Investor Site Visit Dwaalboom Factory 8 September 2009
Investor Site Visit
Dwaalboom Factory
8 September 2009
2
Welcome
Introduction
Programme• 09h30 Presentation • 11h00 Q & A• 11h20 Safety induction• 11h30 Site tour• 13h00 Q & A• 13h30 Lunch• 14h30 Departure
3
Objectives
Objectives for today
• Investors experience the most modern cement operation in southern Africa see first hand PPC’s capital expansions (past & future) meet a wider group of PPC’s senior management and operational staff
• PPCdemonstrate what we are proud & capable of constructing & operatingmeet and interact with a very important stakeholder group
4
’
Orientation
RiebeeckDe Hoek
Port Elizabeth
HerculesJupiter
Dwaalboom
Colleen BawnBulawayo
Gaborone
Slurry
Zimbabwe
Botswana
Moz
ambi
que
Namibia
Saldanha
PPC Cement Sites
5
’
Orientation
RiebeeckDe Hoek
Port Elizabeth
HerculesJupiter
Dwaalboom
Colleen BawnBulawayo
Gaborone
Slurry
Zimbabwe
Botswana
Moz
ambi
que
NamibiaBotswana
Limpopo
North West
Medupi Power Station Polokwane
Pretoria
Dwaalboom
Slurry
Gaborone Mill
Sun City
Hercules
Jupiter
Gauteng
Rail
320kmRail
250km
Road
22
0km
Johannesburg
Thabazimbi
6
Orientation
7
’
Southern Africa Cement Industry
RiebeeckDe Hoek
Port Elizabeth
Lichtenburg
DudfieldHercules
Jupiter
Ulco
Dwaalboom
Simuma
Colleen Bawn
Bulawayo (Mill)
Gaborone (Mill)
Slurry
Industry Capacity 2010/11*
7.4mt4.2mt3.1mt
1.5mt3rd Party Extenders 1.3mt
Total 17.5mt
* Note:PPC estimate (assuming no kiln retirements)Excludes capacities of PPC Zimbabwe (~750kt)Lafarge ZimbabweCimpor Mozambique
Zimbabwe
Botswana
Moz
ambi
que
Durban (Mill)
Mills
Saldanha (Mill)
Matola
Harare
8
10
12
14
16
18
20
22
2006 2007 2008 2009 2010 2011
Regional Supply and Demand
Mt
Growth 7.4% -3.9% -10%? 0%? 6%?
Industry demandIndustry maximum capacity
PPC 1.25Mt/yr, Cimpor 0.6Mt/Yr: (2009)
Lafarge 1Mt/yr PPC Mill 0.3Mt/yr, Afrisam Mill 0.4Mt/yr (2010)
Contracted / Building
CompletedImports
Revision: August 2009
9
Dwaalboom
10
Introduction
1908, a Surveyor, Mr Muhl, got lost and overnighted in a marula tree. Called it ‘ Verdwaalboom’…
Rainfall: 350-650mm per annum
Temp: -2 deg – 44 deg C. Ave 21 deg C
Coordinates: 24° 43' 0" South, 26° 49' 0" East
Industry: Farming, mining, tourism
11
Overview
Dwaalboom cement manufacturing plant located in Limpopo Province
Newest plant within PPC Group
Produce OPC and Surebuild cement
Limestone, shale and lava mined at quarry adjacent to factory
Iron ore and coal brought in
235 permanent employees
ISO 9001, ISO 14001, OHSAS 18001,
SANS 1841 and AMS 16001
12
Overview
Dwaalboom mining property covers 13 000 ha; reserves > 100 years
Kiln 1 commissioned 1985; mothballed soon thereafter due to market downturn
Re-commissioned 1996 along with new cement mill, packaging and dispatch facility
Kiln 2 commissioned Sept 2008
Supplies northern SA, Gauteng region, Botswana & Mozambique.
13
Organisational structure
Operations
Engineering
Mining
Production
Quality Assurance
Packaging & Logistics
Organisational Performance (HR)
Administration
Risk
Environment and Sustainability
14Release Energy/Reward
Clear Purpose
Continuous Performance Improvement
Performance Improvement
(Organisational/Individual)
Learning for Growth
Alignment
Inspiring Climate
Vision Strategy
Communication
Understood
Journey maps
Fairness, order, rules of the gameCommunication, information, influenceManagement styleRecognitionCode of conductRemuneration and benefitsEffective HR administration
Value driversStructureJob model Purpose Scorecard Competencies
CommunicationReviewing progressStretching targetsSolving problemsEducation
Career developmentSkills developmentSuccession planningNQF alignment
Role and function clarity
Accountability
Scorecards, targets & action plans
Performance measurement
Performance reviews
Recognition Action plans for
under performance
Structure/Harness EnergyCreate Energy Direct/Focus Energy
Invocom®
Passionate People: Vital Elements of a Performing Organisation
15
Corporate Social Investment
Social and Labour Plan submitted
MOA local municipality – agricultural feedlot (R5m)
Supplied government pension pay-out centre (R500,000)
Support for several local care centres
Dwaalboom-Koedoeskop road surfacing project (R60m PPP*)(* Public Private Partnership)
16
Geology
17
Geology
Formation of calcrete
18
Mining
Mine
Factory
Crushing
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Mining
Large calcrete deposit is exploited as major component in cement manufacture
Shale and lava deposit exploited for correcting silica and aluminium
Iron obtained from by-products of local iron ore mine or from magnetite
Shallow open cast mine:• Q1, Q2: limestone @ <15m• Q3: shale / lava @ <40m
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Cement manufacturing
21
Cement manufacturing process
crushing plant limestone blending coal stockpile
coal mill
raw mill
cement milling & dispatchpre-heater, kiln line & cooler
mining limestone
clinker storage
22
crushing plant limestone blending coal stockpile
coal mill
raw mill
cement milling & dispatchpre-heater, kiln line & cooler
mining limestone
clinker storage
crushing plant limestone blending coal stockpile
coal mill
raw mill
cement milling & dispatchpre-heater, kiln line & cooler
mining limestone
clinker storage
Cement manufacturing - detail
23
crushing plant limestone blending coal stockpile
coal mill
raw mill
cement milling & dispatchpre-heater, kiln line & cooler
mining limestone
clinker storage
crushing plant limestone blending coal stockpile
coal mill
raw mill
cement milling & dispatchpre-heater, kiln line & cooler
mining limestone
clinker storage
Cement manufacturing - detail
24
crushing plant limestone blending coal stockpile
coal mill
raw mill
cement milling & dispatchpre-heater, kiln line & cooler
mining limestone
clinker storage
crushing plant limestone blending coal stockpile
coal mill
raw mill
cement milling & dispatchpre-heater, kiln line & cooler
mining limestone
clinker storage
Cement manufacturing - detail
25
crushing plant limestone blending coal stockpile
coal mill
raw mill
cement milling & dispatchpre-heater, kiln line & cooler
mining limestone
clinker storage
crushing plant limestone blending coal stockpile
coal mill
raw mill
cement milling & dispatchpre-heater, kiln line & cooler
mining limestone
clinker storage
Cement manufacturing - detail
26
crushing plant limestone blending coal stockpile
coal mill
raw mill
cement milling & dispatchpre-heater, kiln line & cooler
mining limestone
clinker storage
crushing plant limestone blending coal stockpile
coal mill
raw mill
cement milling & dispatchpre-heater, kiln line & cooler
mining limestone
clinker storage
Cement manufacturing - detail
27
crushing plant limestone blending coal stockpile
coal mill
raw mill
cement milling & dispatchpre-heater, kiln line & cooler
mining limestone
clinker storage
crushing plant limestone blending coal stockpile
coal mill
raw mill
cement milling & dispatchpre-heater, kiln line & cooler
mining limestone
clinker storage
Cement manufacturing - detail
28
Products
Clinker• Onsite manufacture of cement• Dispatched to Hercules and Jupiter for cement manufacture
Cement• CEM I 42.5N (OPC*)• CEM II 32.5R (Surebuild)
* Ordinary Portland Cement
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The heart of the operation : The kilns
Kiln 1 (DK1)• 5 stage suspension pre-heater kiln• ~750kt/annum of clinker• supplied by FL Smidth
Kiln 2 (DK2)• 6 stage in line calciner, low NOx kiln• ~1mt/annum of clinker• supplied by FL Smidth
DK 2
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DK2: world class
Main plant – 7 700 t machinery
Total plant – 2 500 t structural steel
Total plant – 39 900 m3 concrete
Total plant – 318 km electrical cable
Installed power: 10MW • (Raw Mill, Coal Mill and kiln only)
Investment: R1 400 million (2008)
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DK2: world class
Contractors on site peaked at 1500• Local labour contingent averaged ± 30%
• 800 benefitted from formal on the job training
• 650 housed in R24m contractor camp
• Every person onsite received a lunch
7 lost time injuries in 5.5million man hours• Most severe was fractured arm
• Formal safety training for every person
640 containers and bundles shipped to site
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DK2: world class
‘Flame-in’ 26 September 08 First clinker is produced!
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DK2: world class energy efficiency
DK1
Thermal3.5 MJ/kg clinker
ElectricalRM - 22 kWh/tonKiln - 49 kWh/ton
DK2
Thermal3.1 MJ/kg clinker
ElectricalRM - 14 kWh/tonKiln - 35 kWh/ton
JK3*
Thermal5.7 MJ/kg clinker
ElectricalRM# - 34 kWh/tonKiln - 35 kWh/ton
Total operational cost reduction of DK2 vs DK1 ~20-30% on R/ton basis
* Jupiter Kiln 3# Raw mill
34
DK2: Word class emissions
Cementmanufacturing
Reduced through in-line calciner technologyNOx
Reduced through electrostatic precipitator, bag filter (Emissions within European standards)
Dust
35% unavoidable (CaCO3 – CaO + CO2)CO2 Reduced through efficient fuel use
35
QUALITY
ISO 9001C&CI ‘zero findings’
ENVIRONMENT
ISO 14001Wildlife protectionInternalisation of process wasteConcurrent rehabilitationRecycling of all domestic wasteEMP: Water,
Ecology, Rehabilitation
Continuous improvementInternal audit (excellent rating)JAP auditSANS 1841
HEALTH / SAFETY
OSHAS 18001AMS 16001Dekra 5 Shield
OTHERMaintenance Optimisation Programme (MOP)Transformation strategy
World class management systems
CORPORATE GOVERNANCE
36
Hercules
Established 1892
• Opened by Paul Kruger
• Beginning of PPC
Location – Pretoria
235 employees
Existing plant
• 2 kiln lines
• 3 cement mills
37
’
Hercules Orientation
RiebeeckDe Hoek
Port Elizabeth
HerculesJupiter
Dwaalboom
Colleen BawnBulawayo
Gaborone
Slurry
Zimbabwe
Botswana
Moz
ambi
que
NamibiaBotswana
Limpopo
North West
Medupi Power Station Polokwane
ThabazimbiDwaalboom
Slurry
Gaborone Mill
Sun City
Hercules
Jupiter
Gauteng
Rail
320kmRail
250km
Road
22
0km
38
Ntšhafatso (“Re-birth”) – New Mill Project
Why Hercules?• Increases flexibility and shorter delivery to key market
• Ideally located to cement extenders (slag & ash sources)• Need for capacity replacement, expansion and product flexibility
New 1mt/annum Vertical Roller Mill (VRM)• Latest proven milling technology
• Approximately 30% less power consumption
• Able to produce a wider range of extended cements (CEM IV & V) reduces energy consumption & CO2 emissions per ton of cement
• 30% of capacity is for replacement of 2 existing mills
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Loesche Vertical Roller Mill
New materials handling and storage
New automated quality control system
Upgrade of plant’s electricity supply • Municipal substation erected by PPC
Total plant – Concrete 15000m3
• Geology required extensive piling
Investment - R700million(2009)
Ntšhafatso: Overview
40
Ntšhafatso: Efficiency
Existing Mill 1
Output15 t/h
Electrical65 kWh/ton
Existing Mill 2
Output20 t/h
Electrical55 kWh/ton
New VRM Mill*
Output120 t/h
Electrical31 kWh/ton
Figures are based on milling OPC (CEM I) only
* Figures based on contractual performance guarantees
41
Ntšhafatso: Project Status
Project progress 80%
Commissioning early 2010
Operational Readiness in parallel• Training in progress at Dwaalboom
Contractors employed to date - 1200• 600 contractors on site at the peak
Safety• 1.4million man hours worked without a lost
time injury• Site congestion a significant challenge
42
Ntšhafatso: Environmental Considerations
Clinker handlingTransport and silo
New dual cement siloand
Bulk dispatch
LaboratoryAutomation VRM
Dust freetransportsystem
43
Thank you
44
Dwaalboom Site Visit
Annexures: Other PPC Sites
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Manufacturing sites: De Hoek
Established 1921
260 employees
Manufactures clinker and cement
46
Manufacturing sites: Jupiter
Established: 1934
150 employees
Manufactures clinker and cement
47
Manufacturing sites: Port Elizabeth
Established 1928
165 employees
Manufactures clinker and cement
48
Manufacturing sites: Riebeeck
Established 1960
180 employees
Manufactures clinker and cement
49
Manufacturing sites: Slurry
Established 1915
250 employees
Manufactures clinker and cement
50
Manufacturing sites: Zimbabwe
Acquired in 2001
533 employees
Manufactures clinker and cement
51
Manufacturing sites: Botswana
Established 1995
155 employees
Cement milling
52
Manufacturing sites: Saldanha
Established 1997
40 employees
Materials handling and slag milling
53
Aggregate quarries: Mooiplaas / Laezonia/ Kgale
150 employees
Supplies construction aggregates and metallurgical stone
54
Manufacturing sites: Lime Acres
Established 1955
330 employees
Supplies lime stone and burnt lime products
55
Disclaimer
This document including, without limitation, those statements concerning the demand outlook, PPC’s expansion projects and its capital resources and expenditure, contain certain forward-looking views. By their nature, forward-looking statements involve risk and uncertainty and although PPC believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of, among other factors, changes in economic and market conditions, success of business and operating initiatives, changes in the regulatory environment and other government action and business and operational risk management.
While PPC takes reasonable care to ensure the accuracy of the information presented, PPC accepts no responsibility for any consequential, indirect, special or incidental damages, whether foreseeable or unforeseeable, based on claims arising out of misrepresentation or negligence arising in connection with a forward-looking statement. This document is not intended to contain any profit forecasts or profit estimates, and the information published in this document is unaudited.