Even as South Africa’s construction sector struggles through difficult cycles of low profitability and declining capacity, it needs responsible and sustainable companies to maintain momentum.
After almost nine decades in business, AfriSam’s legacy has been to demonstrate the value of good corporate citizenship, according to the company’s sales and marketing executive Richard Tomes. AfriSam began its journey as Anglovaal Portland Cement Company in 1934, with a cement plant in Roodepoort.
“The time since then has seen many changes and we are proud to have grown stronger, with our customers confirming that we are still their preferred choice,” says Tomes. “Even with the depressed state of the construction sector, our focus on quality and sustainability means that we can continue to serve the market to world class standards.”
Tomes argues that the extensive investment in cement plants, readymix facilities and quarries over the years laid the groundwork for AfriSam’s considerable contribution to the country’s infrastructure. As Anglo Alpha, it had become a fully vertically-integrated construction materials business in the 1990s through the strategic incorporation of aggregate producer Hippo Quarries and readymix company Pioneer Concrete. When the country re-entered the international community post-democracy, the company was acquired by the multinational Holcim group, further augmenting its access to world-class expertise and best practice.
“The learnings gained when part of the Holcim group were valuable in positioning AfriSam where it is today,” he says. “Our access to global research and the sharing of technical expertise further enhanced the expertise of many staff still with the business.”
He emphasises the large capital commitments which AfriSam has historically made in the country’s productive capacity. Often located in remote areas due to their need for limestone deposits, cement plants must be built for optimal longevity to justify the investment, he explains. These facilities – such as AfriSam’s Ulco and Dudfield plants – operate not just as production facilities but as integrated settlements.
“We have been able to serve the nation’s requirement for vital cement supplies by maintaining entire village environments at these sites, including schools, houses, churches and other services,” says Tomes. “These facilities must be carefully managed and maintained for sustainability, and to make it attractive for our staff to live and work there.”
There is also an ongoing commitment to education and training, to ensure that all plant is professionally operated and systematically serviced while creating opportunities for future generations.
Looking further ahead, AfriSam has taken a leading role in the sector to reduce carbon emissions. Aiming at producing carbon neutral products, the company has already made significant progress in offering the market a range of lower carbon cements. It is also considering renewable energy sources at some its plants, to reduce coal usage.
“We will continue to make a positive contribution in helping South Africa meet its commitments to the relevant global treaties and conventions on climate change,” he says.
The solid performance of Multotec’s pulping chutes at Ekapa’s diamond treatment operation in Kimberley over the past couple of years has opened the door to quicker and more cost effective fines scrubbing.
According to John Britton, Technical Consultant at Multotec, the two pulping chutes have achieved outstanding results, helping the customer’s facility to cost effectively increase the throughput of its Combined Treatment Plant (CTP).
“At our recent two-year inspection of the plant, we found that the wear rate on the ceramic lining of the wave generator was only 20 mm over that 24 month period,” says Britton. “Each chute was processing 380 tph of recrushed kimberlite product with 380 m3 of water, rushing down a 28 degree incline.”
Multotec’s patented wave generators use gravity to create a constant turbulent mixing action in the slurry flow that releases the mud, clay and slime sticking to the kimberlite particles. The chutes are positioned to receive material from the High Pressure Grinding Rolls (HPGR) interparticle tertiary crushing circuit. Multotec’s engineered alumina ceramic tiles give the chutes and wave generators high wear resistance.
“The chutes exceeded our expectations in how well they separated the clay from the kimberlite ore and broke up clay balls in the material stream,” he says. “This has really demonstrated the long term capacity of our design to deliver results with hardly any maintenance or operator intervention.”
He highlights that the chutes are stationery structures which rely on the kinetic energy being created by the inrush of slurry flow over the wave generators. This makes the solution much simpler and less energy-intensive than traditional rotary scrubbers with motors, drives and gearboxes. The chute can also achieve its results much quicker, as the material flow passes through in just three to four seconds.
Ekapa CEO Jahn Hohne says he has been impressed by how well the chutes have performed as an alternative to a considerably more costly scrubber circuit and having delivered a 20% increase in throughput through the plant and making a positive economic contribution to overall efficiency. Hohne says he admired Multotec’s innovation capability and looked forward to even further improvements in the design.
Britton notes that, after conducting the wear inspection of the chutes, there were indeed constructive modifications that Multotec was planning. One of these related to the retarder bars, which slow down and divert the slurry flow.
“We believe we can achieve even better results if we remove some of the retarder bars and install another set of wave generators,” he says. “Our results suggest that this will get the ore material even cleaner, before it reports to the screen, the conveyor belt and finally the dense medium circuit.”
The success of the pulping chutes at Ekapa has led to considerable interest from other diamond producers in southern Africa, he notes.
Zest WEG, the South African subsidiary of Brazilian motor and controls manufacturer WEG, has progressively increased its level of local manufacturing over the past decade and now boasts six manufacturing sites – four in the Gauteng region and two in Cape Town.
A key aspect of this manufacturing drive has been the development of local suppliers by Zest WEG; an effort which has met with considerable success. “Building up our local supply chain is important, of course, in terms of meeting targets for black empowerment stipulated by the government and the mining industry, which is one of our main markets. Having said this, local sourcing is a value that is built into WEG’s culture globally and is nothing new for us,” says Eduardo Werninghaus, newly appoint Group CEO of Zest WEG.
Werninghaus notes that WEG started up in 1961 in the southern Brazilian state of Santa Catarina which was then very undeveloped with the local economy relying primarily on agriculture. “WEG really had no choice but to develop local suppliers, given the distance of its factory from Brazil’s main industrial centres. This programme met with such success – and made such economic sense – that it has now become the standard practice for WEG companies around the globe.”
Commenting on the benefits of local sourcing, Werninghaus says that it gives Zest WEG enhanced control over the production process and helps keep down costs. It also allows short delivery times, as there is less reliance on global markets for parts and componentry, a huge advantage currently given the constraints of the global supply chain. He adds that it has also made a major contribution to Zest WEG achieving its current Level 1 B-BBEE status.
Zest WEG gives considerable assistance to emerging companies that it brings into its supply chain, upgrading their skills so that they are able to produce to the demanding standards of the WEG Group. “We’re a very aggressive company when it comes to manufacturing and very focused on efficiency and productivity. This same culture has been successfully instilled into our South African operations, including our local suppliers,” he says.
In Gauteng Zest WEG has two transformer factories. One is in Wadeville and the other in Heidelberg. Also in Gauteng, Zest WEG – through its WEG Automation division (previously Shaw Controls) – produces a wide range of electrical panels in Robertsham and E-Houses and other electrical enclosures in Heidelberg. In Cape Town, the company has two production facilities, one producing engineered gensets and the other focused on panel production.
Discussing how far local manufacture has advanced, Werninghaus says that the transformers can have more than 90% local content and panels and E-Houses close to 70% depending on the specifications.
“It’s virtually impossible to get to 100 % local content on any of the product lines we manufacture in South Africa, as there will always be certain things that have to be imported due to technical and economic reasons,” he comments. “Nevertheless, we are constantly looking for opportunities to replace imported componentry with locally produced parts so our level of local content will certainly increase further with time.”
Westlake Chemical is scoping expansion opportunities to meet growing demand for construction staple polyvinyl chloride and possibly increasing its internal ethylene production, CEO Albert Chao said May 4, as reported by S&P Global.
He said during the company’s Q1 2021 earnings call that Westlake is a major US ethylene buyer, more than 1 billion lb (453,592 mt) per year, to feed downstream derivatives that the company’s internal ethylene production cannot cover.
“Integration in that area would be helpful,” Chao said.
The company also may add downstream PVC capacity, given strong demand for pipes, window frames, vinyl siding and other products for housing, he said.
“We are finally above the 50-year average for new home construction in the US for the first few months of this year,” Chao said. “We expect that trend to continue, and building products demand will increase,” so Westlake is looking expanding PVC production.
He noted that Westlake has not announced any large capacity expansions, “but small increases to meet the needs, growing needs of our customers.”
Westlake announced the company’s Q1 2021 net income reached $242 million, up 67% from $145 million in the year-ago period.
South African motorists were sent into panic once again this past weekend as oil refineries were shut down due to a lack of crude oil.
This comes after Sasol Ltd declared force majeure at its second biggest refinery on Friday due to a lack of crude oil.
On Monday, Sasol said it will restart its refinery by the end of July.
The shutdown of the Natref refinery around 100 kilometres from Johannesburg has sparked concerns of petrol and diesel shortages in the country where 60% of fuel products are imported.
Sasol, however, said it did not expect any shortages.
Sasol is the only producer of petroleum products in South Africa through its two refineries – Secunda, with output of around 150 000 barrels per day (bpd) and Natref, around 108 000 bpd.
“The crude tanker has arrived in Durban and cargo dispatches are under way. Natref should start-up to run at maximum production capability by end July,” Sasol said in the statement.
The company, which owns the Natref refinery with a subsidiary of France’s TotalEnergies, said it does not “anticipate any fuel supply shortages to fuel stations, including our own”.
Meanwhile, South Africa’s Energy Department said the country will not run out of petrol and diesel.
The department’s deputy director-general of mineral and petroleum regulation, Tseliso Maqubela, said, “I don’t expect that diesel and petrol would be affected greatly, however, we are concerned about the impact this is going to have on the availability of jet fuel, particularly for the airports”.
Maqubela said officials would use this week to assess the impact of the move and what it would take to recover.
“There is the ability to import fuel in the country. We’ve always planned for such an eventuality but I think the impact on jet fuel, because this was something that was not expected, is something we’re going to have to look at,” Maqubela said.
My first visit to a Texas petrochemical plant felt like stepping into a little country — it has its own strict security borders (photo identification required); its own national dress (blue flame-retardant coveralls and hard hats); and even its own language (with words like ethylene oligomerization and polyalphaolefins), the Association of Chemical Industry of Texas published.
Workers pedal around tanks and machines on bicycles, following the country’s rules of the road by stopping for the occasional railroad car and white pickup truck. Clusters of employees tinker with machines towering sometimes 15 or more stories above them like a downtown district. Inside one plant office, an oversized map with intricate red and blue lines outlines the factory’s geography like an urban streetscape.
To my foreign eye, the Chevron Phillips Chemical Co.’s Baytown plant looks like a sprawling maze of pipes, tubes and tanks. But what you can’t see at first glance is the dozens of people sitting several yards away who keep the plant’s machinery humming along safely.
They’re in an air-conditioned “blast-proof” control room behind a wall of computer monitors with moving diagrams and colored lines flashing like an automated game of Tetris. Called process operators, they sit in office chairs for 12-hour shifts tracking the computerized operations of each machine, pipe, tower and tank. They look for any sign of irregularity in temperature, pressure, timing and other minute changes.
They each hold two-year technical degrees — most likely with a fraction of the college debt of the average early career journalist, but with more than double the starting salary. The average plant operator with a two-year degree starts out with an $80,000 salary and usually grows to $100,000 or above, according to the American Chemistry Council, the industry trade group.
Around the industry, they call them “gold-collar workers,” a Chevron Phillips employee murmured to me. It’s not a common term, but one that is sometimes used to describe jobs that don’t fall neatly into the blue-collar or white-collar categories. Gold-collar workers need the “mind of a white-collar worker but the hands of a blue-collar one”, Harvard Business Review noted.
Think of the maintenance technician who repairs aircraft systems at Southwest Airlines; the manufacturing technician at Intel; and the medical technologist who operates laboratory equipment and analyzes test results at Memorial Hermann Cancer Center.
“You can’t just be a great craftsman,” says Peter Rodriguez, economist and dean at Rice University. “You have to understand enough not just to operate the system, but to be creative and solve a problem that’s non-routine.”
Rodriguez estimates these highly paid hourly technical workers make up about 10 percent or less of the workforce in the oil and gas industry, but he expects those numbers to grow, especially in offshore drilling, as fewer people work on the rig itself and more are in control rooms monitoring systems.
These workers fall into what some economists call the “middle-skills gap” — the mounting imbalance in the supply and demand for skilled workers such as welders, truckers, pipe fitters, millwrights, technicians and electricians.
In the Houston area, the industrial construction sector alone could have a shortage of between 5,000 to 10,000 “middle-skill” workers in the next four years, because not enough people are entering these jobs to keep up with the workers retiring, according to data from the Greater Houston Partnership, a business-finance economic development group.
Golden opportunity?
Many young people don’t think of these gold-collar professions when considering their options, notes Bill Gilmer, economist with the University of Houston.
“Aspirations have been set at a different level these days in terms of what you should do coming out of high school, which isn’t necessarily bad,” Gilmer says. “But they don’t explain that alternative of a gold-collar job or even high-paid construction job.”
Manufacturing companies want young people to know that gone are the days when working in a plant meant toiling over greasy machine, says Heather Betancourth, community relations representative for Chevron Phillips Chemical.
“We’re a lot more technologically advanced than people give us credit for,” she says.
The U.S. energy and petrochemical industry has experienced incredible growth over the last decade. The extended period of profitability has caused another surge in downstream investment, but leaders from across the major energy companies have identified one of the most pressing issues as finding qualified and skilled workers vital to the success of future capital projects, Petrochemical Update reported.
The skills gap has reached critical proportions among resourcing the craft labor jobs—technical jobs that require more education and training than a high school diploma, but less than a four-year college degree. Many of these jobs are in construction and manufacturing.
U.S. construction labor demand is expected to outpace labor supply over the next five years, with the total number of unfilled construction jobs growing from 200,000 in 2017 to 856,000 in 2021, according to the U.S. Bureau of Labor Statistics.
According to Forbes magazine, more than 350,000 manufacturing jobs are available now.
Petrochemical Update brought together a group of project management, business development, operations, maintenance, reliability, technology, procurement, and strategy experts from refining, petrochemical and liquified natural gas (LNG) sectors to discuss and debate the role of resourcing, recruitment and developing the next generation of workers in the industry.
BASF, SABIC, Fluor, Chevron, Ineos, DowDupont, Wood, Jacobs, Audobon, Kiewit, Bechtel, Sandpiper Chemicals, Covestro, Shell New Energies, and LyondellBasell, were among the executives brainstorming at the roundtable hosted by the 2019 Downstream Engineering, Construction and Maintenance Conference and Exhibition (DECM). These executives make up the 2019 DECM conference advisory board.
“This group of major business leaders from across the spectrum of capital projects, reliability, maintenance, and process engineering have the unique opportunity to reflect on the challenges, share valuable insight and strategies, best practices and lessons learned together while meeting and planning the 2019 event,” said Jonny Witherspoon, DECM Project Director.
With more than 80% of project and maintenance executives citing resourcing as their most immediate challenge, the DECM 2019 team has decided to make workforce development the cornerstone of the 2019 program, and a central theme of the work of the full conference advisory board.
Glenn Johnson, Director of Workforce Development for BASF, says that if the industry wants to treat the issue, it must treat the symptom and communities must change thinking about these jobs.
“In this country we have allowed a narrative to develop that the “best” jobs are no longer in manufacturing, but in white-collar, office settings – although these jobs are also essential to manufacturing,” Johnson said.
“Simply put, the way everyone from actual parents and teachers to fictional characters portrayed in movies and television talk about certain careers has led to a lack of interest in these careers. Furthermore, we compound the problem by leaving information out during counseling,” Johnson added.
Industry Gaps
The U.S. workforce problem is a mix of demographic trends and awareness issues as an aging workforce retires every day. The first baby boomers turned 70 in 2016.
Millennial workers are now replacing the Baby Boomers, who are retiring at the rate of 10,000 a day, according to the Pew Research Center. However, the millennial generation is less interested in jobs in the downstream industry in favor of what they consider more tech-savvy jobs.
“We are dealing with a people gap. Businesses can’t find the workers they need, when and where they need them,” said Peter Beard, Senior Vice President Regional Workforce Development for the Greater Houston Partnership.
“We are dealing with a skills gap. People lack the skills and credentials they need to compete for 21st century jobs,” Beard added.
Combined with record investments in the U.S. over the next decade, manufacturing will have 3.5 million job vacancies and the skills gap is expected to result in two million of those jobs being unfilled, according to Deloitte.
Additionally, every job in manufacturing creates another 2.5 jobs in local goods and services, according to the U.S. Department of Commerce. That is seven million jobs projected to go unfiled if the jobs gap is ignored.
Skills Gap
The industry is concerned about the quantity, but also the overall quality in the talent pipeline as well, Beard said.
UpSkills Houston, through Greater Houston Partnership, is one group that has put together a team to solve the skills problems before they become too big to handle projects.
A team, which consists of energy executives, educational institutions and community associations, has begun mapping competencies for priority industrial crafts to ensure career progression, stickability and transportability.
Competency maps for key craft jobs identify the related National Center for Construction Education and Research (NCCER) credentials for career progression.
“It is essential to develop an approach for performance verification—the ability to validate that a person can perform the task or tasks related to the credentials,” Beard said. “Performance verification is expected to improve overall quality.”
UpSkill Houston
UpSkill Houston consists of an active employer-led petrochemical sector council of ExxonMobil, Shell, LyondellBasell, Dow, BASF, and ChevronPhillips working in collaboration with the East Harris County Manufacturers Association (EHCMA) and Associated Builders and Contractors.
Also participating: community-based organizations, the Community College Petrochemical Initiative (CCPI), and Gulf Coast Workforce Solutions. The council focuses on the skilled talent pipeline for plants coming on line soon.
The council has helped significantly increase enrollment in petrochemical courses at community colleges and raise completion rates for degrees and credit and non-credit certificates for technical programs.
Through these initiatives, UpSkill Houston is hoping to bridge both the skills gap and the people gap.
Fluor Craft Training Center
Energy, Procurement and Construction (EPC) service provider Fluor launched its Craft Education Initiative to invest resources in targeted colleges, schools and programs throughout the U.S. to get more students to pursue and complete high-value construction industry certifications.
In addition to collaborations with colleges and contractor associations, Fluor offers free training programs for entry-level craft, welder upgrade training, craft certification and supervisory training.
Trainees receive industry-recognized entry-level credentials in the NCCER Core Curriculum in either electrical, instrumentation, millwright or pipefitting.
Fluor also offers 14-16-week, four-day-a-week welder training programs in Houston for experienced welders who want to hone their skills or advance to the next level.
Welders would train from Monday through Thursday and get paid to work on outages and other projects on weekends.
Fluor has also opened a regional craft training center in La Porte, Texas, for both entry-level and welder upgrade training.
If Texas were a country and Texans like to think of it that way, it would be the third largest energy producing country in the world behind Saudi Arabia and Russia, Texas Railroad Commissioner Ryan Sitton said, Petrochemical Update reported.
Commissioner Sitton was speaking at Petrochemical Update’s Supply Chain and Logistics conference in Houston.
U.S. crude oil production and subsequently petrochemical production has increased significantly during the past ten years, driven mainly by production from tight oil formations using horizontal drilling and hydraulic fracturing.
At this rate, many analysts are predicting that Texas will surpass Iraq and Iran and pave the way for the U.S. to become the world’s leader in oil production.
Most recently, U.S. crude oil production reached 11.3 million barrels per day (b/d) in August 2018, according to the U.S. Energy Information Administration’s (EIA) latest Petroleum Supply Monthly in November, up from 10.9 million b/d in July.
This is the first time that monthly U.S. production levels surpassed 11 million b/d.
U.S. crude oil production exceeded the Russian Ministry of Energy’s estimated August production of 11.2 million b/d, making the U.S. the leading crude oil producer in the world.
Texas had the highest production of U.S. states at 4.6 million b/d.
The Permian Basin region accounts for about 63% of total Texas crude oil. From January 2018 to August 2018, Texas crude oil production increased by 683,000 b/d, the EIA said.
The growth in the Permian Region since the start of 2018 surpassed the EIA’s previous expectations, which assumed that pipeline capacity constraints in the Permian region would dampen production growth.
However, industry efficiencies in pipeline utilization and increased trucking and rail transport in the region have allowed crude oil production to continue to grow at a higher rate than the agency expected.
Economic Impact
The oil and gas industry are around 15% of the state’s economy, but several industries support the sector making that number higher.
“Consider the ancillary industries that support the industry. Consider a guy who owns a hotel in south Texas but 90% of his guests are staying there working on an oil project, so we can say that it is nearly 1/3 of the state’s economy,” Sitton said.
While the economy goes through cycles, and technology and other industries are changing quicker than ever, one thing that does not change is the world’s need for energy.
“As the population of the world grows, the hunger for basic products such as energy, water and commodities never go down. It only goes up,” Sitton said. “Everything from oil to natural gas to petrochemicals like polyvinyl chloride (PVC) to wood. All these things have gone up for the last 50 years with only two years where they were level and never dropped.”
Surging Production
Texas oil production has grown from 1 million b/d to more than 4.5 million b/d, according to the EIA.
Texas now refines 6 million b/d of crude oil. The Port of Corpus Christi exports 1 million b/d of oil, more than all the other ports in the country combined, Sitton said.
Murray Energy Corporation (“Murray Energy”) is extremely disappointed that the Federal Energy Regulatory Commission (“FERC”) has failed to enact the immediate reforms necessary to ensure the reliability, resiliency, and fuel security of our Nation’s electric power grids and, instead, dodged the decision.
Mr. Robert E. Murray, the Chairman, President and Chief Executive Officer of Murray Energy stated that “This is a bureaucratic cop-out, whereby these FERC Commissioners have totally avoided making a decision regarding the very urgent situation relative to the lack of reliability, resiliency, and security in our electric power grids in our Country.” “It also adds to the cost of electricity,” he added.
“I fear that we will now immediately observe the announcement of further decommissioning of nuclear and coal-fired electricity generation that will further exacerbate this critical situation,” Mr. Murray added.
“Indeed, the recent moderately cold weather period has further demonstrated the need for immediate action to ensure the reliability and resiliency of our electric power grids, and to hold down the cost of electricity, as natural gas prices have peaked at $175 per million BTU, which is sixty (60) times their normal levels, and the cost of electric power in some parts of our Country peaked at over $500 per megawatt-hour, up from less than $30 per megawatt-hour,” stated Mr. Murray. “Further, at least 37,000 megawatts of supposedly natural gas-powered electricity were entirely unavailable due to the priority for home heating use and the inability of natural gas to flow at cold temperatures. Additionally, power users in South Carolina were asked to voluntarily cut back on their electricity usage because of critical margins in the electric power grid.”
“If it were not for the electricity generated by our Nation’s coal-fired and nuclear power plants, we would be experiencing massive brownouts and blackouts in this Country. During these critical times, coal has far outperformed all other fuel sources, including natural gas, dispatching at over twice the level of gas plants and over fifteen (15) times the output from windmills and solar panels,” Mr. Murray said.
“While FERC Commissioners Kevin J. McIntyre, Robert F. Powelson, Richard Glick and Cheryl A. LaFleur sit on their hands and refuse to take the action directed by Energy Secretary Rick Perry and President Donald Trump, the decommissioning of more coal-fired and nuclear plants could result, further jeopardizing the reliability, resiliency, and security of America’s electric power grids even further. It will also raise the cost of electricity for all Americans, including those on fixed incomes, single mothers, and manufacturers of products for the global marketplace,” Mr. Murray concluded.
When the administration of U.S. President Donald Trump proposed new subsidies for coal and nuclear plants, it seemed like an obvious way to deliver on campaign promises to boost the nation’s energy industry, reports Reuters.
And yet the plan, announced in September, set off sharp criticism from other sectors that Trump has also vowed to help, such as natural gas and utilities.
“Subsidies don’t make you competitive – and don’t make you great again,” said Robert Flexon, the president and chief executive of Dynegy Inc, a Houston-based utility that owns both coal- and gas-fired power plants.
