Industrial Training Report at Lafarge Malayan Cement Langkawi Plant

INDUSTRIAL TRAINING REPORT: AT LAFARGE MALAYAN CEMENT LANGKAWI PLANT

BY MUHAMMAD FAHMI BIN ABD TALIB (ME 083597)

COLLEGE OF ENGINEERING UNIVERSITI TENAGA NASIONAL START DATE: 25 JANUARY 2012 END DATE: 18 APRIL 2012

MUHAMMAD FAHMI BIN ABD TALIB (ME 083597)

COLLEGE OF ENGINEERING

ACKNOWLEDGEMENT

Special thanks to my helpful supervisor, Ir. Dr. Azmi Ahmad. The supervision and support that he gave truly helps the progression and smoothness of my internship program. The cooperation is much indeed appreciation. My grateful thanks also to Lafarge Malayan Cement Plant Manager, Mr. E. R. Kim in giving me an opportunity to work in his plant and also for both host supervisors, Mr. Ibrahim bin Muhammad and Puan Nor Ain Yahya. A big contribution and hard worked from both of you during the 12 weeks is very great indeed. All knowledge obtained during the internship program would be nothing without the enthusiasm and passion from both of you. Besides, the internship program also make me realized the value of working together as a team and as a new experience in working environment, which challenges us each minute. Not forgotten teammates from both Maintenance and Process Department especially to Mr. Abu Yamin, Mr. Rusli and Mr. Rafie for their kindness on guiding me throughout my internship there. The whole program really brought us together to appreciate the true value of friendship and respect of each other. Great deals appreciated also to College of Engineering. The well planned and systemic procedures plus some useful advices help me in doing internship Lafarge Malayan Cement who is the biggest cement producer in the world. Last but not least, thanks to Lafarge Malayan Cement trainees from Kolej Polytech Mara Alor Setar (POLISAS) for their kindness. Discussions and memorable activities that we had done together give me enjoyment while completing this internship program. i

ABSTRACT

University Tenaga Nasional (UNITEN) offers an Industrial Training Program especially for third year students as a requirement for them to complete their engineering course in UNITEN Putrajaya campus. With 4 credits hours, students will be allocated in a hosted company decided by them in order to gain real life working experience. Throughout the 12 weeks industrial training, the students’ performance will be fully monitored by host supervisor and will be guided by UNITEN selected lecturer as their supervisors. Industrial Training Program is conducted with objectives to give opportunities for students to gain their own real life experience before entering actual working life. Besides, this could be an opportunity for them to gain as much knowledge as they could in the things that they have learnt before. In order to join an industrial training, students are needed to attend a Safety and Health briefing organized by CIDB. The industrial training could be a good starting point for students to gain their knowledge in the field that they want next preparing themselves with the real working life that they will experience soon. Hopefully, this report will be used as a reference for students and lecturers who interested in Cement Production.

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Industrial Training Objectives

Industrial training has its own objectives for students to work at any company or institution in order to fulfill the education syllabus requirements. The main objective of this industrial training is to give opportunities for students to gain experience and to be exposed in real working life, so that they could make a good preparation before starting their job after graduation. This opportunity is a one of the future challenges to practice their ability to do a given job or task as well as possible. This training also gives opportunity for students to know the association between theories studied with real practicalities practice and skill in career world. Nevertheless the other purpose of the Industrial Training is to provide exposure for students on practical engineering fields. Through this exposure, students will have better understanding of engineering practice in general and sense of frequent and possible problems. Industrial training also makes students to be high characteristics, proactive, dedicated, in discipline, dynamic, work in team work and trust. As we know, during training students is under pressure with many problems and new environment. So that, students should know how to handle it with the appropriate way and also try to solve all the problems with their best. Widen relationship and social intercourse nicely with current employee to improve team work spirit. At the same time, student also exposed up-to-date with technology such as computer system and technology used inside construction sector and maintenance. Indirectly it does also improve knowledge of the technology.

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WEEKLY TRAINING OVERVIEW

Week 1 I reached the Lafarge Malayan Cement Langkawi Plant and reported to HRA Executive, Mr Azis Bahari. I was given all the Personal Protective Equipment (PPE) like working attire, boots, helmets and safety goggle in order to ensure my safety throughout the industrial training there. After that, some interpersonal interviews between HR Manager, Mr Syafik and I was done. Throughout this week, I need to attend the Familiar Program organized by Human Resource where this program had introduced me the overall information regarding Lafarge Plant. At the end of this program, I had been given a chance to decide which department I would like to be undertrained. I decided that I will be undertrained by Maintenance Department for the first 1 and the half month and at the Process Department for the other 1 and the half month. Week 2 I was assigned to follow the Quarry Section Supervisor, Mr. Abu Yamin for this whole week. For the first day, I was brought to limestone and clay quarry in order to familiarize me with their daily routine. By using a pickup, I was brought to the limestone crushers (1200TPH and 850TPH). There, I had been explained and shown the mechanism of a clay crusher and how the process of crushing the limestone. Moreover, I also had been introduced to the limestone transportation, belt conveyor. For the second and the third day, I joined the execution team where a serious problem regarding the clay crusher had been reported. The clay crusher experienced some blockage at the chute thus causing the clay did not been crushed to the respective sizes properly. In order to overcome the problem, the chute was enlarged. The execution team took three days for this project. iv

Week 3 For the week 3, I was sent to the cement mill section in order to learn the last stage of cement production. At the early of the week, I was brought to see the Dust Collector System where this system is very important in maintaining the dust emission. Poor Dust Collector results high level dust emission thus polluting the environment. In that week also, I involved in replacing the outer slotted plate for Cement Mill 4. Moreover, I also attended a safety briefing organized by Safety Department on Procedures Working in Hole. Week 4 I had been brought by Mr. Rusli to see a problem occurred at Cement Mill 4 involving the leakage of shell liners. In the observation, we conclude that the leakage did not caused by shell liner but the bolts that loosen. Thus, process of retighten the bolts had been done. Together with the process was a Preventive Maintenance (PM). For this PM, iching had been done in order to identify the condition of the shell liners and the broken shell liners were replaced by the new one. Throughout this week also, I was given a project by a Young Engineer, Mr. Mahzuz where this project will be ran in July. It was a joint project leaded by Mr. Mahzuz and this project involves the Sealing Air Fan for Cement Mill 4. Week 5 In this week I was undertrained by Raw Mill Section Young Engineer, Mr. Joshter. I was assigned to follow an Inspector to do a Mechanical Vibration Test at Raw Mill 2. In this test, we had identified a problem in a gearbox. From the data obtained high level of vibrations occurred at the bearing of the gearbox. A report had been issued to Maintenance team. Besides joining the Raw Mill Section team, the Sealing Air Fan Project still ran by schedule. I was assigned by Mr. Mahzuz to calculate the volume of air

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in the lubrication system and determine what type of fan suitable for this project. For this assignment, I managed to obtain 4.1096 m3 of air needed and this volume was close to the value provided by a consultant company. Week 6 This week was the first week I was undertrained by Process Department. I was asked by Human Resources Executive, Mr. Azis Bahari to report myself to Puan Nor Ain who will be my supervisor for the next one and the half month. For the first day in Process Department, I was brought by Mr. Zakrullah, a Young Engineer to see the Raw Mill section in term of a Process Engineer view. Week 7 In this entire week, few programs had been successfully done by Human Resource and Process department. The programs were Quality Award program and Kill-A-Watt program. Besides the launched of both programs, I also had learned on how to calculate the fan performance curve for Line 2. Last but not least, I also helped Process engineers in determining the wet bulb temperature at Raw Mil 2 (RM2). Week 8 Some inspections were done in order to find leakages that occur in Silo Compressors and Coal Mill 2 (COM2). The inspections were done in order to find the source of leakages that affect the entire process before. In this week also I attended a safety briefing on the procedure and rules when working a confined space. Week 9 Week 9 was the week that I learned a lot on tests that had been done by Quality Control Department. The tests were Residue test for both Normal Blaine and High Blaine and

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Sieve test. Both tests are done daily in order to ensure cement that produced is under the required quality of cement needed by plant. I also helped one of the teammate in Process department in sealing leakage at hot ducting in Raw Mill 2. Week 10 Lafarge Malayan Cement had given me a one week holiday so that I can take some rest at home with my family. This holiday was given to all trainees there. In order to apply it, I was needed to fill up a form where the location I went for the whole week and days of holiday taken were asked. The form then was submitted to Human Resource Department for their record. Week 11 Inspections and fire drill had been done in this week. 2 inspections were done involving the dust collector system (purging air) and Grinding Mill at Coal Mill 2 (COM 2). Other than that, a preventive maintenance and a fire drill on Confined Space were done. Week 12 In took almost the entire week to do projects given to me. I was briefed by Mr. Zakhrullah, a young engineer from Process Department on my first project which was to trace the pressure vessels available in LMC Langkawi Plant started by Cement Mill section. To trace the vessels, I joined some inspectors to trace each of the pressure vessels. Through the visit, I was able to note the location, serial number and conditions of the pressure vessels. At the end of the week, I was able to draw a complete drawing for cement mill I presented it to the process engineers.

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Table of Contents

Acknowledgement

i

Abstract

ii

Weekly Training Overview

iv

Table of Contents

viii

Company Profiles 1.1

1.2

1.3

Lafarge Cement

1

1.1.1

History of Lafarge Cement

1

1.1.2

Lafarge Cement Timeline

2

Lafarge Malayan Cement

14

1.2.1

History of Lafarge Malayan Cement

14

1.2.2

Lafarge Malayan Cement Timeline

15

LMC Langkawi Plant Overview

21

1.3.1

Location of LMC Langkawi

21

1.3.2

Organizational Structure of LMC Langkawi

23

1.3.3

Technical Data in LMC Langkawi

24

1.3.4

LMC Langkawi Plant Visions and Missions

25

1.3.5

Components of LMC Langkawi

26

1.3.6

Products of LMC Langkawi

28

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Manufacturing Process of Cement 2.1

What is Cement?

31

2.2

Process

33

2.2.1

Raw Material Preparation

33

2.2.2

Grinding and Storage of Raw Material

35

2.2.3

The Firing of Raw Material

36

2.2.4

Storage and Grinding of Raw Material

38

2.2.5

Packaging and Shipment

40

2.3

Summary

41

Crushers 3.1

Introduction

43

3.2

Type of Crusher Used in LMC Langkawi

44

3.2.1

Jaw Crusher

44

3.2.2

Roller Crusher

47

3.2.3

Hammer Crusher

48

Preventive Maintenances

50

3.3.1

Modify Scraper Outlet Chute of Jaw Crusher

50

3.3.2

Change the Teeth of Jaw Crusher

52

3.3

Grinding Mill 4.1

Introduction

53

4.2

Vertical Mill (Roller Mill)

54

4.2.1

Introduction

54

4.2.2

Mechanism

55

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4.3

Ball Mill (Tube Mill)

56

4.3.1

Introduction

56

4.3.2

Mechanism

57

4.4

Grinding Aid

58

4.5

Preventive Maintenances

59

4.5.1

Outer Slotted Plate Renewed

59

4.5.2

Feed End Liner and Shell Liner Retighten

60

4.5.3

Alignment Motor for Driver Raw Mill 2 (RM2)

61

4.5.4

Taking Flow Rate Reading of Grinding Aid for Cement Mill 3

62

Dust Collector 5.1

Introduction

63

5.2

Type of Dust Collectors Used in LMC Langkawi

64

5.2.1

Gravity Settling Chamber

64

5.2.2

Cyclones

65

5.2.3

Multicyclones

66

5.2.4

Fabric Filters

67

5.2.5

Electrostatic Precipitators

69

5.3

Preventive Maintenances

70

5.3.1

Change the Air Bag Filter for Cement Mill 3

70

5.3.2

Inspection of COM 2 Dust Collector System Purging Air

71

Preheater 6.1

Introduction

72

6.2

Mechanism

73

6.3

Preventive Maintenances

76

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6.3.1

Measuring Temperature and Pressure Reading

76

6.3.2

Coating Leakage at Single Flap Damper, Hot Meal Duct

77

6.3.3

Take Pressure, Temperature and Air Flow Reading of Kiln

78

6.3.4

Measuring the Wet Bulb Temperature

79

Quality Control 7.1

Introduction

80

7.2

Hard Grain Index

81

7.3

Sieve Test

82

7.4

Residue Test

83

7.5

Drop Test

84

Projects 8.1

8.2

8.3

Project 1: Sealing Air Fan for Cement Mill 4 (CM4)

85

8.1.1

Background

85

8.1.2

Objective

87

8.1.3

Expected Benefits

87

8.1.4

Cost Justification

87

8.1.5

Resource Requirements

88

Project 2: Tracing Pressure Vessel Tank in Cement Mill Section

89

8.2.1

Introduction

89

8.2.2

Problem

90

8.2.3

Solution

90

8.2.4

Completed Drawing

91

Measuring the Actual Fan Performance Curve for LK1 and LK2 8.3.1

LK2 – Raw Mill EP Fan

92 93

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8.3.2

LK2 – Cooler Exhaust Fan

94

8.3.3

DOPOL Waste Gas Fan

95

8.3.4

Raw Mill Fan

96

Discussions 9.1

9.2

Safety at Workplace

97

9.1.1

Personal Protective Equipment (PPE)

99

9.1.2

Safety Reporting System (SRS)

100

Environmental Issue

101

9.2.1

Lafarge Group Policies

101

9.2.2

Lafarge Malayan Cement Initiatives

103

9.2.2.1 Biomass to Energy

103

9.2.2.2 Lafarge Roofing

105

Conclusion

107

References

108

Appendices

111

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CHAPTER 1: COMPANY PROFILES

1.1

LAFARGE CEMENT

1.1.1 HISTORY OF LAFARGE CEMENT Lafarge is a French industrial company specializing in four major products which are cement, construction aggregates, concretes and gypsum wallboard. The Lafarge Cement began operations in 1833 with lime operation in France leaded by Auguste Pavin de Lafarge. Through the numerous acquisitions of lime and cement industries throughout the countries, Lafarge became France’s largest cement producer by the late 1930s. The company first expanded internationally in 1864 with the supply of lime for construction of the Suez Canal. International expansion continued in the early twentieth century when operations began in North Africa, United Kingdom, Brazil and Canada. Through the 1981 acquisition of General Portland Inc., Lafarge became one of the largest cement manufacturers in North America. Further expansion of Lafarge continued with the purchase of Blue Circle Industries in 2001 next took on acquisitions around the Mediterranean Basin, Eastern Europe, the Middle East and Asia. By the expansion Lafarge has become the joint leader in the worldwide cement industry, with production facilities in almost 51 countries. The aggregates and concrete business, now operating in 29 countries, made a significant leap in 1997 with the acquisition of Redland plc, one of the principal manufacturers of aggregates and concrete worldwide at the time. 1

1.1.2 LAFARGE CEMENT TIMELINE

1833 The Beginning The story of the world leader in building materials began in the Ardèche region at a place called “Lafarge”, which means “the forge”, near the village of Teil. Joseph-Auguste Pavin de Lafarge began regular extraction operations in the limestone quarries. He had 2 major advantages which are geological and geographical. The geographical means the limestone of the region is of excellent quality and can be used to replace mortar and the Rhone River makes in relatively easy to transport goods. Joseph’s two sons, Eduord and Lèon developed the family company, which then became known as “Lafarge Frères” which means Lafarge Brothers in 1848.

1864 First major project: the Suez Canal Lafarge won the “contract of the century” in Egypt. 200,000 tons of hydraulic lime delivered in wooden barrels, were needed to build the piers of Suez canal. Although its production capacity was limited to just 20 kilns, which produced 50,000 tons per year, Lafarge rose to the challenge. The canal was inaugurated on 17 November 1869, connecting the Mediterranean Sea to the Red Sea.

1866 First operations in Algeria and development in North Africa The Suez Canal contract, the company’s first success in the Mediterranean basin, was the prelude to expansion and the opening of commercial offices in Marseilles, Sète, Tunis 2

and Algiers. Within a few years, the Group had become the leading producer of Portland Cement in Algeria.

1887 Creation of the world’s first research laboratory specialized in cement On the back of its commercial success, Lafarge opened a research laboratory near Teil, France. This laboratory was the first in the world to specialize in cement. The gifted scientists working there placed the laboratory at the forefront of technological progress. To this day, Lafarge works with the most talented research teams. Physical, chemical and mechanical research allows Lafarge to retain its position as the leader in building materials and respond ever more closely to customer requirements.

1889 Social policy rewarded at the Universal Exhibition From the outset, Lafarge has paid close attention to the living and working conditions of its employees and has invested in facilities ranging from dormitories, canteens and hospitals to schools, gardens and rent-controlled housing. The Group’s social policy was rewarded with a gold medal at the Universal Exhibition. Lafarge received this award again in 1900.

1899-1906 Elaboration of the “revolving extinction technique” Lafarge’s teams developed the “revolving roller extinction technique”, an innovative procedure used to create white lime, maritime lime and extra-white cement. The first buildings made with these Lafarge products were the New York Stock Exchange (cut

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stone with white cement joints) and prestigious buildings in the Mediterranean region including the pier in Venice, the port of Algiers and Corinth canal.

1908 Ciment Fondu®, resistant to external forces and high temperatures Lafarge research director Jules Bied filed a patent for Ciment Fondu®, obtained by mixing limestone and bauxite. This cement quickly acquired an excellent reputation thanks to its many properties, notably rapid hardening and resistance to corrosion and high temperatures. It was put to a range of uses and can be found in the Paris metro, on oil rigs, in equipment for the world’s leading steel manufacturers and more recently, in the launch pad for the Ariane rocket in Kourou, French Guiana. Ciment Fondu® is the base ingredient for a number of innovative products including special mortars and refractory concretes.

1921 First patent for white cement During the fabrication process for white cement, clay is replaced by kaolin, which contains low quantities of iron oxide. White cement has the same properties as comparable grey cement but offers additional esthetic qualities. White cement is still used today.

1930 First quarry rehabilitation in Draveil, France Lafarge has long been aware of the environmental impact of its extraction activities. In 1930, the Group carried out its first quarry rehabilitation project. Today, the Group plans

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the rehabilitation of each site before it begins extraction. An environmental impact study, carried out in advance of operations, identifies all measures that will be required to protect the environment, biodiversity and local communities.

1931 Diversification into gypsum, the production of gypsum powder In 1931, the Group acquired “Gypses et Plâtres de France”, a company based in the South France that owned a number of Gypsum quarries. This acquisition marked Lafarge’s entry into a promising market later it became the 3rd largest producer of gypsum in the world.

1947 The leading cement producer in France and North Africa Throughout the first part of the 20th century, the Lafarge lime and cement company continued to develop by acquiring companies across France. After the Second World War, Lafarge consolidated its position as the leading cement producer in France and International development increased while greater demand for building materials saw production double in just 10 years.

1956 The first cement plant in North America and the creation of Lafarge Cement of North America (LCNA) Lafarge built its first cement plant in North America at Richmond in western Canada. It was a bold move to locate a plant 10,000 km and 24 hours by plane from France.

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1959 First operations in Brazil Lafarge acquired a stake in Cominci, a Brazillian company, and built its first cement plant in Brazil at Matozhinos. This plant was the first to produce the famous “Campeâo” brand of cement.

1970 Creation of Canada Cement Ltd. (CCL), the country’s leading cement producer 1970 saw the merger between Lafarge Cement of North America (LCNA), founded in 1956, and Canada’s largest cement producer, Canada Cement Company which had been founded in 1909. The new company was called Canada Cement Lafarge Ltd. (CCL) became the largest cement producer in Canada with 11 plants.

1971 Agreement with the French Ministry for the Environment on dust emissions Since 1971, Lafarge has been taking active steps to reduce dust emissions from its cement plants. The Group does more than simply comply with regulations and the equipment and processes used in plants, such as chimney evacuation filters are constantly being improved through the use of new technologies.

1972 Development of superplasticizers and modernization of the Group Following the oil crisis, the Group was reorganized and the Lafarge holding company was created. New management methods and more effective industrial processes allowed the Group to pursue renewed growth. Lafarge’s research and development team (R&D)

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developed water-reducing admixtures also known as “superplasticizers” which create a fluid concrete without the addition of water.

1974 First use of industrial waste as an alternative fuel In the mid-70s, as petrol prices soared, Lafarge realized that industrial and agricultural waste products such as coffee pods, rice husks, tires, solvents and bone meal could be used to add value in its processes. This industrial ecology approach safely reduces the use of fossil fuels, diversifies energy sources and provides a service to communities by recycling waste. It also reduces CO2 emissions which is particularly important given that the cement industry is responsible for 5% global emissions.

1977 Publication of the Group’s Principles of Action Lafarge’s humanist traditions, passed down the generations since the company was founded, inspired the Group’s Principle of Action. As Olivier Lecerf, Chairman from 1974 to 1989, said “We try to manage by serving rather than by dominating. The true legitimacy of a leader lies in his capacity to serve.” The Principles of Action are a set of humanist values and commitments shared by all employees. They incorporated a vision of becoming the undisputed market leader, commitments to stakeholders and the Lafarge Way, which is a code of conduct that encourages individual success within a multi-local organization.

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1980 Lafarge achieves leadership on the North American cement market – Perfection of high performance concretes The newly-created Lafarge Coppèe Group, born of the merger between Lafarge and Coppèe, became North America’s leading cement producer. The Groups’s workforce increased from 12,000 to 17,000. The following year, Lafarge consolidated its position in North America when it acquired a majority shareholding in General Portland, the 3 rd largest cement producer in the world.

1985 First operations in Cameroon and sub-Saharan Africa Lafarge took its first steps in sub-Saharan Africa in 1985, when it opened a site in Cameroon. Lafarge now has activities in 10 countries in sub-Saharan Africa.

1995 Sustainable development at the heart of the Group' Lafarge implemented its first recycling programs which was production waste was used as an alternative to standard raw materials and fuels at all industrial sites where this was technically possible. The Group published its environmental policy and made commitments regarding the conservation of extraction sites. In the 1995 also Lafarge launched its first employee stock option plan to allow employees to share the Group’s financial success and encourage a sense of community. This operation has been repeated regularly and enjoys growing success.

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1997 Acquisition of Redland: a new business portfolio and further consolidation The acquisition of Redland, a British group strengthened Lafarge’s positions in aggregates and concrete, turned the Group into the leader in building materials in North America and allowed Lafarge to enter the roofing sector.

1998 First operations in India and South Korea Continuing its growth strategy in Asia, Lafarge acquired 2 plasterboard factories in South Korea, close to the town of Busan. The South Korea plasterboard market is the second largest in the region and offers excellent potential for further growth. Lafarge also entered the Indian cement market by purchasing the cement division of Tata Iron & Steel Company Ltd (TISCO), India’s leading steel manufacturer. This acquisition gave the Group a strong presence on the market in western Bengal and an efficient industrial operation in the form of a cement plant and a grinding plant.

2000 A turning point: acquisitions, new product launches and partnerships Lafarge and WWF, the world’s largest environmental protection organization, signed a 5year agreement as part of the “Conservation Partner” program. Besides, the merger between Lafarge’s Aggregates Business and that of the Warren Paving & Materials Group saw Lafarge became one of the leading aggregates producers on the North American market.

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2001 Lafarge, the world’s leading cement producer, targets sustainable growth With the acquisition of Blue Circe, the Group became the world’s leading cement producer and strengthened its position in emerging markets. Lafarge’s first sustainability report received an award for the private sector company which provides the best environmental communication tools.

2002 Framework agreement with the CNRS and the launch of PLAtecTM Lafarge and the French National Center for Scientific Research (CNRS), Europe’s leading research organization, signed a framework agreement to reinforce their cooperation. Besides, the Group launched PLAtecTM, a range of made-to-measure plasterboard solutions which has been used in interior design projects from government building in Vaucluse to the headquarters of Virgin, designed by Renzo Piano.

2003 Signature of the UN Global Compact, creation of the Stakeholder Panel and further efforts in the fight against AIDS Lafarge signed a 5-year partnership agreement with Care, a non-governmental organization, to fight against AIDS. The Group created a stakeholder panel to gain an external perspective on its activities and strategy.

10

2004 Expansion in emerging markets, the launch of SignaTM, humanitarian aid, sponsorship The Group developed its Businesses in emerging countries by building new plants in Asia (Thailand, India, Cambodia, etc.), by consolidating its position in Korea, by expanding its cement capacities in North Africa and Eastern Europe. Following the tsunami of December 2004, Lafarge acted quickly to bring emergency aid to employees and their families.

2005 Recognition for the Group’s sustainable development activities – Increased production capacities Through a joint venture, Lafarge doubled its production capacity in China and became the third largest cement producer in the country. It also invested 300 million euros to expand the production capacities of its Gypsum Business. Lafarge ranked among the 100 best performing multinationals in terms of sustainable development, and signed an agreement on Group social responsibility and international social relations with three international trade unions.

2006 Bruno Lafont and the Excellence 2008 Plan – Commercial launch of Sensium® Launch of the Hypergreen concept Bruno Lafont was appointed as CEO of the Group and launched the Excellence 2008 strategic plan. The program will improve industrial performance, consolidate positions on emerging markets and drive further action on sustainable development. Lafarge

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purchased Lafarge North America minority shares and became the leader in North America across all of its Businesses.

2007 Divestment of the Roofing Business, focus on sustainable growth, launch of 2 concretes with high added value Lafarge divested its Roofing Business to the PAI partners investment fund to concentrate on its core activities. The Group expanded its research center, adding a new experimental concrete plant that allows researchers to test laboratory research results in real time and on an industrial scale.

2008 Acquisition of Orascom Cement, the leading cement group in the Middle East and the Mediterranean Basin This operation is a decisive acceleration of the Group’s strategy in fast-growing, highly profitable emerging markets. Orascom cement is located in high-potential markets, with number-one positions in the key markets of Egypt, Algeria, United Arabs Emirates and Iraq. Its geographical presence is highly complementary with Lafarge’s emerging markets portfolio.

2009 Growth in emerging markets – Concrete innovation Lafarge continues to grow in emerging countries in Ecuador, Nigeria and Iraq. Innovation is in the spotlight with the launch of Thermedia® 0.6B, a new generation of insulating concretes.

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2010 Innovation strategy – Shanghai World Expo – Strengthening business in Brazil and Central Europe Lafarge accelerates its innovation strategy and introduces Aether – a project aiming at reducing CO2 footprint. In additions, Lafarge strengthens its presence in Brazil following the sale of its Cimpor stake to Votorantim and becomes one of the three main cement operators in the country. Lafarge and STRABAG, Central and Eastern Europe’s largest construction company then create a holding company located in Austria.

2011 Significant divestment and new organization Lafarge and Anglo American announce the creation of a leading UK construction materials company. Lafarge also presents a new organization project more agile and responsive, focused on its markets and its clients.

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1.2

LAFARGE MALAYAN CEMENT

1.2.1 HISTORY OF LAFARGE MALAYAN CEMENT Lafarge Malayan Cement Bhd (formerly known as Malayan Cement Bhd) is the producer of cement in Malaysia with plants strategically located in Rawang, Kanthan, Langkawi and Pasir Gudang in Peninsular Malaysia. In addition, it is the owner and operator of a cement grinding plant and a bulk import terminal in Singapore. The Group sells cement and other related building materials in Malaysia and Singapore. The acquisition of the operating companies and a majority interest in Kedah Cement Holdings Bhd in 1999 transformed the company into Malaysia’s largest cement producer with an increased presence in Singapore. Being a member of the Lafarge Group, the company is able to draw from an even wider international base of experience and technical expertise and a broader international trading network. On 30 July 2003, the company unveiled its proposal for an internal reorganization of the Group’s corporate structure of its Singapore subsidiaries, with the intent of streamlining its holdings in its various subsidiaries under one Singapore incorporated company wholly-owned by Lafarge Malayan Cement (LMC)

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1.2.2 LAFARGE MALAYAN CEMENT TIMELINE

1950 Incorporation of Malayan Cement Berhad (now known as Lafarge Malayan Cement Bhd) as a subsidiary of Blue Circle Industries PLC, United Kingdom.

1953 Establishment of Rawang Works, Malaysia’s first cement plant. (Rawang Kiln No.1110,000 tonnes per annum)

1958 Commisioning of Rawang Kiln No. 2 (190,000 tonnes per annum)

1961 Malayan Cement Berhad was listed in the Kuala Lumpur Stock Exchange Berhad on 17 March 1961.

1964 Opening of Kanthan Works by Pan Malaysia Cement Works Bhd (PMCW).

1965 Commisioning of Kanthan Kiln No. 2 (190,000 tonnes per annum). Opening of a grinding plant in Singapore by Pan Malaysia Cement Works Singapore (PMCWS)).

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1967 Merger of cement operations with PMCW and the formation of Associated Pan Malaysia Cement Sdn Bhd. Also acquired 50% stake in PMCWS.

1980 Commisioning of Rawang Kiln No. 3 (1,200,000 tonnes per annum). Incorporation of Supermix Concrete Pte Ltd (SPMS).

1983 Incorporation of Supermix Concrete (Malaysia) Sdn Bhd (SPMM)

1984 Kedah Cement Sdn Bhd (now known as Lafarge Cement Sdn Bhd) commissioned Langkawi Plant.

1985 Commisioning of Kanthan Kiln No.3 (800,000 tonnes per annum).

1989 The company launches its first differentiated bulk product, Mascrete.

1992-1993 Uprating of Rawang Kiln No. 3 and Kanthan Kiln No. 3 to 1.5 and 1.0 million tons per annum.

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1995 Rawang Plant becomes the first location within the Group and the first cement plant in Malaysia to be awarded the ISO 9002 (now changed to ISO 9001:2000) certification. Kanthan Plant received the same certification about three months later.

1997 Southern Cement Industries Sdn Bhd (SCI) commissioned its grinding plant with a rated capacity of 770,000 tons per annum in Pasir Gudang, Johor. Commisioning of Bulk Import Terminal with silo capacity of 55,000 tons in Jurong Port, Singapore to replace PMCWS grinding facility.

1998 Commisioning of Kanthan Kiln No. 4 (1,800,000 tonnes per annum) Acquisition of the remaining 50% stake in APMC). Rawang and Kanthan Plants were awarded the ISO 14001 certification, making us the first cement company in Malaysia to achieve this certification.

1999 Acquisition of Kedah Cement and merger between APMC and Kedah Cement.

2000 Opening of a dry-mix cementitious product plant in Tuas, Singapore. We become the first cement company to be awarded the OHSAS 18001 certification when Rawang Plant receives the certification on 8 December 2000 closely followed by Kanthan Plant on 15 December.

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2001 Becoming part of Lafarge Group following Lafarge’s acquisition of Blue Circle. SPMM acquired Pengkalan Concrete and spread its wings to East Malaysia. The company celebrated the launch of the first fly ash bag cement, Phoenix. Besides, Malayan Cement was awarded the Corporate Awards 2001, Sectorial Award, Main Board – Industrial Products awarded by the Kuala Lumpur Stock Exchange.

2002 Malayan Cement launched a new corporate identity which reflects its membership in the Lafarge Group. In addition, Malaya Cement was awarded the Corporate Awards 2002, Merit Award, Main Board – Industrial Products, Kuala Lumpur Stock Exchange.

2003 Company name officially changed from Malayan Cement Berhad to Lafarge Malayan Cement Berhad to better reflect its corporate identity as a member of the Lafarge Group. Lafarge Malayan Cement was recognized as a Leader – Construction Sector by Malaysia 1000, Malaysia’s top corporate directory.

2005 We secured a long-term contract with Tanjung Bin power plant for the exclusive supply of all their fly ash production. Lafarge also launch the Logistics Safety Conference with the objective of increasing awareness on road safety amongst the company’s transporters and drivers towards achieving zero accident in loading and transportation. Lafarge Young Engineers Programme also had been launched where fresh graduates from local

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universities are recruited and enrolled annually in a cement professional development programme to nurture them into skilled engineers.

2006 Launch of a new differentiated bulk product, Mascrete Pro and the Industrial Safety Conference in order to instill greater safety awareness amongst the company’s members. Besides the opening of the residential housing area, Desa Kuala Garing, built and contributed by LMC to relocate 124 squatters in Rawang.

2007 An annual production record of 3 million tons of clinker by Kanthan Plant. Pasir Gudang Plant launched its first Pulverized Fly Ash (PFA) blended cement.

2008 Lafarge Malayan Cement was honored with the Industry excellence Award (Construction) and Merdeka Corporate Award by Malaysia 1000, Malaysia’s top corporate directory.

2009 Lafarge Malayan Cement was selected as one of the twenty finalists (Marketplace dimension) in the StarBiz-ICR Malaysia Corporate Responsibility Awards. The award focuses on how well companies demonstrate their understanding of Corporate Responsibility throughout the business operations.

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2010 Lafarge Malayan Cement was honored with “Technology Innovation Award for Sustainable Production of Cement” by Frost & Sullivan Green Excellence Awards on 9 June for demonstrating its firm commitment to a continuous focus on reducing the decency on finite resources and resolving to reduce the impact for climate change and overall ecological footprint. LMC also was honored with a plaque by StarBiz ICR Malaysia Corporate Responsibility for being one of the finalists in the segment above RM1 billion market capitalizations. Lafarge Malayan Cement also was placed 11th for Best Corporate Governance Company in Malaysia by Finance Asia, a Hong Kong-based publication reporting on Asia’s financial and capital markets.

2011 Lafarge Malayan Cement receives the Singapore Green Building Product certification for Mascrete LH cement and Phoenix cement by the Singapore Green Building Council. Moreover, LMC also has been awarded an Innovative Award for Sustainable Production of Building Materials by the Malaysian French Chamber of Commerce & Industry on 24 June 2011. Plus, Lafarge Malayan Cement was recognized as a sustainable development leader and was presented the “Enterprise Governance Award 2011 for Green initiative” by The Malaysia Business and the Chartered Institute of Management Accountants Malaysia on 27 September 2011 and short while later was awarded the SIRIM Eco-Label for Phoenix and Mascrete LH on November 2011.

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1.3

LAFARGE MALAYAN CEMENT LANGKAWI PLANT OVERVIEW

1.3.1 LOCATION OF LAFARGE MALAYAN CEMENT LANGKAWI PLANT

Figure 1.1: Langkawi Plant Layout

Figure 1.2: Location of LMC Langkawi 21

Figure 1.3: Plant Layout of LMC Langkawi 22

1.3.2 ORGANIZATIONAL STRUCTURE

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1.3.3 TECHNICAL DATA

Lafarge Malayan Cement Langkawi Plant (LMC) formerly known as Kedah Cement Sdn Bhd is one of the plant built in Malaysia. First built by the 4th former Prime Minister, Tun Mahathir Mohamad in 1981, the plant had been named with Kedah Malayan Cement however the plant had been acquainted by Blue Circle, a UK cement producer in 1999. The Blue Circle has been acquainted by Lafarge Cement in 2001 short while later. Till now, the plant remains organized by Lafarge Malayan Cement centered at Petaling Jaya and supervised by the board of directors in Paris, France.

With the area of 1162.25 acres and 398 employees, the Lafarge Malayan Cement Langkawi Plant produces approximately 3.38 million of cement per annum thus becoming the largest producers and the only exporter of cement products in Peninsular of Malaysia to Singapore, Bangladesh, Myanmar, Hong Kong, Sri Lanka, Mauritius Nigeria and Australia.

The plant operates with 2 lines called line 1 (LK1) and line 2 (LK2) which use Japan technology and German technology respectively. Technology that is used from Japan technology is from Ishikawajima Harima Heavy Industries while for German technology of Krupp Polysius of Germany is implemented. Each line consist of Raw Mill, Cement Mill, Coal Mill and Preheater and these sections are monitored and ran under supervision of Maintenance, Quality, Process and Production Department.

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1.3.4 LMC LANGKAWI PLANT VISION AND MISSION

LANGKAWI PLANT 2012 HOUSE To achieve total Plant Mastery for our customer with Safety as our way of life

•Health & Safety-cultured workforce in all the sites •Towards mastered and robust plant with sustainable improvement •Clean and Environmental friendly plant for our employees & community •Meeting external and internal customers expectations •Leadership through performance culture

Health & Safety • Zero total injury frequency rate • Area ownership JHP and HK • Practice safety interventions • Zero environmental infringements • 12 hrs Safety training • Compliance with group standards and advisories

Plant Plant Mastery Mastery

Customer Satisfaction

• POM Compliance • Industrial standards (LQTS, LQMS, Power, heat to come, first 5 rules are mandatory)

• OTIFIC => 92%, for both Domestic and Export

• Kiln RF => 97.13%

• Consistent Product Quality IQP => 95%

• Kiln PF => 93.42% • Cement mill RF =>97.27% @ UF64.48% • Cementitious C/K => 1.1165 • Cost ownership & control (VC HC3,335 MJ/ton clk, Power 77.92 kwhr/Clk, grinding 51.26 kwhr, IFC compliance 74.54 mMYR

• Product quality complaints = Reduction by 50% vs. previous year • LP Ship loaders RF => 96%

• AF replacement 13.24% • Maintenance project, MCI