THE EcHo - Ferrostaal€¦ · more tugboats are planned to be completed by 2009. “Janus” launched nEws Since 1873, Peru’s mint has been housed in an attractive building from

THE EcHothe Magazine of the Man feRRoStaaL gRoup

SUSTAINABLE The development of new industries in South Africa

December 2007

SUCCESSFUL On the expansion of business activities in growth markets

REMARKABLEThe major transition of a country in only a few decades

The refining column at the Mo3000

cover picture: cape Town Harbour

3THE EcHo December 2007

Editorial

Dr. Klaus Lesker,Member of the Executive Board of MAN Ferrostaal

Offset transactions are common practice in international trade. An estimated 20 percent of world trade depends either directly or indirectly on offset transactions. How-ever, the complex contract law governing countertrade and the problems with regard to balance sheets and tax mean that many companies avoid such transactions. Our marine business has enabled us to build up comprehen-sive, offset-specific know-how which we have developed over time. We would also like to make this knowledge of how to handle offset obligations economically available to others. The wide range of projects which we have launched together with the South African government in this con-text are described in this magazine.

In the field of transportation we offer complete trans-portation solutions and systems for public and private providers. As a general contractor we tailor the solutions required to the needs of our worldwide customers: firstly, with respect to technology, financing, implementation and adaptation to the local conditions, and also on the question of transportation by rail or road. It is foresee-able that the market for maintenance and the provision of spare parts and services will continue to open up. Privat-isation in this sector has progressed to differing degrees in the various regions of the world, but it is constantly spreading. We are increasingly offering our services here. In times of climate change and in view of the discussion about increasing emissions, we also have environmental-ly friendly transportation strategies at our fingertips. For

example, trolleybuses are about to experience an unex-pected comeback.

Power supply is one of the central topics for the future. The development of oil and gas reserves using state-of-the-art offshore platforms is becoming more and more profitable, and consequently it will continue to gain in importance. The demand for powerful special ships for positioning these drilling rigs, for towing FPSOs (Floating Production Storage Offloading) and for supplying the rigs is growing considerably. We and our partners are therefore concen-trating on building these special ships. With the handover of the first three 200-tonne tugboats “Magnus”, “Tau-rus” and “Janus” we have succeeded in positioning MAN Ferrostaal in the field of modern deep-sea exploration and in achieving a good market position in this sector.

We are also gearing our steel business to the future. In No-vember we cooperated with Coutinho Caro and Villacero in launching one of the largest independent steel trading com-panies. This will enable us to maintain a top position in the international steel trade. More information on this and on other topics is provided in this edition of the magazine.

Happy reading!

Yours truly,

Klaus Lesker

Dear Readers,

contEnts

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sErvicEsSOUTH AFRICA: good prospects for new and old industriesThe opening ceremony took place recently for the new shipyard in Saldanha Bay which is to be used to con-struct oil and gas platforms. Experts consider it to be one of the best in the world and its presence brings back to South Africa an industry that was regarded as lost. Together with a further shipyard, this represents the largest offset project in the history of the company.

ProjEctsOMAN: from a nomadic state to a modern nationSince the sixties, this country has been character-ised by great changes. “Black gold” has transformed what was once an agrarian land into a sought-after exporter of raw materials. The gas reserves are still largely undeveloped and open up new opportuni-ties for value creation in the country.

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nEwsNews from all over the world: the launch of a new tugboat, collaboration on the world’s fastest particle accelerator and also on a Brazilian steelworks, assist-ance for earthquake victims in Peru, and much more.

ForumA new major player in the steel trade:Coutinho & FerrostaalCoutinho Caro, Villacero and MAN Ferrostaal launch one of the largest supplier-independent steel trading companies in the world and in doing so acquire a leading position in the international steel trade.

Successful partnership with KfW IPEX-BankThe financing of plants forms an essential compo-nent of MAN Ferrostaal’s project development. This explains why they have been working successfully with national and international banks such as KfW IPEX-Bank for many years.

man PlatForm Upswing in the Andean stateReinhart Hönsch, Head of the new MAN House in Lima which opened in November, expresses his views on MAN’s opportunities and strengths, as well as on the market development in Peru.

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THE EcHo December 2007 5

United under one roofThe MAN House in Malaysia is on the verge of opening. It will be managed by Hubertus Roch and Ernst Geyer, and they see a lot of market potential for the Group.

Three “Ps” for MAN IndonesiaFrom February 2008, the new MAN House in the world’s largest island state will provide a sales and services platform for three subgroups and will ensure better service for customers and partners.

ProjEcts South America’s most modern blast furnace commissioned Brazil plays an important role in international steel production. After three years of construction, MAN Ferrostaal and its partners have completed what is cur-rently the most modern blast furnace in South America.

Expansion of the petrochemicals industryAn international consortium that includes MAN Ferrostaal has been awarded a large contract in Venezuela to build a fertiliser plant. Preparations are already underway at the construction site. Termozulia I: advanced technology as a contribution to more stabilityHydroelectric plants cannot guarantee the supply of electricity during Venezuela’s dry periods. The expan-sion of the Termozulia I power plant and its conver-sion into a gas and steam power plant represent a pioneering contribution to securing the power supply.

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sErvicEsAround the world with traffic conceptsIn an interview, Georg Schwinning, Head of the Trans-portation Business Unit, illustrates the broad range of his product line all around the globe.

High-tech bus with long traditionTrolleybuses constitute an ecologically sound alterna-tive and also gain extra points for their low investment costs.

New printing standards for BrazilFrom the Sugarloaf to the Amazon, MAN Ferrostaal is the largest independent service provider for the graphics industry.

countriEs and PEoPlE“Saving face is important” A portrait of Chief Representative Alexander Mauch, in which he provides insight into the secrets of his adopted home, Vietnam.

standardsEditorialContentsTrade fair calendarPublication order service Imprint

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“Janus” is the name of the latest powerful tugboat which MAN Ferrostaal and the Mützelfeldtwerft

(Mützelfeldt Shipyard) have built for a single-ship compa-ny owned by Harms Bergung. At full load the 27-million-euro ocean-going tugboat achieves a tractive power of 219 tonnes, and at 110 percent of the engine power as much as 232 tonnes. With these figures this ship, which is designed for heavy oil operations, sets new benchmarks for the international offshore sector. Together with the ships “Magnus” and “Taurus”, “Janus” is the most power-ful tugboat ever constructed in Germany for a German account. Four main machines, which generate a total of 14,000 kilowatts, turn two propellers that work in jets. The latest tests of the bollard pull and dynamic positioning in Norwegian waters yielded very satisfactory results. The official launch took place in Cuxhaven on October 21. Five more tugboats are planned to be completed by 2009.

“Janus” launched

nEws

Since 1873, Peru’s mint has been housed in an attractive building from the colonial era, the Casa Nacional de Moneda. This is located in the historic centre of Lima, right next to the Con-gress building and the Chinese Quar-ter, and has little in common with a factory building. The antiquated pro-duction facilities, the production pro-cess and a lack of automation meant that state-of-the-art, high-speed mint-ing machines needed to be delivered. At the end of last year MAN Ferrostaal was commissioned with this task as the general contractor.

The company equipped the mint with new machines from Schuler and ensured that production started smoothly in October of this year.

The Casa de la Moneda has a rich tra-dition: artistically gifted craftspeople at the mint have enriched the prod-ucts, and this is still reflected today in the quality and beauty of the coins and medals. The currency of Peru is the nuevo sol.

Modernising the Peruvian mint mark


Collaboration on the world’s largest particle accelerator

CERN (from the French, Conseil Européen pour la Recherche Nu-

cléaire) is the largest centre in the world for atomic, nuclear and parti-cle physics. Physicists come here to research the composition of matter and the forces which hold it together. Its primary task is to equip the physi-cists with the tools they need. These are accelerators, in which particles are accelerated almost to the speed of light, and detectors to make the parti-cles visible.

For a long time, CERN’s LEP accelera-tor was the largest research system worldwide. Now, in the LEP’s 27-kilo-metre-long tunnel, its successor, the LHC (Large Hadron Collider, a large accelerator for the collision of pro-tons) is being installed. The LHC is planned to start operation in 2008, when it will be the most powerful machine ever constructed to ex-plore the properties of elementary particles. It will allow researchers to probe more deeply than ever before into the structure of matter.

Since 1986, MAN Ferrostaal has sup-plied ventilation and extraction sys-tems, smoke extraction systems and the associated cold-water treatment systems and distribution networks, as well as the electrical engineering sys-tems required for them to function. The total air capacity of the ventilation and extraction systems supplied by MAN Ferrostaal is approximately five million cubic metres per hour. Most of the systems supplied are process plants, planned and manufactured for CERN according to its special require-ments. Air-conditioning units with an air pressure of up to 25,000 pas-cal have been supplied and installed. MAN Ferrostaal will have completed the construction of the systems for supply of the subterranean caverns, including delivery and installation, by the end of March 2008.

The Research Centre was founded in 1954. It is financed by 20 member states and employs about 2,500 peo-ple. About 6,500 scientists visit it ev-ery year from all over the world. CERN is located in Switzerland, near Geneva. However, it does not belong to any na-tional territory but, like the site of the UN in New York, is exterritorial.

CERN homepage: public.web.cern.ch

Besançon

Dijon

Lyon

Turin

Freiburg

Strasbourg

Karlsruhe

Zurich

FRanCe

SwiTZeRLanD

geRMany

iTaLy

Bern

geneva

Lake Geneva

Milan

Bergamo

0 50 km

gas management system for Brazilian steelworks

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Among ThyssenKrupp’s production locations, Brazil, the world’s largest supplier of iron ore, will occupy a

favoured position in future. In Septiba, in the federal state of Rio de Janeiro, the ThyssenKrupp subsidiary CSA Com-panhia Siderúrgica (TK CSA) is constructing an integrated steelworks with a total investment cost of three billion eu-ros. In addition to a coking works, a sinter plant, two blast furnaces, a slabbing mill and a power plant, the works will also include its own seaport.

MAN Ferrostaal received the order for the gas manage-ment system at the end of 2006, and in close collaboration with its subsidiary MAN Ferrostaal do Brasil, it undertook the planning, delivery, installation and commissioning. This includes gasometers, flares and blowers, as well as steel components and pipelines. The gas system collects all the gas produced in the works, a volume of about a mil-

lion cubic metres per hour from the blast furnace opera-tion (blast furnace gas) and the steelworks (converter gas). Through efficient process management, it is possible to achieve optimum utilisation of the available energy and an improvement of the energy balance per ton of steel produced. A third of the gas can be reutilised in the blast furnace process, while the rest is used for power genera-tion in the power plant. The gasometers will have a height of about 72 metres and a diameter of about 60 metres. The order volume for MAN Ferrostaal is 58 million euros.

The TK CSA Steelworks, which will provide work for 3,500 people, is to supply ThyssenKrupp rolling mills in the USA and Germany with five million tonnes of slab steel per year. Commissioning is planned for the beginning of 2009.

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The Indonesian Research Minister, Kusmayanto Kadiman, visited Eu-

rope in June. This journey not only took the politician to Paris, Berlin, The Hague and Vienna, but also to Essen, where he was a guest at MAN Ferrostaal headquarters. Discussions with the minister centred mainly on the subject of “clean energy produc-tion”. The company is very active in this sector, especially in the areas of solar energy, geothermics and petro-chemicals (conversion of methanol into electrical power).

indonesian Research Minister visits Man Ferrostaal

Kusmayanto Kadiman, Indonesian Research Minister, and

Dr. Matthias Mitscherlich, chief Executive officer of MAN Ferrostaal

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From the end of this year, the pro-duction plant Karoon I in Bandar

Imam will be able to produce up to 40,000 tonnes of toluene di-isocy-anate (TDI) annually. TDI and methyl diphenyl di-isocyanate (MDI) are precursor products for the manu-facture of polyurethane foams. They are used in automobile manufactur-ing and the furniture industry for the manufacture of plastic profiles and as insulation.

The project was initiated as a joint venture between the National Petro-leum Company (NPC), Chematur En-gineering AB and Hansa Chemie AG. MAN Ferrostaal is participating in

the joint venture through a joint un-dertaking with Chematur. In 2002, largely because of its many years of experience in Iran and the depth of its know-how in project handling, MAN Ferrostaal undertook the pro-curement of the process-specific equipment. At the end of 2003, ad-ditional orders were received for the procurement of “Key and Gen-eral Equipment” and in 2005, for the supply of instruments, valves and fittings. These orders were success-fully completed by the middle of 2006. Financing took place through a credit agreement amounting to 150 million euros.

On the basis of the successful com-pletion the client, the National Petro-leum Company (NPC) again turned to Chematur for the construction of an MDI plant. The follow-up order came into effect in January 2006 and covers a period of almost three years. The project comprises the planning and construction of plants for the annual production of 40,000 tonnes of MDI, 30,000 tonnes of aniline and 56,000 tonnes of nitric acid. MAN Ferrostaal has again undertaken the procurement of the process-specific equipment.

iran: TDi plant shortly to be commissioned

Karoon I in the petrochemical zone of Bandar Imam

To the very last drop

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At the beginning of 2007, MAN Ferrostaal received an order for the construction of a turnkey water treat-

ment plant in Libya which filters out all the oil from 22,000 cubic metres of water per day down to an oil parti-cle suspension of 10 ppm (parts per million). The technol-ogy applied, “Produced Water Re-Injection”, is one of the very technically demanding tertiary recovery measures used to maximise the recovery of residual oil from a de-posit. In addition to engineering services and installation work, the project includes the following deliveries:

· two gas-bearing, horizontal flotation tanks (each 15 metres long, four metres diameter) · four backwash-capable walnut shell filters (walnut shells have a special property: they extract oil from the water) · tanks, containers · two injection pumps · various pumps, pipelines and control elements

The order value is 22 million euros. The complete water treatment plant is to be completed within 24 months. This is already the third project of this kind in Libya for MAN Ferrostaal.

The client is the ENI Oil Company Ltd., one of the largest oil producers in Libya. Its oil pumping station “Bu Attifel” in the eastern section of the Libyan Sahara has been in operation since 1972.

Since then gas oil and solid particles have been coarsely separated from the oil-water mixture that remains after treatment of the crude oil. It has then been left to evapo-rate or seep into the desert soil. In future, however, the mixture is to be treated again and pumped back into the deposit. The advantages are that by forcing the water back into the borehole the recovery capacity increases, reserves can be more easily exhausted and the technique spares the environment.

nEws

A/100 treatment of stratal water from an oil well

Induced gas flotationNutshell filter

Feed pumps

oil recovery

Settling tank

Storage tank

Booster pumps

Injection pumps

Separator

Degassing tank

Backwash return pumps

Degassing tank

Pumps


Veba Oil Operations (VOO) operates as an oil producer in Libya. The company runs a tank farm with 13 tanks

in Ras Lanuf in the Gulf of Sirte. These each have a capac-ity of 500,000 dry barrels. A third of the total oil produc-tion of this North African country is stored there. Now the tanks are beginning to show their age, so the site has to be modernised.

Within the framework of the modernisation of these sites, VOO invited tenders for an extension and renewal of the

existing fire extinguishing systems. At the beginning of 2007, MAN Ferrostaal was awarded the contract for the procurement, construction and commissioning work. This includes the following goods and services: procurement and delivery of process equipment, tanks, pipelines, electri-cal equipment, instruments and bulk material; preparation of operating manuals and development of commissioning procedures; assembly and commissioning, as well as on-shore and offshore training. The project value amounts to 17 million euros and the performance period is 21 months.

Fire extinguishing system for tank farm modernised

The state-owned Algerian company SONATRACH (oil, gas, petrochem-

icals) operates a plant for the lique-faction of natural gas at the Arzew location, a town on the coast near Oran. The gas is pumped to the coast through pipelines from the explora-tion fields in the southern regions

of the country. Plant complex GL1.Z possesses six lines for natural gas liq-uefaction with a total capacity of 1.6 million normal cubic metres of liquid natural gas per day, which is loaded for international export in the works’ own docks.

In this plant, within the framework of preventive maintenance, various pieces of equipment are being replaced. In this connection, MAN Ferrostaal will undertake the full scope of delivery and services.

MAN Ferrostaal is working as a gen-eral contractor with an international supplier spectrum to fulfil this task. The project period is fixed at a total of 24 months. The financial volume of the project amounts to about 70 mil-lion euros.

Replacement of heat exchangers and steam condensers

Batna

Setif

annaba

Sfax

MisurataBenghazi

Tunis

Gulf of Sirte

Sirte

Djerba

Bu attifel

aLgeRia

Tripoli

TuniSia

LiBya

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Sahara

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algiers

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25th anniversary of Koch de Portugal

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Koch de Portugal, which has been a member of the MAN Ferrostaal Group since March 2007, celebrated its 25th an-niversary in October. This renowned plant builder based in Lisbon was established in 1982 and has since made a name for itself with outstanding projects. These projects in Por-tugal include the first gas- and steam-turbine power plant in the country which generates 1,000 megawatts, the waste disposal plant in Setúbal which handles 60,000 tonnes per year, the April 25th Bridge and the railway bridge of Oeiras. But the company with its 200 employees has re-mained true to the discoverer mentality of the Portuguese and is consequently also strong in many other markets around the world, for example in Nigeria, Jordan, Syria, Brazil, Argentina, Thailand, Malaysia and Iran. Particular mention should be made of the large power plant Ribatejo in Portugal which was fully commissioned in April 2006 and generates 1,200 megawatts. It was nominated as one of the “Top Plants 2004” worldwide by POWERmagazin.

nEws

MAN Ferrostaal is strengthening its Projects Division. On October 15, 2007 Dr.-Ing. Stephan Reimelt joined the company as an additional Member of the Executive Board after the Super-visory Board had decided to appoint him. Dr. Reimelt will be head of the strategic business area Biofuels and will expand the project development area. The company is involved in the construction of plants for producing first-generation biofuels (biodiesel and bioethanol) and is planning to build second-generation plants (BTL – Biomass To Liquid).

In the fast-growing biofuels market MAN Ferrostaal has already recorded

its first successes. Two plants for pro-ducing biodiesel are currently under construction, and further projects for biodiesel and bioethanol plants are in the pipeline. The company plans to expand this business signif-icantly under the leadership of the new Member of the Executive Board: “With Stephan Reimelt we have suc-ceeded in recruiting one of the top experts in the field of biofuels,” said Dr. Matthias Mitscherlich, CEO of MAN Ferrostaal AG and Member of the Executive Board of MAN AG. At Lurgi AG Dr. Reimelt was extremely successful in setting up and expand-ing a competence centre for biofuels. When he left the company he was the

board member responsible for world-wide sales, project development, mar-keting and service.

Biofuels specialist becomes new member of the executive Board


Late in the afternoon of August 15, 2007 a devastating earthquake registering 7.9 on the Richter Scale rocked the south coast of Peru. This was the strongest earth-quake for decades and left 500 people dead and 1,500 injured. Peru’s President Alan Garcia called on hospitals in the country to offer their services free of charge. The Peruvian Air Force airlifted supplies to the victims. The earthquake’s tremors could be felt as far away as Brazil and Ecuador. Hardest hit were the cities of Chincha, Pisco and Ica, which were almost completely destroyed. As a result of the quake, the electricity and water supplies col-lapsed. To show its solidarity, MAN Ferrostaal decided to donate a 15-kilowatt emergency generator to the area hit by the catastrophe. The donation was intended for a pub-lic health authority medical station in Santa Clemente, a suburb of Pisco in which the poor people who live on the coast receive medical care. Some of the building’s obso-lete infrastructure had been destroyed, and the absence of a power supply meant that it was not possible to oper-ate at night and the vital sterilisation device could not be used. And without refrigeration facilities, essential medicines and vaccines were also being spoilt.

The technical service of MAN Ferrostaal in Peru installed the generator and put it into service in the presence of the head doctor, a representative of the city council and the Managing Director of MAN Ferrostaal Peru, Reinhart Hönsch. The company employees also showed their solidarity with the victims and donated money, food and blankets, etc. in response to a public appeal by the Chamber of Commerce in Lima.

Donation ensured medical care

Box Print from the Brazilian re-gion of Rio Grande do Sul is one

of the leading packaging printing companies in South America’s larg-est country. On the technical side, the management has put its faith in MAN Roland Equipment, and particu-larly in the model Roland 702 PLTTLV.

This machine stands out on account of its flexibility and high output. In addition to supplying and install-ing these powerful machines, MAN Ferrostaal also offers a comprehen-sive after-sales service on site, thus guaranteeing the best possible sup-port for the customer. For Box Print

the packaging process is part of the value-added chain. After all, it is the external wrapping of the goods which customers see first, and this can have a strong influence on whether they decide to buy.

The packaging sells the product

In August, the once picturesque coastal town of Pisco was destroyed by an earthquake.

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a new major player in the steel trade: Coutinho & FerrostaalCoutinho Caro, Villacero and Man Ferrostaal launch one of the largest supplier-independent steel trading companies in the world.

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The worldwide steel trading activities of CCC Steel, Hamburg, and MAN Ferrostaal, Essen, will be merged on January 1, 2008 under the name “Coutinho &

Ferrostaal GmbH & Co. KG”. This will result in one of the leading global steel trading companies. The steel trading business area, which is currently named Ferrostaal Metals Group, will be integrated into CCC Steel, with the rights of the shareholders being guaranteed.

CCC Steel is a joint venture of the MPC Münchmeyer Pe-tersen & Co. GmbH Group, Hamburg, and the Mexican in-dustrial group Grupo Villacero, Monterrey. CCC can look back on a history in the worldwide steel trade which began in the late 19th century and it has gone to great lengths to bring about the merger with the Ferrostaal Metals Group. Dr. John Benjamin Schroeder, spokesperson of the Management Board of CCC Steel and joint partner at MPC Münchmeyer Petersen & Co., confirms this: “We made ev-ery effort because we knew from the outset that Ferrostaal Metals and CCC are two steel trading companies which complement each other perfectly. There are few overlaps, the business philosophy of the trading players is identical, and we see excellent opportunities for mutual growth.”

The new company, of which MPC Münchmeyer Petersen & Co., Grupo Villacero and MAN Ferrostaal will each own one third (33.33%), will occupy a leading position in the international steel trade. With 320 employees worldwide at 56 locations in 34 countries, the company anticipates sales amounting to 2.1 billion euros in 2008, trading just under five million tonnes per year. The central locations in Hamburg, Houston and Essen will be retained; no reduc-tions in personnel are planned.

With the merger of these two renowned steel traders, MPC Münchmeyer Petersen & Co. and MAN Ferrostaal have taken a step which is of international importance. It actively underlines the companies’ excellent position in the mar-ket. Villacero is continuing its consistent strategy of taking on a leading international position in the sector of global marketing, procurement and logistics in the steel trade.

Uwe T. Schmidt, Member of the Management Board of MAN Ferrostaal AG and Chairman and CEO of the Ferrostaal Metals Group, is extremely pleased about this promising solution and regards the merger of the two companies as a natural consequence of the continuing consolidation in the steel production sector: “We must meet our partners on the supplier side, who are becom-ing larger and stronger, as an equal partner, otherwise there is a danger that in future we will not be strong enough to play our role in this business in the required scope. The merger with CCC could serve as a role model in the market.”

Dr. Israel Gutierrez, Head of the Strategy and International Business segments at Villacero, says: “With this transaction we have come a significant step closer to realising our stra-tegic goal of expanding our core business and our world-wide steel trading activities and to facing up effectively to the challenges of consolidation and globalisation on the steel markets. The merger of CCC Steel and Ferrostaal Met-als is a decisive step towards enhancing our competitive position in the global environment.”

The existing, experienced management teams of both companies want to ensure the continued success of Coutinho & Ferrostaal in the future under the leader-ship of Dr. John Benjamin Schroeder, Uwe T. Schmidt and Dr. Israel Gutierrez.


Uwe T. Schmidt, Member of the Management Board of MAN Ferrostaal and chairman and cEo of the Ferrostaal Metals Group, will continue to control the destiny of the steel business together with representatives from the other groups.

Successful partnership with Kfw iPeX-BankMan Ferrostaal is also regularly successful with occasionally spectacular projects in “exotic” markets. in many cases it is not just the technology and handling that are important building bricks for the economic feasibil-ity of the investment, but also the financing of the plants. For this purpose the company works successfully with numerous national and internation-al banks. Kfw iPeX-Bank is one of the important partners with which Man Ferrostaal is connected in a close and successful business relationship.

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NEW SERIES

Long-term “first-class partners”The core competencies of MAN Ferrostaal are project development and project management. As a general contractor the company has a large number of contacts and knows who is best suited for which task. A big plus for the customer here is that MAN Ferrostaal is not dependent on suppliers. The company frequently brings together over 100 different partners when building large industrial plants – some as one-off sup-pliers, others for the duration of a project. It has been working with a carefully chosen selection of partners for many years. These long-term partnerships will be introduced in this series.The first in line is KfW IPEX-Bank.


KfW IPEX-Bank provides financial solutions for all business areas of MAN Ferrostaal. The focus here is on the areas of energy, petrochemical industry and

shipbuilding. Above all, in addition to guarantee products for the bidding and construction phases (advance payment guarantees, delivery and performance guarantees, etc.), tai-lor-made and complex products are provided for the long-term financing of plant purchases. KfW IPEX-Bank regards itself as part of the bidder consortium with responsibility for the financing part of the bid.

A prime example of this is the AUM project in Trinidad which was presented in the last edition: KfW IPEX-Bank developed the financing strategy for this project in close cooperation with the project management, the MAN Ferrostaal Finance department and the customer in Trini-dad. As head of a banking consortium, it also provided credits amounting to 1.2 billion US dollars.

The partnership of KfW IPEX-Bank and MAN Ferrostaal has grown over the decades and has proved its worth in several financial and emerging-market crises. In addition to a wide range of contacts at project manager level, a joint event involving the managements of the two companies where the current business situation and higher-level topics are discussed takes place at least once a year.

The long-term cooperation and personal contacts at all levels also enable novel and complex projects to be imple-mented quickly and efficiently. An example of this is the methanol plant for the Oman Methanol Company which was recently commissioned, representing the first private large project in Oman which was completed on a project financing basis. KfW IPEX-Bank was involved directly in the bidding phase so that a convincing strategy for financing could also be presented.

The project involved the construction and operation of a methanol plant with a capacity of 3,000 tonnes per day. The plant was built at the Sohar location, a newly desig-nated industrial zone with a functioning infrastructure, including a deep-sea harbour. The project costs amount View of the Frankfurt skyline from the head office of KfW

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to 520 million US dollars with a construction period of 30 months. The external financing, for which security is largely provided by Hermes coverage, was coordinated, negotiated and signed by KfW IPEX-Bank alone, and then syndicated with an international banking consortium.

The positioning of MAN Ferrostaal as a sponsor and co-owner on the one hand and as an offshore contractor on the other displayed the company’s great strength, but also presented a challenge in structuring the financing. While carefully balancing the interests of all the parties involved, KfW IPEX-Bank was able to take advantage of an enor-mous wealth of experience, especially on the part of MAN Ferrostaal. The particular challenge here was to explain the strategy and the entire structure to the local investor.

Ultimately it was possible to implement the tried-and-tested partnership model in Trinidad. The overall strategy includes not only plant construction, but also operation, distribution and financing – the “comprehensive care-free package” for industrial investors, so to speak. Trust, well-

established cooperation and references provide the basis for this model, which often results in the lowest-priced offer on account of the quick and predictable project im-plementation. This project in Oman certainly sent out a strong signal: with this first private large project the Om-ani side was able to see that cooperation in partnership with experienced foreign investors, plant constructors and financiers has great benefits. And a follow-up project is already being discussed.

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KfW IPEX-Bank and MAN Ferrostaal developed a strategy to finance the largest methanol plant in the world, M5000 in Trinidad.


Am Ende konnte das auf Trinidad bewährte Partner-schaftsmodell umgesetzt werden. Dabei schließt das Ge-samtkonzept nicht nur den Anlagenbau, sondern auch Betrieb, Distribution und Finanzierung mit ein – das „Run-dum-sorglos-Paket“ für industrielle Investoren sozusagen. Vertrauen, eingespielte Zusammenarbeit und Referenzen sind die Basis für dieses Modell, das auch wegen der schnel-len und berechenbaren Projektrealisierung in der Gesamt-betrachtung oft zum wirtschaftlichsten Angebot führt. Die Signalwirkung dieses Projektes in Oman ist jedenfalls hoch; mit diesem ersten privaten Großprojekt hat sich die omanische Seite davon überzeugen können, dass die partnerschaftliche Zusammenarbeit mit erfahrenen aus-ländischen Investoren, Anlagenbauern und Financiers große Vorteile mit sich bringt. Und über ein Folgeprojekt wird bereits gesprochen.

KfW IPEX-Bank belongs to the KfW Bankengruppe (KfW banking group) and specialises in financing business and corporate and infrastructure investments in Germany, and also the exports, large projects and investments of Europe-an companies abroad. In accordance with the understand-ing of the EU regarding development banks of May 2002, it combines all the business activities of the KfW Bankengrup- pe for competing with other domestic and foreign banks. on January 1, 2004 it entered a four-year transition phase which is scheduled to end on January 1, 2008 with its legal independence as a separate bank. KfW IPEX-Bank will re-main a 100 percent subsidiary of KfW and an integral part of KfW Bankengruppe.

The objective of KfW IPEX-Bank is to support German and European industry with tailor-made financing at home and abroad. With over 40 years experience and a portfolio of 63.3 billion euro (December 31, 2006), it is a leading name in this market.

KfW IPEX-Bank offers a wide range of financing products, ranging from export financing covered by Hermes, corpo-rate loans and forfeiting, to complex structured financing in Germany and abroad, through to short-term financing, for example the provision of guarantees. Its offering is de-signed for large German and European companies, and also for medium-sized enterprises in the following lines of business: basic industry, manufacturing industry, trade and health, energy and environment, telecommunication, me-dia, shipping, aviation, rail and road transport, airports and seaports as well as the building industry.

In addition to its headquarters in Frankfurt, KfW IPEX-Bank also has offices in London, New York, São Paulo, Istanbul, Moscow, Bangkok, Mumbai and Beijing.

KfW IPEX-Bank homepage:www.kfw-ipex-bank.de

KfW IPEX-Bank is also the creditor for modernising Sheremetyevo airport in Moscow. on April 23, 2007 the business partners extended the existing credit agreement by signing an addendum covering a further 5 million euros.

20

upswing in the andean stateReinhart Hönsch is head of the new Man House in Lima. new tasks like these are a welcome challenge for the enthusiastic networker. Following his appointment as Managing Director of Man Ferrostaal SaC in Peru in 2005, he has now taken on the next task: expanding the entire Man busi-ness within the Man House.

man PlatForm

THE MAN HOUSES

Present in growth marketsWith the MAN Houses the entire Group wants to concentrate its powers in growth markets and to utilise synergies. Where the subgroups have acted separately to date, central addresses are to be created which combine all the subgroups into one house.

Mr. Hönsch, how good are MAN’s chances on the Peru-vian market at the moment?For the last two years the country has been experiencing an economic upswing which is affecting all industrial sec-tors. The reason for this is a solid foreign-trade balance which is based on increasing exports of mineral raw mate-rials, agricultural products and fishmeal. In western South America, Peru, along with Chile and Colombia, has the most stable national economy. We at MAN can participate in this upswing.

In which business areas is the Group particularly strong? MAN Ferrostaal is successful in the area of printing, plas-tics and packaging machines. We have already equipped two of the largest printing houses in Lima with powerful MAN Roland offset presses. These companies want to ex-pand their capacities still further in the next few years. We are also aiming to increase the minting capacities of the Peruvian mint. Projects in the mining sector are planned too, for example a 3.5-kilometre-long pipe transporting system and a mobile ship-loading system for mining con-centrates, as well as a twelve-kilometre-long conveyor belt for copper minerals. MAN Commercial Vehicles wants to improve local public transportation in the city of Lima with gas buses. The fishery sector will also play a role: here MAN Diesel SE is supplying complete propulsion sys-tems for fishing boats, including technical maintenance and the storage of spare parts. On the one hand we are equipping new vessels in the Peruvian fishing fleet with our motors, and on the other hand we are able to convert older models so that they can operate using heavy oil. Projects for the petrochemical as well as the oil and gas industry offer MAN TURBO lucrative business potential. A project for producing bioethanol from sugar cane is be-ing set up to the north of Lima. We supply the six subma-rines in the Peruvian fleet with navigational equipment and spare parts.

What contribution is MAN making to the development of the local economy?The wide range of products from the Group was and still is an excellent basis for making our contribution to Peru’s development in the various branches of industry. These include most notably fishing, marine, agriculture, food, plastics, energy, printing and transport. This is done using state-of-the-art technology, engineering services, logistical support and in the after-sales service by using excellently trained technical staff. Thanks to our long-term presence on the market, our reliability in fulfilling contracts and last but not least, the personal contacts to our Peruvian friends, we, as MAN, have established a permanent place in Peru’s economy.

www.man-peru.com


Reinhart Hönsch (centre) manages the MAN House in Lima.

Facts and figures for

PERU

Population 27.4 million

Population growth/year 1.5%

GDP in billion US$ (2006) 93

GDP per head in US$ (2006) 3,366

Economic growth (2006) 7.6%

Budgetary balance (in % of the GDP, 2006) 1.4

Source: bfai – Bundesagentur für Aussenwirtschaft (German office for Foreign Trade)

22

Today 16 employees from the subgroups work in the MAN House in Kuala Lumpur, four of these for MAN Ferrostaal. They have the task of strengthening the

Group’s activities in the country and of ensuring a uni-form branding. MAN Ferrostaal has so far made a name for itself in Malaysia above all as a supplier of printing ma-chines. It is envisaged that future fields of activity for the company should also focus on the project development of large industrial plants such as gas compressor stations, power plants and petrochemical complexes. The sectors of shipbuilding and steel trading will also play a role. “One of our tasks will be to identify projects and to check whether these can be considered for strategic investments with equity interest. We could, for example, build up additional capacities for ammonia, urea, methanol and melamine for the Asian market. In the machine business we will supple-ment our portfolio with the plastics and packaging ma-chines segment. I also see good opportunities to partici-pate in the expansion of Asia’s maritime infrastructure, in other words, in expanding the merchant fleets,” says Hubertus Roch, who has worked for MAN Ferrostaal in Ma-laysia for twelve years and, together with Ernst Geyer, is responsible for the new MAN House. In the product sector the spotlight is currently on a direct-reduction plant and a pulp plant. With regard to the equipment for commercial printing, MAN Ferrostaal has for many years cooperated closely with dozens of regular customers in Malaysia.

MAN Commercial Vehicles is active in Malaysia with the joint venture MAN Truck and Bus Malaysia (MTBM), which

is owned by MAN Commercial Vehicles (70%) and the Ma-laysian MBF Holding Berhad (30%). This joint venture not only markets commercial vehicles, but also offers after-sales service and spare parts. “State-of-the-art means of transport, which carry people and goods, contribute to the development of the country in many ways. A good transport system is fast, safe, efficient and reliable. For example, high-tech vehicles with the latest safety precau-tions can help reduce the accident rate. The low emission values of our commercial vehicles comply with European standards and consequently protect the environment,” reports Eric Coste of MTBM, Country Manager for MAN Commercial Vehicles in Malaysia.

united under one roofin February 2008 the Man employees in Malaysia will have reason to celebrate: the new Man House in the capital Kuala Lumpur will open. This facility will unite the various subgroups under one roof, and together with the Houses which already exist, it is designed to promote the internation-alisation of the entire group.

man PlatForm

Hubertus Roch manages the MAN House in Malaysia together

with Ernst Geyer.

23

MAN TURBO (Malaysia) Sdn Bhd, a joint venture with the local partner MASER, started business in June 2006. It focuses on the regional oil and gas industry. Most of the countries in Southeast Asia are supported from the Kuala Lumpur location. Since the early nineties, MAN TURBO has been permanently represented in Malaysia, and since 2000 has had its own office. The establishment of today’s regional office and the knowledge transfer to the region which this entails mean that the customers in the oil, gas and petrochemical industries have a reliable partner who offers them a joint solution for their extremely var-ied requirements. One of the principal tasks of the last

few years was and still is to set up a qualified after-sales services network in Southeast Asia with full access to the MAN TURBO know-how. Ernst Geyer, Regional Head of MAN TURBO, sees the high quality of the subgroup’s products and the reliability and flexibility of a good service team as an important basis for continued strong growth in this market.

Skyline of the commercial metropolis Kuala Lumpur

24

Three “Ps” for Man indonesiaindonesia is a country of superlatives: with its 225 million inhabitants, the world’s largest island state has the fourth-largest population on earth. Over 300 different peoples, mostly of Malayan origin, live between Suma-tra and new guinea. From February 2008 the new Man House in Jakarta will provide a sales platform for three subgroups, and will ensure better service for customers and partners in the country.

man PlatForm

Wayang Kulit, the famous Indonesian shadow theatre, combines various religious traditions.

25

People, passion and performance: Hans-Joachim Del-venthal, spokesperson of the new MAN House in Ja-karta, defines these three “Ps” as central elements of

the MAN business strategy in Indonesia. “These keywords are important and decisive for every team member dur-ing their daily work,” says Delventhal. “In this way MAN Ferrostaal has, for example, always succeeded in adapting to the political, economic and social changes in Indonesia, as on the last occasion during the Asian crisis from 1999 to 2000. Our focuses in project business are primarily in the oil and gas, petrochemical, energy, biofuels and geo-thermy sectors. As a sales and service partner we offer our services in the transport, traffic and printing sectors, as well as in the special machines segment. Our activities include installation and local production. In this way we achieve a high real net output ratio.”

MAN Ferrostaal is also the leading supplier of printing and packaging systems in the country. The company has been active in Indonesia in the transport sector for almost 100 years. In 1909 M.A.N., as it was then called, supplied two stationary single-cylinder engines to the Mijnbouw-

Maatschappij “Billiton” and rails for light railways. In 2004 and 2005 the Indonesian Department of Transportation received some 54 kilometres of rails and two KIROW rail-way cranes for maintaining the tracks.

PT MAN TURBO SEA was founded in 1996 and has since supported its Indonesian customers with great success. On the basis of the high quality of the MAN compressors and by placing faith in quick and expert service provision, MAN TURBO was able to place products in the market seg-ments of oil and gas, petrochemicals and in the base in-dustry. “Indonesia, with its enormous reserves of raw ma-terials and a pent-up demand which is typical of emerging nations, is the most important market in Southeast Asia for MAN TURBO,” says Ernst Geyer, Regional Head of the compressor business in Southeast Asia.

Hans-Joachim Delventhal sees the establishment of the MAN House as a decisive milestone for the whole Group: “In doing this we are sending out an important signal to the market and the local employees. As a result we will be able to make the products of the whole Group even more easily available to the customers in Indonesia.”

THE EcHo December 2007

The new MAN House in Jakarta

Schön, daß Sie neugierig reinschauen, obwohl hier ja eigentlich noch gar kein richtiger Text steht, sondern nur der sogenannte Blindtext. Der aber soll Ihnen

diesmal mehr Spaß machen als das „Eiriseididum“ oder das „Kisuaheli omryx nomryx“ oder dieses „Iam quanto minoris constat haec felicitas accessio!“ oder „In general, bodytypes are measured in the typographical point size“. Dieser Blindtext will Ihnen nämlich dreierlei sagen: Erstens will er den Texter entschuldigen – tut uns leid, aber es war einfach unmöglich, das Ding gestern nacht noch exakt auf Länge runterzuschreiben. Das Briefing, Sie wissen schon. Schwieriges Thema. Und die Freundin ist krank, und der Freund wollte unbedingt in diesen neuen Film. Also sorry. Ja, und zweitens haben wir Sie bis hierhin zum Lesen ge-bracht und wollen damit belegen, daß nicht alle Marktfor-scher und Kaffeesatzleser recht haben, die sagen, daß unser armer Freund Otto Normalverbraucher und seine häßliche Schwester Lieschen Müller maximal Null Komma gar kein Interesse haben für Texte.

Drittens sollten wir für ein paar Zeilen abschweifen und uns dem Gegenstand unserer Bemühungen zuwenden.

Was heißt überhaupt Blindtext? Macht er blind, und wenn ja, wen? Die Grafiker und Typografen, die solange blind in die Tasten hauen, bis ein Schreiber die Zeilen mit Sinn füllt? Ich denke, das Wörtchen will uns ja auch nur warnend darauf hinweisen, daß viel zu oft nach dem Motto „Augen

zu und durch“ verfahren wird bei der verantwortungsvol-len Aufgabe, Grauwert zu verteilen. Ja sapperlot, sagen Sie jetzt vielleicht (wenn der Layouter den Text bis hierhin aus formalen Gründen noch nicht abgeschnitten hat), man soll doch in einem Layout nur sehen können, wie das Schrift-bild überhaupt aussieht: Welche Schrift haben wir denn, in welcher Größe, wie sind die Buchstabenabstände und so weiter (Form follows function?). Trotzdem: Vielleicht ist ja die aktuelle, zeitgeistige und allgemeine Mißachtung interessanter, unterhaltsamer und ausschweifender Betra-chtungen genau darin zu suchen, daß sie präsentiert wird erst mal in Form von Blindtext, also Blödsinnstext. (Siehe oben.)

Nichts über Ihr Produkt, nichts über Ihre Leistungen, nich-ts über Ihren Service, nichts über Ihre tollen Leute. Nichts über Ihr Angebot, nichts über Ihren Stolz, nichts über Ihr Engagement, nichts über Ihren Optimismus. Wäre doch schade, oder? Für den Fall, daß Sie jetzt der Meinung sind, es gäbe über Ihre Sache ja gar nicht so viel zu sagen, gibt es diese alte Werberegel als Trost und Ansporn: Wenn Sie wirklich nichts zu sagen haben, dann sagen Sie das wenig-stens lustig. So, genug jetzt: Die durchschnittliche klas-sische Käfer-Anzeige hatte 632 Anschläge, und wir sind schon weit drüber. Warten Sie mal ab, wie schön der Text ist, der später hier gedruckt wird. Viel Spaß beim Lesen!

HeadlineSchön, daß Sie neugierig reinschauen, obwohl hier ja eigentlich noch gar kein richtiger Text steht, sondern nur der sogenannte Blindtext. Der aber soll ihnen diesmal mehr Spaß machen als das „eiriseididum“ oder das „Kisuaheli omryx nomryx“ oder dieses „iam quanto minoris constat haec felicitas accessio!“ oder „in general, bodytypes are measured in the typo-graphical point size“.

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27DAS EcHo Dezember 2007

From a nomadic state to a modern nation


Progress through oil and gasThe Sultanate of Oman has changed greatly since it started exporting oil in the late sixties. The “black gold” from the desert has transformed what was once an agrarian country into a sought-after exporter of raw materials. This state in the southeastern part of the arabian Peninsula possesses not only oil but also natural gas. The gas reserves are still largely undeveloped and open up new opportunities for value creation in the country.

SauDi aRaBia

yeMen

iRan

uniTeDaRaB

eMiRaTeS

qaTaR

al-Mukalla

Riyadh

Masirah

Duqm

Tamarit

Salalah

Raysut

Sur

Sohar

ibri

nizwa

Muscat

Arabian Sea

Gulf of Oman

Persian Gulf

Dammam

Hofuf

BaHRain

abu Dhabi

Ruwais

Dubai Khor Fakkan

al ain

Chabahar

Habarut

al-ghaydah

nishtun

OMan

Street vendors in Sohar

28

0 100 200 km


The Omanis can look back on a long tradition as seafarers and traders. In the 18th century the in-fluence of this country situated on the Arabian

Sea stretched from the East African coast to India. After the Portuguese were driven out in the mid-17th century, Oman developed into a naval power in the Indian Ocean, and the capital Muscat had become an important trad-ing centre.

In Oman today, Islam is the state religion. Three quarters of the population belong to the Ibadi denomination. Un-like in the Sunni and Shi’a denominations, the imam is elected freely by the community of believers. The Ibadis are also of the opinion that beliefs, as expressed in the Koran, can always be interpreted anew, in accordance with the times. Owing to these liberal principles, this form of Islam is considered tolerant and open-minded. And thanks to the oil there is prosperity.

Things were totally different 37 years ago: there was slav-ery, high internal tariffs, hardly any paved roads, and the

education system was limited to Koranic schools which could only be attended by male students. The health sys-tem was only poorly developed.

U-turn because of reformsOnly after Qabus bin Said became Sultan in 1970 did the country’s public life take a U-turn. Among other things, a raft of reforms abolished slavery and lifted curfews and travel restrictions. High earnings from the flourishing oil industry were channelled into modernising the infra-structure and both the education and health systems. In 1971 Oman joined the UN and the Arab League. Thanks to petrodollars, in a few decades the former agrarian state has evolved into a modern industrial country. Today there are old-age and invalidity pensions, widows’ and orphans’ welfare, and free medical care. The proportion of people living in cities has risen to 78 percent. Well-made roads ensure that even the most remote communities are well connected to the road network.

Part of the restored city wall in Muscat


30

In 2004 the literacy level of the male population was 87 percent, and that of the female population 74 percent. Even without general compulsory education, 90 percent of Omani children are enrolled in school, and schooling is free. In addition to four private universities, there is also the state-run Sultan Qabus University which was founded in the capital Muscat in 1986. Oman became a member of the World Trade Organisation in 2000, and has had a constitution since 1996. In this former agrarian state only five percent of the population still live as Bedouins; agriculture accounted for just 1.2 percent of the gross domestic product in 2006.

Up to now practically everything in the country has re-volved around oil. The power supply is also largely based on it. However, the “black gold” from the desert is a limited resource. The reserves of over five billion barrels are ex-pected to last just another 20 years and are relatively small

when compared with those of the neighbouring United Arab Emirates and Saudi Arabia. The production capacities are already declining. A large number of sources have been in operation for 30 years and no longer yield as much oil as they once did, while new oil fields are more difficult to exploit. In 2006 the average production volume per day was around 737,700 barrels, some five percent less than in 2005 and 22 percent less than in 2001. Measures to ensure more efficient production will presumably only take effect in 2010. Whether in the short or long term, it is essential for Oman to diversify its economy.

Natural gas as an alternative to oilAn alternative to oil is natural gas, which is available in abun-dance in Oman. The confirmed gas deposits would be enough for 56 years at the current production rate. In 2006 natural gas production in Oman rose by 15 percent to around 30 bil-lion cubic metres. Almost half of this volume is converted

The methanol plant Mo3000 in Sohar harbour

ProjEcts

THE EcHo December 2007

to liquid natural gas (LNG). The demand is at present higher than the supply and will continue to grow if greater added value is to be brought into the country through various gas-based projects. An important building block in the diver-sification strategy for Oman’s economy is methanol plant MO3000 in Sohar which was supplied by MAN Ferrostaal. This plant is designed for a capacity of 3,000 tonnes per day, which amounts to one million tonnes per year. Methanol is an important basic material for the chemical industry, and can also be used as a fuel additive. The target markets for methanol from Oman are Europe and Asia.

The city of Sohar is more than just the home of the legend-ary seaman Sindbad. Located 230 kilometres northwest of the capital Muscat, it also plays an important economic role. In 2008 an aluminium smelter, a refinery, a fertiliser plant and a condiment factory plus other projects are due to start operating.

Workers on the building site of Mo3000

Tradition meets modernity: dromedaries in front of an industrial plant

The current investment volume in the harbour, which was opened in 2004, is over 12 billion US dollars. Eight thousand direct and 30,000 indirect jobs are to be created in Sohar. This project is one of the largest of its type in the world.

Oman is also banking on expanding its tourist trade, which should create jobs for young Omanis in particular and ac-count for three percent of the gross domestic product by 2020. Currently it only accounts for one percent. The government is attempting to “Omanify” the labour market in order to create jobs for the 30,000 students who leave schools and universities each year. Certain professions which are currently practiced mainly by guest workers from India and Pakistan are to be reserved for Omanis in the future. Thanks to the numerous reforms and its abun-dance of raw materials, the Sultanate has achieved the quantum leap from the Middle Ages to a modern country in less than four decades.

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A bulwark from the past: the fortress of Nizwa, which was built in 1668, attracts tens of thousands of visitors each year.

Source: central Bank of oman

crude oil and natural gas 47.7%

Mining 0.2%Building industry 2.5%

Power and water supply 1.1%

Farming and fishing 1.2%

Trade 10.6%

Hotels and catering 0.7%

Financial services, real estate 5.5%

Public administration and defence 6.2%

other services 7.6%

Manufacturing 10.2%

Transportation, logistics, communications 6.2%

Economic structure of Oman (2006)


Mo3000 at night

34

For the last three years, our project team has been working very hard and single-mindedly for this moment,” says Project Manager Walter Offner of

the official commissioning at the end of July 2007. “The customer is very satisfied with the stable pig iron produc-tion, which is above the planned level.” Indeed, the new CST Blast Furnace 3 has already exceeded the contractu-ally agreed daily output of 7,800 tonnes of pig iron per year. Previously, Arcelor Mittal CST produced five mil-lion tonnes of pig iron per year with two blast furnaces.

The company’s capacity is now to be raised to 7.5 million tonnes. In addition to its responsibility for the handling of the project, MAN Ferrostaal also undertook the integra-tion of the technologies of its consortial partner with the required ancillary facilities.

In the construction of the blast furnace, the consortium paid great attention to state-of-the-art environmental features. Thanks to the dust removal systems and the efficient gas cleaning, the plant operates with minimal

South america’s most modern blast furnace commissionedBrazil is not only a successful football nation and an exporter of agricultural products; with its wealth of raw materials, this South american country also plays an important role in international steel production. in cooperation with Siemens Vai and Paul wurth, after three years of construction, Man Ferrostaal has completed what is currently the most modern blast furnace in South america for arcelor Mittal CST. This Brazilian company is a subsidiary of arcelor Mittal and has been a partner of Man Ferrostaal for many years.

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Blast furnaces 2 (right) and 3 (left) at night

“

Flue gas and air

cold blast

cooling water

Smoke-stack

Smokestack

From stock house

Main charging conveyor

cooling water

Hot blast cast House Dedusting

Hot metal

Slag to granulation plant

Blast furnaceStoves

coarse dust to sinter plant

To Thickener

Purified BFG

Water from treatment

plant

Demister

Dust

Bag filter

Gas cleaning

Torpedo vessel to BoF

Slag

coke | Sinter | Fluxes

Dust catcher Scrubber

emission values. The cooling water treatment and water purification plants also contribute to the environmen-tal compatibility of the blast furnace. “With this project, we have extended the value added chain in the country from iron ore to pig iron or, in a further process, to steel slabs,” reports Dr. Rainer Bertling, responsible for the Iron & Steel Production product area at MAN Ferrostaal. In fact, at almost 200 million tonnes, Brazil was the world’s largest exporter of iron ore in 2005. Instead of merely exporting this raw material, much more ore can now be processed to pig iron.

A large number of those responsible and otherwise in-volved gathered on the pouring platform for the first tap-ping. The actual ignition ceremony is described by Offner in the following words: “Just imagine, the blast furnace is like a pressure tank with a 60-metre-high reactor vessel, into which, at a pressure of 2.5 bar, a flaming hurricane is blasted at more than 1,000 degrees Celsius. Something like this is always an impressive spectacle.” Up to 12,500 workers took part in the assembly. The total investment volume for the project was a billion US dollars. MAN Ferrostaal undertook the complete financing for the im-port element and the financial management. Blast Fur-

nace 3 is the second major order for MAN Ferrostaal in the city of Vitoria. In 1998, the firm commissioned the neighbouring Blast Furnace 2.

Arcelor Mittal cST Blast Furnace 3 – functional principle

Facts and figures

Arcelor Mittal CST Blast Furnace 3

Pig iron capacity per year 3 million t

Furnace output (average) 7,840 t/d

Furnace output (max.) 8,700 t/d

Hearth diameter 12.5 m

Number of tuyères 34

Number of tap holes 4

PCI rate 0–250 kg/t

Coke rate 335 – 500 kg/t

Slag rate 200 – 300 kg/t

Inner volume 3,620 m³

Working volume 3,130 m³

Hot blast volume max. 5,400 nm³/min

Hot blast temperature 1,250 °c

Oxygen enrichment 0 – 8%

Top pressure 2.5 barg

Productivity average 2.5 t/m³ WV/d








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Projects for the development of Venezuela


with 2.2 million barrels per day, Venezuela is one of the ten major mineral oil producers worldwide and has the largest mineral oil reserves in the western Hemisphere. Despite major political differences, approximately two thirds of the mineral oil is exported to the uSa. To avoid internal un-rest, Venezuela subsidizes both fuel and electricity prices domestically.

38

New plants are planned, both to refine petrochemi-cal raw materials and also to manufacture petro-chemical products such as fertilisers, plastics and

cosmetics. “Venezuela will become a global petrochemi-cals power,” said the President. Years ago, the Venezuelan government under Chávez agreed on ambitious invest-ment plans for the expansion of this industry. In Decem-ber, it is planned to commission a plant for the manufac-ture of 60,000 metric tonnes of polyethylene per year. A further plant to produce a million metric tonnes per year is to follow in 2010.

Major project for an international consortiumAs a part of this policy, plans have also been developed for the conversion of gas into fertiliser and to replace an old fertiliser factory operated by the state company Petro-química de Venezuela S.A. (PEQUIVEN) with a modern, ef-ficient and reliable plant. The final orders for construction of the fertiliser plant, consisting of an ammonia plant and a connected urea plant, were signed in June 2007. MAN Ferrostaal is the supplier of the deliveries and services for the ammonia plant. The assembly will be carried out by MAN Construcciones y Montajes S.A. The urea plant and the ancillary facilities will be supplied by the Japa-nese Toyo Engineering Corporation and the VEC, a joint

venture of Venezuelan firms. MAN Ferrostaal is the com-mercial coordinator for this group. The government is in-vesting about a billion euros in the plant. The urea plant will have a production capacity of 2,200 tonnes per day, the ammonia plant a capacity of 1,850 tonnes per day.

A model for this plant is the petrochemicals complex cur-rently being constructed by MAN Ferrostaal in Point Lisas in Trinidad, which will be one of the largest of its type in the world (THE ECHO 1/2007).

expansion of the petrochemi-cals industryin one of his weekly television shows, “aló Presidente” (“Hello President”), in September 2007, Hugo Chávez said he wanted to expand the petrochemicals industry in Venezuela in the next five years and to raise the annual revenues from this sector to 100 billion uS dollars. By 2013, 700,000 jobs are to be created in this sector – ten times as many as are today provided by the state oil company PdVSa.

ProjEcts

A model for Venezuela is the ammonia plant currently under construction in Trinidad.


Preparations in full swingThe fertiliser plant is to be constructed in the small Carib-bean town of Morón in the state of Carabobo. The prepara-tions are now getting underway. Construction workers are erecting the fencing for one of the largest building sites in the country, while at the same time, orders are being placed for the manufacture of individual items of equipment. Tem-porary facilities such as access roads and accommodation are being constructed. “We plan to begin the piling work at the beginning of 2008 and are expecting to begin the underground work on schedule,” says Helmut Mühlemei-er, the responsible Commercial Project Manager at MAN Ferrostaal. “The whole complex is to be completed by the beginning of 2011.”

No more fertiliser importsThe construction of fertiliser plants not only contributes to the expansion of the petrochemicals industry, but also has a further economic-political significance in Chávez’ pro-gramme. He wants to strengthen the domestic agricultural industry and to attain a position in future where fertilisers no longer have to be imported. These represent a high expendi-ture, particularly against the background of Venezuela’s large reserves of natural gas. According to the plan, imports will already be superfluous in three years. Support for the agricul-tural sector is also urgently necessary, since up to 80 percent of food and consumer goods still has to be imported.

New industries – new jobsBut plans are not restricted to just selling the fertiliser on the domestic market. The country is to become one of the leading fertiliser producers in Latin America. Marketing opportunities exist. Chávez is investing in a growing mar-ket in which worldwide demand is rising. Since 1996, con-sumption of nitrogen fertilisers has risen by 9.5 percent, that of phosphates by 17.9 percent and that of potassium by 27.5 percent.

The further processing of raw materials also increases the added value depth and new jobs are created. Thanks to participation of domestic partners in the construction, several thousand people will, directly and indirectly, re-ceive a secure income for a few years. The plant itself will later employ several hundred workers.

MAN Ferrostaal has been firmly established in Venezuela for over 50 years and has already made a contribution to the development of the country and its industries with a number of pioneering projects. The latest example is the gas and steam turbine power plant Termozulia I, commis-sioned in June.

The domestic agricultural industry is to be supported by an expansion of fertiliser production.

40

The gas and steam turbine power plant Termozulia I was inaugurated in June by President Hugo chávez.

Functional principle of a steam and gas turbine power plant (simplified view)

Heat exchanger

Steam turbines

Generator

Condenser

Steam

Water

Gas turbine

Fuel

Air

Generator

Exhaust gases

Power supply

Almost 65 percent of the power in Venezuela comes from the six existing hydroelectric plants. Mea-sured in power production capacities, that repre-

sents about 14 of the 22 gigawatts produced nationally. Of this, ten gigawatts are produced by the Guri hydroelectric plant on the Rio Caroni. A further 7.5 gigawatts come from 24 thermoelectric power plants. All the power plants to-gether, however, do not produce significantly more power than the amount consumed by industry and the general population.

In this situation, water represents a particularly impor-tant prerequisite for the power supply. Periods of drought are a danger. The dry season from December until April allows the water level in the rivers to fall, thus reducing the power generated in the hydroelectric plants. The same applies for all the major power plants along the Rio Caro-ni. In 2001, after an extremely dry period, the first warn-ings were given against the danger of relying too heavily on hydroelectric plants.

The inadequate investment in new power networks is a further problem. Up to 30 percent of the power fed into the grid is lost in transmission. For these reasons, regional power cuts and rationing measures are part of everyday life in Venezuela. In the oil industry, which is responsi-ble for 85 percent of national exports, power cuts reduce production and export. In rural areas, the unreliability

of the supply has led the operators of larger industrial plants to produce some of their own power. In urban areas too, many larger firms and shopping malls are resorting to this cost-intensive and elaborate option. The general population continually has to put up with unlit homes and breakdowns in the telecommunications networks.


Termozulia i: advanced technology as a contribution to more stabilityVenezuela possesses over 80 billion barrels of oil, the largest proven mineral oil reserves in the western Hemisphere. For its extraction and processing, however, electricity is essential. But the power supply to industry and the public is not always reliable.

The oil reserves along the River orinoco are among the world’s largest.

42

ProjEcts

The Chávez government therefore intends to invest sev-eral billion US dollars in the next few years. For moderni-sation of the transmission network and an expansion of power generation by up to 7,000 megawatts, six new pow-er plants, eight substations and two transmission lines are planned. In order to reduce dependence on the hydroelec-tric plants on the Rio Caroni, about 2,000 megawatts of this increase will be generated by thermoelectric plants.

A pioneering contribution to this goal is the enlarge-ment of the Termozulia I power plant on Lake Maracai-bo. Since June 2007, this gas and steam power plant, up-graded by MAN Ferrostaal in only 30 months, has had a water/steam circulation system. In this system, a steam turbine generates additional power from the exhaust heat from the gas turbine. So, through an investment of about 200 million euros, it has been possible to produce an additional 170 megawatts without additional fuel costs. This technology, never used before in Venezuela,

has stabilised the power supply to the oil industry on the shores of Lake Maracaibo.

From a technological point of view, the project has blazed a trail for the construction or enlargement of further pow-er plants in Venezuela – a field in which MAN Ferrostaal has been gathering experience for years. One challenge was the filtering of the cooling water from Lake Mara- caibo. During the rainy season from April to October, huge mats of algae form on the surface of the lake. After a few days, the algae die, sink to the bottom and obstruct the water intake to the cooling systems. The quantity of algae in the water that is fed in is reduced using screening belt systems and filters.

For the general population, the project was very welcome because of the large number of new jobs created. In the main phase of the enlargement, the construction site pro-vided employment for 1,300 local workers, mainly from

The majority of Venezuela‘s mineral oil supply comes from the Maracaibo Basin, which is where the Termozulia I power plant is situated.


the nearby city of La Cañada. Since well-trained workers were an important prerequisite for the successful com-pletion of the project, MAN Ferrostaal decided to train the workers. Thanks to this further training, long-term prospects in the employment market opened up for many workers – a valuable achievement in the context of the high rates of unemployment and criminality in the region.

MAN Ferrostaal has many years of experience in develop-ing and managing major projects abroad as well as exper-tise in the associated day-to-day operations. The insight it has gained in dealing with state and government institu-tions and its operation as a local firm are the strengths of the company. As a general contractor, MAN Ferrostaal

specialises in the construction of plants in cooperation with local partners, a feature of great importance for the Chávez government. The focus here was on maximum local added value. MAN Ferrostaal was successful here through the general contractor DSD Venezuela, which has been operating in Venezuela for many years. While the main components were delivered from abroad, a large part of the material originated in Venezuela. With a local share of 40 percent of the total order volume, Termozulia I is regarded as a Venezuelan project.

Man Ferrostaal has many years of experience in developing and managing ma-jor projects abroad as well as expertise in the associated day-to-day operations.

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good prospects for new and old industries

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In the docks at cape Town, a maintenance and service station for oil and gas platforms will shortly be constructed.

45DAS EcHo Dezember 2007 45THE EcHo December 2007








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a secure future for thousands of South africans

Together with its project partners, MAN Ferrostaal will have invested a total of around 30 million eu-ros by the time the shipyards have been completed.

This makes them the largest offset project in the history of South Africa and an example of how MAN Ferrostaal gen-erates new opportunities in fulfilling its offset obligations: directly and indirectly, this young industry will create ap-proximately 12,000 jobs. This is a blessing in a region where the unemployment rate is estimated to be 35 percent.

At the opening ceremony in South Africa, Matthias Mitscher-lich, CEO of MAN Ferrostaal, called the shipyard a milestone in fulfilling the company’s offset obligations. “But it is even more important that South African industry has entered the international arena of offshore oil and gas platforms,” he said. He also underlined the amount of the local value added in implementing the project. “Three quarters of all the companies commissioned are South African companies,

and half of all the investment went to companies which promote the interests of the coloured population. During the nine-month building period, over 900 people from the Western Cape region were employed, and 99 percent of the material used came from South Africa.”

“Visionaries and pioneers are required in order to develop a completely new industry, as Man Ferrostaal is doing.” This statement comes from the South african Department of Commerce and industry. By building two shipyards to construct oil and gas platforms, the company is opening up a new growth market for South africa’s economy. The project involves not only the new shipyard in Saldanha Bay, which was opened in late October in the presence of high-ranking representatives from the fields of politics and business and handed over to the operator grinaker-LTa, but also a maintenance and service station for oil and gas platforms in Cape Town.

Speeches at the opening of the new shipyard by the South African Deputy President Phumzile Mlambo-Ngcuka (right) and the MAN Ferrostaal

cEo Dr. Matthias Mitscherlich (left). In her speech the Deputy President praised the company’s commitment as being exemplary in the fight

against unemployment and underdevelopment.

47DAS EcHo Dezember 2007THE EcHo December 2007

Full order books guaranteed

Great potential also exists for the operators of the facili-ties, because until now there have been no shipyards for constructing and maintaining production platforms. In southern and western Africa there is consequently prac-tically no local competition for the facilities which have been built in Saldanha Bay or those which will be built in Cape Town. Until now, new platforms have come from shipyards in Asia, Europe or the USA and have been towed thousands of miles across the open sea to their operat-ing locations off the coasts of Africa. But these existing shipyards are totally booked out. Until now, the oil and gas industry has had to wait up to six years when new production platforms were ordered. When they required maintenance, the African platforms then generally had to be transported back to Southeast Asia, Europe, the USA and the Middle East. Not only does that take a long time – most of all, it is extremely expensive for the users. The daily rental fee for a platform can amount to 400,000 US dollars.

The oil and gas industry in Africa is booming. It already supplies eight percent of the world’s oil – and this share will continue to grow in the future. The USA, for example, has announced that it will increasingly cover its oil require-ments over the next ten years from western and southern Africa in order to reduce its dependence on the Middle East. In this period the share of African oil in the total US oil imports is scheduled to rise from 16 to 25 percent. Experts in the industry forecast that companies will there-fore invest up to 100 billion US dollars in oil and gas pro-duction there over the next five years.

South Africa is near the flourishing production areas. The country also has a well-trained and low-priced workforce. “Until now we have seen the shipyard business literally pass South Africa by,” says Carl Grim, the CEO of Grinaker’s parent company Aveng. “But now that our facilities have started operating, there will be a new place where our plat-forms can be taken to in their vicinity. In the coming 30

years we expect a really strong demand for what we offer,” he explains. So it seems there are rosy times ahead for the South African shipyard industry.

But why these projects? It all started seven years ago, when MAN Ferrostaal, as part of the German Submarine Consor-tium (GSC), finalised a contract for supplying three type 209 submarines to the South African Navy. This order was connected with investments in South Africa in the context of reciprocal transactions. MAN Ferrostaal took on the task of fulfilling this contract clause for the consortium, which consisted of HDW and MAN Ferrostaal.

“At the end of the year we will have fulfilled all of our obligations on time,” says Horst Weretecki, Head of the Governmental Business Unit, who is responsible for these tasks in the company.

a form of reciprocity

The new shipyard in Saldanha Bay

Schön, daß Sie neugierig reinschauen, obwohl hier ja eigentlich noch gar kein richtiger Text steht, sondern nur der sogenannte Blindtext. Der aber soll ihnen diesmal mehr Spaß machen als das „eiriseididum“ oder das „Kisuaheli omryx nomryx“ oder dieses „iam quanto minoris constat haec felicitas accessio!“ oder „in general, bodytypes are measured in the typo-graphical point size“.

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With this commitment the company is very much in step with the times: the market for so-called offset transactions, which are also called countertrade, counterpurchase and reciprocity transactions, is booming. In the late seventies, not even as many as ten countries around the world had defined legal regulations to govern such transactions. In 2000, well over a hundred had them, including Israel, the Gulf States and European countries such as Greece, Great Britain and Portugal. Governments link offset transactions mainly with invitations to tender for large, expensive ma-chines and plants. This enables them to make these invest-ments without too great a commercial or political risk. “A form of reciprocity is always involved here,” explains Mr. Weretecki. This is because both sides can profit from the transactions: the country ensures foreign investments and jobs for its citizens, and in return the company opens up new markets and industries for itself. Serious estimates indicate that some 20 percent of the worldwide trading volume is connected with offset transactions – and the percentage is increasing.

However, a lot of companies steer clear of this type of ob-ligation or do not consider themselves able to fulfil them. As a result they are missing out on their market opportu-nities. Frequently the companies do not have the neces-sary local expertise or specialist personnel since the tasks required are becoming increasingly complex. The compli-cated contract law for offset transactions and the problems with regard to the balance sheet and tax mean that many companies avoid such transactions. In addition, the busi-ness often involves the fulfilment of obligations which require the company to deal with things that are totally foreign to it. Offset transactions also entail financial risks because anyone who fails to fulfil the obligations or does not fulfil them on schedule is threatened with substantial contractual penalties. MAN Ferrostaal has handled offset transactions successfully for many years and has been able to gather a wealth of experience and comprehensive know-how. Not least of all, the core competencies of MAN

Ferrostaal are also called for here: project development and project management. Consequently the company has recently started offering this service to other companies. Thanks to the fact that it has subsidiaries and offices in many regions of the world, the Essen-based Group has good contacts with governments and organisations that are close to governments and has precise knowledge of the structures in the various countries. This is particularly true in South Africa, as the company has already been working closely with the state in offset matters for seven years. “We have very good approaches for selling and marketing such services,” says Christian-Max Pietsch, Department Head in the Governmental Business Unit and directly responsible for the countertrade sector.

By fulfilling its own offset obligations, MAN Ferrostaal has al-ready given a large number of people new prospects for the future and saved entire branches of industry from ruin. On the basis of offset business programmes which were drawn up jointly with the government, the Group has developed and implemented individual measures whose goals are al-ways focused on benefiting the South African economy – be it through know-how transfer, access to key technolo-gies or ecological benefits. The reason why the projects were launched does not interest the people. “The impor-tant thing is that people have wages and something to eat again,” emphasises Mr. Weretecki.

Horst Weretecki, Head of the Governmental Business Unit

The business model


Tea as far as the eye can see

“At last my mum’s getting her money again. Recently she’s been working without pay,” says a happy schoolboy at a tribal celebration near the city of Lusikisiki, Eastern Cape in South Afri-ca, to mark the financial restructuring of the local Magwa tea plantation. The government privatised the plantation in 1994; after that it went downhill financially. First the subsidies were reduced, then completely withdrawn, and mismanagement also played its part. The workers became dissatisfied because no wages could be paid after the turn of the millennium. Despite this the mountain of debt grew, and the export rate dropped drastically.

The company was on the point of folding. But MAN Ferrostaal saw the plantation’s potential and took mat-ters into its own hands. With financial commitment and the help of interna-tional experts, the management and production processes were restruc-tured. Today the tea, which experts consider to be the best in South Af-rica, is cultivated biologically in gi-ant fields of over 1,700 hectares. It is processed and packed on site. A suc-cess story: today the company is back in the black again, and Magwa Tea can be found on the shelves of renowned chains in Great Britain, the Nether-lands and Pakistan. The growing de-

mand for bioproducts means that growing export rates can be expected in the future. Over 3,000 jobs have been saved.

Magwa – the best tea in South Africa

Tea pickers at the Magwa tea plantation, Eastern cape








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High-tech for africa

Another example of MAN Ferrostaal supporting local South African indus-tries is SAMES (South African Micro Systems). This is the only production centre for microchips on the African continent, and it was in an extremely difficult financial situation. Financial and logistical support within the off-set programme enabled the future to be secured of both the company and therefore that of an important factor for the further economic develop-ment of the country. Today SAMES produces microchips on behalf of Eu-ropean high-tech companies for use, for example, in mobile phones.

A queue forms in front of the pay office of a factory in Johannesburg. Collectors of plastic rubbish have delivered their goods to the HOSAF PET recycling plant and are wait-ing for their money. They are paid according to the weight of the rub-bish they collect – daily and in cash. For thousands of untrained workers this is the only way of feeding them-selves and their families. A plus from the ecological viewpoint: the plas-tic rubbish of the metropolis where some eight million people live is reduced and recycled. In 2004 the partners of MAN Ferrostaal began constructing a new building for this

production plant on a greenfield site. Plastic fibres are manufactured as a basic material for the textile in-dustry. The target market is above all South Africa, because until now

the fibres had to be imported and were expensive. So the local textile industry also benefits. Ten thousand tonnes are produced per year.

Employee in the only microchips factory on the African continent

From the humanitarian and ecological viewpoint

Plastic fibres for the textile industry are created from plastic rubbish.


Sustainable investments

The range of the offset projects is extremely varied. For example, MAN Ferrostaal has also invested in the development of a training centre. Young people from the structurally weak region of Atlantis can qualify in various subject areas and conse-quently have prospects of getting a job. In addition to training in informa-tion technology, administration and bookkeeping, skills such as sewing, electrics, mechanics, woodworking and welding are taught. The training centre is also used by the industrial concerns around it for advanced training courses, an important step in a country where above all the col-oured population is still excluded from many educational schemes and more highly qualified jobs.

MAN Ferrostaal was also involved as an investment partner in develop-ing call centre activities in South Af-rica. The key market for this service sector has for many years been the growth market India. South Africa is interesting as a location for Indian call centres: the people have a very good knowledge of English and their open mentality make the country at-tractive for them – and also for other foreign investors.

New projects are already being worked on as quickly as possible to-gether with the South African Gov-ernment. One of the latest projects is to support the aquaculture of the abalone, the most expensive sea del-

icacy in the world. One tonne costs up to 30,000 euros. The abalone is particularly popular in China. The Japanese are also very keen on this snail; they prefer to eat it as sashimi. This has made the abalone a much sought-after animal, as a result of which it is now endangered in the wild and the amount which can be caught commercially has been strict-ly limited. In view of this, farming the animals is a necessary ecological alternative. With the support of MAN Ferrostaal, the local partner Ben-guela Abalone Group has expanded the output of its existing farming

activities from 50 to 100 tonnes per year and built two new breed-ing grounds with a total capacity of 200 tonnes annually. The abalones are processed in the company’s own canning factories on the farms. Once again this creates hundreds of jobs in a structurally weak region; many people can earn a secure living, and an industry is growing.

MAN Ferrostaal helped to expand call centre activities in Johannesburg.








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When people think of glamorous sail-ing yachts or catamarans, perhaps they think of the South of France or Miami. But South Africa has very much got in on the act here. As a re-sult, yacht sales have more than dou-bled since the mid-nineties, and South Africa is the second-biggest yacht

builder in the world after France. However, this has led to the capaci-ties of the final outfitting facilities in Cape Town Harbour becoming to-tally overloaded. Consequently MAN Ferrostaal will help create one of these facilities in the harbour of Saldanha Bay. It will be possible to fit out up

to 25 ships simultaneously there – in total some 300 each year. The De-partment of Commerce has given its approval; the building work is sched-uled to begin in January 2008.

in the pipeline

New facilities for the final outfitting of sailing yachts will ensure the continued growth of this branch of an industry in which South Africa has for years registered enormous growth.


The commitment continues

“A great success story,” says Mr. Weretecki. “We will be the first company that will have taken on offset obligations in South Africa amounting to three billion euros and suc-cessfully fulfilled them.” Mr. Pietsch adds: “Above and be-yond the offset programme, we have managed to establish MAN Ferrostaal solidly as a reliable and expert partner of the government and industry in the region. The finalisa-tion of a Strategic Partnership Agreement with the South African Department of Industry underlines our excellent networking in the country. All of this provides an excellent platform for our continuing project work. Our tasks are not at an end with the fulfilment of our offset obligations. On the contrary, we will strengthen our presence still fur-ther in the future.”

would you like to know more about our offset service?

Contact: Christian-Max PietschPhone: +49.201.818-2403E-mail: [email protected]








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Countertrade, offset or reciprocity transactions

The award of a public contract to a foreign company is normally subject to the condition that the order value must be counterbalanced by reciprocity transactions (also called countertrade or offset transactions). There are dif-ferent types of transactions here. The direct participation of domestic companies in the production of the goods to be purchased is referred to as “direct offset”. However, frequently an obligation is undertaken to award contracts

to domestic companies which have little or nothing to do with producing the goods which are to be counterbalanced. This is referred to as “indirect offset”. The significance of offset transactions for the national economy is consider-able. An estimated 20 percent of world trade is handled in the form of offset transactions, with the more complex “indirect offset” increasingly gaining in importance.

economy

The South African economy is the most important and most exten-sively developed on the African con-tinent. The country is rich in mineral raw materials such as gold, diamonds, coal and platinum. Although agricul-ture accounts for only a small propor-tion of the gross national product, South Africa is the world’s third-larg-est exporter of agricultural products. Around 90 percent of the electricity is generated by means of coal. Despite an unemployment rate of around 27 percent (2006), the last few years have seen economic growth. South Africa has stable legal and financial systems, and also a well-developed infrastructure. The gross domestic product is the highest in Africa.

Facts and figures

Area 1.22 million km²

Population 47.4 million (2006)

Business languages Afrikaans, English

Capital Pretoria

Form of government Executive presidency with federal elements

Head of state and head of government President Thebo Mbeki

GDP 2006 in US$ billion 255

GDP 2006 per head in US$ 5,383

Unemployment 2006 26.5%

Economic structure, percentage of the GDP (2006)

Finance, insurance, real estate 22%

Public services 21%

Electricity, gas, water 2.2%

Building industry 2.6%

Agriculture 2.7%

Mining 7.9%

Transport, warehousing, communications 9.5%

Trade, catering 13.9%

Manufacturing industry 18.2%


GDP (in US$ billion)

300

275

250

225

200

175

150

215

2004 2005 2006 2007

242255

275

GDP per head (in US$)

6,000

5,500

5,000

4,500

4,000

3,500

3,000

4,627

2004 2005 2006 2007

5,1605,383

5,680

Inflation rate (in %)

6.0

5.5

5.0

4.5

4.0

3.5

3.0

4.3

2004 2005 2006 2007

3.9

4.6

5.6

Budgetary balance (in % of the GDP)

0.75

0.50

0.25

0

-0.25

-0.50

-0.75

-1.7*

2004 2005 2006 2007

-0.6

0.1

0.3

Foreign debt (in US$ billion)

70

65

60

55

50

45

40

42.3

2004 2005 2006 2007

46.5

57.2

64.1

With its offset activities MAN Ferrostaal has created more than 20,000 jobs, either directly or

indirectly, in structurally weak regions.

Sources: bfai – Bundesagentur für Aussenwirtschaft (German office for Foreign Trade);* BayernLB








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Country and people

On account of its ethnic variety, the Republic of South Af-rica is often referred to as the ‘Rainbow Nation’. This state, with a population of 47 million, is situated at the southern tip of the continent and is inhabited by a majority of col-oured people and also a white minority of British or Dutch descent. The most important cities are the economic me-tropolises Cape Town and Johannesburg, and the capital Pretoria. In addition to the business languages Afrikaans and English, there are nine other official languages. For a long time the apartheid system, which enforced strict ra-cial segregation, discriminated against the coloured major-ity. This only changed in 1994 with the election victory of the African National Congress under Nelson Mandela. The major problems today are AIDS and the crime rate, which remains high despite the various measures that have been introduced by the government. The gap between rich and poor is only closing slowly. The contrasts between poorly developed rural areas and the modern towns are in some cases startling. The majority of the coloured population lives in townships – residential areas with a low standard of living outside the major cities. The (predominantly white) wealthy South Africans live in settlements which are surrounded by fences and security personnel.

windhoek

Lüderitz

walvis Bay

naMiBia

Saldanha

Cape Town

Atlantic Ocean

n O R T H e R n C a P e

w e S T e R n C a P e

Saldanha Bay

The Cape of good Hope

SOuTH aFRiCa

The cape of Good Hope, once feared for its cliffs

Cape agulhas

atlantis

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History

In 1652 the Dutch East India Company set up a supply sta-tion at the Cape of Good Hope. Towards the end of the 18th century, the Dutch controlled the entire Western Cape re-gion. In 1797 Great Britain occupied the most important trading location to prevent it from falling into the hands of the French under Napoleon Bonaparte. Nine years lat-er, South Africa obtained the official status of a British Crown Colony. The abolition of slavery in 1833 took away the livelihood of many of the Boers who were descended from the Dutch and resulted in a mass migration into the still unsettled hinterland. The discovery of gold and dia-monds in the second half of the 19th century encouraged economic growth and the immigration of a large number of Europeans. In the First Boer War (1880–1881) the two independent Boer republics, the South African Union and the Orange Free State, repelled a British invasion despite numerical inferiority. Only in the Second Boer War (1899–1902) were the British victorious, and they integrated the Boer republics into their empire. In 1910 the four colonies Natal, Transvaal, Orange Free State and Cape Colony finally united to form the Union of South Africa, which fought on the side of the British in both World Wars. In 1948 the National Party introduced racial segregation, referred to as apartheid, which discriminated against the coloured majority of the population and in the second half of the 20th century led to far-reaching economic sanctions and the withdrawal of many compa-nies from South Africa. In Soweto, the largest township in South Africa, protests against this system of injustice led to severe unrest which resulted in 1976 in 176 deaths. Only in 1994 were free elections possible, and Nelson Mandela was elected as the first coloured president. South Africa is one of the few African countries in which a coup d’état has never taken place.

Port elizabeth

east London

Bloemfontein

Kimberley

Durban

Pietermaritzburg

MbabaneMaputo

gaborone

LeSOTHO

MOZaMBique

ZiMBaBwe

BOTSwana

Maseru

Indian Ocean

n O R T H e R n C a P e

e a S T e R n C a P e

K w a Z u L u - n a T a L

F R e e S T a T e

L i M P O P O

n O R T H w e S T

g a u T e n g

Pretoria

JohannesburgSwaZiLanD

M P u M a L a n g a

0 50 100 km

View of cape Town from Lion’s Head

Lusikisiki

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Man Ferrostaal can look back on many years of experience in the trans-port sector. its activities have ranged from the modernisation of historic tramways in the picturesque old city of Lisbon in Portugal, to traffic concepts for the transport of goods at an altitude of 2,000 metres in the Chilean andes, and traffic-related support for the coming Football world Cup in South africa. These tasks could hardly be more different. But they have one thing in common: a close relationship with the customer and a concept made to measure. georg Schwinning, Head of the Transportation Business unit, explains the business model.

around the world with traffic concepts


Mr. Schwinning, how long has the Transportation Unit existed? We are proud to say that our unit has existed just as long as MAN Ferrostaal itself. One of the first activities of the company was a transport business. This sector, of course, just like the technology, has changed a great deal over the years. But we have a very good knowledge of the markets and, extremely importantly in this business, we have a long tradition, just like our customers. This is a major competi-tive advantage.

You say your segment has changed a great deal over the years. In what ways?In the sixties, we even had our own design and produc-tion unit for goods and passenger transport vehicles. At that time, we met the demand for vehicles which had to be operated in particularly difficult environments. Many of these are still in use today, in Bolivia and Peru for example. We have always followed the principle of developing some-thing reliable, robust and very durable which, at the same time, was easy to handle, so that the procurement of spare parts and maintenance work presented no problems. We still follow this principle in our concepts today.

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Then nothing much has changed?Oh yes, it has. We have not had our own production for a long time. In the eighties, we concentrated on the sale of vehicles and components. With our overseas organisa-tions, which still exist today, we acquired representations for manufacturers. But in the mid-nineties a very strong concentration built up on the representative side. Large systems companies like Siemens and Bombardier estab-lished themselves and, at least overseas, these were on just as large a scale, if not larger, than us, so they did not need a pure dealer function. In contrast to the classic machinery business at MAN Ferrostaal, we only have concrete repre-sentations in exceptional cases.

What do you offer today?Today we have to do more: we have to provide intel-ligent services. We oversee the whole process from the definition of a concrete demand to the development of a made-to-measure solution and then its implementation. In concrete terms, we set customer requirements into a reasonable cost framework using the available technology. We examine every demand individually since every prob-lem is quite unique; we never sell the same system twice. The locomotive has to fit the track, the overhead conductor and the signal system. So a suitable workshop is needed.

There is cooperation between a large number of partners, adjusted to the requirements of the individual customer and to the individual demand. We call this know-how pooling. We piece it all together to produce an optimised system. And we do that in the context of the extremely tight bud-gets of transport authorities all over the world.

Can you give some examples?Although our core markets are overseas, we occasionally receive orders from Germany. One example was the ex-tension of the underground system in Nuremberg. Special

Delivery of modernised trams to Budapest


vehicles were needed, which did not exist in Germany and which nobody wanted to manufacture. So we tackled this problem, and together with a Bulgarian manufacturer, we developed and constructed the vehicles required. The Nu-remberg transport authorities were extremely satisfied with our solution. Another example is: the historic tramways in the old city of Lisbon. The head of the transport authority came to me one day complaining that he did not know what he should do about his old trams. They were very old and noisy, were continually in the workshop and were therefore wildly expensive to maintain. After examining a number of possibilities, we came to the conclusion that modernisation was the best solution. The customer wanted the design of the vehicles to remain unchanged, but the technology had to be state of the art. We assembled the right people and de-veloped a successful project together. This was not particu-larly easy with vehicles that were built in around 1920, for which only rudimentary construction plans were available. To date, however, there have been no technical problems and the historic trams still operate reliably and free from defects. One more example is the alternative use of used rail vehicles. These represent an inexpensive variant compared

with the purchasing of new vehicles. They are often still in very good technical condition and we extend their service life considerably by appropriate conversion and modernisa-tion measures. We have successfully realised projects of this type in Hungary and Bulgaria, for example.

Does that mean you tend to take on the more exotic problems in the transport sector? No, not exclusively. But we are not afraid of them. We con-centrate mainly on inventory business, for example on existing transport systems – and there are countless of these. In other words, if a new underground system has to be constructed or ICE high-speed trains are needed anywhere in the world, then that is not our thing. But improving the condition of an existing railway system so that it can operate economically and sustainably certainly is our thing. The same applies for road transport, by the way: we do not regard buses as competition for rail, but as a complementary means of transport. People who want to travel by rail mostly first have to get to the station by bus. The same applies for goods transport. For us, buses and lorries play a vital role. Here, of course, it is primarily a matter of cooperation with our sister company MAN Commercial Vehicles. Together, for example, we have successfully opened up the bus market in Mexico.

What new trends are there?We are following the technical developments in relation to climate protection with great attention. New technologies such as hybrid drives or electrically powered buses, so-called trolleybuses, represent a very interesting alternative and complementary solution. In this sector, we are in demand as a provider of complete solutions, since, as a rule, what is required is the installation of a whole system and its integra-tion into the existing network.

“new technologies such as hybrid drives or electrically powered buses, the so-called trolleybuses, represent a very interesting alternative and a com-plementary solution.”

Modernisation of the rail network on Java

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Does this trend play a role at all in emerging countries, which are the core markets for MAN Ferrostaal?You may be surprised to hear this, but environmental awareness exists there too. It is still a question of financial feasibility since unfortunately, these technologies are of-ten more expensive. But if we look at the example of the trolleybuses, the investment in such a system is far lower than that required in a tramway system, so it represents a real alternative.

And what developments are there in the rail business?It is likely that the market will become more open for main-tenance, spare-parts supply and service. The railway mar-ket worldwide has an annual volume of 100 billion euros. Of this, 50 percent is accounted for by maintenance and service. Until now, the rail operators have dealt with this themselves. That has historical reasons: every rail opera-tion has its own railway workshop, depot and repair unit.

But that is changing now. In some regions, privatisation is already very advanced. Latin America, for example, has gone much further here than Eastern Europe or some parts of Asia. And the market will continue to open up. This is where we want to offer our services.

How do you intend to do that?You have to understand what is important for the individu-al transport operators. To stay with our examples, the mine operator in Chile who operates his vehicles at an altitude of 2,000 metres has maintenance requirements very dif-ferent from those of a tramway operator in Budapest. This is a very complex subject and there are many possibilities here for optimisation. We have the technical know-how, the flexibility and the understanding of our customers’ re-quirements needed to provide services of this kind.

How do you convince your customers?We gain through our honesty, durability and made-to-mea-sure concepts. We accompany our customers from the initial idea to its realisation. One has to take into account here that the decision structures in the transport business are very complex. As a rule, we still have to deal with state concerns, so that means we also take part in tender proce-dures. Here we have come to master all the formalities. If you have well-developed projects, you can win.

Don’t tender procedures usually mean a price war?Orders are granted according to a wide variety of different criteria. It is not always just the price, but also the techni-cal concept that is decisive. Nowadays, all over the world, it is not just the initial investment, but also the follow-up costs that are considered. The tramway, for example, has an average service life of 30 years. The initial investment only accounts for an average of 30 percent when calculated over the whole service life. The costs for repairs and main-tenance, on the other hand, come to a good 70 percent. If you can offer very well-thought-out concepts, as we can, your chances are good.

In which markets do you provide your services?We operate with different services all over the world. In Eastern Europe, in Bulgaria, Hungary and the Czech Repub-lic, there is a lot awaiting modernisation. The trans-Euro-pean corridors have to be modernised so that it is possible in future to travel directly by rail from Paris to South-East Europe. In Croatia we are helping the railways with the lay-ing of new lines. Our focus in Latin America at the moment


Hier steht bald eine Bildunterschrift

is on Chile; Argentina, Brazil and other countries in this region are markets we would very much like to develop again. In Asia we are mainly active in Indonesia. Here we have a long tradition. High growth rates are also evident in the large aspiring markets. India, for example, is extremely interesting, for it is the largest railway country in the world. But other markets, such as the Philippines, Malaysia and Vietnam are also developing. And as the countries develop, they need development and improvement of their trans-port infrastructure. We are also active in Africa. There are two aspects there. First, there is the transport of raw ma-terials, in Ghana for example. Then there is also passenger transport, such as that needed for the Football World Cup in South Africa in 2010.

These are all extremely varied and complex matters in very heterogeneous markets. How do you manage to acquire all this knowledge? Our recipe for success has several ingredients: a lot of valu-able experience, our own engineering capacities and our cooperation with partners and customers. Our philosophy is that nobody knows the vehicles and systems better than

those who run them every day. So we prefer to work very closely with our customers. The world’s transport con-cerns often have very well trained personnel. As a rule, the know-how and the identification of people with their own vehicles are very strong. So we try to make use of this in the context of conversion processes and modernisation mea-sures, or in the development of special vehicles. It is also important for our concept that we cooperate with the local industry. We maintain constant dialogue with our customers. We use our overseas organisations for this purpose. They know their markets and can recognise cur-rent trends. We frequently hold discussions with transport authorities on the alternatives open to them. Projects only develop in intensive, direct talks. This is characteristic of our closeness to the customer, but also shows a strong un-derstanding for the country, its special features, the men-tality of its people and their culture.

Locomotives, inclusive service and a supply of spare parts, for the world‘s largest copper producer codelco in chile

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High-tech bus with long traditionThe trolleybus is about to enjoy an unanticipated renaissance. no wonder: in times of climate change, this electrically powered means of transport scores points with its freedom from emissions, efficient use of energy and low investment costs. Man Ferrostaal is also planning the realisation of traffic projects for the local traffic of tomorrow.

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Diagram: Vossloh Kiepe GmbH

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3 24

13

7

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Functional principle of the trolleybus

Pantograph

Main fuse

Main contact breakers

Braking resistance

Traction converter

Electronic drive-brake regulator

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Insulation monitor

Instrument panel and drive/brake pedal sensor

Instrument panels

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Static inverter

Heating

Emergency/duo aggregate

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1313

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In the metropolitan areas of the world, affordable mo-bility is growing increasingly important. One of the urban transport concepts of the future comes from

the past: the trolleybuses, especially popular in Eastern Europe, need not fear comparison with diesel- or gas-powered buses. Even if the new implementation of a com-plete trolleybus system involves higher initial costs, the outgoings are compensated for by the longer life cycles of the vehicles.

Together with its partners Vossloh Kiepe und NEOMAN Bus, MAN Ferrostaal has won an order for 30 of these buses in the Bulgarian capital Sofia. The Essen-based com-pany is acting for the customer as a general contractor, undertaking the project management and the commer-cial coordination. The technical responsibility is borne by NEOMAN Bus. In Sofia, a total of nine trolleybus lines cover a total network of 57 kilometres. The 30 new vehi-cles will replace part of the old trolleybus fleet and will be in service for the next 15 to 20 years. Delivery is planned for 2008.

The fundamental technology of the trolleybus, or over-head-line bus, originates from the 19th century. In 1882, a trial vehicle developed by Werner von Siemens and powered by electricity drove on the Kurfuerstendamm in Halensee in Berlin. The first real trolleybus went into operation in the year 1900 in Villeneuve, Switzerland. To-day the electrically powered vehicles are real high-tech

machines. The first prototypes have supercaps for ener-gy storage. During braking, these can quickly take up the energy produced and release it again when accelerating. Through storage and recirculation of the braking energy produced, expensive power peaks in the network can be avoided and up to 25 percent of power consumption can be saved. This pays for itself particularly in areas with a variable altitude profile and a large number of braking and acceleration operations.

Twenty-four-metre-long double-articulated buses with capacity for up to 200 passengers are already in service in many cities. Especially where trams cannot be oper-ated economically or flexibly enough, the trolleybus is a good alternative. From an ecological point of view, trolley-buses are attractive because of their relatively quiet run-ning and their complete lack of exhaust gases. A research report published by the University of Applied Sciences in Cologne in 1994 confirms that trolleybuses cause much less pollution of the atmosphere than a comparable diesel bus fleet. Much the largest trolleybus country at present is Russia, where there are 14,000 vehicles running every day. In Western Europe, in Latin America and in Asia, this high-tech traditional means of transportation is now also being rediscovered.


Since 2003 MAN Ferrostaal has delivered 142 trolleybuses to Athens.

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new printing standards for BrazilThe market for printed products in Brazil is hotly contested. Only those who use good equipment can hope to survive in the long term. Man Ferrostaal is the largest independent service provider for the graphics industry and, from the Sugarloaf to the amazon, sells high-quality print-ing machines that often give their customers a crucial edge over their local competitors.

sErvicEs


Before, I never got home before 10 o’clock at night, but now I shut my business two hours earlier and still produce more,” reports Odorico Júnior, direc-

tor of the printing firm Fonte Gráfica. For a few months, the entrepreneur has been using a Ryobi 524 Printing Ma-chine, with which he has already been able to raise his pro-ductivity by 30 percent. Thanks to the use of an inverter control system, the power consumption of the offset print-ing machine is very low. He is more than satisfied with his purchase of the Ryobi: “We now have a good lead over our local competition – and that is a good thing. For only high quality can ensure survival in today’s market.”

50 million reais for modernisationMAN Ferrostaal is also setting new standards in Brazil with the sale of other printing machines. The printing firm Posigraf in Paraná has invested 50 million Brazilian reais (27.6 million US dollars) in the modernisation of its own premises and in three new EUROMAN machines from the manufacturer MAN Roland. The three EUROMAN machines form a printing complex which is even capable of process-ing large orders for a million copies in record time. The new equipment reaches a speed of up to 35,000 cylinder revolutions per hour. The EUROMAN can print 50 metres of paper per minute – that makes it the fastest printing sys-tem currently on the market. The 32-page heatset roller off-set machine with a paper web width of 965 millimetres is equipped with segmented ink blades, three ink form rollers and three temperature-regulated ink oscillators. The ma-chine provides two dampening alternatives: contact-free spray dampeners or film dampeners. Posigraf CEO Giem Guimarães deliberately goes for high quality: “The compe-

tition is getting more aggressive. If you are not really up to date, you can never succeed in business. The Brazilian market for printed products is enormous, so we have to be flexible.” The Brazilian company’s portfolio includes school textbooks, magazines and newspapers.

“Our business works for the good of the community”Another customer, the religious order of the Pallottines, which was founded in southern Brazil in 1866, combines tradition with modern technology. The catholic priests have been publishing the magazine “Rainha dos Após-tolos” (Queen of the Apostles) for more than 70 years. In time, a firm of their own, Tipografia Pallotti, was formed to carry out the printing and it also soon began to accept commercial orders. Today the printing firm operates at two locations in the cities of Porto Alegre and Santa Maria and serves customers in the federal states of São Paolo, Rio, Santa Catarina and Paraná.

“These facilities function like normal firms, but the profit is used for new investments and for charitable purposes. Profitability helps us to maintain our social work,” says Fa-ther Cláudio Walmir Rossini, director of the printing firm, explaining the commitment of the Pallottines. The firm, which employs more than 300 workers, places great value on the right technology and decided on the model MAN Roland 705 LV. The machine prints at a speed of 16,000 pages per hour in the 740 x 1,040 millimetres format. At present, religious texts account for only three percent of the total business of Tipografia Pallotti. “We make our printing technology available to those who need our ser-vices,” says the director. “Ultimately, our business serves the good of the community.”

Ryobi 524 offset Printing Machine

Giem Guimarães, cEo of Posigraf

“

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countriEs and PEoPlE

in just one year he has increased the sales of Man Ferrostaal in Vietnam by 100 percent and has also begun to establish a new field of business. al-exander Mauch is the company’s Chief Representative in Ho Chi Minh City and also a real citizen of the world who can quickly make himself at home in unfamiliar cultures.

“Saving face is important”


Alexander Mauch experienced the Vietnamese sense of humour recently during a journey from Ho Chi Minh City to Germany. A customs official

at the airport took his passport, his boarding card and the “temporary resident card” important for his re-entry. Af-ter a thorough inspection, the official wished the Head of MAN Ferrostaal in Vietnam a good flight and returned his documents with a mischievous grin – except for the “resident card”. Mauch, however, remained unruffled and waited patiently for its return. With a laugh, the customs man admitted his joke and the businessman, now laugh-ing himself, got his card back.

Mauch spent his childhood and adolescence in Geneva, Mogadishu and Moscow, among other places. Apart from the University of Heidelberg, his economics studies took the qualified merchant banker to Paris, Oxford and Berlin. Then, in 2003, came the first high point in his career: his appointment as Assistant to the Board in the then MAN Ferrostaal Division Steel Trading, Industrial Logistics, Pip-ing Supply and Machinery. For him, this was a dream job: “The chance to get to know a large firm from a perspec-tive like that at the start of my career was something very special for me. During my work as Assistant I learned a great deal, especially about how a firm functions and how all the cogs mesh together,” says Mauch. Then, after three years, came the great career leap when in April 2006, he was made Chief Representative in Vietnam. “I wanted to go abroad as soon as possible. I wanted to be where our

Da nang

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quy nhon

nha Trang

Cam Ranh

Ho Chi Minh City

Can Tho

Long Xuyen

Vinh

HanoiHong gai

Lao Cai

Vientiane

Phnom Penh

Hong Kong

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THaiLanD

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South China Sea

Gulf of Tonkin

South China Sea

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land und lEutE

„Das gesicht zu wahren ist wichtig“

Busy street in Ho chi Minh city. In Vietnam, with its 85 million inhabitants, there are estimated to be 10 million mopeds.

“at present, there is gold rush fever in the Vietnamese market. unlike the neighbouring countries, the market segments here have not yet been parcelled out.”

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business is really done – with the customer. I was also excited by the idea of entrepreneurial activity and man-aging a business unit. I am now experiencing all these things here,” reports the 33-year-old executive.

“At present, there is gold-rush fever in the Vietnamese market. Unlike the neighbouring countries, the market segments here have not yet been parcelled out. Our aim is to become one of the most important players in the market in the printing industry sector,” comments Alex-ander Mauch. Indeed, Vietnam’s economic development in the last five years, with an average growth in GDP of 7.5 percent, is impressive. The rise in the standard of living is accompanied by an increased demand for newspapers – so good conditions exist for an expansion of the printing machine business. With the packaging machine segment, Mauch is currently establishing a second supporting pil-lar for MAN Ferrostaal in Vietnam. A growing number of foreign firms manufacture goods locally for export, so the demand for packaging is rising accordingly. At first,

Mauch and his employees will mainly supply smaller fill-ing plants for products such as vegetable oil, coffee and tea. In the medium term, the firm plans to become a well-known supplier in this segment.

Many things in Vietnam are different from Germany: the high noise level in Ho Chi Minh City only lessens gradu-ally between 10 pm and midnight, telephone lines abroad are often overloaded and Internet connections are as slow as they were in Europe in the nineties. Power cuts lasting several hours are quite frequent. In spite of these limi-tations, Mauch enjoys life in Vietnam. “One simply has to accept that many things work differently here than they do in Europe, and one can still get by in spite of the limitations. On the other hand, the people here are gen-erally very friendly, they accept many things with stoi-cism and they are very fond of laughing,” he says. Even if many cultural faux pas lay waiting to be made in this south-east Asian country, he usually succeeds in avoiding them. It is customary in Vietnam, for example, to present


the employees with red envelopes containing small sums of money at “Tet”, the Vietnamese New Year. Originally, Mauch did not want to follow this custom, but he was tipped off by other foreigners that neglecting this tradi-tion would be regarded as a serious discourtesy.

As in other Asian cultures, it is also extremely important always to keep face - for you and your opposite number. If a service is not provided as expected, European custom-ers often react with annoyance and demand the strict and rapid fulfilment of their wishes. In Vietnam, on the other hand, such behaviour only has a counter-productive ef-fect. “The member of staff of the service provider blocks inwardly for, in his eyes, the customer has lost face and can no longer be treated seriously. Losing face in the Asian culture is one of the worst things that can happen to you,” says Mauch, describing the mentality of his present homeland. “Apart from that,” he says, “foreigners are for-given for most mistakes.”

Halong Bay in the Gulf of Tonkin is a UNESco World Heritage site.

Facts and figures

VIETNAM

Capital Hanoi

Area 332, 800 km²

Population 85 million (2006)

Population density 255 persons per km²

Politics Socialist People’s Republic with one-party system

Head of State President Nguyen Minh Triet

Prime Minister Nguyen Tan Dung

Governing party communist Party of Vietnam

Official language Vietnamese

Economy crude oil (main source of income), textile and food industry

Economic growth 8.2% (2006)

GDP/person 722 USD (2006)

Currency Dong

Independence From France, declared September 2, 1945, recognised 1954

71

Source: bfai – Bundesagentur für Außenwirtschaft (German office for Foreign Trade)

aPPEndix

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international Trade Fairs January to July 2008

UpakowkaRussia, Moscow, 29/01–01/02/2008TubeGermany, Duesseldorf, 31/03–04/04/2008Expomin 2008Chile, Santiago, 15/04–18/04/2008interpackGermany, Duesseldorf, 24/04–30/04/2008OGUUzbekistan, Taschkent, 13/05–15/05/2008 MetallobrabotkaRussia, Moscow, 26/05–31/05/2008EXPETROMexico, Monterrey, 28/05–31/05/2008drupaGermany, Duesseldorf, 29/05–11/06/2008FISPAL Tecnologia 2008Brazil, São Paulo, 03/06–06/06/2008CASPIANAzerbaijan, Baku, 03/06–06/06/2008

ALIMENTECColombia, Bogotá, 11/06–14/06/2008NEFTEGAZRussia, Moscow, 22/06–27/06/2008 InlegmaschRussia, Moscow, 23/06–27/06/2008Expo PackMexico, Mexico City, 24/06–27/06/2008

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As an industrial service provider, we are active in many sectors and mar-kets. We always keep you up to date. How we develop projects from our ideas in many countries in the world. How we manage these and turn them into reality. Which people control these projects, and what it is like in the countries where we operate.

You can read all this half-yearly in our magazine THE ECHO.

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■ Annual Report 2006 of MAN Ferrostaal AG ■ German issue

■ English issue

■ Spanish issue

■ Company Report 2006 of MAN AG ■ German issue

■ English issue

■ “MANforum”, the customer magazine of MAN AG

■ THE ECHO, Issue 1/2007 ■ German issue

■ English issue

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■ Brochures of MAN Ferrostaal AG ■ Countertrade, English

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Publisher:MAN Ferrostaal AGHohenzollernstrasse 24D-45128 Essen/Germany

Member of Initiativkreis Ruhrgebiet

Responsible for contents:Daniel Reinhardt

Editors:Angela Kanders (Managing)Oliver HaastertContact: [email protected]

Other authors in this issue:Elaine Almeida, Oliver Baudson, Josef Bäumer, Christoph Bräuer, Alain Chevaillier, Eric Coste, Hans Joachim Del-venthal, Ernst Geyer, Peter Hoffmann, Reinhart Hönsch, Alexander Mauch, Joseph Mbuyi, Walter Offner, Chris-tian Rademacher, Renata Rangel, Hubertus Roch, Klaus Starke, Ingo Trenkner, Götz Trübenbach, Matthias Wiet-brock, Hans-Jörg Zimmer

Photo credits:Atlantis Marine Projects: p. 46; CERN: p. 7; Jim Connor: pp. 29, 32; Getty Images: pp. 6, 19, 20, 23, 24, 36/37, 39, 41, 52, 56, 66, 70, 73; Grinaker-LTA: p. 47; Bernd Hoff: p.61; Veronica Josi: p. 21; KfW IPEX-Bank: p. 17; Koch de Portu-gal: p. 12; Mauritius Images: pp. 13, 42/43; Catrin Moritz: pp. 3, 12, 15, 48, 53, 59, 60, 62; NEOMAN Bus GmbH: p. 65; Posigraf: p. 67; Andri Ramos: p. 40; Karsten De Riese: Cover, pp. 2, 9, 14, 18, 26/27, 28, 30, 31, 33, 38, 44/45, 49, 50, 51, 53, 55, 57, 60, 63, 76; Ryobi: p. 67; Wong Tse Hoong: p. 22.

Design and layout:BOROS

Printing house:Woeste Druck, Essen

Printed on a MAN Roland 705

Frequency:Half-yearly


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