Built for a generation
“You make an investment in a piece of equipment like this you’re investing for no less than 30 years,” said John Hamilton, the CEO since 2010 of Veyance Technologies, the US parent company of Veyance Belting.
Veyance Belting has just finished upgrading its Bayswater, Victoria facility after 18 months and a cost of about $32 million. Hamilton shrugged off any suggestion that such an investment might
not have been a great idea in light of the apparent waning in enthusiasm for commodities, with coal and iron ore miners making up about 80 to 85 per cent of Veyance’s customer base.
“Iron ore mining will ebb and flow as commodity prices ebb and flow but it’s always ebbing and flowing on a very strong upwards trajectory,” Hamilton, who travelled out from Oklahoma, told Manufacturers’ Monthly at the facility’s opening.
“All of the independent studies that look at the demand for iron ore, all of the studies that look at the grade of iron ore and the quality of iron ore relative to other parts of the world, the demand in China and the demand for Chinese manufacturing for export all say iron ore is on a strong upward trajectory.
“I’d also feel good about coal. I know coal has its detractors at the moment and it also has its energy competitors, like shale gas, especially where I am. But it’s a very cost-effective source of electricity… So coal is always going to be an essential part of any country’s energy mix, and again the independent studies say it’s going up.”
The upgrade to the Bayswater site – which was first considered in 2002 but rejected by the American parent company, before eventually being successfully pitched in 2011 – has been driven by long-term goals.
“So if [mining] goes up and down in any given year: don’t care,” said Hamilton. “Because we’re investing for a 30-year timeframe.”
The right chemistry matters
Veyance, which leads its market in Australia and several other countries, puts its position down to providing a better value to its customers than anybody else can. It makes a point of mixing its rubber compounds and polymers – which are purchased in US dollars, which adds to its competitiveness while the dollar remains historically strong – in-house.
“That’s one of the things that really distinguishes us,” Veyance Belting’s general manager, David Stone, told Manufacturers’ Monthly.
“You can have the best press in the world, but it’s all about how you process those polymers. The press delivers you a means to produce the technology.”
Though the factory’s capabilities have been greatly strengthened in the upgrade, this would not matter without the company’s materials science expertise.
“The technology that goes into it is those different mixes of compounds,” said Stone.
The company employs something like 120 chemists around the world, tweaking and creating the compounds that will determine how well a belt’s surface will do things such as minimise the energy spent moving ore (or other things), rule out static, resist heat damage, and withstand damage caused by having huge amounts of iron ore constantly smashed up against it.
“If you’re looking at it from a customer’s point of view, a mine or even a port, the biggest energy consumer in the operation are conveyor systems,” noted Stone.
“So we’ve been listening to them and delivering rubber compounds with low-rolling resistance, which means that there’s less energy to try and push over the idlers. So it’s very much critical to be in control of that process, designing it, mixing it having control of the whole end-to-end process.”
Stone points out that conveyor belt technology (and its associated services, which Veyance also offer) is not a simple commodity; if this
were the case it could be created by anybody.
Veyance also develops compounds tailored to clients’ needs, such as those used in the incredibly lengthy belts for the Curragh Overland Project.
“If you look at the technology required to make these you see today the technology required, the polymers, the rubber design which we do, the actual manufacturing process – it’s not just a straightforward product,” he added.
“So I suppose the way our customers view it, while some of it’s a base price, it’s really the total package and what value we deliver to them.”
Helping Victoria move
Though most business comes from iron ore and coal miners, there are numerous other industries among Veyance’s client list.
“These conveyor belts are absolutely vital to the development and the economy right across Victoria and Australia,” offered Victorian premier Denis Napthine, who, like Stone and Hamilton, helped cut the ribbon at the factory.
“I see these conveyor belts that are made here used in my home patch at Portland Aluminium, where they’re conveying a 4 km conveyor, conveying the alumina, shifting up to the Portland aluminium smelter.
“I see them each and every day at the port of Portland, conveying both hardwood and softwood woodchips from our stockpiles on the ships going to Thailand, Japan and Korea. I see them being used exporting our grain products. Of course a big part of the industry are the massive conveyor belts that are used in the mining industry in our north, with black coal, with iron ore and of course, in our own Latrobe Valley, with brown coal.”
Napthine was happy to list Veyance, which employs 173 people at its Bayswater site and has been operating in Australia since 1965, as one of his state’s manufacturing success stories, helping fuel power needs and move the state’s exports.
“This highlights, once again, that there is an important role for our manufacturing industry in this state,” he added, pointing out that Victoria currently employs more in the sector than it did two-and-a-half years ago.
Manufacturing also contributes significantly to industry gross value-add, with the premier putting this at $27 billion for 2011-12 alone.
“So there is a role and a great future for manufacturing, but it’s manufacturing of the type we’re talking about today: highly skilled, highly technical, world’s best practise manufacturing, advanced manufacturing that is servicing local needs and creating opportunities.”
Ramping things up
The upgrade project – which aims to double Veyance’s overall capacity by about 50 per cent, according to Stone, with earlier reports suggesting it will double the production of belts for its Flexsteel product – is being driven by local demand.
The boost in capacity is put down to three main investments: an investment in increased cranage capacity, a state-of-the-art press for the company’s steel cords, and a new hot former extruder.
The crane capacity investment allows long-length racetrack reels (typically weighing well over 30 tonnes) of coiled belt to be placed on delivery trucks.
The press, by German company Siempelkamp, allows for the individual monitoring of each individually-tensioned steel cord that goes into the company’s belts, with huge productivity benefits along the way.
“What that enables us to do is now manufacture belts now up to ST10,000,” said Stone. “Before our limitation was probably up to about up to ST6,500. Our equipment was only up to two metres wide, this equipment’s now up to 2.6 metres wide.
“And then typically, if you look at the average press around the world, the average length’s about 10 to 11 metres’ length. This is 18.6 metres in length. So you think about then, instead of curing 10 or 11 metres you’re curing 18.6 with the same amount of people, same amount of overhead.”
The demand for steel corded conveyor belts is massive, and Hamilton explained that – not including the company’s Chinese joint venture – the Bayswater factory creates more steel cord than any other in the company’s global network, with the new press to increase things even further.
At the far end of the factory is the hot former extruder, which starts the transition of the carefully-formulated compounds into conveyor belts.
“For our conveyor belt it’s not just the reinforcing material, like the steel cord, that makes a difference,” explained Hamilton.
“It’s the rubber that’s above it and below it, they play very unique roles. The one that’s above it is designed to protect those steel cords from abrasion or impact or things like that. The one below it is what runs on the pulleys and goes around, designed to minimise the energy consumption required to tug that conveyor around the loop.”
Again, both Hamilton and Stone stressed that the upgrades were still considered a sound long-term investment, as has with the recent efforts by the company to move into services in Australia.
For Veyance, the question is “what downturn?”
“For iron ore, if you speak to people like BHP and Fortescue, iron ore will typically chew through conveyor belts every two to three years, so you think about the installed capacity over the last six years, seven years of projects,” said Stone. “Really the installed capacity of conveyor belts out in the field has increased ten-fold in the last ten years.
“I spoke to BHP yesterday and they’re saying, ‘What’s the problem? We’re still shipping as much as we can get out of the ground.’ It doesn’t really matter about the price, that’s irrelevant, as they point out, ‘We’re still using conveyor belts and nothing’s going to change.’”