solar en-ergy and seeking alternative technologies as oil & gas re-serves dwindle. The same applies to our core businesses, petrochemical and power plants, for which great demand also exists in the region. Furthermore, our plant engi-neering business model generates a recurrent need for equity. We now have an owner interested in making the required investments.

Adaptability will determine future success MAN Ferrostaal has found a financially strong, major shareholder in the IPIC sovereign wealth fund from Abu Dhabi. Executive Board member Dr. Klaus Lesker sees opportunities in many areas for large-scale projects in the Gulf region. IPIC’s involvement in Daimler also opens up possibili-ties of cooperation in the automotive sector.


What about the Automotive business unit for which you are also responsible as executive Board member?What is very interesting, of course, is the holding in Daimler which IPIC recently acquired via one of its subsidiaries. In the automotive sector, this brings us closer to a com-pany with which we hardly had any contact previously. We are currently forming joint work groups intended to explore avenues of collaboration.

But Daimler competes with MAn, the latter still own-ing 30 percent of Ferrostaal. Doesn’t this give rise to conflicts?No, I don’t think so. Certainly, MAN will soon cede its re-maining share. IPIC is the new investor, with a stake not only in our enterprise but also in Daimler. I’m sure it has made these investments with a view to possible synergies. And it is fair to say that we in the MAN Group did not have the chance to bring our automotive expertise to bear.

Opel and Ford, who were the customers so far, are now struggling. Yes, business has declined somewhat, but we have an ex-

cellent management which has already worked out ap-propriate strategies and initiated the necessary measures. Accordingly, we can guarantee that this area will contin-ue to be an essential constituent of Ferrostaal’s overall portfolio. Barring closure of any Opel factory, we will be able to avoid massive job cuts. Short-time work schemes are still extensible and, as mentioned, new projects joint-ly with Daimler will give rise to fresh opportunities.

like Dr. Mitscherlich and Dr. reimelt, your position has been confirmed by the new supervisory Board. so you have been a member of Ferrostaal’s executive Board since 2006. How did you come to this company and how had you viewed it as an outsider?About 20 years ago I started off at Uhde and soon came into contact with Ferrostaal. At that time, we were quite envious of Ferrostaal because of their project realization versatility which Uhde lacked. This applied in general to the classic plant engineering business, and also at Lurgi which I joined later. Ferrostaal is able to independently conceive and participate in projects in a manner which proves crucial to their realization. I’m speaking of our

Dr. Klaus Lesker, member of MAN Ferrostaal’s Executive Board

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“best partner” business model here. Because I’ve always found Ferrostaal fascinating in this regard, the company required no introduction when I was asked whether I would like to join the Executive Board.

Which developments have you been through in the last three years and how has Ferrostaal changed in this period?Well, a lot has happened. The objective from the start was to convert from a trading firm to an industrial services provider. In my first year, my agenda was to sell the steel division. This was not an easy task emotionally, since Ferrostaal’s roots were at stake. I think the solution we came up with is considered a success by everyone today. We merged the steel division into a joint venture with CCC Steel and named it Coutinho & Ferrostaal. As early as last year, this joint venture proved very successful despite falling steel prices and transaction volumes, especially in the NAFTA states, such as Canada, USA and Mexico, and despite the beginnings of the present economic and fi-nancial crisis.

In previous years, you were also responsible for the service business which is now the department of ex-ecutive Board member Mr ludwig. Which significant changes did you push for?We have expanded our Piping Supply business, and ex-tended our business model for ships and tugboats. We gen-erally made areas more efficient by lowering costs and co-

alescing locations abroad, thus increasing profitability and making our key figures significantly more attractive.

What are your strategies for your new area of executive responsibility comprising solar, power and Automotive?We have made considerable progress in the Solar business area too. Having engaged in a parity joint venture by the name of Solar Millennium since 2007, we are now in the process of re-organizing collaboration with our partner from Erlangen. As part of this joint venture, the success-ful closing of the order for constructing Andasol III in Spain is expected. We are very pleased to be also pursu-ing a different technology in addition to parabolic troughs with Solar Millennium. As investors in the Solar Power Group, we are also keeping an eye on Fresnel technology. Having raised our stake from 20 to 42.8 percent in April, we are also pursuing interesting projects here. So we will be an important player in this market segment.

We’ve already talked about the Automotive business. What about the power business segment?We are also re-positioning ourselves and expanding our competencies in the area of Power, into which we have in-tegrated the activities of the Construction Services busi-ness unit even though it offers assembly services for all other business units. In Latin America, where we already have two outstanding assembly companies in Chile and Venezuela, we are currently establishing a third one in Peru. In Indonesia, we intend to strengthen our local en-

On the fast track: IPIC’s holding in Daimler creates new prospects in the automotive business area.


gineering expertise and thereby increase competitive-ness so that this country will again be home to our largest and most important company in Southeast Asia. Ferrostaal Lda., formerly Koch de Portugal, is also on board in the area of Power, including Construction. We want to retain and fur-ther enhance this business unit’s value-added depth. An-other objective is to expand the area of alternative energy, for example by establishing further business areas such as geothermal energy.

What is the role played by synergies in this strategy?We are increasingly making use of the individual business units’ synergies. One example here is cooperation with Solitem from Aachen, Germany. This company, in which we have a share of 20 percent, specializes in solar cooling. We have placed sales fully under the charge of a newly created task force within our machine business. This task force will be responsible for marketing which is very sim-ilar to the machine business in terms of scope, processes and support. There are many other opportunities for co-operation between the individual units. In my opinion, a particularly important management task of ours is to take a close look at this aspect and recognize as well as utilize potentials here. In this respect, we set quite a few wheels in motion last year.

Are there any other significant management issues presently under consideration at Ferrostaal?Naturally, there are a lot of issues, three of which I personal-ly particularly endorse. Although we already meet high qual-ity standards, we must never cease efforts toward further im-provement. An essential management duty from my stand-point is to closely examine potentials for improvement and continually motivate employees to do the same.

Also of special importance to me are employees abroad. In this respect, we need to build up local competencies rather than fill subsidiaries with too many expatriates. Employee development abroad is a crucial matter which we take very seriously.

Moreover, we are in the process of fixing our values. The environment, requirements, markets and naturally also Ferrostaal are subject to continual change as a result. However, our values need to remain consistent. The job now is to assess which values our entire organization should live by at home and abroad. I think all these as-pects will be critical in preserving Ferrostaal’s advanta-geous position in future.

Further details on management, individual business units and the best-partner model can be found at: www.manferrostaal.com

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As an industrial services provider and plant manufac-turer operating worldwide, MAN Ferrostaal provides industrial solutions designed to meet specific cus-

tomer demands, thereby turning ideas into reality. Highly qualified employees are vital to this approach. The nurturing of individual skills, know-how and personality is a guiding principle at MAN Ferrostaal. “The qualification of employ-

ees is a key factor in conquering markets and in shaping the future”, says Lorenz Held, Head of the Human Resources & Administration service unit. “This is why the company pro-vides its employees with a systematic development frame-work throughout all stages of their career.” By integrating a wide range of specific training programmes into its overall structure, the company ensures that employees are able to

It’s all about peopleProgrammes for human resources development in line with international standards are given the highest consideration at MAN Ferrostaal. This ben-efits employees right across the world. One example of this is provided by project management certification.

A professional working environment, innovative ideas, open communication and interesting development opportunities – MAN Ferrostaal offers all these things as an attractive employer in more than 60 countries worldwide.


develop their own personal areas of expertise. In this con-text, the company runs training programmes designed to promote soft skills, management qualities, project manage-ment skills, and also specialized areas of expertise. The prac-tical approach is a crucially important factor in all training programmes in order to ensure that knowledge gained by the employee can be implemented with immediate effect for customers and partners. The qualification of employees is a major theme at headquarters in Essen and also within all the Ferrostaal foreign companies throughout the world.

Human resources professionals around the world The Human Resources & Administration service unit has been following an internationalization strategy since 2007, with the aim of giving all employees worldwide the same opportunities for advanced training while also providing optimum local hu-man resource development and support. As part of this strat-egy, 20 experienced human resources experts have been de-ployed in subsidiaries to provide efficient handling of person-

nel-related issues. Central to the remit of the personnel experts abroad is the implementation of the human resources strate-gy. In this context, the key role played by advanced training is matched by the importance of the recruitment of new special-ist staff or selecting employees to take part in international em-ployee exchanges. Additionally, the human resources experts foster contacts with local universities and meet with pre-select-ed potential trainees and apprentices. Carmen Louise Steinberg Perilo looks after human resource issues in Brazil. In reference to her work, she says: “Good personnel development is always a two-way street. The company provides employees with the opportunity to develop, and this in turn allows the employees, with their increased level of qualification, to make a more sig-nificant contribution to the company’s success. As the local hu-man resources representative, I regard myself as a vital piece in the company jigsaw. I promote integration by acting as the principal contact partner for business executives and employ-ees alike, while maintaining continual contact with the Essen headquarters. This ensures constant, lively dialogue.”

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Internationally recognised certificationOne element of further training which is granted particular importance by both the headquarters in Essen and in the foreign companies in Asia and Latin America is the provi-sion of project management training. As Mr Held stresses: “At MAN Ferrostaal, project management is a crucial core skill. In this respect, our company along with our customers and partners benefit from having qualified employees.” The certification programme provided by GPM, the Deutsche Gesellschaft für Projektmanagement (German Association for Project Management), which is recognised by the Inter-national Project Management Association (IPMA), is divided into four stages (D-A) which are based on real business prac-tice and are in line with qualification requirements.

“Participants are provided with excellent opportunities to reflect on their abilities and improve them, while ex-changing their experience to date. This enables them to broaden their planning and management skills under ex-pert supervision,” states Mr Held. In accordance with the

programme’s four-stage structure, employees complete the management training as certified Project Manage-ment Specialists (D-Level), Project Manager (C-Level), Sen-ior Project Manager (B-Level) or Project Director (A-Level). By June 2009, the number of MAN Ferrostaal employees who had gained certification was 142, six of these receiv-ing the Level-A certificate. By way of comparison, a total of 33 Level-A certificates were awarded to companies throughout Germany up to April 2009.

A systematic personnel development programme leads to increased efficiency and lowers the potential for risk dur-ing the running of projects. The high level of international qualifications acquired also provides a competitive advan-tage for acquisition activities and for the execution of projects. Thus, development schemes such as these provide benefits for everyone involved: the company, their custom-ers and partners and of course the employees themselves.

Carmen Louise Steinberg Perilo,Human Resources representative at MAN Ferrostaal in Brazil

“Good personnel development is always a two-way street. The company provides employees with the opportunity to develop, and this in turn al-lows the employees, with their increased level of qualification, to make a more significant contribution to the company’s success.”


Certified project management specialists

∙ possess knowledge across all areas of project management and can apply this knowledge

∙ can work in a team in all project management areas

“At MAN Ferrostaal, project management is a crucial core skill. In this re-spect, our company along with our customers and partners benefit from having qualified employees.”

Internationally recognised certification levels according to GPM, the Deutsche Gesellschaft für Projektmanagement (German Association for Project Management)

Lorenz Held, Head of the Human Resources & Administration service unit

Certified Project Manager

∙ able to manage a non-complex project containing all project parameters, or part of a complex project

∙ able to support overall management of a complex project in all project management areas

Certified Senior Project Manager

∙ able to manage a complex project featuring all project parameters in all project management areas

∙ can lead a large team of project management staff

Certified Project Director

∙ able to take responsibility for the coordination, monitoring and management of all projects within an organisation,

organisational unit or programme

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Heading for success togetherMAN Ferrostaal and the International Petroleum Investment Company (IPIC) are pooling their areas of expertise in a newly established joint venture. IPIC Ferrostaal Contracting, with its headquarters in Abu Dhabi, is focused on implementing complex plant construction projects in the petrochemical, oil & gas, power and solar sectors. IPIC owns 60 percent of the company while MAN Ferrostaal holds 40 percent.


IPIC Ferrostaal Contracting will primarily operate in the economically attractive MENA region (Middle East, North Africa). Initially, however, the focus is on the

GCC region (Gulf Cooperation Council), including Bahrain, Qatar, Kuwait, Oman, Saudi Arabia, and the United Arab Emirates. Furthermore, projects in the petrochemical and power sectors are planned in regions where IPIC is direct-ly involved, for example in central Asia. MAN Ferrostaal intends to partake in the industrial growth of Abu Dhabi while at the same time implementing its own projects in the region. IPIC is aiming to establish IPIC Ferrostaal Con-tracting as a reliable partner in the implementation of its projects. The intention is to assign large projects to MAN Ferrostaal on a sub-contractual basis, while bundling over-all responsibility and coordination of the projects within the joint venture company in Abu Dhabi.

The management of IPIC Ferrostaal Contracting lies with Dr. Stephan Reimelt, Chief Executive Officer (CEO) as well as Executive Board member at MAN Ferrostaal, and also with Dirk Demtröder, who is taking over the role of Chief Operating Officer (COO), and who also comes from MAN Ferrostaal. IPIC Ferrostaal Contracting is similar in struc-ture and set-up to MAN Ferrostaal. This allows the new company, in the role of general contractor, to integrate partners and technologies. In addition to the construction of processing plants, the newly founded joint venture’s oth-er core services encompass the implementation of infra-structural systems such as installations for water provision and disposal as well as the construction of transportation

routes or links between plants. It also provides EPC servic-es, namely engineering, procurement, construction and in-stallation from a single source, working in close collabora-tion with MAN Ferrostaal.

Driver of excellence for the Middle eastThanks to the local presence and excellent network that IPIC has access to, the joint venture possesses a decisive competitive advantage over its competitors and will act as a driver of excellence for MAN Ferrostaal in the Mid-dle East. Additionally, the joint venture could be of inter-est for German and European companies that wish to es-tablish themselves on the markets of the Middle East and Northern Africa.

MAN Ferrostaal views the founding of IPIC Ferrostaal Con-tracting as an important step in the further implementa-tion of its initiated growth strategy. In this respect, Dr. Reimelt says: “The joint venture offers MAN Ferrostaal enor-mous growth potential. Large projects, particularly in the petrochemical and solar segments, are moving within our reach.” The realisation of potential for growth is also the main focus for IPIC. The company wishes to utilise MAN Ferrostaal’s expertise in implementing large-scale plant-re-lated projects as well as tapping into the potential presented by future technologies for the diversification of the Emir-ates’ economy. The state wealth fund from the Middle East also harbours the ambition of accessing markets in coun-tries where Ferrostaal has been operating for decades.

The Al Bateen Towers, Abu Dhabi;on the far right, the tower which houses the

ChemaWEyaat project office set up by the IPIC Ferrostaal Contracting joint venture.

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The initial primary focus of the activities concerns support-ing what is probably the world’s largest petrochemical com-plex, called ChemaWEyaat, which literally translated means “chemicals”. This is a fully integrated chemical complex whose composite structure is to resemble that of BASF in Ludwigshafen. This megaproject, encompassing all stages through to completion, has an overall investment volume of at least 70 billion US dollars. The client is a joint venture made up of the state-owned companies IPIC (40 percent), Abu Dhabi Investment Council (40 percent) and the nation-al oil company ADNOC (20 percent). ChemaWEyaat consists of twelve subsidiary complexes referred to individually as Chemical Complexes (CC) 1–12 and which are to be complet-ed by 2030. While the overall project is still at the design stage, the details of the first sub-project (CC 1), called Tacaamol, have already been clearly outlined.

centrepiece of Ferrostaal expertiseTacaamol incorporates an investment value of around 20 billion US dollars and includes as its central element an aro-matics plant, a naphtha cracker with downstream units and a AUM plant complex (ammonia, urea and melamine). An annual quantity of six million tonnes of chemical products of all kinds is to be produced at this location in the future. The raw materials required for producing the chemicals will be supplied by the Ruwais refinery to the Tacaamol site in Al Taweelah. Internationally renowned companies are to participate in the initial stages, including the Ferrostaal Group in the form of their joint venture IPIC Ferrostaal Con-tracting. This joint venture will act as general contractor, in conjunction with its partners, in the construction of the AUM plant and is also bidding to partake in the naphtha cracker project. The turnkey installation of AUM plants is one of MAN Ferrostaal’s areas of core expertise. Currently, the industrial services provider is operating a similar plant on the Caribbean island of Trinidad. As Adalbert Graff, Head of the Petrochemical Industry business unit in charge of the project, states: “The fact that MAN Ferrostaal is the only company to have already implemented a project of this magnitude and complexity makes us ideally qualified to take on the realisation of the AUM plant complex in Abu

Dhabi. The experience we gained in Trinidad would play a key role in the success of this project.”

Before the construction of Tacaamol can start, however, an-other huge undertaking is in the pipeline, namely the provi-sion of infrastructure and supply systems – officially known as ChemaWEyaat Madeenat (literally “chemical city”). The scale of requirements here is enormous. For example, trans-portation channels and a port facility must be created, as well as a power plant to ensure a local power supply. This is also an area where, through EPC contracts, IPIC Ferrostaal Contract-ing could become involved. The company is participating in the project scoping phase which is already up and running.

The state of Abu Dhabi wants the realisation of ChemaWEyaat to raise its level of international recognition to that of a sig-nificant chemical production location. The petrochemical complex represents a vital element of the country’s diver-sification strategy. In addition to ChemaWEyaat, the devel-opment programme has earmarked significant funds for investment in alternative energies. This includes around ten billion US dollars which Abu Dhabi pledges to invest over the next twelve years in the development of its solar industry. The expertise and technology that MAN Ferrostaal has at its disposal in this area are of enormous interest for the emirate. And that is by no means all. Abu Dhabi wishes to increase its gross domestic product more than fivefold over the next two decades – which requires a huge level of investment. Both IPIC Ferrostaal Contracting and MAN Ferrostaal can have a role to play in this.

Information on ChemaWEyaat

ChemaWEyaat, investment volume at least US $ 70 bill.

ChemaWEyaat, planned completion 2030

Tacaamol (sub-project CC 1), investment volume US $ 20 bill.

Tacaamol, planned completion 2013

Tacaamol, production capacity 6 mill. tonnes per year, including · LDPE · LLDPE · Ethylene oxide · Aromatic compounds

· Urea · Polypropylene


Abu Dhabi

Arabian Gulf

Al Taweelah,planned location

for ChemaWEyaat

Dubai

Yas Island

International airport

IPIC Ferrostaal Contracting

headquarters

AL BATEEN TOWERS

ChemaWEyaat project office

IPIC headquarters

0 5 km

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The dimensions involved in plant engineering projects are often gigantic. Plant heights, enormous component weights and local climatic conditions frequently pose major challenges.


Tailored projects from a single sourceWhether it’s gas-steam power plants in Syria, facilities for Indonesia’s oil & gas industry or refineries in Chile – assembly services for large project have earned MAN Ferrostaal a name all over the world. Long-standing expertise, high quality and local know-how in over 60 countries are the company’s hallmarks in realizing complex projects.

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Outstanding construction competenceThe operational handling of complex plant projects has always been a part of MAN Ferrostaal’s core business. For, in addition to project devel-opment, project management and partner integration, the Construction Services business unit, as inhouse construction expertise, also assumes responsibility for and co-ordinates the complete execution of the con-struction in a large number of its projects.

Left: construction of a power plant in Zayzoun, Syria; centre: co-generation facility in Arauco, Chile; right: mild hydrocracker in Talcahuano, Chile


Thanks to harmonious teamwork in quality, safety, deadline and budget tracking, the company has made a name for itself − for turnkey plants which,

from the feasibility study to the construction and com-missioning, come from a single source. The range of services provided in the handling of plant projects var-ies from project to project. According to the contract, in addition to the planning of the construction project and the scrutiny and monitoring of contractors, it may also include the engineering, procurement and plant mainte-nance. Sometimes, however, MAN Ferrostaal may act in an advisory capacity only, or it may undertake the construc-tion management, the supervision and control of other companies on the site. “For our customers, this joined-up approach provides crucial advantages,” says Jean-Claude Hecht, Head of the Construction Services business unit, explaining the business model. “For the risk is reduced as soon as the overall responsibility for a project is in the hands of a single service provider. In this way, factors for success such as cost controls and construction timing can be applied more efficiently.”

MAN Ferrostaal provides its construction services jointly with its 100 percent subsidiaries, which already possess decades of experience in the handling of plant projects: Ferrostaal Lda., former known as Koch de Portugal, DSD Chile, ProCon de Venezuela, and P.T. MAN Ferrostaal Indo-nesia. In this way, from its Competence Centres in Portu-

gal, Chile, Venezuela, and Indonesia, the Group can con-trol significant parts of the construction activity in their respective regions around the globe – starting with the ex-ecution of civil works, including the overall erection of steel structures, pipe works and mechanical equipment, up to electrical and instrumentation work and the insula-tion and cladding of plants. All four companies specialize in construction for major industrial projects and, to some degree, also in their project planning – only the focus var-ies from company to company.

concentrated local competenceFerrostaal Lda. has been a know-how provider in power plant construction for 25 years and has an excellent rep-utation in the sector. At the end of the 1990s, the firm built the first combined cycle power plant (CCPP) in Por-tugal. Since then, it has constructed over 10,000 mega-watts in the power plant segment. Among its customers are renowned companies such as Siemens, Alstom, Hi-tachi Power Europe, Energias de Portugal (EDP), and Elec-tricité de France (EDF).

In comparison with Ferrostaal Lda., the focus of P.T. MAN Ferrostaal Indonesia is directed more to the field of oil & gas. The firm is currently executing an EPC project for the customer Exxon Mobil with a total contract value of ap-proximately 18 million US dollars. The scope of this per-formance includes the infrastructural facilities on the oil-

Concentrated manpower: In many projects, MAN Ferrostaal employs up to 3,000 local staff on construction sites.

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field, comprising the emergency power supply, the pow-er distribution, the compressed air system, the complete piping of the media systems and oil transport pipelines, and the laying of a two and a half kilometre pipeline sys-tem to the nearby oil treatment plant. As Christoph Bräu-er, Managing Director of P.T. MAN Ferrostaal Indonesia, says: “Indonesia is rich in raw materials, including coal, gas and oil. These three resources contribute 80 percent of the country’s energy supply, providing the basis for In-donesia’s economy. The majority of our projects are there-fore for the handling of plants in the oil & gas industry and for the construction of power plants.”

DSD Chile is known for its construction projects in the fields of refining, mining, wood pulp, and conventional power plants. What is more, the firm possesses erection cranes with capacities ranging from 25 to 600 tonnes, permitting the fulfilment of a wide variety of customer wishes. The bandwidth of the projects the firm has worked on in recent years is broad. “One of the most important projects has certainly been Guacolda 3, a coal-fired pow-er plant that we, as general contractor, constructed for Mitsubishi Heavy Industries in Huasco in northern Chile,” reports Jan Huss, Managing Director of DSD Chile. “The extent of the work covered its entire construction – steel construction, component installation, pipelines, electri-cal and cable work, insulation, commissioning as well as oil-washing and boiler purging. After just 14 months we were able to hand over the power plant, on time, to the customer. At times we had up to 1,000 workers on the construction site.”

ProCon de Venezuela was founded in 1974 and has its roots in the construction of steelworks. Today, it focuses on the petrochemicals and energy sectors, with a range of services including construction, procurement, onshore

project management and onshore project development. ProCon also possesses its own construction machinery and equipment and has carried out a wide variety of major projects on the Latin American subcontinent in recent years. ProCon is currently realising two gas and steam tur-bine power plants, together with Ferrostaal Lda., for the customer ENELVEN in Venezuela. The work includes the site infrastructure, the heat recovery boiler, the Balance of Plant, the mechanical assembly, the pipeline construction and the commissioning. The power plants are located near the towns of Tamare and Bachaquero in the Federal State of Zulia, a major centre of the Venezuelan oil & gas indus-try, on the eastern shore of Lake Maracaibo.

All four units of Construction Services are certified in ac-cordance with the ISO 9001 code of quality and other standards such as the Boiler and Pressure Vessel Code from the American Society of Mechanical Engineers (ASME) or the ISO 3834. They serve as Competence Cen-tres for their respective regions. In the case of projects out-side the core countries, MAN Ferrostaal can draw on its existing infrastructure of foreign representations, form-ing project companies for the execution of construction work. For some projects, the company, through its Con-struction Service units, employs up to 3,000 local work-ers on the sites. “Local know-how and familiarity with lo-cal laws and conventions are hugely important for the handling of our projects,” reports Herbert Kreilkamp, Commercial Head of the Construction Services business unit. “Our customers frequently demand high domestic value creation, which is hard to achieve without the cor-responding permanent roots in the country concerned. Our own Group infrastructure in over 60 countries often gives us an appreciable competitive advantage.”

“Local know-how and familiarity with local laws and conventions are hugely important for the handling of our projects.”

During realization of complex plant-engineering projects, major challenges

are often posed by heavy components. Photo: Assembly of a heavyweight component

for the Zayzoun power plant in Syria.

THE ECHO July 2009

Alpha and Omega: quality and safetyNotable project successes in recent years are a refinery, a so-called delayed coker, which MAN Ferrostaal handled for the customer ENAP (Empresa Nacional de Petróleo) in Chile (THE ECHO November 2008), and the gas and steam turbine power plants Ribatejo and Tapada do Outeiro in Portugal. In the case of Ribatejo, the quality and results far exceeded the expectations of the customer: The per-formance test of the last block took place four months be-fore the agreed provisional acceptance date. The compa-ny also received an award for two million construction man-hours without an accident – a criterion that plays an extremely important role for many customers (THE ECHO August 2007). So standards such as quality assurance and quality control, and matters such as occupational safety, health and the protection of the environment, form cen-tral pillars of the industrial services provider’s activities. As Jean-Claude Hecht says: “Prevention and continuous improvement are keywords we take very seriously. This starts with the selection of qualified personnel, subcon-tractors and consortial partners, includes the technical training of our local employees, and ends with regular training sessions for everybody involved in the construc-tion.” This is a model that pays for itself: Certificates from independent bodies regularly attest to the company’s qual-ity and to the contribution it makes to health and safety. In a subsequent project executed by MAN Ferrostaal in Al Nasserieh, Syria, in 2007, it was even possible to exceed the number of accident-free construction hours. 3.8 million man-hours of construction work without an accident are testimony to the company’s high construction compe-tence. The subject of this project was the conversion of two existing open cycle power plants into combined cycle pow-er plants.

real heavyweightsMAN Ferrostaal also provides construction services for third parties. For instance, the company is currently han-dling a 2 × 435 megawatt gas and steam power plant as subcontractor for Alstom in the Netherlands. Flevo, as the project is named, is the first of its kind to be based on GT26

gas turbine technology, characterised by high power out-put at the same time as excellent emission values. The plant is being constructed on an artificial island in the middle of the Ijsselmeer, about 50 kilometres from Am-sterdam. MAN Ferrostaal bases the execution of the work on a construction concept already successfully employed in similar projects in the power plant sector. The work covers two gas and steam turbines, two generators and two heat recovery steam generators. A challenge is pre-sented, not only by the tight time schedule, but also by the great weight of the boiler which, at 5,000 tonnes rep-resents a real heavyweight among its peers, demanding

3.8 million man-hours of assembly service went into erecting the Zayzoun combined cycle power plant which MAN Ferrostaal extended for the client PEEGT in Syria.

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maximum performance from the company. Two cranes, with a capacity of 600 and 300 tonnes, will be needed to guarantee the construction of this plant component se-curely and on time.

MAN Ferrostaal had already had a heavyweight to deal with back in 2007. Then it was realising, with DSD Chile, the construction project “CMPC Santa Fé ”, with the larg-est steam boiler in Chile, for the generation of 550 tonnes of steam per hour. Here, a component with a height of 75 metres had to be installed. The complete construction of the Arauco cogeneration plant, with steam generation of 210 tonnes per hour and a downstream 30 megawatt steam turbine, is currently also being handled by DSD Chile. This plant, with a construction order value of over 20 million euro, is due to go online in November 2009.

control of subcontractorsAs the general contractor who also coordinates and over-sees the installation services, MAN Ferrostaal is currently completing a major order received in January 2009 for the construction of a 765 megawatt gas and steam power plant

in La Brea, Trinidad. The customer for the power plant is the project company Trinidad Generation Unlimited (TGU). The power plant is due to be handed over, as a turn-key installation, by the end of May 2011. The order, worth 708 million US dollars, covers the classic EPC services. MAN Ferrostaal is responsible for the overall site manage-ment and will supervise the project handling locally.

The broad bandwidth of its projects, their distribution over nearly all continents of the world and the flexibility displayed by MAN Ferrostaal in these projects, whether as coordinator or as construction manager, has made a name for the industrial services provider as a competent con-struction partner for large plants. Qualities which have al-ready been registered by its customers around the world and which, not infrequently, lead to follow-up projects.

For the client Alstom, MAN Ferrostaal is presently constructing a 2 × 435 megawatt gas-steam power plant in Flevo in the Netherlands.


Selection of successfully finalized power projects in the last 10 years

Project Location Country Period

DSD Chile

San Pedro – combined cycle power plant San Pedro de Macorís Dominican Republic 2000–2002

Guacolda – coal fired power plant – unit 3 Huasco Chile 2008–2009

P.T. MAN Ferrostaal Indonesia

Paiton II – coal fired power plant – unit 5 + 6 Paiton/Java Indonesia 1997–1999

Paiton II – coal fired power plant – maintenance Paiton/Java Indonesia 2001–2009

ProCon de Venezuela

Termozulia – Expansion to combined cycle power plant Maracaibo Venezuela 2006–2008

Ferrostaal Lda.

Tapado do Outeiro – combined cycle power station Porto Portugal 1995–1998

CT Ribatejo – natural gas combined cycle power plant Carregado Portugal 2001–2005

Zayzoun – combined cycle power plant Zayzoun Syria 2005–2007

Al Nasserieh – combined cycle power plant Al Nasserieh Syria 2005–2007

FAJR – open cycle power plant Bandar Imam Khomeini Iran 2005–2008

OVT Malmö – combined cycle power plant Malmö Sweden 2007–2008

Would you like to know more about our Construction Services?

Contact:Jean-Claude HechtPhone: + 49.201.818-5407E-mail: [email protected]

Herbert KreilkampPhone: + 49.201.818-2164E-mail: [email protected]

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SErIES Milestones in pictures

Extension for FAJr Petrochemical CompanyMany steps are involved from project conception to completion. This time, our series focuses on extending a power plant and increasing its output by 250 megawatts.

The allocated construction space must be cleared entirely before ground-work can be commenced. Visible in the background is the existent power plant section which needs to be extended with two gas-turbine and generator sets of type GE PG 9171 E.

In the first stage of pile driving, boreholes are made in the earth; subse-quently, steel-reinforced concrete is cast into the boreholes. Precipitation and rising ground water notably hinder operations.


Together with Iranian syndicate partner Oxin Sanat, MAN Ferrostaal received an order for extending a power plant in Iran. Having operated an industri-

al complex in Bandar Imam Khomeini on the northern shores of the Arabian Gulf since 1999, the client, FAJR Petrochemical Company, decided to have the complex extended to be able to supply linked petrochemical en-terprises more efficiently with electricity, process steam and conditioned water.

In this major project, the existent 580-megawatt power plant underwent a 250-megawatt extension to yield a total of 830 megawatts. As part of the contractual agreement, MAN Ferrostaal rendered all necessary EPC (engineering, procurement, construction) services. This included deliv-ery, assembly, and commissioning of two turbo-generator sets and associated secondary systems. The first power plant block was handed over to the customer in Septem-ber 2008, the second block in November 2008.

The foundations for the gas turbines and generators are nearly finished, while construction work on neighbouring sections continues. Local con-ditions involving temperatures of over 50 °C and extremely high humidity are very difficult for all those present.

The Alstom generators are moved close to the foundation by means of low-bed trailers and brought into their final position using hydraulic equipment.

Power plant extension in Iran

Steel assembly operations are in full swing; the framework for the over-head travelling crane is nearly complete; final construction measures are simultaneously underway.

The gas turbine’s air-inlet filter is mounted under the supervision of experts from the manufacturer General Electric, from France. The operation of the existent power plant is not disrupted by ongoing as-sembly activities.

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Pipe assembly is complete except for a few residual tasks: Electricians and instrumentation staff are now working swiftly to finish this stage.

The facility is ready for commissioning.


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SErvICES

Real power packages: MAN Ferrostaal acts as general contractor for the construction of Germany’s most powerful tugs.


Basis of a strong foreign organisationMAN Ferrostaal is expanding its Services division, as well as its plant con-struction business. The company’s service business provides the foundation for a strong foreign organisation, which at the same time forms the basis for expansion in the plant construction business. It also continues to offer ex-cellent potential for growth, in particular through additions to the portfolio.

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Ambitious orientation with attractive portfolio MAN Ferrostaal is reorganising its service business. Under the management of new Executive Board member Joachim Ludwig, a variety of trading and service businesses have been combined to form the Service Platform busi-ness segment. At the same time, the value added chains in the individual business units are being extended and the units’ areas of activity expanded. In some areas, the international presence is being strengthened.

The printing machine business is enjoying success all over the globe.


The merging of our trading and service business to form the Service Platform will mean negligible change for the employees but a great deal for the

company. The structures of very different areas are often similar, so better use can be made of synergies,” says Mr Ludwig, commenting on the restructuring. The new Serv-ice Platform comprises the business units Equipment Solutions (commercial machinery business, particularly printing house, food and packaging machines, and trans-portation), Offset (provision of reciprocal international services in offset deals), Merchant Marine (special ships for the offshore sector, such as tugs and platform supply ships), and Piping Supply (supply of pipes and piping ac-cessories for the oil & gas industry). All these business areas are now being reoriented to put them in a better position to face the future.

new opportunities in the printing machine sectorThe main topic at present in Equipment Solutions is the new set-up in the printing machine area following man-

roland’s termination of their sales agreement. As Mr Lud-wig says, “The termination by manroland came as a great surprise for us. Our collaboration had lasted for decades and had been very successful for both parties. We still do not understand manroland’s motives. We had pursued the sales of manroland printing machines with commit-ment. For many years, it was one of our flagships, because manroland is a strong brand name. On the other hand, the termination gives us a new opportunity, for it should be clearly stated that this business was not among those with the best profit margins. It is now possible for us to shape this business more profitably for Ferrostaal.” Mr Ludwig and his coworkers have therefore been engaged in intensive discussions with other printing machine suppliers for weeks. Several firms have approached the Essen-based Group since the split from manroland. At the same time, the national markets of the foreign companies are being thoroughly reviewed in order to optimise Ferrostaal’s local orientation. “It is conceivable, for example, that we might represent different printing machine manufacturers in different regions, alongside our old established partners like Ryobi and Manugraph. We also want to expand our services. I think a quick decision is important, so that our employees know what is happening and we can put the new products on the market without delay. Then we can really get going,” says Mr Ludwig.

For the machine business, the 43-year-old executive also sees other opportunities. In addition to the sale of print-ing machines, he wants to expand the business with food lines and packaging machines in the individual markets.

Service Platform

Services

“At a friendly football match between FC Bayern Munich and Al Jazeera Sports Club, during the official celebrations of the majority stake acquisition by IPIC: (l. to r.) Joachim Ludwig and his wife, Richard von Braunschweig, MAN AG, Dr. Daniel Fuchs, CEO MAN Solar Millennium

Equipment Solutions

Piping Supply

Offset

Merchant Marine

The Services division comprises the two business segments Automotive and Service Platform. The latter consists of the business units Equipment Solutions, Piping Supply, Offset, and Merchant Marine.

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SErvICES

For this purpose, Ferrostaal has recruited the executive Hans-Jürgen Boewe. “We want to significantly intensify our activities in the packaging machine sector, so that these products can play a greater role within Ferrostaal’s international sales platform in future,” confirms Mr Boewe. The well-proven partnership in the solar cooling sector has also been intensified and further expanded by raising the sales department to the Service Platform and thus internationalising it. “After a successful launch, I ex-pect the first projects to be realised soon in collaboration with our partner Solitem,” says Mr Ludwig.

Additions along the value added chainsFerrostaal has also initiated major changes in the Mer-chant Marine business area. As a general contractor in this sector, constructing special ships for the oil & gas in-dustry, Ferrostaal’s activities are mainly concentrated on two types of ships. These are anchor handling tugs which, for example, can tow offshore platforms over long dis-tances, and supply ships for oil & gas platforms at sea. Here, Mr Ludwig has extended the value added chain for Ferrostaal: further up the chain, with the offering of par-ticipation models, and further down the chain through the chartering out of ships. Whereas in the past Ferrostaal concentrated solely on the German market, it will now press ahead with internationalisation through its entry

into the chartering business. “We regard the merchant marine sector as very attractive. In spite of the econom-ic crisis, there is strong demand for our special ships, as the existing worldwide fleet is too old and too small to meet requirements. The ships built and operated by Ferrostaal are positioned at the upper end of the scale with regard to quality and technical performance. This market segment will grow rapidly in the years and dec-ades to come.” A similar strategy is also being developed for other fields of activity. One example is the expansion to include services such as the maintenance and repair of locomotives and trains in the transportation sector.

Mr Ludwig also sees a clear future market for the Piping Supply business area. Since July 2007, he has been both Head and Managing Director of this business unit at Ferrostaal. Under his management, the volume of busi-ness was increased to 150 million euros in 2008 – this growth was actually well above the average for the mar-ket. “This year we shall naturally feel the buying resist-ance due to the economic crisis, and volume will fall con-siderably. But the way we have set ourselves up means we can expect positive results, even this year,” says Mr Ludwig. Here too, he is taking advantage of the crisis to expand the international presence. Two years ago, an of-fice was opened in the United Arab Emirates, sending the right signals. At the beginning of this year, Piping Sup-ply opened another office in Copenhagen to handle the Scandinavian market and also intensified its presence in Russia. “A weak phase in the market like this can also be used to enlarge our product portfolio and to expand our activities in the special steels sector,” he adds. With all these measures, Mr Ludwig is putting his unit on a firm footing for the future, so that Ferrostaal can emerge strengthened from the economic crisis.

The business with pipelines: a future market


Mr ludwig, what is the attitude of IpIc, our new majority owner, towards your executive Board responsibility?IPIC has a very positive attitude to our service business. This has been a repeated theme in all our discussions with IPIC in the last twelve months. It has been made very clear that Ferrostaal’s strong international pres-ence, based on our service business, is an essential as-set of our organisation. IPIC also wants to make use of it for its own purposes.

What does that mean?This means it also wants to use our sales platform for products in its participation portfolio, which is still grow-ing continuously. So it is not only offering us an opportu-nity of growth in plant construction, but also in the serv-ice business.

Where do you see synergies in today’s sister companies? There is certainly a range of synergies, in the piping supply area with OMV, for example, in which IPIC has a share of about 20 percent. The same applies to Borealis. There are many common interests and points of contact. This will be borne out in the months to come.

Will MenA be a new focus region for your unit?We and our trading company had already been well repre-sented before in many MENA countries, such as Algeria, Iran and Egypt, for example. In Algeria we are currently con-verting our office into a subsidiary of our own and intend to work more intensively on the market in the equipment solutions and piping supply sectors. There is certainly an emphasis throughout the MENA region on the oil & gas and energy sectors. But we also want to establish our machine business area more firmly in the region and to expand it. There is still potential here. At the same time, we are con-tinuing to focus on Latin America, Southeast Asia, Austral-ia and South Africa.

In the last twelve months, as a project manager for Ferrostaal, you have experienced the change of own-ership. Describe your impression of Arab culture.The experience I had was very positive. It is a culture which is strongly based on trust. That can be seen clearly in the lean set-up of IPIC. Although it has now invested assets of almost 20 billion US dollars, the holding company em-ploys a staff of less than 100. That would be unthinkable for a German holding company. Our central structures are much stronger and we exert a greater influence on our af-filiated companies. It is quite different with IPIC. They rely very heavily on the entrepreneurial independence and professionalism of the management of their affiliates. Everything revolves around trust. That is why it is also so important for us to make every effort to achieve our goals and to underpin the trust shown in us.

But at the same time, IpIc is also very helpful.Certainly. Thanks to IPIC, we are now able to build up new business activities in Abu Dhabi, in the United Arab Emirates and the whole Arab region and to take part in major forthcoming projects, especially in the petro-chemicals sector, but also in the solar sector and in oth-er areas of business, establishing new footholds – so the prospects are bright.

Short interview with Joachim Ludwig

Solar cooling – a new area of activity

42

SErvICES

The “Janus” is one of the deep-sea and anchor-handling tugs built by MAN Ferrostaal as general contractor.

Since March this year, Joachim Ludwig has been on the Executive Board of MAN Ferrostaal. He has re-sponsibility for the Service Platform business segment with the Essen-based Group’s international trading and service business, is responsible for the Group’s participations and for information technology. He has also taken over as acting CFO. Mr Ludwig has been with the Group since 2007, starting his career as Head and Managing Director of the Piping Supply busi-ness unit. In the last twelve months, he has led the

project group which has been overseeing the change of ownership for Ferrostaal – a task for which he was selected because of his many years of experience in the field of mergers and acquisitions. The executive, still only 43, can look back on many years of manage-ment experience as CEO and CFO, in groups such as Fresenius and the Darmstadt-based Schenck Group, among others.


Bakery machines made by Werner & Pfleiderer are included in the food area of MAN Ferrostaal’s portfolio.

MAN Ferrostaal has been operating as a sales partner for machinery manufacturers for over 75 years. Here, as in its plant construction activi-

ties, the company employs a holistic approach, preferring to adopt the role of general contractor. This means MAN Ferrostaal not only supplies and installs machines and pro-vides industrial services, but also bundles all its services – from the consulting and planning to the delivery. MAN Ferrostaal also offers the customers of small and medi-um-sized companies tailor-made financing solutions. The Group’s portfolio also includes after-sales service, mainte-nance and spare parts supply, as well as technical support for the integration of individual machines into complete production systems. “For our customers, this offers many advantages. We make it possible for them to buy the com-plete production line from a single source, although indi-vidual components come from different manufacturers,” says Bernd Ahlmann, responsible at MAN Ferrostaal for its worldwide machinery business, explaining the procedure. “Services such as financing solutions and after-sales have a special position in our strategy and, particularly in tight

Innovative concepts are in demandMAN Ferrostaal has its roots in the machinery business. As one of the ma-jor supplier-independent service providers, the company sells machines from the printing, packaging, plastics and metal processing, energy and transport sectors in over 40 countries. Thanks to its innovative concepts, its excellent reputation at home and abroad and its sophisticated supple-mentary services, it has established a good position as an industrial serv-ices provider in markets all over the world – so it is also well equipped to cope with more difficult economic times.

44

SErvICES

economic times, are in great demand. Through our sup-plementary services, we remain long-term partners with our customers, which gives us a unique advantage over our competitors.”

Tailor-made products instead of standard solutionsIn the printing sector, MAN Ferrostaal supplies machines for pre-press, printing and finishing, thus covering the complete production process in this sector. In order to al-ways find the optimum solution for the customer’s re-quirements, the industrial services provider relies on close cooperation with customers and manufacturers. As Mr Ahlmann says, “We avoid standard solutions. We try to un-derstand what the customer needs and then put a tailor-made package together for them – no matter which sector it is.” This is exactly the point which, according to the VDMA (German Machinery and Plant Manufacturing As-sociation), holds great potential, since there is a greater de-mand for innovative products in times of economic stress. The VDMA representatives also see market opportunities in the areas of after-sales service and the spare parts busi-ness. The good development of the market in recent years has left little time for maintenance of machines. Now is the time to catch up.

In addition to the printing machine business, MAN Ferrostaal has also made a name for itself in the plastics, metal working, packaging and food machine segments. The packaging and food sectors, in particular, offer good possibilities for growth in the emerging and developing countries, which now want to complete their transforma-tion from raw material suppliers to modern production centres. But the company also uses the market regularly in the transfer of new technologies. Activities are focused mainly on Latin America, Asia and Eastern Europe, south-ern Africa, the Gulf States and Australia. MAN Ferrostaal covers the whole range of applications,

from pre-press to finishing.


Markus Haefeli, Managing Director of MAn Ferrostaal Australia “MAN Ferrostaal Australia’s main activities are in the pack-aging and printing machine business. In the newspaper sector, MAN Ferrostaal Australia has now acquired a large share of the market. Almost every time a printed product comes on to the market, we have a hand in it. We offer our customers product solutions for the complete production process. This includes pre-press, roller and sheet-fed print-ing machines, flexo and rotogravure technology and fin-ishing. At present, we are also intensifying our focus on digital printing and entering into alliances with well-known machine manufacturers. According to forecasts, about 70 percent of print products will be printed on dig-ital printing machines by the year 2020. We want to be ready for this. What is even more important to us than the sale of a machine, however, is providing good service. For us, the customer is king. It is vital to understand what the

customer needs for their business. That is why we have de-veloped new, complementary business models for our customer service. With our spare parts supply and after-sales services, we want to play our part in keeping our cus-tomers’ machine parks productive and profitable. At the same time, the consumables sector, with expendable products such as printing ink, plays an important role. The printing market traditionally has a pronounced cyclical tendency. Thanks to the high productivity of the machines installed in recent years, the interval between investment cycles is getting longer. We therefore have to expand our business into additional areas. Of these, the consumables sector is especially promising. It will in future be possible to buy our consumables online through an e-commerce platform. We are very optimistic about the future of the printing machinery business in Australia and we shall con-tinue to play a major role in this sector.”

46

erich roth, Managing Director and partner of Industrial plant & service Australia“We are a 70 percent subsidiary of MAN Ferrostaal and specialise in the sale and after-sales service of turbo ma-chines in the Services business division. In the region of Australia, New Zealand and the Pacific Islands alone, we provide servicing, maintenance and repair for 400 tur-bines and compressors. In spite of the precarious eco-nomic situation, the market for our services is still at a satisfactory level. Regular repairs and maintenance are necessary to keep the existing production plants func-tioning efficiently. Customer service is hugely important in a country the size of Australia. It takes about five hours to fly from the west coast to the east coast. Then, howev-er, it is often still a long way to the customer. The major-ity of the industrial plants in the mining, metals, petro-

chemicals and renewables sectors in which we are active are located a long way from large cities. Our customers demand and expect us to be on the spot quickly when problems arise with their equipment. That is why we have established our service centres in Sydney and Perth. We have been able to impress our customers with our af-ter-sales service in the past and it will also continue to be part of our most important activities in the future.”

Aldis spurdzins, Managing Director of MAn Ferrostaal Turkey “We have now been active in the printing machine busi-ness for 20 years, with an emphasis on print finishing and supplying products by Kolbus, Grafotec, Manugraph, Ze-chini, Eterna Brausse, Steinemann, Eltosch, and MDGM. There has been rapid growth here in the last few years, so we shall continue to expand the business area in future. As Turkey is a very price-sensitive country, we also sell used machines, which are well received by the market. In addition, we are currently expanding our sales of ma-chines and plants for power generation: solar cooling and geothermal plants. This market is currently establishing itself and we see great opportunities for our business.”

SErvICES


edzard zu Knyphausen, Managing Director of MAn Ferrostaal Méxiko “Our main business is the sale of extrusion plants for PVC pipelines, packaging materials for the food industry, and printing machines. But our range of products also in-cludes diesel engines and turbo-compressors. The Mexi-can market for these products is very large and has grown rapidly in recent years. Of course, we too are beginning to feel the effects of the economic crisis. Our customers in the printing sector, in particular, have liquidity problems as a result of the sharp devaluation of the currency. The re-payment of credits taken up in foreign currency is now, in some cases, up to 30 percent more expensive in domestic currency. To make matters worse, the local finance market is not strong enough to finance all the projects coming up. More than ever, these firms need financing solutions – just like those we have been providing for many years. This dis-tinguishes us clearly from our competitors and, in recent months, we have also been managed to impress important new customers with our services. In the printing sector, we cover the whole production process. In addition to this, we offer our customers after-sales service, which we would like to expand greatly in the future. There is also very promis-ing development in the market for turbo-compressors. Here too, we have been able to record numerous sales in the past years.”

Sales of turbo machines, repairs and maintenance are included in the range of activities of some foreign organisations.

48

Alexander Mauch, Managing Director of MAn Ferrostaal Vietnam“Vietnam is currently experiencing enormous economic growth. This offers us many opportunities for the devel-opment of our business. Our activities focus mainly on the printing machine business and the associated con-sumables. These account for about 90 percent of our business volume. The prospects in the printing sector in-dicate a future course of expansion, since the Vietnam-ese export sector is making increasing demands on the supply of printing shop and packaging products, and there is also a backlog in the domestic market. As the country is still at a relatively early stage in its develop-ment into an industrial state, price plays a crucial role in the Asian market. We have had great success in the last five years with sales of the Manugraph brand of printing machines, selling 16 of them. They possess a very good price-performance ratio – the ideal product for the Viet-namese market. We focus especially on the sale of con-sumables. These help to reduce dependence on the long-term machine business, balancing it out with shorter-term transactions. In addition to the printing sector, we are also active in the packaging machine and food process-ing plant sectors. The penetration of supermarkets in Vi-etnam is still very small. As prosperity increases, howev-er, consumption behaviour will change in line with the western trend, leading to investments in the food process-ing and packaging segment. We see a good chance for our business here. MAN Ferrostaal has a very good reputation

in the Vietnamese market. Our customers appreciate the fact that we keep our word. This distinguishes us from many of our local competitors.”

SErvICES

In addition to the sale of machines, MAN Ferrostaal also provides consult-ing and after-sales service.


Glyn Gilbert, Managing Director of MAn Ferrostaal south Africa“The focus of MAN Ferrostaal South Africa is on the print-ing machine business. Since 2001, the market of African newspaper readers has grown by over 40 percent. We have profited from this boom in the last few years and have ap-preciably increased our market share. Our products and services cover the whole range of applications in the print-ing sector. We are very successful with our sales of Ryobi printing machines, which are among the best in the world and are greeted with acclaim by our customers. As a result of the economic crisis, a temporary fall in orders is also to be anticipated in the South African market. However, we are in a good position as far as our customer service is con-cerned and we shall continue to impress our customers with high quality and good products.”

Hannes Kritzinger, Managing Director, printing products (south Africa)“Printing Products is a wholly owned subsidiary of MAN Ferrostaal. Our focus is on the graphics industry. There, we specialise in pre-press, post-processing equipment, and packaging machinery. Our portfolio includes well-known machinery manufacturers that find great favour with the South African market. In the pre-press area, we distribute machinery by Fujifilm, Krause, and Luscher. In the post-processing sector, we are sales partners for the Ferag, Sitma and Recmi companies. An important partner for us in the packaging sector is Kiefel Extrusion and Ther-moforming. Our broad spectrum of products gives us a strong position in the industry. In addition to this, the sale of consumables accounts for around 50 percent of our business activities. It makes us more independent of the machinery business. After all, even in challenging eco-nomic times, our customers still need consumables for their ongoing business.”

50

CoUNtrIES ANd PEoPlE

The seaport of Shanghai is the most important industrial city in the People’s Republic of China.


China – the aspiring great powerIn China, all the signs still point to growth. This is shown by indicators such as income or exports. The world is watching China, and it is almost universally recognised that the Chinese have succeeded in a very short time in making an aspiring industrial nation out of a backward agricul-tural economy.

52


In the machinery business, MAN Ferrostaal has a broad base in China, so it is quite crisis-proof. The customer group it addresses comes from the metal processing

industry, mechanical engineering, the food processing and packaging industries and, recently, also from the re-cycling industry. The range of machinery supplied covers the whole value added chain in the production process – from single machines to complete production lines and machine parks.

In China, MAN Ferrostaal’s subsidiary represents well-known European machinery manufacturers such as Achen-bach Buschhütten (aluminium foil rolling mills), Schuler (minting presses), Ernst Grob (cold rolling machines), Rovema (packaging machines for the food industry), and Maschinenfabrik Möllers (packaging lines). Sales of metal forming machines, in particular, have been extremely suc-cessful for many years. There is great demand in the Peo-ple’s Republic for aluminium foil rolling mills, including separator and doubler technology. China is also a key mar-ket for coinage minting. The medals and other collectable and souvenir coins for the 2008 Olympic Games in Beijing were made on machines supplied to the Chinese mints by MAN Ferrostaal.

But the range of activities of the Chinese subsidiary is not limited to sales alone. “The added value in collaboration with us as a sales partner comes from the fact that we sup-port the customer from the planning to the commission-ing of the machines. We provide our business customers with advice right from the start, ensuring a smooth ex-

change of information between customers and manufac-turers and competently supervising the planning of the technical integration into the production sequence. We look after the buying and all the formalities involved, as well as the transport. When the machines are delivered to the customer, they are installed by our qualified local per-sonnel. Our work is not over until everything is running smoothly,” says Thomas Buschmann, Head of MAN Ferrostaal in the Beijing office.

Other aspects very important to him in the planning are productivity and the efficient utilisation of energy and raw materials. He also deliberately works with local staff who have been employed by MAN Ferrostaal China for years, so are very well-known to their customers. “My people are very familiar with the technology and speak the national lan-guage, as well as excellent English. We are well aware that smooth communication between our customers and sup-pliers is of supreme importance,” adds Mr Buschmann.

procurement for plant constructionChina is an example of the way the MAN Ferrostaal Group is able to combine the machinery and plant businesses. The basis of our international presence in 60 countries is the machinery business. Thanks to our decades of oper-ation in most of these countries, subsidiary heads like Mr Buschmann know the market, its special features and key players very well. This also puts the firm in a position, seemingly from a standing start, to generate business in the Projects division, in other words in plant construc-tion. As Buschmann says: “It is hard for us to get into the

Technology to and from ChinaThe country is increasingly aspiring, partly because of its size, to become a great industrial nation. It offers enormous potential for business and a wide range of possibilities for cooperation.


plant business in China, because Chinese firms are very active here themselves. However, we have discovered our own niche market. We buy components here for the plants we construct in other parts of the world. That is not entirely without complications, as some plant con-structors have had bad experiences in this context. But as we have been in the market for a long time, we know exactly what we are doing. We are also directly on the spot, we have strict control over quality and timing and, last but not least, thanks to our intimate knowledge of the culture, we have decisive advantages over other plant constructors.”

Six heat recovery boilers have just been ordered in the People’s Republic for a gas-steam power plant on Trinidad. Ferrostaal recently received an order for the construction of the power plant. Through procurement managers all over the world, they can determine the most favourable purchase conditions in each case and pass them on to

their customers. For MAN Ferrostaal in China and its head, Mr Buschmann, this is a new and promising opportunity for business – after all, many products can be made more cheaply in China than in other parts of the world.

representative sample of MAN Ferrostaal projects in China

1997–1999 Lafarge-Onoda turnkey plaster and plasterboard plant

2001 Achenbach foil rolling line for Xiamen Xiashun Aluminium

2002 Grob Mindelheim cylinder block and head line for Wuxi Diesel

2003 Achenbach foil rolling mills for Nanshan Aluminium

2003 Hage aluminium milling device for the subway wagon construction business of Zhuzhou Locomotive

2004 Achenbach aluminium foil rolling mill periphery for Shanghai Shenhuo Aluminium

2005 Achenbach aluminium foil rolling mill lines and periphery for Kunshan Aluminium

2006 Schuler coin presses for Shanghai Mint and Nanjing Mint

2007 Achenbach thin strip aluminium rolling mill for Xiamen Xiashun Aluminium

2007 Vollert high bay storage for aluminium coils for Chalco Northwest Aluminium for Xiamen Xiashun Aluminium

2007 Achenbach foil rolling mill line for Chalco Northwest Aluminium

Partners like Achenbach, Grob, and Schuler rely on the negotiating skills of Thomas Buschmann, who has been responsible

for the machinery and plant business in China since 2001.

54

Great power in economic transformation

It happened in 2007: There was a change in the order of ranking among the economic powers. In terms of gross domestic product (GDP), China overtook Germa-ny, according to figures published by the Chinese Sta-tistical Office in January 2009.

In doing so, China achieved the highest rate of growth for 14 years in 2007. In the near future, experts antici-pate that, as a result of the global downturn, growth in China will also slow down. The Governor of China’s Central Bank, Zhou Xiaochuan, expects growth of over nine percent in 2008, falling to eight percent in 2009. So, while the global economic crisis is also being felt in this giant state, growth rates should still far exceed those of other economic powers. In the long term, there can be no doubt that this progress will continue. China’s history is marked by many crises, from which the country has always emerged stronger.

From an economic point of view, China’s rapid rise in only a decade and a half is unprecedented. From the start of the boom in the 1990s through to today, the gross domestic product has increased tenfold – with double-digit average growth rates. The credit for un-leashing this economic potential goes to Deng Xiao-ping. From 1978 on, he became the politician making decisions, and with him began China’s reform and opening policy. While the government attempts to slim down its state economy, private industry is simultane-ously supported by the removal of trade barriers and easier access to credit. Discriminating regulations have been abolished and new rules established to protect private enterprises as a motor for growth and a source of jobs. According to expert estimates, the private sec-

tor is meanwhile earning more than 50 percent of the People’s Republic’s GDP. China’s exports are also in-creasing by over 20 percent every year, leading to speculation for some years that China could soon re-place Germany as the leading exporter. Whether China will make it in 2009 is currently a matter of dispute among economic experts. In any case, the govern-ment’s reorientation away from purely quantitative to qualitative growth offers many opportunities for Ger-man companies. In order to realise greater added val-ue and sustained growth in the country, state-of-the-art process control and automation are needed, as well as production technologies which protect resources and the environment.

In spite of all hymns of praise, the downsides of the economic miracle must also be mentioned. The high demand for raw materials and the full utilisation of ca-pacities have led, until the latest economic downturn, to a rise in prices – in some areas they have really ex-ploded. Numerous economic experts had already warned against the negative consequences of infla-tion. The transformation of a centrally managed econ-omy into a market economy also has a negative side. This had already been recognised in the upheaval in the countries of central and eastern Europe, showing itself in the great prosperity gap between the urban and the rural population. Nevertheless, there is no lack of job opportunities in the Far East. Since 2000, the overall number of jobs has risen by six percent. Even more jobs have been created in urban areas in the same period. The official unemployment rate in 2006 was only 4.1 percent.


AFGHANISTAN

TURKMENISTAN

UZBEKISTAN

IRAN

OMAN


MONGOLIA

INDIA

CHINA

Workbench of the world: China’s exports

Source: db-research, * Forecast

2000

2001

2002

2003

2004

2005

2006

2007

2008*

2009*

249.1Export volume

(billion US $)

Growth relative to previous year

+ 28%

+ 35%

+ 7%

+ 29%

+ 35%

+ 27%

+ 18%

+ 1%

266.1

325.7

438.3

593.4

762.5

969.7

1,220

1,429

1,443

+ 22%

+ 26%

Decade of prosperity: GDP growth rates

2000

2001

2002

2003

2004

2005

2006

2007

2008*

2009*

Growth of GDP relative to previous year

8%

8%

9%

10%

10%

11%

12%

9%

13%

5–7%

SRI LANKA

BANGLADESH

MYANMARLAOS

THAILAND

vIETNAM

NORTH KOREA

SOUTH KOREA JAPAN

PHILIPPINESCAMBODIA

BHUTANNEPALPAKISTAN

AFGHANISTAN

TURKMENISTANTAJIKISTAN

UZBEKISTANKYRGYZSTAN

KAZAKHSTAN

IRAN

Beijing

Shanghai

Hongkong

Wuhan

Urumchi

Source: db-research, * Forecast

0 1000 km

56


Aluminium foil has made itself indispensable in the packaging industry. It is an all-rounder, pro-tecting against light, UV radiation, gas, steam and

moisture, as well as odours and microorganisms. In com-bination with other materials, it guarantees high product protection and long shelf life – at an average thickness of 0.006 to 0.015 millimetres (in comparison: human hair = 0.04 millimetres). Aluminium foil is used to manufacture packaging of all kinds. It is suitable, among other things, for drink and food cans, Tetra-Pak cartons, household foils, bottle closures and baking cases. It is also used for components in the furniture industry and as a substrate for printing plates.

china: a growth market In China, the manufacture of aluminium foils is extremely important for the packaging industry. In spite of the world-wide economic downturn, the country still finds itself in a relatively good position. Although annual aluminium pro-duction fell slightly from 2.95 tonnes in 2007 to 2.93 tonnes in 2008, production in China rose comparatively sharply from 950,000 tonnes in 2007 to 1.1 million tonnes in 2008. As a result of this increase in production, there is strong de-mand for production lines for aluminium products. For the industrial manufacture of aluminium foil, the Chinese alu-

minium industry primarily needs rolling mills which permit the rolling of flat products such as aluminium sheets and foils in different thicknesses and widths. Rolling the foil as thin and as broad as possible results in a lower raw material requirement and, thus, greater environmental friendliness and appreciable cost savings.

excellent market positionMAN Ferrostaal, together with its partner, the market leader Achenbach Buschhütten, is very successful with sales of non-ferric metal (NF) foil rolling mills in China. The company supplies and installs aluminium rolling mills for household foils, packaging, pharmaceutical products and the electronics industry. A large part of the aluminium foils manufactured in China comes from Achenbach rolling mills sold by MAN Ferrostaal. “We of-fer our customers in the metal processing industry a wide spectrum of products and services,” says Dr. Thomas Kaup, Head of the metal processing business area in the Equipment Solutions business unit. “We are in a particu-larly good position to provide optimum service for the requirements of the Chinese market. Our many years of experience and our worldwide references for the supply and installation of single machines and overall system solutions, including the provision of extensive services,

The versatility of a lightweightAluminium is a material with countless application possibilities. Whether used for power lines, in aircraft construction, in space technology or simply as a packaging material – aluminium is used wherever weight is important. The Chinese market, in particular, promises continued potential for growth in the aluminium foil manufacturing sector.


also gives us a special status in China.” The Essen-based industrial services provider sells all kinds of rolling mills for the NF industry, from hot rolling mills to strip-, foil- and heavy-metal rolling mills and cutting machines. MAN Ferrostaal is connected with the firm Achenbach Buschhütten through many years of successful collabo-ration in the Chinese market. In future, in addition to China, its area of representation will also include many North and South American countries.

elaborate manufacturing processThe manufacture of aluminium foils takes place in sever-al rolling stages. The pre-rolled aluminium strip is cold rolled to the required thickness in a series of rolling pro-cedures. Foil which is already very thin has to be finally rolled in two layers to prevent its tearing. For this pur-pose, a so-called doubler is used before the final rolling. The doubled material is then separated again by using a separator. This is how the different surfaces (shiny and matt) familiar from household foil are formed. The out-side comes into direct contact with the rollers, so it looks smooth and shiny, while the inside is slightly roughened and appears matt.

Would you like to know more about the machinery business in the metal processing segment?

Contact: Dr. Thomas KaupPhone: +49.201.818-2162 Fax: +49.201.818-3970 E-mail: [email protected]

A large amount of the aluminium foil manufactured in China comes from Achenbach roller mills sold by Ferrostaal.

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China is an important economic partner for many European firms. For good business relationships, it is essential to personally communicate in meetings and to visit partners in person. To make a perfect impression, this overview of business etiquette contains the most important rules for greeting people, table manners, and more besides.

Business etiquette in China – Part 1


In China, people bow to one another in greeting. But most of the Chinese who frequently meet foreign business partners greet with a brief, light handshake.

In order to be quite sure, you should wait and see wheth-er your opposite number bows or offers a handshake. Be careful when shaking hands not to press too firmly, as this is regarded as impolite. It is important when greeting to avoid direct eye contact and to lower the eyes slight-ly. This is a sign of honour and respect. On no account should you embrace someone, kiss them on the cheek, or just nod your head. It is essential to observe the ranking order when greeting: older before younger, men before women. A man only gives a woman his hand when she offers hers.

Immediately after the greeting, business partners gener-ally exchange their business cards. These are presented with both hands so that the text can be read by the recip-ient. When presenting your business card, you should pro-nounce your surname and first name; it is also very im-portant to mention your title and your rank in the firm. Classic Chinese business cards show the surname first (mostly one syllable), followed by the first name (usually two syllables). For your business meeting, you should be ready with your contact details in an English-Chinese translation. During a meeting, the Chinese do not usual-ly switch their mobile phones off. To request them to do so would be an insult. Presentations should not be made using bright colours, as colours play a very important role in China and have different meanings. So restrained col-ours are more appropriate for business purposes. It is ad-visable to stick to this rule, even if you often see gaudy presentations from your Chinese partners.

You should always arrive on time for your business meet-ings and for other appointments and be prepared to show patience, since communication very often takes place much more indirectly in China than in Europe. The har-mony must not be disturbed, so it is unusual to address problems directly. Try to raise sensitive subjects indirect-ly and to couch your intentions in very general terms.

Whether a nod from your opposite number actually de-notes assent will not become clear until later. An open “no” is also seldom heard, in order to save the face of the part-ner. You should always listen attentively, for apparently superficial statements may contain important messages. For small talk, suitable subjects include the weather, golf, football, holidays, and the family. Political events in the country should be strictly avoided.

There is no special dress code for China. For formal occa-sions and business meetings, men should wear a suit and tie, women a female suit, either with trousers or skirt. Avoid cuts that are too revealing and, apart from a shirt or blouse, avoid the colour white, which is the official colour of mourning.

In China, the shared business meal is a special and signif-icant occasion for cementing relationships. Huge quanti-ties are often served. However, you need not eat everything put on the table, for it would mean a loss of face for the host if their guests ate everything served. Beforehand, you should practise eating with chopsticks. When a course is finished, the chopsticks are placed next to the bowl, with the mouth end resting on a saucer. Never stick the chop-sticks into the rice, as this is associated with death. Do not pay any attention to loud smacking of lips, belching or slurping, as this is a part of eating in China. It is quite nor-mal to smoke during the meal, but be sure to offer every-one at the table a cigarette. It is an unforgivable faux pas to blow one’s nose at the table. In China, one goes to the toilet to do this. After-dinner speeches about successful cooperation in the future are very popular. Toasts are fre-quently drunk with maotai, a clear spirit.

In the second part of this review of business etiquette, which you can read in the next issue of THE ECHO, you will find more valuable tips from the Head of MAN Ferrostaal China, Thomas Buschmann.

APPENdIx

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International trade fairs July to November 2009

prOpAK cHInA 2009International Processing, Packaging and End-line Printing ExhibitionChina, Shanghai15 – 17/07/2009

MsV Brno 2009 International Mechanical Engineering Trade Fair Czech Republic, Brno14 – 18/09/2009

cAITMe Central Asian International Textile Machinery ExhibitionUzbekistan, Tashkent15 – 17/09/2009

oils+fatsInternational Trade Fair for theManufacture and Processing ofOils and Fats from Renewables Germany, Munich16 – 18/09/2009

GrafincaInternational Trade Fair for thePrinting and Advertising IndustryPeru, Lima17 – 20/09/2009

Asia Food expo 2009Philippines, Manila23 – 26/09/2009

KIOGeKazakhstan International Oil & Gas Exhibition & ConferenceKazakhstan, Almaty06 – 09/10/2009

Business DayCollege Fair Germany, Münster27/10/2009

Bonding university FairGermany, Berlin03 – 04/11/2009

Hochschulmesse W&I TagUniversity FairGermany, Siegen05/11/2009

sInprODe 2009International Trade Fair for the Defence SectorArgentina, Buenos Aires11 – 13/11/2009

expo pescaInternational Trade Fair for Fishing and Fish FarmingPeru, Lima12 – 14/11/2009

TIOGeTurkmenistan International Confer-ence “Oil and Gas”Turkmenistan, Ashgabat17 – 19/11/2009

AbsolventenkongressGraduate CongressGermany, Cologne25 – 26/11/2009

publisher:MAN Ferrostaal AGHohenzollernstrasse 2445128 Essen/Germany

Member of Initiativkreis Ruhrgebiet

responsible for the content:Daniel Reinhardt

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

Other contributors to this issue:Ernst-Joachim Franz, Ernst-Ulrich Nahrwold

picture credits:Henning Maier-Jantzen: cover picture; Frank van Groen: pp. 3, 13, 31, 38, 42 (above); Gulf Colour Film Photography: pp. 6, 39; Talitha Kumi-Schule: p. 7; Kolbus: p. 8; Daniel Kögler: p. 11; Fotolia: pp. 14, 45 (above), 46 (below), 48 (above), 49 (below), 52/53 (above); Catrin Moritz: pp. 16/17, 19; Getty Images: pp. 20, 47 (below), 50/51, 58; Teja Finkbeiner: pp. 21, 23; Karsten de Riese: pp. 24/25, 32/33 (background), 34/35 (background), 41, 44, 48 (below); Harms Bergung: pp. 36/37, 42 (below); Manfred Ehrich: p. 40; WP BAKERYGROUP: p. 43; Jan Theron: p. 49 (above); Achenbach Buschhütten: pp. 54, 57

Design and layout:BOROS

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

Frequency:half-yearly

IMPrINt


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THE ECHO July 2009 THE ECHO - Ferrostaal...THE ECHO July 2009 5 Outstanding construction competence MAN Ferrostaal is a reliable partner for its custom-ers, supervising project development