May 2010 NA

Businessexcellence ACHIEVING

MAY 2010

O N L I N E

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Including

the kitchen

sink

How Franke Kitchen Systems became the preferred brand in its premium luxury segment

Editor’s letter

Businessexcellence ACHIE VING

Theplanet

bitesback

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 Katelin Abbott kabbott@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 aturner@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 airline industry is no stranger to attacks from environmental campaigners. Attacks from the environment itself, however, are rather less common. Who could have thought that the eruption of a volcano in Iceland would virtually paralyze air transport between most of northern Europe and the rest of the world for the best part of a week?

News coverage tended to focus on the plight of stranded travelers and their Herculean efforts to return home, while broadcasters made their own valiant attempts to pronounce Eyjafjallajoekull. President Obama was forced to cancel his visit to Poland for the funeral of its president, Lech Kaczynski, who ironically died in an air crash a few days earlier.

Many have suffered inconvenience, but I have the utmost sympathy for those businesses that rely on air freight for the delivery of perishable goods or vital components.

This incident has been described as unprecedented and unforeseen, and while there have also been mutterings about the authorities overreacting, who would want to be the airline executive who acted against health and safety advice and lost an aircraft full of passengers?

The truth is that the authorities simply did not know enough about the capabilities of jet engines to cope with volcanic ash. Aircraft were grounded because the International Civil Aviation Organization (ICAO) had set a limit of “no tolerance.” They were allowed to fly again, not because the ash cloud had disappeared, but because the regulations were eased after test flights and consultation with aircraft and engine manufacturers. This should have happened earlier.

In business, it’s the responsibility of executives to plan for unprecedented and unforeseen events. Now that Mother Nature has given us a timely reminder of the danger of relying on a single source of supply, how prepared are you for the next unprecedented and unforeseen disaster?

Like the legendary Murphy, I believe that anything that can go wrong will go wrong. Time to polish your crystal ball.

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12 Strategic management Organized common sense The conclusion of a three-part series shows the impact of retail S&OP on the retailer and the retailer’s suppliers.

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Supply chain management Actionable data Opening the door to new profits with the information to evaluate an individual supplier’s impact on the bottom line.

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Franke Kitchen Systems of America Including the kitchen sink Focusing on the premium luxury kitchen sink segment rather than chasing volume has made Franke the preferred brand.

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Goldcorp: Musselwhite Mine Keeping pace The Musselwhite mine complex shows how mining operations can peacefully co-exist with First Nations peoples.

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Vic Progressive Diamond Drilling They know the drill Attention to quality, safety and environment have helped Vic grow and stand out in a highly competitive market.

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Acuren Group Productive and nondestructive Using the downturn as an opportunity to build a stronger, even more reliable service for its customers.

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San Joachin Refining A refining moment A small, independently held refinery can make adjustments quickly to generate the best economics.

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Memorial Hermann Healthcare System A new model of care A focus on quality care is seen as the answer to rising costs and the looming changes of healthcare reform.

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The Beverly High School DECA Program Clawing into the real world Combining school spirit with the support of the city to aid much-needed research in the fight against cancer.

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Cleveland Airport System Soaring to new heights At the forefront of a trend among airports nationwide to seek out new revenue sources and improve operational efficiency.

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Trumbull Corporation Making the connection Improving infrastructure in downtown Pittsburgh with an extension to an existing light rail system.

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TestAmerica Inc. Taming the environment The synergies between five distinct businesses focused on environmental testing are important to the success of each.

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Nova Scotia Power Getting greener One of the province’s largest wind farms is part of a $1 billion investment to increase the use of renewable energy.

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South Alabama Electric Cooperative Smartening up A multimillion-dollar effort to switch to an automatic metering system for more efficient use of power.

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118 Ram Power, Corp.

From greenfield to green power Formed through a combination of three geothermal energy companies to develop projects in North and Latin America.

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Dynamic Fuels Fuels for a cleaner future A facility being built in Louisiana will be North America’s first commercially sized synthetic diesel fuels plant.

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Peerless Mfg. Co. Avoiding “big hat, no cattle” A solid reputation and strong technology are the basis for expansion for this energy infrastructure manufacturer.

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Stulz Air Technology Systems Cool customer Leading a revolution in a niche market supplying specialist precision air conditioners and humidifiers to data centers.

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Grupo Unidos por el Canal Surgery on a continental scale The Panama Canal Expansion project is one of the largest civil and mechanical engineering jobs under construction today.

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Compañía de Minas Buenaventura A gold mine for the community A Peruvian mining company trying to address the environmental and social issues of the industry.

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Tåîchô Logistics Growing exponentially A new kind of business relationship between a native community and mining companies is attracting attention.

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124 Hunt Construction: Sequoia Hospital A seismic upgrade Adding a new building and tackling a seismic retrofit in a functioning healthcare facility.

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Spring ISD A lesson in growth One school district in Texas has taken giant strides to keep up with demand from a growing population.

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Werner Ladder Company Everywhere, everywhere The world’s largest manufacturer of aluminum, fiberglass and wood ladders, scaffolding, staging and other climbing products.

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Reckson Associates Realty Corp.

Sustainable property A real estate investment trust (REIT) that has incorporated sustainability into the identity of the business.

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University of Texas at Austin A fitting memorial A new science facility is to be named in honor of the illustrious alumnus Norman Hackerman.

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Chenega Security & Protection Services Guarding the guards The continuous development of best practices enables the delivery of high-quality security services to the US military.

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Phillips Edison & Company Centers of attention Sustainable building practices are employed in its shopping centers and its own headquarters.

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AMF Bowling Centers Striking out in new directions Using the slowdown to focus on sustainability and to prepare for further expansion once the recovery comes.

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Bybee Stone Company Rebuilding the past in stone A go-to subcontractor and sustainable supplier for new construction and historic renovation projects.

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Completely Fresh Foods Packaging is the billboard Creating an authentic food experience that consumers can identify with requires a lot of market research.

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Strategic management: Retail S&OP

Organized common

The final article in a thre- part series on retail sales and operations planning shows the impact of retail S&OP on the retailer and the retailer’s suppliers

By Ronald Ireland and Mary Adamy, Oliver Wight Americas, Inc.

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ne of the greatest impacts on a best-in-class retail S&OP process is consistent with our observations of impacts on a best-inclass manufacturing S&OP process, and that is the elimination of “organizational silos” and the transparency of information visibility.

S&OP is truly working and operating in an integrated business planning organization. As one executive told us: “There is no place to hide.”

Integration is the key word here. If all of our people, processes, and tools are integrated, we now can operate with more directional alignment. When we have trust in the S&OP process, we find ourselves strategically managing the company, versus living in a chaotic world of what appears to be constant firefighting. As the chart below illustrates, we are all either working in different directions, or we are going to collectively work in the same direction, which is our ultimate goal.

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When we see that a retailer operates an efficient S&OP process and it is linked using CPFR to a supplier’s S&OP process, the supply chain has made a dramatic transformation that not only has strategic benefits but has significant financial benefits as well.

Smoothing the supply chain bullwhip The supply chain bullwhip effect has been described in various forms over the past 50 years. We can trace it back to Jay Forrester, at MIT, discussing this effect of up-and-down order processing through the links of the supply chain, to Hau Lee, of Stanford University, showing a graphical representation of the bullwhip effect as seen below.

Why the bullwhip? It is normally the result of siloed processing, poor communication, and poor collaboration, internally as well as externally. We find that the order generation does not align to what the true

manufacturing due to misalignment with what is truly needed in the supply chain.

It is when we have the integration of the demanddriven retail S&OP strategic processes, that integrate and align with the execution of the demand-driven manufacturer/supplier S&OP process, that we can see a significant opportunity to “smooth the bullwhip effect� resulting in a significant financial benefit.

The linking of retail S&OP and supplier S&OP using CPFR As we discuss in the first article on retail S&OP, we can define S&OP as being an internal collaboration process and CPFR as an external collaboration process.

Because both S&OP and CPFR are well-documented best practices for collaboration, CPFR becomes the perfect process, with the supporting collaborative tools, in which to link the retail S&OP process and the supplier S&OP processes as shown below.

consumer demand is for products, as illustrated below.

As you can easily see by this illustration, with supply orders that are not aligned with true demand, the excessive cost in the supply chain can become astronomical. Thus, the bullwhip amplification gets worse further down the supply chain. The result; millions of dollars of wasted inventory, logistic expediting, stockouts, and inefficient

With this linkage of S&OP to S&OP using CPFR, we do see a change in the planning horizons and the level of detail that we normally see in traditional CPFR trading partner relationships. Most CPFR programs range from forecast collaboration at a stock-keeping unit (SKU) level, in weekly time horizons for the next 13 weeks, and perhaps monthly time horizons going out for the next

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Strategic management: Retail S&OP

6 to 12 months. Whereas we have discussed earlier, traditional best-in-class S&OP processes are performed at a product family aggregate level, in monthly time periods, over a planning horizon of 24 months.

What is advantageous about the CPFR industry guidelines is the flexibility to handle these differences.

CPFR is able to provide for the external collaboration that supports both detail as well as aggregate levels of collaboration. The data sharing, at the different levels of collaboration, can easily be handled with today’s CPFR technology. What changes is the level of collaboration using the longer-range strategic planning horizons.

The collaboration tends to be in support of strategic alignment between trading partners as each develop future visions and strategies to execute these strategies in collaboration within the retail supply chain.

What’s next and what should you do about it?

Hopefully by now, after reading all three of these articles on retail S&OP and the linkage using CPFR, you can see the importance and benefits that this industry transformation will have. Retailers are always on the prowl to lower costs, and suppliers are always on the defensive to maintain margins and profits. Yet we can all easily identify significant waste in the supply chain, both with our own internal supply chain as well as with the external supply chain.

The VICS CPFR working group is publishing a new set of CPFR guidelines that define what the best practices are in retail S&OP and the linkage of S&OP to S&OP using CPFR. We see that the industry gorillas, in both retail and retail suppliers, will quickly adopt these guidelines. The time is here for retailers and suppliers to take note and ensure they are not left behind on what logically makes sense to pursue.

So what should you do? The first thing to do is to get your own house in order by implementing a best-in-class S&OP process. If you cannot collaborate well internally using S&OP, then collaborating externally will be hard to do. The greatest reason a CPFR program fails is due to lack of trust. Human behavior is the real cause for this concern and how it affects the integration and alignment of internal processes. Lacking trust in the data can also become an issue if there is a lack of proper collaboration to ensure it is as accurate as possible.

The second step you should take is to pilot CPFR, if you have not done so before, using the basic collaborative process, in an area such as sales and order forecasting. Some keys for a successful CPFR pilot are to keep the collaboration simple and to execute the pilot with a key trading partner that is willing to have a win/win collaborative partnership.

Finally, once your own house is in order and you have implemented a good S&OP process, and you now can collaborate in the extended supply chain using CPFR, you are ready to advance your collaboration to the strategic and executive-led levels of retail S&OP to supplier S&OP. The benefits can be significant, and it is where the leading companies are migrating to next. This is what some may call “organized common sense.” On one side, it can be easily seen as the right thing to do but hard to implement, as it deals with the breaking down of internal and external silos at all levels of the organization. It is for this reason that this is defined as a transformation of the retail supply chain, and for transformation to successfully occur, it begins with the vision and commitment from the executives of both organizations. www.oliverwight-americas.com

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Supply chain management

Actionable

Actionable data opens the door to new profits by providing the information you need to fully evaluate an individual supplier’s impact on your bottom line, says Thomas R. Cutler

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ashboards that illustrate real-time shop floor, plant, or warehouse production and product movement sound good. Graphs and charts that pictographically represent what is happening as it is happening also sound informative, interesting, and theoretically helpful. All these data mean nothing if they are not actionable.

As a new way to speed continuous improvement efforts, actionable data will optimally catch problems before defective, damaged, or faulty materials or ingredients are worked into finished goods. Actionable data in practice should minimize manufacturing costs while maximizing finished goods quality and profitability.

Gary Nowacki, CEO of TraceGains, recently addressed the premise of actionable data: “Connecting the supply chain ‘dots’ from raw materials to finished goods ensures supplier compliance and measures supplier impact, and when leveraged correctly results in new profits.”

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Supplier impact is quickly becoming a game changer to measuring true supplier performance. Suppliers can now be evaluated on more than simply price and on-time delivery; impact on profitability, finished goods quality, and even customer satisfaction can now be evaluated according to individual suppliers. Other data allow for a clearer evaluation of true costs for ingredients based on yield or waste.

Leveraging value chain intelligence Existing tools and methodologies rarely provide data on how a supplier or supplied ingredient affects quality and profitability. “The rules are being rewritten for evaluating vendor relationships,” commented Nowacki.

“For the first time, good and bad product outcomes can be traced to specific ingredients and their suppliers, as can customer and consumer feedback.”

This new technological approach creates an automatic firewall for measuring ingredient quality and compliance with critical business rules, and leverages traceability to help learn how each ingredient affects the bottom line on a per-shipment basis. Measuring and managing supplier impact ensures that allowances, discounts, and returns are kept to a minimum.

Further, continuous monitoring enables companies to rank-order suppliers by commodity via a supplier quality index for yield, cost, and customer experience.

Removing errant supplies from the supply chain will limit ingredient variability and produce a betterperforming, higher-quality, and more profitable finished good, with lower manufacturing costs. TraceGains’ CEO suggested, “only with a minute-by-minute audit of compliance with critical business rules for suppliers, co-packers, and contract manufacturers can companies catch problems in their supply chain before they make their way into finished goods and on to the customer.”

Automatic notifications and risk assessment in a dashboard format, which continuously score suppliers based on performance while generating exception alerts for non-compliance, drives actionable data. This allows companies to: • Eliminate the need for manual COA review, and achieve 100 percent visibility on all incoming receipts without additional staff.

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• Reject non-compliant ingredients before they reach the manufacturer.

• Receive automatic alerts for non-compliant COAs, missing information, or any other supplier non-compliance.

Finding new profits Typically the rationale for this technology-driven exercise is to improve profits. The result from actionable data is a 1 to 4 percent reduction in cost of goods manufactured (COGM) by identifying sources of variability and reducing them. The typical cost of goods sold (COGS) components include distribution, ingredients, and, of course, manufacturing. According to Nowacki, “Manufacturing and ingredient costs represent major cost reduction opportunities and are operational targets for variability reduction.”

The current PLM cycle takes too long to realize new profits. To counteract this reality, true product improvement has to occur at every stage in the process: • Product inception/R&D • Ingredient sourcing • Supplier feedback • Packaging & positioning • Production • Product rollout • Customer feedback Only when the PLM process is linked across the supply chain can profitability become improved. When a supplier provides material or ingredients, there must be automatic pre-delivery authentication; when product is received, automatic receiving lab authentication is needed.

Understanding the causes for product variability is the first step to reducing manufacturing costs and can be achieved by finding those attributes that are costing or saving money. The ability to leverage data to maximize profits is the only valid actionable data rationale.

Nowacki insists, “Powerful solutions to analyze these links and show patterns increase the use of profitenhancing inputs and elimination of profit leakages.”

The data must be connected from primary inputs and various suppliers to final finished goods outputs.

Customers and consumers provide direct feedback on specific products and specific product lots which allows for improved linking with the brand positioning.

Supply chain management

“For the first time, good and bad product outcomes can be traced to specific ingredients and their suppliers, as can customer and consumer feedback” This information is tied to the specific upstream suppliers who provided the ingredients for the product critiqued by the consumer; these outcomes can then be added to the supplier benchmark and feedback system.

Evaluating suppliers Actionable data results when companies are able to visually identify the ingredient or supplier that causes a product or brand problem. Now companies can provide feedback to the supplier about how they “stack up” on

key attributes, providing insight about how improvement can and must take place.

“Only when there is a comparison among various suppliers based on key attributes, beyond just logistics and price, can a company provide benchmarking back to its suppliers to improve inbound materials,” commented Nowacki. These actionable data permit the reward, discipline, and coaching of suppliers for the attributes that really matter.

Thomas R. Cutler is President & CEO of Fort Lauderdale, Florida-based, TR Cutler, Inc, founder of the Manufacturing Media Consortium of journalists and editors writing about trends in manufacturing (www.trcutlerinc.com).

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Franke Kitchen Systems of America

Focusing on its premium luxury kitchen sink segment, Franke chose not to chase volume, and the strategy is paying large dividends, including a Q1 15 percent increase in sales. April Terreri investigates

nk

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15 percent increase in sales despite a lackluster economy is a major coup these days. That coup is even more impressive considering that the market for these particular goods has been shrinking. This is the story of Franke Kitchen Systems of America, the premier producer of high-end, stylish and innovative luxury kitchen sink systems. So how did the company achieve this significant growth despite major economic obstacles?

The answer is likely the result of a confluence of events, both internal and external, explains Charlie Lawrence, general manager for the luxury products group headquartered in Hatfield, Pennsylvania, about 40 miles north of Philadelphia. Over the last 25 years, Franke’s parent company—the $3.5 billion Franke Group based in Aarburg, Switzerland—grew through a number of acquisitions. “Here at Franke, we had been selling our luxury kitchen sinks in the US since the early 1980s from this location in Hatfield,” explains Lawrence.

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Franke Kitchen Systems of America

Then in the mid-1990s, Franke Group made two acquisitions to strengthen its presence in North America: Federal Home Products in Ruston, Louisiana, and Kindred, the leading Canadian market-share player for stainless steel sinks. The three companies operated independently after the acquisitions, and in 2004 Franke management in Switzerland decided to merge the companies with Franke Luxury Products Group. All three companies then shared the same sales organization, marketing team, manufacturing group and shipping operation. That’s when the problems began.

“The retail business based in Louisiana was selling opening-price-point products to large retailers like Loews and Home Depot,” explains Lawrence. “Then we had our plumbing wholesale business out of Canada that was targeted to the community that sold to plumbers and builders. Then there was us, with our luxury products.”

Each of the three companies had developed its own culture and its own way of doing things, so when all three companies were merged into one business unit, the unintended result was brand confusion internally as well as in the marketplace. “We struggled with those integration issues for several years, and about a year ago, the new head of our Kitchen Systems Division— which is all of our consumer products business in Switzerland—sat down with a number of us for a strategic planning session,” Lawrence reports. Senior management in Switzerland agreed that there was too much confusion relating to brand positioning and that the company had drifted from its heritage of focusing on the premium segment of the market. “That led to the decision that we needed to separate the three businesses in North America. I was asked to take the leadership position, and it was a good fit because I had been head of marketing for the three combined units.”

At this point, Lawrence’s challenge was to work with the two other business heads to re-establish the personality of each business. “We worked to establish our core competencies based on the channels to market we were each operating in,” he says. “Now I’m pleased to report that—with no help from the economy—through the first quarter of this year, the Luxury Products Group will be up approximately 15 percent in spite of a shrinking luxury market and a very tough economy. A lot of this effort had to do with focus and attention to detail so we could get back to our heritage of delivering luxury quality products and services. We’ve been working diligently for about nine months doing this, and I think we’re well on our way.”

While all these internal efforts continued, external

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Franke Kitchen Systems of America

machinations were also at play that fed into Franke’s successful strategy. “I’m certain that many of our competitors were struggling with the same issues we were having a year ago in having to serve multiple customers through different segments of the market, which is extremely difficult to do because of the cultural differences and customer expectations that are very different from each other,” Lawrence says. “We found that many of our competitors went in the opposite direction we chose to go. For instance, they were chasing volume, which meant they were not investing as much in their brands, and they were making questionable decisions concerning pricing and distribution for their brands.”

So Franke once again became the preferred brand in the premium luxury segment. “We believe the timing of our competitors shifting their strategies meshed with our re-shifted strategies,” Lawrence says. “We became the vendor of choice by the people who are serving that luxury market, such as designers and architects who influence consumers at high-end kitchen and bath boutiques and showrooms.”

During the past 10 years, when the economy was still quite healthy, the luxury segment expanded to about 10 percent of the total market, reports Lawrence. But current economic conditions have brought that number back down to about 5 percent. “This is where we believe the market was prior to that 10-year expansion period,” he says.

Consumers in this market segment are discriminating and are really buying an experience, Lawrence says. “They are buying our luxury products because of the excellent sales support that accompanies that purchasing experience.”

Franke Group is the world leader in the manufacture of kitchen sinks and the preeminent stainless steel fabricator in the world, reports Lawrence. “We are the world’s largest manufacturer of stainless kitchen sink systems, beer kegs and quick-serve restaurant kitchen systems for companies like McDonald’s. We are also the secondlargest decorative kitchen ventilation manufacturer and the third-largest commercial coffee systems manufacturer.

One thing all these products have in common is that they are made from stainless steel. Our core competency, therefore, is expert fabrication of stainless steel.”

The Franke brand is all about a culture of excellence, says Lawrence. Its stainless steel sink systems are fabricated in Switzerland and shipped to the Ruston distribution center for final delivery. The distinguishing element of a Franke sink is its Metabo finish, which is a silky-smooth satin finish on 16-gauge or 20-gauge stainless steel. “This process removes any bumpy surfaces and blemishes that are inherent in stainless steel, helping make the sinks more hygienic,” notes Lawrence. The company’s reputation for design and innovation is unmatched, including its patent on Franke’s signature integral ledge, usually placed halfway up the wall of a sink, which facilitates efficiency in preparing foods. He adds that an independent study discovered that 75 percent of all activity in the kitchen happens at the sink; it is for this reason that Franke uses the term sink system.

Lawrence is quick to credit the company’s success to the dedication of its 40 US employees who actively participate in the philosophy of the culture of excellence.

With revenues of about $200 million for its combined North American businesses, Franke is well positioned to react quickly when the economy rebounds. “We are a division of a privately held $3.5 billion company, so we can act strategically and do more investing because we’re not worried about our stock price everyday, as opposed to public companies,” says Lawrence. “This has served us well in this environment, allowing us to invest in people, products and improving our service.

We will continue to refine our operational excellence as we go forward.” www.frankeksd.com

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Keeping

pace

Goldcorp’s Musselwhite mine complex has been a major producer of gold since 1997 and has long been seen as an example of how mining operations can peacefully co-exist with First Nations peoples. Keith Regan learns from the mine’s general manager how the foundation is being laid for possible productio expansion to feed the continued record-high demand for gold

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ince it went into operation in April 1997, Goldcorp’s Musselwhite Mine has produced more than 2.85 million ounces of gold, including more than 230,000 ounces in 2009 alone. Now one of the most remote mining operations in the fast-growing Goldcorp operational portfolio, the mine continues to feed a hungry market while its owners explore opportunities for maximizing output as the operation continues up to and possibly even beyond the current expected mine life target date of 2018.

The Musselwhite Mine has evolved over the dozen-plus years since it opened, with trucking to the surface being augmented in 2003 by a conveyor system as the mine moved to ever-deeper parts of the ore deposit. And now Goldcorp is looking ahead to its next major infrastructure improvements that will pave the way for extending the mine or increasing production in the meantime.

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Goldcorp: Musselwhite Mine

on

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Goldcorp: Musselwhite Mine

“We plan to use this year to continue to do our exploration and understand what we have, and get even more confidence on what we have ahead of ourselves so we can make that right decision,” says mine general manager Gil Lawson, who worked for former mine owner Placer Dome when it brought the project through the feasibility process and helped bring it into production in the mid-1990s. “We’re studying different options on

what the next 10-year material handling approach will be, whether that’s a new shaft, continued trucking or an expanded conveyor system.”

Even as it prepares for that decision, Goldcorp is constantly investing in the mine, having sunk C$90 million into the operation in 2009 alone, with upgrades to the mine’s ability to handle additional tailing capacity and upgraded underground ventilation

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Goldcorp: Musselwhite Mine

“We know we can never change the cost structure unless we make changes to what we do. We’re constantly examining what we do and trying to engineer ways to do things better and cheaper” installed. The mine’s heavy equipment fleet is also constantly being updated through partnerships with manufacturers such as Caterpillar.

Lawson says Goldcorp is also in talks with regional authorities about ways to improve the existing hydroelectricity grid in the northern reaches of the province of Ontario, a grid to which the mine is currently connected via a single transmission line that runs along the allseason road built when the mine was under construction.

To provide additional capacity and redundancy until that upgrade can happen, the mine has installed 8 megawatts of diesel-powered generating capacity.

“We’d rather not rely on that long-term because it does add to our cost profile, but it at least gives us the capacity we need as we work with the First Nations communities and the government to look at various options for bringing more capacity into the region,” Lawson says. “Overall, we feel we are in great shape as far as our infrastructure goes right now.”

Musselwhite is one of almost 20 active gold and silver properties in the Goldcorp portfolio worldwide and one of three active operations, along with mines at Red Lake and Porcupine. Goldcorp also has a fourth Canadian mine under development at the Éléonore Property, where extensive exploratory drilling took place during 2008 and 2009, as well as operations or projects in development in the United States, the Dominican Republic, Argentina, Mexico and Honduras. Goldcorp recently announced that it ended 2009 with probable and proven gold reserves of 48.8 million ounces and

another 1.3 billion ounces of silver.

Musselwhite, located on the southern shore of Opapimiskan Lake, more than 180 kilometers from the nearest town of Pickle Lake, Ontario—which has a population of less than 500 people—and almost 500 kilometers north of Thunder Bay, has long been seen as a model for its First Nations relations. The Musselwhite Agreement, forged in the mid-1990s as the mine was being planned, places priority for Goldcorp to employ First Nations from signatory communities and support business development. The mine currently contracts with a local First Nation-owned business that provides catering and cleaning services.

In addition, the main air charter service used to move employees and cargo in and out of the mine— an all-season road is used solely for large, truck-based deliveries of mine equipment and supplies—is a First Nation–owned firm. “In terms of those relations and agreements, this mine has pretty much set the standard on how to do things properly,” says Lawson. The agreement also includes environmental remediation and monitoring of the lake and other waterways surrounding the mine site. “We take a lot of pride in the cooperation we have earned from our host communities.”

The resource at Musselwhite is not as high in grade as some other Goldcorp mines, meaning there is pressure to increase overall throughput of ore while keeping costs in check. Ongoing programs focus on energy management and reducing the use of consumables.

“This resource requires that we focus on throughput

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Goldcorp: Musselwhite Mine

and production rates. Moving rock is not for free, and we have to guard that bottom line and try to do things efficiently,” Lawson says. “Our mantra is always about operational excellence. We know we can never change the cost structure unless we make changes to what we do. We’re constantly examining what we do and trying to engineer ways to do things better and cheaper.”

Partnerships with suppliers are another key element of keeping costs stable and low. “We’re always negotiating with suppliers for best pricing and forging partnerships that take the long view,” Lawson says. “We plan to be around for a while, and our suppliers know and appreciate that.” Alliances with heavy equipment providers help keep fleets young and costs down. A program to replace older equipment got under way in 2007 and resulted in a new fleet of mucking equipment, a new hauling fleet, and soon the replacement of support vehicles such as scissor lifts and boom trucks.

The mining approaches have changed over the years that Musselwhite has been in operation, but no major technique changes are anticipated going forward. One area of possible future mining activity may require backfilling with cement-like fill to support ore removal. “We’ve perfected the processes we need to follow to mine this property,” Lawson says. “It’s

just a question of matching the best approach to get the most out of the resource while keeping our cost profile as low as possible.”

While the resource is large, the most valuable asset at Musselwhite may well be the people who operate the mine and related operations. Most of the workforce works at the remote location on a two-week-in, twoweek-out schedule. The workforce is a blend of First Nations peoples and miners from elsewhere in Ontario as well as more distant provinces such as Newfoundland and British Columbia. “Those people are our greatest strength,” Lawson says. “It’s just an incredible team.”

He credits Goldcorp’s solid reputation as a great place to work and the investment that Goldcorp has made in both mine infrastructure and training and workforce development. An extensive health and safety program at Musselwhite helps keep the mine safe, and its mine rescue team recently reached the finals in the Ontario Provincial Underground Mine Rescue Competition.

“We’re the lowest cash-cost gold company out there, so we have that capacity for the large-scale investment that’s required to make a facility a safe, clean and positive place to work,” Lawson adds. “Miners know we have the stability and resources, and that’s appealing in an industry where they otherwise might have to move more often to chase the

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Goldcorp: Musselwhite Mine

FocusNDT FocusNDT is proud of the continued relationship with Musselwhite Mine and their efforts towards mine safety and equipment reliability. Focus provides various inspections including mobile and stationary equipment, bull gears and tank inspections. We utilize advanced ultrasonic inspection methods, including phased array, tank crawlers and corrosion mapping systems for monitoring and tracking equipment conditions.

work. They know if they come to work here, they will know where they’ll be working for a good number of years.”

As it looks to plan the proper infrastructure going forward, the mine is looking to move into several

new zones of gold-bearing ore. Areas dubbed the “Thunderwolves” and “Moose” zones—named by mine employees after regional hockey teams they cheer for—have shown promise for future exploration.

Goldcorp invested around C$10 million on drilling and other exploration efforts at Musselwhite in 2009 alone.

“For the past 12 years we’ve been working in our core resource, and now we’re starting to look beyond that and see where some new opportunities might be available to us as we look to keep the mine producing at the highest levels possible,” Lawson states.

“We know the mine is going to be around a number of years more,” Lawson adds. “The question we’re really trying to answer now is how much growth in capacity do we have available to us and what the best way to go about getting that ore out of the ground will be. It’s not so much a question just of longevity but what the potential for growth in output is in the years in between.” www.goldcorp.com

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Long a go-to provider of drilling services in Canada and the United States, Vic Progressive Diamond Drilling is embarking on its first foray into West Africa, where it will be helping mining development companies explore for gold. Keith Regan learns from the company’s president how attention to quality, safety and environment have helped Vic grow and stand out in a highly competitive market

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aura Araneda’s grandfathers were miners. Her father was an underground driller in the mines of Canada’s New Brunswick province and beyond before he decided to found his own diamond drilling company. Today, as president of Vic Progressive Diamond Drilling (VPDD), the firm her father founded in 1987, Araneda believes that by staying focused on doing things right, by drilling safely and with care for the environment, employees and host communities, VPDD will continue to gain customers and grow into new markets.

Based in Sussex, New Brunswick, Vic Progressive Diamond Drilling has operations across Canada, a location in Nevada in the US, and now a presence in West Africa, where it has won contracts to help explore for gold. The firm’s approximately 100 employees, a number that will rise during the summer months, carry on a tradition of innovation and service to the mining industry as a whole.

“We’ve been in the business for 23 years now,” Araneda says. “Mining is a relatively small community, and your reputation precedes you. That’s got to be your number one priority. You need to make sure that when you commit to something you do it right and do it better than expectations.”

VPDD began with a focus on underground drilling and still does an extensive amount of that work, but it has also expanded into surface drilling, where much of the energy is now being directed as mining firms and exploration interests look to find the next generation of producing mines to feed hungry markets. VPDD has also expanded into providing mine services, extending labor to mines as needed on a contract basis, and offers expertise in high-pressure and high-volume grouting to help address water infiltration and related situations.

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Vic Progressive Diamond Drilling

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“Mining is a relatively sma you. That’s got to be your that when you commit to than expectations”

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all community, and your reputation precedes number one priority. You need to make sure o something you do it right and do it better

Vic Progressive Diamond Drilling

Araneda believes that growth comes as a result of paying attention to the way the company does business on a daily basis. By performing with high standards for worker safety and environmental respect, the company naturally gains customers and market share. “Our main focus is safety and protecting the environment.

Everything else flows from that. For our customers, it’s not about safety versus production but safe production.”

Ensuring that safe operation and a light footprint remain top of mind for all employees at all levels is achieved through regular meetings and constant twoway communication. “All our workers meet daily when possible on the job site. We have a stop-and-correct system in place for any issues or concerns that arise on the safety side; everybody is able to make known what they see or find, and we look for ways to make things a little better and safer. That information is then filtered back to the head office, and if there’s action needed, we jump on it right away. If you want to keep and attract the best people, you’ve got to let them know that their personal safety is number one. Nothing is more important than them making it home at the end of the day.”

Having minimal environmental impact has also been a longtime focus at VPDD. The company has embraced smaller, track-based diamond drilling machines that do less damage to the ground they are helping to explore, and it is constantly looking for ways to move to less environmentally hazardous oils and fluids. “We can be working in some pristine areas, and we want to leave them as we found them,” says Araneda. The company has upgraded its fleet and invested in less hazardous approaches to its work. “It’s a little more expensive up front, but compared to the cost of having even a single accident, it’s definitely worth it.”

Safety and environmental friendliness are often achieved through innovation, with workers devising new drill modifications or new techniques. “It comes back to everybody always talking about concepts for ways to do things better,” Araneda says. “We have a great crew and they know we support their efforts to think out of the box. There are always new modifications and enhancements being tried and tested.” Innovations that the company has been credited with include wireless overshot technology, unitized drilling equipment and back-reaming—advances that heighten employee safety and boost productivity at the same time.

Together, safety and the environment are part of a larger philosophy of community involvement. VPDD pledges to hire as many people as possible from the local communities where it does its drilling as it moves

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Vic Progressive Diamond Drilling

around Canada. The company also makes investments in community groups, supporting youth sports, local charities and other initiatives. “We’ve found that if you bring the community in with you, they’ll buy into the whole of what you’re doing.”

Looking ahead, Araneda is excited about the opportunities the firm sees, as both Canadian and US mine concerns continue to drill underground in existing mines and explore new opportunities and as VPDD

moves into new overseas markets. “With gold prices being where they are, there’s a lot of development happening in West Africa, and as we get over there with our crews, hopefully it will be a great opportunity for us for years to come,” Araneda says. Future opportunities may lie in locations such as Australia and Asia, she adds. “We have the expertise and the crews, and we’ll go wherever the work takes us.” www.progressivedrilling.com

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Productive nondestructive and

With customers in the industrial power, petrochemical, pipeline, and pulp & paper sectors, Acuren has naturally felt the impacts of the economic recession. Keith Regan learns from the country general manager how the resources of its parent company have positioned it to use the downturn as an opportunity to build a stronger, even more reliable service firm for its customers

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curen specializes in the kind of testing that helps get power and industrial plants built and then helps keep them in compliance and up and running over the long term. The company’s 3,000 employees in North America utilize the latest technologies and techniques in nondestructive testing (NDT) to help customers in the power, petrochemical, pipeline, pulp & paper and mining industries.

According to Canadian general manager Tal Pizzey, those customers are looking for Acuren to deliver a constantly increasing level of reliability, and after several years of strong double-digit growth, the firm is using the recession to redouble its efforts to become the most reliable provider of nondestructive testing services in the country.

With business down in the entire sector, but especially in the new construction part of the market, Acuren has turned its attention inward. “We have focused heavily on the concept of a higher level of accountability and reliability,” Pizzey says.

Along with reliability, Acuren differentiates itself with its technical competence— it’s one of few testing firms that also maintains engineering and lab departments that perform failure analysis and forensic engineering and shares that data with its team of field inspectors—its service-oriented culture, and its constant investment in technology and equipment. Acuren is part of Rockwood Services Corp., a well-established but private company with extensive resources and financial stability. “We’re able to invest in what’s needed even in a down economy, and we don’t have to prove to shareholders that we’re cutting back to protect the bottom line,” Pizzey says. “Not many companies in our space can say they’re still in a position to be investing now.”

That investment has been focused on several fronts, reflecting the firm’s belief that reliability is composed of safety, quality and productivity. “Those are areas that our clients are demanding excellence in.”

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Acuren Group Inc.

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To boost its already strong safety record, Acuren has brought in experts from a variety of fields, not just the testing industry, as well as six sigma black belts who have led an effort to focus attention on root cause analysis and introduce fresh ways of looking at old situations and problems. One major change has been in the vehicle fleet, where every one of the firm’s vehicles in North America is now equipped with a GPS tracking device that gives instant insight into driver speed, idle time and other factors. Every driver also goes through a day-long Smith Driver training program. “We have inspectors driving big, heavy trucks to remote job sites, and that makes the highways and roads one of the safety hot spots for us,” notes Pizzey. The result has been a 50 percent drop in vehicle accidents, which in turn has helped contribute to a recent milestone, achieved late in 2009, of 1 million straight working hours without a recordable safety incident.

To boost quality, Acuren has again looked to bring in new ways of thinking, hiring from well outside the traditional boundaries of inspection services and bringing in experts from the auto and aerospace industries to help foster new ways of thinking at the executive and management levels. Acuren has also put new guidelines in place for approving new technologies to ensure that the best approaches are being used. “We don’t just send technicians out in the field with a new instrument and throw a manual at them. First, we need to prove that instrument is repeatable and reliable and provide a robust training curriculum for the technicians who will use them.”

Boosting productivity may seem counter-intuitive, since the service firm is generally paid by the hour by its clients. “There may be a perception that we want to bill more hours, but our goal is to provide the most efficient service we can,” Pizzey says. Improving productivity begins, he adds, with being able to measure how work is being performed. Data points include overtime hours, amount of work performed by night-shift inspectors, time spent waiting for permits or other non-productive delays.

With that snapshot in view, Acuren looks for ways to improve on those measures. Often, that happens through the use of technology, which sometimes is brought into the fold through acquisition of other inspection firms.

For instance, Rockwood recently acquired Halifax, Nova Scotia–based Remote Access Technologies, which performs inspections off ropes, eliminating the need for building scaffolding for areas of difficult access. “Today, we might have an inspection of a boiler that costs $20,000, but behind the scenes the client is spending $100,000 on scaffolding,” Pizzey explains.

Even if the inspection itself costs twice as much, the

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Acuren Group Inc.

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Acuren Group Inc.

“We’re able to invest in what’s needed even in a down economy, and we don’t have to prove to shareholders that we’re cutting back to protect the bottom line. Not many companies in our space can say they’re still in a position to be investing now” client costs still drop from $120,000 to $40,000. “As we walk through those scenarios with clients, our approach to improving productivity really resonates with them. They see how we can use new approaches and technologies to do what we’ve been doing for them in a smarter, more effective way.”

Pizzey acknowledges that some of the changes have not immediately been welcomed with open arms by all employees, but the company has taken steps to ensure that workers see the long-term benefits and how those will help everyone who works for Acuren in

the end. Returning home safely each day and taking pride in the quality of their work are attributes shared by management and employees.

“These steps will help us get more work, and that’s a win for everybody,” Pizzey adds. “We see opportunities to help clients who are looking to reduce their list of vendors by providing more services where we can.

We’re the experts. We have a broad range of experience that our clients can’t easily reproduce in-house, and they’re eager to leverage that to help improve their bottom lines.” www.acuren.com

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refining moment

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San Joaquin Refining Co. Inc.

Two executives from San Joaquin Refining in California tell David Hendricks about the lengths the company goes to in order to comply with all applicable regulations and maintain consistent product quality

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he original refinery was built in 1938 and purchased by San Joaquin Oil Co. in 1968. In 1979 the refinery became San Joaquin Refining Co., Inc., a privately held company located in Bakersfield, California. Major upgrades were accomplished in 1975, 1987, and again in 2001. Bakersfield is in Kern County, located in the San Joaquin Valley. Kern County contains about 31,000 oil wells (approximately 90 percent of which are owned by Chevron, Occidental and AERA) that produce about 425,000 barrels of light and heavy crude daily, which is about two-thirds of the crude produced in California and 8 percent of the crude produced in the United States.

Today SJR processes heavy crude (which is less desirable for transportation fuel production) from leases in Kern County into premium naphthenic oils that are in turn utilized by other companies for use in specialty applications, including printing inks, lubricants, rubber and plastics, adhesives, paints and coatings, electrical insulating oils, asphalt recycling and roofing. The major portion of SJR’s business is the manufacture of several types of paving asphalt, which are delivered mostly to customers in California, Nevada and Arizona. The specialty naphthenic products are distributed nationwide, and some are exported to Mexico, Canada, China and India.

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The company has just completed its annual prespring plant maintenance, which is done to ensure that all machinery and equipment is operating properly and safely. “We’re very safety-oriented toward our employees,” says Mark Del Papa, vice president of supply and distribution.

“We don’t need unexpected equipment failures during our peak season, which is summer, because it would disrupt product flow to our customers,” adds Ed Starbuck, vice president of operations. “We’ve always tried to ensure the quality of our products, to make certain that our customers always get the same material they’re expecting, so that they don’t need to reformulate it or have unexpected problems when it comes time to use the products. One of the reasons we decided to utilize a consistent source of heavy naphthenic crude oil is to have consistency and unique properties in the products we produce.”

“Unlike a lot of other refiners who can run multiple crude slates and focus on being able to obtain the best

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value for crude based on the market,” says Del Papa, “we concentrate on the consistency of the type of crude we use, which allows us to do the things Ed mentioned and maintain a very consistent product quality, whether it’s our asphalt or our naphthenic specialty oils.”

There are a number of regulatory programs that refiners have to comply with at all government levels— federal, state, county and municipal—and SJR tries to be ahead of the regulatory curve, doing what it needs to do to be more sustainable and environmentally friendly. “We always remain active with the regulatory community,” says Starbuck. “We stay proactive in trying to meet the various requirements head-on, rather than trying to catch up to them. Since most refineries in the United States are aging, they probably started off with pneumatic control systems, and most, including this one, have upgraded to a computerized system of operation, which allows us to better control the many variables that affect product quality and output. We’re

San Joaquin Refining Co. Inc.

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San Joaquin Refining Co. Inc.

always trying to improve the energy efficiency of the plant and ensure the consistent quality of our products.

We always do initial and refresher training of employees on the control systems.”

Del Papa notes that the owners of the company have been aggressive about investing in new equipment and technology, hardware and software, to stay in step with the future and maintain product quality. “In the 1980s we invested in solvent extraction, a lube oil plant, which allowed us to make non-label products,” adds Starbuck. “In the 1990s we invested in hydro-treating capabilities, so we can reduce the sulphur and aromatic content in some of our products to enable us to comply with some stringent regulations. So we’ve always been willing to invest in the technology and upgrades to stay in step with future product demand.”

He says SJR’s next project is a green initiative, installing a cogeneration plant that will produce more electricity than the refinery can consume. “We’ll return the excess electricity to the grid system owned by the local public utility. The thermal output from the co-gen will enable us to shut down 14 of our heaters, which will reduce our NO x [nitrogen oxide] and CO [carbon monoxide] emissions as well as our greenhouse gas [carbon dioxide, CO 2 ] emissions, and we’ll be able to capture additional CO 2 from the exhaust gas. Since we’re adjacent to an oil field, our plans are to use that CO 2 for enhanced oil recovery. So our purpose for the

co-gen is to get ahead of the curve on NO x and CO emissions, and to take advantage of the opportunity to reduce CO 2 emissions and the future capture of additional CO 2 emissions. This plant is about a year and a half to two years away; we’re in the engineering, planning and bid quotation stage right now.”

Del Papa sees one of the key highlights for the success of the company being the interrelationships and communication between the people in the various operating groups. “It’s people working together for a common cause. Being a small, independently held refinery, we’re able to make adjustments rather quickly to try to work to generate the best economics. The operations group and the marketing and supply group meet every week, and we look for adjustments we can make to operations to maximize our profitability and to ensure that the right products are available at the right time. So there’s a constant tweaking of crude runs, changing the product slate a bit, to ensure that we’re as good as we can be. Quality control is paramount, and our large database serves as a very effective marketing tool.

If there’s ever a question on quality, we have information from our lab samples to compare to the results in a customer’s lab. For example, in our asphalt business, the people who run hot plants and lay the asphalt may have a question about the aggregate asphalt oil mix, and we can help, because of the information that we accumulate and retain.” www.sjr.com

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new model care

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Memorial Hermann Healthcare System

With more than 21,000 employees at some 128 sites in the Houston area, Memorial Hermann Healthcare System is one of the largest healthcare organizations in the Lone Star State. Keith Regan learns how the system’s focus on quality care is an answer to rising costs and the looming changes to be wrought by healthcare reform

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emorial Hermann Healthcare System naturally takes pride in the 2009 National Quality Healthcare Award it received from the National Quality Forum, a reflection of improvements made in a host of areas, from patient safety to monitoring of care and demonstrated performance improvements. It also proudly displays its recognition from U.S. News & World Report as one of the country’s best hospitals on that publication’s 2009–10 listing.

But according to chief operating officer Chuck Stokes, the quality gains that the Houston-based 11-hospital system has made are not just important strides toward delivering better care but the key to remaining a successful and thriving healthcare entity in the face of spiraling costs and major changes to federal reimbursement rates driven by healthcare reform legislation. Once something that wasn’t discussed in a healthcare context, quality is quickly becoming the gold standard measurement.

Consumers are increasingly able to access information about quality ratings, and soon Medicare reimbursement payments will be tied in part to those same measurements.

As healthcare reform moves forward, private insurers are likely to follow suit, tying how much payment a hospital receives to the effectiveness of care as well as the quantity. For instance, a hospital may receive reduced payments if a patient is readmitted within 30 days for follow-up treatment. “Quality is becoming more important every day,” Stokes says. “The quality metrics are becoming more numerous and transparent. We want the public to know and be able to see the high-quality care we are delivering.

“The highest-quality care is the most cost-effective,” Stokes adds. “It has to be everybody’s strategy going forward. One of the best ways to reduce costs is to get it right the first time.”

Delivering care right the first time is key to long-term financial health for all hospitals. At Memorial Hermann, the challenge is exacerbated by the fact that the area has the highest percentage of uninsured people in the country.

Some 32 percent of the population in the Houston area is uninsured, and another 10 percent is underinsured.

At Memorial Hermann, the quality initiatives are supported by specific initiatives in six strategic areas: people, physicians, service, quality, growth and financial. “The formula for success is to have firedup, engaged and motivated employees and physicians delivering an exemplary level of service and making it clear that delivering high-quality clinical care increases the probability of financial success and continued growth. All those areas are inextricably connected.”

As with quality, measurement and tracking is a foundation of the efforts. Supported by ongoing investments in information technology that helps monitor a host of clinical and financial metrics, the hospital vigorously measures everything it can, including regular surveys to track employee and physician satisfaction.

The hospital system also employs Press Ganey to measure its service delivery success rates. “There’s a lot of rigor around monthly reviews of our quality metrics,” says Stokes.

Each month, each of the 11 hospitals in the system—a roster that includes Memorial Hermann–Texas Medical Center, which is not only the teaching hospital for the

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“The formula for success is to have fired-up, engaged and motivated employees and physicians delivering an exemplary level of service and making it clear that delivering high-quality clinical care increases the probability of financial success and continued growth” University of Texas Medical School at Houston but also home to the country’s busiest Level 1 trauma center as well as a number of suburban hospitals—reviews every metric that applies, looking for successes to build on as well as opportunities for improvement. Everything— from the number of catheter-related bloodstream infections and ventilator-associated pneumonia cases as well as slips and falls and other safety issues—is examined with an eye toward immediate or long-term opportunities for improvement.

Because employee retention is another key to both quality and cost containment, the system works hard to remove one of the main causes of employee departure: unhappiness with immediate supervisors. “The most

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important thing in terms of retention is engagement,” Stokes says. “That has a lot of leadership development and training implications that we take very seriously.”

Physician engagement is seen as key as well. “For us to be successful in the future, we have to be seen as partners. There has to be interdependence between the physicians and the system. We can’t accomplish our cost and quality objectives without mutual collaboration.”

To bring doctors more closely into the fold, Memorial Hermann has set up service-line teams at each hospital that have decision-making power and include physician representation. The system has a physician organization, Health Network Providers, which consists of 3,500 doctors, of which 2,000 meet the criteria for

Memorial Hermann Healthcare System

Clinical Integration. This means they are electronically connected to the system; they practice evidence-based medicine and report their quality data and billing data on a monthly basis. These doctors are electronically linked to the hospitals and back-end information systems, enabling patient records to be automatically moved between the hospital and private doctors’ offices. Doctors and nurses are also treated as key partners in other technology-based initiatives, including bedside bar-coding systems to ensure the right dose of medicine is being given to the right patient at the right time. “Technology is one of the ways we can make the environment safer.”

Although it has recently built some new facilities, Stokes says Memorial Hermann’s future growth will likely not necessarily include more hospital beds or other facilities. “Our goal for the future is figuring out how we consolidate the numerous sites across the city to deliver the best care possible in the most cost-

effective manner,” he says.

All the changes now under way set the stage for new approaches to be brought about by the Obama Administration’s healthcare reform efforts, Stokes says.

“Under health reform, the winners will be the people who can change their model of care to be more efficient and deliver higher quality. The winners will be the ones who can get to that high-quality, low-cost place quickly.

Those organizations will fare well even with all the changes that are coming. Those who can’t or who take too long to adapt are going to struggle.

“There are many unknowns with the current legislation recently passed,” Stokes concludes. “What we do know is that the current system is unsustainable and will force us to develop a new model of care. It won’t be easy, and it requires a fundamental restructuring of our current model of care. The new model will have to include all stakeholders in the redesign process.” www.memorialhermann.org

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Clawin into the

rea

Brendan A. Smith learns program is earning top m

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alworld

why The Beverly High School DECA marks in the fight against cancer

The Beverly High School DECA Program

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f you give the DECA students at Beverly High School a pop quiz on cause branding, they will probably strike ‘C’ on their Scantron answer cards. To these DECA students, marketing is not just a 42 minute class resulting in a pass or fail grade at the conclusion of the semester; marketing is teaching these scholars fundamental business concepts they are already employing in an epic marketing campaign aimed at Clawing at Cancer.

Fourteen years ago, Kristen Maresalchi, Beverly High School’s accounting and marketing teacher, brought the program back to BHS because, as she says, “DECA brings the real world into the classroom.” Maresalchi, who gained experience in public equities while working for Putnam Investments, recognized a need to make learning more dynamic with a transparent window to the “real world.”

That window comes in the form of DECA, an international association of high school students with over 5,000 chapters in the US, Canada, Mexico, Puerto Rico and Guam that compete against one another in marketing, management and entrepreneurship curriculum-enhancing programs. DECA’s ultimate goal is to help students “to develop skills for successful business careers, build self-esteem, experience leadership and practice community service.” And this year, at a high school located 25 miles from the world-renowned cancer research facility, the Dana Farber Cancer Institute & the Jimmy Fund Clinic, students are doing just that, and more.

Six executives—Bridget Leahy, Courtney Brennan, Dan Hagerty, Will French, Liz Zarkades, and Curtis Manuel—utilize complex guerrilla marketing techniques. The objective is clear: increase awareness while raising capital to support pediatric or childhood cancer research and the Jimmy Fund Clinic. The campaign’s slogan is shockingly sobering, as these young students have already learned first-hand —Cancer Is Not Selective.

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The Beverly High School DECA Program

Without infinite capital resources to propel an elaborate media campaign, the executive board aims to “combine BHS school spirit with the support of the city to aid much-needed cancer research. The goal of our campaign is to create a well-rounded community service effort including activities, events, and merchandise sales,” states the group’s website.

The Beverly DECA group began marketing T-shirts and wristbands with the phrases Panthers Claw at Cancer, Join the Fight and Cancer Is Not Selective (the Slogan) to fellow students. The shirts became an instant success, so much so that it’s almost impossible to pass through the hallowed halls of BHS without seeing a dozen or more of them.

This determined, ever-clever group is using every resource available to them. The two T-shirts were designed by BHS students. Just as important, each includes the official Jimmy Fund logo, a special designation granted by the Jimmy Fund itself, which highlights the partnership between BHS and DFCI.

Printing of the T-shirts is also handled efficiently. For production, the group allied itself with Witch Tee’s of neighboring Salem to get the job done at cost.

Attempts to reach the target demographic are proving successful. On primary day, T-shirts and wristbands were marketed to local voters hitting the polls, resulting in $1,500 in sales. “We knew we needed to create an opportunity to reach outside of BHS,” Courtney Brennan explains, “because our ultimate goal is to gather support both from inside BHS and from the surrounding communities.” Already savvy in marketing techniques, Courtney and her colleagues knew that there was a need to get outside the school in order to raise additional funds.

During brainstorming sessions addressing how they would effectively market their product to the North Shore community, the group identified strategic populations that are a willing, capable and supportive demographic.

When asked about the target demographic, the directors are emphatic that they want to reach anybody and everybody willing to listen. Prior to the annual

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The Beverly High School DECA Program

“We knew we needed to create an opportunity to reach outside of BHS,” Courtney Brennan explains, “because our ultimate goal is to gather support both from inside BHS and from the surrounding communities.”

Thanksgiving Game Pep Rally they announced that T-shirts would be on sale in the DECA classroom. “The entire school got together to support the campaign,” explains Liz Zarkades. “The morning of the rally we walked into school and there was a line out of the classroom, down the hall and around the corner. Kids wanted to participate so badly that they bought T-shirts that were not even in their sizes.”

These students are pledging their hearts and minds to the campaign. During sporting events throughout the year, at least one group representative appeals to home and visiting fans for support. “The Panthers Claw at Cancer T-shirts

are designed for our Beverly community,” Will French says when speaking to fans, “while our Communities Unite – Join the Fight T-shirt is designed so that all communities can be involved in raising awareness and supporting pediatric cancer research and the Jimmy Fund Clinic.”

The BHS DECA executives canvass every marketing opportunity, from asking Jim Hayes, Superintendent of Beverly Public Schools, to write a letter to neighboring superintendents explaining the goal of the Jimmy Fund marketing campaign and lobbying for their cities’ support, to reaching out to their own network of friends, families and even the author of this article, a proud product of the Jimmy

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Salem’s

Best Selection of Souvenir

T-Shirts, Sweatshirts and Cardigans

176 Essex Stree, Suite 127, Salem, MA 01970 • (978) 740.0900

(800) 52-JIMMY (54669)

®

Please support the Beverly High School DECA Campaign by making donations directly to the Jimmy Fund Clinic.

Please indicate that your donation is

made in recognition of the Beverly High School DECA Jimmy Fund campaign Dana-Farber Cancer Institute • 10 Brookline Place West, 6th Floor Brookline, MA 02445-7226 • (Tel:) Amy Powers: 617-632-3613

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The Beverly High School DECA Program

“Kids wanted to participate so badly that they bought T-shirts that were not even in their sizes” Fund Clinic and a childhood cancer survivor. It’s obvious that this is more than just a marketing campaign —it’s personal.

Dan Hagerty, one of the BHS DECA elite, says it best, “Cancer has affected my life directly and has become a huge part of my life. I have been battling this terrible disease for around three years now, and it’s awesome to be involved with something that will spread awareness and raise money.”

From the outset, this marketing campaign has been all about one thing: making a difference. Thus far it certainly has done just that. Reflecting back fourteen years ago to Maresalchi’s decision to “bring the real world into the classroom,” it is doubtful she ever imagined that her classroom would take itself into the real world.

Please support The Beverly High School DECA Campaign by making a gift to pediatric or childhood cancer research and the Jimmy Fund Clinic. Please indicate that your donation is made in recognition of the Beverly High School DECA Jimmy Fund campaign.

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The city of Cleveland is at the front edge of a trend among airports nationwide to seek out new revenue sources and improve operational efficiency. Keith Regan learns from the director of port control how the City by the Lake is already on the runway to a brighter future

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ike many of its counterparts across the country, the Cleveland Airport System is actively searching for ways to diversify its revenue base and refine its operations, hoping to become less dependent on the highly cyclical and economically sensitive airline industry. The system includes Cleveland Hopkins International Airport (CLE) as well as Cleveland Burke Lakefront Airport (BKL).

“Our vision is to be the best-performing organization in the industry,” says Ricky Smith, director of port control, a position which includes responsibility for Cleveland’s two-airport system as well as development of the property around them. “These are trying times for airports. One thing we’ve learned is that we have traditionally always focused on revenue from airlines, and we want to try not to rely on that too much.”

The airport system recently negotiated a new long-term contract with rental car agencies and is actively exploring other non-air-service-dependent revenue sources, including development of surplus land and properties and economic development within airport properties. “We’re looking for more revenue sources that will be there regardless of what passenger levels are,” Smith adds. “The airline industry has its peaks and valleys, and we want to have some segment of our revenue base that is not subjected to those swings quite as much.”

One such success story is occurring at Burke Lakefront Airport, which is closer to downtown Cleveland and on the shores of Lake Erie. The airport—a designated reliever airport by the Federal Aviation Administration (FAA)—is heavily used by corporate jets and other private aviation as well. The system is awaiting FAA approval for a master plan for that airport, while also working on a deal to bring a technology and manufacturing tenant onto the airport property, a firm that will use the airport to move cargo out of the city. That one deal will bring in enough revenue to transform Burke from running in the red to being in the black.

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Cleveland Airport System

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“These are trying times for airports. One thing we’ve learned is that we have traditionally always focused on revenue from airlin and we want to try not to rely on that too much” 64

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Cleveland Airport System

A number of changes have been made to the airfield at Cleveland Hopkins International Airport designed to make the airport safer and more pilot-friendly. A main runway was extended by 1,000 feet and runways realigned to eliminate potential conflict points. In addition to making the tarmac safer, the changes provide additional runway capacity, which the airport is hoping can be used to boost international flights in and out of the airport. Continental Airlines, which operates a hub from Cleveland Hopkins, is in talks with the airport to restore service to Europe, and the Pacific Rim in particular appears to be ripe with future opportunities, says Smith. “There are enormous expansion plans on the table in China, and we feel we’re in a good position to capitalize on that because of our location in reasonable proximity to the rest of the nation and the fact that we have the capacity to handle additional service without any congestion or delays.”

The airport is also investing to keep the airfield operating during what can be harsh and unpredictable

Ohio winters. “We know we’re going to get snow, but we don’t know what form it’s going to come in. We might get lake-effect snow or sleet or just about any kind of precipitation you can imagine,” Smith says. The airport recently revamped its snow-removal program to keep the most heavily used areas open as long as possible.

Over the next year it will also invest in two underground snow melters and four portable snow melters that will help it avoid the need for costly hauling of snow off site.

With those airfield improvements in place, the airport plans to turn its attention next to terminal enhancements and landside changes that will impact parking and other support services.

The airport system has already changed the way it handles the economics of retail and concessions within the airport. Previously, it followed a master concessionaire model, with a single operator responsible for all shops and restaurants. The airport is now in the midst of a shift to a developer model, which Smith believes will help foster competition among various

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Cleveland Airport System

Faith Group LLC Faith Group LLC provides detailed “as-is” and “to-be” business analysis coupled with sound security and technology planning practices in order to meet the varied needs of our clients.

We salute the Cleveland Hopkins International Airport for sharing our business focused approach in managing its operations and facilities efficiently and providing the highest level of customer service possible.

outlets and which has already paid off in the form of higher per-passenger spending rates.

British Airports Authority (BAA) is handling that developer’s role, and so far about half of what will eventually be 56 outlets have been opened. “We’re making major progress. It seems like we open another outlet every other day.” Per-passenger spending has already risen from $5 to more than $11.

While parking is “not a major issue” at the airports, the system is eager to ensure that it is maximizing its revenue while providing the most convenience for passengers.

The system is hiring an interim parking manager and plans to complete a parking master plan for both airports and related properties. Approximately 17 percent of the airport’s annual revenue stems from parking income.

“We do have competition off-airport, and though we’re not losing business to them now, we know that’s a risk if we don’t make improvements,” Smith states.

One likely change will be smart-park technology, which automatically alerts visitors when parking spots are available in a garage, enabling it to be kept open until it is 100 percent full. “Right now, we have to close the garage when it gets to 85 to 90 percent full. With smart-park, we can get that right up to 100 percent, and you can see how valuable that would be in terms of recovering lost revenue.”

Smith takes pride in the fact that the International Airport Council has recognized Cleveland’s airports for its ongoing quality program and in fact recently named Cleveland Hopkins the most improved airport in North America. “We took that as a sign that we’re doing some things right,” Smith adds. “But we have not yet met our goals or targets. We know there’s more improvement ahead for us in all our operational areas.” www.clevelandairport.com

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Makin the

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Trumbull Corporation

Trumbull Corporation is a leading Pennsylvania construction company noted for major projects to upgrade the Pittsburgh infrastructure. April Terreri learns more

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nfrastructure improvements continue in downtown Pittsburgh, where Trumbull Corporation is a major player. The North Shore Connector Project began several years ago and involves construction of a 1.2-mile extension to an existing light rail system that will connect the downtown business and cultural district to the North Shore, which is across the Allegheny River from the city. The extensive project encompasses about 18 contracts overall, three of which owner Port Authority of Allegheny County awarded to Trumbull Corporation.

The North Shore is home to Carnegie Science Center, Heinz Field, the new Rivers Casino and PNC Park. Two tunnels have already been bored under the Allegheny River: one tunnel will serve inbound rail transit, and the other will accommodate outbound rail transit. Trumbull Corporation and San Francisco–based Obayashi Corporation formed a joint venture—North Shore Constructors—for the tunnel project, which was completed this past January.

The Port Authority chose the approach of boring under the river from among other alternatives because of its minimal impact to existing and future development in the area.

The tunnels were constructed about 22 feet below the 25-foot-deep Allegheny River.

The tunnels will connect Gateway Station, which is the current downtown station, to two new North Shore stations: North Side Station and Allegheny Station. The entire project is valued at $435 million, with about 80 percent of the funds coming from the Federal Transit Administration. Gateway Station Shell—valued at $49 million—is the contract Trumbull is currently working on. This project entails demolition of portions of the existing Gateway station, reports John Murray, project manager for Trumbull.

The Port Authority awarded North Shore Constructors the Gateway Station Shell project in April 2008, and construction began in September 2008. The project is scheduled for completion January 2011. The new station will be triangular in shape and will be about 400 feet long by 90 feet at its widest and 50 feet in width at its narrowest.

The work encompassed extensive utility relocations and roadway restoration.

Murray explains that the existing light rail system had entered an east-west loop at Gateway Station, and inbound trains would loop around the station to head outbound.

To allow for the new 1.2-mile extension, Trumbull cut into the loop in such a way that the new station will be on the north-south portion of the loop. “Existing trains run east and west, but they will turn north into the new station,” Murray reports. “From the new station, the new rail line extension will tie into the bored tunnels we already constructed under the river, and the line will turn back at the Allegheny Station on the North Shore,” he says. Trumbull has already constructed the North Side Station under a previous contract.

The contract is a cut-and-cover project, and it’s called a shell because it will not have

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many of the architectural finishes when Trumbull’s work is completed. “We’re just building the rough concrete including the walls, floors, roof and platform,” explains Murray. The structure is constructed of cast-in-place concrete, with base slabs four feet thick and roofs at least three feet thick. Concrete was placed using a concrete pump and a crane-and-bucket method. The structure is scheduled to be completed by October 2010, and for about four months after that Trumbull’s team will be involved in roadway restoration.

Once the station is constructed, other contractors will follow behind Trumbull’s team to construct the new track and install the new electrical work, the ventilation system, elevators and escalators. Another contractor will put the finishing architectural touches on the interior and exterior of the station.

Working right in the heart of downtown Pittsburgh presented a number of challenges, notes Murray. “For instance, every utility in this region has a presence downtown, including Duquesne Light, Equitable Gas, Verizon, MCI and PACT [Pittsburgh/Allegheny County Thermal], which operates steam lines that provide steam to some of the buildings in the area.” All the utilities, with the exception of the water lines, are now relocated over the 35-foot-deep excavation area. They are temporarily supported by a series of structural steel trusses and cables.

Another challenge was working within a limited area right in the heart of the business district, with all its pedestrian and vehicular traffic. “This means we have limited availability for a yard to store our material and to move equipment around,” Murray says. “We staged the materials we required offsite at our local suppliers’ and manufacturers’ sites, and we brought in only what we could physically get onto the excavation site on any particular day.”

Excavation for the station shell was about 15 feet below the water table, which presented other challenges. To overcome those challenges and to create a watertight cut-off wall, Trumbull used a method called jet grouting rather than wooden lagging from the top of the level of the water table to the bottom of the excavation area.

Wooden lagging was used from the ground surface down to the top of the water table. “We used 60-footlong steel soldier pile beams and lagging,” Murray says.

“Then we wrapped the entire structure in a 100-mil PVC waterproofing membrane.”

Murray admits that he and his team were surprised by the complexity of the structure once they began construction. “The roofs are sloped and the columns are battered [not plumb, but at an angle] to achieve

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an architectural effect,” he says. “The sloped roofs are an attempt to give an open-space feeling to the interior of the station.”

Another surprise the team didn’t anticipate was having to deal with the G20 Summit held in Pittsburgh this past September. “But everything turned out fine because we had an attitude of preparing for the worst and hoping for the best,” Murray says. “We spent two months removing materials that could be used as potential weapons or projectiles. We secured the site and increased our security force. But everything in general around the city went very well, and I think that was due to all the city planning that took place months before the event.”

The project is a result of the continuing growth in Pittsburgh. “With all the development going on at the North Shore, many of the surface parking lots are being eliminated,” Murray reports. “There are a few new hotels being built in that area, and the Steelers

[Pittsburgh’s NFL team] recently broke ground for their new amphitheater. So with the loss of parking spaces, I think this project is an attempt to get people to use light rail into the city and to the North Shore.”

Murray credits the continued on-schedule success of the project to the cooperation of the downtown people and businesses. The North Shore Connector is a significant regional investment that will support continued revitalization to the business and cultural districts, educational institutions, entertainment developments and residential areas of downtown Pittsburgh and the North Shore. According to a Port Authority press release, the North Shore Connector will also allow the Port Authority to develop future extensions of the light rail system to other destinations within Allegheny County—such as Pittsburgh International Airport—making it a catalyst for future development opportunities throughout the region. http://www. trumbullcorp.com

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TestAmerica Inc.

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environment TestAmerica operates five distinct businesses focused on environmental testing of water, soil, air, sediments and tissues. Iris Seymour reports

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he global collective consciousness today is acutely aware of the stewardship responsibility each of us needs to assume in order to maintain and sustain a clean world safe for all living creatures. TestAmerica Inc., headquartered in North Canton, Ohio, takes this responsibility seriously as the parent company for a group of five firms providing environmental products and services to residential, commercial, industrial, government at the federal, state and local levels, and the consulting and engineering firms who support them.

These companies employ more than 2,000 people nationwide and conduct thousands of tests to determine a variety of environmental projects and programs.

“Each company is an independent business, having been acquired over time

by TestAmerica. While independent and designed to serve unique environmental applications, the business units are complementary to one another, making TestAmerica the most comprehensive testing firm in the world,” explains Mike Bogar, COO of products and services, responsible for overseeing four of the five companies: QED Environmental Systems, Inc.; METCO Environmental; EMLab P&K; and TestAmerica Drilling Corporation.

QED Environmental Systems is the leading supplier of groundwater sampling equipment and remediation pumping systems, explains Bogar. The company develops and manufactures sampling and air-powered pumping systems used primarily at landfill sites and contaminated groundwater sites. “QED has a successful record of helping clients reduce costs by providing innovative methods and equipment,” Bogar says. “Our experienced field and customer service team supports these products.” The equipment improves the effectiveness of groundwater sampling, remediation and landfill liquid control.

QED’s expertise in pneumatic pump technology, coupled with customer needs, led the company to produce a second product group: air-powered pumps for remediation and landfill pumping. The advantage of air-powered pumps, explains Bogar, is that they are valuable in pumping difficult-to-handle fluids, especially those with corrosive conditions, high solids levels, solvents or elevated temperatures.

QED also manufactures a patented type of air stripper for removing volatile contaminants from contaminated groundwater after it is pumped from the ground. These air strippers are specially adapted to reduce maintenance costs and maintain treatment efficiency

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when treating water that produces fouling mineral deposits. Due to these unique properties, the QED air strippers have been applied at hundreds of remediation sites and process plants, including internationally.

METCO Environmental is the largest company in the country specializing in air emissions testing, reports Bogar. “We provide field-based air emissions testing for industries such as petrochemical, refinery and power companies. All METCO field personnel have received comprehensive health and safety training, and they maintain the highest safety standards in the industry.

METCO is one of a few testing companies in the country that have achieved interim accreditation status in accordance with the standard practice for competence for air emissions testing bodies.”

Any company with an air stack is a major source of testing for METCO, says Bogar. “We insert probes into the stack and pull air samples of released air to determine if the companies are in compliance with EPA standards. We are NELAP-certified [National Environmental Laboratory Accreditation Program], and our certification is above reproach. This brings value to our clients because the reports we produce certify that we conducted the testing in accordance with EPA standards.”

EMLab P&K is the leading commercial indoor air quality company in North America, Bogar states. The company analyzes air samples and then prepares reports for clients. “We are the leader in analytical microscopy and indoor air quality testing. We helped shape the industry with our more than 20 years of experience in these kinds of analyses.” The company specializes in analyzing air and surface samples for fungi, bacteria, radon, asbestos and allergens. The diverse client base includes industrial hygienists, indoor air quality consultants, environmental specialists, mold remediation and HVAC contractors, hospitals, home

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inspectors, building owners and commercial property managers, and engineering and construction firms.

TestAmerica Drilling Corporation, located in California, provides drilling services throughout the Golden State. “We provide our clients with environmental and geological drilling services to support comprehensive site characterizations and remediation programs directed by industry consultants and regulatory agencies,” Bogar reports. “We take soil samples, and our clients test them for the existence of any kind of environmental problems.” Services range from routine subsurface geotechnical and environmental drilling to highly specialized services. “We revolutionized this business through innovations like the decontamination trailer and limited-access drilling rigs,” he continues.

“With our diverse fleet of equipment and experienced drillers, we provide safe and effective drilling services at competitive prices. Our field crews receive extensive classroom and hands-on training in the specialized arena of drilling in hazardous environments.”

The fifth company, TestAmerica Analytical Services, is the largest group under the umbrella of companies, with 36 fixed lab locations and an additional 31 service centers nationwide that offer a wide range of analytical testing, producing reports on these tests. “This company performs thousands of tests across the 36 labs in its network,” says Bogar. Many of these tests are conducted for the four other companies within the TestAmerica family. Some of the specialty analyses TestAmerica Analytical provides include testing air and drinking water for aquatic toxicity, explosives, specialty organics, dioxins, drinking water, sediments and tissues, emerging contaminants, radiochemistry and mixed waste testing.

“We continually invest in our people, technologies, and capital equipment and infrastructure to develop our

TestAmerica Inc.

unprecedented combination of resources, experience and testing capabilities,” says Bogar. The company is able to support clients in the public and private sector through its network of about 2,800 industry professionals. “We have the industry’s most unique and innovative solutions to address challenging opportunities for clients like the Department of Defense, the Department of Energy, and consulting and engineering firms supporting these sectors,” Bogar reports. He adds that TestAmerica is an industry leader helping to shape how analytical solutions are brought to market through establishing standards for quality and ethics.

A major benefit of belonging to such a large family of companies is the inherent synergies that enhance the development of efficient and effective results and that build strong customer relationships for each of the five companies, notes Bogar. “For instance, our drilling company is the first step in capturing methane gas from landfills. We can drill holes at a landfill. Then QED can

provide the pumps required to evacuate liquids from these areas so the methane gases can be captured, collected and transferred to a generating area to be used for energy instead of burning it off and sending those gases into the atmosphere. And our testing labs can test all the air, soil and water samples collected through the activities of our other companies. So the synergies between our companies are very important to the success of each.”

Bogar anticipates significant growth for the family of companies over the next several years, not only nationally but internationally as well. “We want to see year-over-year annual increases of between 8 and 15 percent. We are globally positioned to offer our clients quick responses to their requirements. With our global distributors in place for some of our businesses, we expect to expand our current reach in Europe, Asia, Australia, China, Japan and Latin America.” www.testamericainc.com

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Getting greener Nova Scotia Power is under provincial government mandates to increase its already extensive use of renewable energy dramatically over the next few years. Keith Regan learns how that will mean as much as $1 billion in investment in coming years, including one of the province’s largest wind farms

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he provincial government of Nova Scotia has set aggressive energy conservation and renewable energy production targets for Nova Scotia Power, the privately owned company that serves nearly a half million customers, supplies electricity to 96 percent of the homes and businesses in the province, and manages some $3.5 billion in assets.

Although some target dates have been modified, the regulations require not only conservation and increased grid efficiency but also new sources of energy that do not rely on fossil fuels. The province already generates and distributes power from wind installations, hydroelectric stations, a tidal power generator and biomass, says Graeme MacKenzie, director of project implementation.

“The targets are for new sources,” he says, noting that the requirement is to have 5 percent of total sales from new renewable installations by 2011 and 10 percent by 2013. Currently, the province gets about 12 percent of its power from renewable sources, much of it from hydroelectric but also from a number of relatively small wind farms that combined represent about 100 megawatts of generating capacity. “There is a high level of acceptance and fairly positive attitudes toward wind power and wind farms here,” MacKenzie adds.

In setting out the renewable targets, the Nova Scotia government had also mandated that, whenever possible, Nova Scotia Power reach its goals by striking agreements with independent power producers who would build and operate the plant and sell the power to the utility. The requirement is designed to help maximize the economic benefits of the investments being made to comply.

One such developer, Calgary-based EarthFirst Canada Inc., began design and preconstruction work on the utility’s Nuttby Mountain Wind Farm, a 22-turbine, 45-megawatt installation on one of the highest points in the province.

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Nova Scotia Power

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AMEC AMEC is proud to be associated with the Tufts Cove 6 Waste Heat Recovery Project in Dartmouth (Halifax), Nova Scotia. With responsibility for the project management, engineering, project services and construction management, AMEC is pleased to see the project progressing through construction with a number of key milestones already achieved. AMEC values its relationship with Nova Scotia Power – one that has been developed over many years.

The financial industry meltdown dented that developer’s ability to proceed with the $120 million project, and Nova Scotia Power has since stepped in to complete the work. “We spent a lot of time ensuring we had good suppliers for the turbines, and we feel confident that once we get the road built and equipment starts arriving on site, the project will go quickly,” MacKenzie comments.

Actual construction work on the turbines themselves was slated to begin in the spring of 2010, with the wind farm targeted to be brought online before the end of the year. Although in a somewhat remote location, the wind farm is close to existing transmission lines capable of handling the power from it, reducing the overall cost of the project significantly compared to a wind installation that required extensive support infrastructure, notes project manager Debra McLellan.

Nova Scotia Power hopes to bring the farm online quickly and have it added into the base energy load to help meet its regulatory targets. However, even at the best sites, wind power is not consistent and may not be available when the grid demands it most because of weather-related demand peaks or because of economic considerations driven by spikes in other fuel sources.

“Wind power is not dispatchable,” MacKenzie points out. “You get generation when the wind blows with quite a bit of variability. To be able to match the load with demand, you need something that can give you that additional flexibility.”

To that end, Nova Scotia Power embarked on plans to capture waste heat from two existing LM6000 natural-gas-fired combustion turbines that were put in place at Tufts Cove Generating Facility in 2003 and 2005 and that have the capacity to churn out 100 megawatts of power. Capturing this waste heat boosts efficiency by generating electricity without burning additional fuel.

Each LM6000 will be equipped with a once-through

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Nova Scotia Power

steam generator (OTSG), and together they will power a single new steam turbine generator to provide as much as 25 megawatts of electric generating power—with potential for twice that amount—by burning additional natural gas in the OTSGs. The $84.3 million project is also expected to be completed before the end of 2010, says project manager Dan Baur. It became feasible, he adds, as the Tufts Cove LM6000 combustion turbines were run more and more.

“Originally, these turbines were brought online to help smooth out the peaks or for quick response if anything happened on the system,” he says. Lower natural gas prices—the turbines are powered by gas from nearby Sable Island—compared with coal and other fuel sources as well as overall demand from Nova Scotia Power customers meant the plant was being run more and more often. “At 20 percent of capacity, it wasn’t feasible economically, but as the plant started to be run at 30 to 40 percent of capacity, it started to look like it

would be worth it to pick up that extra energy.”

The plant will be the first combined-cycle facility in Nova Scotia, and Baur says care was taken to choose equipment and support systems that will allow for maximum variability in how the plant is run to capture the most efficient mix possible.

In addition to the two new projects, investments have been made in making the electric grid more efficient and in educational outreach programs to promote conservation. Nova Scotia Power has estimated that it will spend as much as $1 billion over time to meet the government mandates. That will likely soon include additional renewable projects, including those that follow the independent power producer model again.

“We don’t have any other major plans before regulators at this time, but that will likely change very soon,” MacKenzie says. “Despite these projects and the gains we’ll realize from them, we still have several more to do in order to meet our targets.” www.nspower.ca

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Smartenin

up

South Alabama Electric Cooperative is in the midst of a mu effort to switch to an automatic metering system, part of a help consumers make wiser decisions about how and when and tie the use of power to the most economical possible g Keith Regan learns how the efforts will open doors for educ and business customers alike

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ultimillion-dollar a larger push to to use power generation source. cating consumers

South Alabama Electric Cooperative

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ike virtually all of its utility counterparts, the holy grail for Troy, Alabama–based South Alabama Electric Cooperative (SAEC) is the game-changing move from a simple, fixedrate environment to a dynamic and variable one that charges customers more or less based on the nature and time of their power usage—and how that usage impacts the electricity that the utility buys or generates for its customers.

SAEC’s CEO, Max Davis, who has been at the helm of the cooperative since 1982, says the need is a pressing one as the South faces the likelihood of needing to add additional power-generating capacity within the next seven to ten years. That is a stark contrast to recent decades, when the South found itself with excess capacity after years of building coal and natural gas generating facilities.

“We went from encouraging use to encouraging conservation. The difference today is that we’re not pushing just conservation but smart use of power,” Davis says of the 73-year-old cooperative. “We want to be able to send better price signals to encourage smarter use. We’ve reached that point where we need to make the investment to have a smarter grid.”

The main part of that effort is an Automated Metering Infrastructure (AMI) rollout scheduled to begin in earnest in the summer of 2010 and continue until all 17,000 customers are on automated meters, a $3.4 million project that will likely take about 15 months to complete.

The utility had hoped to win stimulus money to advance the project but was not selected. “We did all our due diligence at the beginning of 2009, and the board of trustees didn’t want to see that go to waste, so the decision was made to move forward with smart metering,” Davis says.

The system that was chosen, Davis believes, will not only pay for itself quickly and provide almost immediate benefits but also set the utility up for even greater opportunities for encouraging off-peak power usage as smart home area networks and smart appliances begin to be more widely used. To make the best possible use of the data being gathered by the new meters, SAEC is also working on a consumer portal Web site at which customers will be able to see powerusage patterns overlaid with related data, such as time and temperature. The Web is already a key part of the utility’s conservation education efforts, with customers able to do self-evaluations of their energy consumption patterns.

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South Alabama Electric Cooperative

Because much of its service area is rural in nature, the cooperative is involved in efforts to extend broadband coverage to remote areas. “While we will have information that is valuable and can really mean something to a consumer, they have to be able to access it,” Davis says. SAEC is partnering with local companies that are fostering broadband network expansion into the remote parts of southern Alabama. “We’re out touching many of those remote customers, so we’re trying to address that need as well at the same time.”

One of the largest power users in the cooperative’s district is Fort Rucker, a US Army base that is used to train helicopter pilots in several branches of the service. The base has signed a utility energy services contract (UESC) to help it meet a Department of Defense mandate to roll energy usage back to 1985 levels. Working with Siemens, the utility is providing demand-side management and conservation programs, gaining knowledge that can be used with private-sector customers in the future. “Siemens is able to work with

us and help them do a better job, and we take away tremendous knowledge and insight as to how we can translate that information elsewhere in our customer base,” says Davis.

While large-scale power installations will be needed down the road, SAEC and its power supplier, PowerSouth, is working now to help give itself more peak capacity, building two 167-megawatt gas power turbines that could be converted into a combined-cycle plant with a third generator in the future. PowerSouth has also signed an agreement with the Municipal Electrical Association of Georgia to buy power from a planned nuclear power plant that could be brought onto the grid by 2017. The utility is also hoping to buy power from a planned 110-megawatt biomass plant being considered in the area.

Although conservation efforts are bearing fruit, weather continues to be a major driver of power usage that can quickly trump even the most aggressive efforts to encourage conservation. In fact, early 2010 saw a long stretch of cold, wintry weather—an unusual occurrence for the region, which is just two hours north of the Gulf of Mexico. Power usage was up more than 21 percent in January 2010 compared to the same month in 2009, and 17 percent higher in February. “The system held up well with few disruptions, but those levels are something we worry about,” Davis says.

At the same time, some long-term trends will continue to drive additional electricity consumption, including the proliferation of plasma TVs, high-definition DVD players and a host of handheld devices that require recharging.

“That’s an area where we know we’re going to be able to work with our consumers for conservation down the road,” Davis says. “Consumers need to become more aware of the fact that those trends are impacting power demand as well.”

The region will see its own organic growth as well in coming years. A software company recently announced plans for a facility that will house 300 workers and draw talent from nearby Troy University, which continues to expand as well. Other industries include farming and manufacturing, some of which have been hit hard by the recession, but Davis says recent months have seen renewed interest in possible expansion or relocation projects.

“We expect that we’ll see more growth, and we have the infrastructure in place to serve that increased demand,” Davis adds. “We’re just focused on making sure we can deliver consumers not only the power they need but the information they require to make smart decisions about how to use it.” www.southaec.com

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green From to

greenpow

Ram Power, Corp. was formed through a business combination of three geothermal energy companies to develop projects in North and Latin America that offer a return on shareholders’ investment, as David Hendricks learns from executive vice president Dan Schochet

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am Power, Corp. is a renewable energy company based in Reno, Nevada, focused on developing, owning and operating geothermal power plants. It was founded in 2008 as Ram Power, Inc., by former senior executives from Ormat Technologies, which is also in the business of geothermal energy development. “We decided to form Ram Power because we wanted to have a piece of the action, and working at Ormat wasn’t as much fun as it used to be years earlier,” says executive vice president Dan Schochet, whose primary responsibility is business development.

Initially Ram Power had a substantial financial commitment from an Icelandic company and an Icelandic bank, which unfortunately fell through because of the global economic crisis in late 2008, Schochet says. “We began seeking independent financing; we met with a number of US-based private equity firms, but that field didn’t prove productive for the corporate seed capital we needed to get started.

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Ram Power, Corp.

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“Our approach, based o experience, is that ever a return on investment for development is set h

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on our management team’s many years of y project that we develop should provide for the shareholders. So the threshold high”

Ram Power, Corp.

“We were directed,” Schochet continues, “through a series of fortuitous events, into a transaction that culminated on October 20, 2009, with Ram Power amalgamating with two geothermal companies listed on the Toronto Stock Exchange, Western GeoPower and Polaris Geothermal, with Ram Power management in control of the new company—Ram Power, Corp., which was able to raise about C$180 million as a stock offering on the Toronto Stock Exchange. The reason we listed there was that the Canadian capital markets are geared toward investment in resource-based companies, and the risk associated with those kinds of companies is not new to them; the mainly institutional investors we attracted are located everywhere, not just the US and Canada.”

That gave the new Ram Power the impetus it needed to start on its project development, and though the company started out with the intention of securing C$120 million in funding, it soon found itself oversubscribed to C$180 million. “The reason was that we had a good story to tell,” Schochet says. “We highlighted the most advanced project of each of the three companies.”

Western GeoPower had a project in Northern California at The Geysers, where enough previous drilling had been successfully performed to mitigate any resource risk, and there was a 20-year contract to sell the power to Northern California Power Agency.

“We’ve put The Geysers on hold temporarily while we consider our options to optimize value,” Schochet explains.

“The reason is that the 25-megawatt [MW] power output is relatively small for that area. Our approach, based on our management team’s many, many years of experience, is that every project that we develop should provide a return on investment for the shareholders. So the threshold for development is set high, particularly, for example, in a single geothermal operating project, where the size of the staff will be the same whether the output is 25 or 50 MW.” Polaris Geothermal’s major project in Nicaragua—the San Jacinto-Tizate project—also had enough previous drilling to mitigate the resource risk, and there was already a relatively inefficient 10-MW backpressure turbine online, with plans to extend to 72 MW, and an agreement to sell the power to a local distribution utility.

This project is currently under construction. Ram Power has closed on debt financing, and the first 36-MW Fuji turbo generator is on site and should be operating by early 2011; the second turbo generator will be installed by the end of 2011, only two years after the company took over there. “We have also acquired some concessions in Chile,” says Schochet. “They’re long-term prospects, on the assumption that Chile is one of the most transparent

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of South American countries to work in, and the resources might be developed in about five or six years.”

Ram Power itself had a 50-MW project called Orita in the Imperial Valley in Southern California, on a leased block that was previously drilled by oil companies in the 1980s. Ram Power had a power sales agreement signed

by Southern California Edison Company. Orita was ready for development, permitting was ready to begin, and the management team had experience in that area.

“We used those three as advanced development projects upon which to base the company’s valuation,” Schochet says. “We labeled all the other prospects the company had—which totaled perhaps 700 megawatts—as pipeline prospects, and we gave them a low risk-adjusted probability and valuation.

Today in the renewable energy space, whether wind, solar or geothermal, investors aren’t looking for early pipeline projects; they want projects that are advanced enough to become revenue-producing properties with contracts signed by investment-grade firms.”

Ram Power has a number of leaseholds in the Imperial Valley, where the resource prospects are considered among the best in the US. As Schochet explains, “Our experience there, and from the oil companies in the 1980s, is that there are still vast undeveloped areas, and by focusing on those we accomplish two things. First, we’re going into areas of proven geothermal resources. Second, we have a proprietary database that gives us a head start, and we can then do additional geophysical exploration on the ground ourselves and verify that the previous data are still valid.”

The company has a project area in the Clayton Valley in rural central Nevada, where it acquired five greenfield geothermal prospect blocks, each about 5,000 acres and located roughly ten miles apart, that don’t connect geologically but could be connected with power lines.

“The utility there knows us well, so they asked us to consider offering them an energy supply arrangement in a portfolio fashion,” says Schochet. “We suggested that if they gave us enough time to explore, we would be able to generate 32 megawatts, possibly a lot more. But if they committed to the first 32 megawatts, we would offer them the right of first offer to anything additional in the Clayton Valley, and they agreed on that basis.

“Our business strategy is simple but effective,” he adds. “Find out what your customer’s needs are and try to meet them. We believe that our business model provides the most value for our investors, our customers and our employees. If we can satisfy all those stakeholders, then we’ll consider ourselves a success.” www.ram-power.com

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Fuels

for a

cleaner future It may be an overused saying, but there really is no substitute for experience, especially in the burgeoning new world of synthetic fuels production. That mantra sits especially comfortably at one of Louisiana’s newest establishments, Dynamic Fuels, LLC, where a little local knowledge goes a long way, Andrew Pelis finds

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Dynamic Fuels, LLC

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ynamic Fuels, LLC, based in Geismar, Louisiana, is a 50/50 joint venture between Arkansas conglomerate Tyson Foods, Inc., and Syntroleum Corporation out of Tulsa, Oklahoma.

The two parties have forged a partnership to build upon the growing area of renewable synthetic fuels aimed to produce energy in a manner that reduces life-cycle greenhouse gas emissions, while building forward-compatible renewable fuels infrastructure. The site currently being built in Geismar will represent North America’s first commercially sized renewable, synthetic diesel fuels plant.

Synthetic fuels are one of the few economically viable and industrially scalable alternatives to petroleum capable of providing a major source of the liquid transportation fuels required to run the economy, and a potential new source of aviation fuel.

The plant is configured to produce diesel fuel but could switch to production of aviation fuel when aircraft are certified to use the synthetic fuel and pricing is competitive with diesel, according to plant manager Don Duga.

“Dynamic Fuels can provide diesel fuel and is poised to supply jet fuel when the market becomes a reality. We’re under construction and will soon be operational, so our priority remains the successful transition from pilot scale to full commercial operation. We expect to be mechanically complete in June and become fully operational throughout the summer months,” he explains.

“The plant in Geismar is a commercial production facility,” Duga continues. “It’s not set up to do research and development; all our R&D is conducted at Syntroleum’s laboratories and pilot facilities. We’re just going to focus on producing our synthetic diesel initially and continue working closely with those markets to transition us into the jet fuels markets.”

Experience comes to a large extent from location, according to Duga, who comes from a chemical background and most recently worked at starting up ethanol plants. He says that with so many refineries in this part of the country, he has been able to hire a team of experts with most bringing 10 or more years of petrochemical knowledge to the fledgling operation.

“At this stage our priority is to ensure that everything is installed correctly, that all the maintenance and quality processes are in place, and that all my staff are properly trained in the new process and clearly understand the importance and focus required for operating a safe and environmentally responsible facility,” Duga says.

“We’re now fully staffed, and we’ve been very fortunate

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PumpWorks 610 When Dynamic Fuels needed API 610 pumps for their most critical services to meet an aggressive schedule, the choice was clear. They called PumpWorks 610, the proven workhorse of the hydrocarbon processing industry. As standard, PumpWorks 610 assures the highest level of quality and shortest delivery (16 weeks) with 100 percent of the engineering, manufacturing, assembly and performance testing done in the U.S.A. Call PumpWorks 610 - “When quality and delivery matter.”

Empire Scaffold LLC Scaffolding is our specialty!

Empire Scaffold LLC is one of the few specialty contractors left in the industry. By specializing, our employees know what is expected of them for the work they perform day in and day out, allowing them to stay focused on safety! We’re building scaffolding to put you on top.

Yes, Empire is ONE of the FEW!

that nearly all of our operators came here with prior knowledge of hydro-treating and refinery operations experience. Those that haven’t worked in refineries have extensive chemical or ethanol process experience.

“The main focus at this point is to make sure that our process runs as designed,” Duga adds. “We already have agreements in place with local companies to deliver many of our raw materials. We’re in the final stages of setting up our service agreements while currently negotiating with potential customers ahead of production.”

Producing the fuel, he says, is a three-step process that requires a very reliable supply of hydrogen, which is conveniently close at hand at nearby Praxair. Indeed, proximity to suppliers and customers was a primary consideration in the joint venture’s selecting Geismar as the base for its nearly $170 million project.

“We use a mixture of low-cost feedstocks delivered to the plant by a combination of rail and truck, and we react it with hydrogen to restructure the molecule to produce a normal paraffin, and then continue the process to

convert to an isoparaffin. The remaining steps are the standard fractionation process,” Duga explains.

“The primary product is the synthetic diesel fuel, which can be sold as a blend for refineries to satisfy their RFS [Renewable Fuel Standard] requirements or can be used neat, meaning that it can go directly into any diesel engine from the pump at 100 percent, but we also produce naphtha and liquid petroleum gas [LPG].

As non-fossil fuels, our products are much cleaner burning and contain less than one part per million of sulphur. Our fuel generates 74 percent less greenhouse gas than burning a gallon of petroleum-based diesel.”

“The pioneering technology we use was devised

by Syntroleum and is known as Bio-Synfining,” Duga says. “A couple of years ago, Syntroleum was talking to suppliers of animal fats as it began to commercialize its technology, and Tyson, who already had a renewable fuels division, decided it would rather be a partner than just a supplier.”

According to Duga, a large proportion of the investment on site went into purchasing high-pressure reactors, heat exchangers and reciprocating compressors, which are all standard capital in the refinery business for pumping hydrogen up to high pressure levels and cracking animal fat molecules.

“In 2008, at the time the site was being designed, lots of refineries were retrofitting their plants, and there was not much shop space available for our equipment, so we ended up purchasing some equipment from Korea and India,” he says.

Duga is looking no farther ahead than the start of production right now, but he says that Dynamic Fuels is currently utilizing only about half of the 25-acre site it has leased, offering plenty of scope for further development. The plant is designed to produce a nominal 5,000 barrels per day or approximately 75 million gallons per year of finished product.

Such a large-scale production is bound to throw up opportunities to improve efficiency, but Duga says that will take time to establish. “Post scale-up, we can look at how efficient our processes are, and I feel confident that with the experience we’ve brought in, we can look at improvements when we’re fully functional. Similarly, our approach to quality control may change in time, and we know what process parameters we can change to alter the quality results that we generate.” Asked if ISO accreditation was a goal for the future, Duga responds, “ISO is customer-driven, and if our customers require it, then it could be a route we might take in the future.”

Of course, with production comes waste, or in the case of Geismar, wastewater specifically. “Once

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Petrin Corporation Petrin Corporation is proud to work with Dynamic Fuels in building its pilot plant. Petrin not only provided the labor for insulation and electric tracing but was also able to utilize just in time delivery for insulation materials due to limited space at the site. In addition, Petrin provides coatings, removable covers and energy audits for the industrial industry.

we produce some of our first quantities and know specifically the concentrations of the by-products we’re dealing with, we can then determine the magnitude of recycling. You can be assured that recycling is part of our improvement plan going forward,” adds Duga.

The Dynamic Fuels story might just be getting started, but next year the target is to produce approximately 62 million gallons of diesel, about 7 million gallons of naphtha, and about 6 million gallons of LPG. At a time when the environment has never been more on the nation’s conscience, it’s good to know that hard work, ingenuity and experience are helping to secure a cleaner future. www.dynamicfuelsllc.com

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Avoiding “bighat, nocattle” Having a solid reputation and strong technology is a good start, but as Alan Swaby learns from Peerless COO Warren Hayslip, it’s only a start

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eerless Mfg. Co. is one of those engineering companies that give hope to the rest of the country’s industrial base.

Yes, it does have a new factory in China, but it also maintains an active US manufacturing base, with four plants operating in Texas. Having an Asian manufacturing center is related more to logistics and the requirements of “local content” than a purely economic decision. “Because of the size of the equipment Peerless makes,” says COO Warren Hayslip, “it often makes more sense to build products closer to where they will be installed than to ship them around the world, and the Pacific Rim is one of the fastest-growing regions for us.”

The chances are that precious few outside the energy sector will have heard of Peerless, and yet everyone who heats their home with natural gas owes a vote of thanks to that company. It was founder Donald Sillers who, back in the 1930s, hit upon the ingenious idea of odorizing otherwise undetectable natural gas and thereby helped remove the danger of gas accumulations that had previously threatened communities with fires and explosions.

But Sillers had plenty of other ingenious ideas, and he built a successful business around various ways of filtering and purifying natural gas. His patented inertial vane designs revolutionized the separation of foreign contaminants from natural gas and made possible the delivery of clean, safe fuel for use in homes and businesses. And on the post-combustion side of natural gas, Peerless is the world leader in selective catalytic reduction (SCR) systems, which convert nitrogen

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oxides (NO x ) produced when natural gas is burned into harmless nitrogen and water. Over 100,000 megawatts of electric utility generating plants now have Peerless SCR systems operating and reducing pollution, as well as countless other items of equipment such as fired heaters, boilers and industrial combustion processes.

In absolute terms, it’s not a particularly large company.

Revenue stood at $158 million in its last fiscal year, and it employs 350. But the broader filtration & separation industry—where Peerless successfully competes—is very fragmented and no single company dominates there. When solutions need to be engineered for specific situations, there’s no such thing as “one size fits all.”

Peerless does have some proprietary products, but generally the approach is to design systems around the technology it possesses. Contracts can be worth less than $50,000 and take just a few weeks to complete, or they may stretch to 18 months or more and have price tags of many millions of dollars.

Just over two years ago, Peerless acquired New York–based Nitram Energy, Inc. and with it, access to vital technology from Nitram’s subsidiaries Burgess-Manning, Bos-Hatten, and Alco Products. This has opened doors to other markets throughout the oil/natural gas, chemical/petrochemical and power generation industries.

Against this background of complex challenges, highly engineered solutions and market fragmentation, Hayslip was recruited by the company’s CEO, Peter Burlage, to put order into the way the business runs and improve operational effectiveness. Although Hayslip’s tenure at the firm is only six months old, the measures taken to restructure the company are already taking shape. “The objective,” he says, “is to focus everything we do on what the customer requires.

Whereas earlier the company was structured more in terms of technology and products, we’re now moving to an operating structure defined by end-use markets and where other support functions and disciplines within the company will be unified and aligned.”

As such, Peerless has divided its activities into four market areas: environmental systems, pressurized products, process equipment and separation systems.

Although it’s still most closely associated with natural gas production and purification, it has a presence in other forms of energy—including nuclear—and throughout petrochemical and industrial processing.

Further, it supplies state-of-the art equipment to the US

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“Because of th it often makes where they wil the world, and growing region

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military and almost anywhere where demand exists for complex, highly engineered systems for natural gas.

Although Peerless’s direct customers tend to be located in the industrialized Western countries, the products and systems it produces find their way into the most remote corners of the world. Rather than trying to manage every detail from the company’s US offices (in Dallas, Buffalo and Houston), regional offices in Canada, the UK, Qatar, Singapore, and other parts of the world have been established and given the responsibility to improve performance throughout the Americas, Europe, Middle East, Africa, and fast-growing Asia-Pacific.

he size of the equipment Peerless makes, more sense to build products closer to ll be installed than to ship them around d the Pacific Rim is one of the fastestns for us” Having responsibility for all operational functions at Peerless—from sales order to shipment—gives Hayslip the opportunity to see the business work under a single unifying light. And with the company being very technically driven, Hayslip has taken steps to bring the engineering departments closer together, with designers and engineers working side by side with their R&D colleagues, and none of them are very far from sales and marketing.

“When you’re talking about the way in which a company is restructured,” says Hayslip, “it’s never a question of black or white. But by looking at the situation from a slightly different angle or tweaking things here and there, it’s possible to get more leverage out of the things you’re already doing. This is what continuous improvement is all about.”

Although engineering and design are the kingpins around which the business functions, with a reputation for robust, durable, high-quality products to protect, accuracy and quality control on the shop floor are fundamental.

To strengthen Peerless’s manufacturing capabilities, a significant portion of the $15.9 million recently raised by issuing new shares will go into modernizing machinery and plant facilities at various locations.

Even with its own factories and the two it acquired with the purchase of Nitram, it isn’t possible for

Peerless to manufacture every item that goes into an installation, and considerable use is made of an extensive network of subcontractors. The nature of the business means that work must be carried out to the most exacting standards and specifications, which calls for strict qualification processes and tight control over output. This has been most critical in applications for the nuclear industry and the US military.

In fact, Hayslip talks about the company having two types of factories—the “physical factory” (represented by its production facilities) and the company’s “information factory” (represented by its offices around the world). In other words, he sees no difference in making the front office running of the business—sales, marketing, finance and accounting—work as efficiently, with cost reductions and higher productivity, as is commonly expected on the factory floor.

It’s in the area of monitoring performance that the most noticeable changes have taken place. “We’re now measuring what we call ‘3-D performance’: speed, accuracy and cost,” says Hayslip, “and if you add safety, it becomes 4-D.” The company’s ERP system has been significantly upgraded, and 11 distinct stages have been identified from sales order to shipment. Performance is now being monitored and measured in terms of speed, accuracy and cost at each of these 11 stages.

To date, Peerless has progressed thanks to the high caliber of the top level of managers, many of whom are highly trained engineers in their own right.

But if Hayslip is to meet his charge in developing the global potential of the business, he’s going to depend to a large extent on developing a new generation of strong middle management. The specialized nature of the business means that few employees arrive at the company with sufficiently detailed knowledge of its products and markets, and it has always been the case that Peerless has had to draw from good-quality—but general—engineering stock and then train them up to the specific needs of their own particular market. In the future, Hayslip will have to apply the same modus operandi to his managers.

“With a foot in both the environmental and energy camps,” says Hayslip, “and good technological credentials, Peerless is strategically well positioned.

But we need to scale up in size. And to do that, we have to execute on our strategic plans and overcome what Texans refer to as ‘big hat, no cattle,’ and make a real mark on the industries we’re in.” www.peerlessmfg.com

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Stulz Air Technology Systems Inc.

customer Over the past six years, Stulz Air Technology Systems has led a revolution in the data center HVAC marketplace. Oliver Stulz and David Meadows talk to Gay Sutton about continuing the technological development, reducing energy costs and cutting the carbon footprint

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ew technological advances come either as the result of continuous evolution or as a paradigm shift that changes the nature of the marketplace and forces competitors into a game of catch-up. Over the past six years just such a paradigm shift has become evident in the niche HVAC market supplying specialist precision air conditioners and humidifiers to data centers.

The company to introduce this groundbreaking technology was Stulz Air Technology Systems (Stulz-ATS), the US arm of the Stulz Group of Germany, a privately owned group that also manufactures plastic components for the automotive industry. A global leader in precision air conditioning for data centers, Stulz has manufacturing facilities in Germany, Italy, India, China, and in Frederick, Maryland.

“For many years the precision air conditioning market in the US had been dominated by one major player, and I would say that the technology had remained pretty much the same for around 20 years,” explains company president Oliver Stulz. “In 2004 we introduced industry-changing technologies into this stagnant market. At the same time, we saw an increase in demand for our ultrasonic humidifiers when energy savings became a higher priority for data center owners.”

Ultrasonic humidification has become an excellent tool in the fight to reduce carbon emissions. The traditional methods for producing humidity are infrared bulb and steam canister, which both produce steam by boiling water. “But the last thing you want in a data center, which needs to be cool, is steam,” Stulz says. “Our

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ultrasonic humidifier uses mechanical movement to produce humidity so no heating is involved. It also produces an adiabatic cooling effect, which means the computer room air handler [CRAH] has to work less hard.” Independently verified tests have shown that this unit regularly achieves an impressive 93 percent energy saving.

The industry changing technological innovation was the design of new CRAH units with unique design features using the EC (electronically commutated) fan and a cabinet designed to reduce the pressure drop inside the cabinet, therefore reducing the work done by the fan in drawing air through the unit. Previous conventional CRAHs incorporated a forward curved centrifugal blower that in most cases had two settings, on and off.

“The EC fan is proportionate controlled,” Stulz says, “which means the speed can be varied to match the load, and this can deliver considerable energy savings. The fan is more efficient. It doesn’t have any belts or pulleys, so it doesn’t create belt dust and maintenance is practically eliminated. It improves the air distribution, and at partial load it maintains its high efficiency.”

The company has undertaken direct comparison studies pitting the new CRAH units against outdated technology from its competitors, and it has proved that for the same footprint the units with these new design features require up to 40 percent less energy to perform the same task.

The impact of these innovations on the US market has been significant, and in 2008 Stulz-ATS received formal recognition when it was presented with the Frost and Sullivan American Data Center Cooling Solutions Growth Strategy Leadership of the Year Award. The award was based on an average growth in excess of 20 percent per annum over the previous five years, driven by new technology, and that growth rate has continued. Today the company’s market share has roughly tripled. While its competitors in the industry are introducing the EC fans to their own portfolio of products, Stulz-ATS still enjoys a head start of four to five years of optimizing the design.

Remaining at the forefront of product development is a key element of company strategy, and Stulz-ATS invests heavily in R&D, first to continue improving the current product portfolio and second to develop new technology.

R&D for the North American market is largely done at the Maryland site, but its engineers have access to the knowledge and technical capabilities of the group’s R&D centers worldwide.

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“One of the technologies we are currently looking at is optimized air and water economizers,” Stulz explains. “It’s an important area of development for us. We have substantial resources allocated to it, and we’ve been working together with our R&D colleagues in Germany on this.”

R&D efforts are also being focused on reducing energy consumption even further, through improvements to cabinet design and the use of control algorithms to prevent dehumidification of the air (dew point control).

“We’ve also been the first to introduce the EC fans into direct expansion systems,” says applications engineering manager Dave Meadows. “We’ve found a way to vary the fan speed without reducing the reliability of the compressors, which has always been an issue in the past.”

While the company manufactures a range of standard products, many of these are customized to the individual operating environments of its customers.

Moreover, new developments and improvements can arise from unique customer needs. “For large projects, where customers have very specific needs,” Meadows explains, “our sales representatives bring our applications and R&D groups together with the clients to discuss their specific requirements and develop a suitable product. Very often these custom improvements evolve into a standard offering.”

One customer, for example, wanted to incorporate two separate power sources and two separate cooling water sources into the CRAH unit to increase reliability.

“After we had designed the unit, we found many of our customers had the same needs, so we’ve been able to introduce this product to them,” Meadows says.

Stulz-ATS also works closely with server manufacturers to ensure its products are optimized to provide the right operating environment, and this collaboration looks set to go a stage further. “We’re working on some interesting container projects at the moment,” Stulz says. “Incorporating the infrastructure, equipment and servers into a container is one new way of deploying data centers. It’s a little early to celebrate yet, but we have established a unique and innovative product offering for the container market.”

Looking to the future, the company’s strategy is to continue investing in product development, both in terms of reducing the energy and carbon footprint of existing products and pushing the boundaries to develop new technologies and explore new concepts for data center cooling. “Our aim is to stay ahead of the curve,” Stulz concludes. www.stulz-ats.com

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The Panama Canal Expansion pr civil and mechanical engineering today. John O’Hanlon speaks to managing director of Grupo Uni consortium responsible for its fl

tal

roject is one of the largest g jobs under construction Antonio Zaffaroni, idos por el Canal, the flagship contract

Grupo Unidos por el Canal

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n July 15, 2009, the Panama Canal Authority (ACP) announced that Grupo Unidos por el Canal (GUPC) been granted the job of designing and building the new set of locks that join the Panama Canal to the Atlantic Ocean at one end and the Pacific Ocean at the other. There was fierce competition for this massive project, worth well over $3 billion, with two other international consortia prequalified and in the bidding, but ACP judged that GUPC presented the best value proposition and had the resources to execute the project and bring it to completion by the scheduled date, August 2014, on the centenary of the canal’s opening.

ACP has had the job of managing the world’s most important commercial and strategic waterway since it was handed over to Panama by the US in 1977. The expansion megaproject is a big deal for Panama and international trade since the canal had been running close to capacity for some time now and needed to be able to handle larger ships.

The existing two sets of locks, which raise ships 85 feet from sea level, define the “Panamax” standard limiting container vessels to 5,000 TEU (twentyfoot equivalent units); the new locks will be able to handle 13,000 TEU “postPanamax” ships. The new Pacific locks are to the southwest of the existing Miraflores Locks. The Atlantic locks are east of Gatun Locks. Each set of locks will have three gravity-operated levels or chambers. Each chamber will be accompanied by three water-saving basins, allowing the reutilization of 60 percent of the water in each transit.

GUPC is a consortium comprising Sacyr Vallehermoso SA of Spain, Impregilo SpA of Italy, dredging specialist Jan De Nul NV of the Netherlands, and the Panamanian construction company Constructora Urbana. It is led by Antonio Zaffaroni, an Italian engineer who has spent the last 35 years working on some of the largest projects in the world—most recently the spectacular (but delayed) €6 billion Messina Bridge that will one day link Italy and Sicily. The Panama Canal may be his swan song, and he recognizes that for any engineer this would be a good way to close out a career.

The project is a large one, but not particularly complex, says Zaffaroni. It has gone smoothly so far with installation, industrial preparation and mobilization of heavyduty machines precisely on schedule. In fact, he expects to be able to complete the current excavation phase almost a year under schedule. “The contract consists of three main elements: excavation, concreting, and the installation of the gates and all the electromechanical equipment,” he explains. “Getting the excavation done and cleaned up early is beginning to seem feasible, so we are moving in that direction. That will give us better conditions to do the concrete pouring, and then we will see if we can save time on the concreting phase.”

The installation phase and the time that will have to be spent testing the operating systems can’t really be cut, Zaffaroni says, so don’t expect him to pull back the completion date by a whole year. But he promises to save a significant amount of time, and time saved means savings in indirect costs. Not that either of these considerations is the main motivation. “It’s always good if you can conclude the work early, but this is really about professional pride, for our team to prove that we can do the highest-profile

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“Getting the excavation done and cleaned up early is beginning to seem feasible, so we are moving in that direction. That will give us better conditions to do the concrete pouring, and then we will see if we can save time on the concreting phase” Sisgeo Sisgeo is a leading designer and manufacturer of a wide range of instruments for rock, soil and structural displacements monitoring.

Sisgeo, alongside GUPC and SC Sembenelli Consulting, is involved in the Panama Canal’s enlargement works by monitoring the dewatering activities and the construction of coffer dams.

Sisgeo is honoured to be given the opportunity to offer GUPC’s team its expertise, providing cutting edge quality products, on-site technical assistance and a complete array of services aimed to support the contractor with tailored solutions before and during the critical phases of the project.

job in the world in the best possible way.”

In fact, the scale of the project helps rather than hinders the schedule. When a problem is encountered, you simply get on with another part of it while you sort it out, he says. “We hit some geological problems in the lower chamber on the Pacific side, so we shifted our priority to the upper chamber and maintained the program as a whole.”

You might also expect the day-to-day demands of canal operations to be affected by an upgrade of this magnitude, but not so, says Zaffaroni. “We do have to coordinate blasting operations on the Pacific side, but we work farther away from the Miraflores Locks and we do not foresee any interference.” The only activity carried out in the same place where the ACP operates is the movement of aggregates by barge through the canal, he adds.

That’s just one of the logistics streams that play a key part in the smooth operation of this and any other project, Zaffaroni emphasizes. “We have thousands of tons and

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millions of dollars of supplies that have to be designed, produced, tested, transported to the site, installed and tested again. The civil engineering underpins the whole thing, but even that can’t go ahead if the supply of the other elements is not done in good time.”

MRP, design and project planning, financial control, HR and the like are controlled by a combination of proprietary programs like Primavera and software developed in-house by GUPC and by the companies constituting the joint venture. The expansion program is important to Panama not only because of the income it will generate from traffic; it is a huge opportunity for development, and not least for raising the education and skills level of its population. GUPC is currently employing 2,000 workers, but at the end of 2010 it will be increasing this to 7,000.

The company is working with the Ministry of Labor and with the National Vocational Training Institute for Human Development (INADEH) to recruit the best

graduates from universities and colleges, offer them jobs on the project, and train them. “At the beginning we have relatively high numbers of foreign experts coming in to set up the facilities, but these guys are just meant to come in and train the locals. Knowledge transfer is one of the collateral benefits of the project.”

The experience will create a pool of qualified and employable people ready to use their skills and expertise in Panama. Once the project is complete, it is the policy of companies like Sacyr Vallehermoso and Impregilo to employ some of them in its operations around the world.

In the meantime there’s a great deal of infrastructure work to be done in this fast-developing country, paid for by the income it will receive from the Canal. Estimated at $2 billion this year, the Canal contributes about 20 percent to Panama’s GDP. If traffic increases as expected with the estimated rise in toll rates as sea trade picks up after the recession, that figure could increase significantly. http://www.acp.gob.pa/eng/index.html

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gold mine forthe

community

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Compañía de Minas Buenaventura

The current high price of gold has led to unprecedented levels of mining that threaten deforestation and create fears of impending ecological disaster. Against this backdrop, Andrew Pelis finds it reassuring to learn that one Peruvian company is trying to address the environmental and social issues at stake with a series of measures

C

ompañía de Minas Buenaventura is Peru’s largest publicly traded precious metals company and a major holder of mining rights in Peru. The company is engaged in the mining, processing, development and exploration of gold and silver and other metals via wholly owned mines and through its involvement in joint exploration projects.

Lima-based Buenaventura aims to maintain the highest environmental standards and best operational practices within a climate of sincere respect for other people and their cultures.

One of the company’s main social goals is to improve access to and management of the watershed system that surrounds its developments, by means of constructing dams, canals and irrigation systems. This ties in with Buenaventura’s efforts to create a “brotherhood” of water that improves the availability and flow of this vital natural resource. Furthermore, the company has embarked upon a number of reforestation projects and has begun to address the problem of efficient soil management.

Buenaventura currently operates several mines in Peru (Orcopampa, Poracota, Uchucchacua, Antapite, Julcani, Recuperada and Caraveli) and has a controlling interest in two mining companies (CEDIMIN and El Brocal) as well as a minority interest in several other mining companies in Peru.

Originally established in 1953, the company is a sociedad anónima abierta (open stock company), incorporated under Peruvian laws. It has been listed on the Lima Stock Exchange since 1971 and on the New York Stock Exchange since 1996.

Buenaventura’s first quarter-century was focused primarily on the exploration of silver mines, and it was during this period that the company purchased the Julcani mine and began its exploration of the Orcopampa mine, which began production in 1965. Further exploration of the Uchucchacua mine took place in 1960, and this site was fully operational by the mid-1970s. At this time, political instability led the company to expand its exploration to other parts of South America, including Colombia, Ecuador, Venezuela, Bolivia and Argentina.

By the latter part of the 1980s, Buenaventura had begun to expand its production efforts and efficiency through a series of measures including property acquisitions and intensive exploration programs. This included the acquisition of an equity interest in the much-vaunted Yanacocha mine located in the Peruvian Andes, approximately 850 kilometers from the country’s capital, Lima. It is the largest and most profitable gold mine in Latin America and was created with the support of the International Finance Corporation (IFC) in 1993. The IFC subsequently backed several expansions of the Yanacocha mine.

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“One of the company’s main social goals is to improve access to and management of the watershed system that surrounds its developments, by means of constructing dams, canals and irrigation systems” Minera Yanacocha is a huge open-pit gold mine spreading over a concession of about 25,000 hectares and has been mined as a joint venture between USbased Newmont Mining Corporation and Condesa (a subsidiary of Minas Buenaventura) since 1992, with the IFC retaining the balance of 5 percent of the shares.

Further exploration led to the discovery of gold mineralization and the subsequent production of gold at the Orcopampa, Shila, Ishihuinca and Antapite mines, and these finds changed the profile of the company from a silver producer to a gold producer.

Given the potential damage that exploration and mining can have on the environment, Buenaventura has introduced a number of measures to mitigate the effects of its work through its safety, health, quality and environmental system, modeled around internationally recognized standards. The environmental aspects of this initiative are based on the ISO 14001 Environmental Management standard, while the safety side is based upon OHSAS 18001 and the quality element on ISO 9001.

The company’s philosophy places production and environmental protection hand-in-hand, and it is this belief that empowers its sustainable development efforts, which focus on social, environmental and economic issues at each mining location.

The Orcopampa site was the company’s first mining unit to gain ISO 14001 accreditation back in 2002, with further sites attaining this environmental acknowledgment in the ensuing years. Furthermore, Buenaventura’s commitment to the environment (in accordance with the current regulations it must adhere to) has seen the creation of ecologically sound projects at each mine.

At Julcani an acid drainage collection and conduction system has been linked to the water treatment plan, while at the same time rehabilitation has begun of the open-pit mines and waste dumps at the Herminia mine.

The creation of the Patón Tunnel at Uchucchacua has enabled effluents to drain at the lower levels of the mine; meanwhile, at Orcopampa pipe-laying has redirected sewage to oxidation ponds, which has, of course, greatly benefited the health of the local community.

Buenaventura very much looks to the communities it enters, at all stages of mine development. The company feels it is essential to integrate with local communities and aims to improve everyone’s standard of living through its activities. To that end, in the provinces of Castilla and Arequipa, substantial investment in projects has improved pastures and fish farming, and has led to the construction of a Higher Institute of Technology that offers technical skills training for the local residents.

In the department of Huancavelica, Buenaventura has developed infrastructure and looked to establish a sustainable development model through a number of projects including the $20 million construction (in tandem with the Mantaro Hydroelectric Power Plant) of an electrical transmission line that supplies not just the department but also over 78 towns in Huancavelica and Ayacucho with electric energy.

With further initiatives aiming to retrain workers for new careers in a variety of skills including automotive mechanics, welding and shoemaking, and a Poverty Reduction Program in Huancavelica, the company has a long track record of successfully enhancing lives.

Financial results for first quarter 2010, announced in April, indicate the rising stock of Buenaventura. An increase in gold sales and prices resulted in a net income in excess of $155 million, a 55 percent improvement on the same period in 2009. It would appear that the company’s pathway to a golden future is secure, and with it, the improved lives of thousands of Peru’s impoverished people. www.buenaventura.com

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Growing

expo

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Tåîchô Logistics

onentially A different business relationship between a native community and mining companies is attracting attention in the far north, David Hendricks learns

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åîchô Logistics was established by the Tåîchô (pronounced “tlee-cho”) First Nations band in 1999 in Yellowknife, Northwest Territories, Canada, as a joint venture with ATCO Frontec Ltd. to contractually provide site services and personnel to the mining companies that were constructing and operating mines in the region. The intention for the Tåîchô people was self-governance, and by the summer of 2005 full self-management of this company was realized. It meant that instead of each mining company with permits to mine on Tåîchô land negotiating mineral rights and hiring native workers individually, the mining companies had to sign Impact Benefit Agreements (IBAs). These don’t include a negotiation over mineral rights per se; they’re more of a comprehensive agreement that includes members of the band being employed to work at the mine site and related areas.

“There were opportunities under those IBAs to take advantage of working for the mining companies,” says vice president of operations Cliff Robertson, “and that’s how Tåîchô Logistics began, by supplying site services, and it took off from there.

Site services include functions like building roads, pumping sewage, and other things comparable to municipal works services in small towns.” The giant companies mining locally—Rio Tinto Zinc, BHP Billiton (Yellowknife) and De Beers Canada (Yellowknife)— have lived up to their commitments under the IBAs, he says.

“We’ve been treated well by all the main players,” Robertson says. “All three of them are mining on Tåîchô land, and they respect that and want to leave a decent legacy behind. In the meantime, we’ve expanded beyond site services into civil projects, such as constructing buildings and other structures for the mining companies, whose commitment is to hire aboriginal people first, then people from the northern region.

Then if they still can’t find people with expertise, they go to the southern provinces.

And we made sure we stepped up to the plate and delivered, by recruiting the right people, still by our charter values, which means hiring as many Tåîchô citizens as we can and performing well, to make money for our shareholders.”

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Tåîchô Logistics

Included in the stated goals of Tåîchô Logistics, beyond providing employment opportunities for its people, is to train them in several skills, involve young people in activities that lead to business and professional development, and to “create sustainable business capacity and wealth for the company’s shareholders.” When the Tåîchô started their business, Robertson points out, “they didn’t have a lot of money, so they had to earn some and used it to get a cash flow going.” At the time, he was in charge of human resources for BHP Billiton at its diamond mine in Yellowknife, where he had a record of hiring a lot of native workers. Tåîchô Logistics was looking for someone “soft on people but hard on issues.” He was hired as general manager of the logistics firm, and two years later is vice president of operations. Neither Robertson nor his managers are natives, but that doesn’t prevent him from understanding Tåîchô’s goals in business.

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“Tåîchô Logistics is quite progressive, with a lot of support from the leaders, and their relationships are built on trust” “Tåîchô Logistics is quite progressive, with a lot of support from the leaders, and their relationships are built on trust.” The company’s board of directors is composed of Tåîchô natives, “and anytime one of the company’s divisions wants to expand its business, it has to do research and sell that business opportunity to the board, which has to approve it before it moves forward. They make the final call on it.” Those other company divisions were created for diversity, but first the native workers had to be trained in certain skills, including certified trades—electrical, heavy-duty mechanical, welding, millwright, pipefitting, carpentry,

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cement finishing, ironworking—“so that when mining shuts down, we have other work for them.”

Tåîchô Logistics started to invest in an infrastructure that would diversify the company away from general mining work, “so there was less dependence on mining for income.” The decision was made to invest in a transport company, Ventures West Transport of Fort Saskatchewan, the second-largest bulk fuel and bulk chemical (fire retardants, fertilizers, etc.) hauling service in Western Canada. Tåîchô Logistics currently owns 60 percent of it and operates the trucking service in the Yukon, Alaska, and five southern provinces. “The

Tåîchô Logistics

mines in our region use millions of liters of fuel,” says Robertson, “and we’ve secured the contracts for hauling that fuel for them. So we now have a major share of a successful trucking firm, and in five years we’ll acquire the remaining 40 percent.”

A division—Aboriginal Engineering Ltd.—was created to do reclamation breakdown and cleanup work on sites when a mine is shut down in the northwest region.

“That’s a good business here because there are plenty of mines of all sizes,” Robertson says. “We also have a 30 percent investment in IND Management, which supplies heavy equipment to mines.” Another division—Tåîchô Landtran—hauls cargo throughout the region, which is especially tricky on difficult, treacherous roads that are mainly snow-covered year-round. Tåîchô Lafarge Cement Ltd. is a joint venture company (51 percent owned by Tåîchô Logistics and 49 percent by Lafarge North America) supplying cement to mining companies.

“A lot of mining companies and aboriginal groups from

near and far have been visiting us to study our business model, in the interest of perhaps applying it to their own situations,” Robertson explains. “In many countries they seem to have problems in this regard, so they’re curious to see how we make it work. As we move forward, we’ll continue to look for other business opportunities in order to expand our diversity, still springboarding from the mining part of the business. We’re fortunate that the mining companies are cooperating in that side of it, bringing us business, as they see that our commitment is there. The future looks promising because not only are the Tåîchô people being taught how to operate various kinds of equipment and machinery, for which they’re proving to have somewhat of a natural aptitude, they’re also learning how to operate various aspects of a company. Whereas in the past the post-secondary educational achievements of Tåîchô students have been rather sparse, today they’re growing exponentially.” http://www.tlicho.ca/tlichoinvestmentcorp

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fact of life on the West Coast is preparing for the inevitable earthquakes. In California, after several hospitals were damaged or closed as a result of a bad quake in 1994 at Northridge in the San Fernando Valley, the state passed a Senate bill that required hospitals to evaluate their facilities, develop plans to meet seismic standards, and ensure that their buildings are seismically sound. California’s acute care hospitals were a priority, and one of its agencies, the Office of Statewide Health Planning and Development, with its consultant engineers with seismic experience, is working with hospitals to ensure that their facilities could withstand a major earthquake or other disaster— including possible terrorist attacks—and remain operational to serve the injured.

Old, outmoded or inadequate hospitals are being retrofitted or rebuilt to meet

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Hunt Construction Group: Sequoia Hospital

mic

upgrade David Hendricks speaks with Tom Martin, construction manager for Hunt Construction Group’s “rebuild” project at Sequoia Hospital, to see what’s involved in seismic retrofitting a functioning healthcare facility

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Hunt Construction Group: Sequoia Hospital

Essrig Taylor Construction

The GNU Group

Essrig Taylor Construction (ETC), California’s

CHW found their way to the GNU Group

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to create a comprehensive orientation and

specializing in the seismic retrofit of California

navigation program to connect the renovated

hospitals,

Sequoia

full

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design/build

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announce

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commencement of multiple SB 1953 NPC-3

pavilion. Comprised of wayfinding elements,

State of California mandated retrofit projects

patient communications and staff training, the

with Catholic Healthcare West.

integrated system assures that visitors and

ETC: envisioning, designing, and constructing

patients will easily find their destinations. GNU

the environment of care and the life science

appreciates the opportunity to assist CHW

facilities that support it.

with this innovative health care environment.

modern structural and medical needs and designs.

As a result, the board of Sequoia Hospital—which opened in 1950 in Redwood City, south of San Francisco in San Mateo County, and is currently owned and operated by Catholic Healthcare West (CHW)—began to look at its options. Sequoia Hospital is an accredited, not-for-profit community hospital providing innovative healthcare to Bay Area residents. With a nationwide reputation for pioneering advanced cardiac care, Sequoia was designated as a 2009 Blue Distinction Center for Cardiac Care by Blue Cross and Blue Shield of California. Sequoia also excels in the areas of stroke care, emergency services and birth center services.

Sequoia’s aging buildings are still functional but needed seismic upgrading, and it was time to expand in terms of adding space and ultramodern equipment. In 2007 the hospital board decided to construct a new building adjacent to the existing buildings on the campus.

On November 30, 2007, the Sequoia Healthcare District approved a funding plan for the new addition and seismic upgrading to the existing buildings, in which Sequoia Hospital, Sequoia Healthcare District and CHW would each contribute $75 million toward the cost, with an additional $15 million to be raised by the Sequoia Hospital Foundation. (CHW, based in San Francisco, is a system of 41 hospitals and medical centers in California, Arizona and Nevada. Founded in 1986, it is one of the nation’s largest not-for-profit healthcare systems and the largest private hospital system in California.)

A design was developed by Moon Mayoras Architects of San Diego, and the project was bid on at the end of 2009. The key position of general contractor was awarded to Hunt Construction Group, with its West

division headquarters in Phoenix and a regional office in San Francisco. Hunt had just completed two hospital projects for CHW at Mercy Gilbert Hospital in Arizona.

Tom Martin is Hunt’s construction manager for the new Sequoia project and supervised the ones in Phoenix.

“We built a new wing at Mercy Gilbert,” says Martin.

“The first project was three floors, the second was an additional floor, and each took about nine months to complete. It was nice to see very few change orders on those, and they were finished on time and on budget.

It was a good working relationship with CHW, and that was likely a factor in us getting this one in Redwood City.” Hunt has also completed the massive LAC+USC Medical Center Replacement facility and is currently constructing the Veterans Administration’s Southern Nevada Healthcare System Medical Center and the San Antonio Military Medical Center.

Martin has been with Hunt for 33 years, starting as an engineer just out of college. “The Sequoia project had been through multiple contractors previously, then it was bid in December 2009, and we were awarded the job in March 2010,” he says. “Currently another contractor is preparing the site for construction, and we’ll get going there shortly. We’re still going through the permitting process. This new facility is being built adjacent to the current one, and then we’re going back and remodeling the older buildings.”

Martin points out that since the Sequoia rebuild is being done in phases, “it will be a challenging job, considering that the hospital will remain fully functional during the construction of the new facility.

The seismic upgrade and improvement work involves some sheer walls being installed in the middle of the operating hospital, and there are currently between 50

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Hunt Construction Group: Sequoia Hospital

and 100 pipes going through the area where the wall is supposed to go, so there’s quite a bit of coordination and investigative surveying required to do all that work.

And there will be issues relative to necessary infection controls and abatement methods.�

The new building will consist of a four-story, 148,000-square-foot, 167-bed pavilion housing an expanded emergency room, a new medical office building, with medical and surgical services as well as an advanced cardiovascular center, outpatient surgery facilities, a central utility plant, a mechanical yard and a dining area with kitchen. The larger, private rooms with improved infection control for patient safety and enhanced patient care and comfort have enough space for family to visit and stay overnight.

The new consult rooms will have better integration of care and communication between physicians, families and patients, including portable medical records and advanced technology capabilities.

The building overall is designed as a healing environment, with soothing natural interior colors, healing gardens and a water wall. It features many technological advances, including the wireless collection of patient vital signs being transmitted directly into the patient’s online medical record; integrated electronic systems for bedside point of care; a hands-free wireless voice telephonic system to allow better communication between physicians, staff and patients; new connectivity with first responders; portable and hand-held devices for easy review of patient records; and wireless patient care alerts. A new four-story, 600-vehicle parking garage has been completed, and new landscaping will incorporate the existing trees and add terraced front gardens. The new medical office building is expected to be complete by the winter of 2011, while the new hospital building and all seismic upgrades are expected to be complete by the spring of 2013. www.huntconstructiongroup.com

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in

The first part of the mnemonic for changing the clocks r “spring ahead,� and that advice has been well taken in o in Texas. The Spring Independent School District (ISD), of Houston, has indeed taken giant steps forward in its d for the past nine years, as Andrew Pelis discovers

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n

reminds us to one school district located just north development plan

Spring ISD

A

s the Greater Houston area has witnessed enormous population growth, the Spring Independent School District (ISD) has become a “discovered” local resource, according to Jeffery Windsor, director of construction and energy, who for the past nine years has overseen all attempts to keep up with rising demand.

“We’re located just 20 miles north of Houston, and our demographics have changed significantly over the last 10 to 15 years,” says Windsor. “We used to be regarded as a suburban/rural district, but nowadays many of the students live in apartment blocks, and around 70 percent of the area is economically disadvantaged.”

The school district was born in 1935 when two small thriving schools merged to form one independent school district. Today, the District serves over 34,000 pre-kindergarten through 12th-grade students in 36 schools.

As Spring ISD works toward achieving the District’s vision of being recognized nationally as a leader among learning organizations and being known for exemplary student achievement by the year 2015, Windsor and his team have worked tirelessly to build and improve the region’s educational infrastructure.

“Expansion has been essential, given that we’ve been a fast-growth district within Texas since 2001,” he says. “Back then, when I started here, we had 22,000 students, so you can see how that figure has grown, and we now manage over 2 million square feet of educational space.”

The rise in population can partly be attributed to the growth of Houston, but Windsor says that Spring ISD has always been held in high esteem, attracting people to the area. “People kind of found us; instead of moving 50 miles out and driving into Houston, they found us just 15 minutes away.”

In response to the rise in demand, the District began to look at ways to raise funds in order to build new schools and update existing sites. “We’ve always had a very supportive community and administrations that were not afraid to think outside the box,” Windsor comments.

“A good example is our 2003 funding that permitted the construction of the Earl Wunsche Senior Career and Technology Academy, which allows students across the district to target their education in a direction that will help them achieve their career aspirations. For example, we have a courtroom that has been approved by the State of Texas and is used by our law students. Their core courses like English, math and science are then developed around their interests, which is crucial, as we have found that retaining student interest is the key to academic success.”

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Spring ISD

Loop Tech International Loop

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Since then, Spring ISD has raised and invested over $280 million through bond programs; the first bond in 2001 raised $135 million, which was used to build a middle school and a couple of elementary schools.

“Two years later we saw a jump of 8 percent in growth and went for a $157 million bond, which paid for the construction of Wunsche High School and other schools, and three years ago a third round of funding was needed as our elementary schools had become overcrowded. This time we were able to build another seven elementary schools,” Windsor explains.

He goes on to say that acquiring funding is never a straightforward proposition, and as recently as 2005 an attempt to raise a bond proved fruitless. “We receive funding from two main sources. The maintenance and operations side receives help from the State, property taxes and the federal program. On the other hand, for the funding of capital projects we put together a committee of community members including business leaders, teachers, parents and students and work on what we need. We balance that with what we think is fair and affordable and then aim to raise bonds.”

Once consultation with students and teachers has taken place and funding has been acquired, Spring ISD uses the Competitive Sealed Proposal system to evaluate contractors on their merits according to the specific job. “We struggled for years to determine the weight of reputation against the cost, and for the past nine years the system we now use has worked well. We have a questionnaire that evaluates the contractor’s history and experience on similar work, and if the results put the company in the top 20 percent, we then take the lowest bid,” Windsor explains. The evaluation process has clearly worked to Spring ISD’s advantage; Windsor says that in his nine years here every project has been completed on time and under budget.

His team, in conjunction with architects and engineers, aim to build energy efficiency and sustainable materials into the design of each building. He says that the economic slump has seen a fall in the cost of materials that has made this much more achievable as the price of sustainability is now “reasonable and justifiable.”

“Our cost per square foot has decreased by about 20 percent, and whereas in 2006 we were looking at double-digit inflation on material costs, we’re now seeing deflation take place.”

Aside from building efficiencies, the introduction of green diesel to all the school buses has received community endorsement, and Windsor says that the District has just purchased its first hybrid bus, which will reduce costs.

Further investment in technology has ensured that all students have their own laptops, and every school classroom is fitted with interactive smart boards and projectors.

The end result of this is, of course, to set America’s next generation on the right academic path, and the return on the investment to date appears encouraging. “All schools are course graded, and in the last five years we have significantly raised the numbers,” affirms Windsor. “We’ve gone from only a handful of recognized schools to nearly 15 now, so we have seen marked improvement.”

The improvement will continue as Spring ISD continues on its master plan to build further schools that will ultimately create a feeder pattern from elementary level to middle school and on to high school.

And the secret ingredient to all this continued success? “Our superintendent, Dr. Draper, and our district representatives really want to make a difference and are very proactive on the educational side. I am so proud of our forward-thinking approach,” Windsor concludes. www.springisd.org

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A

mid-1960s radio series about a crime-fighting character called “Chickenman” spawned a popular catch-phrase: “He’s everywhere! He’s everywhere!” The next time you see a contractor’s pickup truck or a service van from your local utility company driving through the neighborhood, take a look at the ladders strapped on top, and more often than not you’ll see the familiar blue Werner Ladder logo on the side. In fact, if you could peer into the average household in the US and Canada, chances are you’d find a Werner kitchen ladder, step ladder, or extension ladder lurking somewhere.

Werner is the gold standard of ladders, leaving its competitors to think, “They’re everywhere!

They’re everywhere!”

In 1922, Richard D. Werner started the R.D. Werner Company as a small business selling metal moldings for floors, carpets and walls. Probably the farthest thing from his mind was the notion that his company would someday become the world’s largest manufacturer and distributor of aluminum, fiberglass and wood ladders, as well as scaffolding, staging and related climbing products. All this from a company that in 1935 introduced as its first product a patented specialized metal decorative trim molding called Chromtrim that was used for dressing up the raw edges of kitchen sinks, cabinets, walls and stair treads.

Chromtrim quickly became known in the marketplace for its rugged wear, strength and durability, with the company enjoying great success until the start of World War II, when the government placed a restriction on metals, mostly brass and aluminum, to help with the war effort. The company began experimenting in the burgeoning field of plastic extrusion, which led to a

Every

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eve

Ric Larson finds that business manageme ideas and old-fashi Werner Ladder Co manufacturer of a ladders, as well other climbing p

Werner Ladder Company

ywhere,

erywhere

t a combination of modern ent strategy, innovative ioned adaptability have made ompany the world’s largest aluminum, fiberglass and wood as scaffolding, staging and products

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Werner Ladder Company

contract with the US Navy to produce extruded plastic inhibitor strips for rockets. During the 1940s and early 1950s Werner became a respected leader in the plastic extrusion field, producing a full line of plastic trim, sink frames and other plastic shapes and accessories that were sold nationwide in both the US and Canada.

known as monomers, react chemically to produce vast chain-like networks called polymers. At least 100 combined monomer molecules are needed to produce products that have certain unique properties such as elasticity, tensile strength, and the ability to produce fibers. Many resin types may be used in pultrusion,

“With a long list of patents and innovative ideas, Werner became the world leader in climbing products and supplies” The company began to purchase hydraulic extrusion machines in the late 1940s, after war restrictions were lifted, for extruding its highly profitable Chromtrim line and for custom-designed extrusions, becoming one of the first companies to manufacture semi-fabricated aluminum components for its customers. Werner began to search for new products to develop to utilize its enormous aluminum extrusion capacity, which led to its entrance into the climbing products industry in 1950.

Werner quickly and aggressively introduced new products to the climbing market. Its aluminum ladders were almost instantly recognized for their high-quality and ruggedness in the field. With a long list of patents and innovative ideas, Werner became the world leader in climbing products and supplies. The company left the plastic extrusion business in 1952 to concentrate solely on extruded aluminum products, introducing aluminum staging in 1953 and aluminum scaffolding in 1957.

Werner invented the groundbreaking ALFLO TwistProof rung joint, which solved many of the safety and structural problems of aluminum extension ladders in 1954. The rungs on most of Werner’s ladders are D-shaped, with the flat side of the D positioned upward to form the ladder’s rung step. This substantially increases the load strength and rigidity of the ladder while at the same time creating a rung that is locked in place and impervious to twisting or becoming loose and offering superior gripping power for safety.

In 1963 the company started manufacturing fiberglass ladders, with a special emphasis on the development of fiberglass pultrusion technology. Pultrusion is a continuous process of the manufacturing of composite materials with constant cross-section, where reinforced fibers are pulled through a resin, followed by a separate preforming system to prepare it for insertion into a heated die, causing the resin to undergo polymerization, a process in which a collection of small molecules,

including polyester, polyurethane, vinyl ester and epoxy.

The 1960s saw Werner begin to develop a national field-warehousing program in order to more efficiently distribute its climbing products, playing a key role in getting its products under the feet of customers sooner and more efficiently than anyone else in the industry. In 1970 the company built new headquarters in Greenville, Pennsylvania.

To expand its product offering, Werner acquired three independent wood ladder manufacturers in the 1980s, building a state-of-the-art wood ladder plant in Carrollton, Kentucky, and in 1996 the company consolidated its wood manufacturing operations there under one roof.

The company is presently led by COO Eddie Ignacio, who oversees 1,800 employees that help generate over $400 million dollars in annual revenue. While at General Electric, Ignacio embraced the six sigma business management methodology, and with its implementation, he has produced positive results for the company in a short period of time. Six sigma was pioneered by Motorola USA in 1981 and has been adopted in many sectors of industry, though not without controversy.

Ignacio has made dramatic inroads by cutting costs and improving production to upward of 20,000 ladders produced daily. Customers enjoy quick turnaround time, with orders being placed and products custombuilt and shipped to the purchaser within five days, and only three or four days for scaffolding.

Werner has expanded into other markets under Ignacio’s leadership, including Mexico and Europe. The company has a revenue goal of $700 million by fourth quarter 2011, with its sights set on $1 billion by 2013.

Ignacio stresses that the focus is not only to reach and exceed financial goals but to sustain that balance within the confines of the always-volatile commodities market. www.wernerco.com

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A

fitting memorial One of the most important projects on the University of Texas at Austin campus is fast taking shape and is on schedule for an autumn opening, as Jeff Daniel discovers

O

ne of the most illustrious names associated with the University of Texas at Austin is that of Dr. Norman Hackerman: chemist, professor and president emeritus.

Hackerman spent most of his working life at Austin and in his day wrote or coauthored over 200 papers and well as teaching and directing research.

Throughout his working life, he was showered with countless awards and recognitions. He was inducted into the Texas Hall of Fame for Science, Mathematics and Technology. He was a member of the National Academy of Sciences and the American Academy of Arts and Sciences, and yet he never stopped teaching freshman chemistry.

But Hackerman had an equal impact on the administration of the university, viewing UT as an economic engine for the whole state. Back in the 1940s he attracted the first research grant to UT and was the first to connect academia with industry. In his role as chairman of the Chemistry Department, vice president and provost, vice chancellor of academic affairs and ultimately president of the University of Texas at Austin, followed by 15 years as president of Rice University, he was credited with transforming the way both institutions were run.

Not surprisingly, then, when the university decided it was time to replace the former Experimental Science Building (ESB)—built in 1952 during Hackerman’s early years of tenure—it wasn’t a difficult decision to name the new building after him.

The Hackerman Building, designed by CO Architects, is to be a catalyst for collaboration among research groups and integration of various sciences.

Laboratories and classrooms will support cutting-edge research and education, while plazas, porches and galleries will promote social activity and connectivity. The 290,000 square feet of space will establish a new model for research laboratories with an open plan structure that aims to encourage collaboration and innovation.

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The $160 million project started in spring 2008 and will be complete by fall this year, or at least 56 percent of it will. The remaining 44 percent of the building will be completed at a later stage once an additional $47 million has been raised.

On the first floor will be seven state-of-the-art organic chemistry teaching laboratories for foundation students.

Two more teaching labs will be on that floor for more advanced students, and all labs will be served by a central facility and dedicated support staff. On the fifth and sixth floors will be 14 organic chemistry research labs, each housing four researchers and giving them ample working space as well as dedicated facilities such as fume hoods and material storage. Center for Learning and Memory and Neurobiology laboratories will be on the second, third and fourth floors. These lab suites will provide write-up spaces and wet bench areas for each researcher and ample adjacent space for tissue culture and other research methodology.

The basement will house core facilities and equipment used by all, such as a high-field Nuclear Magnetic Resonance facility, an Electron Microscopy Imaging suite, an in vivo optical imaging space, and a functional magnetic resonance facility for brain imaging. Three additional NMR machines will be located on the fifth floor for more routine use. These core facilities will provide support for several other research areas including pharmacy, psychology, biomedical engineering and other areas of natural sciences.

In the spirit of collaboration, eight interactive spaces will provide an informal environment for students and faculty to gather and discuss ideas comprising seating and workstations. The third floor has a large outdoor terrace looking east and will serve as an impromptu gathering space to promote interaction among faculty and students. Further informal space will be found in a student workroom and lounge, while a large seminar room on the first floor will provide a formal multipurpose space for up to 120 people for symposia, lectures or meetings.

Advanced audiovisual technology is being employed to create an enhanced environment for training and instruction and will be easily adaptable for future technology. Five conference rooms are located throughout the building and provide multimedia and audiovisual capabilities to faculty, students and staff.

One of the biggest challenges facing the whole campus at Austin—flagship of the University of Texas system—is lack of space. Located just east of the State Capitol and flanked by a major highway on one

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University of Texas at Austin: Norman Hackerman Building

“The Hackerman Building is to be a catalyst for collaboration among research groups and integration of various sciences” side and several state government buildings on the other, the campus has limited space to accommodate the massive expansion seen over the years. Already there is a student body of 50,000 and a master plan to eventually house 9,000 of them on campus, a jump of almost 30 percent in just a few years.

Before the final blueprint was drawn up, CO Architects was hired as an outside consultant to determine if renovating the existing ESB building was feasible.

However, it soon became clear that restricted floor-tofloor height and lack of suitable services facilities would severely impact the functionality, and it was concluded that a new facility would need to be built.

Appropriately, as the building will house the green

chemistry department, architects are aiming for a Silver award from the US Green Building Council’s LEED program. The building and its surroundings are going native in an attempt to provide a water-efficient landscape. Oak trees are being replaced by native plants, while a green roof, together with the largest solar roof in the state, will absorb the sun’s energy and redistribute it for sustainable use. As such, occupants will work under natural light coming into the building from the southern façade while storm water will be used for irrigation.

If the new facility inspires the current student body to emulate the achievements of its famous namesake, Dr. Hackerman’s pioneering work in science and university management will have been well served. www.utexas.edu

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Cent Andrew Pelis finds out how Phillips Edison & Company focuses on environmentally friendly materials and sustainable building practices in the shopping centers it owns and operates as well as its own headquarters

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he world of construction in North America has for the last few years taken a major culture shift toward building green. The introduction of the US Green Building Council’s LEED standards has created a new way of thinking that has, for some, become a way of life now.

One company to have embraced the “Green Revolution” has been Phillips Edison & Company; such has been the impact of environmental concern that the Cincinnati-based business has launched its own “Green Dream Team.”

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Phillips Edison is a fully-integrated retail real estate company, boasting a portfolio of more than 26 million square feet of neighborhood shopping centers across the country. The business has been acquiring and operating neighborhood and community shopping centers since 1991, with its primary focus on grocery-anchored centers with redevelopment or value-add potential.

Over the years, Phillips Edison has expanded its team to enable cost-effective implementation of a complete range of real estate services, including leasing, property management, development, construction, redevelopment,

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attention acquisitions, due diligence and fund management.

It’s a focus that has worked exceptionally well, as Eric Richter, vice president of property management, explains. “We own and operate a portfolio of more than 240 properties that meet the everyday shopping needs of communities from coast to coast. We recently acquired the Bridgewater Falls shopping center in Fairfield Township, Ohio, a 635,000-square-foot center that is home to Target, JC Penney, Best Buy, TJ Maxx, Old Navy, Bed Bath & Beyond and Dick’s Sporting Goods, as well as a collection of smaller retail shops in the center’s Village area. For all our properties, we provide a full range of services including leasing, operations management and accounting, as well as common-area maintenance services such as landscaping, maintenance and security.”

Richter says that the introduction of the Green Dream Team two years ago was the culmination of almost a decade of green initiatives. “One of our principals, Mike Phillips, first worked on a green project more than 10 years ago, using a silver roof coating to help reduce tenants’ energy costs. Since that first step, the company has constantly looked at ways to lessen its environmental impact, and in 2008 Mike assembled a group of interested associates and formed the Green Dream Team to investigate and implement green initiatives and sustainable building practices in the company’s offices, operating properties and construction projects.

“We are developing a plan that will reward the tenants at our shopping centers for implementing green practices,” Richter continues, “while PECO University,

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our professional development program, is creating a syllabus for ‘learning green’ activities for our associates.

We have registered our corporate office in Cincinnati for LEED certification and are committed to training our construction staff to maximize the use of sustainable building practices.”

Phillips Edison’s focus on environmental issues has gone much further, and given that it typically acquires shopping centers that are roughly 20 years old, there is plenty of scope to replace old roofs with a more environmentally friendly alternative. Indeed, since 2002 more than 3.5 million square feet of white, reflective thermoplastic, single-ply roofing membrane (which is 100 percent reflective) has been installed at the company’s properties, reducing the urban heat island effect.

Perhaps the company’s most impressive initiative to date has been at Four Hills Village Shopping Center in Albuquerque. Over the last two years the introduction of a 9.9-kilowatt solar panel system has generated enough power for one of four house panels at the site. As a result, Richter says that several companies have approached Phillips Edison about implementing a nationwide solar energy program. “We have also been able to receive third-party incentives and rebates from utility providers such as Duke Energy when installing high-efficiency HVAC or retrofitting lighting,” Richter adds.

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Phillips Edison is currently developing Blue Sky Ranch & Resort, a 3,000-acre ranch near Salt Lake City (where the company has its second corporate office) that will be used as a conference center resort.

Upon completion, the facility will accommodate up to 300 participants for corporate retreats, concentrated training programs, team-building activities and other events. The Ranch will be used for a variety of Phillips Edison corporate activities and will be available for other companies and groups that want to improve the professional and personal skills of their workforce.

The project is being developed according to LEED standards, with plans to create an environmentally sustainable project that will be a workshop for green building practices, with power supplied through windmills, a micro hydro plant, solar, photovoltaic and hydrogen fuel cells.

Training of staff plays an integral part in Phillips Edison’s success and extends beyond one-on-one training to the aforementioned PECO University. All associates are encouraged to present and attend the initiative’s OJLAs (on-the-job learning activities), which cover a wide variety of subjects enhancing not only day-to-day skills but also providing an insight into all aspects of the company’s business.

Perhaps the most eye-opening aspect of Phillips

Phillips Edison & Company

Myers Painting Myers Painting offers a wide variety of services in the commercial and industrial markets.

Our company is committed to customer satisfaction, especially in the area of “green technology.” For example, we have become an OSHA LEED certified applicator of a variety of coatings and many of these offer 10 and 20 warranties.

Services offered include: painting, epoxy floors, roof coatings, above ground waterproofing and expansion joint repairs.

Edison has been its phenomenal success over the last two years, a period when one might have anticipated tough times, given the economic climate. “In 2008 we executed

new leases for over 1 million square feet of retail space, which was a company record,” states Richter. “We then doubled that figure in 2009, and the goal for this year is to exceed 3.5 million square feet. Much of the credit for our success goes to our in-house leasing team and our company culture—you’ll find competitiveness and commitment running through every department.”

Richter says that even the Property Management Group has successfully increased revenues by pursuing temporary leasing deals such as carnivals in parking lots, Goodwill donation trailers, fireworks and snowcone stands, and other short-term opportunities. Having generated $1 million in temporary leasing in 2009, the group now aims to raise an additional $2.5 million in 2010.

Firm foundations are an essential part of Phillips Edison’s strategy, whether that relates to an established shopping center, an acquisition target or an experienced in-house team. The success of the last two years suggests the company is based on a safe footing. www.phillipsedison.com

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Rebuildingthe E

ven before terrorists flew hijacked airplanes into the Pentagon building outside Washington, DC on September 11, 2001, Bybee Stone Company had already worked on several projects at the headquarters of the US military.

When efforts to rebuild the Pentagon were put on a fast track, Bybee’s existing relationships and its unique skill set helped it become the cut-limestone supplier for the project.

“We were right there, already on site, and Masonry Arts knew we could do the work and recommended us for the project,” says Will Bybee, president of the Ellettsville, Indiana–based company. As it turned out, Bybee also happened to be one of very few stone-cutting companies that could replicate the kind of finish found on the original Pentagon stone work.

To Will Bybee, whose great-grandfather started the family tradition of working in the stone business and whose father purchased the mill and surrounding property—once known as Matthew’s Mill—that formed Bybee Stone in 1979, the Pentagon project is just one of many in a portfolio of high-profile projects in a host of construction settings, from government and institutional to high-end residential.

“We’re capable of doing the largest projects in terms of volume and of doing very intricate carving and fine detail work,” he says. “We utilize very traditional equipment and highly skilled labor to do what we’ve been doing for a lot of years.”

Bybee operates a mill capable of producing more than 10,000 cubic feet of stone per month in a 50,000-square-foot enclosed facility that allows for year-round work. Traditional machinery includes 80-year-old gang saws dating from the mill’s early years.

Today, Bybee’s work can be found on performing arts centers in Las Vegas, Nashville and Carmel, Indiana; college campuses from the University of Denver and Duke to Harvard and Princeton; and on national landmark buildings such as the US Capitol and the Washington Cathedral.

“These are all projects that are very long-lasting in terms of how many years they are going to be around, and our clients expect very highquality work,” Bybee says. A growing amount of work involves historic restoration—Bybee’s own headquarters building is being redone and has been nominated for a national historic preservation award—such as the Iowa State Capital, the company’s largest such project to date.

The work reflects a trend that has taken hold in recent years, as the company has benefitted from a rediscovery of sorts among architects and construction firms of the quality and other benefits of Indiana

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Bybee Stone Company cus Civil War. Keith Regan lear and sustainable supplier fo high-profile as the rebuild

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Bybee Stone Company

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stom-cuts Indiana limestone at a plant that dates to the rns how the family-owned business is a go-to subcontractor or new construction and historic renovation projects as ding of the Pentagon after the September 11 attack

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limestone. As a construction material, it is all-natural, a strong natural insulator, and emits no chemicals, helping projects that use it to gain points toward Green Building status through the US Green Building Council’s LEED program. “We’ve got quite a few Gold and Silver projects to our credit over the years,” Bybee notes.

Gold-certified projects Bybee helped make possible include the Prindle Institute for Ethics Building at DePauw University and the Ricketson Law Building at the University of Denver.

“Limestone is a product that has a lot of opportunities for reuse and lasts a long, long time.”

While technology at Bybee has been and continues to be aggressively updated, Bybee still uses mainly traditional cutting equipment and highly skilled labor. Bybee has examined the option of automating more of the actual stonecutting process with CNC machines but has not yet found the technology to be a suitable substitute for manual work done by its workers, though he acknowledges that gains are being made. “For now, we still feel it takes craftsmen; it doesn’t take a computer,” Bybee says. The milling still gets a heavy assist from computer drafting tools and other enhancements, but with as much as eight full truckloads of material leaving the plant weekly, manual work is still a key to the process.

The area near its plant has long been a limestone quarrying and cutting hotbed, and Bybee draws its workforce from that population, with most taking full advantage of the firm’s apprenticeship program to learn the trade. “It’s very rare to have the opportunity to have a trained craftsman walk in and apply for a job,” Bybee says. Part of the reason is the history of the industry, which had its historic peak in the years before and after World War II, when booming cities on the East Coast demanded massive quantities of cut limestone.

New architectural trends and materials innovations in the 1960s and ‘70s began to change that, and with demand down, the once-bustling limestone business shrunk considerably. As demand has picked up again more recently, capacity is not as robust as it once was, helping to create a strong market for highly skilled firms with strong reputations. “Now we’ve come back to a place where there are only so many companies that can deal with big projects,” Bybee says.“We’re among those large firms that can handle high-volume detail work, and we’re very competitive.”

At one point in its history, Bybee quarried its own stone from approximately 50 acres of property at the mill site. “Over time we found the stone to be unacceptable in terms of quality, and we shut down the quarry,” says Bybee. “Now we end up buying our stone, which enables us to get the best quality and the best stone to match whatever project that comes up.”

Bybee also performs circle planing with unlimited radius, as well as 16-foot panel planing and lathe work capable of

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Bybee Stone Company

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Bybee Stone Company

17-foot lengths and 8-foot diameters. While finished materials used to leave the plant by rail—a siding remains in place—most hauling is now done by truck.

Bybee has done work in most of the United States, with a heavy concentration of its product heading to large metropolitan areas east of the Mississippi River.

With each block of limestone weighing in at 145 pounds per cubic foot, safety is a primary concern at the mill, where stone is moved with forklifts and overhead cranes. The workforce of 76 people—down slightly from a recent high of 90—follows OSHA training guidelines as well as additional Bybee training. “This is heavy material traveling on overhead cranes, and if a mishap were to occur, it could be disastrous. These guys have it instilled into them from the day they first walk onto the property and every day thereafter that they have to be safety-conscious.” The plant has operated its entire 31year history as Bybee Stone without a major accident or workplace death, the company president notes.

Alongside safety is an equal emphasis on quality, which Bybee believes is in large part a reflection of the work done to improve communication and coordination among all levels of the company, from the way design and specification drawings are handled by the Bybee Stone Company’s drafting department and all the way through the plant. “Each area has foremen that are responsible for quality control, and at the end of the whole process, when stone is said to be finished, there are someone’s initials on the end to show that it has been checked and complies with our standards.”

Bybee has a small number of local quarries that it works most extensively with, though it has the capacity to handle stone from anywhere, including specialty sources that a customer might bring to a project. While the price of limestone continues to escalate, there is little doubt that there is plenty of supply in the ground. “It has been estimated that we have 500 to 700 years of raw material to work with at current use rates,” says Bybee.

The Bybee family legacy is already a stone-solid one in the limestone and stone-building industries. The Building Stone Institute now awards the Bybee Prize each year in honor of former company president Dan Bybee, Will’s brother, who died in 2000. The award goes to an individual architect for his or her achievements in designing with limestone. The company also has won its own prizes—beyond the LEED awards mentioned earlier—including Tucker, Prism, and Golden Trowel awards, as well as “body of work” awards such as Classical America’s Arthur Ross Award. www.bybeestone.com

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Sustainab prope

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Reckson Associates Realty Corp.

Many companies now pay homage to the principles of sustainable business, but Reckson Associates Realty Corporation has incorporated sustainability into the company’s very identity. Rob Harris reports

ble W erty

hen a guitarist releases a note and the sound endures, we call the phenomenon sustain. When sustained tones work together, the beauty of harmony is created. Reckson Associates, a division of SL Green Realty Corporation, is a real estate investment trust (REIT) that has taken these concepts into its everyday business practice.

REITs were created in the 1960s as a way to make investments in large-scale income-producing real estate available to investors of all kinds, creating a liquid security that could be sold and traded just like mutual funds in the securities market. In the past 10 years REITs have seen their market capitalization grow from $90 billion to over $200 billion. These investment funds must adhere to strict regulations: 75 percent of the total assets must be in real estate; 75 percent of the gross income must come from rents on real property or mortgages on real property; and the trust must distribute at least 90 percent of its taxable income to its shareholders.

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In 1968, William Rechler and his sons started Reckson Associates with its first property on Long Island. Now it’s one of the largest commercial property managers in New York.

Reckson Associates converted its first industrial property into an office complex in 1978, allowing the company to charge tenants approximately five times the purchase price of the building and effectively making Reckson Associates one of the pioneers in building recycling.

The company became a publicly traded REIT in 1995 and entered the Westchester County (New York) and Fairfield County (Connecticut) markets in 1996, eventually becoming one of the largest managers of office space in these two counties. According to the US Census Bureau, Westchester is the second wealthiest area in the State of New York (behind Manhattan), while the State of Connecticut and Fairfield County are two of the richest areas in the entire US. Today, Reckson Associates Suburban Properties consists of 16 holdings in Westchester and Fairfield Counties and one building on Long Island. These properties have a combined square footage of over 2,600,000 and have averaged 85–90 percent occupancy over the past year.

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Reckson Associates Manhattan Properties consists of four holdings with a square footage of 3,770,000 and occupancy of 97 percent over the past 12 months. These properties combined generated an annualized rent of more than $341 million and have a total of 210 tenants.

Companies that adhere to the sustainable business initiative generally are more conscious of the environment than traditional corporations. They use products and chemicals that are not harmful to the environment and leave a minimal footprint. Beginning in 2007, Reckson Associates began using sustainable initiatives on all new construction and renovations in partnership with Armstrong Manufacturing, starting by replacing and recycling the carpets and ceiling tiles in its facilities.

Sustainable businesses use the triple bottom-line principle: people, planet and profits. Companies that subscribe to the sustainable business movement usually adopt, as part of the corporate philosophy, the idea that the company will not have a negative effect on the environment, community, society or economy.

These companies incorporate the ideal of sustainability into every business decision they make; it’s the final filter in the decision-making process.

Reckson Associates Realty Corp.

Reckson Associates is a market leader with this model, and is now focusing on energy efficiencies. With the current tax incentives passed by Congress in 2005, a tax deduction of up to $1.80 per square foot can be taken for upgrading heating and cooling, ventilation, water heating, lighting, and the business envelope system. To get the maximum tax incentive, at least three major systems must be upgraded and must be documented to have an energy savings of 50 percent or more. Only certain software has been approved by the IRS to measure the buildings’ energy savings.

Companies can install specific components and still receive the tax incentive. For example, a 10 percent energy savings in upgrading the building envelope, or a 20 percent energy savings in the lighting system, or a 20 percent energy savings in the heating and cooling system would net the company a tax incentive of up to 60 cents per square foot. Once savings are documented

by IRS standards, facilities managers can immediately start to take the deduction off their taxes. New guidance

was issued in March 2008 to the Energy Policy Act of 2005, and the program has been extended through December 31, 2013.

Reckson Associates is taking advantage of this great tool. These incentives can give the corporation a oneto two-year return on its investment. The new energy efficiencies with the added tax incentive will do nothing but increase profits and decrease the company’s environmental footprint, while helping the overall economy. Reckson is doing today what it has done so well before, and that is taking a property, recycling it and making it more profitable. Now, 30 years later, the company’s sustainability model is working well. With newer facilities and a huge savings on utilities, the company is maintaining a smaller corporate footprint on the environment and is achieving an enduring effect on the economy.

Reckson Associates has proven that when the right notes are released and sustained, things usually sound pretty good. www.slgreen.com

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Dan Barry, director of operations at Chenega Security & Protection Services, tells Gay Sutton how the continuous development of best practices enables the company to deliver high-quality and effective security services to the US military

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ut of the disaster of 9/11 has risen a whole new world that is alert to terrorism and acting together in a way that had previously been unthinkable. One company that has emerged from the ashes and now provides valuable security services for the US military and federal government agencies is Chenega Security & Protection Services (CSPS).

Based in Ashburn, Virginia, CSPS is part of Chenega, an Alaskan Native Corporation owned and run by the Chenega People, who are themselves no strangers to disaster.

Their original settlement on Chenega Island was destroyed by the 1964 Good Friday Earthquake and accompanying tsunami. Then, after resettling at Chenega Bay at Evans Island, their livelihoods were deeply affected by the 1989 Exxon Valdez oil spill in Prince William Sound.

In the era of heightened security that followed 9/11, Chenega acted quickly to provide urgently needed security services for some 28 military bases in the US, and in April 2005 it formed the CSPS Company to manage and run the security business. Its first employee was current director of operations Dan Barry, who has guided the company through significant growth, establishing it as a security business with sound ethical values and a reputation for providing reliable, quality services. “That’s a reputation that we protect,” Barry says. “I believe it comes down to a number of factors. We don’t cut corners in anything we do, and we are continuously developing best practices and embedding them throughout our business.”

Today, CSPS runs security operations across the US, largely providing armed security but also offering training services to the military. Its 850 security personnel are located on seven US army bases, three naval bases, two Department of the Interior/Bureau of Reclamation dams, two Missile Defense Agency sites, and four Federal Law Enforcement Training Centers.

In the security industry, the quality of service is largely dependent on two factors: the quality and reliability of the security personnel, and the programs, policies and processes under which they operate. CSPS’s seven elements of best practice—recruitment, training, evaluation, scheduling, operations, communication and motivation—address both these issues.

Many of CSPS security personnel are either former or retired military, and the company invests heavily to ensure it selects the best. Before interviews take place, the supervisors— who are all trained in interviewing techniques—thoroughly vet job applications and resumes. As part of the interview process, selected candidates then undergo psychological evaluation to assess their ability to be successful in security. “These steps not only allow us to pick the best but also lower attrition rates among our staff.”

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CSPS makes significant investment in training, providing initial training at two company-run training academies in Virginia and California, and then updating staff capabilities as part of the ongoing improvement process.

Both at the academies and on the military bases, CSPS trainers are fully qualified and certified in their disciplines. “Classroom training is less than 50 percent of the work, though,” Barry says. “Most of the curriculum is performance-oriented and scenario-driven.” The instructor/student ratio is very high, 2 to 1 on the ranges and never more than 10 to 1 in performance training.

“This is very important. It ensures students don’t get lost in a large class, and we know right away if they haven’t learned the material.

“We also build very strong relationships with our clients so that we can understand what they expect of us. We try not only to deliver that level of service but to take it a level higher,” Barry continues. “Our training is an example of this. We ask our clients to vet the curriculum. We can then tailor it to ensure it will satisfy all their expectations. That becomes our minimum level

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of training, and we add to that.”

All new recruits are provided with a personal training manual that serves as a quick reference guide. Within 90 days they each receive an individual self-development plan to identify training goals, objectives and milestones.

These then form part of the continuous staff evaluation process, which also includes a formal written evaluation every six months assessing performance, adherence to company standards, knowledge and ability.

Interestingly, the evaluation process also provides staff with the opportunity to give feedback on operational matters and to suggest ways in which the service could be improved or better delivered. “We actively seek this feedback. Our processes are not locked in stone. We’re always looking for better ways to do things,” Barry says.

Security work tends to be a 24/7 occupation, and the company has developed scheduling processes that allow its officers a degree of predictability in their lives.

Moreover, when a staff member is sick or has to take a day off work, a part-time member can be called in to fill the post. “This not only assists in the quality of life for the workforce—they know they’re guaranteed their

Chenega Security & Protection Services

days off—it also keeps overtime costs down.”

Operationally, all security processes, tasks and activities have been standardized across the company, which has been accredited to ISO 9001:2008 standards.

Each post, for example, has a clear and concise set of written instructions, while actions have to be signed and accounted for and those records are regularly checked by the team leader. “Our supervisors then review these on a weekly basis, looking for anything that might be improved upon.”

Discipline, morale and good operational standards are also maintained through good communications, and this is administered through an open-door policy. Good and outstanding performance can be acknowledged, for example, grievances can be dealt with in a timely manner, and marginal or poor performance can be addressed with employees. “At any given moment, our officers know where they stand with their leadership and what they need to do to improve or maintain their performance.”

Motivation is a high priority and is encouraged through a variety of schemes. “We run a quarterly recognition program on each contract site that financially rewards outstanding performance. We also provide a good medical plan and a 401(k) retirement savings plan in which we match a percentage of the employee’s contributions. When the CSPS Tuition Assistance Program is in effect, we provide assistance for education improvements, such as a degree in law enforcement or criminal justice, which will not only benefit the officer but also CSPS and our clients.”

Currently the company’s contracts are all with the government, but CSPS has its sights set on making the transition into the commercial world. “We’re taking a serious look at this right now and are currently incorporating it into a business development plan.”

This could result in considerable growth, but CSPS has the necessary standards and practices in place to make this transition a success. www.csps-llc.com

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Striking direct

Before the recession slowed its roll slightly, AMF Bowling Centers was on course upscale bowling centers and push forward on a plan to build a chain of family en Keith Regan learns how the company has used the slowdown to focus on sustain itself for further expansion once the recovery comes

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AMF Bowling Centers

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ccording to the National Sporting Goods Association and the Bowling & Billiards Institute of America, bowling is the most popular participatory sport in the United States, and AMF Bowling Centers is the world’s largest operator of bowling centers, with 300 centers in the US and Mexico, where 25 million visitors bowl 100 million games annually. AMF—which began life as American Machine and Foundry in 1900—has been an innovator in the industry for decades, dating back to its commercial introduction of the automated pinspotter in 1946.

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“We turned the service model on its head. When you combine the customer attention with the physical facility, it has really taken bowling to a new level” Over the years, Richmond, Virginia–based AMF has expanded into other areas—it owned the Harley-Davidson motorcycle brand for a time—but since 1985 it has been focused squarely on bowling. It has also formed a joint venture, QubicaAMF, that manufactures and sells a full line of bowling equipment such as automatic pinspotters, scoring equipment, bowling center furniture, bowling pins, synthetic lanes, ball returns and spare parts.

More recently, AMF has helped drive a move within the bowling industry toward offering customers the option of a more upscale and higher-end bowling experience.

Nine of AMF’s 300 centers now operate under the 300 brand, a concept that senior vice president for facilities and design Simon Shearer helped develop.

“Until the economy stalled, we had been pretty aggressive in opening or converting centers to the 300 brand,” Shearer says, targeting underserved markets with strong demographics. To date, 300 centers have been opened in Anaheim, San Jose, Pasadena, Dallas, Houston, Atlanta and New York. More centers are planned once economic conditions improve.

The 300 centers are meant to offer a completely different experience from the traditional white-lighted suburban bowling center. 300 is bowling with a twist.

What’s the twist? It’s everything entertainment under one roof: state-of-the-art lanes, floor-to-ceiling video screens, casual dining, and your favorite local hangout with friendly servers. “The fit and finish on the interiors are of very high quality,” Shearer says, noting that the 300 located in Anaheim, not far from the entrance to

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Disneyland, is regarded as a prime example of the brand’s potential. “It’s truly magnificent and a great example of how we position the brand as an upmarket and upscale offering.”

Personalized attention is also a key part of the 300 experience. Customers first visit a greeter station and, after reserving their lanes, are led to an equipment room where bowling shoes and balls are custom-fitted. That equipment is then handed off to a lane captain who sets up the lane and assists with anything else needed from the bar or the kitchen. “We turned the service model on its head,” Shearer notes. “When you combine the customer attention with the physical facility, it has really taken bowling to a new level.” Even though revenue has dipped in the recession, and even though labor costs are higher at the 300 centers because of the need to hire professionals to manage alcohol distribution, the 300 brand has helped the company’s bottom line significantly, he adds.

Shearer and AMF were in the process of developing yet another stand-alone brand when the economy went south as well. Known internally as Avenue E, the concept is for a full-fledged family entertainment center, with bowling offered as part of an experience that includes amusement games, laser tag, multiple food and beverage options, and other amenities.

The Avenue E centers were going to be built from the ground up, and AMF planned to strive for Platinum certification for the centers from the US Green Building Council’s LEED program. “Platinum is very difficult to achieve, but that was the goal we had set out for

AMF Bowling Centers

ourselves when it comes to any new construction that we were going to pursue,” Shearer says. “There are not only great short-term operational benefits, but it’s also the right thing to do.”

The recession has not stopped AMF’s efforts to become more green and sustainable, however. The company recently finished a complete retrofit of the lighting in all its facilities, replacing inefficient fixtures with T8 fluorescent lighting. Gains were seen immediately, Shearer says, and the entire retrofit will likely pay for itself even faster than the two-year payback term initially expected. “We’re looking at well under two years, and that’s very compelling.”

Attention is now being turned to the building envelope systems at its centers, with AMF working with a number of energy services consulting firms to look for ways to further reduce electricity and gas consumption and embrace sustainability.

The chain is even evaluating the feasibility of solar

power installations on the roofs of its centers, though Shearer believes that is not a likely short-term solution because up-front costs remain high and break-even periods relatively long. “Energy is the second-biggest cost on our balance sheet after payroll, so there are major benefits from focusing on it, and it’s an area on which we’ll continue to put a lot of attention and resources.”

Looking ahead, AMF sees plenty of opportunities for expansion, with some of its most successful markets— such as Houston, Atlanta and Phoenix—maintaining strength that is creating new opportunities every day.

Going forward, Shearer expects AMF to maintain a blend of its brands in the marketplace, with plans already drafted for new 300 centers in key markets. “There’s always going to be a place for traditional bowling centers and the value they offer,” Shearer says. “We’re ready to go with more 300s, and we’ll have the Avenue E brand to cater even more broadly to families. We’re very optimistic about the future.” www.amf.com

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Completely Fresh Foods

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With supermarket products having just 1.5 seconds to grab consumers’ attention, Alan Swaby looks at how marketing is transforming one traditional food company

W

hen John Wayne, one of the most popular cowboy actors of all time, took a break from herding cattle to tuck into a tin plate of beef stew or chili and beans, little did he know that 40 years after his death, he would be the inspiration for a successful range of ready-to-eat chuck-wagon chow.

These days, of course, there’s nothing new about celebritylinked brands, but making them successful and sustainable is an altogether different story. “Licenses are expensive,” says Tony Cimolino, vice president of sales and marketing for Completely Fresh Foods (CFF), “and can last for ten or more years. To recoup that kind of investment, it’s necessary to build a brand with staying power. This involves far more than simply slapping a new label on an existing product.”

In fact, the R&D team at Completely Fresh spent a considerable amount of time touring museums and poring through history books to get the right information about ingredients and cooking methods. On a cattle drive, chuck wagons were able to haul all sorts of goodies, but lonesome cowboys had to live off what they could carry or find. Consequently, morning coffee dregs were used to flavor an evening meal—at least when there was no wild sage around.

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“Having a personality such as John Wayne on the packaging encourages inspection and trial,” says Cimolino, “but only quality and value will ensure repeat purchases.

The Wild West has a deep resonance with Americans, and they would soon reject anything that didn’t resonate with the established traditions as they know them.”

Completely Fresh Foods is a relatively new venture from a long-established meat-producing organization.

This family-owned and -operated company’s roots go back to the 1970s when Culver City Meats was formed in the western suburbs of Los Angeles. Then in 1991 Culver City Meats morphed into Golden West Trading, Inc. (GWT) based in Vernon, near downtown LA, with the same emphasis on raw meat, poultry and fish but gradually appealing to a wider audience. In fact, Golden West Trading caters to kosher and halal consumers as well, imposing considerable restrictions on the way it operates. Effectively, GWT has to run completely separate lines and workforces to satisfy the different demands in the way the meat is processed. In all, the group has five separate locations, with a sixth coming onstream in February next year, totaling nearly 1 million square feet of processing space.

Although much of the raw meat is bought on the open market, its highest quality range is based on Angus cattle

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reared in prime farming country, individually selected from ranches and then slaughtered under GWT supervision.

Traditionally, the business serviced professional customers in the foodservice business with customized cuts of beef, pork and chicken. Six years ago, though, it decided to go retail and supply portion steaks, chicken and fully cooked entrees throughout the supermarket and club store arena. Retailers were so impressed with the quality of GWT and CFF that the business has quickly grown to over 14,000 retail stores nationwide.

Although CFF has its own brand of fully cooked products, the real growth is expected to come from high-profile brands linked to an existing theme. As well as the John Wayne range, CFF currently has two other established heat-and-eat lines: Jack Daniel’s BBQ—with sauces that contain the elixir—and the Godfather range of Sicilian-style Italian food—the sort of meatballs and spaghetti that gave Marlon Brando his chubby cheeks.

With movie companies having led the way in exploiting the marketing potential of manufacturing licenses, the next wave of names is likely to include any number of famous stars along the lines of John Wayne.

“It might look simple,” says Cimolino, “but creating an authentic food experience that consumers can believe in and identify with requires a lot of market research and

Completely Fresh Foods

“Licenses are expensive and can last for ten or more years. To recoup that kind of investment, it’s necessary to build a brand with staying power. This involves far more than simply slapping a new label on an existing product” product testing. With the three brands we already have we’ve proved that we know how to do it. Our target is to have ten such lines within three years. These days people are coming to us and asking for our input in producing new licensed products.”

With factories already working around the clock to meet demand, the extra 300,000 square feet of space opening next year in Vernon will be warmly welcomed. It’s not an entirely new plant but rather a complete refurbishment— from the drains up—of a former processing house near the existing Vernon premises. “It has given us the opportunity,” says Cimolino, “of implementing more green features, from big ideas such as a highly efficient wastewater system to smaller ones of low-energy

lighting. Even though packaging design is a major part of our marketing activities, we’ve still incorporated as much recycled and recyclable materials as we can.”

With such rapid expansion, one of the biggest concerns for CFF is maintaining quality. As well as securing ingredients that would make John and Jack proud to be associated with the food, a third shift every day is devoted solely to cleaning the plants. Just as Marshal Rooster Cogburn knew his reputation as a lawmaker was only as good as the last dispatched gunslinger, so too Cimolino is aware that Completely Fresh Foods’ well-earned reputation for quality is only as good as the last batch of chili it dispatches. www.gwtinc.com

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