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EXCELLENCE BUSINESSEXCELLENCE

Editor’s letter

Businessexcellence AC H I E V I N G

Converging

themes

EDITORIAL

Editor In Chief Martin Ashcroft mashcroft@bus-ex.com Managing Editor Bud Sadler bsadler@bus-ex.com

DESIGN

Production/Creative Director Zachary Smith zsmith@bus-ex.com Production Designer Mallory Lindsley mlindsley@bus-ex.com

BUSINESS

Director of Editorial Research Scott Mason smason@bus-ex.com Director of Sales Sean Brett sbrett@bus-ex.com Administration & Operations Kathy Toomey ktoomey@bus-ex.com Chief Executive Andy Turner info@bus-ex.com Subscriptions info@bus-ex.com Infinity Media LLC 100 Cummings Center Suite 243C Beverly, MA 01915 Tel: 978 232 9284 Fax: 978 560 0999

The August issue of Business Excellence has two major themes, strategy and sustainability. These two concepts are edging ever closer together, as companies see the value of incorporating sustainability into their business strategy.

The cover story offers advice from Michelle LaBrosse on how you can green up your business, starting with small steps and building up to follow the example of Wal-Mart, Starbucks and others who have embraced ecofriendly ideals in pursuit of the triple bottom line—economic, social and environmental benefits.

We also feature Algonquin College’s Centre for Construction Excellence, being built in Ottawa, Ontario. Canada is suffering a shortage of trade skills, and the new facility will offer a means to fill the gap in the future.

Fittingly, though, it has been designed with the goal of attaining LEED Platinum certification, the highest level awarded to buildings under the scheme for Leadership in Energy and Environmental Design.

Our lead story looks at the development of strategic thinking over the last fifty years, from a theoretical, but also a practical point of view. As the concept of continuous improvement has gained ground in various industry segments, so has the importance of people as a competitive advantage.

When Ray Smith came out of retirement in 2009 to turn around the fortunes of True Energy Trust, some serious strategic thinking was required. The company has since emerged with a new name (Bellatrix Exploration) and an ambition to become the rising star of the Western Canadian Basin.

Smith’s account of how this was achieved is fascinating, but of course he didn’t do it alone. He began by creating the strongest possible management team, and then he sought to optimize production across all levels of the company and drive down its cost base. “We changed out about 50 percent of the field staff,” he said, “appointing individuals we felt possessed the skills required to accomplish the goals and objectives set for them.” Strategy can be so simple, when you look at it like that.

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STRATEGY: Half strategy, half execution, half culture Science or art form, or a little of both, strategic management has evolved to suit 21st-century business conditions.

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SUSTAINABILITY: Green it like you mean it There are many ways to kick-start your green initiative and operate in an eco-friendly and sustainable way.

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Jetcrete Australia and Thyssen Mining JV Down Under experience in North America An aggressive entry into the North American mining market for an Australian company with a Canadian partner.

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Calgary’s West LRT line Good listeners Engaging public opinion has helped the city to develop the latest stage in its light rail transit system.

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Bellatrix Exploration Ltd. Growth by drill bit A remarkable turnaround, a new name, and an ambition to become the rising star of the Western Canadian Basin.

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TIW Corporation Making roughnecks’ work a little smoother Providing the technology and specialized equipment to the big-name companies to aid in the search for oil and gas.

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Excelerate Energy Excelerate the positive The technological expertise to bring liquid natural gas projects to fruition adds energy flexibility to economies around the world.

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Shaw AREVA Mox Services, LLC Swords into plowshares An inspiring project to de-fuel weapons of mass destruction and convert the fuel for use in commercial nuclear power plants.

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Modular Space Corporation Space for rent Making an impact on the North American modular building industry after a significant acquisition.

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Structal-Heavy Steel Construction Champion of the arena Building up an enviable reputation in sports stadium construction by consistently delivering quality on time.

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Vanbots Construction Making tomorrow a better place The automotive industry has seen its fair share of tough times in recent years, and the need for innovation has never been greater.

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EllisDon Corporation Green and Platinum Building the Centre for Construction Excellence at Algonquin College in Ottawa, and fittingly aiming for LEED Platinum certification.

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Bonduelle Eat up … they’re good for you Commercially driven it may be, but this French food company is equally passionate about taste, choice and quality.

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Le Bleu & Nature’s Pearl Nature study Embracing scientific studies on its muscadine grape supplement and using human networking to spread the word.

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LDM Foods Crushing victory One of the largest canola crushing facilities in North America will benefit the local area and the food industry.

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Cliffstar Corporation Quality the C-Way The C-Way initiative is a program designed to involve all the company’s associates in continuous improvement.

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Bridor Serious dough Bridor is thriving by adapting European breads, croissants and pastries to North American tastes.

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Tucker Wireline Services The hole business Competing with the big boys in the oil patch is a healthy challenge for this family company known for its customer service.

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InterOil Papua’s natural gas With almost complete anonymity, Papua New Guinea has become one of the most important sources in the world for gas.

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TransAtlantic Petroleum Underground horizons Vertical integration and strategic acquisitions have helped the company through troubled times in the oil and gas sector.

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VELCO A smart future Vermont’s power transmission company is preparing for another phase of development as it migrates to the smart grid.

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Oscar Renda Contracting The hardworking Miss Colleen Tunnel boring can be hard work, but it doesn’t come much harder than on this Maryland water supply project.

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Aqua America Hate that dirty water A utility company that is dedicated to providing its customers with the best available water supply.

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Baffinland Iron Mines Worth the wait The story of the Mary River iron ore deposits is a compelling tale of politics, national pride, split opinions and fluctuating prices.

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First Majestic Silver Corp.

From the ground, up Committed to building a senior silverproducing mining company based on an aggressive development and acquisition plan.

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Xstrata Zinc Canada Mine, all mine Construction begins on a new mine, Bracemac-McLeod, which will use existing Matagami infrastructure.

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Fresnillo PLC Look for the silver mining Operator of the world’s richest underground silver mine and the largest underground zinc mine in Mexico.

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Engman-Taylor Company Inc. Focused on new business Hard times have been put to good use by expanding internal capabilities and strengthening the sales force.

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ARB Inc.: Lodi Energy Center Fast track to green energy General contractor responsible for one of the cleanest and most efficient natural-gas-fired power plants in the country.

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Shepard Development Corporation A spec of difference The company’s philosophy is not to build on spec, but to have value-added tenants ready to occupy new office and commercial buildings.

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Turner Const.: Duval County Courthouse The modern-day phoenix Overcoming local skepticism to deliver a long-awaited new courthouse in Jacksonville, Florida.

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Balfour Beatty: Innovation Village It takes a village Providing a new stadium and muchneeded student accommodations for Florida Atlantic University.

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Goddard Enterprises Limited Caribbean catering kings Barbados-based diversified group, involved in catering, manufacturing, services, finance and import distribution.

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Strategy

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Martin Ashcroft traces the development of strategic management into the 21st century

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ne of the quotes attributed to the infinitely quotable American baseball icon Yogi Berra, is that “success is half strategy, half execution, and half culture.� While Berra had the oddest way of putting things, there was usually a fundamental truth trying to escape. Many column miles have been written about strategy in the last fifty years by academics, business leaders, journalists and management consultants, but few have been as punchy as this.

Strategy, in its basic definition, is simply a plan of action. In the business environment, strategic management has been defined as “the analyses, decisions, and actions an organization undertakes in

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order to create and sustain competitive advantages.”

In other words, where are we now, where do we want to be next, and how do we get there?

Approaches to strategy fall into two main camps. The traditional view, known as the industrial organizational approach, is one of a rational, planning-based, “top-down” activity in which information is accumulated and analyzed, forecasts are made, and an action plan produced that is passed down the organization for implementation. Strategy formulation was traditionally the task of the CEO and the senior management team, with little consideration given to workforce commitment or involvement.

If this can be characterized as a content

flexibility to enable the organization to function best in an environment that is fast-changing and essentially unpredictable. The essence of strategy, according to this view, is adaptability and incrementalism. This approach has been criticized for failing to give an adequate sense of where the organization is going and what its mission is.”

Whichever camp they came from, the most successful companies seem now to be combining these two approaches in their 21st century strategies. The rigid sounding top-down economic approach has evolved as performance initiatives like lean and continuous improvement take hold.

With the emphasis of these initiative being on

“To stay competitive, an organization’s strategy must be formulated, challenged, tested, and constantly updated” approach, based on facts and figures, the other, known as the sociological approach, is more about the process of management and the culture of the organization. As practiced by Google, among others, this approach deals primarily with human interactions. Based on the premise that the future is unknowable and that forecasting is, at best, inspired guesswork, the key to this approach to strategy is to put in place a system of management that will allow the organization to respond to an unpredictable business environment that is not conducive to planning.

In their book Strategic Management: Issues and Cases (Blackwell Publishing, 2004), Paul Dobson, Ken Starkey, and John Richards argue that these two approaches are not necessarily mutually exclusive. “Our own view is that good strategic management actually encompasses elements of each perspective,” they say. “There is no one best way of strategy. The planning approach can work in a stable, predictable environment. Its critics argue that such environments are becoming increasingly scarce, events make the plan redundant, creativity is buried beneath the weight and protocols of planning and communication rules. Furthermore, those not involved in devising the plan are never committed to its implementation. The second approach emphasizes speed of reaction and

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workforce empowerment, enlightened CEOs have begun to realize they may not have a monopoly on ideas. Companies are increasingly adopting a collaborative approach to strategic ideas, where contributions can be passed up the managerial chain from the bottom. Not only does this capture ideas that may otherwise have been missed, but as the most brilliant strategy can succeed only if it is properly executed, gaining workforce commitment to the organization’s future strategic direction can only contribute to its success.

Dobson et al propose their own definition of strategic management thus: “all that is necessary to position the firm in a way that will assure its long-term survival in a competitive environment. A strategy is an organization’s way of saying how it creates unique value and thus attracts the custom that is its lifeblood.”

With growing uncertainty in the economic environment, organizations had to be more adaptable to the demands of customers and markets, introducing internal and external stakeholders into the strategy process, and bringing about a boom for management consultancies, which enjoyed an industry growth rate exceeding 20 percent in the 1980s and 1990s.

Whichever approach to strategy is taken, strategic decisions are now being made on the

Strategy

understanding that the competitive advantage of value added is a constantly changing reference point. Even the much criticized planning approach includes an evaluation phase, after which plans can be revised according to new evidence. But as the rate of change in the business environment continues to gain pace, evaluation itself can become a continuous process, as management consultancy Kepler-Tregoe points out in its approach. “Strategy formulation is an art and a discipline. It demands creative, out-of-the-box thinking and the discipline of logical thinking and flawless execution. To stay competitive, an organization’s strategy must be formulated, challenged, tested, and constantly updated.

to make the best informed decisions.

While not necessarily at the forefront of thought leadership (a title that is difficult to wrestle away from the academics), external management consultants have traditionally led the development of strategic management on the ground. Their contribution to clients has often been criticized in management literature, however, for focusing on what they see as the best solution on paper without understanding the client’s capacity to change, and also for lacking accountability for the execution of the solution.

External consultants have also been criticized for having little interaction with the client’s line managers, and for having an unfortunate tendency

“In the edifice of a world class company, kaizen is like a brick. You need many hundreds and thousands of bricks” “Strategy formulation begins with strategic intelligence gathering and analysis of markets, competitors, technology, and past performance,” K-T continues. “This provides an information base for strategic decision making, agreed-upon assumptions about the future, and a profile of the environment in which strategic decisions are being made.”

The aspect of this which has come under closest scrutiny in recent years is the degree to which strategy relies upon assumptions about the future. Another global player in the consultancy world, Deloitte, alludes to this, too, in its advice on “winning in a changing world.” “The current economic downturn impacts businesses around the world. At times like these, it is important to remember that even the most dramatic upheavals are part of the business cycle. If companies focus on the basics and make informed decisions, they can manage their way through the current volatility to emerge stronger and more competitive.

Companies that keep pace with market changes, staying one step ahead and managing through volatile times, will emerge as leaders.”

Information and analysis have always been strong suits for the larger consultancies, and the implication here, of course, is that if you engage their services, they will provide the necessary analysis for the client

to walk away after delivering the strategy, leaving the company on its own to execute it. More recently, however, their approach has been praised for a higher degree of line manager involvement, a stronger appreciation of the client’s ability to change, and greater consultant involvement in implementation. To illustrate this, PWC now promises prospective clients: “We help you to assign your resources to the activities that maximize value and are best aligned to your strategic objectives.”

The consultancy with the strongest case for thought leadership is the industry No. 1, McKinsey & Co., whose own academics Tom Peters and Robert Waterman developed the 7-S model in the late 1970s, dividing management into seven aspects: strategy, structure, systems, skills, staff, style and supraordinate goals (now referred to as shared values). In 1981, Richard Pascale and Anthony Athos claimed in The Art of Japanese Management that the main reason for Japanese success was their superior management techniques. Using the 7-S framework, they described the first three aspects as “hard” factors in which American companies excelled. The remaining four aspects (skills, staff, style, and shared values) were called “soft” factors, which, they alleged, were not well understood by American businesses of the time.

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T h e s e early writings were hugely influential in the growing importance of culture as a strategic tool and owed much to the study of the Japanese approach. In 1982, The Mind of the Strategist was released in America by Kenichi Ohmae, head of McKinsey & Co.’s Tokyo office. (It was originally published in Japan in 1975.) Ohmae claimed that strategy in America was too analytical. Strategy should be a creative art. He said that Americans constrained their strategic options by thinking in terms of analytical techniques, rote formula, and step-by-step processes.

Also in 1982, Peters and Waterman (of 7-S fame) released a study that would respond to the Japanese challenge head on. Asking “what makes an excellent company?” they examined 62 companies they thought were successful.

To classify them as an excellent company, they decided they had to be above the 50th percentile in four of the six chosen performance metrics for 20 consecutive years. Forty-three companies passed the test. The authors then studied these successful companies and interviewed key executives, concluding in their book In Search of Excellence that there were eight keys to excellence that were shared by all 43 companies: • A bias for action: Do it. Try it. Don’t waste time studying it with multiple reports and committees.

• Customer focus: Get close to the customer.

Know your customer.

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• Entrepreneurship: Even big companies act and think small by giving people the authority to take initiatives.

• Productivity through people: Treat your people with respect and they will reward you with productivity.

• Value-oriented CEOs: The CEO should actively propagate corporate values throughout the organization.

• Stick to the knitting: Do what you know well.

• Keep things simple and lean: Complexity encourages waste and confusion.

• Simultaneously centralized and decentralized: Have tight centralized control while also allowing maximum individual autonomy.

Since these early attempts to catch up with the Japanese, a myriad different theories have been applied, all adding new terms and concepts to business lexicon, some of which have stuck, like core competencies and the value chain.

In 1993, Scottish economist John Kay took the idea of the value chain to a financial level claiming that “adding value is the central purpose of business activity.” Borrowing from Gary Hamel and Michael Porter, Kay claims that the role of strategic management is to identify your core competencies and then assemble a collection of assets that will increase value added and provide a competitive advantage. He claims there are three types of capabilities that can do this; innovation, reputation, and organizational structure.

A decade after Peters and Waterman, James Collins and Jerry Porras undertook six years of empirical research on what makes great companies, concluding that a key underlying principle behind the 19 successful companies they identified was a “core ideology.” Even though strategy and tactics changed daily, the companies were still able to

Strategy

“Culture is a key part of execution. If the strategy or execution conflict with the culture, bet on the culture” maintain a core set of values that encouraged employees to build a sustainable organization.

In Built To Last (1994) they claim that short-term profit goals, cost cutting, and restructuring will not stimulate dedicated employees to build a great company that will endure.

Thus the idea of corporate culture began to seep into strategic thinking, to the extent that it has now embedded itself in the global boardroom.

Executives who have shared their accounts of continuous improvement with Business Excellence in the last few years invariably talk of culture change as the catalyst for the effective implementation of their improvement initiatives.

During the 1980s and 1990s, American manufacturers struggled to adapt the Japanese idea of kaizen to their own culture. Masaaki Imai, founder of the Kaizen Institute, who first coined the term, told me in a 2003 interview how frustrated he had been by this. “In the edifice of a world class company, kaizen is like a brick,” he said. “You need many hundreds and thousands of bricks.” What frustrated him was the way Western manufacturers liked to pick a brick or two here and there, then convince themselves they could build a world class company with them.

But it’s a different story today. Many of the world’s (non-Japanese) leading companies now have director-level executives responsible for improvement programs. One such is Gary Thomas, director of global continuous improvement and risk management at HJ Heinz, which is implementing the Heinz Global Performance System (HGPS) to drive sustainable continuous improvement in its 74 plants around the world. “HGPS is a five to seven year journey that never ends,” he told me earlier this year. “We’re trying to shift away from projectbased productivity to a process-based system. Our employees are solving the problems on the floor, so they don’t have to turn them into projects.”

HGPS is a management-led initiative, of course, inasmuch as it derived from the boardroom, but the key to successful implementation is the culture change that will sustain it. HGPS is intended to drive the organization towards a collaborative, continuously improving culture as the process

matures. “I would describe it as ‘just in time’ continuous improvement,” said Bob Ostryniec, global supply chain officer for Heinz. “It might sound fundamental and simple to some, but our performance system is all about the people.

If we focus on developing the capabilities into our people by empowering them to lead change at all levels of our organization, the process improvements will come.”

Most recently, I was attracted to a blog from Jim Heskett of Harvard Business School, published on June 2nd this year, entitled a ”How Do You Weigh Strategy, Execution, and Culture in an Organization’s Success?” After posing the question, Heskett threw it out for comment, receiving 77 responses, overwhelmingly in favor of culture.

One of my favorites was this by Bob Legge, president of management consultancy Legge & Company, LLC. “Culture is a key part of execution.

If the strategy or execution conflict with the culture, bet on the culture.”

“Culture is a soft issue that must never be ignored in the formulation and implementation of strategy,” commented Carl Abruquah of Ghana Commercial Bank Ltd. “A culture that is resistant to change will relegate strategy into the dustbins of the organization.”

“Another way to view this is how many businesses (and managers) were extremely successful, then tried to execute the same strategy in a different country without taking into consideration the local culture,” suggested David Broderick, director, global services delivery, for consulting group, CAI. “Businesses and business schools do a great job teaching strategy and execution as a discipline. For long-term global success, however, we need to better understand and teach about people, cultures, and their effect on an organization’s success. This discipline is just as important as understanding a P&L, since it will ultimately determine the bottom line.”

Finally, Yan Song, program manager for Abbott Laboratories, responded thus: “In the type of work that I do, it is still fundamental that we articulate a clear strategy, build an adaptive execution team and nurture an innovative culture.” Back to Yogi Berra’s three halves, then, but not quite as succinct.

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Green tips by Michelle LaBrosse, founder of Cheetah Learning and Cheetah Power, and Erica Edmond, CAPM, Cheetah Green Team

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nce upon a time, saving the environment seemed to be limited to a yearly celebration called Earth Day where, like New Year’s Eve, people made resolutions they wouldn’t necessarily keep.

For decades, the idea of saving the environment and contributing to a healthier world seemed like a great idea, but it was either too big a task for one individual to handle or a seemingly time-consuming activity that would cut into money-making time.

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Then things started to change at work, at school and at home. From unthinkable gas prices and a tough job market to skyrocketing health care costs, many folks came to a similar conclusion: to become more resourceful and live better.

There has been a rise in eating local, for example.

Not only does it taste better than the grocery store, but buying local and eating what’s in season saves money and the resources that it costs to transport food to one-stop-shopping nationwide. Businesses are looking more closely at their waste—paper, energy to power an office 24/7 and throwing dollars away on everything from disposable coffee cups to plastic packaging for products.

There are many ways to kick-start your green initiative at work and operate your business in an eco-friendly and sustainable way. At Cheetah Learning and Cheetah Power, we are committed to growing virtually with all of our employees working out of their homes. It’s saved us tremendously on real estate costs and also made our carbon footprint smaller. The good news is that there are many ways to be greener. Let’s take a look at how other businesses are doing it.

To get your juices flowing, here are six businesses that are doing it and doing it well. These multinational businesses received Natural Health magazine’s “Green Choice” Awards in 2009 for their excellence in leading by example across the globe.

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Wal-Mart: although many have been skeptical of this retailer’s green practices in the past, Wal-Mart now has a very large-scale environmental plan of action to power each of its stores with 100 percent renewable energy. Wal-Mart plans to set aside $500 million a year to increase fuel efficiency within its truck fleet, decrease energy consumption in its stores, decrease solid wastes from its stores, and a number of other environmental endeavors.

Starbucks: with the company’s “bean-to-cup” motto and approach to business, Starbucks uses environmentally savvy methods at each stage of production. Made from post-consumer goods, Starbucks’ recycled cup-sleeves saved more than 78,000 trees in 2006.

Verizon: its HopeLine initiative saved more than 5.6 million cell phones from ending up in landfills, using them instead to fund more than $6.3 million in cash grants to domestic violence agencies. Verizon has played a leadership role in encouraging customers and shareholders to choose paperless options. In addition, Verizon Wireless signed agreements to deploy smart power grids and continues to upgrade its fiberoptic network with equipment that is four times more efficient and reduces cooling costs. This is equivalent to keeping as many as 16,000 cars off the road annually.

Sustainability

Whole Foods: this organic food chain was the first company to buy the amount of wind-energy credits to compensate for 100 percent of the electricity it consumed. Whole Foods has eliminated its use of disposable plastic bags and replaced them with reusable bags for customers. These reusable bags are made from recycled plastic bottles.

Aveda: this natural-beauty product manufacturer uses primarily organic rather than man-made materials in its products. Aveda also employs wind power in its manufacturing facility to reduce electricity consumption, and uses 100 percent recycled packing materials. On top of these commendable business practices, Aveda funds wildlife preservations, and since 1999 has raised $8 million for environmental causes.

Discovery Channel: this company is not only green in the information it communicates through its many environmentally informative television shows, but through its company actions and practices.

The Discovery Channel has compensated for its carbon dioxide emissions through making equal contributions to environmental feats and projects and using energy-efficient lighting, architecture, and water systems in its company headquarters. In August, Discovery Channel took over the leading environmental lifestyle website, treehugger.com, as part of its initiatives to inform people about important environmental issues. Most impressive of all, the company set aside $50 million to create green television programming, beginning with a show entitled Ten Ways to Save the Planet.

I often hear people talk about the enormity of being green, and then the project manager in me comes alive and I have to remind them that anything is possible with a project plan that can break the most monstrous goals down into doable and realistic parts.

Develop a “Green Business Check List” to get your company thinking about ways it can behave in a greener and more sustainable manner. Here are a few areas to consider: Corporate and environmental social responsibility: Do you only invest in environmentally conscious companies? Use your investment portfolio to only support business organizations or industries that operate in an environmentally conscious way.

Energy, water and heat: Do you make use of natural light by keeping windows and skylights clean and clear? Don’t turn lights on in the

middle of the day if you have sufficient natural light coming into your office.

Do you regularly check and fix any leaking taps?

Over the long term a leaking tap can waste a significant amount of water. Post a number to call near sinks so someone may fix it right away. Do you keep radiators free of office furniture? Make sure that furniture does not block the radiators as otherwise the heat will be wasted.

Environmental policy: Have you set up a “Green Team” or “Eco Champions” team in your company?

By getting your employees involved and part of the greening process, they will feel valued. Do you have a collection point for aluminum, glass, or plastic?

Information technology: Do you have a green IT infrastructure? There are now over 1.1 billion computers in operation worldwide, collectively producing about one billion tons of CO2 through their electricity requirements. Also contributing to the earth’s pollution are outdated computer equipment, mobile phones and electronic gadgets that make up 5 percent of the world’s garbage. Considering our continuing demand to have the latest and greatest in multitasking phones and so on, that’s an alarming amount of products to be tossed aside each year.

Office supplies: Do you have a printer that can print on both sides? If you don’t, then consider investing in one once your lease for the existing one is up for renewal or when your existing one no longer works.

Travel and transportation: Rather than traveling to meetings have you invested in suitable technology for conference calls? It is worthwhile investigating alternatives such as using iChat or Skype for meetings that require face time.

Wildlife and biodiversity: Have you created a wildlife area around your office? Even if you only have a concrete courtyard you can still create a wildlife area by planting some native plants and flowers in plant pots. This will be beneficial to the planet and much easier on the eyes than sterile office files.

Making use of what you have is an easy place to begin your journey to being greener. How do you see your organization becoming more resourceful with materials and money? How will you continue to evaluate its progress towards being an ecofriendly company that you can feel proud of?

Take a small step towards this victory…and then another small step…and then another. Each step is for the generations that follow us. Walk on!

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Down under exp in No

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mong a range of Australian mining companies, Jetcrete has been well known for close to three decades as a leading provider of shotcrete and related ground-stabilization solutions. From vent shaft construction to high-wall stabilization, badground rehabilitation to shaft lining, remote spraying of horizontal development works to vent wall construction, Jetcrete has developed a reputation for safety, quality and innovation. Now it hopes to translate that experience and success into the robust North American marketplace.

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For more than 25 years, J and related services to mi Now, thanks to a joint ven North American mining ma

Jetcrete Australia and Thyssen Mining Joint Venture

perience

orth America

Jetcrete has been providing shaft wall building, ground stabilization ining and construction companies across the Australian continent. nture with Thyssen Mining, the company is aggressively entering the arket, as Keith Regan learns from the joint venture’s general manager AUGUST 10 www.bus-ex.com

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Jetcrete Australia and Thyssen Mining Joint Venture

Elasto Plastic Concrete Elasto Plastic Concrete (EPC) is a leading global supplier of structural synthetic fiber reinforcement, focusing on the development of safe-to-use, durable reinforcement for civil and mining Shotcrete applications. EPC’s BarChip range of fibers are designed to replace steel fiber and welded wire mesh in primary and secondary Shotcrete linings, as well as precast segmental tunnel linings. At EPC we aim to improve our customer’s

competitiveness

by

providing

superior economic returns through the delivery of world class application knowledge and advanced technology to control the toughest of environments. BarChip – when performance and durability matter, make your first choice the right choice. www.elastoplastic.com.

The platform from which Jetcrete is making that push is a joint venture with Thyssen Mining Construction Canada, a Regina, Saskatchewan– based mining contractor that specializes in shaft sinking, horizontal development and production mining and that has a close relationship with Jetcrete’s parent company, Byrnecut Mining, also a leading specialist underground contractor in Australia and around the world. Both are part of the mining and industrial conglomerate known as Thyssen Schachtbau GmbH of Germany.

According to the joint venture’s general manager, Scott Johnston, Thyssen provides the back-office support and other infrastructure that made the launch into the new market possible. “Moving into this market was something we had looked at previously, and we’ve had a variety of inquiries for our services here in the past,” says Johnston, who has about a decade’s worth of experience with Jetcrete in Australia. With a letter of intent to provide contract services to a client in hand, Jetcrete renewed those efforts during 2008. “We

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decided that a joint venture would be the right way to work together to make this happen, because it would not require us to put the entire infrastructure in place we would need to operate here.”

The joint venture formed in the fall of 2008, and by early 2010 Jetcrete had about 20 employees in the field with plans to further ramp up hiring as demand increases in 2010.

Although Jetcrete technology may not seem that different from most other providers of shotcrete spraying, which is essentially the application of concrete or other mortar products applied through a high-pressure concrete pump and then directed-placed through either a handheld or robotically operated nozzle to the surface as required. However, Johnston says, what sets Jetcrete apart from its competitors is the company’s commitment to safety and attention to detail along with the procedures for varying tasks it has developed over its long history.

Shotcrete and fibrecrete are often used as replacements for traditional wall-stabilization methods, including steel mesh that is bolted into place over any exposed rock that may pose a hazard to the workers and equipment. The ability of a contractor such as Jetcrete to offer a faster alternative to that painstaking process makes it compelling to mining companies that are eager to reach their ore bodies and begin generating cash for their shareholders.

“We’ve developed techniques and equipment over the years that may not have been used here in North America in the past,” Johnston adds.

“Shotcrete itself is not a new process, but the way you can go about applying it is where there have been a lot of advances that we hope to bring into this market. Certainly mining company owners and operators are always looking for ways to get their underground development works and shafts completed more quickly so they can start the actual mining of the ore body sooner. Building mines is an expensive endeavor, and mining companies will embrace any approach that is safer and of higher quality but also faster than what they have traditionally done.”

Recent technological advancements in the industry that Jetcrete has helped advance or embraced include hydro scaling to prepare the surface areas for the application of fibrecrete and the use of robotic equipment to reach dangerous

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Jetcrete Australia and Thyssen Mining Joint Venture

“Mining is a fairly small industry, so there are people in North America who know about our work Down Under. Our job now is to keep building that reputation one project at a time” spaces. “We’re always trying to continually improve on what we have,” Johnston says.

“There’s always room for improvement, and we’re constantly getting feedback from our sprayers and our clients about ways we can do that.”

Other value-added services offered include customized shotcrete mixes and blends, often mixed on-site from locally sourced materials, and the ability to apply shotcrete to shafts currently up to 500 meters deep without sending workers into the space. That process uses a control room connected via closed-circuit television, where highly trained operators conduct the entire process remotely, eliminating the need to put workers at risk before the shaft walls are through being stabilized.

The technology used has applications in a range of mining settings, especially in underground mines where shafts predominantly are used for ventilation, emergency egress or for ore passes used to get material out of the ground.

Some of the differences encountered in the North American market include the prevalence of owner-operator mines in the new market, whereas “in Australia you find more contractors running mines for the owners and also the use of in-cycle fibrecrete and post bolting more widely utilized for standard ground support as opposed to traditional bolt-and-mesh application,” Johnston points out, “as well as varied environmental conditions in a market that stretches from the Arctic Circle to the deserts of the southwestern US. We’re also

dealing with a wider range of temperatures here, and that poses its own challenges that have to be addressed in terms of getting the material mix correct in the field so it can meet and exceed the client’s requirements in terms of minimum strength and the quality of the application.”

One of the areas for constant monitoring and improvement is safety, with mine operators demanding excellence from their contractors of choice. “You have to be safer than your competitors,” Johnston says. That means having the latest equipment and technology as well as highly trained operators. All Jetcrete sprayer operators receive extensive training, including mandatory apprenticeships in other positions, such as material delivery and equipment setup, before they are authorized to do the actual material applications.

Some of Jetcrete’s first North American engagements include work on uranium mines in northern Saskatchewan with Cameco, and other clients include Xstrata Nickel Rim operations in Sudbury, Ontario. For the time being, Johnston and his team are focused on getting the word out to North American mining companies about Jetcrete and telling the story about the company’s long and successful history in Australia. “Mining is a fairly small industry, so there are people in North America who know about our work Down Under,” says Johnston. “Our job now is to keep building that reputation one project at a time.” www.thyssenmining.com/jetcrete-na.html

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Calgary’s West LRT line

Calgary’s West LRT project represents a number of firsts and other major milestones for the western Canadian city and the province of Alberta. Keith Regan learns how the project’s intentional detour through an extensive public interaction and feedback process is helping to make for a smoother ride now that construction is well under way

T

he western Canadian city of Calgary, Alberta, has long recognized the value of extending its growing light rail transit (LRT) system to the west side of the metropolis, which in the past decade has grown by leaps and bounds as nearby oil sands projects have helped boost the economy.

An initial functional study of the idea of extending light rail to the western fringe of the city was completed some 27 years ago, only to sit on a shelf for some time.

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But in 2006 the project was revived as part of a larger effort to engage the Calgary community on issues of land use. What ensued was a large-scale effort to gather public input around station design and urban design. By mid-2008 the City Council had approved a revised alignment incorporating citizens’ suggestions. At the same time, the Council adopted the public engagement plan, a first for the city, according to Christian Cormier, communications coordinator for the project.

“We had more than 120 public meetings with the community,” Cormier says. “This is a line that is being built for the communities it will serve, so we wanted those communities to take ownership and have a say in how the stations and the line itself integrated with the community.”

As a result of the public feedback, the

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8-kilometer extension was designed to feature the city’s first elevated LRT guideway and station, Sunalta Station, which will have the added benefit of knitting back together two neighborhoods cut off by a major road with the connection to a pedestrian bridge. “That’s a perfect example of how the public engagement process enabled us to make a better project,” says Cormier.

Another project highlight includes the first underground station. The project is also the first new LRT line in Calgary in more than two decades and the largest infrastructure project in the city’s history.

The line’s six new stations will feature a common architectural language, which Cormier described as Chinook arch, though each station will also feature a unique design reflecting the input of the community it will serve. “Our mission

Calgary’s West LRT line

was to strike that balance,” he says. “We wanted to get that local input because citizens know their communities best. But we also needed to have a consistency along the line, and we worked hard to bring everyone together on the final station and urban designs.”

Beyond the LRT line itself, the public had a major hand in helping to shape the future development of the catchment area. For instance, in the area near the Westbrook station, where an existing mall and extensive prime land sits, the public helped shape a planned transit-oriented development (TOD) that will include a mix of residential and retail uses.

“We’ve always been a forward-looking city in terms of land use and development issues, and these are more examples of how we can stay on that cutting edge,” Cormier says. The LRT line will be used

mainly by commuters into the booming downtown business district from the fast-growing suburbs to the west, as well as by a recreational center, a community college and a new high school that is also being built.

The public engagement process helped create a foundation for the ongoing communication that is necessary to make the project run smoothly.

Traffic disruptions are unavoidable, particularly as two major access roads to downtown Calgary are within the construction zone. The project team uses an interactive website, email alerts and the local media to keep commuters and residents updated on changes and progress.

“There is a lot of coordination that has to happen on the ground to make sure things run smoothly, and the team we have in place is going a great

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job of making sure that stakeholders are kept informed in a timely manner,� Cormier says.

The project was put out to bid at a favorable time, in mid-2009. Some of the budget savings reaped so far have been plowed back into the project. For instance, a third wing that was not

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in the original budget has been added to the new high school being built to replace an existing school that needed to be moved to make way for the TOD site at Westbrook.

Work is progressing on schedule as well. The City of Calgary embraced a design-build approach

Calgary’s West LRT line

SNC-Lavalin In addition to the West LRT EPC contract, SNCLavalin provided the City with track work design and engineering for the Northeast and Northwest CTrain extensions.

SNC-Lavalin is Canada’s largest engineering and construction company, with a presence in all major Canadian cities. It has designed and constructed many of the most ambitious transportation and infrastructure projects, and won national recognition for sound corporate governance.

to help move the project forward more quickly, with a joint venture consortium led by SNCLavalin along with Graham Infrastructure, CANA and ENMAX securing the design-build contract.

Major utility relocation and roadworks construction will likely be wrapped up next year, and current plans call for the line to begin revenue service in December 2012. “When you look at the project from start to finish, including the engagement process, we will have finished the project within five years, and that includes more than a full year of public engagement,” says Cormier.

Once it is up and running, the LRT line will get its power from wind—all of the Calgary LRT’s power comes from that source. “That’s just one of our green initiatives that help the City of Calgary reduce its carbon footprint,” says Cormier.

“Calgary has seen substantial growth on its west side,” he adds. “In the next decade or so there will be more and more people on that fringe of the city. And the West LRT line will offer them a safe, reliable, fast and clean transportation option.” www.westlrt.ca

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dr

Growthby

In 2009 Ray Smith was parachuted in as CEO and president to rescue Tru Trust. Now 18 months into the job, he talks to Gay Sutton about the rem turnaround, about renaming the company Bellatrix Exploration Ltd., and a ambitions to make it the rising star of the Western Canadian Basin

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ellatrix operates with integrity and conducts its operations in a safe and environmentally responsible manner. When Ray Smith was appointed CEO and president of True Energy Trust in January 2009, the oil and gas exploration and development company had gone into serious decline. Operating as a trust, it had made a series of acquisitions. But with lethargic oil and gas production and limited exploration success, the company had accrued a debt of C$215 million against a projected cash flow for 2009 of just C$28 million.

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Bellatrix Exploration Ltd.

rillbit

ue Energy markable about his

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Bellatrix Exploration Ltd.

“As a result, the company asked me to come out of retirement and take over,” Smith explains.

With some 41 years of oil and gas exploration, development and production experience in the Western Canadian Basin—many of them at the helm of successful businesses—he was tasked with turning the company around.

Just 18 months into the process, the company’s debt has been slashed from C$215 million to C$73 million and cash flow has increased from C$28 million to C$70 million. “We’ve turned the corner, and we’re now into a continuous growth mode,” Smith says. Moreover, this dynamic and forward-looking ethos has also been beautifully articulated in the rebranding of the company at the end of last year as Bellatrix Exploration Ltd., named after one of the brightest stars in the sky.

“Bellatrix is the name of a bright star sitting on the left shoulder of Orion, which is some 10,000 times brighter than our own sun. We feel this company will be a new rising star,” Smith says.

The road to recovery, however, has been rough, and Smith has tackled the turnaround with a fourpronged strategy aimed at setting the company on a strong operational and financial footing, reinvigorating its exploration activities and beginning the process of establishing a balanced portfolio of operations to offset the risks of volatile prices.

His first step was to create the strongest management team possible to lead this change, and he swept most of the old management away, appointing a new suite of vice presidents, all of whom had 30 years or more of experience in the Western Canadian Basin. Only the CFO was retained from the previous team.

Smith then looked to optimize production across all levels of the company and drive down the corporation’s cost base. “We made significant changes to our field staff. In actuality we changed out about 50 percent of the field staff, appointing individuals we felt possessed the skills required to accomplish the goals and objectives set for them,” Smith comments. Of the original 100 employees and consultants company-wide, over half were replaced by just 30 new appointments.

Today the company operates with roughly twothirds of the original staffing levels, and economies have been made across all departments. “By streamlining the business and taking care of the paperclips, if you like, we’ve driven our general

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and administrative costs down from $18 million to $11 million, which is a 40 percent decrease.”

Looking at the broader canvas, overall lease costs have been reduced from C$66.5 million for fiscal year 2008 to C$45 million for 2009, and these are likely to be further cut to C$36 million this year.

The second step was focused on stabilizing the cash flow. Given the highly volatile commodity price environment facing the oil and gas industry in 2009, his primary strategy was to maximize the company’s hedge position as it pertained to gas prices. In early 2009 the company hedged out about 68 percent of its gas at C$7.26 per thousand cubic feet. This, combined with production optimization, delivered a cash flow of C$36 million for 2009—more than 28 percent above the original forecast.

turnaround strategy, an equity financing was made in January 2010 under the new company name—Bellatrix Exploration Ltd. This raised C$45 million and was followed by successfully closing a C$55 million convertible debenture at an interest rate of 4.75 percent and a maturity date of April 30, 2015. The combined financings were used to further reduce debt, provide additional capital for the 2010 exploration program, and facilitate the buying out of the company’s C$85 million convertible debentures that had a 7.5 percent coupon. The result is a lower cost of capital as a base component of Bellatrix’s overall debt structure. “We’re moving forward with a $75 million exploration budget based on $60 to $70 million in cash flow, and we’re looking at the 2010 year-ending debt forecast to be

“We changed out about 50 percent of the field staff, appointing individuals we felt possessed the skills required to accomplish the goals and objectives set for them” The third prong in Smith’s plan was to reduce the company’s enormous debt, providing financial flexibility by reducing the ratio of debt to cash flow to one year. In three separate transactions, the company sold production of 3,600 barrels of oil equivalent per day and some minor overriding royalties paid to the company for approximately $102 million. The combination of cash from the asset sales and excess cash flow received due to the gas price hedges enabled him to pay down a considerable amount of debt, reducing it from C$215 million to C$107 million by the end of 2009.

However, the sale of assets had the adverse effect of reducing production to 6,200 barrels of oil equivalent per day. “In the fourth quarter the company initiated its exploration program, which has been very successful; we’ve rebuilt our production to 7,000 barrels of oil equivalent per day by year-end 2009.” The final act of 2009 was to convert the company from a trust to an exploration and production company by way of a plan of arrangement and take on the name Bellatrix Exploration Ltd., which was approved by shareholders on November 1, 2009.

To complete the financial element of the

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approximately $80 million,” Smith says.

The fourth element of Smith’s turnaround program focuses on achieving stability for the future by shifting the production portfolio toward a 50/50 mix of oil and gas production. “We are therefore spending about 75 percent of our $75 million exploration budget on oil plays this year and an equal percentage in 2011. It’s anticipated we can achieve our goal by mid-2011, which should provide the company with a more stable cash flow base during years of additional price volatility,” he explains. “Meanwhile, we have a very large inventory of development opportunities on our existing properties in the Cardium oil and Notikewin liquids-rich gas plays in central Alberta.”

To enable it to dramatically drive down the costs of finding new oil and gas and to increase the productivity of the wells, Bellatrix has been harnessing some of the latest technology. Over the past five years, new completion techniques have been developed that allow horizontal drilling in multistage completions in reservoirs, resulting in a much higher productivity rate and ultimate recovery rate. Until last year, that technology had been applied exclusively to non-economic

Bellatrix Exploration Ltd.

vertically drilled reservoirs and shales, increasing productivity and making them economically viable. “This of course has led to the massive advancement of shale gas in North America,” Smith says. “At the end of last year, however, we began to introduce this new technology to existing quality reservoirs in Western Canada, and the results have been nothing short of phenomenal.”

The application of this new technology is proving to be a “game changer” for the Western Canadian Basin; the wells’ production rates have been improved dramatically and the ultimate asset recovery is enhanced, resulting in substantially improved economics and return on capital.

The technology has not only increased the productivity of new wells but also has had a more complex long-term impact on costs. The Cardium reservoirs, where the majority of this investment is being spent, has a relatively shallow

long-term annual decline in production of just 6 percent; the industry average in recent years is 20 to 22 percent. “By adding a large block of this lower-decline asset, we’re bringing our corporate decline rate down to 15 to 16 percent. So the mathematics are simple; we can deploy less capital replacing annual production and more of our capital for growth.”

Looking to the future, the company does not foresee making any acquisitions unless they fit well with the existing asset base and provide additional drilling opportunities. “We can provide our stakeholders higher sustained rates of return for their investment in Bellatrix by growing the company with a successful drill bit program, and we have the ability to do just that,” Smith concludes.

“We believe we can double the company over the next three to four years through development drilling alone.” www.bellatrixexploration.com

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Making

roughnecks’w

Jeff Daniel looks at TIW Corporation, one of companies that provide the technology and sp to the big-name companies to aid in the se

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TIW Corporation

g

work alittle smoother

f a myriad of smaller pecialized equipment earch for oil and gas

C

ompany mottos tend to be a bit folksy at the best of times, and the one at TIW Corporation is no exception: “Get the job done right, as fast as possible, whenever and wherever the call comes. And if you find a better way, do it.” But the exhortation to complete the job ASAP and to adopt all new improvements in the process has served TIW well for more than 90 years, when it was known as Texas Iron Works.

These days the company is still in the same family’s hands, but it has moved on considerably, going from town blacksmith to international provider of services and solutions to the world’s oil companies. It might well have been because a horse-drawn wagon couldn’t negotiate the ruts in the road between Goose Greek and the other side of Houston—15 miles away—but the habit of opening new shops to service important exploration areas has stuck.

Oil has been extracted in Texas for decades, but it was only in 1917 that the newly developed rotary oil drilling technique caused a boom in the marshlands of Goose Creek. Rotary drilling was three to four times more efficient than the previous system, and the promise of faster drilling and faster payoffs attracted would-be oil barons from all corners of the world.

But the improved drilling technology, centering around “fish tail” bits, brought a need for more maintenance work and new machinery that could only be carried out by people who had the facilities, the know-how and the creativity to develop them. In fact, one of the consistent aspects of TIW’s evolution is the number of firsts it has contributed to the industry and the continuous flow of patented innovations it has registered.

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TIW Corporation

“TIW’s reputation means that its equipment is specified around the world on some of the deepest and most difficult wells in existence, whether state-of-the-art horizontal completions or in deepwater applications” For example, early slips were manufactured in two separate pieces. If roughnecks dropped them into the housing wrong, or if half slipped, the pipe could be kinked. TIW developed the first unitized slips, with the sections joined together so that when set, the pipe was held with equal pressure on all sides.

The weakest point in most early drill strings was the connection. Torque stresses from pipe wrenches, combined with heavy-handed treatment when pin and box were slammed together, weakened the metal and threads, which were then stressed even more by constant abrasive rubbing between open hole and casing. To help rotary rig drill strings withstand the wear, TIW developed the first string of tool joints ever made on the Gulf Coast.

As liners began to be used in casing programs, TIW introduced a wide range of liner packers and setting equipment. When liners got too heavy to be set on the bottom, TIW developed liner hangers to support their weight. Then, as the search for oil and gas pushed wells deeper and deeper, the demand for accuracy, quality and consistency became much greater to match these new, harsh environments.

TIW liner hangers have been used to hang some of the heaviest and deepest liners in wells around the world, including three of the deepest wells in oil industry history. In March 1990, a TIW hydraulic set liner hanger was used in the Gulf of Mexico to hang the world’s longest and heaviest liner up to that time. The 13,847 feet of 13 5/8-inch casing weighed in at over 1.2 million pounds.

TIW still has its corporate headquarters and main manufacturing facility located in Houston, from which it services a vast network of subsidiaries, branch offices and agents throughout the world.

In addition to the Houston plant, TIW also has manufacturing facilities in Lafayette, Louisiana, and Nisku, Alberta, while Honing Inc., located in Houston, is a fully owned subsidiary of TIW, performing precision boring and honing operations.

The bulk of the business still comes from the essential, down-hole tools found in every oil and gas well. It’s the type of business where you’re as good as your last job. There are enough things

to go wrong on a drilling rig without having to worry about the consumables not doing their work properly. Functionality, ease of use and dependability are all key attributes to anything that goes down the well hole.

TIW’s reputation means that its equipment is specified around the world on some of the deepest and most difficult wells in existence, whether stateof-the-art horizontal completions or in deepwater applications. At the same time, drill operators often call for TIW on less challenging wells where they simply want the work to be as hassle-free as possible.

As a recognized industry leader in completion solutions, TIW offers a complete line of liner hanger systems, expandable liner systems, completion packers, safety and Kelly valves, and window cutting products for the well liner.

As TIW is engaged in a highly competitive industry, however, nothing stands still for long.

With all the easy oil taken, more innovative and productive methods are continuously being sought. Consequently, TIW has recently invested a further $1 million in improving its R&D facilities to assure that the company will remain at the cutting edge of technological advancement.

As well as the usual computerized design aids, TIW engineers make full use of finite element analysis and rapid prototype modeling to verify a product’s performance before it is ever rendered in steel, but with so much as stake, nothing goes into the field that hasn’t been tested to the nth degree beforehand.

In order to simulate conditions as closely as possible, TIW has a 280-foot-deep vertical and a 55-foot 24° inclined test well with 133 / 8-inch casing that can be sleeved down to test smaller sizes. Oil flow is simulated thanks to two 400-barrel tanks complete with rotational and vertical movement, and data generated is captured on state-of-the-art recording and analytical equipment.

Companies such as TIW Corporation might be outside the limelight, but without their expertise the oil business as we know it would be a lot less productive in what it does. www.tiwtools.com

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Exceler

Excelerate Energy’s technolo gas projects to fruition. Chi using that knowle

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Excelerate Energy

ratepositive the

ogical expertise has earned it a solid reputation for bringing liquid natural ief operating officer Jonathan Cook tells Keith Regan how the company is edge to help bring more energy flexibility to economies around the globe

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hen Excelerate Energy got its start in July 2003, company sponsor George Kaiser and his co-founders recognized a need for new ways of importing natural gas into the North American marketplace. At the time, demand was outstripping domestic supply, and the marketplace was not well equipped to import large quantities of the fuel, which is used for heating and cooling homes and businesses as well as powering electric generation plants and industrial facilities.

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Excelerate Energy

GAC For the past seven years GAC has provided global hub services to Excelerate Energy.

GAC is a global provider of shipping, logistics and

marine

services.

These

services

are

constantly being refined and integrated to serve our customers’ increasing need for competitive solutions. Emphasizing trust, reliability and a strong human touch, GAC has been building its reputation in its chosen markets since 1956.

Headquartered in Dubai, GAC employs over 9,000 people in more than 300 offices worldwide. www.gacworld.com

land, Excelerate had to install just eight miles of new pipeline to tap into existing gas infrastructure.

Two years later, Excelerate commissioned and built a land-based receiving terminal in the United Kingdom. That facility, known as the Teesside GasPort, is the world’s first dockside LNG vaporization and natural gas receiving facility and uses the company’s Energy Bridge technology. That project was brought into service just 12 months after the site was chosen and cost just a fraction of a traditional land-based terminal.

A year later, Excelerate was again building offshore assets, this time constructing the Northeast Gateway some 13 miles off the coast of Boston, which enabled the company to tap into the seasonally driven demand for natural gas. Building that facility helped Excelerate drive efficiencies in

“There are significant supplies that are dislocated from the markets where the demand exists, and irrelevant of price, there is a need to move the gas from the supply source to the market” With several key co-founders on board from the former liquid natural gas (LNG) unit at El Paso Energy, Excelerate began to address the gaps in the market with technology that enables LNG to be regasified at offshore facilities.

Co-founder and chief operating officer Jonathan Cook says Excelerate, which is headquartered in The Woodlands, Texas, began securing access to the handful of LNG terminals in the United States and by the end of 2003 had struck a deal to acquire the Energy Bridge assets of El Paso Energy, which was eager to divest itself of the assets in the wake of the Enron fallout and other hard times for energy companies. “When we were with El Paso we had pioneered the technology of onboard regasification, and we saw that technology as an opportunity that was better positioned than traditional land-based facilities,” says Cook. Around the same time, Excelerate acquired the rights to ships owned by Belgium-based Exmar that had onboard facilities that could transform LNG back into gas form and discharge it to receiving terminals.

In 2005 Excelerate completed the Gulf Gateway project, an offshore terminal located some 116 miles out in the Gulf of Mexico. Despite the distance from

its shipping fleet, significantly reducing the amount of emissions from those vessels and reducing their water usage while also implementing technology designed to reduce the number of collisions between ships and marine wildlife such as the endangered North Atlantic right whale.

Since that time, most of Excelerate’s investments and opportunities have been overseas. In 2008 it commissioned a facility in Argentina that actually uses a regas-capable ship as a portable terminal to provide services to that country when demand is high for natural gas used for heating, in the May to September period. The rest of the year the ship can be deployed to other parts of the world where demand is higher.

The Middle East is proving to be another key growth market for Excelerate. In 2009 it built a gas port in Kuwait to help address peak demand for natural-gas-powered air conditioning. Excelerate also served as the engineering and construction contractor for the shoreside facility in Kuwait.

“Our focus is now very much on an international basis,” Cook says. “We’re seeing opportunities in various parts of the world: in and around Europe, in the UK, in the Mediterranean region and in South

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Excelerate Energy

America, as well as Asia. There is a lot of demand for LNG receiving capabilities, and our technology allows us to come in and—with a very minimal footprint compared to more traditional land-based facilities—do things more cost-effectively and often more rapidly.” Excelerate gained additional access to markets in Europe and elsewhere in February 2008, when Kaiser sold part of his stake in the operation to Germany-based utility RWE. Although LNG is not particularly hazardous or dangerous cargo, siting onshore facilities can be a challenge because of safety concerns. “It tends to be a lightning rod for public concern, and being able to locate offshore facilities on a permanent or semi-permanent basis is a palatable alternative for a lot of people.”

In addition to buying and selling LNG on the spot market and through longer-term supply contracts, Excelerate also provides storage and regas services and also charters its own vessels to third parties. Doing so enables the company to keep its assets in use as much as possible, which in turn allows it to keep its costs lower.

Excelerate is also one of several companies close to bringing to market technology that will equip ships with the ability to liquefy natural gas for transportation, which could create new markets for stranded gas reserves that could be

sold to markets where demand is running higher.

Excelerate continues to work with Exmar on such ship-based advances, with Exmar serving as technical managers and owners of the vessels and Excelerate operating them and owning an equity stake in partnership with Exmar.

Even with the global economy in slowdown mode, the demand for LNG is continuing to grow, Cook says. Many newer power-generation facilities are capable of running on multiple fuels, and natural gas is considered cleaner and more environmentally friendly than some other alternative fuel sources, such as coal.

“There are significant supplies that are dislocated from the markets where the demand exists,” says Cook, “and irrelevant of price, there is a need to move the gas from the supply source to the market. What we’ve been seeing is that even with gas prices in the US at historic lows, the market is so large that it can absorb more supply. Even with new liquefaction coming on line and new suppliers in the market, you’re going to continue to see LNG flowing to those places where the demand exists. The marketplace knows we have the technology and the experience with bringing projects from idea to reality in a way that makes more projects feasible and economical.” www.excelerateenergy.com

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res

Shaw AREVA MOX Services, LLC

Dave Stinson, president and COO of Shaw AREVA MOX Services, explains the process of de-fueling nuclear weapons and converting that fuel for use in commercial nuclear power generation

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n the early 1950s, when the Cold War began between the United States and the Soviet Union, massive military reactors went online at the US government’s Savannah River Site (SRS) in Aiken, South Carolina, where workers in five plants began producing plutonium and tritium for thousands of nuclear warheads. The SRS is one of eight facilities that make up America’s Nuclear Weapons Complex, in which programs managed by the Department of Energy’s National Nuclear Security Administration (NNSA) ensure proper surveillance, maintenance, refurbishment, manufacture and dismantlement of the US nuclear weapons stockpile and perform research and development.

In early 2000 the Plutonium Management and Disposition Agreement signed by the leaders of the US and Russia declared the nuclear weapons to be “surplus,” and each country agreed to dismantle 34 metric tons of the nuclear material, which accounts for most of the stored weapons. Just prior to that meeting, in late 1999, the NNSA signed a contract with a consortium, Shaw AREVA MOX Services, LLC (MOX Services), to design, build and operate a Mixed Oxide (MOX) Fuel Fabrication Facility on property at the SRS, where plutonium from dismantled bombs would be converted to mixed-oxide fuel to be used in commercial nuclear reactors to generate electricity.

But while planning proceeded slowly in the US, it moved much more slowly in Russia, apparently due to lack of funding. So Americans offered to help the Russians, at least with workers and contractors, if Russia could find funding to begin construction of the plant. Then both sides became deadlocked on the liability rules for the US personnel who would help build the Russian plant.

After much discussion and delays, in September 2006 the US and Russia signed a liability agreement that cleared the legal hurdle for the US workers in Russia. In November 2007 the US energy secretary and the director of

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Shaw AREVA MOX Services, LLC

Siskin Steel & Supply Co. Siskin Steel & Supply Co., a wholly-owned subsidiary of Reliance Steel and Aluminum Inc., announced its new teaming agreement with Specialty Maintenance and Construction Inc. (SMCI) earlier this year. This newly formed alliance establishes Siskin Steel / SMCI to provide nuclear grade metals in accordance with NQA1 (10CFR-50 Appendix B) and ASME Section III specifications. Commercially dedicated material will be stocked at Siskin Steel’s Chattanooga facility, making it readily available for immediate delivery to those in the nuclear industry.

Rosatom, Russia’s state corporation for nuclear energy, signed a statement committing the countries to dispose of Russia’s surplus plutonium. And most recently, at the Moscow Summit held in July 2009 between Presidents Barack Obama and Dmitry Medvedev, both countries restated their readiness to finally implement their previous commitments.

At SRS, construction of the MOX facility began in August 2007. The main partners behind the consortium contracted to build it are Shaw—a vertically integrated provider of engineering, design, consulting, procurement, pipe fabrication, construction and maintenance services to government and private-sector clients in the energy, environmental, infrastructure and emergency response markets—and AREVA— the world leader in nuclear power, covering all industrial activities in this field, with manufacturing facilities in 43 countries.

The consortium’s board of governors chose Dave Stinson as president and COO of the MOX facility.

Stinson began his career in the Air Force and then founded Digital Engineering, a software and engineering firm of 300 that developed systems for conducting safety analyses for commercial nuclear facilities. After selling that company, he became the Tennessee Valley Authority’s project manager for the $1.5 billion recovery of the Browns Ferry Unit 3 nuclear plant, which was completed in 1995, six months ahead of schedule and $120 million under budget. Later he joined Intergraph Corporation as president, responsible

for developing its 3D CAD business.

“Construction of the MOX facility is progressing well,” says Stinson. “This year’s budget is $567 million, and expenditures will be about $470 million, with the balance in procurements.”

Most procurements are domestic; some specialty products are imported.

The design of the MOX plant is based on a similar project in France, where the MELOX and La Hague facilities provide MOX fuels to more than 30 commercial nuclear power plants in several countries. Construction of the 600,000-squarefoot MOX facility at SRS will require more than 170,000 cubic yards of concrete, 35,000 tons of reinforcing steel, 23,000 electronic instruments, 1,000 tons of heating and air conditioning equipment, 500,000 feet of conduit, 47,000 feet of cable tray, 3.6 million feet of power and control cable, and 100 miles of piping. The plant’s exterior will consist of a pair of 42-inch-thick concrete walls reinforced with a mesh of two-inch steel bars; between those walls will be a cavity filled with boulders; the resulting fortified wall will be built to withstand the impact of a missile attack.

Once the facility is operational, the surplus weapon-grade material will be cleaned and purified in the seven-level aqueous polishing portion of the building. The MOX area will consist of three levels where the fabrication of the fuel takes place, from formation of the pellets to assembly of the MOX fuel rods for reactor fuel assemblies to be used in commercial nuclear power reactors to create electric power. The facility will be capable of annually turning 3.5 metric tons of weapon-grade plutonium into MOX fuel assemblies. Operations are scheduled to commence in 2016 and are expected to remain functional into the 2030s. The total estimated cost of the MOX Project is $4.86 billion.

“We continue to get strong support from Congress,” says Stinson. “Our domestic procurements are a kind of small stimulus program for this country, and we continue to do high-quality work. We have a strong partnering relationship with our NNSA staff that has had a significantly positive influence on the project.

We’re very proud of our safety program and the way our employees have implemented it. Keeping them safe is my top priority. We’ve worked more than 5.6 million man-hours with only two minor incidents of lost workdays, and since then we’ve

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Shaw AREVA MOX Services, LLC

gone on to log another 1.4 million safe hours. That means a lot to us. Our incidence of recordable injuries is low, and we’re looking at first-aid cases to see what we can do to anticipate and prevent those as well.”

With the lack of skilled nuclear workers in the US, MOX Services is working with colleges to develop both technical and management training programs. “We have an MBA program for our employees at the University of South Carolina, and we’ve started a two-year program with the local technical college in Aiken. We’ve got strong support from our corporate board of governors to help make that process easier for employee training. We’re offering our people courses in project management and engineering that we pay for. And we’ve already started the recruiting process focused on middle schools and high schools.” He expects the number of employees at the facility to peak at around 2,400.

Once trained for the MOX facility, employees also have a career opportunity with both Shaw and AREVA, which have active projects in the US building commercial nuclear plants.

“We’re creating a work environment that’s accommodating to employees by acknowledging their goals and aspirations, providing them an opportunity to challenge themselves educationally and career-wise. We call it our

MOX Gateway program, and it’s working well.”

Asked whether he intends to stay on in operations once the facility is constructed, Stinson laughs and says, “No, at that point my work will be done. I actually accepted this position when I was officially retired, because it seemed like a great mission. Early in my career as an Air Force Academy graduate, I was in the Strategic Air Command. I’m sure many of these warheads that we’re now taking out of service and turning into clean, carbon-free energy are ones that I was responsible for 34 years ago. I’ve been a project manager responsible for commercial nuclear plants, and some of the plants that I built are going to use this MOX fuel.

“The engineering and safety procedure software we developed in the past is being used here,” Stinson continues, “and I was able to go out and recruit very senior-level people. I asked them to come in at a lower level than their last job, to build a leadership team and help shape the workforce here.

Today we’re hiring and training the leaders for that operational portion due to begin in 2016. So for me, like a lot of the people I brought in to help work on this project, this is an opportunity to go full circle in our careers—to do something that we feel really good about. To me this is the greenest project on earth, from weapons of mass destruction we get clean, carbon-free energy.” www.moxproject.com

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Space

Three years ago the North American m industry witnessed the creation of its bigge when Modular Space Corporation came to lif talks with ModSpace senior vice presiden about the secrets behind the com

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Modular Space Corporation

eforrent

modular building est organization fe. Andrew Pelis nt Kevin Bremer mpany’s success

M

odular Space Corporation (ModSpace) emerged in April 2007 from Resun Corporation’s acquisition of General Electric Capital Corporation’s North American modular space business. The acquisition created the country’s largest US-owned supplier of permanent modular construction and temporary modular space.

At that time, Kevin Bremer was working at GE Capital; today he is senior vice president for ModSpace’s US field operations.

“The creation of ModSpace in 2007 has been a good blending of the two companies’ cultures,” Bremer says. “On the one side was a very structured GE culture, whereas Resun had more of an entrepreneurial approach to business. I think we’ve kept the best of both cultures, and we never get too big for our customers.

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Modular Space Corporation

Tri-Arc Manufacturing Tri-Arc Manufacturing is one of the leading North American manufacturers of standard and custom designed and engineered climbing and access products. From a standard line of mobile ladders and work platforms to the most versatile modular access stairways, Tri-Arc offers an array of standard products ideal for most industries, applications and environments.

Tri-Arc FlexiGuard Custom Access Solutions division specializes in the design, engineer and fabrication of non-standard application specific passive fall protection solutions. When the need calls for high quality climbing and access products, Tri-Arc is the logical choice. Tri-Arc is proud to be ModSpace’s supplier of our VersaStep modular access system products that are used to access their leased buildings. Tri-Arc has been supplying the highest quality products to ModSpace for the past 11 years.

“ModSpace has allowed us to look at new opportunities,” he continues, “and we now have a bigger cross-section of customers than in the past, which has enabled us to become more innovative with our product lines. At ModSpace we provide both temporary and permanent facility space to virtually every market, including energy, commercial, construction, medical, federal and education customers. We have more than $1 billion of buildings in over 80 branch locations across the US and Canada.”

The company delivers a wide range of products, including office trailers, designer series buildings, portable storage units, classrooms, modular complexes, fiberglass enclosures, new custom buildings and emergency space to the commercial, construction, education, government, healthcare, industrial/energy and special events sectors.

Services include steps, decks and ramps (OSHA, CAL OSHA and general code options); furniture, from just the basics to professional office; insurance (optional commercial general liability and damage waiver options); communications services (prewiring for voice and data); plug-and-play services (utility hook-ups, HVAC, bottled water delivery, etc.); and turnkey services project management, design/build services, financing options).

Over the years the Berwyn, Pennsylvania–based company has completed major modular building projects and related services for many prestigious clients including Pfizer, Boeing, Eli Lilly, General Motors, Motorola and the US Army.

Innovation is what really sets ModSpace apart, in Bremer’s opinion. “Our approach helped us grow as the market started to shrink in 2008,” he comments.

“Innovation is one of the four pillars of our culture [along with quality, service and value], and we looked beyond the crisis at how to better invest time and resources to improve products, product performance, service delivery and overall operational efficiency— all done with the customer in mind.”

An example of innovation and the entrepreneurial ModSpace spirit has been the launch of the company’s new website in late June. The new site provides additional customer applications including service requests and online billing, and it opens the door to new business opportunities.

“From our standpoint, internally our teams will link up a lot more, and we have so many assets we can utilize around North America that the new website offers exciting possibilities,” Bremer asserts.

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“We also doubled efforts to improve an alreadystrong sales force,” Bremer adds. “The entire sales team went through an intense one-week course on how to better understand our customers, the markets they serve, and how we can better address their needs and concerns. The results have shown that, even in a declining market, our sales team has improved year over year.”

He further cites quality as one of ModSpace’s key selling points. “We’re very proud of our stringent qualification process. There are hundreds of manufacturers out there, and we’re highly selective on which ones we use; they must meet our quality requirements, and we regularly talk with them to ensure quality and on-time delivery are met. We also use a customer quality tool called the Net Promoter Score where, using an independent third party,

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Modular Space Corporation

“ModSpace has allowed us to look at new opportunities, and we now have a bigger cross-section of customers than in the past, which has enabled us to become more innovative with our product lines” customers are contacted and give a rating and feedback on the level of service they received. The feedback indicates that 90 percent of customers would recommend us to a colleague or friend.”

With as much as 70 percent of business coming by way of repeat customers, positive feedback is crucial given the overall decline in demand for space, and Bremer describes the challenge as a tough fight for a bigger piece of the pie.

Looking ahead, he feels that there remains enormous potential for a bigger slice, given the buoyancy of certain sectors such as energy and medical, though the sales focus is very much aimed at promoting the diversity of services and

sectors that ModSpace can accommodate.

“The new website (www.modspace.com) will help us enormously in this area, and we also operate a call center to cater to customers’ needs. Innovation remains our major priority, and we have several new products due for launch later this year, while we’ll take into account customer suggestions as part of our quality drive. Even though the market is slow at the moment, we’re expecting to penetrate our markets further. We’ve got a national presence yet operate locally with a portfolio of high-quality products. Our motto is, ‘We are ModSpace: one team, one mission, winning with integrity’.” www.modspace.com

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Champio

ar

the

In sports stadium construction, m Luc Pelland, president of Structal explains to Gay Sutton how the com reputation by finding solutions consistently delivering quality pro

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Structal-Heavy Steel Construction

onof

rena

meeting deadlines is critical. l-Heavy Steel Construction, mpany has built an enviable for construction issues and oducts and services on time

T

ake one look at the iconic new stadium currently under construction for the New York Giants and Jets, and it’s obvious that these enormous sports facilities are visually stunning and complex structures. They also represent the cultural identity of large regional communities and a spiritual home for many sports fans around the world.

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Over the last five years, four of these ambitious new stadium projects have been completed in the New York area alone. The New York Yankees and New York Mets have both moved into new baseball stadiums, the New York Giants and Jets will start the 2010 season in their new football stadium, and the New York Red Bulls soccer team also has a new home. In addition, the Pittsburgh Penguins’ new arena is set for completion in August. With so much riding on the efficiency and success of these high-profile building projects, it takes a very special construction team to do the job.

Structal-Heavy Steel Construction has a diversified construction portfolio that includes large-scale commercial, high-rise, industrial, utility and public buildings. Structal and its Quebec-based parent company, Canam Group, have a strong reputation for excellence in the manufacture and erection of steel structures for

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this demanding marketplace. To date, they have participated in the construction of no fewer than 54 stadiums across North America, 19 of them major league stadiums including the four in New York. Noteworthy among their current projects are the Florida Marlins stadium in Florida and a new retractable roof for the BC Place stadium in Vancouver, which is billed as the largest suspension roof in the world. “This is a complex project, and we picked the best people we have to ensure that we deliver a quality job on time,” explains Structal president Luc Pelland.

The number of general contractors (GCs) operating in this specialized marketplace probably only amounts to a handful, and Structal has developed a strong relationship with each of them.

“We work on the principle that the customer is king,” says Pelland. “This attitude begins at the top with the chairman and the president, and, as the saying

Structal-Heavy Steel Construction

goes, we don’t just talk the walk, we walk the talk.”

Providing a full range of services, including engineering, design-assist, fabrication and erection, Structal believes that the earlier it gets involved in a project, the greater value it can deliver to the GC or architect. By bringing its expertise to the table at the design and engineering stages and becoming involved in the decision-making process at these critical stages, many problems can be avoided.

Among the many services it offers, Structal coordinates the detailing of the steel and concrete elements of projects using building information modeling (BIM) technology. In this way, any contact or connection problems can be identified and ironed out before the concrete and steel elements are manufactured, avoiding many costly and time-consuming efforts later on. This service can be expanded further to integrate the HVAC and electrical systems of the project.

In construction projects of this magnitude, no matter how well coordinated you are, difficulties are bound to arise. “We don’t spend time claiming that it’s somebody else’s problem, nor do we argue

disposal to get the work back on track.”

Structal is heavily involved in R&D, investing considerably in new construction products and processes. A patent is currently pending on a new lightweight riser that could significantly reduce the weight of stadium seating. Risers, to which the seats are secured, are traditionally built of concrete and weigh approximately 100 pounds per square foot.

The new risers are fabricated from extruded aluminum and weigh only eight pounds per square foot. “You can imagine the savings that can be made on the foundations, the steel rakes on which the risers are set, the speed of erection and even the cranes required for lifting them. I believe that in the next few years this product will be taken very seriously. It has many advantages and will deliver great cost savings.”

Structal, which employs up to 400 staff members during busy periods, is structured around two fully dedicated sales, marketing and project management teams. One is based in Point of Rocks, Maryland, for the US market, while the other, located in Boucherville, Quebec, serves the Canadian market.

“We don’t spend time claiming that it’s somebody else’s problem, nor do we argue about who’s responsible for what. We work together to find a solution, and then we move forward” about who’s responsible for what,” Pelland adds.

“We work together to find a solution, and then we move forward. Working very closely with the GCs, engineers and architects and building a relationship of trust with them are part of our modus operandi and a major reason for our success.”

The stadium industry is also unique in having to cope with immutable deadlines. For example, the New York Giants and Jets had a full schedule of games organized for their new stadium, which was scheduled to open in April, so construction could not be delayed. “Many things can happen to delay construction, and very often the delay occurs elsewhere and is beyond our control,” says Pelland. “Admittedly, we can’t prepare for every eventuality, but once we’ve been given our start date and completion date, we build alternative solutions into our schedule so that we have a backup plan and, if need be, the means at our

As a division of Canam Group, Structal has access to a network of structural steel fabrication plants spread across North America with an overall production capacity of up to 620,000 tons per annum. In the last four years Canam Group has invested an average of $25 million per year in its manufacturing facilities to improve quality, efficiency and safety, and to deliver cost savings to the customer. “We’re constantly looking for ways to reduce delivery times, cut costs and maintain high quality,” concludes Pelland. “This is a perennial battle that all companies face. But I believe that our efforts have paid off and that we’ve achieved success as a construction solutions provider, basically because we continuously invest in our fabrication plants and administrative structure and always make sure that we have the right people. Having the right people is key.” www.structalstructure.ws

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T

he Vanbots name is ensconced in the finest traditions of Canadian construction. Creativity, innovation and safety have been essential components that have driven the likes of General Motors and Honda to Vanbots’ door when tendering bids on ambitious projects.

The company started out in Ontario in 1955, when two Dutch migrant carpenters began to build homes in Don Mills; by 1959 their success had led them to register the business as Vanbots Builders Ltd. Since then, a succession of takeovers and acquisitions has seen the company grow not only in revenue but also in industry expertise across the globe.

Vanbots today mainly focuses on large commercial projects; it is one of Canada’s largest general contracting companies, with annual revenues that exceed $600 million. The company has built some of Canada’s most prestigious buildings and been involved in challenging projects including the Royal Ontario Museum’s Michael Lee-Chin Crystal, the expansion of the Vancouver International Airport, the Schulich School of Business at York University, and Sunnybrook Health Sciences Centre’s M-Wing expansion.

Perhaps more significantly in the context of the General Motors project, Vanbots has worked on several major projects with Honda, helping to build manufacturing facilities in Canada, the United States and the United Kingdom, as well as Honda’s new head office in Markham, Ontario. The decision to involve Vanbots Construction in the General Motors of Canada Automotive Centre of Excellence project would certainly have taken into account the company’s success stories within the automotive sector.

In 1999 Vanbots successfully won a contract to build Honda’s new European plant in Swindon, England. This ambitious project required a standard of precision in its design and construction that related more to car manufacturing rather than construction, and there was the small matter of completing everything within just 21 months.

Not only did Vanbots measure up to the challenge, it became the first-ever Canadian construction company to win the prestigious British Construction Industry Award in 2002, an accolade that took into account procurement, design and delivery.

With such outstanding credentials, it is little wonder that General Motors of Canada involved Vanbots Construction in its new initiative.

In February 2008 the project received a huge boost, with more than $120 million in contributions from the automotive giant and PACE (Partners for the Advancement of Collaborative Engineering Education), the Government of Ontario and the Government of Canada.

The new GM of Canada Automotive Centre of Excellence will be the hub of the broader Automotive Innovation Network linking automotive engineers, auto suppliers and Canadian universities. When completed, the center, which will be adjacent to UOIT’s OPG Engineering building in Oshawa, will house state-of-the-art research and development tools in the areas of vehicle dynamics, noise and vibration; a thermal climatic wind tunnel; structural durability testing; and the ability to accommodate future automotive fuels like hydrogen.

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Making Vanbots Construction

tomorrow

better place

a

The auto industry has had more than its share of tough times in recent years, and the need for innovation has never been greater. So when General Motors of Canada decided to create an Automotive Centre of Excellence at the University of Ontario’s Institute of Technology (UOIT), it called upon the expertise of Vanbots Construction

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Vanbots Construction

Aiolos Engineering Corporation Aiolos continues to play a leading role in the design and implementation of many state of the art research & development facilities globally.

Our specialized process experience and ability to integrate complex requirements have earned us a strong reputation with many of the world’s automotive, aerospace, industrial and research organizations. We provide critical ongoing support to our partners throughout the project to ensure success. As in the unique UOIT climatic wind tunnel facility, our experience has helped create competent goal oriented project delivery teams in partnership with leading builders such as Vanbots.

At the time, Arturo Elias, president of General Motors of Canada stated, “Our vision has been to create a new advanced automotive technology cluster centred at UOIT that links together our best Canadian companies, universities, students and engineers with companies in the Canadian automotive supply chain.” Such vision sits comfortably with Vanbots Construction, whose company mission is “Making tomorrow a better place.”

The new center partners with PACE, a consortium of companies with five partners (GM, EDS, HP, Siemens PLM Software and Sun Microsystems), and 10 other PACE contributors. PACE will provide an initial investment of more than C$60 million in state-of-the-art computer-based hardware, engineering software and student and instructor training and academic support. That level of support is expected to grow over time as it is integrated into new curricula. The Ontario government is investing $58 million in the center as part of its $235 million auto strategy investment in GM’s Beacon project.

Commenting on the project at the time, UOIT president Dr. Ronald Bordessa said, “UOIT is honored to have the opportunity to create the GM of Canada Automotive Centre of Excellence here on campus. This partnership is very important strategically, as it significantly builds upon the foundation we have developed at UOIT for educating Canada’s next-generation automotive

engineers, men and women who will blend technical knowledge and creative design skills to greatly advance automotive research and design.”

Hired as construction managers on the project, Vanbots began work on the facility in the summer of 2008. The facility has been designed

by Diamond and Schmitt Architects and upon completion will represent a world-class research and development facility specifically focused on the automotive industry.

Completely unique to Canada, the Automotive Centre of Excellence will provide a competitive edge to the Canadian automotive industry in addition to providing graduate students with top-quality facilities and technology with which to conduct research related to the automotive industry.

Aside from the six-story research center, the facility will house a groundbreaking three-story climatic wind tunnel capable of generating wind speeds of over 200 kilometers per hour in addition to simulating all weather conditions. It is the largest automotive thermal wind tunnel in North America, with a four-wheel dynamometer offering a full range of climatic simulations, including temperature ranges of between –40°C and 60°C and humidity control of between 5 and 100 percent.

Among other features of the site will be the ability to test air-flow quality and boundary layer control and acoustics, sufficient for high-fidelity aerodynamic testing. There will be thermal soak rooms, vehicle preparation bays, an instrumentation area and an extensive machine shop for prototyping, a hemianechoic test cell with a multi-axis shaker table, an integrated teaching and learning environment including a vehicle concept laboratory, and a PACE program–oriented design studio that will contain collaborative lab spaces.

Vanbots has come a long way from its original residential projects, but along the way it has never lost its focus to be the leader in delivering integrated solutions for infrastructure, buildings and services. The company continues to succeed and grow, thanks to its set of core values: openness, collaboration, mutual dependency, professional delivery, sustainability (including profitable growth) and innovation.

That innovation has played a big part in the GM Automotive Centre of Excellence project and offers an exciting future for Vanbots Construction. www.vanbots.com

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Green

an

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EllisDon Corporation: Algonquin Centre for Construction Excellence

Platinum

nd

EllisDon Corporation is building the Centre for Construction Excellence at Algonquin College in Ottawa, and fittingly for such a project, it is aiming for Platinum designation, the highest award achievable in the LEED program

A

n aging workforce, declining birthrates and an outdated perception that the trades represent an undesirable career option are primary factors contributing to the looming shortage of skilled trades workers across Canada. It is estimated, for instance, that over 50 percent of existing trade workers are likely to retire by 2020. The reality is that trades are often high-demand, high-wage occupations, but Canada is destined to be drastically short of skills unless something is done about it.

That is happening at Algonquin College in Ottawa, where Mississauga, Ontario–based contractor EllisDon Corporation has a $77 million design-build contract for the 180,000-square-foot Algonquin Centre for Construction Excellence to help to address the skills shortage in the construction industry by providing classrooms, studios, laboratories and shops for 600 construction students as well as thousands more studying in related programs. Designed for LEED Platinum certification, the building will be a showcase and teaching laboratory for best practices in sustainable construction. If it achieves Platinum status the center

will be the largest building in Canada to do so.

Ground was broken on the new facility in October 2009, and it scheduled to open a mere two years later, in the fall of 2011. Construction work is expected to be substantially complete by March 31, 2011, leaving the college sufficient time to move in by the beginning of the school year.

The building consolidates all of Algonquin College’s trades programs under one roof. Designed to act as a “Living Laboratory,” it will offer students a hands-on approach to learning; several wall and floor assemblies, revealed in cutaway sections, and mock-ups used during construction are exhibited in the atrium, exposing students to sustainable design practices and materials in an informal but didactic environment. The structural, environmental and energy performance of the building is also monitored and displayed interactively, informing students and visitors about the processes at work around them.

Among its features will be a storm water recovery system that will capture rainwater to flush toilets; solar panels to provide some power and hot water; and a “Biowall,” a four-story living, green wall covered with

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EllisDon Corporation: Algonquin Centre for Construction Excellence

plants that helps control humidity and clean the air.

The design will have a significantly upgraded building envelope, which will include R30 insulated walls, triple-glazed windows and an R50 insulated roof. This upgraded building insulation will considerably exceed building code requirements and conserve energy by reducing heating and air conditioning needs. Air conditioning and heating will be provided by heat pump technology, economically using hot water for heat.

LEED points are awarded for proximity to public transport as well as energy savings, and the new facility will integrate the relocated bus station and a new below-grade transit roadway to the main campus via a $4 million pedestrian bridge to be constructed across Woodroffe Avenue.

Architecturally, the project is a joint collaboration between Diamond and Schmitt Architects and Edward J. Cuhaci and Associates Architects.

Support for the project has come from the college community and all levels of government, including a contribution of $35 million each by the federal and provincial governments through the Knowledge Infrastructure Program.

The building is planned around social spaces that encourage inter-disciplinary interaction. The great hall with its two dramatic seating pods floating overhead welcomes the visitor into the building and a terraced commons is an informal work space for students. Balconies and windows overlook the atrium, affording cross and diagonal views to different spaces and activities. The new building will identify Algonquin College as the focal point for skilled trades programs in eastern Ontario, attracting the best in educators, researchers and students, while positioning the City of Ottawa as a center of excellence for trades professionals.

Since its founding in 1951, EllisDon has transformed itself from a company with just four employees into a multinational corporation with over $2 billion of new construction projects and approximately $5 billion worth of work under way at any given time.

In May 2010, EllisDon received LEED certification for four of its other projects; a Gold certification for the Bay Adelaide Centre in Toronto, and three Silver certifications, one each for the 5750 Explorer Drive office building in Mississauga, the Nova Scotia Community College Waterfront Campus in Dartmouth, and the K-Rock Centre in Kingston, Ontario.

Along with its expertise in building construction, EllisDon provides a diverse array of services for its clients that include construction management, project management, design-build, public-private partnerships and general contracting services.

The company’s portfolio comprises civil and transportation, culture and recreation, education, healthcare and research, industrial, public and government, residential and hospitality, and retail and commercial office projects.

Most well-managed companies and corporations know they are only as good as the sum of the people they hire, and EllisDon, an employeeowned company, has won awards and special recognition for providing its workers with career opportunities and a corporate environment that is conducive to maximizing their job performance and continuing the company’s record of topnotch building, design, and project management that keeps the contracts rolling in. President and CEO Geoff Smith says, “At EllisDon we rely on our people—pure and simple—and we give them the freedom to think hard about what our clients need to succeed, and all the authority they need to deliver this success in an atmosphere of mutual respect and trust.”

The company is a Platinum member of Canada’s Best Managed Companies, an organization sponsored by Deloitte, CIBC Commercial Banking, National Post and Queen’s School of Business.

The award program recognizes companies that demonstrate innovation, exceptional growth, financial success and a strong corporate culture.

For two years running EllisDon has been named Canada’s best employer in a survey done by Hewitt Associates, a human resources consulting and outsourcing firm headquartered in Lincolnshire, Illinois. www.ellisdon.com

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Eat up..

they’reg

Commercially driven it may the French food

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Bonduelle

..

goodforyou

y be, but as Alan Swaby learns while talking to the GM for North America, Bonduelle company is equally passionate about taste, choice and quality

T

he world’s leading producer of exclusively vegetable products isn’t from North America. It’s French. But after conquering practically all the known world, it was inevitable that it would eventually turn its attentions to this continent.

Bonduelle has global revenues just short of $2 billion and employs over 8,000 staff in 18 countries. It deals with 4,000 farmers cultivating 250,000 acres of land, the output of which is handled in 43 production centers worldwide and sold as branded products in 80 countries. But it’s a name practically unheard of in North America.

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Bonduelle

Hensall District Co-operative, Inc.

Syngenta

Hensall District Co-operative, Inc. (HDC) is a large

Leadership in the vegetable industry requires

regional

co-operative

constant innovation. As a world leading agri-

located near London in south-western Ontario.

Ontario

farmer-owned

business, Syngenta supplies Bonduelle with

HDC specializes in originating and processing

seeds and crop protection solutions, and

13 different kinds of high quality edible beans

works closely with the company in product

plus food-grade soybeans. Sourcing edible

development and trials. This industry partnership

beans in Ontario, Michigan, North Dakota and

is a key input for Syngenta’s breeding programs,

Manitoba, HDC processes all beans through

leading to varieties that combine performance in

HACCP certified, robust, world-class facilities

the field and packaging / processing plant with

with quality and food safety our #1 priority.

strong consumer appeal.

“Acquisition has always been a major part of our growth strategy,” explains Jerome Bonduelle, general manager of North American operations, “but being family owned we can take a long view on matters and wait until the right opportunity comes along. Three years ago it happened when we bought Aliments Carrière—Canada’s number one supplier of canned and frozen vegetables.”

As such, despite being the leader in Canada and one of the big(ish) boys in the US, the Bonduelle name per se is not in the public domain. But pick up a can or packet of Arctic Garden vegetables and you have Bonduelle in your hands.

“Our strategy is clear,” says Bonduelle. “We concentrate exclusively on vegetables in all forms—canned, frozen and fresh—and sell through every distribution channel, everywhere in the world. But achieving this exclusively on the back of the Bonduelle brand is not necessary.”

It’s a pragmatic position that allows the business to best shape itself to prevailing economic conditions regardless of the level of affluence. So despite the US being the biggest single market for food products, Bonduelle realizes that trying to make a mark at retail level would require such enormous marketing effort that it would break the bank. Instead, it accepts that just 10 percent of its US revenue comes from retail and rather concentrates on the 75 percent of sales that come from the food services sector.

Rather than being precious about products appearing under its own brand, a significant proportion of the business comes from private labels or co-packing deals on well-known brands

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produce,” says Bonduelle. “Where once prices moved modestly ± 2 percent, 2008 saw demand from bio-fuels, as well as a developing Chinese and Indian market, create double-digit movements.

This year, prices have gone down but are still higher and more volatile than pre-2008.”

With a double whammy like this squeezing margins, it was inevitable that Bonduelle turned its attention to costs. In this respect, Jerome Bonduelle is highly complimentary of the management that had steered Aliments Carrière into its position of dominance. “The leanbased program they developed in conjunction with Montreal consultants Pro-action has been implemented at six of the seven North American plants,” says Bonduelle, “and the results have helped the business maintain its position through very difficult times.”

Overall, productivity has increased by at least 15 percent and as much as 30 percent. Plants are more responsive and can change from line to line much faster than before. “The most impressive feature, though,” says Bonduelle, “is the change of culture. The old fire-fighting ways have gone and instead we have a more

“The old fire-fighting ways have gone and instead we have a more motivated workforce embracing a proactive, problemsolving mind set” such as Green Giant or Del Monte that are owned by others but produced either exclusively or partly

by Bonduelle for Canada.

“North America is a mature market,” says Bonduelle, “and it’s pointless creating extra capacity. Growth in this region, just like in Europe, comes from acquisitions. Countries such as Brazil, on the other hand, are growing vigorously and it makes much more sense to build more processing capacity there.”

At the time Bonduelle was eying up Aliments Carrière, the exchange rate with the US dollar made business across the border extremely favorable. These days, though, an almost parity rate means that easy sales are long gone. “Our purchase of Aliments Carrière also coincided with an enormous price bubble in agricultural

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motivated workforce embracing a proactive, problem-solving mind set.”

The program has been so successful that it is being exported back to France and being implemented there under the guidance of the former Canadian head who is now general manager in Europe. “There is a huge difference in business style between North America and Europe,” acknowledges Bonduelle. “It would be good to inject a dose of Anglo-Saxon pragmatism into lofty Gallic theorization.”

In fact, staff development is one of the key fundamentals of the Bonduelle corporate approach.

In some countries it’s obligatory to allocate a percentage of total salaries into training programs, but Bonduelle invariably surpasses that requirement and invests around 2 percent of salaries this way.

Bonduelle

It’s all part of the grand plan to create a sustainable business in the sense that it will be viable and profitable for generations to come. As well as enhancing the skills of employees brought about by annual appraisals leading to tailored training programs, Bonduelle is an enthusiastic signatory to the French national aim of reducing agro-chemical usage by 50 percent. For example, instead of spraying weeds systematically, Bonduelle’s growers must follow good practice guidelines for minimum usage of herbicides, and the company promotes the use of the integrated production model by sponsoring eight farms into a pilot program in Northern France. Then there is the constant battle to reduce water and energy consumption.

So far, overall reductions achieved measure 6 and 10 percent respectively, while 90 percent of all vegetable waste is being recycled.

Despite increased affluence, very few of us eat as healthily as we should, so the final link in the chain is to try and improve the nutritional intake of customers by supporting research, taking field initiatives, and participating in information and education programs.

The Louis Bonduelle Foundation has created possibly the web’s most comprehensive information reference point on vegetables in which it places great emphasis on helping children develop a liking for nutritious food. In Canada, under its support to non-profit organization Jeunes Pousses (French for “baby leaves”), it takes the message directly into schools, encouraging children to grow and then eat their own vegetables.

“What better way of sustaining a business and staying number one than by creating the next generation of healthy customers?” says Bonduelle. www.bonduelle.com www.bonduelle.ca

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Natu

Le Bleu high-end resta helping to n Regan learns how musca

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ure

Le Bleu & Nature’s Pearl

study

has been a top provider of bottled water to consumers, offices, retailers, aurants and resorts for more than two decades. Now top management is nurture a fast-growing dietary supplement company, Nature’s Pearl. Keith w the company is setting itself apart by embracing scientific studies on its adine grape supplement and using human networking to spread the word

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or 20 years now the Le Bleu brand name has meant ultra-pure, steam-distilled bottled water for customers in North and South Carolina and many around the world who drink Le Bleu Premium, privately labeled by upscale resorts such as the Waldorf Astoria.

Le Bleu vice president Brock Agee says that supporting 4,000 private-label customers—with help from an in-house graphics designer who can customize bottles in small batches—helps set the company apart from larger competitors. “We’re not Coke or Pepsi,” he says. “We have to find niches that they don’t do. We’ll create 20 cases for a specific customer, and that’s something that doesn’t work into their business model.”

Le Bleu, based in Advance, North Carolina, also services some 60,000 customers in the Southeast with home and office delivery of 5-gallon bottles and coolers, as well as Free Trade–certified coffee. Le Bleu Premium bottled products—packaged in award-winning cobalt-blue bottles—include 12-ounce, 20-ounce, 1-liter and 1.5-liter bottles that are found in grocery chains such as Whole Foods and Food Lion and are sold through food distribution companies such as Sysco. The company uses the Waterflex software package to help manage delivery routes and operate at the highest efficiency possible. This is critical in the face of rising fuel prices. “Good product and on-time delivery are what’s kept us alive for 20 years,” Agee says.

While the water business is not immune to economic recession, it is somewhat insulated by the fact that water is essential to human life, he adds.

“The human body doesn’t call for soft drinks, but it does call for water.”

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Le Bleu & Nature’s Pearl

The focus on health helped lead to the formation of Nature’s Pearl, a related company for which Agee serves as president. When Le Bleu founder Jerry W. Smith began searching for a natural alternative to medication for high cholesterol, he learned about the powerful properties of the muscadine grape seed. “When Jerry saw what it did for his own health, he started Nature’s Pearl,” says Agee.

Starting in 2008, Nature’s Pearl embraced a multi-level marketing format similar to that of The Pampered Chef or Mary Kay and is now a rapid growth story. Approximately 2,800 independent distributors now sell the supplement in 48 states, all of them brought on board within the past 24 months.

Agee believes the key engine to that growth is

in the first six months of the program.

Production is handled at a 120,000-squarefoot facility in Mocksville, North Carolina, where commercial dryers, freezers and coolers are used in the process that transforms the raw grape skins and seeds into the finished supplement. “We manage the entire process and supply chain, which gives us strong controls and quality oversight,” Agee notes. All the raw material is sourced locally from farmers who tend a crop that Native Americans were known to use long before settlers arrived.

“The muscadine grape only grows in the southeastern United States, so our supply is 100 percent local,” says Agee. The raw material was actually made from what was considered waste on

“We’re not Coke or Pepsi. We have to find niches that they don’t do. We’ll create 20 cases for a specific customer, and that’s something that doesn’t work into their business model” the clinical studies Nature’s Pearl has done on its products, which the company says contain more than 100 different antioxidants. “Nature’s Pearl is the only muscadine grape supplement that has been subjected to human clinical trials,” he says. “The expense is well worth it because our customers can trust that our product has been shown to have a measurable effect on the cardiovascular system.”

Researchers at Wake Forest University put the product through clinical trials to test its ability to improve cardiovascular health. The researchers found that Nature’s Pearl muscadine extracts had a measurable effect on vasodilatation of the brachial artery (the major blood vessel of the upper arm) in men and women with cardiac risk factors.

Additional in vitro research has also shown that Nature’s Pearl significantly inhibited the growth of seven types of cancer cells, including breast, brain and prostate cancer as well as leukemia.

Nature’s Pearl has aggressively supported its sales network, offering video brochures that detail the benefits of the supplement and letting independent distributors offer free 30-day supplies to all first-time customers. “The free-trial format makes it easy for anyone to sell, even if they’re not a salesperson,” Agee says, noting that the company has filled some 4,300 free-trial offers

farms that grew grapes. The skins and seeds of the grapes that had been crushed to make wine, juice or jellies were typically reused as fertilizer. Instead, Nature’s Pearl now has long-term supply agreements in place with many farmers. “We’re using 100 percent of this rich fruit now, instead of throwing away 90 percent of these valuable antioxidants,” says Agee. “We estimate we’ve got 50 percent of all the muscadine skins and seeds in the Southeast. With the muscadines we currently have sourced, we could build the company into a $100 million brand.”

The Nature’s Pearl brand has been extended into an organic, chemical-free skin care line.

Muscadine20 Antioxidant Skin Care now features five products and will soon be expanded to include all-natural shampoo, toothpaste and other products.

The natural focus fits with the overall Le Bleu philosophy. The company sources its water locally as well, using no plastic to shrink-wrap cases of bottled water. Le Bleu’s green initiative doesn’t stop there. Only recyclable cardboard and 100 percent recyclable plastic in the bottles are utilized. “One of the things we’re most proud of is that we source virtually everything locally—well over 98 percent of our materials come from within the US, and from our region. The very best way to be green is to buy locally.” www.lebleu.com

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LDM Foods has completed construction of one of the largest canola crushing facilities in North America in Yorkton, Saskatchewan. Keith Regan explains how the joint venture benefits the small city that hosts it, area farmers, and the food industry giant’s new customers

L

ouis Dreyfus Group is a $20 billion a year global foods powerhouse that has been in the industry since 1851 and now has operations in some 53 countries around the world. Louis Dreyfus has also long been a major player in the canola products market, owning and operating and feeding raw materials to canola crushing plants in the United States, Argentina, Brazil and China.

Louis Dreyfus has been operating in Canada, meanwhile, since 1941 and in the past decade has amassed an ownership of some 10 high-throughput grain elevators scattered strategically around the Canadian plains region. While those elevators often take in canola seed, most of that has traditionally been shipped overseas for processing and consumption.

Some significant shifts in the marketplace convinced the company that there would be a significant benefit to building a processing facility close to those Western Canada farms and elevators, according to an executive vice president with LDM Foods—a joint venture 60 percent owned by Louis Dreyfus’s Commodities subsidiary and 40 percent owned by Japan-based Mitsui & Co. That joint venture was formed in 2007 and is responsible for construction and long-term operation of the facility in Yorkton, Saskatchewan.

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LDMdeFoods SuKarne, S.A. C.V.

ushing victory

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The facility is one of the largest such plants in North America, capable of processing 2,500 metric tons of seeds daily, or the equivalent of 850,000 metric tons over the course of a year. The resulting product is refined, bleached, deodorized (RBD) canola oil, which is then shipped in bulk by rail to customers across North America. Those customers include food processors as well as bottlers who sell canola oil to consumers. The plant also produces pelletized meal for use as livestock feed.

The choice of location for the facility, which sits on 220-plus acres in Yorkton, a community of about 17,000 people, was driven by a number of factors, including proximity to the farms where canola seed can be grown—competing for acreage with other crops such as spring wheat, peas and cereal grains such as oats and wheat. The company says that there are excellent growers in the area, with good soil conditions for the crop and not a lot of domestic capacity traditionally.

By having a local production option, LDM hopes to promote the value and incentivize the growers to plant additional areas in canola.

Yorkton also sits at a major transportation hub, with many roads in this part of Western Canada passing through Yorkton. In addition, LDM has access to rail lines operated by both national railroad operators in Canada, Canadian Pacific and Canadian National. Those lines in turn each have connection agreements with rail lines in the US, enabling large-scale shipments to be sent directly to customers. In fact, the Yorkton plant is the first in Western Canada capable of shipping entire 100car uni-trains, all containing a single commodity.

Each car is capable of carrying some 95 metric tons of canola meal, enabling LDM to service some of the largest-scale food processors and producers in North America. That scale will enable the company to strike beneficial shipping terms with carriers, yielding savings it can pass along to customers.

Louis Dreyfus has long focused on logistics excellence as a differentiator, and those skills will be important in operating the Yorkton facility at maximum efficiency.

Meanwhile, demand for canola oil is growing, especially for Omega-9 canola oil, which has different seed properties that enable the oil to be used in place of partially hydrogenated soybean oil in some food processing settings. That means that Omega-9 canola oil can be used without

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LDM Foods

“The facility is one of the largest such plants in North America, capable of processing 2,500 metric tons of seeds daily, or the equivalent of 850,000 metric tons over the course of a year” adding trans fats to a finished product, a health concern that is increasingly in the public eye.

Meanwhile, all the major seed companies are working feverishly to develop improved canola hybrids with more healthful properties that could further boost end-user demand. Louis Dreyfus’s existing expertise and technology in tracking seeds from the farm through processing also becomes more important as those new varieties take hold, with the company able to use identitypreserving (IP) techniques to give customers confidence in the origins of their canola products.

Throughout the construction process, LDM used local subcontractors whenever possible, though it needed to bring in some outside expertise to construct the facility itself. At the peak of construction activity in the summer of 2009, some 400 workers were on the site. The plant operates around the clock and employs 72 people, a significant number of new jobs in a community of less than 20,000 people. The company says that the town has been excellent to work with in terms of enabling the growth and moving the construction process forward.

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Quality the

C-Way

Cliffstar Corporation, one of the largest private-label beverage suppliers in the country, takes quality very seriously.

Vice president Jim Todd talks about the C-Way initiative, a program designed to involve all the company’s associates in continuous improvement

P

rivate-label products have come a long way from their historical perception as cheap, mystery products packaged under dubious black-and-white labels.

Cliffstar Corporation is a stellar example of a privatelabel company deeply committed to producing highquality juices and beverages.

Jim Todd knows both sides of the industry, having worked for national branded manufacturers as well. “The quality standards that private labels are held to are every bit as rigorous—and many times more rigorous—than national brands,” says Todd, vice president of quality and engineering for the Dunkirk, New York–based company.

“Private-label companies take their business very seriously, and their products’ quality, performance and freshness are equal to or higher than the branded side.”

Cliffstar has been in business for more than a century and has been family-owned for four generations. The company supplies thousands of private-label lines with over 145 blends of juices, pressing most of its own grapes, cranberries and prunes to assure its customers and their consumers of consistent quality, flavor and color. Cliffstar’s product line includes shelf-stable juices, teas, sports drinks, fitness waters and vitamin waters, and its customers include some of the largest retailers in the world.

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Cliffstar Corporation

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their ideas for improvement and pitch in to make things better throughout the company.”

Steering teams are in place at every location, headed in the corporate office by the CEO and at the plants by the plant manager. These teams form and support project teams that focus on a certain topic and contain a small group of associates.

“The people involved are those with the most knowledge and the most interest in that particular topic,” Todd explains. “They include associates from all levels and from all departments within the company.” Each project team has a team leader who runs the meetings and manages the team, and a team facilitator who is trained in problem solving. Once the team has examined the topic at hand, it presents a recommendation to the steering team, which acts on those recommendations. “We

“Private-label companies take their business very seriously, and their products’ quality, performance and freshness are equal to or higher than the branded side” Cliffstar operates five main bottling plants and three processing plants where it produces concentrate from fresh fruits for its juice lines, and it is implementing SQF initiatives throughout the company. The Safe Quality Food Institute is a division of the Food Marketing Institute, which administers the SQF program, a leading global food safety and quality certification and management system. “Our SQF certification will put us among the best in the industry in terms of quality,” notes Todd.

Cliffstar is a family-owned but professionally managed company, says Todd. This means it has recruited executives with a deep knowledge of and seasoned experience in the industry. “Since we’re competing against the biggest and best in the industry, we knew we had to do something different in our operations to continue to grow and evolve.”

One of these differences is the launch early last year of an initiative called C-Way, a program designed to involve the company’s associates in continuous improvement throughout every department.

Todd notes that C-Way is the foundation upon which the company continues to be successful and evolve. “Although we’re constantly improving things like quality, service and cost efficiencies, we also focus on improving the quality of work life for our associates. So we expect them to voice

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can develop more results this way than we could have gotten otherwise.”

The program is a way of institutionalizing change, explains Todd. “We’re building in change as a way of life, so change is viewed as natural as our associates work to make things better. It gets people excited as they work on new ideas to make their work lives better and more productive.

It allows them to be part of a team that can influence what happens in the company and where their opinions are important.” He adds that an idea doesn’t necessarily have to be profound.

“For instance, we’ve had teams working on ideas for our parking lots and locker rooms because those things are important to their work lives.

Once people believe they can influence what can happen, that spills over into everything we do.”

The program is equally balanced in pursuing topics dealing with operational improvements and improvements in associates’ work lives.

Todd points to an example of a problem that associates identified and then solved. Several associates pointed out how poor-quality pallets were affecting production. “Pallet quality is not normally at the top of the list of what management would deal with,” he says. “But it could be a safety issue, because we put pallets up four levels high in

Cliffstar Corporation

our warehouse, and if a poor-quality pallet were to collapse, that would be a safety issue. So we put a team to work on solving the problem.” Initially, the team thought it would cost the company an additional $125,000 a year to buy higher-quality pallets. But by the time they had analyzed the data, they developed a better solution that would actually save the company $125,000 a year.

The people who were charged with receiving pallets couldn’t keep up with the level of inspection required, so the shipping department stepped in and volunteered to receive and inspect the pallets. “They began rejecting the ones we should not have been receiving all along, and, remarkably, the quality of incoming pallets improved because our suppliers got the message,” Todd says. “We also found a better way to repair broken pallets. In the warehouse, we developed a solution to make the racks safer.

And all these solutions were developed in-house by our own people, resulting in a safer work

environment and savings to our company. There is an enormous amount of pride in the associates who were involved in resolving these problems.”

An engaged, energetic and interested workforce is the horsepower for solving problems and moving a company forward, says Todd. “There are so many reasons why associates would want to be involved in C-Way. Not only does it improve job security, it offers variety and challenge, increased job satisfaction, the opportunity to learn new skills, and the chance to be part of a team that values everyone’s contributions. People gain selfconfidence, and they can demonstrate abilities they might not have known they possessed, and that could lead to future promotions.”

Todd notes that Cliffstar has continued to be successful and has reached a point where it needs to develop a new map to continue moving forward.

“Part of this is the improvement in our culture, with C-Way as a means to achieve that culture. This is the real story of Cliffstar.” www.cliffstar.com

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Bridor is thriving by adapting European breads, croissants and pastries to North American tastes, as Pam Derringer learns from company marketing vice president Pierre Martella

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ouis Le Duff arrived in North America from France some 30 years ago with an entrepreneurial spirit and a passion for food, looking for opportunity. He found it. More accurately, perhaps, he made it.

The newly arrived Le Duff discovered that the families in the Quebec university community where he resettled had an unquenchable appetite for European breads and pastries but liked them slightly different from those he knew. Croissants, for example, had to be sweeter and have a more curved shape than they have in France. And North American croissants are more likely to be consumed as part of sandwiches rather than enjoyed as pastry. Although Bridor makes a great sandwich croissant, it would certainly want to add excitement to the croissant experience, according to marketing vice president Pierre Martella. “Our goal is to help North Americans discover the pleasure of a cup of coffee and a hot croissant on its own,” he says.

Another regional difference: Bridor’s North American baguettes, though identical in appearance to European versions, are softer without being spongy, he says. In both cases, Bridor adapted the original recipes to local tastes, and that has been the key to its success.

Today, privately owned Bridor has more than $100 million in annual sales in Canada and the US, four North American plants with a combined workforce of 350, plus the US-based La Madeleine country café chain and the Brioche Dorée restaurant chain for a total of about 3,000 employees. The forecast: strong growth ahead, especially in the US. “It’s all about innovation and quality,” Martella says.

At the heart of Bridor’s steady growth is Le Duff, who still sees business opportunities all around him and remains president and actively involved in Bridor operations today. Le Duff has never been afraid to invest whatever is needed to make sure a new venture gets

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Bridor

RLS Logistics RLS Logistics is one of the northeast’s leading temperature-controlled

logistics

providers

offering superior transportation, warehousing, packaging, and distribution services. RLS has three frozen and refrigerated distribution centers in the northeast, one being a dedicated facility that is managed for Bridor USA. RLS Logistics is a privately held, family-run organization with the third generation of the Leo family currently managing the company.

With a professional logistics management team and experienced support staff, RLS has the flexibility to create and implement customized supply chain solutions to meet your specific requirements and enhance your profitability.

line for par-baked, frozen breads, as well as for frozen and proof-&-bake Viennese pastry in North America. Par-baking simplifies and shortens the remaining work for retailers and allows them to order in bulk but bake loaves only as needed.

Bridor and Au Pain Doré also have begun offering frozen par-baked breads directly to consumers, but more work remains to develop consumer packaging, Martella adds.

While many companies describe themselves as innovators and their products as high quality, Bridor means what it says. Bridor is continuously developing new bread and pastry products in response to changing tastes, including its new Advantage bread, which is white in color due to a specific milling process and healthier because it’s made with whole wheat, Martella says. Made with ConAgra Ultragrain flour, Bridor will roll out four Advantage bread products soon to restaurants and retailers.

In addition, Bridor has broadened its ethnic

“Bread products are very sensitive to environmental conditions, and only bakers know how to knead and shape the dough until it is perfect. You have to work with the bread by hand, allowing for different temperatures and humidity levels, and let the bread rest” off to the right start. And he never compromises on quality.

The history began in 1980 with a Montreal bakery, which grew so fast that Le Duff opened the first of four bread and Viennese pastry plants four years later. With a growing restaurant business and more retail clients, Bridor added a second Canadian plant in 1995. A third bread plant, creating a beachhead in the US market, was opened in Vineland, New Jersey, in 2002.

Au Pain Doré, a 50-year-old Montreal plant that makes artisan baguettes and specialty breads, was added earlier this year.

Now Bridor breads and pastries are served in high-end restaurants in Canada and the eastern US and sold in supermarket bakeries, where the “par-baked” breads can be removed from the freezer, ready to sell after only five minutes in the oven. BRIDOR set the industry standard with the installation and operation of the first production

flavors from just French to European, including Viennese pastries and, coming this fall, Pugliese Italian loaves. The latter were created by a longtime Italo-French baker on Bridor’s in-house staff.

“Offered in various shapes, Pugliese bread is made with olive oil and, while crusty, melts in your mouth,” says Martella. “We distributed small samples to our sales teams and they all want it NOW.” Other segments such as Portuguese and Hispanic breads are under process of development to better fill the needs of the eastern US market. In addition, new equipment has just been added to the Vineland plant to enable it to make the popular ciabatta Italian loaves and other artisan breads.

But it’s not just the innovative methods and variety that set Bridor apart. It’s also the quality of the staff, first and foremost, as well as the ingredients.

Right from the start, Bridor has enjoyed closer ties with established European bread bakers than other North American competitors because

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Bridor

Le Duff himself is a French native, Martella says. By remaining in constant contact with its European counterparts, Bridor is able to retain its authenticity and seek help when problems arise.

In addition, when European bakers introduce new products, Bridor is the first on the other side of the Atlantic to know about it, he adds.

Another key Bridor differentiator is its own inhouse staff of seven bakers, about two per plant, and a chef. They not only preserve Bridor’s distinct French ethnicity but also spur the innovation of new products and help provide assistance to stores and restaurants, Martella says. “The chef and bakers can explain our product, experts to experts, and also provide important customer feedback to us.”

Chefs and bakers in Bridor’s research and development labs are encouraged to “play with dough” and come up with new ideas, the best of which, when ready, are transferred to production. “Bread products are very sensitive to environmental conditions, and only bakers know how to knead and shape the dough until it is perfectly adapted. You have to work with the bread by hand, allowing for different temperatures and humidity levels, and let the bread rest,” Martella says. “Only a real baker can do that.”

Finally, a word about ingredients. If you think Bridor makes pastries with just any flour and water or butter, you’re mistaken. For starters, the company doesn’t use pre-mix flour (like Bisquick, for example). Although pre-mix is simpler and faster, the end product loses its individual identity, Martella explains.

In addition, flour is a natural product, with harvests of varying quality, and Bridor is very cautious about what it buys. Bridor insists on specific protein content and other specifications and therefore buys flour from different regions in order to obtain the same quality year-round.

Butter, too, varies considerably in quality, so Bridor only buys from specific producers and regions and always uses fresh butter—never frozen—even though the latter can be cheaper, Martella says.

With sales growing faster in the US, where the Vineland plant has been in operation only eight years, Bridor has set ambitious growth goals.

“Our goal is to double sales in the next five years,” says Martella. www.bridor.com

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hole

The

Competing with the big boys in the oil patch is a family company known for its customer servic 94

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Tucker Wireline Services

ebusiness

a healthy challenge for this ce, David Hendricks learns

T

ucker Wireline Services is a subsidiary of Tucker Energy Services—an independent, family-owned business that originated in Trinidad in 1935 as an oilfield service company named Industrial Agencies Ltd, which expanded to Venezuela in 1945, then to Brazil and Colombia, and in 1986 operations were established in the United States and Canada. The Canadian division of Tucker Wireline is based in Calgary, Alberta, headed by president David Jellett, who has worked in the oil patch

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Tucker Wireline Services

PricewaterhouseCoopers LLP PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 163,000 people in 151 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice. In Canada, PricewaterhouseCoopers

LLP

(www.pwc.com/

ca) and its related entities have more than 5,300 partners and staff in offices across the country.

“We offer three basic services: open hole, cased hole, and slick line. Our competitors are the giants—the Schlumbergers and the Halliburtons–and the fact that we can go out and successfully compete with them on a daily basis is a testament to our business” for about 30 years, the last 18 with Tucker, initially as operations manager. His engineering background comes to bear frequently, as Tucker is constantly developing its own proprietary equipment, both in its research and development facility in Houston, Texas, and in partnerships with equipment technology companies.

“Geographically in Canada,” says Jellett, “we work in the Alberta tar sands, in shale gas in the Montney and Horn River areas of British Columbia, and in conventional oil and gas fields throughout the country including the far north, except for the east coast. We offer three basic services: open hole, cased hole, and slick line. Our competitors are the giants—the Schlumbergers and the Halliburtons–and the fact that we can go out and successfully compete with them on a daily basis is a testament to our business and maintains our niche in the industry.”

One of the biggest clichés in the corporate world is that a company is only as good or bad as its culture, its people. But after 75 years and several buyout offers, Tucker chooses to remain

a family-owned company that hasn’t forgotten its roots and continues to cultivate its core values, which ultimately means being useful to customers with service that provides results and solves issues. With Jellett at the helm, it’s leading by example and it rings true.

“We hire carefully and we treat our employees as part of the family. We hold our core values dearly, and people are the main value. That leads naturally to the second part of who we are: our customer service. We pride ourselves on our ability to build strong relationships with our customers, and tailor the service we provide them around what they need. The vast majority of customers that we work for, stick with us. And they bring us referral business.

“Another part of who we are is safety, it’s another core value. And maintaining that level of safety conscientiousness throughout the organization is very important to us. There’ve been a lot of mom and pop companies servicing the petroleum business over the years, and today there are fewer of them, since the conglomerates

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Tucker Wireline Services

Fraser Milner Casgrain LLP Fraser Milner Casgrain LLP (FMC) is proud of its long-standing relationship with Tucker Wireline Services, an industry-leading oil and gas services company. FMC provides clients like Tucker Wireline Services with the essential depth of experienced legal counsel and an unparalleled understanding of the energy industry regardless of where they and their projects are located. With more than 500 lawyers in six full-service Canadian offices, FMC provides experience and trusted legal advice to anticipate clients’ needs and help them achieve their goals. For more information, please visit www.fmc-law.com/energy.

have come in, offered a ton of cash, and bought some families out. But the Tuckers are not about making a lot of cash; they like their legacy, which is creating a family business that they can hand off to their kids. They’ve had plenty of lucrative offers, which only confirms our value as a company. We have a strong customer base that we work hard to maintain, and I’ve seen more success in our company due to referrals in the last two years than ever before. And that’s not often seen in this business, especially with the last few years being hit by the recession. But we’ve done quite well.”

In terms of services, ‘open hole’ (also called open hole well logging or well evaluation) is a generic industry term for the process of evaluating a new well; logging is recording the events of the process. After an oil company is finished drilling a

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Frank Henry Equipment We’ve learned a thing or two over the years from our customers both here in Canada and the United States and that is… first, it doesn’t matter if you’re a local independent or an international success the three keys to customer satisfaction are the 3Ds… dependable people, dependable equipment

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secondly, cost is not the sole definition of value.

Frank Henry Equipment: Value in 3D

new well, Tucker lowers a number of sensors into the well, and an analysis based on what those sensors indicate leads to an evaluation that helps the oil company determine whether or not that

particular well will be profitable enough to move forward. “It’s like doing an MRI on the ‘body’ of the well. The reality is, oil companies drill a lot of holes, and not all of them are successful.”

A ‘cased hole’ operation is done once the decision is made by the customer to go ahead and complete the well and put it into production. Some sort of casing, such as a steel liner, is run down into the well – “and then you need to create a path from the well bore out into the formation, through that casing. We call it completing the well.” Once a well is in production, there may be some issues with it.

The flow may be less than expected; there may be more water than gas or oil. And part of its cased hole business is helping the customer evaluate why that well isn’t producing as much as anticipated. “We roll that up under cased hole as well as ‘slick line.’”

Specialty services help resolve specific well situations. The company has also been working

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BFL Canada The Energy industry carries with it a unique range of risks and BFL Canada has you covered. Our niche expertise and our ability to work with cross border issues of insurance risk and related taxes makes our valued business relationship with Tucker Wireline Services Canada Ltd. a great fit.

on some new services, unique to Tucker. It has just entered into a partnership with Read Well Services, a Norwegian company that provides quality seismic and micro-seismic services. “In their seismic work, they create an artificial noise source and measure the magnitude from a certain distance to provide an illustration of what’s underground. In the newer micro-seismic analysis, they fracture the zones within the shale gas formations and place geophones into adjacent

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“It’s relatively easy to bring a sample of rock out of the hole, but as it ascends, going from down-hole to surface pressure, the gas in the rock dissipates. And that makes it difficult for petroleum companies to determine what is actually in the reservoir” areas and wells to monitor the fracture, to see if it’s propagating through the rock properly, and they produce an illustrative graph of the fracture.

And when you’re spending upwards of a million dollars to fracture a well, it’s worth monitoring whether it’s performing properly.”

Another specialty tool Tucker developed for shale gas and coal bed methane, also unique in the industry today, is a pressurized coring tool that enables samples of the rock to be analyzed under

its own pressure. “It’s relatively easy to bring a sample of rock out of the hole, but as it ascends, going from down-hole to surface pressure, the gas in the rock dissipates. And that makes it difficult for petroleum companies to determine what is actually in the reservoir. This affects their reserve calculations, production estimates and how the well is completed. All of these are critical to the petroleum companies’ value, share price and cash flow.” www.tuckerenergy.com

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g

With almost complete anonymity, Papua New Guinea has become one of the most important sources in the world for gas products, as Jeff Daniel discovers

P

apua New Guinea is more often in the media for anthropological or botanical surveys than the oil and gas variety. So it may come as a surprise to learn that Papua New Guinea has a burgeoning oil and gas industry and that InterOil in particular has been beavering away for the past 13 years in the endeavor of creating a complete, vertically integrated exploration, production and distribution business to satisfy that remote country’s needs.

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Townley Group International TGI has been working with InterOil for a number of years now, and InterOil has come to rely on our ability to perform at a moment’s notice. “InterOil often has a requirement for urgent freight or aircraft charters and TGI delivers the solutions within a matter of hours—24 hours a day, seven days a week, 365 days a year,” said Townley Group’s managing director, Peter Townley.

Our clients’ needs are always met and expectations are often exceeded. At TGI the focus is on the customer’s needs and our ability to deliver to the letter what they require. From complex project forwarding through to general cargo, TGI has the solutions, with state-of-theart technology including GPS and RFID cargo tracking.

“At TGI we keep you moving even when you think you’ve been grounded.”

to the refinery project including a loan amount of US$85 million from the US Government agency OPIC to complete the project—an investment protected by a 30 year agreement with the state which expires in 2035. During that period, the state undertakes to ensure that domestic distributors purchase their refined petroleum product needs from InterOil according to an import parity pricing (IPP) structure. The idea behind this is that distributors are no worse off than if they had imported product, while InterOil captures most of the freight costs and refinery margins which were previously paid to international shipping and oil companies. Even if a further refinery was to be built during the life of the agreement, it would be unable to undercut the prevailing IPP rates.

The primary products produced for the domestic market are jet fuel, diesel and gasoline.

“The well results establish Papua New Guinea as a world class gas resource strategically close to the largest and most well developed liquid natural gas (LNG) market in the world” Prior to the 1990s, Papua New Guinea was one of a few oil rich countries that did not have its own refinery. Instead, it relied entirely on imported petroleum products from Singapore and Australia with the corresponding transport costs associated with journeys of anything up to 4,000 miles. As such, InterOil was formed in 1997 with the principal objective of being able to satisfy Papua New Guinea’s domestic needs.

The InterOil refinery, which went live in 2004, is the only petroleum refining facility in Papua New Guinea. It can process 36,000 barrels per day, a volume sized to meet the current and predicted demand for the whole of the Papua New Guinea market and consequently is currently working well within its design capacity.

The refining process has been chosen to suit light sweet crude and so avoids the need for hydro-treatment or complex and expensive heavy oil processing such as catalytic cracking and coking. As a result, the refinery comprises only atmospheric distillation plus a modest catalytic reformer for production of gasoline blend-stock.

An amount of US$214 million was committed

The refining process also results in the production of naphtha and low-sulfur waxy residue but rather than converting naphtha to gasoline, it is exported to Asian markets in order to avoid the more complex technology that would otherwise be necessary.

Total revenue in 2009 amounted to just short of $700 million—down on the previous year but more than offsetting losses incurred in the upstream exploration process and thereby putting the company into net profit for the first time. In fact, Phil Mulacek, chairman and CEO of the company, said that 2009 had been the most successful year to date, with all of the major objectives set for the year having been met.

Revenue comes from distribution and refining.

The refinery itself is across the harbor from the city of Port Moresby and has been carefully sited in an area surrounded by hills and shielded from view. In fact, InterOil has gone to considerable lengths to minimize visual impact and the attention paid to environmental matters meets or exceeds the recommendations of the World Bank for new refinery installations.

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AMC

Hamilton Group

AMC has been supporting InterOil since 2003, and is

Hamilton Group and PEI applaud InterOil’s success.

a leading supplier of products and solutions to the oil

We are proud of the contributions that our drilling

& gas industry. AMC’s dedicated Oil & Gas Division

consultants continue to make in logistically difficult

develops, manufactures and provides a complete range

environments.

of drilling fluids, treating chemicals and engineering

project management skills of our consultants with our

solutions. The company maintains a philosophy of

experienced staff and proprietary assignment matching

continual development of drilling and completion

database, we efficiently and effectively provide world-

products that are innovative, technologically advanced

class engineering, consulting, and project management

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solutions to our upstream clients.

At the same time, the operation can utilize the wonderful natural harbor that is Port Moresby, the only sheltered deepwater harbor in the region, with clear water that exceeds that of both Sydney and Brisbane. The design of the refinery jetty and deep draught of the harbor allow easy access for tankers of all sizes up 110,000 tons dead weight tonnage.

Smaller vessels can also unload crude oil from the PNG river systems and unload at the refinery.

InterOil’s upstream activities began when it

By

combining

the

technical

and

bought assets from Shell and BP and now center on some of the largest exploration rights in the country, covering an area of around four million acres. Currently drilling is taking place in three 100 per cent owned onshore areas within petroleum prospecting licenses (PPLs) 236, 237 and 238, to the north-west of Port Moresby in the Eastern Papuan Basin. InterOil also has 15 per cent equity in PPL 244, located offshore in the Gulf of Papua.

In the second half of 2006, InterOil drilled the

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exploration well Elk-1 located within PPL 238, which resulted in a significant gas/condensate discovery. Since then, Elk-2 and Elk-4 have been drilled to test the adjoining Antelope feature. Both Elk-1 and Elk-4 flowed gas at excellent rates in excess of 100 million cubic feet of natural gas per day (mmcfpd), establishing record PNG flow rates.

Consequently, in October 2008, InterOil started drilling the Antelope-1 well, located approximately four kilometers south of Elk-1. Antelope-1 targeted an area that had been seismically interpreted to have superior reservoir characteristics and InterOil has since announced that it flowed at 382 mmcfpd with 5,000 barrels of condensate per day for a total 68,700 barrels of oil equivalent per day. This set a new record rate for the country of Papua New Guinea and amazingly, qualified for a Guinness World Record for an onshore vertical well!

Whichever way the results are measured, InterOil feels justified in announcing that the well results establish Papua New Guinea as a world class gas resource strategically close to the largest and most well developed liquid natural gas (LNG) market in the world. So much so that it plans to proceed with the construction of an LNG plant adjoining the InterOil refinery and by 2015, aims to have built a direct pipeline from the gas fields to the plant.

The idea of an LNG plant was first floated in 2006 but at an estimated cost of $6 billion; and without any domestic market as such, the costs and

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risks are high. InterOil has entered a joint venture agreement with Pacific LNG Operations to form Niugini Gas Limited which will build and operate the gas processing facility. The proposed LNG plant is a two-train plant with a nominal four million metric ton per annum processing capacity for each train.

Downstream, as a result of buying BP’s entire commercial and retail distribution assets in 2004 and the subsequent acquisition of Shell’s Papua New Guinea assets in 2006, InterOil has the largest wholesale, retail and aviation petroleum product distribution base in Papua New Guinea, accounting for a 70 percent share of the country’s refined petroleum product needs; although by Western standards, the 51 retail outlets is extremely low.

To put this in perspective, InterOil operates 12 aviation refueling stations, making it the largest in aviation outside the main Port Moresby center.

To complement InterOil’s own diesel, jet fuel, gasoline, kerosene and fuel oil products, it also sells Shell and BP branded commercial and industrial lubricants, such as engine and hydraulic oils. However, these imports account for only a small percentage of total sales.

InterOil owns and operates six large terminals and 11 depots used to supply product throughout Papua New Guinea. By far the largest volume of product goes to commercial customers engaged in such activities as mining, agricultural, fishing and logging. Many of these agreements call on

InterOil

InterOil to supply and maintain company-owned, above-ground storage tanks and pumps. In 2008, more than two thirds of volume was accounted for in this manner, albeit at a lower margin than retail sales. Nevertheless, as PNG increases in prosperity, the importance of the retail sector will grow; and InterOil is already well positioned to take advantage of that growth.

InterOil has minimal capital tied up in transportation and instead leases just two tankers to deliver refined products to both self owned and independent distribution terminals and depots, and relies on independent transport operators for interior movements. Most of the distribution to both commercial and retail customers is by road, although a number of the larger commercial consumers are served by coastal ships. In all cases, though, InterOil passes transportation costs through to customers.

As would be expected in a country as under-

developed as Papua New Guinea, InterOil is closely linked with the social progress of the country’s citizens. As well as employing 750 people who make a positive contribution to the country’s economy and driving improvements in living standards, through its Community Affairs department, InterOil is working closely with communities and government to spread the benefits of the operation.

The aim is to create a balance between respecting a traditional way of life while making meaningful improvements to the quality of life. The Community Affairs department oversees all assistance programs and manages land acquisition, related compensation claims and payments. The overriding philosophy is based on ‘bottom-up planning,’ hoping to take the local community into account during planning and development. Around the refinery there is a longterm community development assistance program to benefit the villages and villagers. www.interoil.com

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horizons For some investors the recent global financial crisis has sounded the bell for acquisition opportunities.

Matt McCann, CEO of TransAtlantic Petroleum, gives Andrew Pelis some insight into how troubled times for the oil and gas sector have worked to the company’s advantage

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n aggressive strategy of acquisitions in emerging markets during the current market slump is very much paying off for one oil and gas company from Texas.

TransAtlantic Petroleum has quickly built its reputation as a vertically integrated, international energy company engaged in the acquisition, development, exploration and production of crude oil and natural gas. The company holds interests in developed and undeveloped oil and gas properties in Turkey, Morocco and Romania. When oil and gas prices plummeted in late 2008, circumstances created big opportunities for acquisition, and TransAtlantic was at the forefront for capitalization.

Vertical integration plays an important role in the company’s success, as Matt McCann, CEO explains. “We own our own rigs, fracture stimulation and seismic equipment, which has been a key component to our success as we have entered underdeveloped energy countries.”

Headquartered in Dallas, the company has a focus on Turkey, where many of its 500 employees are based, and aside from employee expertise, it’s the equipment that makes a big difference. “We own seven drilling rigs—and have an eighth on the way—and we currently have six drilling projects going on, with several additional exploration projects taking place,” McCann says.

At the present time TransAtlantic is looking to add to its assets with the $96.5 million acquisition of Turkish company Zorlu. With that comes ownership of another million acres of prime oil and gas country that represents “dozens of opportunities” in McCann’s eyes. “The site is located in the Thrace Basin, and we expect to close this deal within the month,” he affirms. “We try to grow the company with a balance of organic growth and strategic acquisitions, where we feel that our skill sets and management can unlock the value of a target.”

The strategy of targeting opportunities in Turkey— and recently Morocco and Romania—is one that has a number of benefits for TransAtlantic Petroleum. For starters, the technology simply doesn’t exist within these countries to get the best utilization out of oil and gas reserves, and that’s where TransAtlantic’s strengths really play to its advantage.

“We’ve been first among international E&P companies in recognizing the opportunity in these countries early,” McCann admits. “You can acquire

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big areas on good fiscal terms, and there exists the opportunity for high-rate wells. Although there has been historic drilling in all three countries, they remain largely underdeveloped. I think that Turkey in particular will capture the imagination of the industry over the next several years.”

The company has been involved in Turkey for several years, but its roots stem from the Riata Energy Empire that chairman Malone Mitchell built up from the mid-80s. Starting out with just $500, his business became one of the largest privately held oil and gas exploration companies and the largest privately held land driller in the US before it was sold in 2006.

“Following the sale of Riata, Malone started to look for new opportunities to re-enter the oil and gas market and eventually came across TransAtlantic in early 2008,” McCann explains. “We had a legacy and strategy of being vertically integrated and also owned capital, so we started out by buying stock from the company and gradually increased our stake. This is a public company, but Malone’s involvement and experience has been huge.

“What has really set us apart have been the last two elements of what we call the four-step business cycle,” McCann continues. “The first step is identifying where you want to be; the second element is to acquire the acreage [they had already acquired the rights to drill], and then we came along to complete the cycle by funding the drilling [the previous owners had little access to capital], and of course the final step is execution. It doesn’t matter if you have the acreage and the capital; if you don’t do a good job you won’t succeed, and you’ll get exactly the returns you deserve.

“We look at managing a balanced book of business between the development of established sites and low-level up to higher-risk exploration,” McCann continues. “Right now we are drilling in Turkey; you try to mitigate risk before drilling through a series of seismic tests, and we use OYO Geospace technology to ascertain geophysical conditions and ensure there is a structure in place in the ground. This involves using wireless 3-D seismic crews, and it gives us a distinct advantage, as we can acquire higher-quality data much faster than other companies.”

The other huge factor that’s going to make TransAtlantic’s sorties into Turkey successful will be its fracture stimulation equipment, which is due

to arrive shortly. Often the gas or oil is holed up inside rock, and the equipment is able to pump fluid and sand at high pressure into the rock to fracture it and create cracks that the sand enters. Once the pressure is released, an environment is created that allows the oil or gas to flow into the well reservoir, significantly increasing the productivity.

McCann describes Turkey as a “terrific location for business” and adds, “we find the culture very hard-working and talented, and where possible we hire local people. We have some ex-patriates over there bringing the Western oil and gas mindset to the country, and because fracture stimulation is not currently done in Turkey, we’ll have to create that talent through in-house training.

“Another of our strengths is operating in a parallel rather than linear fashion,” McCann adds, “and we try to get our people trained to multi-skill and look at opportunities to save time and improve efficiency. It also helps that we set up our service team [Viking International] in Istanbul in 2008, and they can clear or build roads, shoot the seismic and drill the well for us, meaning that our execution is very much based on successful teamwork.”

Looking to the future, McCann says that the arrival of the fracture stimulation equipment will offer further opportunities to rehabilitate old wells, while the acquisition of Zorlu is also very much on the horizon. “We expect to see a return in several different ways: we’re buying existing production and see a strong cash flow from this, but we can also drill wells and connect these to pipeline. Acquisitions will remain a possibility, and we’re always looking for opportunities; if anything fits perfectly, we’ll consider it.” www.transatlanticpetroleum.com

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smart

Vermont’s power transmission company, VELCO, is preparing for another development as it migrates to the smart grid. CEO Chris Dutton and VP e Johnson talk to Gay Sutton about the challenges of becoming a telecomm

I

n April this year, longstanding energy expert Chris Dutton was called in from retirement to take over as president and CEO of Vermont Electric Power Company, Inc. (VELCO) to see it through one of the most challenging periods of growth in its 60-year history.

Owned by a consortium of electricity utility companies across Vermont, VELCO is unique in being the state’s sole transmission company, and until 2005 it had enjoyed a relatively stable and peaceful existence. Its original purpose during the 1950s was to construct a power transmission backbone for the state. Gripped in a post–World War II boom, the demand for power looked set to outstrip the supply generated, and it was perceived that a single state-wide transmission system would enable the state to import much-needed power from a hydroelectric plant in neighboring New York State. Thus, VELCO was created.

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tfuture

phase of external affairs Kerrick munications company

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substation projects throughout the United States.

This comfortable state of stability continued until the middle of the current decade, when the transmission system began to come under pressure. Interestingly, the strain was not created by a rapidly increasing population or industrialization, nor has demand outstripped supply as it did before. It was precipitated by peaks in demand caused by the increasing use of air conditioning during the hottest parts of the summer months, and heating during the winter.

“It then became clear that, even though we had enough power supply to meet the needs of the state, the increased peak demand was putting strain on the transmission system and putting its reliability in peril,” explains Dutton. “We have therefore had to make substantial improvements to the infrastructure of the transmission system simply to keep the lights on.”

To some extent taken unaware by this rapid change in public habit, the company had to

After the initial construction period, the company settled down to its role as a freestanding transmission company, in some ways a precursor of the current disaggregation of the industry whereby supply, transmission and distribution are performed by separate entities. Its main role for many years was maintenance, though it went through several minor phases of construction that enabled the company to import power across the Canadian border from Quebec and from other areas of New England.

act quickly. Working in conjunction with ISO (Independent Systems Operator) for New England, which is responsible for overseeing the security of the power supply for the six-state region, the company identified several projects that would strengthen the transmission system. In 2005 work began on the first of these, the Northwest Reliability Project.

Costing in the range of $220 million and reaching completion in 2009, the project entailed the

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construction of a completely new transmission line some 75 miles in length. The southern portion of the project consisted of a 345-kilovolt line linking Rutland to New Haven, where a new substation was built to step the power down to 115kV. A second transmission line of 115kV was then constructed to carry power north to Burlington, the largest city in Vermont. Concurrent with this, a number of smaller projects were also undertaken in the Burlington area to connect outlying towns to the grid.

The second major project, the Southern Loop Coolidge Connector, began in 2007 and is now nearing completion. Costing slightly less than the Northwest Reliability Project, it includes the construction of a new substation in the town of Vernon in southeast Vermont and 52 miles of 345kV transmission line linking it with the Coolidge substation in the town of Cavendish, a major substation that is currently undergoing expansion to handle the extra capacity.

These projects—in addition to the many smaller works that have strengthened the network at a local level—have resulted in a considerable expansion of the transmission network. “In the past five years, we’ve gone from a company with an asset base of about $120 million to close to $1 billion,” Dutton says. “And more than half this increase can be accounted for by these two projects alone.”

The internal strain imposed by this migration from what was essentially a maintenance company to one initiating and overseeing major construction projects has also been enormous.

“You can imagine the logistical challenge that kind of growth has presented to a small company like VELCO,” Dutton says. “We had to increase our employee population significantly, our people have had to acquire new skill sets, and frankly we’ve had to instill a new culture to deal with the exigencies of the construction contracts. It has certainly been quite a contrast to our former 30 years largely as a maintenance organization.”

Although Dutton did not hold an executive role at VELCO during this busy period, he was closely linked with executive decision making as a serving member of the board of directors. Moreover, right up until his retirement in 2008, he was CEO of Green Mountain Power, the electric utility company that supplies power to around one-quarter of Vermont’s population and one of VELCO’s largest shareholders.

However, Dutton’s retirement didn’t last long.

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When VELCO’s CEO resigned in April this year, Dutton was asked to step in as president and CEO and see the company through what is likely to be one of the most exciting and challenging periods in its history.

The power industry is moving forward to embrace three fundamental new technologies: the implementation of fiber optic communication across the system, the development of the socalled “smart grid” system, and the connection of new renewable energy generation technologies to the grid system.

When Dutton took over in April, the company had a number of smaller construction projects in progress. But planning was already under way for several major projects that will move the transmission system into the 21st century.

The first of these is the installation of fiber optic communications across the transmission network.

“Planning for the project had been going on for some time, but we began work on it six weeks ago, and we foresee finishing the entire ring in the first quarter of 2013,” Dutton says. It’s a massive project costing around $56 million, and it entails connecting the vast majority of Vermont’s 290 substations across the state via 1,100 miles of fiber optic cable.

Once completed, the new system should significantly improve the company’s ability to

communicate with substations across the grid.

The aim is to make data such as amperage and flow—right down to community and neighborhood level—available to the utility control centers in Vermont and to the New England control center in Massachusetts. By receiving such information in real time, the control centers will be able to see what is happening within the system and to respond quickly to situations that might threaten the stability of the power supply. Such quick reaction will improve the reliability and integrity of the entire system and prevent catastrophic failure.

Not only does this benefit the communities of Vermont but, because the grids across all of New England are interconnected and interdependent, and a failure in one state could initiate catastrophic failure throughout the region, the project has considerable significance for the reliability of power delivery across the region as a whole.

Once again, the planning was undertaken in conjunction with ISO New England. “But there have been all kinds of challenges,” Dutton says.

“First and foremost was aligning ISO New England and the various parties inside the state to agree on the scope and intentions of the project and how it should be financed.”

The importance of the system to the integrity of power supply for all six New England states

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heating and industrial uses in times of peak demand so that system costs are reduced and system stability is assured,” Dutton explains.

VELCO has played a key role in coordinating the applications across the state for federal stimulus funding and has successfully brought together each of the state’s 20 power utilities along with the regulators and the Vermont legislature to create a single application and a single vision and strategy.

“I believe this was a unique picture in our nation,” says vice president, external affairs, Kerrick Johnson.

“Other states had competing applications. Vermont had one application and everybody gathered behind it. There were 400 applications in total, out of which the department of energy awarded 100 Smart Grid Investment Grants. We were awarded a grant of $69 million in October last year, which is the 16th highest by value.”

Bringing together so many disparate interests— and indeed political views and perspectives—was

“Even though we had enough power supply to meet the needs of the state, the increased peak demand was putting strain on the transmission system and putting its reliability in peril. We had to make substantial improvements to the infrastructure simply to keep the lights on” has, of course, played a significant part in the negotiations for funding for the project. As a result, 80 percent of the $56 million will be paid for out of the ISO New England tariff—which means the cost will be borne throughout New England— and 20 percent of the cost will be paid for by the energy consumers of Vermont.

The transformation of the network into a fiber optic communications system is an essential element of the long-term eEnergy Vermont plan to install the smart grid system throughout the state. The aim of the smart grid is to enable the energy utilities to communicate directly with their customers, not only to install statewide automated metering but also to control appliances within consumers’ homes and facilities in order to save energy, reduce cost and increase reliability and transparency. “It also gives the utilities the capability, for instance, to control air conditioning,

no mean feat, and must have been a powerful advocate on behalf of Vermont’s bid. Meanwhile, the strategy to implement the smart grid is structured around four plans. The first is a very detailed overarching project execution plan that includes a step-by-step timeline detailing exactly what activities and initiatives will be undertaken by whom and when. This has been accepted and approved. The second is a cyber-security plan, which has also been finalized and adopted.

“The last two plans are still outstanding,” Dutton says. “We’re currently in discussions with the Department of Energy to finalize exactly what should be included in a consumer behavioral study, and we’re discussing a metrics and benefits plan that will gauge how successful we are with the project.”

The consumer behavioral study is one of nine to be undertaken by selected schemes nationwide and will involve running pilot schemes to analyze what works

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VELCO

and what doesn’t work, and what customers like and respond to. Information from these schemes will then be shared nationwide and will drive subsequent smart grid investments across the country.

Finally, national concern about climate change is driving the national policy to increase the percentage of power being generated from renewable sources.

“In Vermont this is largely wind power. Wind turbines, of course, need be sited where the wind resources are greatest—on mountaintops, well away from areas of population currently supplied by our transmission grid. Bringing power from these remote locations to the grid requires a new transmission infrastructure,” Dutton explains. “We’re currently working on some relatively small projects in Vermont, but we believe there will have to be some significant investments in transmission lines in the future to bring this power to the consumer.”

Dutton sees two main challenges ahead as the company gears up for these major changes. “With the rollout of the fiber optic project we’re clearly entering an area where we have little experience: telecommunications.” So there is another period of learning, expansion and culture change ahead.

“Then there will be the challenge of dealing with the cyclical nature of construction,” he continues.

“Six years ago VELCO’s construction budget was $15 million. This year we will spend more than $200 million. Four years from now we may be spending $50 million. To be able to expand and contract like an accordion to deal with those swings in project construction is going to be a challenge.”

With Dutton at the helm, VELCO has a leader with considerable experience and knowledge of the industry. But it’s inevitable that the lure of retirement will one day become attractive again.

“I think it’s safe to say I won’t be here in 10 years,” he concludes. “Part of the responsibility of any CEO is to find a successor, so how long I stay will in part be dictated by that. It will also be dictated by how interesting I find the work. And right now I find it very interesting.” www.velco.com

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The

hardworking

Miss Colleen

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Oscar Renda Contracting

Tunnel boring can be hard work, but it doesn’t come much harder than on this Maryland project by Oscar Renda Contracting, as Alan Swaby learns

a

T

here are gophers busy under the suburbs of Silver Spring, Maryland, but they’re not doing any harm. Instead, they’re busy nibbling away the rock, ready to construct a vital link in the Washington Suburban Sanitary Commission (WSSC) water system.

Known as the Bi-County Water Tunnel, the 5.3mile tunnel will eventually connect two existing water mains in Montgomery County and Prince George’s County. It’s a $168 million safety precaution to provide a redundant water tunnel in case a nearby tunnel should fail.

The Bi-County water supply main project was first identified in the late 1960s. Since that time, WSSC and the planning agencies of the two counties involved have been monitoring water system performance, water pressure, demand and growth patterns to determine an appropriate project implementation.

In 2004 they judged the time was right to begin work so that it would be complete by the decade’s end. Without it, WSSC couldn’t be sure of providing a daily reliable water supply. Throw in emergencies such as fires, droughts or, heaven forbid, another hurricane like Isabel, and the risk of disruption becomes even greater.

Had this project not gone ahead, the community would have begun to notice the effects of low water pressure. Should this drop below 30 pounds per square inch, there is an immediate impact on the ability of the fire department to provide effective

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Oscar Renda Contracting

DSI DSI,

American

Commercial

Division,

has

partnered with Oscar Renda Contracting for over 25 years on tunnel and shaft jobs in the Texas market, and now to expanded markets such as Bi-County, Maryland. DSI currently supplies shaft and tunnel liner plates, steel rib, DSI thread bar and friction bolts to at least five projects.

DSI enjoys a great relationship with Oscar Renda; we want to congratulate them on their many successes, including the recent New Irvington Tunnel project they were awarded.

They are a winning team and we look forward to building upon our successful relationship for many years to come.

Tim Winn, supervising the Bi-County project, “underlies everything the company does. It found success in the early years by taking on the most difficult and challenging projects and made a reputation by completing them regardless of their financial outcome.”

On that basis, then, the Bi-County pipeline has been awarded to the right guys, as it is a farfrom-straightforward project. WSSC could have specified an open-cut pipeline involving excavation and burial of a pipeline no deeper than 20 feet underground. However, such an approach would have required a working area at least 75 feet wide along the entire length of the pipeline. The noise, vibrations and additional vehicular traffic would have caused considerable disruption in what is already a highly congested residential locality.

Instead, the decision was taken to go underground, but this brought its own set of

“Oscar’s work ethic underlies everything the company does. It found success in the early years by taking on the most difficult and challenging projects and made a reputation by completing them regardless of their financial outcome” protection. At the same time, residents would notice a decrease in their plumbing performance should several faucets be open at the same time.

Consequently, serious planning for the pipeline began in 2004, and contracts were awarded for the drilling of the tunnel in 2009.

The firm chosen to do the work, Oscar Renda Contracting (ORC), is from Roanoke, Texas, and despite being in business since 1974 and probably holding the number one position for water treatment plants in the Southwest, it’s only in the last six years or so that it has begun to make a mark farther afield.

ORC is one of those “successful immigrant” stories. The young Oscar arrived with his family in 1956 under provisions of the Refugee Act, and immediately began chasing the American Dream.

After a childhood juggling education and part-time jobs, he was well equipped to launch ORC in 1974 while holding down two other full-time jobs.

“This work ethic,” says regional manager

problems. The main access point for the tunnel is from a two-acre site just off the Washington interloop. Here a 36-foot shaft has been sunk 180 feet deep at the center point of the 28,000-foot-long tunnel. “Once we got to the bottom,” says Winn, “the rock was solid, but at around 50 feet we encountered a lot of groundwater that needed to be sealed off before we could continue.”

Saying that the rock is solid is something of an understatement. It’s solid granite rated at 20,000 psi or, in other words, five times harder than concrete.

ORC has brought in as partner the specialist tunneling company Southland Contracting, Inc., which utilizes a 10-foot-diameter Robbins tunnel-boring machine.

Even then, Miss Colleen—as the tunnel borer has been affectionately named—has had to be beefed up considerably. Horsepower was increased 50 percent to 1,250 and the hydraulics similarly boosted to cope with the constant strain of a 20-hour-per-day, sixday-per-week boring schedule.

At the start of each shift, the cutting heads have

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Oscar Renda Contracting

Diamond Electric Diamond Electric specializes in efficient designbuild, fast track, commercial, industrial, and institutional electrical construction. As the goto electric contractor in the Mid-Atlantic region, Diamond Electric is reliable, responsible, and your industry leader.

to be examined for wear and replaced if necessary.

Then the borer goes to work, chipping tiny fragments of the granite face, which are then conveyed back to muck carriers taking spoil out to the surface.

“Getting enough ventilation through this relatively small tunnel is a significant challenge,” says Winn. “Normally there would be additional shafts for ventilation, but we have only the three shafts effectively 2½ miles apart. That has called for a much more robust ventilation system to keep the guys safe.”

The one advantage of this type of granite is

that it is solid, removing the need for significant tunnel supports except in only around 5 or 10 percent of its length where it passes through fault zones. Once the 14 months of laser-guided boring is complete, the next stage will be to lower and install an 84-inch steel pipe in 50-foot-long sections that then have to be butt-welded and grouted into place. The pipe has a concrete lining to give it corrosion protection, and the final stage of the build is to line over the inside of the welded joints, giving it seamless protection.

There’s been some disruption for residents, and occasionally there’s a report of the earth moving as low-impact blasting takes place, but WSSC has gone out of its way to minimize the impact on residents, who will of course be much happier in October next year when their water supply is so much more assured than it is today. www.oscarrenda.com

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Hate thatdirty wa W

hile serving in the US Navy, I was stationed in the Philippines and was appalled to see the squalid conditions in which some people lived, with raw sewage polluting their rivers and streams and affecting their drinking water supply, and the government unable or unwilling to do anything about it. The Navy base at Subic Bay had clean drinking water, but if you left the base to explore the outlying islands and countryside, you were advised not to drink the water due to the real possibility of nausea, lung irritation, skin rash, vomiting, dizziness, and in extreme cases, even death.

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Ric Larson has seen firsthan environment by pollution, to groundwater supplies. Now h dedicated to providing its cu

Aqua America

ater

nd the damage being done to the earth’s oxic chemicals and the contamination of he reports on Aqua America, a company that is ustomers with the best available water supply

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00 www.bus-ex.com MARCH 10

Atlantic States Cast Iron Pipe Company American made—green manufacturing company For over 150 years, Atlantic States Cast Iron Pipe Company, a subsidiary of McWane Inc., has been dedicated to producing quality water and waste water transfer products, maintaining environmental and public health standards for our nation’s water infrastructure. Providing ductile iron pipes, flanged pipes, restrained joint and specialty pipes; along with the valves, hydrants, fittings, and accessories available from additional McWane Inc. owned and operated entities, Atlantic States is a key contributor to infrastructure revitalization both domestically and internationally.

As a LEED certified manufacturer creating new products from nearly 100 percent recycled materials, Atlantic States is charting new courses in environmental stewardship every day. Our state of the art emissions control systems have been lauded on both the State and Federal levels as a breakthrough in responsible and green manufacturing. Our storm water runoff capture and reuse programs supplement this commitment to a better world.

Following the beliefs of our founder, J.R. McWane, Atlantic States honors our heritage by manufacturing products which are lasting and sustainable. We invest significantly in the future of our business, our employees, and our communities. We commit to excellence, integrity, service and quality. We strive to adhere to the highest standards of workplace safety and environmental leadership based in responsibility. As a participating member in numerous precedent setting optional programs, both with safety organizations such as OSHA and energy supply companies; our voluntary activities and the decisions guided by such lead to substantial energy savings to the company and superior workplace safety for all. Implementing lessons of the past improves and protects everyone’s future.

Recent expansion by Atlantic States into supplying domestic waterworks products internationally to places such as Jamaica, Puerto Rico, and Africa extends our environmental leadership around the globe.

Atlantic States’ vendor relationship with AQUA America Inc. expands these goals and philosophies to new and greater heights. Working with and learning from a renowned company such as AQUA, Atlantic States accepts the challenge their stringent requirements demand, and looks forward to growing stronger and cleaner as a result throughout the years ahead.

The US too has had its well-documented share of contaminated water, with people becoming sick after drinking water containing bacteria and swimming in contaminated lakes, resulting in dire warnings and closed beaches. There are companies, however, that are dedicated to providing their customers with the best available water supply, working to eliminate these problems on a daily basis.

Bryn Mawr, Pennsylvania–based Aqua America, a leading provider of water and wastewater treatment services in 14 states with over 3 million customers, can trace its beginnings back to 1886 when a group of Swarthmore College professors founded the Springfield Water Company in Springfield Township, Pennsylvania, primarily for the purpose of tapping into a nearby spring water supply to provide local residents with naturally filtered, clean drinking water, giving them the

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opportunity to abandon their wells for a more healthful water supply. Almost 40 years later in 1925, Springfield Water Company grew into a large utility serving the residents of 58 municipalities located in three counties, and the company’s name was changed by a vote of its shareholders to Philadelphia Suburban Water Company (PSW).

By 1968 the board of directors voted to establish a holding company, the Philadelphia Suburban Corporation (PSC), and in July 1971 it was listed on the New York Stock Exchange.

By the 1980s PSW began to implement a strategy of growth through acquisition—formulated on and stemming from its purchase of three Chester County water systems—resulting from stagnant growth in some of its municipalities. Growth through acquisition was so successful that by 1998 PSW acquired 27 more water systems, adding

Aqua America

more than 50,000 customers to its growing list of consumers. In 1996 the company made a foray into wastewater treatment systems by purchasing a facility in Chester County, and then another in Bucks County the following year.

The company changed names again in 2004 to Aqua America, with the 2003 purchase of AquaSource, a water and wastewater treatment utility that served over 400,000 customers in Florida, Texas, Virginia, North Carolina, South Carolina, Indiana and Missouri. Subsequent purchases of utilities and water services companies in North Carolina and Florida in 2004 resulted in almost 200,000 additional customers.

Aqua America is constantly reviewing and implementing ways to provide high-quality water for its customers. When water is collected and stored in naturally occurring reservoirs through the force of nature (raw water), it has a tendency to clarify and purify through the actions of oxygen, sunlight and other natural agents. As a result, foreign matter and bacteria are for the most part removed naturally. The company then pumps the water through low-lift pumps (centrifugal pumps that direct water from the raw water source to underground flocculation and settling basins) into its treatment plants where it is treated with chlorine to kill any remaining harmful microorganisms.

A coagulant is added (usually liquid alum) that forms a thick, gelatinous substance known as floc (a fine, fluffy mass formed by the aggregation of suspended particles), which acts as a magnet to trap and suspend any impurities in the water.

In addition to the coagulant, finely powdered carbon may also be added to remove any unpleasant odors and taste that may occur through the decay of organic materials. It may be required in this process to add ammonia to the water, which acts in combination with the chlorine to assist the carbon in reducing further unpleasant tastes or odors. The pre-treated water is then flowed through flash mixers—which are tanks that agitate the water, causing the flocculation to form into a mass heavy with impurities—and then reaches a sedimentation basin and sinks to the bottom. The water is introduced to a series of filters to remove any particles or impurities that are not removed in the sedimentation basin. The water slowly seeps through filters composed of anthracite coal, sand and gravel contained in large cement boxes. A small amount of chlorine disinfectant, lime and corrosion

inhibitor are added to the water as it flows through the distribution system, where it is lifted through high-lift pumps (pumps that discharge treated water into arterial mains) into distribution piping and finally to a home or business.

Aqua America employs over 1,600 people and has grown through more than 130 water and wastewater treatment acquisitions since the 1990s, and it is poised to expand even further due to the installation of solar energy in selected plants that have been weaning the company off the cost of using traditional sources of energy for plant operations. With the availability of US government tax credits and depreciation deductions, Aqua America is thriving, with the goal being to continue providing the best water and waste treatment services to an even wider cross-section of the American public at the lowest cost possible. www.aquaamerica.com

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Worthth

The history of the iron ore deposits at Mary perseverance and hope, as Richard “Bo” McClos CEO and president of Baffinland Iron Mine

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Baffinland Iron Mines

wait

he

y River is a tale of politics, skey, chairman and interim es, reveals to Andrew Pelis

T

he story of the Mary River iron ore deposits is a compelling tale of national pride, split opinions and fluctuating prices, with a splash of political intrigue. For these reasons, the high-grade iron ore reserves remain undeveloped, nearly a half century after they were first discovered by Murray Watts and Ron Sheardown.

After much procrastination, that may finally be about to change as the site is now in the ownership of Baffinland Iron Mines. As Richard “Bo� McCloskey, chairman of the board and interim CEO and president, can testify, the desire to begin mining still has several more hurdles to clear, not least of which is the need to secure $4 billion of extra funding.

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Baffinland Iron Mines

Ron’s Auto Service Ltd. Ron’s Auto Service Ltd. is a Northern owned one stop shop for rental, sales and service of all types of equipment, safety and industrial supply. Our 40 years of experience in mining & exploration; oil & gas; construction; logging and recreation enables us to give our customers the answers they need. We know what is required to keep equipment working in our harsh climate and how to get past the logistical issues of getting our products to the most remote settlements and operations across the North.

We are proud to be Northern and working with companies like Baffinland Iron Mines.

Toronto-based Baffinland Iron Mines Corporation is focused on its 100-percent-owned Mary River iron ore deposits located about 160 kilometers south of Pond Inlet, Baffin Island, Nunavut Territory, Canada.

The high-grade iron ore deposits were discovered in 1962 and taken to lease by Baffinland Iron Mines Limited in 1971. Exploration and development work was re-started by Baffinland Iron Mines Corporation in 2004, which currently owns three mining leases covering approximately 1,600 hectares (about 4,000 acres) in the Mary River area of Baffin Island. Baffinland is a mineral exploration and development company with a sole focus on the advancement of its Mary River Property, which consists of five high-grade iron ore (hematite/magnetite) deposits.

Perhaps it was fate that McCloskey would end up running the operation that will finally get to dig in Canada’s pristine north. His career path has been intrinsically linked to Mary River for more than 30 years through his work with a number of mining companies. Who better to explain the history of false dawns and the current optimism that Mary River might finally fulfill its promise?

“Part of the problem is that the site is situated on North Baffin Island, well above the treeline, meaning that the terrain is spectacular but remote—we have rolling hills, lakes and seasonal rivers to contend with, and in summer there are 24 hours of daylight and in winter 24 hours of darkness,” McCloskey comments.

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Baffinland Iron Mines

Summit Air Northwest of Iqualiut Nunavut lies the secluded Baffinland

Iron

Mines

Mary

River

Project.

The culturally significant land, delicate Arctic environment

and

volatile

weather

create

substantial logistical challenges for Baffinland, but Summit Air provides a vital business solution.

“Since 2005, Baffinland has relied on Summit Air to provide efficient, cost-effective and most importantly, safe remote air service for their project

personnel,”

says

Dave

Mathieson,

President, Summit Air Charters.

Summit Air has specialized in providing remote cargo and passenger service to Canada’s north for over 20 years. Its versatile fleet and unmatched safety record make Summit Air the business solution of choice for Baffinland and the world’s largest companies.

We are proud to be Northern and working with companies like Baffinland Iron Mines.

“The site is on North Baffin Island, well above the tree-line, meaning that the terrain is spectacular but remote—we have rolling hills, lakes and seasonal rivers to contend with, and in summer there are 24 hours of daylight and in winter 24 hours of darkness” “Deposit No. 1 is 500 meters above the land and can be seen for miles around,” he continues. “The main handicap to this project has always been shipping. If there is an ideal product coming out of the Arctic, this is it. It’s a quarry at the end of a rail line. This opportunity offers everything a miner could ever want: the highest grade of iron ore on earth and well over a billion tonnes [metric tons] of resources. But it also throws up ice as a challenge.”

Back in the days when Mary River had first been discovered, the remote location became a center of national sovereignty and a pawn in a fierce general election, as McCloskey well remembers. “Mary River became a political

asterisk in the 1960s; after two feasibility studies were performed, a political storm ensued over the ‘pristine Canadian North being exploited’ by foreign powers did not go down very well.

“After those problems came the discovery of iron ore deposits in Australia and Brazil,” he continues, “and the money that could have been spent here was instead used on projects where the logistics were much easier.”

McCloskey says that since then a succession of fractured ownerships never gave the Mary River project the impetus to get off the ground.

“Like many mining projects, every mine needs a champion for its cause, but there was split ownership; shortly after the discovery Murray

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Baffinland Iron Mines

Logistec Logistec provides over five decades of experience in stevedoring and terminal operations as well as cargo-handling services through a strong network of strategically located facilities in 23 ports in the Great Lakes, the St. Lawrence River and on the Eastern Seaboard of North America. We provide customized solutions to your logistics requirements through our vast expertise and market knowledge. We are proud to be Northern and working with companies like Baffinland Iron Mines.

Watts promoted the site, and all the base metal companies in Toronto gave money, but the result was a fractured ownership.

“I became involved with a private company controlling leases in the mid-70s at a time when iron ore was not of much interest and prices were

low. At the bottom of the market a few years ago, the purchase of a northern Australian mine brought Gordon McCreary and I together, and we started to talk about approaching Hudson Bay, which owned 47 percent of Mary River.

“After a couple of discussions it became apparent that we could purchase their interest,” McCloskey continues, ”so in 2004 we underwent the conversion of a private company into a public one and the new Baffinland was born. Initially the investment of $5.5 million was raised through friends and business associates.”

Subsequent feasibility studies indicate that there is over a billion tonnes of high-grade iron ore at the site, leaving Baffinland with the dilemma of transportation and logistics. “I’ve never seen a mining project where grade and tonnage are irrelevant, and to have both elements in place eliminated two of the key challenges,” McCloskey states.

Moving the ore across the land to a port where it could be shipped has proven a big stumbling block, however. Given the conditions, heavy ships are

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Baffinland Iron Mines

needed to break the ice, and improved transportation networks are also an essential element.

Baffinland completed a feasibility study in 2008 with robust economics but a price tag of $4 billion for the capital costs. As 2009 changed attitudes toward large development projects everywhere, Baffinland started to look at different alternatives.

It recently completed a conceptual study on road haulage using a 100-kilometer road that transports the ore to temporary facilities where it can be loaded onto ships in the 70- to 90-day ice-free period. This would enable the organization to ship up to 3 million tonnes per year via truck to Milne Inlet. The viability of this project alternative is very much dependent on the price of iron ore per tonne. “This has not been looked at before simply because the prices did not make it feasible,” McCloskey explains.

Having provided a small sample of the iron ore to Europe, McCloskey is extremely confident that demand will be sky-high when full production begins. “It will be like a sought-after and addictive product, in good times and bad, to the iron ore customers,” he exclaims, “but the infrastructure is not in place, and we have 60 to 70 people currently working on exploration.”

Obtaining relevant permits is of course another prerequisite, and McCloskey suggests that this will also take years to accomplish. “We train Inuit people with local knowledge to work with us, and we’re currently negotiating an Inuit Impact and Benefit Agreement as well as conducting an environmental impact study. We expect to obtain the needed permits in about two years. Even though the trucking scenario looks attractive in initial studies, our main focus now is to raise the $4 billion we need to get Mary River into full-scale production. The downturn in the economy came at just the wrong time, as the results of our samples sent to Europe had been spectacular.

“The feasibility studies revealed that a $4 billion investment would see a payback in less than four years,” he adds, “but a junior mining company simply cannot raise that kind of sum. We’re talking to major companies all the time, and there are serious discussions taking place.”

Maybe finally the Mary River project can truly get under way—under Canadian ownership— and that long wait will have been worthwhile. www.baffinland.com

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u

Fromthe ground,

First Majestic Silver Corp. is committed to building a senior silver-pro based on an aggressive development and acquisition plan with a focus Davila takes David Hendricks on a virtual tour of the company’s three

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up

oducing mining company s on Mexico. COO Ramon e producing silver mines

First Majestic Silver Corp.

F

irst Majestic Silver Corp. was established in Vancouver, British Columbia, in 2002 as a silver mining company focused on Mexico. The company currently has three underground mines in production and is nurturing two other projects for future production.

Ramon Davila, First Majestic’s chief operating officer in Mexico, is based in Durango. He has an engineering degree in mining and metallurgy and a master’s degree in minerals economics. He worked for Industrias Penoles, the largest silver producer in Mexico from 1978 to 1987 and then became vice president of mining operations for Luismin until 1993. Five years later Davila became president of Plata Panamericana SA de CV, a wholly owned subsidiary of Pan American Silver Corp., where he was in charge of exploration and production of its Mexican operations. He’s a past president of the Association of Mining Engineers, Metallurgists and Geologists of Mexico, and he is currently a director of the board of Mexico’s Chamber of Mines and a member of the Society for Mining, Metallurgy and Exploration.

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Davila says the La Encantada Silver Mine— located in the Sierra Madre Oriental mountain range in the state of Coahuila in the northern part of central Mexico, fairly close to the US border— is First Majestic’s main operating asset at the moment. It’s in an isolated area, so it’s important to the local communities as a source of jobs. The infrastructure includes an airstrip, housing, offices, ancillary buildings, a laboratory, restaurant, general store, school and recreation facility. The mine is situated within First Majestic’s land package of approximately 4,000 hectares (about 10,000 acres).

“Last November we completed a major construction project there,” Davila says, “a cyanidation [a metallurgical technique for extracting precious metals from oxide ore] mill upgraded from 800 to 3,500 tons per day capacity. The plan there is to reprocess all tailings left behind, because the previous companies operating that mine over the past 30 years didn’t perform the correct process for the type of ore.

There are plenty of valuable tailings, so threequarters of our current production is coming from those, and one-quarter is coming from fresh ore, from the mine.” The mineralogy of the deposits is predominantly iron oxides, carbonates and lead sulphates, with high concentrations of silver (argentite and native silver) values, as the result of an oxidation process and enrichment in a known vertical range of more than 400 meters.

The full production capacity of the La Encantada mine is more than 4 million ounces of silver in the form of dore bars. First Majestic currently has nearly 500 people working full time, and a further 1,500 are employed in indirect jobs. “In the next four years we’re going to increase the capacity of this mine and reduce the amount of tailings that we feed to the plant. Our strategy from the start of this project was to construct the most up-to-date facility using the latest technologies. Currently over 80 percent of all water used is recycled, including a large portion of the cyanide. The result is one of the cleanest operations in Mexico.” The silver dore bars are shipped to Toreon in Mexico and will also be shipped to the US and Europe eventually.

La Parrilla Silver Mine and mill sit within First Majestic’s land package of more than 53,000 hectares located in the state of Durago, about 75 kilometers from the city of Durango, in the western

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First Majestic Silver Corp.

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“The plan is to reprocess all tailings left behind, because the previous companies operating that mine didn’t perform the correct process for the type of ore. Three-quarters of our current production is coming from those tailings and onequarter from the mine” part of the Mexican Altiplano, an extensive volcanic plateau characterized by narrow, northwesttrending, fault-controlled ranges separated by wide, flat-floored basins. The town of San Jose de La Parrilla is just north of the property, and Vicente Guerrero is 16 km to the southeast.

The La Parrilla mine is currently producing about 1.8 million ounces of silver equivalent per year. The current mill runs with twin circuits, each 425 tons per day: one to handle oxide ore, and the other

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to handle sulphide ore. “In the flotation circuit we produce zinc and lead concentrate, which also contains silver,” says Davila. “In the cyanidation circuit we produce oxide ore and silver dore bars. The mine is close to a community called La Parrilla, and we’ve been working closely with the community and the local government to maintain a good relationship with them. We’ve been doing projects with them like paving the road and other public works. And despite being a mine, we are

First Majestic Silver Corp.

also certified as a clean industry in Mexico.”

The San Martín Silver Mine is located 250 km north of Guadalajara in the northern part of Jalisco State. “It produces about 1.2 million ounces of silver equivalent per year with a cyanidation process. It’s been a mine operated by other companies for the last 20 years, and we are now exploring it in order to try to increase the reserves and the capacity. We have a good relationship with the local community.” The San Martín mine suffered from a lack of reinvestment for several years. First Majestic identified an opportunity to make investments in development, exploration and mill improvements, and it took control of operations of the mine in June 2006 by purchasing a majority stake in First Silver Reserve Inc. In September 2006 First Majestic purchased the remaining shares of First Silver, resulting in 100 percent ownership.

First Majestic also has two projects in consideration of development. One is Del Toro Silver Mine, which consists of numerous areas of interest for mineral exploration within the Chalchihuites mining district in Zacatecas State, including the San Juan and the Perseverancia mines.

Both were historic mines; the Perseverancia was mined for high-grade silverrich sulphide ore, and the San Juan is believed to be the oldest mine in the district, dating back possibly 500 years. “Del Toro could become our next mine,” Davila says. “The other is Real de Catorce, a relatively new mine that we acquired in November 2009 as a result of the purchase of all the issued and outstanding shares of Montreal-based Normabec Mining. The property consists of 22 mining concessions covering 6,327 hectares. It’s still somewhere in the future for us.” www.firstmajestic.com

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all Xstrata Zinc Canada: Bracemac-McLeod Mine

Mine, mine Xstrata Zinc Canada’s Perseverance mineral exploration was the 12th mine opened in the Matagami camp in Quebec since that region became a mining hotbed a half century ago. Now the company has begun construction of a new mine nearby, called Bracemac-McLeod, which it hopes will use the existing infrastructure and provide ongoing employment for the existing workforce

T

he Matagami Mine region has been producing metals for more than 40 years. In 2008 Xstrata Zinc Canada brought an active mine online at the Perseverance deposit, which is estimated to contain 5.1 million tonnes (metric tons) of zinc and copper ore. The mine just celebrated its second year anniversary of operations, having come online in July 2008 after nearly two years of construction but months ahead of the original schedule and within budget, despite significant increases in materials costs during the peak of construction in 2006 and 2007.

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Xstrata has not rested on that accomplishment, however, and immediately began to seek out ways to improve the mine’s performance by boosting output, reducing costs and increasing the safety at the site. The company believes strongly that safety promotes quality, efficiency, productivity and reduced costs, so it constantly strives to improve on safety and quality, and as a consequence, its costs keep going down.

Headquartered in Madrid, Spain, Xstrata Zinc is one of the world’s largest producers of zinc and one of the commodity business units within the major global diversified mining group Xstrata plc.

Xstrata’s zinc and lead operations and exploration projects are located in Australia, Canada, Germany, Peru, Spain and the United Kingdom.

On July 9 this year, Xstrata Zinc Canada announced the beginning of construction of its new BracemacMcLeod mine. At full production, it is expected that the mine will yield 80,000 tonnes of zinc and 10,000 tonnes of copper annually, with development tonnes expected in early 2012 ramping up to reach full production in the first quarter of 2013.

The total capital cost for the mine is approximately C$158 million (US$151 million), of which Xstrata’s share will be about C$104 million (US$98 million). The mine will provide 250 jobs for its lifespan of at least four years and will be

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located just four kilometers from the Matagami concentrator, which is currently supplied with ore from the Perseverance mine.

“We are delighted to be able to commence construction on the development of the BracemacMcLeod mine,” said Jean Desrosiers, vice president, mining operations. “The project is a low-capital-cost, high-return project that will provide a continued feed of ore to Xstrata’s Matagami concentrator once the Perseverance mine comes to the end of its life. The new mine will use existing processing infrastructure and will provide ongoing employment opportunities for the existing workforce at Perseverance. The new mine will also minimize its environmental footprint by using the closed Bell-Allard South mine pit to dig the new ramp.”

The Bracemac-McLeod project is the result of a successful exploration joint venture between Xstrata and Donner Metals. The project will be managed and operated by Xstrata, while Donner Metals has the right to earn a 35 percent share in the joint venture by proportionately funding its share of the capital costs. The Donner/Xstrata team won the Mining Journal’s Outstanding Exploration Award for their new discoveries at Matagami.

Xstrata embraced continuous improvement even during the construction phase at the Perseverance mine, which makes use of a concentrator unit that was already used in early mining efforts in the area, and it expects to do the same at BracemacMcLeod. Work on Perseverance began in August 2006 and was completed by July 2008—well ahead of the original schedule deadline of October.

The project also came in within the C$160 million budget, despite soaring commodities costs. Given the unprecedented rise in materials costs during the time Perseverance was being built, Xstrata had to find alternative ways to reduce costs to stay on budget. Although there were changes throughout the mine, a significant amount of the time and resource savings stemmed from improvements made by the underground mining team that reduced the amount of development necessary to bring the mine into production.

Originally, the output of the Perseverance mine was forecast to top out at 2,600 tonnes per day, but Xstrata Zinc pushed that level to 2,800 tonnes without any significant changes to process, major capital investments or increases in headcount, but instead with process improvements from the

Xstrata Zinc Canada: Bracemac-McLeod Mine

underground mine itself through the concentrator and into maintenance. It was all pure productivity improvements, and they are both sustainable and reproducible at Bracemac-McLeod.

Equally important was improving safety, keeping workers safe even at higher production levels. That goal was also reached at Perseverance with a 58 percent improvement in safety performance. The mine’s maintenance division managed to clock an entire year without a reported accident—which includes anything that involves seeking even the most minor form of medical attention.

The company credits strong communication with the mine’s 225 employees, which includes 160 hourly workers, with the safety gains. Xstrata works with a five-point safety system but also relies heavily on a behavior-based safety approach that rewards good behavior rather than strictly focusing on negative events or lapses in safety. Good behavior is believed to mobilize the workforce better to know

what to look for and to want to contribute to the safety record by looking out for one another.

A community of just 1,800 people, Matagami is located approximately 250 kilometers north of Val d’Or in western Quebec province and relies almost exclusively on the mining operations to provide jobs and livelihoods. As a result, Xstrata is a major contributor to civic life in the region, and its employees are part of the fabric of the community. People who work at the mines get involved in the ski club, the golf club and minor league hockey in Matagami, and Xstrata works to support all they do.

The Perseverance mine started producing in July 2008, at which time it had been estimated to have a five-and-a-half year life. It was built in a forward-looking way, with many of the buildings able to be moved by flatbed to another site in the future. As a result, Xstrata is optimistic about the 13th Matagami mine. www.xstrata.com

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Lookfor the silverm

Ric Larson goes underground to learn the precious metals subsidiary of Mexico which operates the world’s richest und the richest underground gold mine, the mine, and the largest undergroun 164

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mining

n about Fresnillo PLC, o City–based Peñoles, derground silver mine, largest open-cut gold nd zinc mine in Mexico

Fresnillo PLC

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ifteen-year-old Spanish Basque explorer Francisco de Ibarra was chosen by his conquistador uncle, Diego de Ibarra, a wealthy mine owner, to commence an exploration of Mexico northwest from the state of Zacatecas in 1554. Francisco’s task—in addition to plundering, pillaging and conquering—was to discover more silver mines to further enrich his uncle’s fortune and, while he was at it, line his pockets as well. As he was passing through what is now the city of Fresnillo, he came upon an area littered with raw silver and silver ore, but he ignored it and went farther away to found the towns of San Martín, Avino, and the city of Durango. In time he became governor of the Spanish province of Nueva Vizcaya in present-day Mexico. Francisco de Ibarra eventually became a rich mine owner, but the one that got away, the Fresnillo mine (also known as Mina Proaño), is today the largest and most profitable silver mine in the world.

Fresnillo PLC, the precious metals subsidiary of Mexico City–based Peñoles, purchased the mine in the 1960s. The mine has been producing off and on since the 16th century (closed many times for several years due to flooding and cyanide contamination) but came into fruition during the 1920s with the introduction of modern mining techniques. Fresnillo PLC estimates the remaining life of the mine to be at least 12 years. The company owns four producing mines in Mexico—Fresnillo, Ciénega, Herradura and SoledadDipolos—as well as a developing project in Saucito and three exploration projects in San Juan, San Julian, and Orysivo. The company claims its mining concessions cover almost 2 million hectares (about 5 million acres) in Mexico.

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The Fresnillo mine is located about 38 miles northwest of Zacateca City and consists of underground mining operations and a concentrator plant. There are several techniques used in underground (or subsurface) mining, including drift mining (the use of horizontal tunnels), slope mining (using diagonally sloping shafts), and shaft mining (the use of vertical shafts). Other processes and methods used are shrinking stope mining (upward mining to create

ounces of attributable gold.” The construction of the open-pit (removing overlaying rock to expose the ore) Soledad-Dipolos gold mine was finished in December 2009, and commercial production commenced in January 2010. The company expects to extract 100,000 ounces of gold in 2010 and 130,000 ounces in 2011.

Fresnillo may be more accurately described as a diverse miner that produces four of the most valuable metals in terms of pricing: silver, gold,

“The company is well on track to achieve full-year 2010 production targets. We expect to produce approximately 38 million ounces of silver, and with the contribution of Soledad-Dipolos, we expect to produce approximately 340,000 ounces of attributable gold” a sloping underground room), long-wall mining (grinding of a long ore surface underground), and room and pillar (extracting ore from “rooms,” leaving pillars intact to support the room).

Retreat mining is the end result of room and pillar, essentially the removal of pillars that support the room, allowing the room to cave in and thereby loosening more ore for extraction. After the ore is extracted it is fed into a concentrator, much like a sluice, which uses a water channel controlled at its head by a gate to separate precious metal ore from other materials.

Fresnillo PLC is the largest primary silver producer in the world and ranks third in the world behind two other companies that produce silver as a by-product. It is also the second-largest goldproducing company in Mexico. At the end of second quarter 2010, the production of precious metals set a new record for the company and drove its shares to an all-time high. Silver production increased from 9.59 million ounces in 2009 to 9.62 million ounces this year, and its gold output from its new SoledadDipolos project increased to 91,254 ounces, an increase of 34 percent over previous numbers.

“The company is well on track to achieve full-year 2010 production targets,” Fresnillo PLC said in a statement released earlier this year. “We expect to produce approximately 38 million ounces of silver, and with the contribution of Soledad-Dipolos, we expect to produce approximately 340,000

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lead and zinc. The company’s stocks are some of the best-performing of any kind. After it was listed on the London Stock Exchange in 2007, Fresnillo raised over $900 million due to the implementation of the structure and consolidation of the precious metal interests of its parent, Industrias Peñoles.

Holders of Fresnillo (and Peñoles) stock have seen enormous rewards in recent years due to the current market value of the company residing at almost $6 billion, where it ranks number 50 among the world’s most coveted and soughtafter mining stocks. And the celebration doesn’t stop there. The company’s underground Saucito mine, scheduled to be fully operational in 2011, is estimated to contain over 200 million ounces of silver and over 1 million ounces of gold.

The Ciénega underground mine has increased production from 755,000 tons per year to over 900,000 tons in 2010, and in 2008 it produced 950,000 ounces of silver, 117,000 ounces of gold, 11,200 tons of zinc, and over 9,000 tons of lead.

Fresnillo’s Herradura open-pit mine produced 124,000 ounces of silver and 123,000 ounces of gold in 2008. The company estimates the remaining life of both the Ciénega and Herradura mines to be in the 12- to 13-year range.

Mining cannot be done without major changes to the surrounding environment, however, and Fresnillo is acutely aware of the waste generated by its mines that seeps into the atmosphere,

Fresnillo PLC

Mining Technologies International Inc. Mining Technologies International Inc. (MTI) is a proudly Canadian company with a global presence.

MTI’s advanced mining and tunneling/construction equipment is competitively priced and we are focused on overcoming environmental challenges.

Utilizing

three

state-of-the-art

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facilities and international sales and service centers, we are dedicated and committed to developing innovative solutions for our clients.

water and soil. It strictly adheres to environmental laws and has acted in responsible ways to lessen the impact of its projects on the surrounding

countryside and delicate ecosystem. The Fresnillo mine aggressively reprocesses tailings (finely ground material left over in containment areas or discharged to receiving waters after valuable metals are extracted) by installing cover vegetation on closed tailing dams. Other efforts include strict measures for cyanide management—cyanide bonds readily with gold and is used in mining to extract gold from ore— sustainable forest projects, the transplanting of rare cacti and fauna, and the management of animal species in the area of the projects.

As Fresnillo moves forth in seeking operational excellence and value in the precious metal cycle, it continues to improve and expand upon a rich tradition and heritage that has enriched its investors and furthered its reputation as one of the world’s leading mining concerns. www.fresnilloplc.com

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Engman-Taylor Company Inc.

d ew

usiness Engman-Taylor Company underwent some restructuring as a result of the economic slowdown. But as Keith Regan learns, the hard times have been put to good use by expanding internal capabilities and strengthening a sales force to pave the way for future growth

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ngman-Taylor Company (ETCO) assists its customers in the manufacturing sector by helping to re-engineer and reconfigure processes in ways that reduce overall costs. By combining products from cutting tools to lubricants from 1,300 manufacturers with expertise in the form of application engineers who spend extensive time at customer locations to understand the processes they use, ETCO has been a trusted supplier for more than 65 years.

While its services remain in demand in all economic conditions, the downturn did prompt changes at ETCO. Last spring, headcount was reduced by 34 people, many of them in backoffice positions that have since been automated or reallocated as much as possible.

“We certainly didn’t want to lay anybody off,” says president and chief executive officer Rick Star. “But we were forced to, and in so doing, we realized that the process was providing us with a

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unique opportunity to analyze the return on our personnel investments. In many cases, the return was there; in some cases it wasn’t, and that led us to the next step in the analysis. We looked at common denominators in both high- and low-return environments. The results showed that the highreturn areas related primarily to customer-oriented positions, and the low-return positions related primarily to task-oriented positions. This conclusion was not particularly surprising, since customers provide revenue. It also pointed out that we had deviated too much from our core philosophy of financially justifying any new hires, as we had too many positions that provided an inadequate return.

“So while we are always confident our solutions will work, no one can know exactly what it will look like until it’s run. Now, we can replicate the process right here in our showroom and that not only enables us to give a more finished solution, but it avoids the need to shut down or take a factory offline to do testing.”

ETCO’s product lineup has expanded recently, too. For the first time, it has added a number of different paper and cleaning products, from shop towels to toilet paper and janitorial supplies.

“Historically we have been known as a pretty technical company and that is still what we are,” Star says. “Stocking that type of material

“We wanted to make sure that any hiring we did was of people who are in front of the customers, finding out what more we can do for them and helping to drive new business” “So as we have recovered,” he continues, “we’ve been very diligent in making sure that any new personnel are in positions that relate to customers. Tasks that are unrelated to customers have been eliminated, automated or reallocated.

For example, our document management process is now entirely electronic, so we don’t need file clerks to file and retrieve hard-copy files. If we keep our floors clean as we work, then we don’t need to pay people to clean them. The tasks that have been reallocated are targets for eventual elimination or automation.

“The bottom line is that we improved the company as a result of the downturn. We are better today as a result.”

ETCO has also made investments to enhance its ability to test new solutions for its customers.

The company recently added a vertical machining center that boosts its ability to test, demonstrate and tweak new process approaches. The machine, made by MAG/Fadal, is a vertically oriented spindle that turns at up to 10,000 RPMs and is equipped with a 25-tool changer and a sophisticated CNC connection.

“It’s very flexible in terms of what we can do with it. In the past, typically when we would go into a customer with a new solution, it would get tested within that customer’s facility,” Star notes.

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is a departure for us, but it is going well. It enables us go to into end users who don’t use the engineered stuff we sell as much and it also allows us to sell more to the customers we already have. We have always called on metal working shops, but now we can go to places that are entirely different sorts of businesses, including service companies. The key in the space is to be competitive on price and we’re buying in big enough quantities to make that possible.”

One of the other challenges of the recession has been handling customers who sought to extend credit terms well beyond traditional time frames.

“The recession really exacerbated the trade credit issue,” Star says. “We’ve put an intense focus on credit worthiness so that we don’t get burned by customers who simply can’t pay.”

Growth has already returned to ETCO, with sales up over the summer of 2009, when the recession was at its deepest point in the trough. The Menomonee Falls, Wisconsin-based company, whose traditional base has been the Midwest and Southeastern parts of the United States, where manufacturing is most heavily concentrated, is on the verge of an expansion into Mexico. It recently won a contract to supply an Emerson Electric plant in Monterrey, Mexico—an area that has seen a dramatic increase in manufacturing activity in recent years. “We’re

Engman-Taylor Company Inc.

moving in on the sales side first and are considering incorporating in Mexico,” Star says, adding that no final decision has yet been made.

While traditionally serving manufacturers in the industrial, motorcycle, and marine spaces (Brunswick’s outboard division and HarleyDavidson are among its largest customers) Star says ETCO also has the ability to serve growth industries such as aerospace and medical device companies. “The people are here on staff to service those types of customers,” he adds.

Moving forward, all of ETCO’s expansion and growth efforts will be built on the foundation of its Cost Circles model, which Star points out is the only distribution model that bears a registered trademark. “That’s the basis of what sets us apart from our competitors,” he says. “Driving those cost savings in the core manufacturing processes and supply chains of our customers is what we

are committed to doing no matter which direction the economy moves.”

ETCO uses 36 different metrics to track its business on a daily basis, and daily sales began to turn upward early this year. “It’s come back quicker than we thought it would,” Star says.

“Right now, we are putting an enormous focus on new business.” In fact, the company is devoting a great deal of energy on what it calls a New Business Imperative. “We are emphasizing that this is something we have to do as a company.”

A new position was created to oversee business intelligence and use databases to provide support to its already robust outside sales force. “In the past, a lot of sales depended on relationships or knowing someone. We are trying to augment that with a more scientific approach to identifying and locating those new business opportunities.” www.engman-taylor.com

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Fast

trackto greenene

The Lodi Energy Center Project is s mid-2012, which means that contracto and awaiting final design—even after summer. Keith Regan learns how th existing energy production capabilit how the lead general contractor pla experience t 172

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ARB Inc.: Lodi Energy Center

ergy W

scheduled for completion by ors will be racing the clock— the shovels hit the dirt this he project will help augment ties with greener power and ans to leverage its extensive to bring the work in on time

hen it goes online in mid-2012, the 296-megawatt Lodi Energy Center will represent one of the most efficient and cleanest natural-gas-fired power plants in the country. Sponsored by the Northern California Power Agency (NCPA) with support from the California Energy Commission, the combined-cycle gas-fired combustion turbine generating station will consist of one turbine powered by gas and a second powered by the steam generated as a byproduct of the process.

The $452 million project will rise alongside a wastewater treatment plant on publicly owned land, and according to NCPA it will be among the cleanest and most efficient gas-fired plants in the nation.

The facility will generate as much as 30 percent of the electricity needs for nine of the agency’s 17 member communities and districts in Northern and Central California. Some communities will receive as much as half their power from the facility, says NCPA. The Northern California Power Agency was founded in 1968 as an agency through which community-owned utilities could prevent costly market abuses employed by private utilities at that time, and to make investments to create an affordable, reliable and clean future energy supply for the electric ratepayers they serve.

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ARB Inc.: Lodi Energy Center

PIC Group, Inc. PIC Group, Inc. is a global power generation service provider. For over 20 years PIC has delivered professional, value-added services with a focus on safety, quality and customer satisfaction.

PIC has worked with ARB on multiple projects in the past and was recently selected by ARB for the commissioning, start-up and documentation effort required by the LODI project.

Among its generation sources is The Geysers, a geothermal field that has been producing power since 1960 and now represents the largest geothermal field in the world, capable of producing more than 2,000 megawatts. For the last 25 years, NCPA has been operating two geothermal power plants at The Geysers, each with a rated capacity of 110 MW. Supporting NCPA’s production system are eight deep injection wells to replenish the reservoir, 10 miles of surface pipelines to channel and deliver the steam to the plants, and more recently, a novel integrated delivery system for wastewater injection.

As for the project at Lodi, as of late July 2010 ARB Inc. was awaiting final approval on permits so that it could begin the work of site grading and preparation. That portion of the work was expected to last just a few weeks, with foundation installation starting shortly afterward. The work under ARB’s contract is worth more than $90 million.

Even though the project is using a traditional design-bid-build approach over the more streamlined design-build method, the work will likely begin without a final design in place. “They won’t be fully complete with engineering until sometime in April 2011, but if we waited until then, we wouldn’t be online when they want the plant to be up and running,” says Chris Anderson, a vice president in the Industrial Group of ARB Inc., the general contractor on the project. Once the permits were in place, he says, the goal would be to “get to work and get it built as quickly as we can.”

ARB won the general contractor’s role after two rounds of bidding—the first set of bids were protested by a would-be contractor and scrapped by NCPA— and is working closely with Worley Parsons, the lead design and engineering firm on the project, which is

also serving as construction manager.

The project will be the first that ARB has completed in Northern California that features a 1-to-1 gasto-steam burner ratio configuration; most such combined-cycle plants have two or more gas-fed burners for each steam turbine. “It’s new technology and a new configuration for us,” Anderson says.

The site where the plant will rise is somewhat constrained by the presence of an existing wastewater treatment facility and an existing power plant on both sides of the site that must be worked around during grading, staging and construction. “Most projects in California are like that, with existing facilities or on brownfields,” the vice president adds. “We’re not building plants on greenfields very often out here in California.”

Otherwise, the main challenges on the project center around the schedule, Anderson says. “The biggest thing is getting the design completed and making sure the engineered equipment gets there on time,” he explains, adding that industrial and power plant giant Siemens is providing most of the turbine-related equipment, and ARB is building its schedule around its timely procurement.

ARB is a fixture in the power-plant construction sector in California. Most plants built to date have used traditional fuel sources, but Anderson says ARB’s Southern California division is starting to see more interest in solar and wind-fueled plants as well, a trend he expects will move north over time.

Several waves of plant construction have taken place since a wave of power failures in the early 2000s shone a light on the need for more generating capacity. “There’s quite a bit of action in the marketplace this year,” Anderson says.

“Some of that is a result of Pacific Gas & Electric looking to buy power, and some of it is independent municipalities or agencies going it on their own.”

ARB’s industrial division also works on processing facilities, compressor stations, refineries and industrial furnaces, and Anderson says the flow of work has been somewhat steady despite the economic slowdown. In a 2003 corporate organizational change, ARB became the largest subsidiary of Primoris Services Co., a holding company that went public in 2008. Primoris has continued to grow on the strength of the services provided to the power industry and recently announced that it had achieved a record backlog of $1 billion worth of work. www.arbinc.com

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Adifferen specof

April Terreri learns a few s Shepard Development Corporat not to build on spec, but to have to occupy new offi 176

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Shepard Development Corporation

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secrets about the success of tion, including its philosophy e value-added tenants ready fice and commercial buildings

or Shepard Development Corporation, slow and steady is how the company is winning against the threatening economy. The company is currently involved in three major development and construction projects in Calgary—despite the downturn. “Our growth is very carefully planned, so the buildings we develop and construct are never left with space that hasn’t been leased,” explains Christie Simpson, vice president of the Calgary-based company. The reason for this is that Shepard will build nothing on spec; its business philosophy is to have value-added tenants ready to occupy buildings ready for occupancy. “We believe in strong covenant tenants who will bring value to the properties we develop.”

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“Our growth is very carefully planned, so the buildings we develop and construct are never left with space that hasn’t been leased.

We believe in strong covenant tenants who will bring value to the properties we develop” For over 67 years the Simpson family has been providing development and construction services to businesses in the province of Alberta through the CANA Group of Companies, comprising Shepard Development Corporation, CANA Construction and ACE Construction Company Ltd. Over the past 46 years the Simpson family has owned and managed CANA. One major project Shepard is currently developing is the Shepard Regional Centre at the intersection of Deerfoot Trail and 130th Avenue in Calgary. “This is a retail power center of over 1 million square feet of retail development,” reports Simpson. The project sits on a parcel of 280 acres, which Shepard had owned for quite some time. “We began developing this center in 1996, so it has taken us over 15 years to build, but it has been done in a way that made sense for the area and for the retailers in Calgary, as it grew along with the population of the trade area.”

The center opened incrementally since 1996, and Simpson expects it to be fully completed

by Christmas 2011. “We approached this project recognizing that this was going to be a long-term development plan and knowing that you cannot build over 1 million square feet of retail space in just a matter of a few years,” explains Simpson.

“This project has been a major success for us because the space continued to be occupied immediately upon completion.”

It’s an outdoor mall with big-box powerhouse tenants like SuperStore, Canadian Tire, Safeway, Home Depot and Lowe’s. “We received landuse approval for this project in the late 1980s because of its importance to the area as a major commercial and employment node for southeast Calgary,” reports Simpson. “This is now the primary shopping area for the region.”

One of the challenges was laying out the development so that it interfaces seamlessly with the city, notes Simpson. “We worked with the city on a number of things including extending 130th Avenue, which is a major thoroughfare in

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Calgary. We did this to help build a relationship with the city and to ensure traffic in the area was able to move smoothly. We also worked with the city in the late 1970s to plan for an interchange at Deerfoot Trail that would provide direct access into the center. This access has been a huge factor in the success of the center.”

Another success relative to this project is the fact that Lowe’s Canada will open one of its first stores in western Canada at the center. “Lowe’s is currently under construction now on a 14acre parcel of land,” Simpson says. “This was a huge accomplishment for us in getting such a notable retailer with no presence in western Canada prior to this.”

The second of Shepard’s major projects is a 30acre suburban office campus located within the Shepard Regional Centre. “This campus will have direct access to a light rail transit station,” notes Simpson. The project will offer 850,000 square feet of office space once completed. Construction is pending, awaiting a major tenant to finalize contracts. “We’re ready to begin construction once we have a tenant.” Plans call for about nine office buildings and a hotel.

Jacksonport Industrial Park is Shepard’s third major project. Construction is expected to begin sometime this year. “This industrial park is located in the northeast part of the city adjacent to the Calgary International Airport,” reports Simpson, who hopes that the proximity to the airport will help draw light industries related to the aviation industry.

The project sits on a 160-acre parcel, with 100 acres of developable land for light industrial companies and 10 acres of retail development opportunities for establishments like restaurants and coffee shops to serve the employees within the industrial park.

“We’re in the initial phases of servicing the parcel with infrastructure facilities like water and sewer,” says Simpson. She adds that Calgary’s location lends itself to attract many distribution companies and warehousing facilities to locate there. “Calgary has grown to become a large distribution center for

Shepard Development Corporation

western Canada because of its proximity to major consumer markets.” The first tenants are expected to take occupancy in 2012.

Simpson notes that Shepard has been active in providing commercial, retail and industrial construction to the surrounding region for decades. “As a very small Calgary firm, we’ve been able to successfully deliver one of the largest power centers in Shepard Regional Centre,” she says. “We’ve been able to kickstart this project from the ground up, despite being a small firm. This is primarily because of our values of not pushing the development past its capabilities. One of our biggest assets is our in-house construction capability through CANA Construction. This allows us to have the ability to control construction costs while building this many buildings, which are typically not built by a developer’s contractor. It also comes from our

upfront dealing with our vendors and purchasers.”

CANA Group has been recognized for its reliability for eight consecutive years and is one of Canada’s 50 Best-Managed Companies.

CANA’s versatility allows its companies to provide services under stipulated lump-sum contracts, fixed-fee contracts, design-build services and project management services. Since 1969 it has completed over $2 billion of construction management projects. “Our firm-but-fair approach has earned numerous repeat clients and has helped build strong relationships with our design partners and sub-trade partners,” Simpson says.

She reports that the majority of CANA’s senior management team has over 30 years’ experience in the construction industry. The group’s Canadian Construction Association Gold Seal certification recognizes the team’s experience and educational achievements in construction. www.cana.ca

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Turner Construction: Duval County Courthouse

modern-day

hoenix

Turner Construction is on course to deliver a splendid new courthouse for Florida’s Duval County. Project executive Mark Alles talks to Gay Sutton about the unique features of good courthouse construction

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or many years the people of Duval County, Florida, have understandably been skeptical about the promise of a new courthouse. The current courthouse, located on the Jacksonville waterfront, was built over 50 years ago for a population that numbered just over 450,000. But it has long been perceived as cramped and inadequate for a population that, according to the census of 2000, has swelled to nearly 780,000.

A splendid new courthouse was a key element of the Better Jacksonville plan created more than 10 years ago, and work began on a new site in the downtown district of LaVilla. However, numerous financial problems—including the massive building boom in China, which led to materials shortages and skyrocketing price inflation—beset the project, and construction of the courthouse finally ground to a halt in 2003.

Little wonder, then, that when the county took a new tack in 2008 and awarded a design-build contract to Turner Construction and KBJ Architects to deliver the new courthouse, the announcement was met with skepticism. “The previous project had been stopped

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Turner Construction: Duval County Courthouse

Tri-City Electrical Contractors, Inc. Tri-City Electrical Contractors, Inc. can turn the power on for you, whether it’s design build, value

innovation,

construction,

installation

or service. Tri-City handles initial wiring for projects of all sizes and provides electrical maintenance as well as systems and service repairs. Founded in 1958, with six offices located throughout the state, Tri-City can handle any project from start to finish.

a couple of times, and one of our biggest challenges has been convincing the community that the courthouse is now actually going to be built,” explains Mark Alles, project executive at Turner Construction. With many years’ experience in courthouse construction, he had never encountered a situation like this before. “In fact, it was not until we were well into concrete coming out of the ground that people actually believed it would happen.”

Construction began in May 2009. Today, Turner is one-third through the project and on schedule for completion in May 2012. Key to winning the contract was Turner’s considerable depth of experience in courthouse construction, the company’s vision for the design of the building, which would avoid the pitfalls inherent in the previous attempt, and the guaranteed maximum cost of $225 million. Once completed, the seven-story unified courthouse will undoubtedly be an iconic landmark, incorporating some 51 courtrooms and reinvigorating the downtown district of LaVilla.

From the community perspective, the project will not only rejuvenate the local district but also provide the added benefit of boosting employment around the county during a time when the construction industry has seen a dramatic slump and unemployment has risen considerably. It’s a benefit that Turner is working hard to deliver.

“We’ve been focusing our efforts on maximizing local participation in the project and on employing local contractors where we can,” Alles says.

“We’ve done this by engaging in town hall meetings with the community, not only informing

them about the project but also about the contracts that are coming up and how and where they can bid for them,” he continues. As part of the design-build contract, for example, Turner was tasked with employing small and emerging local businesses for 25 percent of the work and is currently on track to exceed that goal.

The overriding aim with this splendid new building, however, is to relieve the overcrowding and space constraints of the current courthouse and to provide capacity for many years to come. “Our focus is therefore on the long-term durability of the building,” Alles explains. “This is one of the unusual elements of courtroom construction in general.”

Duval County has had just four new courthouses over the past 175 years, and this new building will be expected to last for a considerable period of time. “In most construction projects the cost of materials and the speed of construction are the primary factors,” says Alles. “In this project, if we thought that way we’d be short-changing the project and the community. So we’re looking for durable materials that will last longer and deliver a significant long-term payback.” Issues such as the frequency and cost of maintenance and the repair and replacement of equipment and materials are significant factors in the decision making.

The security considerations that go into courthouse design are also a unique feature of this type of construction. The paths of the three groups of people who will use the building—the public, the judges and staff, and the detainees—should never cross. So with 51 courtrooms, all enclosed within the seven-story building, there have been some serious logistical design challenges. Turner’s solution to the problem has been to design the entire building around the courtroom modules by drawing on its considerable experience of best practices in courthouse construction and paying particular attention to the separation of occupancies.

Today’s courtrooms also differ from their predecessors by being almost painfully quiet, which is achieved by using an array of sound-attenuation construction techniques. The silence, however, can come as a shock to staff used to the noises inherent in the earlier buildings. To solve any such issues of usability and to ensure the building meets expectation, Turner always builds a full-sized mockup of each type of courtroom before construction commences. “In this way we’re able to let the

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“One of our biggest challenges has be community that the courthouse is now It wasn’t until we were well into conc ground that people actually believed i

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een convincing the w actually going to be built. rete coming out of the it would happen”

Turner Construction: Duval County Courthouse

judges and staff walk in, feel, touch, sit and see the sightlines of their new facility when it’s open,” Alles says. This, he believes, has been the most significant tool in making the project a success.

Although only seven stories in height, the project is large and complex, and it is subject to tight time schedules. One of the secrets of maintaining those time schedules, Alles believes, is thorough and extensive pre-planning. The company therefore spent a considerable time projecting scenarios for anything that could go wrong during construction and then devising contingency plans for coping with it. Now when anything does occur—and with a construction project, problems inevitably do arise—the team simply switches to the contingency plan and no time is lost.

The project now has the full backing of the local community, and at last there is a sense of excitement and expectation. After all these years of delay and failure, there is a confidence that Turner will deliver the courthouse on time and on budget. Meanwhile, the construction project is already delivering significant benefits throughout the county. www.turnerconstruction.com

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It t

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Balfour Beatty Construction: Innovation Village

takes a village Innovation is considered to be critical to policy makers when stimulating growth, and there are some innovative ideas in southern Florida right now, Rob Harris reports, as Balfour Beatty Construction begins work on the first phase of Florida Atlantic University’s Innovation Village

I

n your typical college town the beginning of fall signals the introduction of a new term. Students move into dorms, the pace and tempo of the town picks up as students come back to campus, old friends unite and new friendships are made. Excitement builds on campuses as the weekend approaches because of that unique cultural experience we call college football.

Florida Atlantic University is looking to enhance that experience on its Boca Raton campus for alumni and students with the University’s recent commitment to build a new 30,000-seat stadium and to surround that stadium with the Innovation Village—a gateway that will allow students and all members of the FAU community to have a unique opportunity for living, learning, dining, shopping and having fun. In February of this year FAU began the first phase of this project when it began building the Innovation Village dormitories.

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Balfour Beatty Construction: Innovation Village

Jade Communications, Inc. Jade Communications, Inc. was established in 1987 and is owned and operated by Serge

Leblanc.

For

over

20

years

Jade

Communications, Inc. has been serving the Florida market with high quality fiber optic and copper cabling system installations, design engineering, maintenance and support.

Our professional team of qualified staff offers a reliable worry-free approach from small to large projects. As our long term partner, you will work with a team of dedicated professionals whose priority is always to deliver quality, timely and premium service. Our partners put their trust in us because they know not all cable contractors are alike.

around the country, were focused on providing superior construction services and building a great relationship with clients and subcontractors.

They were also committed to employing the best people and to having quality relationships in their respective communities. Drawn to these values, Centex acquired these regionally based construction companies and formed Centex Construction. In early 2007 Centex Construction was acquired by UK-based Balfour Beatty plc and renamed Balfour Beatty Construction. The PLC, an international construction and engineering firm, celebrated its 100th anniversary in 2009.

Balfour Beatty’s core value lies in its promise. “We are passionate about providing clients with the best construction experience they have ever had—every time.” It’s not surprising that over 65 percent of the firm’s current projects are from repeat customers.

FAU’s main campus in Boca Raton currently has 28,000 enrolled students and over 110,000 alumni. The current campus housing can only

“We are passionate about providing clients with the best construction experience they have ever had—every time” The University’s decision was to go with a contractor it had used before, so it partnered with Balfour Beatty Construction, which is no stranger to the FAU campus. The company formed a positive relationship with the University while building FAU’s new 92,000-squarefoot biomedical research facility. Paulo Brida, associate director of facilities planning at Florida Atlantic University, was asked to give a customer testimonial and praised the company for its work on the facility. “You have demonstrated an incredible professionalism in management and leadership, not to mention competence in providing excellence to FAU,” he said. “I know these qualities are what make [Balfour Beatty] stand out above its competition. I appreciate the entire team’s extra hours spent on weekends and evenings in order to deliver a better project.”

The business that is now Balfour Beatty Construction started in 1933 with two regional construction businesses in Miami and Washington, DC. These businesses, along with several others

accommodate around 2,600 students, however, and Innovation Village is part of the University’s long-range plan to accommodate more student housing and retail locations. The University has started developing its new 30,000-seat football stadium to support the athletic department’s move into the NCAA’s Division I level. This is to be the centerpiece, surrounded by the Innovation Village dormitories, consisting of two buildings, one seven stories tall and the other eight stories tall, with 374 apartment-style student rooms that will include a kitchen. The two buildings will total approximately 500,000 square feet, and each will house a common room on the ground floor for meetings. In between the two buildings will be a courtyard that will include a swimming pool and a volleyball court.

The buildings are scheduled to be finished at the beginning of the fall 2011 semester.

According to John Southard, project manager for Balfour Beatty, the construction project is fairly standard, but it does have a few unique features.

The first of these is the project’s Tunnel Form System

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Balfour Beatty Construction: Innovation Village

of construction. In a traditional form system, the floors are constructed separately from the walls. With a tunnel form system, giant angled sections are locked together to make an inverted U-shaped wall, floor and ceiling forms. After reinforcement, the stop ends are installed and the concrete is cast. Once the concrete is cured, the forms are removed and the cycle is repeated up to the next level.

Using tunnel forms speeds up the construction process dramatically.

Once the tunnel is formed, crews may begin work immediately, finishing the completed tunnel while a new tunnel is being formed above them.

This type of mass-production construction demands a significant amount of planning at the beginning of the project. Scheduling and sequencing of the subcontractors and materials required that everyone have great communication skills, and cooperation with the team was a priority. Balfour Beatty has a rigorous qualification process for all its subcontractors and suppliers, because it knows that a project’s success depends on the quality of its subs.

Another unique characteristic of the Innovation Village dormitories is the fact that they are aiming for a LEED Silver certification. LEED (Leadership in Energy and Environmental Design), the internationally recognized green building certification system operated by the Green Building Council, has a 100-point system with four levels of certification: Certified (40–49 points), Silver (50–59 points), Gold (60–79 points), and Platinum (80 points and above). Points are scored evenly on categories such as sustainable sites, energy and atmosphere, materials and resources, and indoor environmental quality. Balfour Beatty is working on the use of locally purchased (within 500 miles) recyclable materials and waste recycling.

Will Rogers once said: “Successful colleges will start laying plans for a new stadium; unsuccessful ones will start hunting a new coach.” Any coach will tell you that success comes from building a winning team, and that the team’s strength is determined by the strength of its individual players.

Balfour Beatty approaches every job with the same formula: employ only the best people and make sure the customer’s expectations are exceeded.

With Balfour Beatty Construction on your team, you’re onto a winner. www.balfourbeattyus.com

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Caribbe

cater

E

very year when the steel gray skies of November turn into the snowy, bone-chilling iciness of December, come the ads reaching out hypnotically from the television screen beckoning us to leave the clanging noise of the dirty, hardscrabble city for a getaway to the sugar-white, sun-baked sands of the Caribbean. Here life moves at a pleasant pace, and the sunny, bright, Wedgwood-blue sky meets the aqua-tinted water on a horizon dotted with fishing boats, sailing sloops and cruise ships, cutting through waves filled with happy urban dwellers relaxing on

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Goddard Enterprises Limited is a widely diversified group are involved in catering, man and finance as well as impor America and the Caribbean,

Goddard Enterprises Limited

ean

ring kings

d, based in Barbados, whose subsidiaries nufacturing, services t distribution in Latin as Ric Larson finds out

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deck and eating plates of freshly prepared seafood, endless selections of tropical fruits, with cool, refreshing rum drinks in hand. It’s an irresistibly beautiful microcosm of the palm-treed paradise that most everyone dreams of while drudging through a brutally harsh winter.

If your chosen means of transportation to the lands of the sun, sand and sea, is the airplane, it’s a likely bet you’ll have the opportunity to dine on an in-flight meal that was prepared by any one of the 23 flight kitchens managed by Goddard Enterprises Limited

location and uncompromising tenacity. As the company spread in extent and influence, scores of subsequent ventures and acquisitions would follow over the next nine decades, leading it to partner in joint ventures with a variety of companies, and in the process forming beneficial and profitable alliances between them.

The company reported revenues of BBD (Barbados dollars) 954.7 million during the fiscal year ended September 2008 and showed an increase of 26.3 percent over fiscal year 2007.

“I am very confident that we have a team who are up to the challenge and who are dedicated to creating value for our shareholders” (GEL), with seven in South America, two in Central America and fourteen in the Caribbean. Additionally, GEL has catering-type services that are associated with airline terminal restaurants in four airports in three countries through GEL’s subsidiary, Airline Restaurants Limited, located in Florida.

Goddard Enterprises Limited is a holding company headquartered in the city of Bridgetown on the island of Barbados, the “Little England” of the Caribbean, and it’s a truly diverse, multi-faceted conglomeration of subsidiaries and services. GEL operates in three main segments of business: trading, manufacturing and services, which encompasses a dazzling array of enterprises that includes rum distilling, restaurant catering, bakery operations, airline catering, automobile retail and automotive parts, real estate, the manufacture of aerosols and liquid detergents, and financing. And if that isn’t enough, the company’s family tree of businesses branches even further into investments, general trading, meat processing, stevedoring, packaging, fish and shrimp processing, and general insurance. The company operates in more than 20 countries in the Caribbean and North, South and Central America.

GEL has been in business since 1921, founded as a meat and grocery store by British businessman Joseph Nathaniel Goddard in partnership with his son Victor, and now employs over 4,400 people throughout the Caribbean and Latin America. It is rooted in the commercial realization that its success depends upon integrity, vision, creativity,

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The operating profit of the company was BBD 72.1 million during fiscal year 2008, an impressive increase of 32.6 percent over 2007. The net profit of the company was BBD 42.9 million during fiscal year 2008, an increase of 13.9 percent over 2007.

But that was then. The magnitude and severity of the global economic crisis has impacted even the most stable of companies, and GEL was not immune to it. Sagging consumer demand starting in 2009 caused a 6.9 percent drop in group turnover to BBD 889 million. But on the bright side, GEL saw gross profits of BBD 279.8 million equating to 31.5 percent of sales compared to 30.1 percent in 2008. The company attributes this to the re-evaluation of its cost base, resulting in aggressive controls over waste, inventory and redundancy. Management has refocused its efforts on key drivers and risks across the board by adopting enhanced performance indicators that are continually monitored and retuned by the company’s subsidiaries and business units.

With more than 2,000 of the company’s 4,400 employees working for its airport and airline catering subsidiary, including the new Grab ‘N’ Go and Island Grill restaurants, GEL’s Airline Restaurants Limited is responsible for a large portion of the company’s business and profits.

Stewart Massiah, divisional general manager of GEL’s catering group, is bullish on the company’s ability to remain profitable despite the economic challenges facing the airline industry. “The issues confronting the aviation catering industry such

Goddard Enterprises Limited

Manter Manter is a manufacturing company of selfadhesive materials and produces a wide range of papers and films specially designed for the labels sector.

As pioneers and specialists in a self-adhesive range of materials for the beverage sector (wines, spirits, etc), and proud suppliers to Caribbean Label Crafts, our companies have a unique synergy that provides a winning formula.

as high fuel prices, escalating raw material and operating costs, and the expected consolidation among airlines will present challenges, but this will be countered by our move into new areas

of business such as restaurants, Grab ‘N’ Go operations and industrial and event catering,” says Massiah. The results at the end of fiscal first quarter 2010 show that the catering division has performed admirably in a devastating economic climate by focusing primarily on diversification.

“The division has over 2,050 dedicated employees, and my job will be to guide and inspire them to deliver on our plan and to take corrective action to stay on course as market conditions change,” says Massiah. “I am very confident that we have a team who are up to the challenge and who are dedicated to creating value for our shareholders.”

Goddard Enterprises Limited has been a major force in Caribbean and Latin American business for almost 90 years. With continuing diversification and entrepreneurial spirit, the company is set to thrive in the face of a dismal 21st-century world economy. www.goddardenterprisesltd.com

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