Citec attitude 1 2016 by Citec Group

CITEC

1•2016

Citec Germany working on three fronts PAGE 12

The fine art of financing a power plant

Safety first in propulsion production

PAGE 16

PAGE 20

ON OR OFF THE PREMISES WHAT’S THE IDEAL LOCATION FOR ENGINEERING CONSULTANTS? PAGE 6

EDITORIAL

CITEC

PUBLISHER Citec, P.O. Box 109,

The times they are a-changin’

FI-65101 Vaasa

EDITORIAL BOARD

he Finnish engineering industry is becoming increasingly internationalised. For certain companies – such as Citec – internationalisation is a planned strategic step. Other companies, however, are forced to internationalise to counter the protracted recession in their home market. As Finnish engineering firms today more often compete for large European projects, we need to further improve our competitiveness, for example through digitalisation. Globalisation also affects the careers of young engineers. At Citec, we are happy that increasing numbers of our younger engineers are willing to move abroad and work on assignments for longer periods. Since we are steadily investing in global growth, the experience these young engineers gain will be of great benefit both to the company and to themselves.

+358 (0)6 324 0700 attitude@citec.com Vinita Darole, Maria Bertula, Katarina Westerén-Hagnäs, Michael Smirnoff, Lars Rosenblad, Ralf Petell, Nichlas Råtts, Anna Jeanne Söderlund EDITOR-IN-CHIEF Michael Smirnoff PROJECT MANAGEMENT, EDITING Anna Jeanne Söderlund PRODUCTION Morgan and Citec LAYOUT Studio PAP COVER PHOTO Arash Matin PRINT Forsberg 2016 COMPANY KEY FACTS

Our main industry area – the global energy sector – is currently characterised by changes, too. Structural shifts in China’s economy mean that less energy is required to generate growth. Meanwhile in India, an expanding middle class of 600 million new electricity consumers means a large rise in the energy required to fuel the country’s development.

Citec offers multi-discipline engineering and consulting, and provides services related to information management. The total number of employees is 1,300 and the turnover for 2014 was 77 million euros. Citec is headquartered in Vaasa, Finland and has offices in Finland,

The 21st United Nations Framework Convention on Climate Change (COP21/CMP11) was recently hosted in France. To loud acclamation by virtually all the 195 nations involved, the conference succeeded in reaching its objective; to keep a global temperature rise well below 2 degrees Celsius during this century, and to drive efforts to limit the temperature increase even further to 1.5 degrees above pre-industrial levels. Although the phase of energy transition had already started earlier, a clear signal was needed from Paris to ensure that the transition continues. Now that a universal commitment towards renewable energy solutions has been made, investors and future generations can focus on a clearly painted picture of the future energy market. This will help energy projects to start faster than earlier. Happy reading with Attitude! MARTIN STRAND CEO

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Sweden, the UK, France, Germany, Norway, Russia, Singapore, Kazakhstan and India.

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CONTENTS

“ Citec’s project manager becomes a natural part of our team as he is present at our office.”

PAGE 10

“ The Finnish communication style is clear and straightforward, and it’s easy for me to feel at home at Citec.” PAGE 12

12 10

“The biggest challenge in financing a power plant project is to allocate the risks and rewards between all the parties.” PAGE 16

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NEWS

All in for competence and agility Strong customer focus, competence and agility were cornerstones when Citec renewed the Finnish operations. ■ Citec Finland now serves its industrial customers through a consolidated, much stronger organisation than ever before. This organisation is called Project Delivery and is formed from three previously separate units that have now merged under one roof, like in other Citec countries. The main target for the change is to clarify and strengthen disciplines, business responsibility and development. Project Delivery has seven different disciplines, which, led by Discipline Heads, take their projects from the sale and tender stage all the way to completion. “This allows us to offer our customers a one-stop package. But it’s no letterbox; the interaction is mutual, close and active”,

says Arto Rajanen, Head of the Product Engineering unit. The organisational change means that Citec can provide every project with exactly the right expertise needed and ensure that customers receive the best added value possible. From now on, the same Citec experts will work very closely with a project from start to finish, making sure that everything runs smoothly and according to plan. “Additionally this organisational change allowed our experienced employees to shift to new roles and opportunities. This was a welcome change change and significantly improves our services to all customers”, Rajanen says.

Key benefits: • Working close to customers and maximising direct project work – overlapping roles eliminated • Customers receive faster and more straightforward service – internal communication chain is shorter • Sales personnel become a part of the project organisation – responsibility for the project and customer satisfaction is clearer • Development responsibilities are clarified – the personnel’s competence and experience are utilised in the projects in the most effective way

PROJECT DELIVERY ORGANISATION

5 QUESTIONS

Director: Mikko Juopperi Seven disciplines and their Discipline Heads: • Product Engineering – Arto Rajanen • Electrical and Automation Engineering – Timo Wolff • Process Engineering – Tom Thorn • Information Services – Sonja Ahonen • Plant Engineering – Jari Hänninen • Civil Engineering – Nicklas Holmqvist • Project Management – Antti Hahtala

Sensibility is the base for recruitments Melanie Guivarch works as a Recruiter at Citec’s oil & gas engineering consultancy Akilea Engineering in Paris, France.

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Why are listening skills so important for a recruiter? First of all I need to listen and understand the recruitment needs of Citec, usually by talking to the sales team. Good listening skills are also needed when I do job interviews, as I need to find out the candidate’s personality. It’s hard to explain how I do it exactly; mostly it’s about asking the right questions in order to get the

candidate to speak as much as possible. How do you find the best candidates? I start the work by looking for candidates in our database. I also use the web, usually Linkedin or Monster and sometimes even Google. When I have found good profiles that match the recruitment needs, I call them up and conduct the first

NEWS

Citec built a tailor-made search engine with Wärtsilä Yoogle is living proof of how helping a client can end up in a new innovation. ■ A few years ago, the marketing department at Wärtsilä Energy Solutions asked Citec to help them organise their marketing material. Over time, the material had been spread out in different shared drives and various places in their document management system (DMS). This made it almost impossible to find the needed files. “Instead of reorganising the files, Citec’s suggestion was to make a completely new easy-to-use tool to make people share their files instead of leaving them on their hard drives”, says Project Leader Miia Viitamäki.

interview. During the first interview it’s really important to understand the candidate’s expectations and expertise. That’s the base for a successful recruitment. What are the factors that matter most in recruitment? In most cases the work experience plays the biggest role. As we work in France, the right education is also important. In addition to

The customer said yes, please, and Yoogle was born. A traditional DMS only works as far as the users upload, categorize and fill in the metadata. Yoogle is the opposite, it is a place where you drop your files with a minimum amount of input. The server then processes the rest in the background by reading the files and adding relevant tags. It also scans selected customer DMS structures and automatically imports new material from these periodically. “Just like regular search engines, Yoogle has smart searches built in with parameters

experience and education, the personality matters quite a lot. Without a good first impression it will never work. Actually, the gut feeling you get when speaking with a candidate is often crucial. Luckily, most of the times my gut feeling has been right! What do you do in your free time? I’ve done sports since I was four

that have different weight of importance”, explains Viitamäki. Some of these parameters are connected to the site usage, due to which they get their rankings. Yoogle also presents the results in a way that uses visual information to show which document could be suitable for the user’s needs. Yoogle has now been up and running for a year and about 8,000 files have been uploaded to the system. Presentations, videos, graphics, animations, white papers, etc. are now just a click away.

years old. My favourite sport is basketball, because of its great team spirit. I’m interested in a lot of other things as well, like street art, fashion, movies and all the people around me. Do your hobbies help you in your work in any way? Actually they do. Basketball has taught me how to integrate new players to the team and get the

best out of them. Team spirit and analytical skills are equally important in basketball and in my work. And to appreciate art and fashion you need to be sensitive; it’s my sensibility that gives me better knowledge of the human nature at work as well. How you speak on the phone, write the CV and use your voice are important little details that help me to identify a candidate’s personality. 1•2 016 C I T E C AT T I T U D E

OPERATIONAL MODELS

Our place

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OPERATIONAL MODELS

or yours? Should engineering consultants be located at the customer’s premises, or is it more effective if they have their own offices? All operating models have their pros and cons.

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OPERATIONAL MODELS

Råtts has spent a lot of time on elaborating new co

hen engineering consultants carry out project assignments for customers, the work can be done in different ways: consultants can either be located at the customers’ premises, or the work can be done as distance work, at the consultant’s own office. In addition, a variety of mixed models are also possible. Traditionally, Citec has mainly carried out assignments at the home office (Model 5 in the picture on page 9). Citec’s organisation is essentially also built up to suit this way of working, especially considering the vast expertise available in India. However, as Citec’s customer base has now expanded, a need for new cooperation models has emerged.

NICHLAS RÅTTS, Director of Engine Power at Citec,

has recently spent a lot of time on elaborating new cooperation models. His ideas have sprung from the concrete needs of the customers, as he has a solid experience from working with many different customers. “Not all customers are willing to work in accordance with our usual concept, which entails that the work is done entirely at our premises. This concept is most suitable when the cooperation has been going on for some time, and the assignment is large in terms of scope and size. When you have clear working routines, the customer doesn’t have to provide detailed work descriptions each time.” Many factors will affect the choice of best operating model: the nature of the project, the length of time that the companies have worked together, and the line of business in which the customer company operates.

IF THE CUSTOMER relationship is new, or the tasks by

their nature are many and small, the customer may be reluctant to outsource the assignment to a consultant located at a different office, or even in a different country. In response to this, Citec has recently implemented a brand new cooperation model (Model 4). In this model, a project manager will be based at the customer’s office, but employed by Citec. The project manager receives the assignments, divides the tasks and passes them on to the colleagues at Citec. “The clear advantage of this system is that it lowers the threshold for the customer to outsource a job to Citec. This, in particular, applies to work that consists of multiple smaller tasks rather than larger whole project entities. It is both timeconsuming and laborious if the customer repeatedly has to explain their requests to us at Citec from the start. Now it is C I T E C AT T I T U D E 1•2 016

ONE DOES NOT FIT ALL. “Many factors will affect the choice of best operating model: the nature of the project, the length of the customer relationship, and the line of business”, says Nichlas Råtts.

OPERATIONAL MODELS

operation models the project manager who informs us about the kind of service that the customer is looking for”, explains Råtts.

GENERAL OPERATING MODELS FOR TECHNOLOGY CONSULTANTS MODEL 1 SETUP

IN DIFFERENT countries there are different

practices as to how engineering consultants work. In Sweden, consultants have traditionally been customer-office based, whereas in Finland, the norm has been the opposite. “To merely provide manpower, which is often customary in Sweden, has its limitations. It becomes more difficult to quickly increase the resources at peak loads, and it also becomes harder to utilise our cost-effective global resources. Cost-effectiveness is a very important competitive factor for many large corporations in today’s engineering world”, says Råtts. However, from the client’s point of view, this can be seen as a safe way to operate, particularly if that is the way you have been used to working for many years. Nichlas Råtts emphasises that Citec is happy to work according to Model 1, which means providing manpower, since customer drive and need is always essential. This, however, is more seen as an entry point, since Citec wants to have a plan for how to move towards Models 4 or 5. “Ultimately, the question is about what you wish to gain from a partnership”, says Råtts. “If the customer wishes to buy manpower services in the long-term, we try to solve that requirement, too. We are always flexible.”

A MAJORITY OF CITEC’S current business is

generated from project work that has been delivered according to Model 5; in other words, work which is done in its entirety at Citec. Nevertheless, Nichlas Råtts thinks that Citec cannot get stuck on this model. He has opened several interesting discussions with current customers, in order to find out whether the model being used is the most suitable one, or if other operating models should be tried out instead. “It is our job to be business-minded and help our customers be comfortable and succeed. A new model which we have tested is one where the consultants sits with the customer to learn the ropes of the work and then move back to the home office.”

Citec working at customer premises within customer projects.

MODEL 2

MODEL 3

MODEL 4

MODEL 5

Citec project team working at customer premises with assigned project.

Citec project team working at customer premises + home office project team for assigned project.

Citec has project manager at customer premises. Project team at home office.

Citec has project team at home office working for the customer project.

Steering group

CUSTOMER PREMISES

CITEC PREMISES

TYPE OF PROJECTS

Manpower, smaller projects or tasks.

Part of projects or stand-alone projects. Single discipline participation for certain projects.

Part of major projects or stand-alone projects. Multi-discipline participation in certain projects.

Typically single discipline projects. Can also be multidiscipline project if a PM works at the customer premises.

Outsourcing of work. Direct contact and access to customer network and systems.

CUSTOMER BENEFIT

Rapid deployment of staff to balance workload peaks and unforeseen work.

A complete team ready to take on bigger tasks or projects at the customer’s premises.

Cost efficiency by downloading some parts to global offices.

Cost efficiency. Global resourcing of specialists and designers.

Cost efficiency and less office space needed. Global resourcing of needed people.

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OPERATIONAL MODELS

CASE 1 Magnus Andersson, Kalmar/Cargotec:

Citec takes responsibility from start to finish ■ In the summer of 2014, Citec took over Cargotec’s operations in India, and Cargotec became one of Citec’s customers. “When we started the cooperation with Citec, we agreed that Citec would have a representative at our premises. From our earlier cooperation with India we were aware of the problems which may occur when operating in different locations”, says Senior Manager Magnus Andersson at the business line for Forklift Trucks within Kalmar, a business area of Cargotec.

ACCORDING TO

We employed a project manager together.

Andersson, a big challenge when outsourcing jobs to consultants is to limit the time an assignment will consume of the company’s own resources. The more you must control, correct and give guidance to the subcontractors, the smaller the benefit of outsourcing becomes. Citec and Kalmar have developed a model together to ensure that a substantial part of such problems are eliminated. Citec has a project manager (see adjacent article) working at Kalmar’s office in Lidhult, in the south of Sweden. Both companies were involved in the recruitment process during the last time this position was filled. “After more than a year of cooperation, we can see that the model works well – we have been able to continuously transfer more and more work to Citec. I have even promoted the model to other business lines of Cargotec”, says Andersson.

HE BELIEVES that the biggest reason why the cooperation has been so successful is that the areas of responsibility are clearly defined. “Citec takes responsibility for the work from start to finish, which facilitates our job. Citec’s project manager becomes a natural part of our team and as he is present at our office the communication between us runs smoothly.” What is then required from a project manager to do a good job? “You have to be self-reliant and know how to find the information needed. Since you are in touch with so many people, it’s also an advantage to be sociable, at the same time as being structured and organised.” C I T E C AT T I T U D E 1•2 016

OUTSOURCED. The business line for Forklift Trucks within Kalmar, a business area of Cargotec, has been Citec’s customer since 2014.

OPERATIONAL MODELS

CASE 2 Kristoffer Lindroos, Citec:

Jan Malmsten, ABB Finland:

Juggling 50 tasks at the same time

Speaking the same language

■ Project Manager Kristoffer Lindroos is employed by Citec, but works at Kalmar’s office in Lidhult, Sweden. His responsibility is to ensure that the cooperation between Citec’s unit in India and Kalmar’s unit in Sweden works as effortlessly as possible. “I receive the assignment description, collect all the information required, and submit the order to India. A great part of the work entails staying in touch with all the parties involved and finding the answers to their questions. I am, in short, Citec’s extended arm at the client location.”

■ A couple of years ago ABB Finland’s Power Systems Substations decided to focus on their core competencies and outsource some of the non-core tasks to a partner. The choice fell on Citec, and the two companies started developing a cooperation model. “We have worked our way to the right model by trial and error. If we felt that something was not working we simply changed it”, explains Jan Malmsten from ABB, who was in charge for the cooperation with Citec when it started.

LINDROOS STATES that there are obvious advantages to be had by sitting

We trialled our way to the right model.

onsite at Kalmar. Being able to meet people face-to-face, quickly respond to their enquiries and look at drawings together bring a great deal of added value. “Another significant advantage is that it’s close to the production site, since Kalmar makes the forklifts here in Lidhult. I can take pictures, make measurements and talk to the production staff when necessary.” Some of the Swedish engineers already have a long experience of cooperation with India and can thus handle the greatest part of the contacts themselves; nevertheless, most of them want to get help from Lindroos.

THE COOPERATION started by a person from Citec relocating to ABB’s office to become familiar with the organisation. Communication turned out to be a major initial stumbling block. “We noticed that it is extremely important to use the same terminology in communication. If you do not use the same technical jargon misunderstandings happen easily. We also realised that thorough follow-up with the steering group is necessary to develop the cooperation.” Another challenge that arose was that a contact person with expertise in one engineering discipline is not necessarily the most suitable person to delegate tasks within another discipline. “After some time we realised that we needed one contact person for each discipline to make things run smoothly”, Malmsten reminisces.

THE BIGGEST challenge in this job is the large number of tasks that need

a model where there are two contact persons at Citec and ABB respectively. One pair handles civil engineering tasks whilst the other manages electrical tasks. Everyone sits in their own offices, but meet face-to-face regularly, at least once a month. “This has turned out to be the best model for us”, Malmsten says. In his experience, communication, attitude and technology are the key areas that need to work to ensure that things are running smoothly. Another important factor for success is that the consultants feel that they are a part of the ABB project team. “It is important to choose the right kind of contact person. It is easy to fall into the trap of choosing the technically most qualified person; in this job other qualities might be more important. Being a good team player is key to succeeding in the role.”

I am Citec’s extended arm at the client.

to be worked on all at once. “Currently I’m juggling 50 different tasks at the same time; it can be everything from the production of a new machine to replacing a part in another machine. I must be very organised in order to keep track of all the details. I continuously have to set priorities and figure out what the different engineers expect.” Lindroos has only been in his current position for a few months and the job description is still taking form. In the long term he believes he will be able to offer Kalmar an increasingly broader range of Citec services, and perhaps even serve other units at Kalmar.

TODAY CITEC and ABB Power Systems Substations work according to

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BUSINESS

HENSSLER TAKES THE New German MD Christian Henssler wants to differentiate Citec from the competitors.

onsidering that he was born and raised in Germany, Citec’s new Managing Director in Germany, Christian Henssler, is very familiar with Finland; he has Finnish relatives and, as a child, he spent his summer vacations in Finland. Moreover, he previously lived in Finland for two years when working at the Finnish consulting and engineering firm Pöyry. Citec was a new name to Henssler when he was approached by a headhunter in the spring of 2015. After meeting Citec’s CEO Martin Strand a couple of times he was on board. “Martin Strand had a clear vision, which appealed to me directly. I think Citec’s concept with local engineering close to customers together with the Indian resources is a real strength. It really differentiates us from the competitors, as smaller engineering companies in Germany are traditionally very local.”

Thirdly, we need to be closer to our customers and further develop the organisation to ensure that the right competences are available.” Citec is currently looking at two additional new locations in Germany; Frankfurt and Munich. The presence at these locations would preferably be established through acquisitions of small engineering companies with good references. “The market in Germany is promising as there is a realignment going on in the energy sector. Changes in legislation will have an impact on decentralised power generation.”

Of all the business cultures Henssler has been acquainted with during his career, the Finnish culture is one of his favourites.

CHRISTIAN HENSSLER is leading Citec Germany since August 2015 and

5 QUESTIONS

his task is to build something completely new. Citec has approximately 90 employees in Germany, working mostly in the engineering of rail vehicles and aircraft galleys. Henssler’s task is to add completely new business areas to the company; plant engineering for the chemical, energy, oil & gas and metallurgic sectors. “We are working on three fronts simultaneously. Firstly, we need to secure more projects in the current business areas, and secondly we need to win projects in the new business areas. This work is steadily developing and a lot of groundwork with potential customers has already been done.

Enjoying the balanced Norwegian lifestyle Originally from Indonesia, Team Leader Sanny Rusjdi has lived in many countries before ending up at Citec Norway.

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ALTHOUGH Christian Henssler’s new task is

certainly a challenging one, he has always been ready to take on new challenges during his career. Originally from Germany, Henssler has lived and worked in ten different countries on several continents. “Working abroad for 16 years was not something that I planned. But I was always promoted to interesting jobs that were easy to accept, especially as I was supported by my wife and two daughters who wanted to come along for the new adventures.” For the past two years, Henssler has been back in Germany, and he is slowly adjusting to the weather as well as to the German bureaucracy. Of all the business cultures Henssler has been acquainted with during his career, the Finnish culture is one of his favourites. “The Finnish communication style is clear and straight-forward, and people treat each other fairly and professionally. I’m still in the process of getting to know Citec as a company, but one thing that has become obvious to me is that Citec is an agile, business-minded company with a solid technical background. It’s easy for me to feel at home here.”

You have lived all over the globe. Where, exactly? I come from Indonesia, where I finished my education. Then I moved to the Netherlands for further studies. After graduating I worked in Jakarta, Indonesia, for two years before moving to Singapore to work. I joined M7 Offshore, which was later acquired by Citec. After I got the Norwegian working permit, I moved here with

my family in 2012. In addition I’ve also spent a few months at an internship at the UN headquarters in New York, and a few months working on a project in India. Why did you want to move to Norway? Both my wife and I had a wish to live either in New Zealand or Norway, for various reasons. Both countries have a beautiful nature and a good work-

BUSINESS

HELM IN GERMANY GLOBETROTTER. Christian Henssler has worked abroad in ten different countries during his career. Now he is in the process of steering Citec Germany in a new direction.

CHRISTIAN HENSSLER Born: September 1961 Previous jobs: Specialist for Rotating Equipment, Head of Steam Turbine Integration, Business StartUp Manager India, Engineering Director Power Plants UK and North America, Vice President Plant Engineering, MD Pöyry China Family: Wife and two grown-up daughters

life balance. Therefore, we were very happy when I got the position at M7 Offshore’s Norwegian office. Have you experienced any cultural shocks? The most shocking change for us was the climate. When we arrived at Oslo Airport, it was the coldest day in that winter with –20 ° C. In other words it was totally different from tropical Singapore. After a while,

we managed to adapt a bit to the Norwegian winter by following an old Norwegian saying: “There is no bad weather, only bad clothing.” What is delightful in the Nordic working culture? Norway values a good balance between work and personal life, more than most Asian countries do. We also realised that most people here trust each other,

which is evident, for example, in the fact that parents leave their children unattended outside in strollers. You’d never see people do that in Asia. What do you do when you don’t work? My two main hobbies, travelling and photography, are related to each other. We love travelling around Europe and while travelling, I take

photos of the places we visit. I also play tennis weekly with the Wärtsilä folk from the Asker office. Two years ago I tried skiing, but because my wife was expecting our second son I had to take a break. However, this year we’ll try to learn to ski together.

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CUSTOMER SATISFACTION

A PERSONAL TOUCH ON PROFESSIONAL RELATIONS Sanjay Kale, Head of Plant Engineering in Citec India, shares his views on how to make customers satisfied.

ow is your Citec career related to customer satisfaction? I started at Citec as a Quality Manager, my next role was a Section Manager, and now I work as the Head of Plant Engineering (earlier known as Competence Services). One of the things I’ve been responsible for in all of these positions is customer satisfaction. I need to understand the customers, be available for them all the time, convince them that we can do what we promise and ensure quality services. That is our prime motive. Working for better customer satisfaction has become my clear goal during the 9 years I have been at Citec. What are the most important things needed to ensure customer satisfaction? Quality, I would say, is the most important factor behind it. In addition, customer response times and customer engagement initiatives are equally significant. In today’s competitive market, being cost effective along with providing an added value is a key to sustaining customers. Making the right competence available, being flexible with resourcing, offering a local presence and flexible engagement models have also helped. What motivates you in terms of working for the customers? I enjoy my present role because it challenges me in different ways on a daily basis. Furthermore, I have always enjoyed guiding and inspiring my team. Recruiting high-end competence and retaining the motivation in the team is important. I also constantly need to discover and plan ways to do things better for the customers. What are the biggest challenges in keeping the customers satisfied? As we have customers at various far off locations, there are limitations when it comes to meeting them in person. Additionally, there are cultural differences, which need to be handled with tact and respect. My current

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role as PE Head is both very demanding and exciting since I have to manage our resources as well as the customers; it’s about being able to please the customer without overburdening ourselves. Therefore, we customise our tools and processes to suit the customer needs in the best possible way. By standardising our products, designs and modularisations, we are able to further enhance our own efficiency – and customer satisfaction. You work close to the customers. Can you easily form personal relationships with them? In the end we are all humans and tend to look for some warmth; it is essential that we add a personal touch to our professional relationships to keep them healthy and flourishing. I’ve been fortunate since I’ve succeeded in developing close relationships with many of our customers.

CUSTOMER SATISFACTION AT A GOOD LEVEL According to the latest customer satisfaction survey, Citec’s customers are in general pleased with the services they receive. Of the respondents, 95 per cent could re-select Citec as their supplier, and 96 per cent would recommend Citec to their colleagues or acquaintances. Almost every third respondent evaluated Citec’s total operations to have improved in the past year. Altogether Citec has to a great extent managed to meet the respondents’ expectations. However, one of the objectives of the survey was to identify areas that need to be improved. In the future, Citec will therefore pay even more attention to areas such as keeping project schedules and to adequate allocating of resources. The survey was based on 150 telephone interviews with key customer contacts and it was performed in late spring 2015.

BUSINESS

A new dawn for pulp and paper The paper industry is currently experiencing a recovery and upswing. Citec too is actively working in this area with engineering and information management services.

he paper industry has been on a rollercoaster ride for the last few years. Before the turn of the millennium the sector was overheated, only to subsequently go into freefall as the demand for paper shrank due to digitalisation. Now all the graphs are pointing upwards again, and large investments are being made in both Finland and Sweden. “If you had asked anyone five years ago if they thought there would ever be another investment into a paper processing line in Sweden, everyone would have said no. Things have changed very quickly”, Business Area Manager Peter Hallberg points out. Hallberg has worked in the industry for 20 years. In September 2015 he started working for Citec Sweden with the brief to develop Citec’s offering to the pulp and paper industry.

QUICK CHANGE. “Five years ago, nobody would have thought there would ever be another investment into a paper processing line in Sweden”, says Peter Hallberg.

ONE REASON for the strong current upswing is due to

the so-called bio-economy trend, which means that wood is being used in new innovative ways. Another reason is that the demand for paper packaging is increasing. “A normal car requires 200kg of paper before delivery in the form of manuals and different packaging. The demand for liquid containers is also increasing, mostly due to fewer products being canned”, Hallberg explains. One might think that it does not require much to manufacture paper packaging, but according to Hallberg, it is as complicated to make a liquid container as it is to build a smart phone. The fact that paper containers are in demand is especially beneficial for the Nordic countries since the long fibres found in our coniferous trees are perfect for that purpose. “Paper packaging needs to be strong, and to become strong the fibres need to develop slowly. The types of wood found around the equator grow faster, but are more suited to tissue paper.”

THE COMBINED investments in the paper industry in

Sweden will total roughly 1.5 billion euros by 2020. Peter Hallberg’s mission is to ensure that Citec gets a little share of that pie. “My task is to build a team who can serve the paper industry. Today we can offer small facility conversion projects and project management. In the future we will be able to offer, for example, installations and operationalisation.” 1•2 016 C I T E C AT T I T U D E

BUSINESS

THE FINE ART OF POW

Financing a power plant is like doing an enormous jigsaw puzzle. It usually takes years before all the pieces have fallen into place.

here is a great demand for electricity in the world, and there are a lot of different players willing to finance power plant projects. However, few people are able to master the difficult art of tying the whole package together.

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One person who is familiar with the challenges, though, is Terje Gresslien, Director for Project Development (small picture) at Jacobsen Elektro. He has had several years of experience in financial modelling for power plants.

BUSINESS

ER PLANT FINANCING

The ones needing a power plant – mostly state-owned utilities – rarely have enough capital to finance it.

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BUSINESS

Companies offering power plants often also arr “What makes it so complex is the great number of different parties involved and all the negotiations and contracts between those parties”, Gresslien explains. The main part of a power plant is typically financed by different kinds of lenders; commercial banks, development banks, export credit agencies and private equity investors. In addition to these parties, there is of course the buyer, that is, the TERJE GRESSLIEN, Director for Project utility for whom the power Development at Jacobsen Elektro. will be produced. There are also local authorities involved all along the way, as well as guarantors. When the construction of a power plant is started somewhere in the world, it is actually the result of several years of hard and persistent work.

THE BACKGROUND to today’s complex situation regarding power plant

financing can be found in history. The ones needing a power plant – mostly state-owned utilities – rarely have enough capital to finance the planning and construction of it. To combat this dilemma, a model was formed in the late 1980s, whereby companies offering power plant solutions also arranged the financing. This became known as an IPP model, which stands for Independent Power Producer. “For Wärtsilä, this model was a way to enter into the power plant market”, explains Clas-Eirik Strand, who is a board member of Citec. He once participated in the development of Wärtsilä’s power plant business, and today works for Jacobsen Elektro. Like Wärtsilä, Jacobsen Elektro arranges financing for power plants in order to ensure their deliveries. “For us, the primary objective for arranging the financing is to ensure that our EPC projects are realised. In some cases we also operate the power plant after it has been completed, although that is not our main aim”, says Terje Gresslien. During the process, a so-called Special Purpose Company (SPC) is usually started, which will run the power plant and sell the electricity to the utility. The company also functions as a kind of buffer in case the project fails.

THE MODEL that emerged in the late 1980s still applies today. One

difference now, though, is that the projects have become harder to realise due to the increasingly stringent nature of the project requirements. Today, investors carry out lengthy due diligence processes

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Previously, there was rarely any social dimension in the projects. Today, however, these requirements are even more detailed than the environmental ones. and demand lots of documentation and assessments before financial closure. The financial crisis has made banks and other financiers even more cautious than before. “The interesting thing is that the environmental and social requirements today come from the financers, and not necessarily from the legislation in the country where the power plant is built. If you print the environmental requirements set by the banks, you will get a ten centimetre thick stack of paper. All the documentation can be four shelf meters long”, says Strand. Previously, there was rarely any social dimension in the projects. Today, however, these requirements are even more detailed than the environmental ones. Social issues can, for example, be about how the power plant affects the way children living in the area go to school.

ALL THIS LEADS to lengthy time-consuming investigations. According to

Terje Gresslien, you never know for sure until the day of financial closure if it was worth your while. That being said, projects are carefully evaluated from the start and throughout the process. “The first question you should ask when considering a potential project is whether there’s a need for the power. In sub-Saharan Africa, where we mostly operate, the answer is typically yes. The second question is whether they can pay for the power, that is, what is the long-term sustainability of the project? Another important thing to look into is whether there is proper legislation in the country. We also start negotiations with some lenders at a very early stage, and depending on how they evaluate the project, we might simply stop it there”, says Gresslien.

EVEN WHEN the project is considered worth starting, things can still go

wrong in the years that follow. One of the biggest risks is the political one. “The appetite for realising a project can disappear after elections have been held. Another typical scenario is that the IMF can impose borrowing limitations on a country, if it has lots of other debts as well.” The whole funding process can typically take five years or even longer.

BUSINESS

ange the financing PRIVATE INVESTORS

LENDERS (BANKS ETC.)

This is due to the large number of parties involved, which makes it particularly challenging. “There are a lot of simultaneous negotiations going on all the time. One piece falling into place can affect all the other pieces. The biggest challenge in any project is to allocate the risks and rewards between all the parties”, Gresslien explains.

SPECIAL PURPOSE COMPANY

EPC

CONTRACTOR

There are a lot of simultaneous negotiations going on all the time. One piece falling into place can affect all the other pieces. CONSIDERING that a typical project is worth approximately 400 million euros, it is perhaps little wonder that financing a power plant is such a complex business. Although there is no shortage of either investors or potential projects available, the challenge is to find the projects which can be materialised and start earning a return within a reasonable time.

STATE-OWNED UTILITY

MINISTRY OF ENERGY

According to Clas-Eirik Strand, it is natural to feel frustrated from time to time when working in the field. “You have to be constantly paranoid in order to succeed. At the same time, this job is very rewarding and varied; you get to see the world and meet a lot of different people.” According to Terje Gresslien, the job requires a lot of patience. However, you sometimes have to be impatient to make things move forwards. Like Strand, he thinks it is an extremely interesting and meaningful field to work in. “Electricity is such an important part of any developing countries’ ability to grow. There are still a lot of people in the world who don’t have access to power. Nothing beats the feeling when you finally reach the financial closure.”

WHO BUYS A POWER PLANT? 1. U tilities, which are usually state-owned. The trend has long been that utilities finance power plants increasingly less themselves. 2. P rivate companies, who need the power for their own operations. For example, mining companies or factories. 3. I PPs (Independent Power Producers). These are companies founded solely for the purpose of developing, financing, constructing, owning and operating a private power plant project. Most of the power plants built today are financed in this way.

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CUSTOMER SUCCESS STORY

Giant propulsors need giant tools C I T E C AT T I T U D E 1•2 016

CUSTOMER SUCCESS STORY

ABB Azipod® propulsion systems placed below an icebreaker’s hull can push through the thickest ice. Citec designed heavy-duty production devices for this heavy-duty product’s whole chain of production. They are strong enough to safely lift and transport propulsors of up to 70 tonnes.

he gearless and steerable ABB Azipod thruster is the world’s leading propulsion system for icebreaking vessels. The electric drive motor is in a submerged pod outside the ship’s hull. Azipod propulsion units obviously meet massive ice loads in the freezing water, so the conditions place heavy demands on them. They have to be large, durable and strong. “Our largest Azipod model weighs 400 tonnes”, says Juha Korhonen, Production Manager at ABB.

land and sea routes were important. For example, the transport frame has to function in such a way that the gigantic propulsor will not fall over during transportation even in very rough seas”, says Kim Edsvik, Project Manager at Citec.

THE PROJECT proceeded smoothly. Because there were a

THERE ARE always many issues to be solved when

manufacturing and transporting massive products. ABB has been leading the ice propulsion market for 75 years and has long been supplying the market with different kinds of Azipod propulsion units. But when the company was planning the production of the Azipod ICE 1400 propulsor, it faced some completely new challenges: there were no devices of the same size with as strong an ice class as this model’s, so the company had to develop the production devices for it from scratch. “Just then Citec happened to inquire if we needed any kind of design help. Because Azipod propulsion units are so large in themselves, so is the production tooling required. They both have to be handled with cranes in the assembly hall”, Korhonen explains.

ABB HAS long been Citec’s key customer in many sectors,

except propulsion. Now Arto Rajanen, Head of Product Engineering at Citec, was taken onto the floor of ABB’s assembly hall next to an Azipod propulsion unit and was asked if Citec would be interested in making the production devices for it. Rajanen said yes, and the cooperation began. Citec was tasked with designing the production tooling for the Azipod ICE 1400 propulsion system’s whole chain of production. These devices include the tools needed to handle the product, production and testing equipment, lifting gear and transport and handling equipment. Regulatory requirements on the production safety have become increasingly stricter, and Korhonen remarks that safety is the number one value also for ABB. “Citec designed the CE-marked tools, with every necessary strength calculation and risk assessment performed on them. Also, the lifting plan for the Azipod propulsion units in the factory and the transport plan for

HEAVY LIFTING. Citec designed the production devices for the entire chain of production for Azipod propulsion units, from manufacture to transport. The photograph shows a yellow lifting and transport frame.

lot of government regulations to take into account, the compact planning team worked efficiently and in close cooperation with customers to ensure the best possible result. For Citec, the project was particularly interesting, because this was the first time it was producing production tooling on such a large scale. “We got to consolidate the whole chain of production and participate in the planning of the product’s manufacturing process, transport and regulatory planning”, says Rajanen. ABB sought out Citec as their cooperation partner because they were convinced by Citec’s previous references and solid expertise. “Of course, there are some challenges with every project. The true indicator, however, is the way they react. Citec always did a perfect job”, Korhonen praises. The two companies’ continued cooperation is another sign of customer satisfaction. Since then Korhonen has transferred to ABB’s factory in China and still orders production tooling from Citec, now for the Azipod thruster models manufactured there.

THE DESIGN OF PRODUCTION DEVICES Citec designs complete processes in-house from start to finish, which is why we can make projects proceed as easily as possible for the customer. Citec develops production tooling from the concept to final planning and the documents required, according to the customer’s needs. When necessary, we also perform the preliminary analysis of manufacture, such as inviting tenders for the manufacturing processes. Citec observes standards and keeps up-to-date on changes in government regulations on behalf of customers.

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SOLUTIONS

REDUCING ERRORS AND The CitecDot solution puts together all the information and interaction of an EPC or EPCM project in one online platform. As a result human errors, delays and extra costs are reduced to almost zero.

fter five years of development, the CitecDot solution can now drive all document and material deliverables in EPC and EPCM projects from the sales stage to cutting the ribbon at the construction site. The integrated and agile processes of the solution have numerous benefits; you can easily interact with other stakeholders and keep all the track records and decisions in one place. In other words, the whole project value chain is included in CitecDot, bringing together all the stakeholders around the globe. This ensures that the project will be completed on time, within budget and with the expected quality level. “In one of our ongoing projects, engineering takes place in Italy and Estonia, document control in India and manufacturing in China, while the construction site is found in Mexico. When there are a lot of players and interaction involved, emailing is not efficient enough. That’s where CitecDot saves the day, acting as a global platform for interaction and follow-up”, explains Rémy Jeandemange, the Project Solutions Director who is driving its deployment.

CITECDOT PRESENTS the people involved with the overall picture of the project, because it has total insight on every level. “You can chart every step of every deliverable from contract signature to erection completion at the site. For example, has the design been approved by local authorities and has a certain part already been sent from the factory to the site? It’s not based on guesswork but real facts”, says Jeandemange. Because all the parties involved can follow all the stages of the project via the same interface, their work becomes much easier and more efficient. This also speeds up the project’s delivery time. Due to project-specific processes, the quality assurance also works better than with manual organisation. CitecDot even prevents mishaps by giving an automatic early warning if, for example, an action in the project is running late. “Delayed projects usually involve huge penalties. CitecDot reduces the risk of deviation to close to zero. This solution allows you to manage corrective actions at an early stage to keep the project on track”, Jeandemange says.

CITECDOT IS an all-in-one solution, but it can also be scaled to the

client’s needs. Jeandemange explains that the platform can initially be C I T E C AT T I T U D E 1•2 016

adopted as just a document management service, with more comprehensive management systems added as required. “CitecDot is like a Lego set: a flexible solution that can be extended and adapted according to the client’s needs. Clients rarely have time to spend their resources on control issues and project management. When they want to secure their projects and focus on their core business, CitecDot is the answer.”

SO THIS GREAT solution covers all the stages of a project and all its

thousands of details – but will this make it complicated to use? The Solution Architect at Citec’s Information Solutions, Markus Rintala, is one of the team members that developed the technology. He says that their number one target was to make CitecDot user-friendly. The experts worked hard to keep the use of the CitecDot services simple and handy. They have created flexible solutions that help their users and save their time at all levels of a project. “CitecDot uses cutting-edge technology, accommodating all the complexity of projects, but works unnoticed in the background. For the user, it is an extremely easy online application that only requires basic access to the Internet. It takes just a couple of hours to get this tool up and running. The intelligence is behind it, people just use it and benefit from it.” ______________ For more details and a demo, contact Rémy Jeandemange: remy.jeandemange@citec.com, +336 77512091

BENEFITS OF CITECDOT • Combines all stakeholders in one interface • Leads to time savings and shorter delivery times • Reduces the risk of deviations to close to zero • Creates high quality processes • Meets project-specific requirements • User-friendly online solution

SOLUTIONS

EXTRA COSTS

CitecDot is a comprehensive project lifecycle management solution that takes care of all your document and material deliverables and the progress follow-up of the EPC(M) project. CitecDot is usable by all the stakeholders and parties involved in the project.

citecdot Stakeholders

FOLLOW-UP 3D animations, BIM

CUSTOMER

DOCUMENTS HANDLING search, create, import, export, revise

PROJECT MANAGER

ISSUE TRACKER RFI, design changes, nonconformities, statements, tasks

MATERIAL HANDLING procurements, manufacturing, expediting, storage, installation

PROJECT TEAM SITE MANAGER

ADMIN manage users, roles, workflows, codification rules

QUALITY TEAM

VENDORS LOGISTICS TEAM FACTORIES

FOLLOW-UP progress reports, lists of deliverables, Gantt diagrams

CONTRACTORS SUBCONTRACTORS

DOCUMENTS HANDLING markup, comment, approve, reject, release

Product information connected throughout the project Document management • Templates • Inputs • Output deliverables • Contracts, schedules • Instructions • Manuals

Progress follow-up • Schedule • 3D model • Reports • Automatic warnings and reminders • Task assignment

Material tracking • Part list • Packages • Site map • 3D model • Stock transactions

Project lifecycle Sales

Engineering

Procurements

Manufacturing

Logistic

Installation

Commissioning

Operation

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1300 experts globally. 30 years of excellent engineering and information management services.