Hope Construction Materials is a new cement and building materials producer in the UK with assets that include the largest cement plant in the UK at Hope. Although the cement plant itself is over 80 years old, the company is looking towards the future. Global Cement recently visited the plant and met key figures at this ambitious new company...
Hope Construction Materials was launched as a new company on 7 January 2013. It is owned by Mittal Investments and holds the majority of the assets sold by Lafarge Tarmac as a condition of the UK joint venture between Tarmac and Lafarge UK.
The company's flagship facility is the Hope cement plant in Hope, Derbyshire, which has been in operation since 1929. Under the stewardship of Blue Circle it saw a major overhaul in the 1970s. After Blue Circle was acquired by Lafarge in 2001 the plant passed over to the French multinational, which invested heavily in the 2000s.
Location and history
Ashley Bryan, Hope Construction Materials' Industrial Director, was plant manager at the Lafarge Hope Works prior to the formation of the new company. He introduced the plant, which is located in the remote and picturesque Peak Disrict National Park.
Ashley Bryan: "Hope cement plant is located in the Hope Valley close to three villages: Bradwell, Hope and Castleton. Castleton has a visitor centre that is the second-most visited in the UK so we are quite an externally-facing factory. We work very closely with the local community and neighbours with a very active liaison group that meets at the plant very regularly."
"A lot of people in the valley have an association with the plant, either because they draw a pension, they work here or their business is supported by the plant in some way.
"Initially there were five wet kilns on the site in 1929 when the plant was first built. They were added over a period of a few years so that the plant reached full capacity by the early 1930s. Some of the silos from that time are still standing and can be used if required."
"In the 1960s Blue Circle designed and built its own kiln lines and had a technical department to be reckoned with. Two dry Polysius kilns that Blue Circle installed in 1970 are running today with FLSmidth cement mills. Although it is a suspension pre-heater design, the plant is efficient and it holds its own in the UK industry today."
"The plant has had a lot of investment in recent years. Lafarge put in replacement secondary and tertiary crushing units from Sandvik in 2000. Bag-filters were installed in 2000 and 2001 and we also have selective non-catalytic reduction in 2005 and lime addition to tackle NOx and SOx."
"The plant has very good rail connections. Rail is the life-line of the plant. Much of the investment in the plant over the past five years has been associated with improving the rail connections. There is a new 4000t cement silo and new sidings. We also had to move the main office to accommodate the new tracks so the plant also got a new office block at the same time."
"We have our branch line that connects to the main line at the other side of the valley 2km away. A lot of the local residents tell us that they are pleased that the plant is here because if it weren't for the plant it is likely that the line would have been cut as a result of the Beeching Report, which closed a large number of smaller local lines in the 1960s. About five years ago Lafarge closed the packing plant."
Transfer
Ashley Bryan, Mike Cowell (Managing Director Cement) and Andi Hodgson (Head of Communications and Marketing) were happy to discuss the transfer of the Hope cement works and the company's wider activities from Lafarge to Mittal ownership.
Mike Cowell was employed by Lafarge and Blue Circle around the world prior to returning to the UK. Andi Hodgson was employed in a communications role within Lafarge Paris and also served the group around the world.
AB: "Under Lafarge there was a huge amount of work on team development. We had implemented an area team organisation rather than a functional team organisation, which was a radical approach. That approach drove the plant's performance up in terms of tonnes per hour and helped increase our level of alternative fuel use."
"The area-based approach really helped us through the sale because the plant was up for sale for two years. It was quite a difficult time but we retained very high levels of performance."
Andi Hodgson: "As the deadline for separation came there was a massive recruitment drive to create the management structure and commercial teams for cement, concrete and aggregates. Of course there was a group of people, around 600, who were directly transferred under the TUPE regulations (for continued employment). Another 200 were recruited from elsewhere within Lafarge and Tarmac. The scale of that process still astonishes me. Some of those 200 were not in Lafarge UK at that point but were elsewhere in the group."
Mike Cowell: "Our commercial team for cement does not come from Lafarge UK or Tarmac UK. They had not operated together before and some of the pre-conceptions about how you should market cement in the UK were not there. We were free to develop a new and, what we think is, a better approach."
"We actually started very humbly and asked our customers what they wanted from the product, our services and us. For every customer we returned to them with a response to the issues raised and how we could do business with them as a new company."
AH: "Broadly speaking that approach extends to the whole company. As a new company we have the sense that the slate is clean. Just as the commercial team have had that opportunity, other teams elsewhere have much more autonomy and are masters of their own destinies. We don't want to throw away all of the old approaches because many of them were really good, but we have a lot more freedom to think about the practices that are not optimum for us as a cement plant or as a company."
MC: "Maintaining relationships with customers was another issue that we needed to solve but the management got a lot of help from the staff with respect to this. One delivery driver turned up with a list of 25 customers that he had delivered to over the past few years because he was worried that we wouldn't know about them. He was right! We didn't actually have any of that information. We spoke to them and many were keen to continue doing business."
GC: "What support or influence have you seen from elsewhere in the Mittal empire?"
MC: "Arcelor Mittal volunteered to help: Its communication department has helped us with communications and we have had help with Human Resources. We have also benchmarked ourselves against them in terms of pensions, terms and conditions, etc. We are also very keen to benchmark against other cement producers in the UK and we invite parties in to show best practice. There are synergies with Arcelor Mittal but it doesn't operate in the UK so there are some differences in terms of our approaches."
AH: "Something important that our new owners have brought is an approach to doing business that is friendly and inclusive. Those are key elements of how we work and they have only been enhanced since we became Hope Construction Materials. The values of the new business exactly fit the values of this cement plant. I think that this cement plant was already a bit ahead of others within the group and the performance statistics speak for themselves."
"We have a new chairman in Amit Bhatia, who has exactly the same approach to people and inclusivity and people working together. That is the kind of refreshing cultural attitude that we want at Hope Construction Materials. When talking about visions and ambitions it is not to hit this particular number or target. We want to be a fantastic company to work for and want people to identify Hope as a company they want to be involved with. We don't want to just be the leader in terms of size or turnover, but lead in a much more subtle way too."
GC: "What was the largest hurdle to transfer?"
AB: "I know that it sounds hard to believe but it has actually gone very smoothly."
GC: "What about the most exciting part?"
AB: "Being part of a small and agile organisation."
GC: "Is that also scary?"
AB: "Yes, in a way. We are operating at a very high level at this plant. I want that to continue and I want to continue to see improvements.. Previously we had large technical resources within Lafarge and we don't have that any more. That is a concern. We need to go and find that expertise but that is something we can work on in the coming years."
"We also worked hard as a vibrant network of cement plants and there was a lot of cross-fertilisation between different facilities. Not having that is a hurdle, but not one that is insurmountable. It's something that we can work to restart."
MC: "Some of our employees were the section heads of departments within Lafarge. We need to make sure that they can continue to operate at the highest level."
GC: "Presumably Hope Construction Materials also has skills gaps in other areas?"
AB: "To a certain extent, yes. The key for me is to recognise that and to do something about it. In the past four months we have gone externally for expertise more times than we had in the prior five years. I think that that method has the potential to work better than being 'hemmed in' to a set way of doing things in a large corporate structure."
MC: "Another risk is that we have seen other stand-alone cement producers lose sight of what performance is. They may think that they are doing really well but they cannot always see advances elsewhere in the industry. We don't want to fall victim to that effect."
GC: "Presumably you have pre-existing commitments to Lafarge customers?"
MC: "In the first couple of months after transition we had some pre-existing contracts to fulfil but most of those contracts are completed now. We have some longer term ones that we are still supplying."
Operations today
GC: "Production in the UK is in a lull at present. How much cement is the plant producing?"
MC: "We have a capacity of around 1.5Mt/yr and we are expecting to work at above 80% utilisation."
GC: "Can you describe the split between road and rail distribution at present?"
AB: "We distribute around 1Mt/yr by rail and we dispatch around 400,000t/yr by road. We have a road limit, which is 586,000t/yr. That was the capacity of the old works. The plant received approval for the upgrade to 1.5Mt/yr in the late 1960s but any additional production above 586,000t has to be railed out."
"During the Lafarge period, we distributed via Liskeard (Cornwall), Westbury (Wiltshire), Theale (Berkshire) and West Thurrock (Essex) (All in the south of England). It was a very well utilised plant, I think third in Lafarge in Europe. However, now we operate a completely different business model. Hope Construction Materials distributes to Dewsbury (West Yorkshire), Theale and Walsall (West Midlands). Our rail distribution pattern changed overnight."
"At present the packing plant remains closed, but we are still in the process of evaluating where we see the company in the future. It's very early days and we can't comment on the likelihood of restarting bagged cement production in the future."
Health and safety
GC: "Can you comment on health and safety in Hope Construction Materials?"
AB: "It's over 500 days since our last lost time injury (LTI) and first-aided incidents are down year-on-year-on-year. This is due to engagement with the workforce and really encouraging people to come up with their own initiatives. You have to keep safety fresh and fun."
"The rail supervisor was really keen to re-do the film induction of the plant and they redesigned the induction with different videos for different parts of the plant. Another guy implemented a rescue team on site. He has done an immense job with them, we call them the Rescue Rangers. We have given them a room and the support to train 16 people in rescue from confined spaces. Hope gives its staff the time and opportunity to proceed with their own initiatives."
"The Road to Zero Harm programme was initiated at Hope. This was subsequently adopted by Lafarge prior to its merger with Tarmac."
AH: "Not only has the company done well but this was achieved throughout a period of intense uncertainty for the plant. Re-organisations of any sort in any industry usually result in a deterioration in health and safety performance. It happens in the best companies in the world but so far our colleagues have managed to avoid that pitfall."
Alternative fuels
GC: "Can you run us through the evolution of alternative fuel use at the Hope site?"
MC: "We started talking about burning tyre chips, the first of our alternative fuels, in around 2000. At that time the process was very slow and complex, requiring significant investment prior to gaining approval and without clear emission targets to achieve. We were pointing to the continent to countries such as Germany and those in Scandinavia as solid examples for permitting alternative fuels. The process is much clearer now and we have to thank the various regulatory bodies for their support in helping with this."
AB: "After approval was granted we started burning tyre chips in 2003. They were burnt in the pre-heater tower and we still burn them today at 2t/hr in the back end. In 2006 meat and bone meal was introduced into the front end of the kiln. In 2012 Schenck Process UK installed a processed sewage pellet feeding system to supply the kiln."
"We are also burning solid waste fuel (SWF) at the moment on a temporary trial system and await the introduction of a full supply system for that. We have a number of waste codes in that permit. We can burn chipped carpet, fluff, wood, cardboard and plastics that are segregated and controlled far better than refuse-derived fuel."
GC: "What proportion of alternative fuels are burnt and what are Hope Construction Materials' targets for the future?"
AB: "The total alternative fuel substitution rate is around 35% and we want to take that up to 50-60% very rapidly. We have some pretty ambitious targets with regards to alternative fuels, even with a suspension pre-heater design, which makes the technical challenge more difficult than with a pre-calciner. We want to be higher than 60% and get way up high with our alternative fuel rate."
"At the moment we are looking at our burner design to help with our alternative fuels programme and we are looking at our pre-heater design to see how that can be optimised in light of our new fuels."
GC: "What was the largest hurdle with the implementation of alternative fuels?"
AB: "The largest hurdle was managing stable process conditions and avoiding build-up in the tower. Alternative fuels raise a whole new set of challenges in cement production."
"That said, we actually managed to increase our tonnage on the kilns as we introduced the new fuels, which is an interesting concept and rare. We were told that we would never rise above 20% alternative fuels at this plant. The key for us was raw mix design and stability."
Emissions trading
GC: "Do you have any comments on the current state of the EU ETS?"
MC: "The ETS scheme was set up to provide some kind of way to measure the benefits of CO2 reduction in a financial sense. When a plant is looking to reduce its CO2 level the price of CO2 on the market matters dramatically. I think that reducing the allowance at this phase of the scheme makes it harder on industry in some ways but that is the point of the scheme. The reduced allowances should make CO2 more valuable and that should help support initiatives to reduce CO2 in the future."
The future
GC: "Can you comment on the likelihood of a recovery in the UK cement market?"
MC: "Well, at Hope Construction Materials we are not really economists, so it's difficult to comment. We have seen, however, an up-turn in the spot hire road haulage and rail haulage industries which seems to indicate a recovery."
"Quite a lot of people are cautiously saying that the environment is improving but they don't seem to want to say it out loud yet. There is still a lot of uncertainty with regards to the sustainability of a possibly improving trend."
GC: "It seems that under Lafarge the Hope cement plant became a 'lean-green' cement producing machine. Do you think that the new company Hope Construction Materials has been formed at a good time?"
MC: "We are in a good position and we want to look for opportunities to grow during any recovery or otherwise. We are a stand-alone business and want to make the most of it. The investment from Mittal Investments is not a one-off. It's the seed for a future business that could grow internationally. We are confident in our ability and our products are well received in the UK."
"The plant's time under Lafarge was very beneficial to operations here. Lafarge prides itself on being one of the best technical cement organisations in the world. We have learnt an incredible amount because Lafarge implemented some fantastic systems and processes. What we are doing as a new business is taking that expertise and building on it into the future."
GC: "Where does Hope Construction Materials see the UK cement industry in 10 years time?"
CM: "To tell you the truth no-one knows but we will be in it. We see Hope being there in the long term but it's a very difficult question."
AB: "We are confident that we are nimble enough to manoeuvre ourselves for the future market."
GC: "Gentlemen, thank you for your time."