energy - ESCO Corporation
Transcription
energy - ESCO Corporation
THE Solutions from ESCO AUGUST 2007 IN THIS ISSUE ENERGY ESCO MISSION To be the premier provider of highly engineered, technically rich metal components and solutions for industrial applications. The EDGE: Solutions from ESCO The Magazine of ESCO Corporation August 2007 Volume 4 Issue 2 ESCO Corporation, founded in 1913 in Portland, Oregon, USA, is a global group of companies that manufactures engineered metal parts and components for industrial applications. ESCO is comprised of two operating groups: Editor John Howard Engineered Products Group Innovation leader for metal wear parts, components and earthmoving products used in global mining, construction, dredging and other challenging industrial applications. Designer Natalie Maciukenas Director of Marketing Communications Jodi Walder-Biesanz Turbine Technologies Group Responsive manufacturing partner for precision investment cast components in aerospace and industrial gas turbine applications. The EDGE staff would like to thank the following individuals for their help on this issue: Nilton Albino Filho, Edson Alves Morais, StephenBabson,CleberBitencour,JamesColeman,Vincente de Sales Fonesca, Claudio José de Silva, José dos Santos Sobinho, Tim Elbel, Philippe Faidherbe, Bill Fewless, Pat Fonner, Bryan Haynes, Glen Jarvis, Jeff Kershaw, Peter Lehnhoff, John Lines, Roger Long, Ana Paula Machado, Jason Muck, Leonardo Munck, Carmen Myers, Tim Myers, Raphael Neves, Joe Novasio, Carl Openshaw, Jon Owens, Mike Passen, Álvaro Paulose, Dirceu Ramos, Laurent Reminiac, Ulrich Rissler, Rodrigo Sanchez, Romeu Scarioli, Jr., Romeu Scarioli, Sr., Ermanno Simonutti, Mike Smith, Bill Struthers, Masaaki Tanaka, Marcos Vieira, Max Villanueva, Shane Williams, José Wilson Batista, Maurício Zuquim Macedo TO THE EDITOR John, I just received my latest [April 2007] edition of the ESCO EDGE, opened it and read your editorial. I must say you are truly blessed as a writer and photographer! What an extremely interesting account of your 17-year-old world travels. Fantastic! In all the years we have known each other and worked together, I never knew you had that wonderful experience. Great articles and great pictures, as always. Roger Long Senior District Manager Atlanta, Georgia The EDGE is published in April, August and December. Readers’ comments and suggestions are always welcome. EDGE Magazine ESCO Corporation 2141 NW 25th Avenue Portland, Oregon USA 97210 email: [email protected] EDGE MISSION • Show the strengths and problem-solving capabilities of ESCO’s business groups • Spotlight ESCO’s successes in the diverse markets it serves • Communicate the values and traditions that make ESCO unique • Help build lasting and mutually beneficial relationships with customers ´ ´ ´ John, I left ESCO in 2001, but whenever I see copies of the ESCO EDGE, I read it cover-to-cover—always have. I felt that the April 2007 issue was especially well-written. Your reflections on The World is Getting Smaller were great, as was the rest of the issue. I think that you have an aptitude for presenting information in theme with a given issue and for making ESCO seem like a family within the pages. I just wanted to offer my appreciation for your writing. Yet another person out there in the world that enjoys reading it. Best, Jeff Summerson Camas, Washington Printed in the USA on 100% recycled / 100% post consumer waste paper. © 2007 ESCO Corporation. All Rights Reserved. Editor: My thanks to Jeff Summerson, an account manager with ESCO who worked hard to promote ESCO’s hydraulic impact hammer line with equipment rental firms throughout the west until the company decided to get out of the hammer business about six years ago. FROM THE EDITOR CONTENTS OIL SANDS BOOM My first trip to Fort McMurray and the Alberta oil sands was an eye-opener. The flight was packed with mine workers returning from holidays in warm, sunny places. Situated on the banks of the Athabasca River 270 miles northwest of Edmonton, Fort McMurray is the unofficial capital of the oil sands. Mud-encrusted pickup trucks prowl its crowded streets. It has the look of a fast-built, bustling, modern day boom town, like Dawson Creek during the Klondike Gold Rush. 4 ENERGY HELP WANTED signs are all over town. Wages are high and prices are even higher. Fast food clerks and janitors earn $17 per hour, and gas station attendants get $600 signing bonuses. Equipment operators and mechanics can earn over $100,000 a year at the mines. Tiny apartments rent for $1,200 per month and very modest two-bedroom homes sell for $500,000 or more—if you can find one. Because of the housing crunch in town, the big mines offer extensive on-site housing. With a population of about 69,000, Fort McMurray has doubled in size over the last 20 years. Thousands have emigrated from Canada’s Maritime Provinces and elsewhere to take high-paying jobs in “Fort McMoney” and the oil sands operations nearby. Virtually every mining and processing vendor in the industry has a presence in Fort McMurray to serve the mines and participate in the oil sands boom. The mines themselves (profiled in the article beginning on page 6) are located in the flat boreal forest a few miles north of town, their processing stacks towering over spruce and birch trees. All the surface mines now use power shovels and haul trucks to dig and transport the chocolate-brown oil sand from the pits to the processing facilities. 6 ALBERTA OIL SANDS 10 BAUMA 2007 ESCO has supplied earthmoving wear parts to oil sands mining customers for decades. Our engineers and metallurgists have worked shoulder-to-shoulder with mine operations personnel there to address the biggest challenge of oil sands mining: extreme abrasiveness. Even when overlaid with tungsten carbide, mining teeth, adapters and blades wear out quickly when working in the Athabasca oil sands. When you add brutally cold winter weather to the challenge of unusually high abrasion, the oil sands present one of the toughest mining environments imaginable. Machine operators and maintenance supervisors told us how much they appreciate the durability of ESCO mining lip and tooth systems, and especially their reliable and easyto-change designs. In the gloom of winter when it is 30 or 40 degrees below zero, nobody wants tooth changes to take a long time! As the worldwide demand for energy rises and the “easy” sources of crude oil begin to diminish, the Athabasca oil sands represent an important and politically stable resource—especially for consumers in North America. In this issue of the EDGE we not only discuss the booming oil sands, but a variety of energy resources that utilize ESCO products to mine and process. — John Howard, editor 16 ESCO SOLDERING ROSEBUD COAL MINE 12 CVRD 18 MINAS GERAIS, BRAZIL 19 SUGARCANE 20 ETHANOL 21 TT CUSTOMER: WOOD GROUP 22 OSCAR MEIER 40TH ANNIVERSARY 24 ESCO NEWS 24 INTERVIEW WITH DIRECTOR STEPHEN BABSON 26 ORGANIZATIONAL CHANGES 28 SERVICE ANNIVERSARIES 29 Cover: Flames boil upwards when scrap steel is dropped into an electric melting furnace. Photo by John Howard. E nergy is in us and all around us. Each of us must have energy in the form of food and light to survive. We need energy for transportation; to heat and light our homes; to grow, harvest, cook and refrigerate foods; and to manufacture every product imaginable. Look around you: everything you see required energy to create and transport. Some of what you see or hear is consuming even more energy, such as the clock, computer, light fixtures and air conditioning. The most abundant source of energy is solar, the rays of heat and light that reach us from the sun. Plants and certain sea life are able to directly consume and store solar energy, which is passed up the food chain. In most cases, humans tap solar energy indirectly in the food we eat and fuel we burn. ENERGY! The most widely used form of energy is fossil fuel—oil, coal and natural gas. Formed when vast underground deposits of ancient organic matter were compressed and transformed over eons, fossil fuels account for over 80 percent of the energy consumed by man worldwide. World Energy Consumption By Type Bio-diesel & ethanol; wind power 9.5% Solar <1% Hydroelectric 2.5% Article and photos by John Howard Nuclear 7% Fossil Fuels 80% Oil is the leading fossil fuel. The world consumes about 85 million barrels of oil per day (bpd) or 3.6 billion gallons. The world economy has a ravenous thirst for oil for transportation, heating, lubricating, and petrochemicals. Paints, plastics, synthetic fibers, tires, roofing, asphalt — they are all made from oil. Most crude oil is drawn in liquid form from underground or undersea deposits. Some crude oil is extracted from oilbearing sand deposits, as described in the article beginning on page 6. THE EDGE AUGUST 2007 Coal is the second most widely consumed fossil fuel. In some parts of the world, it is burned directly for cooking and heating. It is also burned in industrial boilers to run factories. The most voluminous use of coal is in large power plants that burn it to turn turbines that generate electricity. China, North America and Europe rely heavily on coal for electrical power. Natural gas is another important fossil fuel used to heat homes and generate electricity. Industrial gas turbines convert the energy in natural gas to electrical energy. ESCO’s Turbine Technologies business is deeply involved in making sophisticated parts for gas turbines. Natural gas and coal each account for about 20 percent of world energy consumption. Nuclear energy, created by splitting the atom, is the world’s fourth largest energy source. Although it generates harmful and incredibly long-lived radioactive waste, it produces very little air pollution or greenhouse gases. Nuclear energy accounts for about seven percent of world energy consumption. Europe relies more heavily on nuclear power than other regions. Hydroelectric energy, generated by river water turning turbines at dams, represents only about 2.5 percent of world energy consumption. Considered a clean energy source because it does not generate greenhouse gases, hydropower requires huge capital investment and carries environmental costs including degraded fisheries. As many of the world’s major rivers have already been dammed, there is only limited growth potential for this energy source. Solar energy — getting electricity and/or warm water directly from the rays of the sun—has great promise as an energy source, but to date accounts for less than one percent of total world energy use. Photovoltaic cell technology which converts sunlight directly into electricity is expensive compared to fossil fuel-generated electricity, but it is growing more attractive as a clean alternative energy source as the cost of fossil fuels climbs. Bio-diesel and ethanol derived from processing sugarcane, grain, wood chips or other organic matter is being used as a substitute to fossil fuel. Brazil, for example, is a world leader in converting sugarcane into clean-burning ethanol for use in specially designed automobile engines, as described on page 21. Wind power, created by tower-mounted turbines turning in the wind, is another promising and growing clean energy source. Windmill farms are being installed at a growing pace throughout the world, but their cumulative impact remains very small compared to fossil fuels, nuclear or hydroelectric energy. ESCO’s Engineered Products and Turbine Technologies businesses are deeply involved in assisting energy production around the globe. Much of the earthmoving required for a number of the world’s hydroelectric dams was done with ESCO products. Our mining products are widely used to extract coal, oil sands and uranium. Our cast turbine components are used in industrial gas turbines and other energy-producing technologies. In the pages that follow are examples of ESCO’s role in energy production. ´ THE EDGE AUGUST 2007 1788. The first attempts to commercially exploit the oil sands occurred in the early 1900s, but the cost and difficulty of mining the gritty substance, separating bitumen from sand with hot water, then upgrading the bitumen to crude oil drove all of the early entrepreneurs into bankruptcy. The modern era of oil sands development began in the late 1960s when the Great Canadian Oil Sands project (now Suncor Energy) brought in enormous bucketwheel excavators to move massive amounts of the black sand. Long, elaborate conveyors carried the material to the processing plants. photo courtesy of Suncor Energy ALBERTA’S OIL SANDS When Syncrude commenced operations to the west of Suncor in the late 1970s, it used huge draglines in combination with bucketwheels. The use of draglines and bucketwheel reclaimers continued for about 25 years before the last of these behemoths was parked in 2005. Today, all the surface mines have opted for the more versatile “truck and shovel” mining method where huge electric power cable shovels (P&H or Bucyrus) and hydraulic face shovels (Hitachi, O&K or Komatsu) load mammoth haul trucks capable of carrying 240 to 400 tons per load of oil sand to the sizers or crushers. Normally, two tons of oil sand are necessary to produce one barrel (42 gallons) of crude oil. A vast energy resource in Canada containing nearly as much oil as Saudi Arabia is being developed with sophisticated mining technologies U by John Howard p in the northwest corner of Alberta, Canada lies one of the world’s largest oil reserves. This is not your classic subterranean pool of crude oil that gushes from wells, however. Instead, this is a vast underground deposit of oil-bearing bitumen bonded with sand. In summer, it is like a cakey mix of coarse sand and tar. In winter, it is like hard-frozen chocolate ice cream. In any season, it is challenging to mine and process oil sand, but in a world of rising energy costs and dwindling crude oil supplies, the oil sands are being developed at a fever pitch. Covering some 87,000 square miles (140,000 km2), the Alberta oil sands deposits contain an estimated two trillion barrels of bitumen—enough to supply the entire world’s energy needs for 15 years or more. Only in a relatively small area north of Fort McMurray, however, are the oil sands close enough to the surface to be mined by open pit methods. Elsewhere, the bitumen is being tapped by underground steam injection techniques, called in situ. Men have been intrigued by the oil sands for centuries. Aboriginal peoples used the gooey bitumen to waterproof their canoes and make torches. Explorer Alexander MacKenzie noted a region of “bituminous fountains” here in THE EDGE AUGUST 2007 Reliable, abrasion-resistant ESCO products have been used by mining companies in the oil sands for decades. ESCOSUPPLY Ltd., a joint venture of ESCO Corporation and Equipment Sales & Service, opened a store in Fort McMurray early in 2007 to provide an even higher level of responsiveness and customer service. (Please see sidebar article at right about ESCOSUPPLY Ltd.) Tens of billions of dollars have been invested in the oil sands to date and much more is expected to be spent over the next decade. ExxonMobil, Royal Dutch Shell, ConocoPhillips, ChevronTexaco, Petro-Canada and a number of other global oil companies are heavily invested here. Currently there are three major surface mining operations in the Athabasca oil sands north of Fort McMurray, and a number of other projects under development. Suncor Energy, Syncrude Canada, and Albian Sands Energy have largescale producing surface mines. Canadian Natural Resources (CNRL) is soon to begin production at its Horizon Mine, and a fifth surface mine at Petro-Canada’s Fort Hills site is also scheduled to open in the near future. Together, the surface and in situ subsurface mining operations are today producing about 1.1 million barrels per day of crude oil. Total production is expected to double by 2012 and possibly reach four or five million barrels per day by 2025. Suncor Energy, Inc. The first commercially successful oil sands mining operation was pioneered by Suncor in 1967. In its early surface operations Suncor used a system of huge bucketwheel excavators and conveyors to transport the sand to the extraction plant where raw bitumen was separated from the sand and clay with a hot water process, and the bitumen was upgraded to synthetic crude oil. The company eventually switched to truck and shovel techniques in its surface mining, and has also begun in situ mining where the oil sand lies too deep. ESCOSUPPLY™ LTD. Wear Parts Supermarket for the Oil Sands L ast fall, ESCO Corporation and Equipment Sales and Service, Ltd. (ES&S) announced a joint venture to better serve customers in the Alberta oil sands. The new ESCO/ES&S “wear parts supermarket” located in Fort McMurray is called ESCOSUPPLY Ltd., part of ESCO’s growing worldwide network of retail stores serving the mining and construction industries. ESCO, founded in 1913, has over 90 years’ experience in metallurgy and wear parts products design and manufacturing. ES&S has over 60 years’ experience in the distribution and field application of wear product solutions. Both have served customers in the oil sands for decades. Together, as ESCOSUPPLY Ltd., they are focused on providing unequaled service to the mining community. “ESCO and ES&S have targeted the oil sands because of the strong growth projections for this market and its heavy consumption of mining wear parts,” noted Tim Elbel, ESCO’s general sales manager for mining. “This store is making it easier for mining customers to access our full array of products and services.” The entire line of ESCO brands is available through the store: ESCO, Bucyrus Blades, and the former QSF line (now part of ESCO). ESCO’s SV2® hammerless mining tooth system, Super V® and Posilok® tooth systems, plus the Grizzly™ and Simplex™ systems are stocked at the Fort McMurray store for quick delivery to the mines. Special AR wear plate and overlay solutions are also available from ESCOSUPPLY Ltd., which is closely supported by ESCO’s oil sand products manufacturing facilities in nearby Nisku and Edmonton, Alberta. “We are also interested in adding additional product lines and services outside of the ESCO family where they fit with our strategic direction,” added Mike Smith, vice president and general manager of Equipment Sales and Service. Photos of coke processing plant (opposite) and power shovel (above) courtesy of Suncor Energy. Glen Jarvis and Shane Williams, product specialists, are the original members of the ESCOSUPPLY Ltd. Fort McMurray team, supported by parts manager Josh Smith of ES&S. Additional management and staff members are expected to be added to the ESCOSUPPLY team as business activity demands. ´ THE EDGE AUGUST 2007 Separator that separates sand from bitumen. Photo courtesy of Albion Sands. In 2006, Suncor passed the milestone of having produced one billion barrels of oil from the Alberta oil sands. It now produces about 260,000 barrels per day, and is currently increasing its production capacity to reach approximately 350,000 barrels per day in 2008. For many years Syncrude used draglines to dig and pile the oil sand in windrows, which was then moved by bucketwheel and conveyor to the extraction plant. In 2006, the last dragline/ bucketwheel/conveyor system was retired in favor of more economical and versatile power shovels and haul trucks. Suncor uses 12 electric power shovels and three hydraulic shovels in its surface mine. To date, shovel managers there favor ESCO’s hammerless Grizzly™ tooth system and vertical pin Simplex™ tooth system on their mining shovel buckets. Both are manufactured at ESCO Nisku, outside Edmonton. Based on a successful trial run earlier this year, Suncor has ordered ESCO’s SV2® hammerless tooth system on a 58 yard bucket for one of its P&H 4100 shovels. ESCOSUPPLY’s Shane Williams handles the account, working closely with Suncor’s Erik Jones to supply the mine’s ground engaging tool needs. Today, Syncrude uses 14 cable shovels and four hydraulic shovels in its surface mining operations. Under the direction of Mark Brannan, leader of the Mine Operations Support Team, Syncrude uses ESCO® tooth equipment on half of its cable shovels and a competitor’s product on the other half. Currently, performance and unit costs are being closely tracked to determine which tooth system will “win” the comparison and earn future business. “The Grizzly tooth system is a reliable, proven product with proven performance numbers,” said Erik Jones, an operational engineer and materials planner with Suncor. “We’re expecting even better productivity, reliability and safety out of ESCO’s SV2 system.” Syncrude Canada, Inc. The Syncrude joint venture was formed in 1964, but it wasn’t until 1978 that the sprawling facility was completed and the first barrels of synthetic crude were produced. Twenty years later, in 1998, Syncrude sent its billionth barrel down the pipeline, five years ahead of schedule. Current productive capacity is 350,0000 barrels per day (bpd) with future plans to expand to 500,000 in the future. THE EDGE AUGUST 2007 “We’re always looking for high performance from our equipment working in the oil sands,” said Mark. “The operators love shovel teeth that are easy to work with. When it’s 3 a.m. and 40 degrees below zero, they don’t want changing teeth to be a chore.” “We want everything to be as reliable and user-friendly as possible in the field,” agreed Tony Fifield, a Syncrude expeditor responsible for stocking and delivering the teeth, adapters and shrouds to the shovels when they are needed. ESCO’s Ken Remple, Glen Jarvis, Dean Heaney, Ermanno Simonutti and others have worked closely with Mark, Tony and other Syncrude personnel to resolve issues at their monthly “GET IT” meeting. Product performance data are reviewed and action steps are revisited. Concepts like value stream mapping have been introduced to better understand and improve the process. “ESCO, like many suppliers, has done a lot of positive work for us over the last few years and has helped us reduce unit cost,” Mark added, including some adapter redesign work to improve digability and wear life. “This oil sands environment is unique. Its abrasiveness and the wear patterns it creates on equipment are unlike any other mining in the world.” Albian Sands Energy, Inc. Production commenced in December 2002 at Albian Sands’ Muskeg River Mine and Scotford Upgrader. This operation is a joint venture of Shell Canada, Chevron Canada and Western Oil Sands, Inc. Located a few miles north of the other surface mines, Albian’s Muskeg River Mine is believed to contain more than five billion barrels of mineable bitumen. Albian is currently producing about 155,000 barrels per day, and a major expansion is underway to bring production up to 255,000 bpd in the near term and 750,000 bpd in the long term. Albian uses five Bucyrus 495HF cable shovels and one Hitachi EX8000 hydraulic shovel in its Muskeg Mine. All are fitted with ESCO tooth equipment. A separate pit called the Jackpine Mine is scheduled to come online in 2010 and produce an additional 100,000 barrels per day. Eight more shovels will be needed for that surface mine. Bob Rogers, Albian Sands’ Shovel and Mine Electrical manager, worked with ESCO for several years to develop a 2° off centerline tooth design to help machine operators do a more efficient job of cleaning the bottom of the cut. “That new design works well,” he said. “We don’t lose any hardware at all and there’s very little wear on those ESCO noses.” Bob is looking forward to a trial this summer of ESCO’s completely hammerless tooth and adapter system. Albian will be the first oil sands customer to use ESCO’s SV2® and Whisler Plus® system, which offers benefits in both safety and performance. *** Together, the three oil sands mines described above provide direct jobs to over 10,000 people plus thousands of contractors and indirect jobs. In addition to the billions of dollars spent annually on salaries, goods and services, the mines also pay sizable royalties and taxes to the provincial and federal governments. Moreover, all are committed to sustainable development practices including land reclamation and safeguarding air and water quality. Sensitive to climate change issues, all are working to minimize the release of carbon dioxide and other greenhouse gases. ESCO’s Glen Jarvis discusses Posilok tooth installation in the bucket maintenance shop at Syncrude. billions of additional dollars are expected to be invested. Every mine has expansion plans underway. We’ll want to maintain our strong position in ground engaging tools on the mining side, and we’ll want to take advantage of opportunities in the processing side, as well.” The number of applications is almost limitless where ESCO wear plate, Kwik-Lok® wear runners, and/or abrasion-resistant overlay capabilities coming out of our Edmonton plant can solve wear issues in oil sands extracting and upgrading. The Alberta oil sands represent a secure and growing supply of crude oil needed by Canada and the US to reduce our reliance on imported oil from more politically volatile regions of the world. We are proud that ESCO’s expertise in metallurgy, abrasion resistance, and product design is useful to many of the customers that mine this gritty oil-bearing substance and transform it into sorely needed fuel. “ESCO is focused on serving our customers in this growing market,” concluded Ermanno Simonutti, ESCO’s product manager for oil sands products. “Over the next ten years, THE EDGE AUGUST 2007 BAUMA 2007 AUMA 2007 by Jodi Walder-Biesanz H alf a million visitors from 170 countries jammed the halls and outside display areas at BAUMA 2007 in Munich, Germany. Billed as the world’s largest trade fair for the construction and mining industries, BAUMA offered a feast for the senses and tons of impressive displays. Unusually summer-like weather for April boosted attendance and contributed to the festive atmosphere. ESCO was extremely well represented. The new ESCO two story booth was sleek and dramatic. Dealers, OEDs and end use customers flocked to the stand to sit at café tables, enjoy refreshments and chat with knowledgeable ESCO sales and service people. A customer appreciation party included great food and jazz music and drew hundreds. The impressive ESCO stand displayed a full range of wear products for mining, construction and quarries. Highlights 10 THE EDGE AUGUST 2007 were a full size display of the new EverSharp™ lip system for underground mining and the SV2® tooth system with the 65SV2 size working model displayed. The SV2® model was quite popular, as it allowed visitors to remove the tooth and discover for themselves the benefits of the hammerless system. Exposure of ESCO products was high throughout the fair. Countless displays from OEMs, bucket manufacturers and ESCO distributors sported ESCO products. Manufacturers featuring ESCO products on their equipment included Hitachi, Lehnhoff, Liebherr, Terex, Volvo, CASE, JCB, Doosan and CAT. Engineered Products Vice President of Global Sales and Marketing, Pat Fonner commented, “The market is good and the customers were upbeat. The stand was full; at any given time we had people from Africa, Asia, Europe, Australia, the Commonwealth of Independent States (including Russia) and North America – it was truly a global show. The ESCO European staff was fabulous. This was undoubtedly the best ESCO show ever!”´ H itachi made quite a splash at BAUMA with its dramatic display of the EX5500-5 excavator. Twelve units of this mammoth machine had been sold by Spanish dealer Serex to Unión Minera del Norte, a coal mining operation in Spain. All of these giant excavators are effectively fitted with ESCO cast lips and Posilok® teeth, and ESCO’s Spanish dealer BYG provides aftermarket service. These machines are truly impressive with an operating weight of 518,000 kg (1,142,000 lbs), a bucket capacity of 29 m3 (38 yd3), and a bucket digging force of 1370 kN (308,000 lbs). ESCO’s Brian Haynes works with Miller, which supplies the buckets for these machines, and Max Villanueva calls on Unión Minera del Norte. John Lines, Managing Director for Miller UK says, “The combination of ESCO service and product quality coupled with Miller design and manufacturing excellence has proved a winning formula.” ESCO staff in the Miller bucket with an ESCO cast lip and Posilok teeth. This bucket, on the Hitachi EX5005-5 was the biggest attraction at the fair for photo opportunities. L Ulrich Rissland, Pat Fonner, Peter Lehnhoff, Mike Passen and Jeff Kershaw. ehnhoff is the #1 bucket manufacturer in Germany and one of the biggest in Europe. They have a world renowned reputation based on quality and product innovation. In January 2006, Peter Lehnhoff made the decision to sunset their in-house tooth system and put ESCO teeth as standard on all their original equipment. ESCO’s Bruno Pesch, Ulrich Rissland and Mike Passen helped make this transition a smooth one. Lehnhoff buckets with ESCO teeth hit the market in April 2006. Peter Lehnhoff explained, “The best buckets deserve the best teeth.” T he Liebherr 9350 was on display at BAUMA and is the new version of their 994. Liebherr wanted an upgrade in both power and capacity. For ten years the former model used ESCO V81 teeth. For the new model they decided to trial the SV285. Philippe Faidherbe and a team of ESCO engineers worked with Liebherr engineers and operators on concurrent design and the SV2 was trialed on the Liebherr 9350 in France. The ultimate tooth system design was adapted based on those experiences, and these new machines have SV2 as standard equipment. THE EDGE AUGUST 2007 11 12 THE EDGE AUGUST 2007 Rosebud Coal Mine Uses ESCO Dragline Bucket & Teeth by John Howard C olstrip, Montana — Western Energy Company’s Rosebud Mine is one of the top-producing coal mines in the United States. The mine produces about 12.5 million tons of low-sulfur coal per year for electric power generation. Ñ THE EDGE AUGUST 2007 13 > About 80 percent of the mine’s production is burned in four power plants located just outside the mine property in Colstrip. The remaining 2 million tons or so are shipped by rail to industrial and municipal power consumers elsewhere. The town of Colstrip was founded in 1923 and the Rosebud Mine began production in 1924. For the first 35 years, the coal was used almost entirely to fuel the boilers in steam locomotives. When diesel locomotives replaced the old steam engines, mining ceased at Rosebud in 1958. Western Energy reopened the mine in 1968. When the Colstrip power plants were built in the mid-1970s (Units 1 & 2) and the mid-1980s (Units 3 & 4), the Rosebud Mine was contracted to supply all the coal. A 4.2 mile long overland conveyor was built to move coal from the mine to Units 3 & 4 at a rate of 36,000 tons per day. A steady stream of haul trucks supplies coal to Units 1 & 2. The four power plants are owned and operated by PPL Montana, plus a consortium of other companies including Puget Sound Energy, Portland General Electric, Avista Corporation, Pacificorp, and NorthWestern Energy. The four plants generate about 2,100 megawatts of electricity. Westmoreland Mining purchased Western Energy and the Rosebud Mine in 2001. Westmoreland Mining and its affiliate Westmoreland Resources together own five surface coal or lignite mines located in Montana, North Dakota and Texas. Their parent company, Westmoreland Coal Company of Colorado Springs, Colorado, is one of the top eight coal producers in the country, producing over 30 million tons per year. Overburden Removed With Draglines The Rosebud coal seam is generally 24 feet thick and in most places lies about 100 feet below the surface. After the topsoil is carefully removed and stockpiled, the mine uses four enormous draglines to set the overburden aside in spoil piles and replace it after the coal has been extracted. Front end loaders and power shovels are used to dig the coal itself and load it onto the mine’s fleet of 18 haul trucks. The largest of the draglines is a Marion 8200, which weighs 8.5 million pounds, and took 1 1/2 years to assemble on site. In December 2006, the huge machine was fitted with a new ESCO 78 cubic yard Production Master® dragline bucket. The bucket features an S130 straight lip with S-Series Posilok® tooth system, Toplok® lip shrouds, Kwik-Lok® wing shrouds, and a Vidaplate® wear liner package. The bucket moves up to 90 tons of overburden material with each pass. Together, the machine and bucket make an awesome and efficient earthmoving tandem. After getting used to the new bucket, “the operators love it,” according to the mine’s maintenance planner Bill Struthers, a 35-year mining veteran. “The [ESCO] bucket digs well, chops well and handles well.” 14 THE EDGE AUGUST 2007 Dragline operator Bob Cole agreed that the bucket is wellbuilt and fills well. He especially likes the S-Posilok tooth system. “That top-pin design is a good set-up,” he said. “It only takes about half an hour to change the teeth. Those old sidepin teeth were awful to remove.” The mine also has a 60-yard ESCO dragline bucket that has moved over 100 million tons of abrasive overburden during its lifetime. A new ESCO replacement bucket is on order. Veteran salesman Bill Fewless, who also manages the ESCOSUPPLY store in Billings, sees that the mine’s bucket and wear parts needs are met. (Please see sidebar at right on ESCOSUPPLY). Environmental Responsibility In addition to providing good-paying jobs to 400 employees and contributing over $22 million in state and county taxes per year, the Rosebud Mine has an award-winning environmental protection program. The office walls are hung with a number of award certificates from the Department of the Interior’s Office of Surface Mining (OSM) for measures the mine has taken to protect the air, land, water and wildlife. The mine has also taken pains to preserve cultural and historic sites found on the 17-mile-long property. Ancient petroglyphs and rustic homestead buildings from the 1800s have been preserved and respected. “I’m a native Montanan, and if we couldn’t operate this mine without preserving the environment, I wouldn’t work here,” said Joe Novasio, the mine’s Maintenance manager. “I’m a native Montanan, and if we couldn’t operate this mine without preserving the environment, I wouldn’t work here.” –Joe Novasio Maintenance manager, Rosebud Coal Mine ESCOSUPPLY - Billings E SCO’s Billings, Montana store is one of 12 retail stores in the ESCOSUPPLY network directly serving customers in mining and construction. The former High Desert Supply branch, located at 6547 Elysian Road, offers ESCO buckets, teeth, attachments, wear plate, and crusher wear parts; Bucyrus Blades™ ground engaging products; Excel crusher parts products; Terex light plants and generators; Luff Industries conveyor components; crusher screen and other products in demand by mines and contractors. Bill Struthers, maintenance planner, and ESCO’s Bill Fewless examine wear pattern on the new 78-yard dragline bucket at the Rosebud Mine. Joe started working at Rosebud 33 years ago and has seen the mine produce over 350 million tons of low-sulfur coal over that time span. During the same period, over 7,000 acres of disturbed land have been returned to the original contours, dressed with topsoil and replanted with trees, shrubs and native grasses. Land is reclaimed at the same pace that it is mined. If 300 acres are disturbed in a given year, 300 acres are reclaimed. Some reclaimed sections are leased to local farmers and ranchers. Reclaimed areas of the mine now support healthy populations of deer, elk, pronghorns, turkeys and other species. “We even had a moose in here once, wading in one of the reclamation ponds,” Joe recalled. ESCO is pleased to be a supplier to such an efficient, profitable and environmentally responsible operation as the Rosebud Mine in Colstrip, Montana. It is no surprise that highly engineered ESCO dragline buckets and mining tooth systems are performing so reliably for one of the nation’s leading producers of low-sulfur sub-bituminous coal for electric power generation. ´ The store opened early in 2001. Bill Fewless, with over 25 years experience in the industry, is branch manager as well as salesman in charge of mining accounts. Five surface coal mines are served by the store including Absaloka, Decker Coal, Rosebud (see adjacent article), Savage, and Spring Creek. ESCO buckets, tooth systems and other wear parts are used at all five mines. About two-thirds of the Billings store’s sales come from the mining sector. Construction has been booming in Montana over the last five years, and the Billings store has grown busy supplying contractors. Carl Openshaw is the store’s outside salesman for construction and Jason Muck handles inside sales, receiving, shipping, consignment inventories, etc. “Our construction business is still in the baby stage,” said Carl. “There is a lot of potential for us there. Where we’ve gotten ahead of our competitors is on service. We make the effort to get to know the people and what they need.” Manager Bill Fewless is very proud of the growth and commitment he’s seen from Carl and Jason. The Billings store, supported by the entire ESCOSUPPLY network, has increased sales three-fold since its doors opened six years ago. A high level of local construction activity plus steady growth in mining have helped increase sales, but excellent product lines backed by conscientious service have been the real keys to ESCOSUPPLY Billings’ success. THE EDGE AUGUST 2007 15 ESCO SOLDERING Brazilian Joint Venture Soldering’s current customers an expanded array of wear solutions, which will help Soldering continue to grow. In addition, Soldering becomes part of the global ESCO organization. For ESCO, the venture provides superior distribution in the growing Brazilian market and a strong manufacturing presence for premium wear products in Latin America. I n May 2007 ESCO Corporation launched a joint venture with Brazil-based Soldering, a leading manufacturer of wear-resistant steel wear products and solutions for the mining, industry, sugar, heavy construction and cement markets. The joint venture combines the two growing companies’ competitive advantages – Soldering’s strong reputation in Brazil, and ESCO’s global reputation for superior products and technical capabilities. Soldering was founded in 1969 by Romeu Scarioli, Sr., and is headquartered in the city of Betim, Minas Gerais, which is home to large mining operations. The company sells its wear solutions to equipment manufacturers and end-use customers – as well as to dealers who represent such companies as Caterpillar and Komatsu. Soldering has approximately 450 employees, fifteen of whom work in design engineering, and the company is headed by General Manager Romeu Scarioli, Jr., son of the company’s founder. The advantages to Soldering include access to ESCO’s metallurgical, R&D and engineering expertise, plus the right to sell ESCO products throughout Brazil. This provides 16 THE EDGE AUGUST 2007 Steve Pratt, ESCO chairman and CEO, says: “This joint venture brings together two outstanding companies that share a great deal in common. Each company has a rich, proud history. Each company is genuinely committed to providing superior products and customer service. And each company has a family of employees who are willing to take on customers’ greatest wear challenges and find solutions.” Romeu Scarioli, Sr. commented, “ESCO and Soldering go beyond customers’ expectations, not only by developing customized solutions but also by providing a differential in terms of agility. We invest in talented people. Our markets are convergent. Our products complete each other, even physically. We make a strong commitment to building our future. Our “foot-on-the-ground” conservatism is the same. Our daring search for better results has the same intensity.” Romeu Scarioli, Jr., Romeu Scarioli, Sr. and Steve Pratt. The joint venture company has been named ESCO Soldering, to indicate that both ESCO and Soldering products are now available in Brazil from one reliable source. As a young man Romeu Scarioli, Sr. saw an open competitive niche and sold his vehicle to raise capital to start Soldering. The original concept of providing tailor-made solutions for each customer and for each application is still the cornerstone of today’s business model. Soldering is known throughout Brazil for its “in-the-dirt” collaboration with customers. Application engineers work in tandem with sales, visiting customers and brainstorming solutions to their toughest wear problems. Soldering made its reputation by offering custom fabrication and repair of large buckets. Their ISO 9001:2000 certified, environmentally friendly fabrication facility produces buckets up to 60 tons for excavators, front end loaders, shovel dippers and bulldozers. In addition ESCO Soldering extends product life by adding optional wear liners, overlays and offering the biggest variety of wear resistant steels in Brazil. These most advanced wear technologies are provided by partnering with USIMINAS, Lincoln Electric and the Arcelor Group. ´ Top: Truck bed wear liner fabricated by ESCO Soldering, which makes liners for large machines like the CAT 793 and Komatsu 830. Middle: Employees Sebastião Ferreira Santos, Emerson Antônio Louzada, Alair Mota Cezar, Adeira Vieira da Silva, Célio Belmont Mendes and João Leandro da Silva. Bottom: Bucket wheel transports blended iron ore for pelletization. All buckets on the wheel are fabricated by ESCO Soldering. THE EDGE AUGUST 2007 17 Jose dos Santos Sobrinho (Tamandua Maintenance Supervisor), José Wilson Batista (ESCO Soldering sales) and Marcos Vieira (ESCO Soldering Application Engineer). potash and other minerals. CVRD is a large logistics player in Brazil, owning and operating railroads, maritime terminals and a shipping company. In May 2007 CVRD increased its ownership share of MBR (Mineracão Brasileiras Reunidas) to 100%. Together they produce over 300 million tons of iron ore per year. CVRD – COMPANHIA VALE DO RIO DOCE B razil is the one of the world’s largest iron ore producers and exporters. Iron ore has traditionally been the country’s largest export product, accounting for 5% of the total value of mineral exports. China, Japan, Germany and South Korea are the main importers of Brazilian iron ore. CVRD is a global mining company. It is a producer and exporter of iron ore and pellets. CVRD is involved also in the exploration, mining and beneficiation of bauxite, gold, kaolin, Iron ore from Tamandua and Capitoa do Mato travels on the longest conveyor in South America (29 km) for processing at Vargem Grande. 18 THE EDGE AUGUST 2007 ESCO Soldering provides the CVRD Tamandua and Capitao do Mato mines outside Belo Horizonte with cutting edges, end bits, truck beds and liners for all buckets and shovel dippers, including the Komatsu PC 4000, H285 DEMAG, CAT 994D and the Marathon Le Tourneau L-1100. ESCO Soldering made the complete DEMAG H-285 dipper and wear liner and it lasted for approximately 10,000 hours of hard use – a 30% improvement over the prior configuration. ESCO Posilok® and SV2® teeth are also currently used in the mine on the Komatsu machine. The maintenance team considers ESCO tooth systems safer and easier to change, resulting in a lower operating cost per hour. Claudio Jose Silva, Maintenance Coordinator at Tamandua commented, “Our biggest challenge is to keep good availability of our equipment and ensure employee safety. ESCO Soldering helps us do both.” ´ M MINAS GERAIS, BRAZIL inas Gerais (or simply Minas, as it is more commonly known) is one of 26 states in the Brazilian federation and is the second most populous. The state was principally formed by European colonists searching for veins of gold and gems, and later diamonds. The name literally means general mines, a shortening from Minas dos Matos Gerais. The state has a distinctly more native flavor than cosmopolitan São Paulo and a more traditional slant than flashy Rio de Janeiro. The state is more Portuguese than São Paulo in southern Brazil, which has large populations of Italians and Central Europeans. Minas is also more Portuguese than northern Brazil – with its indigenous peoples – and more than the Northeast – with its heavy Afro-Brazilian influence. Minas is nationally known for its cuisine, and many dishes are prepared using locally produced vegetables and meats, especially chicken and pork. Traditional cooking is done using coal- or wood-fired ovens and cast iron pans, making for a particularly tasty flavor. The best-known dish from Minas is “pão de queijo,” a small baked roll (known internationally as “Brazilian cheese rolls”) made with cheese and cassava flour and served hot as an appetizer or for breakfast. Minas Gerais is a major producer of milk, coffee and other agricultural commodities – as well as minerals. The state also produces electronics, and automakers Fiat and Mercedes-Benz have factories in Minas. Tourism is an important activity for Minas, and historical cities like Ouro Preto, Mariana, Sabará, Congonhas, Diamantina, Tiradentes, and Sao João del Rey are major attractions for visitors interested in colonial architecture. The central region of the state (where the capital is located) has large reserves of iron (and to a lesser extent, gold), which are still actively mined. The western region is less densely populated than the rest of the state and is currently a focus of biotechnology investment, which includes leading research in cattle, soy and corn culture. ´ Above: Near the center of Minas Gerais is the city of Belo Horizonte – Portuguese for “beautiful horizon.” Here is the location of Soldering’s headquarters. Belo Horizonte is home to ESCO’s joint venture partner Soldering, and the city is an excellent example of Brazil’s mid-20th century planned cities and was constructed to serve as the state capital. Photo courtesy of Jodi Walder-Biesanz. THE EDGE AUGUST 2007 19 SUGARCANE T by Ana Paula Machado and Leonardo Munck he sugar and ethanol sector in Brazil is currently the most efficient in the world, as the cost of converting sugarcane to ethanol is significantly lower than converting from most other sources. Brazil is already the second largest ethanol producer in world, and has great growth potential due to its favorable climate, which is ideal for sugarcane cultivation, and still has enormous areas available in which to expand plantations. It is estimated that 420 million tons of sugarcane will be processed each year through 2015. Sugarcane, an extremely abrasive and acidic product, is quick to wear metals with which it comes in contact, making the sugarcane industry ideal for innovative wear solutions. The São Martinho group is one of the biggest sugar and ethanol producers in the world. It processed roughly 9.7 millions of ton of sugarcane in 2006, resulting in production of 597,000 tons of sugar and 440,000 liters of ethanol. They have many processing facilities throughout Brazil, and are world renowned for efficient sugar and ethanol processes and productivity, the quality of the sugarcane in their fields, and social and environmental responsibility. On June 13th and 14th, ESCO Soldering’s Tim Myers (General Manager Latin America), Romeu Scarioli, Jr. (General Manager ESCO Soldering), Ana Paula Machado (Sugar and Ethanol Manager) and Leonardo Munck (Application Engineer) visited the Iracema and São Martinho sugar and ethanol mills, owned by the São Martinho group. Nilton Albino Filho and Cleber Bitencour were their hosts at Iracema, and the tour of São Martinho was conducted by Dirceu Ramos and Álvaro Paulose. Sugarcane processed with ESCO Soldering wear parts. 20 THE EDGE AUGUST 2007 In its pursuit of continuous improvements leading to increased industrial efficiency, the São Martinho group has worked closely with ESCO Soldering for more than ten years. Together they have developed and implemented new wear solutions, such as rails for the supplying tables, sugarcane feed table and conveyor belt wear bars, sugarcane feed table covering, mill guides, a lateral sugarcane shredder, and rotor vanes. This joint creativity and development has significantly reduced maintenance down time, resulting in greater productivity and reduced costs. Face to face communication about the ESCO Soldering joint venture elicited an extremely positive response from Dirceu Ramos, Extraction Coordinator at São Martinho. “Soldering has always been considered a partner of São Martinho – the relationship is much more than simply being a supplier. São Martinho constantly searches for productivity growth. In order to achieve this we rely on Soldering expertise in wear technology to succeed. The joint venture of two competent companies such as Soldering and ESCO brings added value to our interactions. Our need for new and constant development is sure, and ESCO Soldering will be a great resource.” As more biofuels are converted to ethanol worldwide, the pressure on exiting producers grows. “We are facing a strong investment and productivity process era. Our partnership with ESCO Soldering will result in new technologies that help us achieve cost reduction goals,” explained Nilton Albino Filho, Industrial Manager at Usina Iracema. ´ Leonardo César Bolato, Romeu Scarioli, Jr., Dirceu Ramos, Jr. and Tim Myers. Ethanol – Dominant Alternate Fuel in Brazil Photo courtesy of Bruno Takahashi Carvalhas de Oliveira A by John Howard s the price of gasoline has soared in recent years, the quest for alternate fuels has accelerated. Ethanol, a type of ethyl alcohol derived from organic plant material, is one of the more promising substitutes for gasoline. Although a gallon of ethanol yields only about two-thirds of the energy of a gallon of gasoline, ethanol has the advantages of burning cleaner and, since it is derived from plants, it is a renewable energy source. Today, Brazil is the second biggest ethanol producer in the world. About 70 percent of all new cars sold in Brazil can run on either gasoline, ethanol or a mixture of the two. Sugarcane plantations are being expanded and ethanol production and distribution facilities are growing rapidly. Currently, over six million hectares (14.8 million acres) representing 60 percent of the country’s sugarcane crop is earmarked for ethanol conversion. Some 325 plants across Brazil process over 500 million tons of sugarcane annually, yielding nearly 4.7 billion gallons (17.7 billion liters) of ethanol. Additional conversion plants are being built and new technologies are being introduced to further improve the efficiency of converting cane to ethanol. Brazilian ethanol producers maintain that they have a cost advantage over gasoline as long as oil prices stay above $30 per barrel. Ethanol in the US When US President George W. Bush visited Brazil earlier this year, he was impressed by the Brazilian use of ethanol and their freedom from dependence on imported oil. He advocated greater use of ethanol in the US, where it currently accounts for only three percent of total fuel consumption. Brazil is a world leader in the production and use of ethanol. Beginning in the 1970s when the first world “energy crisis” happened, Brazil began an aggressive state-sponsored program to produce ethanol on a massive scale and induce drivers to switch to ethanol-burning engines. Although relatively little sugarcane is grown in North America, the United States is the world’s largest corn producer. Most of the ethanol produced in the US is derived from corn. Over 4 billion gallons of ethanol are produced annually from corn in the US. It is blended with gasoline, usually 10 to 15 percent. Domestically-produced ethanol enhances octane, reduces carbon monoxide and carbon dioxide emissions, and reduces the nation’s overall dependence on foreign oil. Brazil’s source of ethanol is sugarcane, which grows abundantly in large areas of the country. When fermented, sugarcane yields more energy-rich ethanol than almost any other plant material. For each energy unit expended to convert cane, over eight times as much energy is created in the form of ethanol. However, corn is far inferior to sugarcane as an energy source. Whereas the energy created to energy spent ratio for cane is over eight to one, the ratio for corn is only 1.3 to one. In other words, it takes the energy equivalent of one gallon of gasoline to create 1.3 gallons of ethanol from corn—not a terrific return, but still a 30 percent net gain. The conversion program was not an overnight success, however. Brazilians who switched to ethanol-powered engines felt chagrined when the price of gasoline dropped and the price of ethanol rose due to a surge in world sugar prices in the 1980s. For a while ethanol was more costly than gas. But ethanol use really took off in Brazil over the last four years as gasoline prices skyrocketed and auto manufacturers began offering “flex fuel” engines, capable of running on either fuel. As nations respond to increasingly costly imports of fossil fuels and seek to develop sources of renewable energy, ethanol production surely is an option that cannot be ignored. Wherever there is a surplus of grain, cane, wood chips or other “biomass”, there is the potential to convert it to ethanol, a clean-burning, renewable alternative to fossil fuels. Brazil is a shining example of country that has shed the yoke of dependency on imported oil by producing ethanol on an enormous scale. ´ THE EDGE AUGUST 2007 21 WOOD GROUP: WORLDWIDE ENERGY SERVICES COMPANY Article by John Howard Photos courtesy of Wood Group 22 THE EDGE AUGUST 2007 T he Wood Group, headquartered in Aberdeen, Scotland, is a leading international energy services company which employs over 20,000 people in 44 countries. Its primary customers include the oil, gas, and power generation industries. Its services include engineering, project management, maintenance and repair for a wide variety of energy-related applications. The Wood Group is a market leader in deepwater engineering, offshore pipelines, submersible pumping, enhancement of mature oil and gas fields, and the repair and overhaul of industrial gas turbines. This last business—the maintenance, repair and overhaul of industrial gas turbines—is where ESCO Turbine Technologies and the Wood Group’s Gas Turbine Services division have common interests. ESCO is one of a select number of worldwide suppliers of high quality cast components that Wood Group technicians use to repair and overhaul heavy industrial turbines used to generate electric power. “We’re the world’s largest independent provider of gas turbine maintenance, repair and overhaul services,” said Bill Weisbrod, vice president of Operations, Wood Group Gas Turbine Services. “We have a high level of capability on all the major turbine makes—ABB, GE, Alstom, Pratt-Whitney, Rolls-Royce and Solar. Customers have come to think of us as an alternative OEM.” ESCOTurbineTechnologiesemployees,below,makepartsforWood Group Gas Turbine Services at its plants in New York, Ohio, Arizona and Belgium. In some cases the specifications call for castings with directionally solidified single crystal (DS/SC) composition. Few foundries in the world have ESCO’s technical capability and experience producing sophisticated DS/SC investment castings. ESCO manufactures heavy industrial turbine blades, vane segments, and heat shields at its Syracuse, Cleveland, Tempe and Belgium plants for the Wood Group’s engineered new replacement parts business. The recent sharp rise in energy prices has spurred a tremendous amount of capital investment on the part of oil, gas and electric power producers. This surge in energy spending has presented opportunities as well as challenges to the Wood Group and its key parts suppliers like ESCO. “We’re anticipating over 30 percent annual growth in our advanced parts manufacture (APM®) business over the next few years,” said Bill, “which is a huge change from the single digit growth that we saw in past years. To continue to satisfy our customers in terms of quality, cost, delivery and responsiveness during a period of such dramatic demand will challenge both our organizations.” “Customers choose Wood Group Gas Turbine Services over the competition for a few key reasons,” he noted. “The variety of products we service, the comprehensive variety of services we offer, and our flexibility in tailoring our services and contracts to the specific needs of the customer.” He complimented ESCO on its technical capability, and described the two companies as “like-minded” in terms of tactical imperatives and strategic business objectives. “ESCO has the size, experience and capability to grow with us as we aggressively go after new MRO business in the heavy industrial turbine market. I’m optimistic that ESCO can play a key strategic role in our future.” THE EDGE AUGUST 2007 23 Oscar Meier 40th Anniversary O scar Meier AG/SA is the ESCO dealer for Switzerland. In April 2007 ESCO and Oscar Meier AG/SA celebrated the 40th anniversary of their dealership agreement at the world renowned Bayerische Hof in Munich. The company was founded in 1959 by Oscar Meier. His son, Rolf, joined the company in 1972 and his granddaughter, Switzerland’s famous Daniela joined the Matterhorn (4475 meters). business in 1997 and is currently the General Manager. Rolf, Daniela and their team have been consistent top performers for ESCO and have a very high market share. Their approach to the Swiss market has been extremely innovative, especially in their use of OED bucket manufacturers to extend their presence. Principals from Manfred Kaiser (bucket manufacturer), Probst-Maveg AG (Hitachi dealer), Robert Aebi AG (Volvo dealer) and Akimat (JCB dealer) were in Munich to join the festivities, as were ESCO sales representatives Andrea Weckop, Bruno Pesch and Mike Passen and commercial manager Laurent Reminiac. ESCO Turbine Technologies Deploys Oracle E-business Suite at All Facilities C by Tim Mayfield ustomers don’t generally know or care what sort of back-end information technology is used to run a business, however the efficiency of that technology affects customers every day. In 2004, ESCO Turbine Technologies (TT) implemented the Oracle e-Business Suite in Cleveland, Ohio, and in 2006 it was extended to Syracuse, New York and Guaymas, Mexico. In May of 2007 ESCO TT Belgium “went live” on Oracle, bringing all TT locations to a common platform. The TT implementations were performed with ESCO people – no consultants were employed. This was possible because ESCO employees from Frameries, Portland, and Tempe had experience with Oracle implementations for the Engineered Products group. They joined TT employees from each location to implement the software. Despite different countries, time zones, work groups, cultures and languages, all employees worked together to accomplish a huge task successfully, quickly and cost-effectively. Now that the implementations are complete, great opportunities exist to leverage Oracle across ESCO Turbine Technologies. With this common systems infrastructure, ESCO’s lean commitment to Quality, Value and Speed will be applied to Oracle-enabled processes. The result will be improved process efficiency and better service to its customers. Some of the implementation team members from ESCO TT Belgium braved the cold in Syracuse to see and understand the software. Laurent Reminiac, Rolf Meier and Daniela Meier-Ueltschi. 24 THE EDGE AUGUST 2007 From left: Pascal Herck, Philippe Grojean, Olivier Cornet, Frederic Jerome, Xavier Balhan, Christian Crasson, Yurgo Sarissavas, and Tim Mayfield. European Mining Team Workshop A team of ESCO employees from Europe came to Portland in March to meet key people, see the facilities and learn about the latest ESCO mining products. After a tour of the plant, offices and metallurgical lab, the group settled in for the two-day workshop. Philippe Faidherbe presented a market update for Europe, the Middle East and Africa, followed by Bodie Cooper and Ermanno Simonutti who spoke about ESCO’s full line of mining expendables. Top: Dan Pizzuto discusses locking pin technology. Bottom: European participants, from left, Tessa Dussart, Bryan Johnson,PhilippeFaidherbe,UlrichRissland,NikolayVishnevskiy, Jerome Carlier, and Connie Svaerke. The following day, Gordon Strutz presented hydraulic machine products, Michael Meidow and Jim Hall spoke about capital products, and Moises Martinez and Ermanno Simonutti presented value-added wear products. Other topics included warranty returns and the role of the Technical Services Group. During and following each topic there was lively discussion on the part of the presenters and the European participants—a valuable learning experience for all involved. Freeport-McMoRan Visitors R epresentatives of Freeport-McMoRan Copper & Gold, Inc. visited ESCO Portland in June to tour the facilities, meet with key personnel, and build upon our long-standing mine-supplier relationship. It was the first time Mike McAdam, purchasing team leader, and Jason Bowsher, global commodity manager, had personally seen ESCO’s headquarters, foundry, metallurgical labratory and R&D facilities. The visitors were accompanied by ESCO’s Bill Fewless and Dow Waite who are very familiar with FreeportMcMoRan mining operations in Indonesia, South America and the United States. Last March, Freeport-McMoRan acquired Phelps Dodge Corporation to create the world’s largest publicly traded copper company. The firm now has 12 producing mines around the world, with two more coming online in 2008. Top: In 3-D glasses, ESCO’s John Dillon (left) and Eric Hupp (seated) show the three-dimensional capabilities of ESCO’s scanning electron microscope to the visitors from Freeport- McMoRan Inc. Bottom: Mike McAdam, Jason Bowsher, Bill Fewless and Dow Waite. THE EDGE AUGUST 2007 25 INTERVIEW Stephen Babson ESCO Corporation Director S tephen Babson is a partner with Endeavour Capital, the oldest and largest private equity firm in the Pacific Northwest. He has been a member of ESCO Corporation’s board of directors since 2003. Continuing our series of interviews with the company’s directors, Stephen met with EDGE editor John Howard at the downtown Portland offices of Endeavour Capital in early April. Please tell us a little about your upbringing, Stephen. I was born and raised here in Portland, Oregon and did my undergraduate studies at Stanford University. Novelist Wallace Stegner was on the faculty there, and for a while I thought I might become a writer. I eventually continued on to graduate school, where I earned my JD degree from the Stanford Law School and an MBA from the Stanford Graduate School of Business. Did you join a law firm immediately after graduate school? Yes, but I worked between college and graduate school. I worked for a time for Portland Mayor Neil Goldschmidt and for Commissioner Mildred Schwab before returning to graduate school. ESCO went through a period in the late 1980s and 1990s when it acquired a number of firms and broadened its scope. Did you have a role in that? Yes, the Stoel Rives firm advised and consulted with ESCO regarding several acquisitions, especially those in the late 1990s. What were the circumstances when you were invited to join ESCO’s board of directors? In 2002, I left Stoel Rives to join my long-time client, Endeavour Capital. I had a real interest in staying involved with ESCO and I talked with Hank and Steve about ways I might continue to serve ESCO. I was asked to join ESCO’s board in 2003. ESCO divested itself of its Integrated Manufacturing (IM) and Engineered Metals (EM) businesses at the end of 2006. What did you think of those changes? I supported those decisions. Selling those businesses allows ESCO to focus on what it knows best. Mining, construction and turbine components are more in ESCO’s “power alley.” The sale also provided some cash for the Employee Stock Ownership Plan (ESOP). Did you have a specialty at the law firm? I worked mostly on mergers, acquisitions, raising capital, and public and private securities. I eventually became chairman of the firm, responsible for strategy. How did you get acquainted with ESCO? Actually, I met Hank and his father Ernie Swigert many years ago through tennis. Hank was a very good racquet man. I recall that he and his dad beat my father and me in doubles. They were good at sports, but very competitive—especially Ernie. I got reintroduced to the Swigert family and ESCO years later when Stoel Rives did legal work for the company. I got to work with Hank Swigert and Steve Pratt and saw that ESCO was a company to be admired—committed to its employees and ethical in its business practices. Right from the start, it struck me as a company that I would like a long-term relationship with. 26 THE EDGE AUGUST 2007 “[ESCO] is a company deep in talent and commitment. It has a powerful culture and a remarkable commitment to common enterprise.” What are your thoughts about the ESOP, by the way? We at Endeavour have worked with a lot with ESOPs and we like them. An ESOP is like an employee retirement account with contributions in the form of company stock. It doesn’t jeopardize the 401K or pension programs. Shares are released annually to employee accounts, which can be cashed-in when they retire. An ESOP works wonderfully in a quality company like ESCO whose owners are committed to the long-term welfare of employees. In this case, the ESOP bought a percentage of the company stock and was able to reward the family investors—some of whom had held ESCO stock for 90 years. This was a win-win for employees and long-term stock holders. ESCO Recognized by Vulcan Materials With the divestiture of the IM and EM businesses, should we conclude that ESCO has cooled on growth though acquisition? No, I wouldn’t conclude that at all. In the medium to long term, the company is very well equipped to grow through acquisition. The sales give ESCO more legs to surge in its core heavy equipment wear parts business. What is your overall impression of ESCO, Stephen? It is a company deep in talent and commitment. It has a powerful culture and a remarkable commitment to common enterprise. There is less grandstanding in ESCO than almost any other organization I know. The people are extremely qualified. When they commit to something, you better get out of their way. It is the same message from the top down and from the bottom up. I admire ESCO and am very optimistic about its future. Tell us a little about yourself personally. What are your hobbies and interests? Well, I work too hard. My travel schedule is very difficult. My wife Melissa and I have two sons, ages 24 and 20. I like to ski and I used to play tennis. I am miserable at golf. And I still have politics in my blood. I’m a big supporter of Mitt Romney, who did a remarkable job running the Salt Lake City Olympics. He has great ability to reach across the aisle, organize and recruit talent – so I am serving as chairman of his Oregon finance committee. Thank you, Stephen, for your service on the board of directors and for sharing your thoughts with readers of the ESCO EDGE. ´ Left to right: Dave Poer,ESCO Eastern sales manager; Mac Badgett, Vulcan senior vice president; and Roger Long, ESCO senior district manager. V ulcan Materials Company, headquartered in Birmingham, Alabama, is the nation’s leading producer of crushed stone, sand and gravel. The materials are used in the construction of highways, railroad beds, roads, bridges, airports, etc. The firm operates 287 sites in 21 states, and ships over 250 million tons of aggregates per year. In 1998, ESCO and Vulcan signed an Alliance Charter Agreement. Under the agreement, our company provides ESCO ground engaging tool products, Bucyrus Blades ™ products, and crusher wear parts, including jaws, cones, gyratories and impact parts to Vulcan’s quarries, gravel pits and processing plants around the country. For the last eight years, Vulcan has surveyed its plant managers and rated suppliers in terms of product, service, support, transactional, value and overall. And every year ESCO has qualified for a gold, silver or bronze award. This year at Vulcan’s annual awards banquet held on March 5th in St. Petersburg, Florida, ESCO’s Roger Long and Dave Poer were honored to receive a gold award from Vulcan on behalf of the entire ESCO organization. ESCO is proud to add this award to its collection, and proud that its products and services continue to receive high marks from Vulcan Materials Company. THE EDGE AUGUST 2007 27 ORGANIZATIONAL CHANGES Pat Fonner Named Group Vice President, Engineered Products – Global Sales and Marketing Kevin Thomas Named General Counsel and Secretary Cal Collins Named Group Vice President, Engineered Products – North American Operations Toby Weber Named Engineered Products Group Controller Jon Owens Named Vice President, Mining and Construction Products Eric Blackburn Named Assistant Treasurer Mark Mallory Named Vice President, North American Sales Ray Sykes Named Vice President, Industrial Products Tim Myers Named Managing Director, Latin America Doug MacGowan Named Vice President, Foundry Operations Percy Chang Named Managing Director, Asia Pacific John Thomas Named Vice President, Bucyrus Blades and Attachments Ray Verlinich Named Corporate Controller 28 THE EDGE AUGUST 2007 Steven Bebb 35 • EP Portland Bruce Boundy 35 • EP Port Hope James “Wally” Duncan 35 • EP Portland Antonio Gutierrez 35 • EP Portland Larry Huget 35 • Corporate Tyler Lewis 35 • EP Newton Steve was born in Portland and graduated from Marshall High School. He is a chill man (“V” process pattern service, Portland Tech. Center). His first ESCO job was in the Doghouse, and he has also worked in the Scrap Yard and in Heat Makeup. Steve and his wife Debi live in Milwaukie and have two children – Sami and Rocky. In his free time, Steve likes cliff diving and bungee jumping. Bruce was born in Port Hope, Ontario and graduated from Port Hope High School. He works in Stores and Receiving and started at ESCO as a grinder. Bruce has also worked in Shipping and Heat Treat. What he likes best about working at ESCO is the steady work. Bruce and his wife Mary live in Harwood; and in his free time, Bruce enjoys golfing and “hanging around my property.” Wally was born in Portland and graduated from Benson High School. Before ESCO, he served in the U.S. Army and worked at the Benson Hotel. Wally is a coremaker in the Main Plant and started as a coreroom helper. What he likes best about ESCO is the job security. He and his wife Margaret live in Gresham and have five children and 11 grandchildren. Tony was born in Quiroga, Michuacan, Mexico and graduated from Lindsay High School. Before joining ESCO Portland in 1972, Tony worked for the post office. He is currently Manufacturing Manager, Main Plant Mold and Pour and has also held jobs as a flogger, molder and team leader. Tony’s son works at ESCO in pouring. Tony and his wife Irene live in Portland’s St. Johns neighborhood and have two children and two grandchildren – with whom Tony likes to fish. Tony also enjoys playing golf in his free time. Larry was born in Portland and received his BS and MBA degrees from Portland State University. He joined ESCO as a mining equipment product supervisor and has held several management and officer-level positions. He served as president and CEO of Bucyrus Blades, Inc., was president of Engineered Metals in 1997-98. Between 1998 and 2005, Larry served as president of Engineered Products. Today, he is ESCO president and COO. Larry and his wife Irene live in West Linn and they have two sons – Pete (who also works at ESCO) and Matt. Tyler was raised in Newton, Mississippi and graduated from N.H. Pilate High School and East Central Community College. He served in the Army Reserve and retired as Master Sergeant. Tyler started at Newton as a bucket builder and has also worked as a team leader, grinder, repair welder and robot operator. He currently works in Inspection. Tyler’s cousin and nephew also work at ESCO. Tyler and his wife Paula live in Forest and have eight children and eight grandchildren. Tyler enjoys fishing, hunting and playing football and basketball. Paul McGinness 35 • EP Portland Archie Moore 35 • EP Newton Robert Parker 35 • EP Bucyrus William Prather 35 • EP Portland Hermon Rogers 35 • EP Newton Phillip Walker 35 • EP Newton Paul was born in Lindenwold, New Jersey and graduated from John Marshall High School. He joined ESCO in 1972 and has worked as a heat makeup scale operator and as a maintenance mechanic. Paul is currently an instrument technician and enjoys the challenges of his job. Paul and his wife Barbara live in SE Portland and have two children and two grandchildren. Paul enjoys motorcycling, traveling, classic cars (he owns a 1939 Chevrolet), and spending time with family and friends. Archie was born in Newton, Mississippi. He began at ESCO Newton in 1972 as a flogger and has worked as a bench grind fitter and as an arc air furnace operator. Today, Archie is a team leader in Finishing. Archie enjoys the “good people” he has worked with through the years. He and his wife Mattie live in Newton and have two children and seven grandchildren. Archie enjoys fishing, playing with his truck, and spending time with his grandchildren. Robert (“George”) was born in Bucyrus, Ohio and graduated from Wynford High School. He works in the Shipping department and has also worked as a welder and in Receiving. He says: “I can’t describe what I like best, but something made me come to work every day for 35 years, and I have never called in sick or wanted to look for another place to work.” George and his wife Carol live in Bucyrus and have three children – Robin, Ted and Tim – and one grandchild, Logan. George’s brother Gary works in customer service. Bill was born in Vancouver, Washington, graduated from Battle Ground High School and received his Mechanical Engineering degree from Oregon Institute of Technology. Bill is the Continuous Improvement Manager for Logistics and Commercial Operations and started as an engineering draftsperson. Bill and his wife Janet live east of Woodland and have three children and “5.5” grandchildren. In his free time, Bill works with Janet on their tree farm and trains their three horses. Hermon was born in Newton, Mississippi and began working at Newton in 1972. He started as a bench grinder and today works in Inspection. Hermon’s brother Mike Harris works in melting. Hermon and his wife Eva have three children – Antonio, Pheoba and Jamoal – and three grandchildren – Kia, Jaylin and Jaymarks. Phillip was born in Newton, Mississippi. He graduated from N.H. Pilate High School and served in the U.S. Army before joining ESCO Newton in 1972 as a welder. Phillip lives in Newton and has three children – Craig, Phillip, Jr. and Alana – and eight grandchildren. In his free time, he enjoys fishing. ESCO SERVICE ANNIVERSARIES THE EDGE AUGUST 2007 29 30 Timothy Adams 30 • EP Portland David Bishop 30 • TT Syracuse Jeannine Bufo 30 • EP Belgium Victoria Cain 30 • TT Syracuse Jimmy Coker 30 • EP Newton Peter Fair 30 • EP Port Hope Tim was born in Portland and graduated from Benson High School. He is a Main Plant maintenance team leader (3rd shift mechanical maintenance). His first ESCO job was an LFA grinder, and he has also been a welder, crane operator, burner, and air arc mechanic. Tim says he especially likes the steady employment. His son works in the mail room, his father-in-law is a retired ESCO-ite, and his brother-in-law Steve Fessler works in the V-Bay. Tim and his wife Sue live in North Portland and have three children – Sara, Jennifer and Daniel. Dave was born in Syracuse and graduated from Chittenango High School. He worked in agriculture, landscaping and refrigeration before joining ESCO. Dave started in the foundry, working as a caster, team leader, process engineer, and today works as a manufacturing engineer. Dave’s favorite thing about ESCO is that “you can always see or hear something that will get you to laugh at least once a day.” He and his wife Mary have two children and live in Chittenango. Dave volunteers extensively with various regional conservation organizations. Jeannine was born in Baudour, Belgium and graduated from Notre-Dame in Jemappes. She is an order release analyst and started as a purchasing and sales administrator. Before ESCO, Jeannine worked as a secretary for a pharmaceutical firm. What she likes best about ESCO is “the job itself – the contacts with my colleagues and other people.” Jeannine and her husband Raffaele live in Flénu and have two daughters – Sabrina and Jessica. In her free time, Jeannine enjoys reading, walking and spending time with family. Vicki was born in Syracuse and graduated from Henninger High School. Her first job was as a wax injector, and she also worked as a floor leader and inspector. Today, Vicki is a wax scheduler. What she likes best about working at ESCO is the friends she has made. Vicki lives in Chittenango, has three children – James, Dawn and Robyn – and five grandchildren – Celina, Briana, Austin, Jacob and Caitlynn. In her free time, she enjoys spending time with family and friends, reading and traveling. Jimmy was born in Meridian, Mississippi and graduated from Meridian High School. He is a mobile equipment operator in the Core department and started as a bench grinder. He has also been a wheelabrator and a flogger. Before ESCO, Jimmy worked for Winn-Dixie. He and his wife Linda live in Hickory and have five children and five grandchildren. In his free time, Jimmy enjoys hunting, fishing and raising American Kennel Club-registered beagles. Peter was born in Peterborough, Ontario, graduated from Port Hope High School and received his Building Construction Technician degree from Sir Sandford Fleming College. He is assistant quality team leader, and his first job at Port Hope was as an overhead crane operator. He has also worked in Melting and Molding. Before coming to ESCO, Peter worked for Lasco Steel. He and his wife Darlene live in Bewdley and have two children – Russ and Leslie. Peter enjoys hunting, woodworking and four-wheeling. Mark Green 30 • EP Port Hope James Hall 30 • EP Portland Robert Johnston 30 • EP Newton Bill Tendam 30 • EP Port Hope Janet Miller 30 • EP Portland Thierry Million 30 • EP Paris Mark was born in Bowmanville, Ontario, attended Port Hope High School, and graduated from the three-year welder fitter course at Durham College. He started as an arc air welder and has also worked in grinding and heat treat. Today, Mark is a finishing team leader. He likes “the people I work with and the daily challenges.” Mark’s brother Randy is ESCO Nisku’s site manager. Mark and his wife Valerie live in Baltimore, Ontario, and Mark enjoys decorating, painting, BBQ-ing and “having a couple cold ones.” Jim was born in McMinnville, Oregon, graduated from Fillmore High School (Fillmore, California), and received a BA from Portland State University. He is the marketing manager, EP Mining Group. Jim’s first ESCO job was the assistant product supervisor. He has also been product supervisor, Capital Products; district manager, Forest Products; and Inside Sales, Forest Products. Before ESCO, Jim was an underground miner. All four of Jim’s sons have worked at ESCO at one time or another. Jim and his wife Leslie live in Gresham. Robert was born in Kosciusko, Mississippi and graduated from Union High School. He worked at Laird Hospital before joining ESCO Newton. Robert started as a flogger and today works in molding. He likes the many friends he has made at ESCO throughout the years. Robert and his wife Linda have one child, Chris, and two grandchildren, Christian and Garret. Bill was born in Holland and attended Clarke High School. Before ESCO, Bill worked for General Motors. He started in grinding and also worked in heat treat and painting. Today, Bill is an inspection trial inspector. What he likes best about working at Port Hope is “the people I work with every day.” Bill and his wife Karen live in Cobourg and have two children – Will and Annette – and one grandchild, Meagan. In his free time, Bill enjoys golfing, playing darts and spending time with family. Jan was born in Rupert, Idaho and graduated from Minico High School. Her first ESCO job was in Production Control doing daily tonnage reports for Danville, Newton and Portland. Jan also worked for the Engineered Metals group for 23 years. Today, Jan is an administrative assistant and switchboard operator in Portland. She has one daughter, Vicki, and one granchild, Ian. In her free time, Jan enjoys baking, reading, walking, country dancing and time with her family and friends. Thierry was born in Lyon, France and graduated from the Institut Supérieur du Commerce de Paris. He started at ESCO in inside sales and today is senior district manager, Middle East, North Africa and the Balkans. Thierry also served as district manager for western France, Greece, Cyprus and Israel. He was also an inside sales manager for dredge and non-dredge customers, as well as a stock and logistics manager. Thierry and his wife Armelle live in Lanmeur, Brittany, and have three children – Julien, Sybille and Alix. THE EDGE AUGUST 2007 ESCO SERVICE ANNIVERSARIES Kenneth Neese 30 • EP Newton Skyler Pixton 30 • EP West Jordan Edward Ray Strebeck 30 • EP Newton Wendy Crandall 30 • TT Syracuse Donald Collins 25 • EP Phoenix Scott Spengler 25 • EP Bucyrus Kenny was born in Philadelphia, Mississippi, and graduated from Hickory High School. He worked at a paint company before starting at Newton as a flogger. Kenny has also worked in Shakeout, Core Utility, Grinding, Pouring and on the paint line. Today, he works as a pattern repair person. Kenny’s brotherin-law Keith Comans also works at ESCO as a team leader. Kenny lives in Hickory and has two children and one grandchild. He enjoys hunting, fishing, golfing and riding his four-wheeler. Skyler was born in Murray, Utah, graduated from Cyprus High School and received an AS Electrical degree from Salt Lake Community College. He is a Maintenance Supervisor, started as a helper on the straightener press and then moved on to second-shift maintenance. Skyler especially likes the “opportunities to learn and develop new skills.” Before ESCO, Skyler worked for Chromalloy and Paper Calmenson and Company. He and his wife Pam live in Magna and have six children. Ray was born in Newton and began at ESCO Newton in 1977 as a stand grinder. He has also held a number of various jobs at ESCO through the years. He is currently an order clerk in Shipping. Ray’s cousin Jackie Strebeck also works at ESCO in maintenance. Ray lives in Hickory with his wife Sara. They have two children and two grandchildren. In his leisure time, Ray enjoys going to dirt track races, hunting, working around his house and playing with his grandchildren. Wendy (friends call her Harriett) was born in Albany, New York and graduated from Lafayette High School. She was a homemaker before joining the Visual Inspection team at ESCO Syracuse in 1977. Wendy has held numerous ESCO jobs, including straightener, part maker, supervisor and final inspector. Her son also works at ESCO in Maintenance. Wendy lives in Oneida and has one child and three grandchildren. In her free time, she enjoys camping, NASCAR racing and taking road trips. Donny was born in San Diego, California and graduated from Apollo High School. Before ESCO, he worked in stainless steel sink fabrication. Donny began at ESCO Phoenix as a grinder and has also worked as a machine operator. Today, Donny is a team leader. His favorite thing about working at ESCO is “working with my fellow team members.” Donny and his wife Tanya live in Phoenix and have two children – Taylor and Shaela – and one grandchild. Donny enjoys quad riding, hunting and fishing in his free time. Scott was born in Van Wert, Ohio and graduated from Wynford High School. He is a team leader and a mold board press operator (Scott’s first ESCO job). Before ESCO, he worked for Pacal Blades. Scott and his wife Judy live in Nevada, Ohio and have two sons, two stepsons and one stepdaughter. In his free time, Scott enjoys hunting and being outdoors. Motorcycle stunts were a big draw at BAUMA 2007. Pictured THE EDGE AUGUST 2007 here are CASE excavators, with ESCO teeth. This show drew 31 ESCO SERVICE ANNIVERSARIES huge crowds at the fair. Your next issue of the EDGE Magazine will focus on “green” topics: recycling, energy conservation, mine reclamation measures, and other examples of environmental responsibility. ESCO is committed to operating in a responsible and sustainable manner. This photo by John Howard was taken at the ESCO Portland Golf Tournament in Welches, Oregon. ESCO CORPORATION 2141 NW 25th Avenue Portland, Oregon 97210-2578 United States of America PRESORTED STANDARD US POSTAGE PAID Portland, Oregon Permit No. 382