Norsk Stein is somewhat unusual in Europe in that it is increasing its investment while other quarry operators are cutting back. ABE interviewed Norsk Stein's Tommy Lorentzen to find out more
Norway's Jelsa Quarry is not only unusual in terms of size and location, but also in the way it does its business. However, the company must be doing something right as it is actively progressing investment plans when other businesses in Europe are more hesitant.
The
"Norsk Stein differs from other quarry operators because it does not deal directly with customers," said Norsk Stein transport adviser and machine co-ordinator Tommy Lorentzen. "Instead we supply all of the material extracted from the quarry to our partner Stema/Mibau, which is one of the largest suppliers of aggregates in Europe. It owns the ships and has an extensive network of more than 40 terminals located on the coastlines of the North Sea and the Baltic Sea." The agreement means that the granodiorite aggregates produced at Jelsa reach a wide market and allows Norsk Stein to concentrate on expanding the operation for producing high quality aggregates. The company is currently in the middle of what Lorentzen describes as a "vast expansion" project and is investing in new equipment to meet the expected demand.
Rapid rise
Today Jelsa, which is just over 100km north of Stavanger, produces 5.8million tonnes of aggregates each year - double the production volume of just five years ago and over 10 times the rate in its first year of operation.
Norsk Stein was founded by Per Nerheim and Odd Hotveit in 1987 and production at the Jelsa site started in 1988 with 500,000tonnes of material extracted in that first year. Since then, it is not only the rate of production that has changed but also the ownership - in 2001 Heidelberg Cement bought a 50% share of the company and the remainder is owned by another Germany-based business, Hans-Jurgen Hartmann.
Founders Nerheim and Hotveit have also changed their involvement with Norsk Stein. Nerheim now works for AF Decom, which is part of the fourth largest construction company in Norway, AF Gruppen, but Hotviet who left Norsk Stein in 1996 has recently rejoined the company.
The company employs 110 people and in the last financial year generated revenues of NOK301million (€34million). Lorentzen was an early recruit, joining the operation in 1990 after 13 years working on arranging the transport and equipment for the construction of hydroelectric projects in Norway.
Jelsa is Norsk Stein's sole quarry operation but to illustrate its size, Lonrentzen points out that its production volume accounts for 50% of Norway's annual aggregates exports. "Up to 95% of materials are exported by sea to customers in Denmark, Germany, UK, France, Poland and the Netherlands," he said. "The aggregates are used to manufacture concrete and asphalt products as well as for railway construction, hydraulic engineering and as an underlay material." According to Lorentzen, the location of Norsk Stein is ideal for distribution to countries such as Germany, the UK and Denmark. "Ships to Germany and the UK, for example, have five-day cycles," he explained. "Two ships dock at Norsk Stein a day, taking a total of 17,000 tonnes."
Economic impact
Lorentzen said that so far, the global economic crisis has had no impact on the activities of Norsk Stein. In fact, if the crisis worsens, the company believes it will only benefit from the increase in road construction projects, which will be funded by governments trying to revive the economy, particularly in France and Germany.
Its distributor Stema/Mibau is also upbeat about prospects and Lorentzen said that the company has recently invested in new ships, with capacities ranging from 60tonnes to 26,500tonnes, each costing €40million. Almost NOK1billion (€113million) is being invested in ships alone.
"Therefore, we continue to be optimistic about the future, including the next 12 months, and expect demand for volume to continue to grow year by year," he said. "In 2009, output is expected to be 6.5million tonnes." But Norsk Stein is expecting the growth to continue and capacity will reach 10million tonnes per year when the investment for the expansion is completed this autumn. The company estimates that it has sufficient reserves to continue operating Jelsa at this production rate for another 40 years.
"Like most countries, Norway has strict rules governing changes to the landscape and its appearance," said Lorentzen. "Norsk Stein received permission to build the quarry in 1987 and this also applies to the current expansion plans. Luckily, few people live in the area surrounding the quarry, so it was a relatively quick and easy task to gain consent. Also, the company produces very little waste, we use almost everything that we produce, up to 97%." In order to ramp up production, Norsk Stein is investing N0K1billion (€113million) at Jelsa. The expansion project consists of two phases; the first includes the construction of a 500m-long conveyor belt, a workshop and canteen, and new primary and secondary crushers, due to be completed by August 2009. Phase two includes the construction of a 50,000m2 storage space, due in spring 2010.
Preparation
To create space for the new primary crusher, which is 25m high and will be delivered by ship from Egypt, Norsk Stein invested in a
Norsk Stein also invested in other Hitachi equipment for the project, including a ZX190W-3 wheeled excavator which was delivered in October 2008. "It is used for a variety of tasks on the site including earthmoving, transporting rocks and stones, and carrying pipes used in the construction of tunnels," said Lorentzen.
The site also operates a number of wheeled loaders including two
"It's important that we don't only have one brand, but several competitors' machines on site," said Lorentzen. "The reason behind our decision to choose Hitachi for some of our recent machine purchases was due to the positive experience we had with our first Hitachi machine, an EX1800. We bought the EX1200 because we had to clear the space for the crusher and none of our existing fleet could do the job.
"The relationship between Hitachi and the official Hitachi dealer in Norway, Nanset, was also an important factor on our decision. No one else could deliver this same kind of machine at that price and so quickly - any delay would have impacted on the whole project.
"The Hitachi EX1200-5 is not used directly in production as yet. It has been used for earthmoving to create roads, and space for the crusher, but will be used in production by August or September 2009. We will aim for 3000tonnes of production every hour." The Jelsa operation places a high demand on its machines. "We use every machine to its full potential, 24/7," said Lorentzen. "The new machines are reliable, which is important because there can be no downtime. We will soon be running at full capacity and we will rely on each machine fully, all year round. On average, our machines operate for 6,000 hours a year. They are exchanged every two years, with the exception of dump trucks, which are changed less frequently." According to Lorentzen, although safety was an important issue when it came to machine choice, he believes that many features are now common across the major manufacturers, so was not the main factor for consideration. Nonetheless, safety is given high importance within Norsk Stein and Lorentzen said, "We need every hand we have, so safety is hugely important. A sign on one of the buildings on the site has a safety message to employees which translates as: 'Think safety. We need you, so take care'."
Restoration plans
Despite the current focus on investment to increase production at Jelsa, Norsk Stein also has an eye on the distant future and the time when reserves are exhausted. "In 40 years, the site will be filled with water, and there are already plans in place to show how it will look when production has finished," said Lorentzen. But in the shorter term, the company is positive about its prospects and achieving its production targets in spite of the current economic downturn being experienced in Europe.
Economic impact
Lorentzen said that so far, the global economic crisis has had no impact on the activities of Norsk Stein. In fact, if the crisis worsens, the company believes it will only benefit from the increase in road construction projects, which will be funded by governments trying to revive the economy, particularly in France and Germany.
Its distributor Stema/Mibau is also upbeat about prospects and Lorentzen said that the company has recently invested in new ships, with capacities ranging from 60tonnes to 26,500tonnes, each costing €40million. Almost NOK1billion (€113million) is being invested in ships alone.
"Therefore, we continue to be optimistic about the future, including the next 12 months, and expect demand for volume to continue to grow year by year," he said. "In 2009, output is expected to be 6.5million tonnes." But Norsk Stein is expecting the growth to continue and capacity will reach 10million tonnes per year when the investment for the expansion is completed this autumn. The company estimates that it has sufficient reserves to continue operating Jelsa at this production rate for another 40 years.
"Like most countries, Norway has strict rules governing changes to the landscape and its appearance," said Lorentzen. "Norsk Stein received permission to build the quarry in 1987 and this also applies to the current expansion plans. Luckily, few people live in the area surrounding the quarry, so it was a relatively quick and easy task to gain consent. Also, the company produces very little waste, we use almost everything that we produce, up to 97%." In order to ramp up production, Norsk Stein is investing N0K1billion (€113million) at Jelsa. The expansion project consists of two phases; the first includes the construction of a 500m-long conveyor belt, a workshop and canteen, and new primary and secondary crushers, due to be completed by August 2009. Phase two includes the construction of a 50,000m2 storage space, due in spring 2010.
Preparation
To create space for the new primary crusher, which is 25m high and will be delivered by ship from Egypt, Norsk Stein invested in a Hitachi EX1200-5 excavator in May 2008. In three months it cleared enough space, digging down to 15m below sea level, and is now being used to move earth for a road to be built through the site.
Norsk Stein also invested in other Hitachi equipment for the project, including a ZX190W-3 wheeled excavator which was delivered in October 2008. "It is used for a variety of tasks on the site including earthmoving, transporting rocks and stones, and carrying pipes used in the construction of tunnels," said Lorentzen.
The site also operates a number of wheeled loaders including two Caterpillar 988H, a Caterpillar 990H and a Komatsu WA800 but the fleet will be supplemented with a Komatsu WA900 in September this year to coincide with commissioning of the new crusher. Jelsa's dump truck fleet is currently formed by three Komatsu HD 785-6 and one Caterpillar 777 trucks but Lorentzen has said that the three Komatsu machines will be replaced by three new Komatsu 785-7 machines that are also due for delivery in September.
"It's important that we don't only have one brand, but several competitors' machines on site," said Lorentzen. "The reason behind our decision to choose Hitachi for some of our recent machine purchases was due to the positive experience we had with our first Hitachi machine, an EX1800. We bought the EX1200 because we had to clear the space for the crusher and none of our existing fleet could do the job.
"The relationship between Hitachi and the official Hitachi dealer in Norway, Nanset, was also an important factor on our decision. No one else could deliver this same kind of machine at that price and so quickly - any delay would have impacted on the whole project.
"The Hitachi EX1200-5 is not used directly in production as yet. It has been used for earthmoving to create roads, and space for the crusher, but will be used in production by August or September 2009. We will aim for 3000tonnes of production every hour." The Jelsa operation places a high demand on its machines. "We use every machine to its full potential, 24/7," said Lorentzen. "The new machines are reliable, which is important because there can be no downtime. We will soon be running at full capacity and we will rely on each machine fully, all year round. On average, our machines operate for 6,000 hours a year. They are exchanged every two years, with the exception of dump trucks, which are changed less frequently." According to Lorentzen, although safety was an important issue when it came to machine choice, he believes that many features are now common across the major manufacturers, so was not the main factor for consideration. Nonetheless, safety is given high importance within Norsk Stein and Lorentzen said, "We need every hand we have, so safety is hugely important. A sign on one of the buildings on the site has a safety message to employees which translates as: 'Think safety. We need you, so take care'."
Restoration plans
Despite the current focus on investment to increase production at Jelsa, Norsk Stein also has an eye on the distant future and the time when reserves are exhausted. "In 40 years, the site will be filled with water, and there are already plans in place to show how it will look when production has finished," said Lorentzen. But in the shorter term, the company is positive about its prospects and achieving its production targets in spite of the current economic downturn being experienced in Europe.
