Pulp and Paper Canada

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Lost Opportunities


July 1, 2007
By Pulp & Paper Canada

This could be another boring article about corrosion: how much corrosion costs mills and the industry, either to control or, more commonly, to deal with consequences of not controlling it. But, after …

This could be another boring article about corrosion: how much corrosion costs mills and the industry, either to control or, more commonly, to deal with consequences of not controlling it. But, after spending more than 30 years of working on this undeniably important cost generator for the industry, I believe it is far more important, with more mills seemingly closing every month, to ask: Why do managers in pulp and paper companies so steadfastly ignore addressing these plainly obvious costs? And why do companies never make any effort to systematically reduce these substantial costs when about all it really requires is for managers to pull their heads out of the sand?

Sadly, the pulp and paper industry is not the only major N. American business with management that seems not address issues very crucial to its survival. When it comes to the auto industry, business analysts, management consultants, employees, suppliers, unions and most “men on the street” agree on what went wrong with American car companies in the past 20 years. As business commentator Ben Stein accurately states in his May 27 New York Times op-ed article, The Dream That Once Was Detroit: “The problem is not the UAW. The problem is not so much legacy costs. The problem is that management stopped making cars Americans want to buy and drive. Japanese and German models, even if made in Kentucky, just look, drive and feel better…and are more reliable than what Ford, GM and Chrysler generally turn out.” Stein astutely concludes, “It’s not the workers fault, even though they will be blamed for it… It’s management’s fault.”

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This problem resonates loudly in the North American pulp and paper industry. Most companies’ knee-jerk management response to today’s tough business realities is to “reduce costs” by eliminating technical staff. They completely ignore the serious opportunity to save enough maintenance money to help pay the mill’s energy bills and employ a couple of engineers, one of whom could be designated to systematically reduce the millions of dollars of corrosion-related costs. For example, it costs around $1 million to replace a white or green liquor clarifier, but well-established knowledge of the corrosion mechanisms involved makes it feasible to eliminate all corrosion costs in carbon steel liquor tanks for about 1/4 of that.

Today almost all possible corrosion damage mechanism in pulp and paper mills are well understood regarding their causation, consequences and cost-effective mitigation. The largest outstanding “mysteries” were directly addressed more than twenty years ago by the ground-breaking AF&PA-DOE, multi-year Recovery Boiler Corrosion Research Program. Sadly, most of the world-class, fundamental results and myth-debunking knowledge generated in this work is largely ignored in North America where many production days and hundreds of thousands of dollars are wasted every outage searching for corrosion damage that’s not even possible. Worse yet, high risk corrosion damage mechanisms like thermal fatigue cracking in furnace-opening tubes are not even looked for, and millions of dollars are unquestioningly spent quixotically hoping studs mitigate prevent gas-phase sulphidic corrosion.

It is also unfortunate that most mills do not even know about the incredibly comprehensive, searchable trove of corrosion information published in TAPPI Technical Information Papers and TAPPI Press books (Disclosure: I edited most of them.) and in TAPPI and CPPA/PAPTAC Conference Proceedings. Even mills aware of this strategic knowledge typically have no management purpose for it. To help redress this costly missed opportunity, this article describes a proven way to systematically address corrosion costs, using a simple analogy from the crime-fighting world.

Corrosion-crime analogy

Most people agree that, like corrosion, crime is generally undesirable, even though both phenomena seem inevitable. They both exact substantial direct and indirect societal costs. They also require significant resources for abatement, including substantial industries aimed at “controlling” them. The net burden of crime in the U.S. exceeds more than a trillion dollars per year, according to David Anderson’s1 research published in the Journal of Law and Economics. Anderson estimates that the per capita cost of crime is $4,100 for each US citizen, an estimate that includes factors ranging from the value of the life of a murder victim to the more mundane chores of locking doors and locating keys.

In similar vein, the latest estimate by the National Association of Corrosion Engineers (NACE-International) is that corrosion costs the US$ 276 billion annually. This calculates to about $1,000 per citizen, but at the same time it is larger than the GDP of most countries. The annual cost of corrosion to NA pulp and paper companies is estimated at $4-5 billion, averaging around $30 per ton of paper and paperboard. Any mill can check its own situation: direct costs for corrosion-related activities like outages, inspections, scaffolding, NDT, repairs, etc., typically consume 30-40% of the annual maintenance budget, depending partly on the mill’s processes and products.

These are gloomy economic scenarios. However, there is also a positive side to this story. In the past decade, FBI statistics show that overall crime in the US decreased by 18%. A main point here is that corrosion costs can be reduced at least that much — using concepts and practices similar to those crime-fighters use so successfully — and in much shorter time! As the NACE study projects “…20-30% of the total (cost of corrosion) could be saved by using new corrosion management practices.” There’s that opportunity again for management to step up!

How is this possible? The primary tool for successfully reducing crime in recent decades is to systematically track computerized crime statistics, then deliberately deploy the right anti-crime measures where they are most effective. Initiated on a large scale in NYC in 1992 by Rudolf Giuliani and his initial police chief, William Bratton (recently hired by Los Angles to bring crime under control there), this technology identifies where crimes occur and the nature of the crime, in order to deploy appropriate resources to prevent any recurrence. The key concepts are using statistics as a means of accountability and prioritization, and ending tolerance of low level or “quality of life” crime. These tactics can be just as effective for reducing corrosion costs in pulp and paper mills: systematically determine what causes them; prioritize prevention measures and track the statistics; and ending tolerance of the misconception that corrosion is inevitable. It really is that straight-forward, especial for organizations equipped with computer data management systems, which is true for most pulp and paper mills.

This scientific approach is already being used to some extent in the chemical process industries. Refineries and petrochemical and chemical plants — which admittedly deal with more combustible or hazardous materials and products than pulp and paper mills — generally designate significant resources to systematically monitor the condition of their equipment. Because companies in those industries must avoid repetitions of tragic incidents like Bhopal; ARCO’s big oil spill into the Ohio River, the Pasadena, Texas and Texas City refinery fires, etc., they have strong incentives to aggressively manage corrosion, leaks and equipment failures in their facilities and plants. These industries also collaborate with each other and with suppliers, contractors and consultants to devise and use up-to-date standards and codes for inspection, repair and maintenance of major components and equipment, including pressure vessels, tanks and piping systems. The many API standards are evidence of their efforts in this regard.

Pulp and paper mills already understand the value in systematic monitoring in some critical areas. Most notably, modern sensing technology, computerized analysis and modern practices ar
e widely used to systematic maintain all those rolls pumps and other rotating equipment. These efforts are successful enough in many mills that the vibration analysis team often finds it must constantly justify its continued existence: if bearings hardly ever “crash” any more, why do we need you? (Effective “non-event engineering” always raises this question.) Furthermore, many pulp and paper mills also religiously track and analyze safety statistics, both to systematically reduce the overall safety risks and to simultaneously lower safety costs. Some companies even use their safety statistics to publicly demonstrate how committed they are to systematically improving safety, and incorporate safety statistics into performance reviews of mill management personnel.

Practical implementation

Creating a system for tracking corrosion costs should be a relatively simple task in most pulp and paper mills. Most mills already use computerized maintenance management systems (CMMS) to manage budgets and generate maintenance work-orders.

A good place to start is to letter-code all maintenance work-orders for corrosion-related work. This normally should include equipment inspections, as well as repairs and replacement due to all types of corrosion and material degradation – kiln refractories, tile linings, conveyors chains and flights, chipper hoods, pump impellers, suction rolls, sewer deterioration, structural steel, etc. It’s a good idea to include the scaffolding and cleaning work associated with repairs and inspections. Maintenance personnel that issue work orders — planners and engineers or hourly personnel — can be quickly trained to recognize what to code for this cost tracking. Mills can customize the way corrosion costs are tracked to suit their CMMS and management situations.

The resulting information usually is eye-opening. For example, some paper mills learn that between 40-50% of their overall maintenance costs are corrosion related and it is easy to identify the three or four highest-impact issues or problems. High costs for fixing corrosion “surprises” in liquor tanks in pulp mills, repairing brick and tile linings, or in recovery boilers often demonstrates the value of an organized pressure vessel and tank inspection program, which also helps standardize inspections and identify wasteful inspection dollars. The point is, just as with crime-fighting, learning where problems occur and what they are is the first step to eliminating them. As the saying goes: “Identifying a problem is the first step to solving it!”

A statistics tracking system for corrosion costs show the impact of simply reducing costs by deferring maintenance, e.g., postponing maintenance painting, or when management mandates longer intervals between inspections and PM activities. On the other hand, highly disciplined equipment condition-tracking systems helped many nuclear plants get regulatory approval to extend mandatory licensing inspection intervals by several years and convinced regulators and jurisdictions to significantly extend inspection/teardown intervals for jet engines and turbines.

Best practices and procedures are the most sustainable management tool for addressing the initially most costly corrosion problems and success is measured by how many of these problems are economically eliminated. Fortunately, because the pulp and paper industry is so traditional, solutions to corrosion problems in mills are simpler and more economical than those proposed to reduce more intractable “crime” problems. As stated in the NACE study for overall US corrosion costs, our experience is that most corrosion and materials problems in pulp and paper mills can be cost-effectively eliminated with existing, proven technology, nothing has to be invented.

With internal and staff technical resources at a premium in most paper companies, they often must turn to outside companies to obtain the specialized training, support and materials needed to implement an effective corrosion-tracking system in any mill. Key elements for successful implementation of a program to achieve “No surprises at lowest cost!” are:

* Devise appropriate management incentives to focus mill and engineering managers’ efforts on achieving the irrefutable cost-reduction benefits.

* Establish technical “best practice” procedures, specifications and guidelines, not only to eliminate personality-driven projects and obtain work of acceptable quality, but also to sustain the cost-reduction system when mill personnel involved in the effort inevitably change over time. Well planned and executed inspections don’t cost, they pay!

* Rationally and objectively challenge all projects for major outages and deliberately implement risk-based rules for “right-timing” inspections and repairs, instead of doing them mainly because the equipment is down anyway.

* Insist that area engineers learn about corrosion damage mechanisms that affect the fixed equipment in their areas, and stop awarding “hero status” to engineers who come in late on a Sunday night to fix things that proper scrutiny reveals could have been prevented from failing or leaking.

* Give project and area engineers greater rewards — real and intangible — for reducing costs and increasing reliability of fixed equipment than they obtain — directly and indirectly — from external maintenance service providers, especially contractors for NDT, brick and tile repair, kiln refractory lining, FRP repair, structural painting, boiler inspection, boiler and tank repair.

* Change the practice of blindly relying on contractors who enthusiastically offer to “take care of the problem”. Because contractors naturally first look after their own interests, they always should be expected to offer the technologically best solutions and implement them as efficiently as possible. Adequate control of contractor specifications, costs and work quality are keys to breaking the wasteful cycle of rewarding them for doing the same work every outage. Constantly changing contractors is not good practice either.

No more excuses

Nothing described in this article is at all new or unproven. Most of these concepts are standard operating (management) practice in other industries, including air transportation; petroleum exploration and refining; chemical and petrochemical process; nuclear and fossil power. The usual reason (excuse) pulp and paper industry leaders give me for not doing this is that, other than in recovery boilers, health and safety and environmental consequences from ignoring corrosion are far less severe as in a refinery or airplane, for example. But that’s a poor excuse for such a cost-challenged industry to ignore the real and intangible benefits of this smarter approach in today’s chal-lenging, cost-focused business climate.

Using the car industry comparison again, the management concept I’m describing is much like Toyota’s vaunted, superior management philosophy of systematically eliminating waste and wasteful practices, which contributes immensely to their world-class business success. Furthermore, implementing this process requires no new software or hardware, no additional employees and no economic risk. What it does require, however, is mill management committed to use all the industry’s resources and experience to save millions of dollars a year by systematically identifying and reducing corrosion costs. Who knows, perhaps this article will inspire at least one, well-managed NA pulp and paper company to seriously consider this now that they see how simple and beneficial it is. Especially before every South American pulp and paper company demonstrates its superior management by fully implementing it.

At the risk of overdoing the analogies, because everyone knows that treating the symptoms never is as cost-effective as curing the disease, all that’s needed here to improve any mill’s financial health is a straight-forward management decis
ion to use all available information and resources to systematically reduce corrosion-related maintenance costs and, coincidentally, increase the reliability of fixed equipment. But alas, the chance this will happen before another hundred mills close for good seems truly remote.

Dave Bennett has 35 years of experience as a corrosion and materials engineer in the pulp and paper industry, most prominently for 17 years at Champion International. He is presently a senior consultant at Corrosion Probe in Centerbrook, CT, and has written more than 60 technical papers and articles and several corrosion handbooks for engineers and P&P mills.

1 David A. Anderson, “The Aggregate Burden of Crime,” Journal of Law and Economics, October 1999.


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