By Rusty Haggard NALCO CHAMPION THREATENED TO OUTGROW ITS PRODUCTION CAPACITY AS ECOLAB’S INCREASINGLY GLOBAL CUSTOMER BASE REQUIRED AN EXPANDED GLOBAL SUPPLY CHAIN. THE COMPANY FOUND ITSELF AT A CROSSROADS: EITHER CONTINUE SHIPPING PRODUCTS HALFWAY AROUND THE WORLD OR INVEST SIGNIFICANTLY IN NEW CONSTRUCTION AND FACE ENGINEERING, LEGAL AND ENVIRONMENTAL COMPLEXITIES COMPOUNDED BY DISTANCE FROM ECOLAB AND NALCO CHAMPION’S GLOBAL HEADQUARTERS. A CLEAR PATH Continued growth required smart investment. That investment, the new Eastern Hemisphere Core Plant (EHCP), represents an expansion of capabilities, a critical link in the global supply chain and a strong commitment to Nalco Champion customers around the globe. Now nestled into Singapore’s business and manufacturing hub, Nalco Champion around the globe. prepares for the startup of the $150 million EHCP. “WE REDUCE OUR RISKS TO OUR CUSTOMERS BY HAVING THE SUPPLY CHAIN CLOSER TO THEM IN THE EASTERN HEMISPHERE.” BOB SMITH SUPPLY CHAIN MANAGER, ASIA PACIFIC BUILDING THE CASE FOR CONSTRUCTION More than three years ago, Ecolab and legacy Nalco company leaders began looking at capacity expansion options. One choice pointed to upgrading the twenty-year-old chemical plant at Freeport, Texas. Two Gulf Coast locations, Freeport and Sugar Land, represented the beginning of a global supply chain that stretches to Europe, South America, Western Canada, the Middle East, China, Asia and the Pacific Rim. These two plants were the source of all intermediates and blends shipped to points east and west, north and south. Proximate locations and worldwide transportation carried risks: namely hurricanes and typhoons. Distant travel routes and cost stood as additional obstacles. Nalco Champion Vice President Supply Chain, Asia Pacific, Bob Smith cites reducing risks as one prime reason an alternative to an expansion seemed favorable. “We had forecasted years ago that we would be tight on capacity by 2015 due to the high growth of the business,” he recalls. “We could reduce our risks to our customers by having the supply chain closer to them in the Eastern Hemisphere.” The second option called for a greenfield project near the emerging growth markets of the Eastern Hemisphere. Strategically, markets in the Eastern Hemisphere are among the fastest growing anywhere. And those willing to establish themselves through investment in new, sustainable infrastructure attract the support of the region’s customers, economic bureaus and governments. Analysis revealed transport times could be cut from three months to four to six weeks if Nalco Champion located a new plant close to the emerging markets. MAKING A NEW HOME IN SINGAPORE Jurong Island in Singapore beckoned as an ideal spot. An amalgamation of seven offshore islands created through land reclamation, it is host to many of the world’s leading energy and chemical companies. Not only could new construction at Jurong Island yield a plant equipped with the latest technologies to manage the production of blends and intermediates, but the stable political conditions in Singapore, the excellent reputation of its technical workforce to run the completed plant and the close proximity to booming markets presented an irresistible alternative to upgrades on the Gulf Coast. However, several unknowns loomed. Neither Ecolab nor Nalco Champion had experience planning and executing a $150 million capital construction project. Neither had experience in Eastern Hemisphere construction, where projects are defined by multi-national workforces myriad legal issues and strict environmental permitting. Fortunately, the companies knew a ready and willing local partner. Jacobs Engineering had successfully engineered and constructed previous projects for Nalco and Jacobs-Singapore offered invaluable local experience and knowledge. Selected by Ecolab, the world-class engineering and construction firm then supplied its expertise to front-end engineering and design (FEED), detailed engineering and construction management. Duc Le, the Nalco Champion project manager at the EHCP, is close to completing the largest project of his career. That project, for him and the company, will soon become larger. During FEED, company and engineering team members put a continuation and expansion of plant capabilities into place. Foundation and infrastructure for Phase 2 are already completed. Once the additional process vessels are in place, which could be as early as 2015, capacity at the EHCP will double. The construction of the EHCP entailed complexity: building in an unfamiliar country, using a multi-national workforce and needing extra safety precautions based on a large workforce in a small area. In addition, Jurong Island is a secured manufacturing location with highly restricted access. The Economic Development Board (EDB) of Singapore guided Nalco Champion through the myriad complexities. The EDB acted as an excellent governmental partner, providing help in locating and securing the land and later with various legal and permitting issues that preceded the start of the project. Jacobs-Singapore helped with selecting the numerous subcontractors needed for the complex job, brought in the skills and crafts and managed the FEED, construction and execution phases. Le worked closely with the Jacobs team as project manager for Nalco Champion. “INSTILLING A SAFETY CULTURE, WITH THE HELP OF THE TRANSLATORS, WAS A PRIORITY. THAT SAFETY-FIRST CULTURE WAS SET FROM THE MOMENT THE WORKERS STEPPED ON SITE.” DUC LE PROJECT MANAGER The EHCP employs local workers and has engaged in long-term supply contracts with providers for critical raw materials, both supporting the local economy and strengthening the security of Nalco Champion’s supply chain. INSTILLING SAFETY ACROSS CREWS AND CULTURES “Le is passionate about safety and worked tirelessly to instill the company’s safety-first culture. “The multitude of languages and cultures make a project like this very different than an expansion project in the U.S.,” he says. “Even value systems are different from culture to culture, so instilling a safety culture, with the help of the translators, was a priority. That safety-first culture was set from the moment the workers stepped on site.” “Nalco Champion engaged translators to facilitate communication between a workforce speaking up to six different languages on site. During construction of the two four-story buildings on the site, each floor grating was covered with a protective flooring to prevent tools and materials from falling to lower floors and causing injury. Any worker carrying a tool higher than 1.8 meters (about six feet) had to tie off that tool. Nalco Champion also built a designated and barricaded walk path for visitors. Once a visitor was on site, the workforce was not allowed to cross that pathway. Banksmen were assigned to every vehicle on site to further control traffic flow during construction. “The fact that all of our employees went home in the same safe condition they came to work in means everything,” Le says. The company’s safety-first culture overcame differing languages, cultures and value systems to achieve a remarkable, award-winning effort. At peak, there were 1,400 workers on site daily completing construction that totaled 3.02 million safe hours. Add in another 400,000 safe engineering hours and the EHCP was completed with 3.4 million safe hours for the entire project. The Singapore Ministry of Manpower recognized the EHCP with an award for one of the safest construction projects in Singapore for 2014. As the plant transitions from construction to production, safety continues to be guided by the principles of GOAL ZERO and is reinforced by the strategic siting of the plant on Jurong Island, where a highly restricted causeway is the only route from the city to the vast chemical infrastructure on the island. Because the island is secured by the government, the entire EHCP construction workforce rode transportation buses each day from housing in the city to and from the site. Security continues upon arrival, when each worker must have their identity checked and bags scanned by security personnel before entering Jurong Island. All visitors and short-term workers to the island must pre-register and seek admittance approval prior to arriving on the island, surrendering their passports until the day’s end. Safety measures also reflect the precautions needed for the production of sensitive materials, including reaction and ethoxylation products. High-pressure steam and flammable warehousing round out detailed safety planning and preparation. TRAINING IN THE UNITED STATES Training for the highly regarded Singapore technicians who will manage the plant is ongoing at the Freeport and Sugar Land locations. Approximately 40–45 trainees from Singapore have actively replicated every facet of EHCP plant operations since 2013. They make products exactly as they will be made at Jurong Island and are also trained in information sharing, controls, optimization and other processes with the same SAP systems used in the new plant. For the first six months of operations, the plant will focus solely on production of legacy Nalco products. Eric Seip, vice president of supply chain at Nalco Champion, explains the strategy behind the decision. “The plant was conceptually designed as a Nalco plant before the merger, and it will operate on the N-SAP ERP system, so we followed through with the idea of starting up with Nalco products,” he says. “Those in training here in the U.S. have spent several months learning how to make these products specifically. It’s a natural way to work them into full-time operation in Singapore. We’ll add additional products as the market demands and the system harmonization completes,” he says. Bob Smith, vice president of supply chain, Asia Pacific, has experienced eight greenfield projects in his career. His focus now shifts to the freshly trained EHCP team. “I keep pressing the point with the team that making one product in a vessel successfully is far from having a manufacturing plant running smoothly,” he says with a smile. “We have to get the raw materials through the plant, get that shipped out, have all the paperwork ready and get that product to the customer on time. There’s a lot left to do.” Smith has lived in Singapore the past four years and will be working full-time at the EHCP on Jurong Island. The EHCP offers dramatic improvements in speed to delivery, in some cases 15 to 30 days’ improvement in delivery times. Designed to alleviate supply constraints and scaled for ready expansion, the plant’s capacity was sold-out upon its opening. A CRITICAL LINK IN THE GLOBAL SUPPLY CHAIN The 20-month, 22-acre project hit mechanical completion in July with startup in September and is perfectly positioned in Singapore, a global chemical hub. Alex Blanco, executive vice president and chief supply chain officer at Ecolab, singles out the EHCP as the centerpiece of the global supply chain moving forward. “Two things: we believe the Eastern Hemisphere is a real growth area for us. Second, we need a balance of capacity,” he says, referring to the need for production in more than one location to enable more efficient loading of markets as needed. “Hurricanes can bite you. Singapore is the perfect place for us to service our customers in Asia, China and the Middle East. There is a stable political situation and a stable workforce. It has played out extremely well for us.” As Blanco sees it, the EHCP will facilitate better responsiveness, better service and better value to customers, and streamline collaboration between the Ecolab family of companies. “You don’t sell the same products to a McDonald’s as you would an ExxonMobil,” he says, “but you’d be amazed at the overlap in terms of products and chemistries. We’re seeing opportunities at Ecolab, whether on the water or the energy side. Being in Singapore and having access to the Middle East, China and Asia — the vast majority of the growth in the world — is exactly where we need to be.” Ecolab is striving to ensure the supply chain will support what the company hopes to become by 2020: a $20 billion company. The impact on Nalco Champion’s supply chain will be dramatic. Nalco Champion has shipped both intermediates and blends from Freeport and Sugar Land, but that will soon change. More intermediates will be produced and shipped from the online EHCP, making the company more cost-competitive logistically. Proximity to many of its customers will result in shorter lead times for deliveries, sped by direct shipping channels from the port of Singapore that lead directly to supply chain customers in the region. In addition, the EHCP frees up Texas operations and capacity, allowing Gulf Coast business leaders and operators to focus on the Americas and West Africa. Already a model of safety and a reliable, secure and dependable source of state-of-the-art chemistries, EHCP is more than capital construction. It is a clear commitment to the region and to the company’s future in it. Expertly designed and safely implemented manufacturing and quality testing processes ensure consistent, sustainable, high-quality production of intermediate chemistries to Nalco Champion upstream, refining and petrochemical customers in the Eastern Hemisphere. The Eastern Hemisphere Core Plant (EHCP) is the biggest capital construction project Ecolab has ever undertaken — by a factor of three. And it’s scaled to grow, with a 10+ hectare plot for expansion. The plant will supply all intermediate chemistries to the Eastern Hemisphere, support the local economy and speed delivery by up to 15–30 days for some products.