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02 | 2011
Vertical market report What’s moving the markets – from chemicals to automotive, mechanical engineering, food & beverage, and all the way to pulp & paper.
How businesses and governments develop the scrap of urban prosperity as a source of raw materials worth billions.
How manufacturing companies lower energy consumption with clever consumption management.
How a flat glass manufacturer from Eastern Germany produces 20 percent more cost-effectively than his international competitors.
02 Industry Journal | 02 | 2011 | Editor’s note
Industry Journal | 02 | 2011 | Editor’s note 03
On October 1, the start of our new fiscal year, it became a reality: the Siemens Industry Sector now has a new look and a sharper strategic profile. With these organizational changes we are putting an even stronger focus on our industrial customers. Our goal is to further intensify our vertical-market and service businesses – particularly in growing verticals such as the mechanical engineering, automotive, pharmaceutical and chemical industries. At the same time, we will expand our leading global role in industrial software. For the service activities of our industry business we have created the Customer Services Division, with about 17,000 employees who will build up our business in technology-based and value-added services. We will now be able to leverage our bundled vertical-market expertise even better – for increased productivity, flexibility and efficiency in industrial processes. And we can do a more comprehensive and effective job of offering our vertical-market customers in particular an end-to-end portfolio from a single source, from individual products to specific partial solutions and on to complete system integration and a full range of services – all throughout the entire lifecycle of plants and products. You will notice that our Industry Journal has a new look as well. We have added new segments and modified its focus. But we haven’t changed everything; we’ve stayed with our old formula for success: a careful mix of articles on concrete topics taken from your market and informative reports that look at details as well as the big picture. I hope you enjoy reading this issue. Sincerely, Siegfried Russwurm
Prof. Dr. Siegfried Russwurm, CEO Industry Sector
CEO of the Siemens Division Customer Services. success factors. Markets 06–07: The Big Picture 10–21: Dissimilar siblings The challenges facing the global industries and the factors that connect them. fiercer competition. A global report about five leading vertical markets: automotive. booming emerging countries – these are factors occupying the global industry. 76: Publication information . and Brazilian cows. about green technologies. The U. This brings in billions and spares the environment.04 Industry Journal | 02 | 2011 | Contents Cover story: Vertical market report 10: Dissimilar siblings Higher flexibility and productivity. and all the way to cost-efficient paper production. rarest metals. mechanical engineering. News and trends – from remote maintenance of fountains to e-planes. biggest squanderers. Interview with Jigar Shah. and buildings as valuable sources of raw materials. CEO of the “Carbon War Room”. visionary believes in the future of artificial intelligence. Tendency: rapid growth. The AIDA shipping company’s new cruise ship offers luxury and technological sophistication. chemicals. 42–47: People to watch: Jigar Shah 28–33: Goldmine junkyard Governments and businesses discover electrical waste. His prognoses have proven correct quite often. pulp & paper. But apart from those basics. 62–65: People to watch: Ray Kurzweil 34–40: Country report Brazil Brazil counts among the world’s largest economies. challenges.S. food & beverage. old cars. and growth perspectives differ greatly. 41: Facts & Figures Raw materials: richest countries. market economy. A vertical market report. 08–09: Spotlight 22–27: ExperTalk ARC analyst Valentijn de Leeuw in conversation with Dirk Hoke.
as well. don’t squander Thousands of small and medium-sized business literally put their money down the drain for unnecessary energy expenditure. . 53–57: The system consultants A lot of production plants have up to 50 percent of their normal power consumption during downtime. The company f | glass produces by 20 percent more economical than its competitors – with one of the most innovative flat glass plants of the world. It does not have to be like this. Innovation 66–70: The optimum is just about good enough The company f | glass built one of the most innovative and economical production plants for flat glass from scratch within 15 months.Industry Journal | 02 | 2011 | Contents 05 Contents 48: Save. They often only lack the required knowledge. 61: Facts & Figures Energy efficiency: Energy demand and power consumption 2030. 58–60: Case study A Chinese steel manufacturer had to make a tough decision after a fire: repair or replace? 75: Facts & Figures Growth driver innovations: Best companies. Slowly it dawns on them that energy savings measures pay off. biggest hurdles. most innovative countries. world champions of CO2 reduction. Management 48–52: Save. 71–74: Europe gets a green shock More ambitious climate protection targets can speed up economic growth and create millions of new jobs. don’t squander Small and medium-sized businesses could reduce their energy costs dramatically. 66: The optimum is just about good enough The production of float glass for the industry is extremely energy-intensive. And that clever energy management is easier than imagined. price trend in fossil power sources. highest returns.
06 Industry Journal | 02 | 2011 | Big Picture .
which was named in 2007 (photo). for instance. She will be launched in the spring of 2013 and has many innovations and even more innovative technology in store for her future passengers. a subsidiary of the U. has 1. .5 MW electric motors from the Siship Drive MV production range for the diesel-electric drive system. The safety management system. Among them is the AIDA diva. and can accommodate more than 2. all this is not overly exciting: the new cruise ship is already the seventh AIDA ship equipped with Siemens technology. alarm. Two 12. Much of this innovation comes from Siemens. air conditioning plan control.000 measuring points are collected. For Siemens and the Meyer Werft (Meyer shipyard) from Papenburg.Industry Journal | 02 | 2011 | Big Picture 07 The Big Picture She is 252 meters long. The ship belongs to the third generation of AIDA cruise ships. Altogether. and innovation are needed for it. Germany.S. data from some 13.000 cabins. group Carnival Corporation. Also the ship automation system Siship Imac that is based on the Simatic PCS 7 control system and manages all monitoring. Germany. where the ship is being constructed. Because they do not know how much effort. The smoothly running luxury at sea is a matter of course for the passengers. and control functions on board. and self-sufficient emergency shutdown system are integrated in it as well.000 passengers – the as yet unnamed new club ship of the Aida Cruises shipping company in Rostock. high-tech.
The system calculates the optimal values for the drying process based on these parameters and adapts them to the process. water quality and weather conditions can be monitored at all times to ensure the optimal operation of the fountains via the Internet from the headquarters of the manufacturer Delta Fountains. Energy-efficient paper production Producing steam in order to dry paper consumes a large amount of the energy required for paper production. Siemens has developed the world’s first plane with a serial hybrid electric motor.500 km away. Germany. fuel consumption is very low.3 million liters of water each. With sensors. In cooperation with partners.000 liters have to be pumped and 23. Siemens’ automation software Sipaper APC (Advanced Process Control) DrySec helps to lower the energy demand by dosing the steam depending on the papers’ thickness and density. such as humidity and temperature of the paper webs. significant amounts of energy are saved. The motor glider “DA36 E-Star” is still in the testing stage. was able to lower their steam consumption for drying by more than three percent and to reduce energy costs and CO2 emissions accordingly. Sipaper APC Drysec calculates process variables that are not monitored. This enables the localization of errors in the process at an early stage. It is projected to save 25 percent of fuel and emissions compared to today’s most efficient technologies. The battery is recharged in cruising flight. The plane uses a serial hybrid electric motor as integrated power train. A small Wankel engine with connected generator provides power. This is made possible by the controller-solution Simatic S7-300 with added features. A Siemens electric motor drives the propeller. This feature alone leads to savings in maintenance costs of up to 200. During start and climbing stage a battery system from EADS provides additional power. located in Florida some 1. Every minute. The technology is . Additionally. As the combustion motor always runs evenly and on low power. Rhein Papier GmbH in Hürth near Cologne. Additionally. The world’s first hybrid plane with an electric motor meant to be used in large aircraft in the future. The monument features two huge fountains with a capacity of 2. An inverter from Siemens provides the electric motor with energy from battery and generator.08 Industry Journal | 02 | 2011 | Spotlight Spotlight Remote maintenance of memorials A memorial site for the victims of the terrorist attack on the World Trade Center ten years ago was inaugurated in New York on September 11. 2011.000 filtered. 120.000 US dollars a year. In a pilot project.
and heterogeneous collections of data into knowledge. Based on the flooding catastrophe in New Orleans. In future. the software learns under realistic circumstances to interpret the measurement data correctly. The HVDC connection enables a highly energy-efficient transmission of power. Siemens was honored with this distinction in recognition of its contribution to a sustainable Chinese economy and society for the second time running. .Industry Journal | 02 | 2011 | Spotlight 09 “Greenest” foreign company in China China Central Television (CCTV). For this research project. Siemens experts are employing software originally meant for the monitoring of production plants. saving 30 megatons of CO2 emissions a year. They use research dykes. and Roland Berger Strategy Consultants have awarded the “Best Company Award in Green Competitiveness 2011” to Siemens China. which are destroyed in different ways. the stability of these protecting walls is meant to be closely monitored with sensors. Siemens commissioned the world’s highest-performing High Voltage Direct Current (HVDC) line. Siemens Corporate Technology Russia is cooperating with partners in the framework of the A better understanding and evaluation of data Siemens software solution High Definition Product Lifecycle Management (HD-PLM) is a recently introduced product that enables decision makers to take better and more efficient decisions during a product’s lifecycle. They enable users to understand information better and to classify the meaning of data faster. In 2010. USA. Financial Times. This prize for multinational companies contributing to the economic development of China was awarded in the framework of the Best Foreign Business Ranking during the World Economic Forum in Davos. HD-PLM has been developed to transfer large. for instance. Here. At the moment a two-year trial period is under way in Eemshaven.400 kilometers. It connects the provinces of Yunnan and Guangdong over a distance of 1. an experiment simulated water causing a tunnel in the dyke. Software is able to predict dangerous situations based on these measurements in order to implement actions. Intuitive. visual presentation of product data from various sources can be presented in a customized format. Netherlands. which is now adapted to the characteristics of dykes. Software from production plants prevents flooding European research project UrbanFlood to develop a condition-monitoring technology for the early localization of dangerous damages to dykes. for instance. in 2005. distributed.
But apart from these basic similarities. or beer – similar trends are emerging in every field of industry: higher flexibility and productivity. the outlooks. chemicals. more sustainability. mechanical engineering. the U.S.10 Industry Journal | 02 | 2011 | Markets Dissimilar siblings Whether it is in Asia. challenges. as well as pulp and paper. cars. or Europe and whether it is the production of plastics. . and success factors differ greatly.. The Industry Journal takes a look at five leading vertical markets: automotive. fiercer competition especially from and in the emerging countries. food.
For mediumsized and highly diversified suppliers. and rising demand for new and customized products. Latin America. increased productivity. It just does not take place on the traditional Western markets in many cases. The formula for success for the manufacturers of both capital and consumer goods is maximum flexibility. but mainly in Asia. corporate companies can meet the individual demand of their customers at all stages and apply best practice examples from other industries. The days of horizontal markets.Industry Journal | 02 | 2011 | Markets 11 The global economy is undergoing radical change: Many industries note a solid growth. An era of vertical markets begins. and higher efficiency in all areas. holistic solutions. and sustainable production methods. It is the only way to achieve customized. Because the software enables the parallel flow of product and production planning – for higher efficiency and shorter development cycles. Further challenges for businesses are the globally soaring prices for energy and raw materials. but also excellent specialists. in which international businesses. For this. Unlike these specialists. asking themselves how they could actively contribute to a higher product variety and flexibility of their customers. This approach demands an uncompromising customer focus. . will probably have the greatest success in times of vertical markets. and Russia. Massive geoeconomic and geo-political shifts are the result. suppliers try to put themselves in their customers’ shoes. in which standardized products were sold to businesses in various industries. seem to be at their end in the industrial business. as well as a marked service mentality. they need cutting-edge production plants as well as excellent engineering and automation software. instead of simply reacting to their requests. such as Siemens. More and more often. the reduction of interfaces through personal responsibility for industries on the supplier side. process know-how in great detail. an industry expertise that is far above average. Corporate companies with international presence. focus on individual areas – just as highly specialized niche suppliers have always done. times will probably get tough. an increasingly fierce competition.
the one of utility vehicles even by 32 percent. Important drivers of this growth will mainly be China. But in Western countries. energy as well as cost efficiency. too: According to the study “Automotive Landscape 2025” by Roland Berger Strategy Consultants. Korea. systems. As the average purchasing power in those countries is considerably below the one in Western industrial nations. The speed of innovation increases as well. Impressive 71 million cars were produced around the world in 2010 – 25 percent more than in the previous year and way more than were expected. the demand for affordable vehicles will rise. and India. Time-to-market. Even if traditional car manufacturers continue to have a dominant role – one in six cars produced globally wore the brand sign of a German group in 2010 – a strong competition is developing. the production of cars rose by 24 percent. Siemens as a global partner provides products. The growth rates are predicted to be an average 5. Such variety demands increasingly complex IT and production concepts for virtual engineering and digital plants. The number of car owners is rising by more than 35 percent each year in China alone. too. and Russia. More than 30 new production facilities in the Asia-Pacific region will take up operation by 2017. a global trend towards comparatively small and affordable models is on the rise. engineering.5 percent per year until 2017. Car manufacturers have to rethink their technological positions. and not least e-mobility will decide about success. solutions. for example. and Malaysia. but increasingly at Western ones as well – with the target of meeting the high European and American standards. flexibility in production. there are billions of options of ordering due to the many equipment variations for one car. one in ten new cars around the world will run on electricity and 30 percent will have a hybrid drive in 2025. With them. Siemens is leader here as well (compare box: “Flexible production plants”). Experts predict sales of 75 million cars for this year. A lot of the local manufacturers do not only look at the regional markets any more. . Indonesia. expanding markets are developing in Thailand. too. The automotive industry is doing well again after its dramatic slump in 2009.12 Industry Journal | 02 | 2011 | Markets Automotive: Industry in motion The automotive industry is booming and will radically realign itself in the next few years. These are images of production plants to be built. The digital plant plays an important role in this as a key technology. and services for infrastructure as well as automation and drive technology. production processes can be simulated and procedures optimized – to meet the increasingly stringent regulations for energy efficiency. Mathematically. New markets are emerging in Asia. and so does the demand for customization. With a continuous PLM platform. Alongside them. especially in China. where production capacities are on the increase. Since then. and the auditing company PricewaterhouseCoopers prognosticates 83 million sold units for 2012. India. New plants and production facilities are built mainly where the highest market potential lies. but also Southeast Asian states. The trend towards globalization has reached all manufacturers by now.
1 5.2 +7. and more profitable than before.0 European Union 16.3 4. USA 7.7 % +12.0 6.9 Japan 9.5 % + 0.5 % +9. Growth of car production* 2010 to 2017** Brazil 3.1 4.a. for instance.4 % * in million units ** average growth p.3 % +0.3 3.1 9.1 % Source: PricewaterhouseCoopers .2 South Korea Flexible production facilities are virtually planned and analyzed with the help of PLM solutions in the framework of the digital plant. the gap between product development and production of a car is closed. This shortens the time to market. Digital engineering and the planning of the production in the digital plant become reality – from importing data generated in the planning stage to projecting the automation solution and all the way to the use in the operating plant. The result: New models can be brought to market in shorter time. China 14. With it.3 % +2. with a higher degree of customization.0 % +14.Industry Journal | 02 | 2011 | Markets 13 Automotive Flexible production plants Siemens reacted with its industry-leading Product Lifecycle Management (PLM) range to the increasing time and cost pressure in the automotive industry. or that production plants can be virtually commissioned. This means that production processes can be simulated cost-efficiently and flexibly.6 10.5 27.7 India 3.8 +5.1 Russia 1.3 19.
Food & Beverage Optimized Package Line (OPL) from Siemens ensures a comprehensive automation of packaging lines.14 Industry Journal | 02 | 2011 | Markets Food & Beverage: Turnover and variety are increasing Strong and reliable market development as well as an increase in product variety with the costs for raw materials and energy rising at the same time – the industry is in a challenging area of tension. The new mega-plant is to produce some 30 million hectoliters of beer per year in its final stage of development. Grupo Modelo plans to use the OPL concept in other stages of the development as well. It comprises most notably the standardizing of interfaces and hardware components. The main reason for this is the risen demand in the BRIC states and in many emerging countries in Asia that is caused by a higher level of income. the solution simplifies fault diagnostics and maintenance. a Mexican city near the Texan border (USA). for instance. The market is growing very stable. The soft drinks manufacturer PepsiCo has made comparably good experiences with it for some time. the costs for both of them are rising and due to the fierce competi- Optimized packaging for beverages Close to Piedras Negras. It is a matter of course that those materials have to be affordable and therefore suitable for competitive use. The representatives of the food & beverage industry (F & B) are enjoying the industry’s dynamic growth. as well as being in accordance with high international standards of quality and security. Because on the one hand. which is uncommon in markets today (cf. The remarkable successes in this area form a contrast to the equally significant challenges.000 employees and its most popular brand is the beer Corona. A special focus lies on the use of water and energy. are decreasing. The company has some 40. Especially manufacturers with global presence have to produce the larger part of their products with locally available raw materials. . the Mexican beverages producer Grupo Modelo is building the world’s largest brewery. Siemens supplies the standardization concept OPL (Optimized Packaging Line) to the manufacturers of the bottling and packaging lines. bottom right chart). And due to the standardization. the concept can be effortlessly migrated to other parts of the plant. In addition to that. because the spare parts demand and the training efforts for employees. This saves costs.
additional costs cannot be passed on to the customer in form of higher prices. most leading companies feel duty-bound to their own ambitious targets for minimizing the consumption of water and energy. Solid Growth Country/Region Market development 2009–2013* North America +3 Latin America +7 Europe. new production processes can be engineered 30 percent faster. The interest in Siemens’ solutions that reduce the energy consumed by up to 30 percent and in systems for water reclamation that enable the reuse of up to 100 percent of the wastewater is accordingly high. Increased flexibility and fast variations in production are enabled by the use of modern industrial software. Convenience food and wellness products are said to be the product ranges with the highest growth potential. Thanks to innovative production processes. On the other hand. A lot of food and beverage companies manage the balancing act between diversification and higher returns increasingly well. as well as sustainable and efficient actions are a prerequisite for rising turnovers and yields. eating habits are changing due to an increase in the average age of the world population and an inclination toward a healthy diet. such as the Totally Integrated Automation Portal (TIA Portal). Demands as complex as that can be satisfied best by food and beverage manufacturers with an international presence. the demand for foodstuffs produced on an industrial scale has to be satisfied and their security ensured. in particular. With this software. Middle East +4 Asia +6 *calculated annual growth rate (in percent) Basis: Euro Source: ARC advisory group. product lifecycle software solutions. On the one hand. Finally. They support the identification of optimization potentials. Some other challenges are the quickly changing demands of consumers. The use of Manufacturing Execution Systems (MES) has increased in businesses since roughly a decade. Comos. and Teamcenter. F&B Study 2009 . High flexibility and availability of goods. The megatrends urbanization and demographic change also demand a change of traditional views. There are high-performance engineering applications. enable a 20 percent shorter time to market. they have saved up to one-third of their costs lately and unleashed additional potentials for revenue with it.Industry Journal | 02 | 2011 | Markets 15 tion. On the other hand. and local characteristics. trendsetting logistics. trends. such as Tecnomatix.
Some 90 percent of China’s production is still made up of large batches of comparatively simple machines for the domestic market. The industry is confronted with completely different challenges faced in the established Western markets. Therefore. the triad markets USA. but the way is already prepared. Experts on the sector expect the Chinese to start strengthening their international activities first of all in the construction. They massively develop their local presence and business activities. But after this. including research and development. low-maintenance and affordable machines with a low degree of automation. cheaper and faster development. . Currently. mining. the importance of a holistic view of the entire product lifecycle including the assessment of total cost of ownership increasingly shift into the focus of considerations. A consistent. Five years ago. especially because the Chinese government fosters the strengthening of the businesses’ innovative work. This development will be sustained to a large part by the economic upturn of the emerging countries. Not only China’s mechanical engineering companies. profit from an upward trend in the industry. software-based design of automation. better. This would place them among the world’s largest mechanical engineers. If their growth continues. development and production is turning into a key task. The demand in these regions is mainly for technically less advanced. as well as to react quickly and with individual solutions to regional characteristics. The international consulting company Oliver Wyman expects the Chinese mechanical engineering industry to expand into other emerging countries first. and shipbuilding industries. they will reach an average annual turnover of some ten billion Euros in the next five years. and Europe are on the list. Western mechanical engineering companies will have to pass an enormous test in years to come. China is taking the offensive with considerable verve. as well as production methods. Here. but also their competitors from other countries. The change in their share of the world market was similarly impressive with its rise from nine percent in 2007 to 25 percent in 2009.16 Industry Journal | 02 | 2011 | Markets Mechanical Engineering: the action is in the East The industry is increasingly headed toward growth. Japan. business models and strategies are of less concern than technology. The speed of growth in the People’s Republic is breathtaking: the turnover of Chinese mechanical engineers grew by 64 percent to 343 billion Euros between 2007 and 2009. Higher speed of innovation and ever-shortening development cycles in high-tech markets demand new. production systems will merge increasingly in the virtual and the real world. The expansion is not expected before another three to five years have passed. Market researchers expect a global production increase of approximately eight percent for 2011. Booming markets and new business models come into existence because of geo-economic and geo-political shifts toward Asia – driven mostly by the development in China. the 15 largest mechanical engineering firms in China have an average turnover of three billion Euros. textile machinery. International mechanical engineering companies are becoming increasingly present in these countries in order to meet this demand. In 2010. In addition. the same companies made an average 700 million Euros. the Chinese added another 40 percent to this. But this is going to change.
UN. innovative systems. This helps to shorten development times. packaging and tool machine builders. as well as for businesses from the conveyor technology or the glass and wood processing industries. High double-digit growth in many countries Country Turnover 2010 (in € bn. weak points can be found during the development stage and removed without costly expenses in terms of time and money before production commences. for example. . The automation and drive solutions fit every sector of industry. holistic solutions and comprehensive global services make Siemens the leading partner of mechanical engineers around the world. Source: Eurostat. Through this. customer-specific requirements and simultaneous multi-disciplinary development can be integrated in an innovative simulation technology. plastics. and optimizes the quality of mechanical and plant engineering. VDMA.Industry Journal | 02 | 2011 | Markets 17 Mechanical engineering Higher flexibility and efficiency Scalable products. estimated) Growth compared to 2009 (in %) 40 51 11 8 9 77 3 39 26 46 China Japan USA Germany Italy South Korea France Great Britain India Brazil 481 237 230 191 80 70 46 43 40 38 Mechatronics Concept Designer is based upon computer-game technology and helps to shorten development times by up to 20 percent. This holds true for the printing machine industry. It is applicable for crane. One example from the comprehensive range of products: with Mechatronics Concept Designer. national statistics. textile.
The result: the plant availability increases and the total cost of ownership decreases. deliver. The auditing company PricewaterhouseCoopers (PwC) conducted a global survey among managing directors and chairpersons of managing boards in early 2011. and environment.1 trillion Euros were produced globally in 2010 – a gargantuan market. machines. Every crisis is a chance – businesses from the chemical sector have impressively demonstrated the truth of this saying from the Far East in recent years: The Lehman crash with its consequences had led to a new orientation of the field of business – towards higher cost-efficiency and flexibility. The time to reap what they have sown has now come: After a slump in turnover of more than six percent in 2009. a regional shift of the world markets. The world’s most advanced butyl rubber production plant has a nominal capacity of 100. Integrated security concepts ensure the fault-free operation of the plants and protect employees.000 tons per year. Siemens was asked to design. LANXESS employees during an inspection round on a production plant for technical rubber. The generally optimistic industry is occupied with annual growth rates of six percent. and commission the process automation as well as the power distribution for the production site on the basis of Simatic PCS 7.18 Industry Journal | 02 | 2011 | Markets Chemicals: Stable growth Chemicals worth 3. nearly all businesses in chemical industries had initiated extensive savings measures during the crisis and strongly aligned their strategy toward yield growth. An example: The starting signal for building LANXESS’ new rubber plant in Singapore came in May 2010. The distributed control system enables the extremely flexible reaction to changing demands of the market. and increasing scarcity of resources. individual solutions. it rose by a remarkable Rubber in Singapore The global Siemens network makes it possible to support customers around the world with decades of experience gathered in various companies of the business and with holistic. According to it. rising costs of energy. Chemicals .
some two-thirds of the company bosses said that they were “very confident” to continually increase their turnover until 2014 – experts predict an annual plus of some six percent. This is hardly a surprise: In China alone. The field of business is facing great challenges in spite of the generally good opportunities for growth. in Brazil by 14. and energy demand the modernizing and retrofitting of existing production sites in those regions. the consumption of chemicals rose by 23 percent from 2005 to 2010. the production gradually shifts towards the emerging countries.5 –2 2009 13 –20 –15 –17 2010 Source: Chemdata International. Not only does the industry note the strongest growth in the lower-cost countries – strong new competitors and as many plants as nowhere else in the world spring up here. and in India by 12 percent. petrochemicals. But plant engineers still have a lot of work in the USA and Europe. and polymers). Especially the stringent conditions regarding environment. According to the PwC survey. This becomes increasingly possible with innovative lifecycle management solutions. Regional distribution of chemicals consumption (in %) 46 38 25 19 2008 2020 21 18 6 6 10 11 Asia/ Pacific Western Europe North America South America Other regions Source: BASF Global sales trend in the segments of the chemical industry (in % compared to previous year) Inorganics PetroPolymers chemicals Fine and Detergents/ Pharmaspecialty Body care ceuticals chemicals 29 33 29 23 17 8 1. and contribute to the shortening of innovation cycles and the increase of production flexibility. Higher energy costs across all fields of business as well as scarce natural resources make the business difficult as well. Such concepts consider the time from commissioning to operation and all the way to the dismantling of the plant as early as in the planning stage.Industry Journal | 02 | 2011 | Markets 19 23 percent in 2010. The trend of a global market shift is obvious as well: Even if 70 percent of the global turnovers in chemicals are still made by the ten largest chemicals-producing countries. VCI . The profitability of production plants has to be increased throughout their entire life cycle. today’s leading chemicals regions. The basic chemicals area (inorganics. security. which generates 45 percent of the entire turnover of the chemical sector. has had to fight price jumps and exchange rate effects for years. They compel businesses to invest in measures for higher energy and resource efficiency.
and newspaper papers. It is more and more about intelligent processes for water and wastewater treatment. The reason is the economic growth of the BRIC states. through this. catalogue. Apart from that.4 percent every year until 2020. or about refuse recycling or disposal. Manufacturers of paper and pulp around the world are occupied with energy efficiency. the sector is fighting one common problem around the world: The constantly and further rising energy and raw material prices weigh heavily on the margins. The situation could not be more different in South America and Asia. The world of the pulp & paper industry is divided: The manufacturers in Europe and North America suffer from excess capacities and declining demand in many regions. A whole lot of modern high-performance plants are built here at the moment to meet the rising local demand. it will be less about new plants and the extension of capacities. the positive global economic outlook speaks for an increase in demand on both sectors. This trend will probably continue. and Germany. On the other hand. it is more than twelve times this amount in Germany at a per capita consumption of 250 kilograms. The industry produced more than 370 million tons of paper and pulp in 2009. but rather about modernization and services. At the moment. the emerging countries on expansion. . production and consumption have always developed differently depending on the region. increasingly stringent environmental regulations demand innovative and efficient solutions.20 Industry Journal | 02 | 2011 | Markets Pulp & Paper: Good times in the east – Bad times in the west The traditional markets rely on consolidation. A lot of smaller and. a lot of companies in these regions rely on consolidation. as was the tissue and sanitary segment. so that the markets will probably note a new regional distribution in the medium term. on the one hand. The demand is projected to increase by an average 2. It looks entirely different for graphic papers: Internet. The segments do not develop in parallel. rising raw material costs. But South American and Asian states such as Brazil and Indonesia increasingly discover expansionoriented business opportunities in Pulp & Paper. Only Finland and the leader USA use more than that. as well as tissue and sanitary products (34 million). The industry is facing a geographical change as well: About the third part of its production capacities are still in Europe. comparatively inefficient plants have already had to shut down. and sustainable production methods. This promises interesting orders for the manufacturers of corresponding production plants. too: Cardboard and packaging papers have been important drivers of turnover lately. other paper and cardboard varieties (96 million). graphic papers (152 million tons). digital cameras. In the classical markets. for instance. China is leader as an individual country in front of the USA. Market observers estimate that the production will amount to 453 million tons in 2014. and e-books contribute to noticeable declines in photo. It consists mostly of cardboard and packaging paper (171 million tons). Whereas an Indonesian consumes only an average 20 kilograms of paper annually. However. In the ranking of nations. not on expansion. Japan. Either way.
KG from Gengenbach in the German state Baden-Württemberg produces 40.000 tons of highquality cardboards every year. The cardboard manufacturer can not only reuse the largest part of its process water and reduce its wastewater volume by 90 percent. The noticeably lower demand for process steam contributes to this. RISI .Industry Journal | 02 | 2011 | Markets 21 Pulp & Paper Lower water and energy consumption Albert Köhler GmbH & Co. The energy costs decreased by some 140. 2009) 42 44 24 22 23 21 7 3 Asia Confederation of European Paper Industries 3 North America 5 2 3 Rest of Europe Latin America Other regions Source: CPI. Albert Köhler’s wastewater treatment plant can recycle nearly the entire process water of the business. The machine and plant technology is placed in containers and can therefore be commissioned without great assembly efforts. The wastewater treatment takes place in the world’s first membrane bioreactor plant with subsequent reverse osmosis. The solution for energy efficiency. and water management was developed and implemented by Siemens and has led to noticeable savings and optimizations. The overall concept is considered a benchmark by the international paper industry.000 Euros a year – and with them the CO2 emissions by some 800 tons annually. The largest producers and consumers of the world (data in %. for instance. emission control.
2011. he was head of the Siemens Cluster Africa. This also changes the role of external service providers. From 2009 onwards. the mechanical engineer was head of the Siemens Division Industry Solutions. and Valentijn de Leeuw. Dirk Hoke. CEO Customer Services Division. Director of Consulting at ARC Advisory Group. and Austria. Siemens Industry Sector Dirk Hoke (42) is CEO of Siemens Industry’s new Division Customer Services. Dirk Hoke. the former Transportation Systems Group in the United States. CEO Customer Services Division. He has worked for the company in many regions and business fields.22 Industry Journal | 02 | 2011 | Markets ExperTalk Quo vadis. Before that. and the pressure on manufacturers to increase both productivity and flexibility grows. Argentina. Germany. automation services? The industrial landscape is changing. Hoke was appointed CEO of the Siemens Cluster Western & Central Africa in 2008. Hoke came from the car manufacturer Renault in Paris to Siemens in Erlangen 15 years ago. Among them. which was established on October 1. recently discussed the future of automation service providers. as well as the leadership of Siemens Transportation Systems Group in China. . which encompasses more than 50 countries. Siemens Industry Sector.
manufacturing operations management. asset management. operations management.S. performance management. At ARC. De Leeuw was born in the Netherlands and is now based in Brussels and Paris. with focus on clients in Europe. His focus is on organizational effectiveness. He analyzes a number of global businesses and is a consultant of the EU commission. The international company for consulting and analysis of industry and infrastructure businesses is headquartered in Boston. Massachusetts in the U. . amongst others. he is responsible for research and consulting in process industries. and knowledge management. Director ARC Advisory Group Valentijn de Leeuw (53) is director at ARC Advisory Group Europe and holds a doctorate in Engineering and Chemistry.Industry Journal | 02 | 2011 | Markets 23 Valentijn de Leeuw. Middle East and Africa (EMEA).
Hoke: During the financial crisis. de Leeuw: It’s vital to consider the people aspects. which is easier to do with outsourced services. they want to be fast and agile. for which we see significant potential. de Leeuw: And the providers benefit from collaboration and specialization as well. Doing this the right way can lead to a successful quickstart. however. ours are in industrial automation. They have a global understanding of automation. That included the challenging part of involving and gaining buying-in from our people. Siemens started a project called “Growth in Vertical Markets and Services. They can afford specialists that focus on one specific item only and can deploy resources just when needed. But a huge and increasing majority see their core competence in manufacturing. but will go shopping for providers that can deliver what they need. This means that Siemens has the resources to invest in Research and Development and be ahead of the crowd. I strongly encourage you to continue this approach.” Valentijn de Leeuw: We expect that the growth in supplier-provided automation services will be significantly higher than the average sales of automation product solutions and services. that consider automation services to be a core competence and capability. Hoke: We have been offering both online and classroom training for years and we will strengthen this service regarding automation. manufacturers with an effective outsourcing strategy had a huge competitive advantage because they only paid for what they really needed – which often was less than before. We all do best if we stick to our core competencies. some of whom are joining us from other service units.” . What about training? End users seem to have a high demand for this. as well as to reduce their costs. de Leeuw: There are multinationals. we have put a strong focus on communication and telling people about the advantages and benefits this has for them as well. Within the project. These figures include value-added services. they can maintain skills that are used every day – which can reduce costs for their customers as well. How about other advantages – apart from reduc ing projectrelated costs? de Leeuw: The key finding of our survey is that companies want to outsource to extend their internal resources. In January. If these assets are becoming increasingly im portant – why shouldn’t multinationals be able or willing to build up their own resources? Hoke: You can’t innovate and be a leader in all domains. to optimize assets. and for operations management. And as nobody knew when the recession would end.” What have you done so far? Dirk Hoke: The project led to setting up our Customer Services Division which went into operation on October 1 (see page 27). There will ! “Automation suppliers can provide users with the resources needed for new projects. it was important to delay Capex. Our customers’ core competencies are in production. We also have the skills and resources our customers need.24 Industry Journal | 02 | 2011 | Markets ! “As the automation market emerges from the recession. such as from our Divisions Industry Automation (IA) and Drive Technologies (DT). ARC predicts that services will grow by around eight percent over the next five years – compared to six percent in other products and solutions within the automation-related business. external automation services will lead the way in growth. Plus.
Hoke. the system will lose its total value within five years or so. What is . compressors. supplier and manufacturer will have to become interdependent. In the next phase. Control strategies must be updated and control loops retuned to readapt the automation solution to the new plant situation. which we can offer. Hoke: That is why we pay so much attention to covering the whole lifecycle. we have to address new business models as well. for expanding the lifetime of a product and to offer replacement when the end of the lifetime approaches. the fastest way to convince a customer is for the supplier to assume all risks by getting paid only out of the savings. If we look at energy efficiency topics. we have to work out ways to get access to the system information without having access to the production information. That changes everything in your relationship. In fine chemistry or pharmaceuticals. de Leeuw: People do not differentiate between the cost and the value aspect quite often. we are talking about trust. If the associated automation strategy and structure are not constantly adapted. Probably. software updates. spare part services. they can reduce wear and breakdowns. you both depend on each other to do business. So during a product’s lifecycle there is a multiple of the potential of the pure system purchase.Industry Journal | 02 | 2011 | Markets 27 03 25 be new training centers for customers – and for our own people as well. remote monitoring. If users don’t do these things properly and frequently. though. and other processing equipment are being replaced. Hoke: Therefore. But in general. for instance. is to optimize the value that the system delivers. Why should a manufacturer believe that paid services would be profitable for him? Suppliers have to answer this question quickly – perhaps. de Leeuw: But still there must be measures that protect the user’s intellectual property and knowledge. If the customers make sure that the equipment is well maintained. like maintenance. We know that the manufacturing equipment changes over time. Mr. including the upgrades. The other aspect. don’t you find your customers to be reluctant since they are afraid their costs will rise over time? Hoke: That would only happen if we couldn’t guarantee cost transparency between investments and returns. In the end. So at the end of the day. Hoke: Obviously. You can compare that to a bakery where you used to buy bread every day – and that was that. the system loses value since it no longer delivers what it was initially designed to deliver. Production secrets and key information equal the wheat. in particular. even before it is asked. ! “Operations management and maintenance have the largest impact on lifecycle costs. That is a matter of standardization as well. Now you grow the wheat yourself and deliver it to the bakery before you buy the bread – made out of your own wheat. We will offer service as a product that has repeatable solutions that can be priced and measured easily. each case is different. services are the bread.” de Leeuw: The system-to-lifecycle cost ratio depends on the type and useful lifespan of the products. sharing this type of proprietary information requires an extremely large amount of trust. Pumps. the lifecycle cost and value is a multiple of the system and installation cost. modernization. We will have a certified service education so that – at a certain level – we can ensure our people have the same competencies. and many other possibilities. Will we see a major change in the relationship be tween customers and suppliers in the near future? de Leeuw: Definitely – trust will be a key aspect. the best way to run a competitive system? The answer to this always requires a thorough analysis. and thus total costs. So suddenly. it is all about capital efficiency. And. The objective must be to go beyond the traditional client-provider relationship. These are mainly performancebased contracts. and so on.
Even in China. the benefits of services are easily measurable if you compare energy consumption. as well as improving meantime between failures. which directly impacts production and thus profitability. But the purchasing departments of manufac turers are used to pay suppliers by the hour. Only they understand the benefits that we provide and can give the proper input to supply chain management.” Hoke: More experts are needed globally than ever before. this was unthinkable. many experts have simply retired. Quite often. by the piece – by anything but performancebased results. for example. for example. Hoke: That is a difficult issue. So the problem will even increase. de Leeuw: In response. Our customers can rely on service stability – which they might not feel safe about with smaller suppliers. Hoke: Interviews obviously often follow a given pattern. ultimately. as we can deliver what multinationals need on a global basis with uniform quality. based ! “There is a lack of automation skills and expertise within the manufacturing companies. de Leeuw: What happens if purchasing blocks you? Hoke: We can’t go directly through procurement but have to address the topic directly on other levels like executive. And in mature countries. Hoke: True. Other key performance indicators that could be discussed with customers might be reducing downtime and guaranteeing uptime. “Suppliers can add value to out. So with our approach we can hardly go into direct comparison with most of the other suppliers. factory. waste and water management. That means that we have to train our personnel accordingly. Even in emerging countries like China there are not enough skilled graduates to supply the needs of the industries. There are many possibilities. In this area. we are building up a service academy in conjunction with a German university that will offer a complete curriculum on services and. and so on. de Leeuw: Or the percentage of scheduled and unscheduled maintenance-related downtime. and production-line management. big customers are opening up to outsourced services. every service person should also be a salesperson. Employees can study while still being paid by their companies. For many manufacturers. How do you standardize feedbacks? Hoke: This is a global trend. leveling out their previous advantage in this area. In the future. how do you value the importance of the supplier’s size? Hoke: That is a big opportunity for us. the industry in the UK started sponsoring a curriculum for a Master’s degree in process automation. Take energy efficiency topics. If a manufacturer asked ARC for advice whether to build up its own automation expertise or leave it to the suppliers – what would you recommend? de Leeuw: Collaborate with and use the resources of service providers. These are not only about automation but about the factory as a whole – which includes air conditioning. outsourcing non-core activities seems to be the far smarter way than doing it themselves. the corporate employees in the purchasing or supply chain departments are not trained to evaluate such benefits. And the frequency of executive-level customer visits should be increased to improve the feedback process.! sourced maintenance functions by providing metrics for overall equipment effectiveness. About five years ago. Or take our net promoter score. Hoke: And we have established cooperations with many of the best universities worldwide. .26 Industry Journal | 02 | 2011 | Markets de Leeuw: But meanwhile they have to think more and more about profitability as wages go up. a Master’s degree.” If the dependency increases. Additionally. So this is about performancebased payment as well. provided by a few universities.
Hoke: Certainly. de Leeuw: Is the business planning and execution iterative in your case. if needed. then with the Siemens Healthcare and Energy Sectors.” Hoke: We don’t see ourselves in such a role.Industry Journal | 02 | 2011 | Markets 27 03 on some 18. can coordinate this system. The new Siemens Division Customer Services The new Siemens Industry Division Customer Services (CS) was established on October 1. like in “planning by discovery”? Hoke: No. Since we’re organized regionally. Information and order: rkilies@arcweb. de Leeuw: What turned out to be the key success factors in this evaluation? Hoke: Service culture and an appropriate mindset definitely play a major role. Among the product-oriented services are online support. 2011. In some cases. First. CS delivers product-oriented services as well as value-added services. in cooperation with the Divisions Industry Automation (IA) and Drive Technologies (DT). This score tells us how many customers would recommend us. our top priority is to ensure that the people in the regions understand our service approach thoroughly. plant monitoring. ARC examines the automation sector up to the year 2015. remote maintenance. These comments are always extremely helpful. The 203-page study costs 6. ! “An ecosystem of provider and integrator services can provide full lifecycle services. The provider. we have to focus on what to do first according to our resources. and how many would refuse to recommend us. we have done that with our own business units.000 people around the world and advances the service strategy for products as well as for industries. and holistic plant management.300 Euros. technical support. paper. we are much further than that. For example. The Division employs around 17. we will not be able to have the same competencies on the same level worldwide. Its task is to develop and expand the service business. how many are neutral. we have done a lot of service benchmarking to identify blocking points and key success factors.000 customer interviews every year. The value-added services comprise consulting (regarding energy and environmental management. This means that it is most important to overcome internal hurdles before rolling out a service strategy externally. Afterwards. But at present. de Leeuw: I would imagine that there should be plenty of opportunities for suppliers like Siemens to partner with value added resellers and thirdparty service providers. we extended that to companies that are complementary to our service offerings such as MAN Turbodiesel Services USA or Schindler elevators. such as automotive.com . The automation market study The theses of this ExperTalk are taken from a survey by ARC Advisory Group: in the report “Supplier Provided Automation Services Worldwide Outlook”. we cooperate with partners. as main automation contractor. Siemens is present in almost every country of the world. They shared their experiences with us very openly. pharmaceuticals. and metal. Obviously. and is responsible for all services within the industry sector. and field services for industrial plants. But we will always find solutions that are best for our customers. for instance).
cars. gold. One ton of electrical waste contains many times more precious metals than the same amount of ore from a goldmine. the reclamation of gold from recycled materials requires less energy. Car manufacturers increasingly develop their own utilization concepts as well. “Urban Mining” – the reclamation of copper. . and houses a profitable business. Accordingly.28 Industry Journal | 02 | 2011 | Markets Goldmine junkyard Raw materials are becoming scarce – and the recycling of electrical devices. and aluminum from waste – is a sophisticated technological process that benefits the environment as well.
000 tons every year. landfills. copper pipes. and scrapyards around the globe lie huge amounts of valuable raw materials that were built into cars. railroad tracks. In the walls of buildings awaiting demolition.” says Markus Mehl. All sorts of metal are of greatest interest. They are not only extremely valuable. the potential is even more impressive: Europeans dispose of 1. Zinc. one can make money in scrap recycling. politics. According to the Bavarian Ministry of the Environment. but can be reused infinitely without quality losses.000 tons of copper are thrown away every year.5 billion tons of reusable materials every year. The theft of entire power lines. Scarcity of resources and rising prices of raw materials push the so-called “Urban Mines” in the focus of economy. “There are no stolen goods better than scrap metal. The company Umicore alone recycles 7. CEO of the largest recycling plant in Bonn. Recycling is a profitable core business for the international Umicore Group. because it fetches cash immediately. . and all the way to slags and flue dusts containing precious metals. which is headquartered in Brussels and specializes in precious metals. Umicore’s sector Precious Metals Refining is among the world’s leading businesses for the recycling of precious metals from composites – spanning from electrical waste to car and chemical catalysts.Industry Journal | 02 | 2011 | Markets 27 03 29 It sounds like a hoax: “The global scarcity of raw materials leads to an increase in crime at junkyards. and 6. But even without resulting to criminal activities. The gold alone has a value of 100 million Euros – that is equal to the monthly production of some gold-mining countries. and research. Lots of money. nickel.” But it is true indeed that rising prices on international raw material exchanges lead to rocketing burglary rates at many a country’s scrapyards. and houses over decades. electrical devices. Studies by the Hessian Ministry of Environment claim that today an average landfill contains metals worth 30 million Euros. One ton of old printed circuit boards contain 200 grams of gold (right). and shopping trolleys is becoming more frequent. More than 60 percent of Umicore’s turnover of nearly ten billion Euros a year come from recycling – with a recent annual increase rate of about 42 percent. waste disposal and recycling companies save an annual four billion Euros for the German economy. 28 tons of silver. unlike materials like plastics or paper. on recycling depots. The EBIT adjusted to special influences even rose by 68 percent. and lithium batteries are a valuable source of raw materials when recycled (left). too. four tons of gold. Savings of four billion Euros There are an estimated 100 billion megatons of metal in German buildings alone. And in China. Germany. The Institut der Deutschen Wirtschaft (Institute of the German economy) estimates that raw materials worth 18 billion Euros will be reclaimed from waste in the Federal Republic in 2015 – more than twice as much as in 2009. On an international scale.
Rate of utilization and recycling in % 80 79 82 83 Germany Spain 60 65 82 Sweden 76 86 75 Great Britain 78 76 85 France Consumer electronics Monitors and controls 63 72 80 Poland IT and telecommunication 23 39 Source: Eurostat 2011 A future-proof business As the demand for precious and special metals is constantly on the rise. there is still a lot of potential. And thanks to modern recycling facilities. this is an enormous amount of money – tendency rising. The considerable dependency on import. or by more than 300 million PCs and laptops a year. the business is futureproof. These metals weigh only a couple of milligrams per cell phone and are not even worth one single Euro.” The Umweltbundesamt (Federal Bureau for the Environment) estimates that disused cell phones containing materials worth 65 million Euros lie in the cupboards of German households. In regard to recyclable materials. “The importance of this source of raw materials is as big as the environmental risk it constitutes on landfills and in technically inadequate recycling. With pollutant-free monosubstances such as glass or steel scrap. plastics. And the precious metals they contain make up 80 percent of this value. the focus is on throughput and cost. the average recycling rate in the EU-27 lies at only 30 percent.” says Hagelüken.3 billion cell phones sold worldwide. One of the challenges of Urban Mining is the extraction of reusable materials without causing further damage to the environment. for instance. most metals can be used again. The problem of many Western countries is that “there are. But multiplied by 1. The de facto reuse is less than 2. halogens. and special metals as well as pollutants.000 tons. Recycling reduces dependency on raw materials To ensure a secure supply with technological metals at affordable prices is of the utmost economical importance. But with polysubstance materials . glass. not even three percent. Electronic scrap. divisional director Business Development of Umicore Precious Metals Refining. In most cases. and others. and cobalt in Central Africa – increase the risk of supply bottlenecks as well as price leaps.” explains Christian Hagelüken. The same is true for 13 percent of the palladium and 15 percent of the cobalt mined. This means that raw materials have to be mined abroad and imported.30 Industry Journal | 02 | 2011 | Markets European recycling rates Electrical junk is utilized in a lot of different ways across Europe. next to no primary storage facilities for technological metals in Europe. “And end-of-life products are a huge storage facility that has to be used. In recent years the costs for this have risen by 80 percent in Europe. for instance.000 tons. Three percent of the annual global production of silver and gold are used for the production of computers and cell phones. together with a regional concentration of indispensable metals – such as rare earths in China. because the specific characteristics of so-called technological metals are irreplaceable in the production of many appliances – from consumer electronics to production facilities. All those are good reasons for the targeted use of end-of-life products. is a complex mixture of precious. basic. especially for regions lacking raw materials. Other materials cannot replace them. The global recycling potential for cell phones only is more than 80. platinum metals in South Africa.
considers this to be a significant contribution to securing raw materials for Europe: “We want to . And no wonder – one ton of rock contains only five grams of gold.100 1. Printed circuit boards are 40 times as profitable.” says Umicore’s expert Hagelüken. And the extraction of one ton of gold from a conventional mine causes 1. mostly in mining and processing. today. It is high time for a fundamental change: “This is about responsible management of resources. Katherina Reiche. Accordingly. catalysts.” Recycling is a business with high economical. and a global cycle economy.07.200 1.01.” says Hagelüken. Metal recovery of 95 percent At Umicore’s metal works near Antwerp the utilization of these end-of-life-materials can be seen. the stopping of sinister exports.000 tons of metal from 300.2001 02.Industry Journal | 02 | 2011 | Markets 27 03 31 Explosion of raw material prices (Price index 2001–2011.700 tons of CO2 emissions. “The energy demand for the recovery of precious metals through modern recycling is just a fraction of the amount required for mining.000 mid-range cars. High-tech is in demand Hagelüken sees one of the main problems of European recycling in the channeling of collected products through dubious channels to “backyard recycling plants” in emerging countries. in US dollars) 1.” 14 tons of electrical scrap yield approximately one ton of copper. 600 500 400 300 200 Gold Silver Palladium 100 0 13.” Hagelüken says. It is also a significant contribution to climate protection. yielding an average 200 grams of gold per ton. it should be on eco-friendly extraction of trace elements and on improving the reclamation of value. To mine that much. Calculated for the entire recycled material this means an annual yield of 70. the Ministers of the Environment of the 27 EU states agreed on more stringent conditions for the disposal of electrical scrap.000 tons of mainly secondary materials. ecological. “Compared to the ore content of the primary deposits. “This kind of recycling does not only bring valuable raw materials back into the cycle.2006 03. This has been recognized by politics as well: last March. and lithium-ion batteries.2011 found in complex components. The world’s largest integrated metal works for the recovery of (precious) metals uses elaborate technical processes to achieve metal yields of over 95 percent from complex materials such as printed circuit boards.01. up to 1. the collection rate is meant to rise from today’s 30 to 65 percent within eight years. computer circuit boards are a veritable bonanza.300 1. And the process is becoming increasingly complex: IThardware of the 1980s contained about eleven different valuable elements. The path leads away from conventional scrap business towards hightech recycling. The German Federal Secretary for the Environment.000 900 800 700 Rising prices for raw materials as well as rising demand lead to increased profitability of recycling electrical junk due to the technological metals it contains. and social relevance. there are 60 – that is half the periodic table. Less than a quarter of the potential yield of precious metals is recovered in those plants. This is as much as the weight of 45. which integrates the complete registration of old devices. “The goal has to be the focus on quality and economic relevance of raw materials.000 tons of rock have to be moved.
the vehicles were pre-treated in the RDZ. the BMW Group has been researching in their in-house Recycling and Demonstration Center (RDZ) how to integrate materials used in vehicles into the cycle of material and to spare natural resources.” In the next step. The return of materials into the cycle is a new aspect. the rest of the vehicle body was pressed and shredded. With that in mind. “The law stipulates the neutralization of pyrotechnical components such as airbags and pretensioners. other materials that can be used as secondary raw materials were extracted with post-shredder technologies. Afterwards. Firstly. explains. BMW has the world’s leading concept Next to electrical appliances. “In the test we dismantled all components for which there is a demand on the market – such as alloy wheel rims. “Originally. Since the beginning of the 90s.” Steffen Aumann.” says the delighted RDZ boss. the RDZ’s experts initiated a large-scale test with about 500 vehicles three years ago.” EU Commissioner of the Environment. bumpers. Next to no scrap is as valuable as old cell phones: One ton contains about 300 grams of gold – 60 times more than one ton of rock from a goldmine. “We develop important approaches for dismantling and draining technologies as well as recycling concepts for the vehicles of the future. the legal requirements for the recycling of vehicles include a utilization rate of 95 percent. adds: “It is important that we view electrical scrap as a valuable resource. the focus was on environmentally friendly disposal when treating old vehicles. .” Aumann explains. and headlights. cars are one of the most important sources for secondary raw materials. the pure draining of working materials such as oils and fuels. They wanted to prove what modern recycling concepts are capable of. From the non-metallic shredder residue. director of the BMW Group’s RDZ. “In the test we were able to demonstrate that we can conform to the 95 percent recycling quota stipulated by law.32 Industry Journal | 02 | 2011 | Markets make sure that materials are reused once they have entered the cycle. the metal parts of the body were separated completely by using techniques such as magnetic separation and air sifting. Janez Potocnik.” From 2015 onwards.” And indeed: Losses through non-recycled metals amounts to nearly four billion Euros a year in Europe. as well as the reduction of concentration of harmful substances. The certified specialist business for disposal is regarded as one of the world’s leading companies in this sector.
steel. What is the situation in other countries? In North and South America those appliances are still produced. But this does not mean that the matter is not relevant any more. dedusting sound insulation.000 kilograms are emitted per appliance. The recycling of only one conventional refrigerator can compensate for this amount. and copper contained in refrigerators can be reused. 70 percent of all refrigerator and freezer appliances arriving at the disposers still contain CFC. 6. Specialties are recycling plants for electrical household devices and electrical junk as well as plants for disposing and recycling old refrigerator and freezer appliances. Today. Industry Journal talked with Peter Heßler.000 kilograms of CO2.000 kilometers. the recycling of refrigerators and freezers will never be profitable. A profitable plant that meets these requirements is virtually the top class of recycling technology. So this is about protecting the environment as well? The blowing agents contained in insulation foams destroy the ozone layer and are accountable for a large part of the greenhouse effect. The aluminum. like electrical scrap.) is headquartered in Karlstadt.000 cooling appliances. What is the part of CFC. gigantic amounts of them are still out there. What is the difference between the recycling of refrigerator and freezer appliances and other forms of recycling? Primarily the cost as well as the compliance to EU stipulations for plants treating refrigerants and disposing of the CFC contained in refrigerators in an eco-friendly way. Bavaria. The Montreal protocol of 1987 was initiated because of the CFC problem. managing director of UNTHA. which was a hot topic 20 years ago but is next to not discussed today? CFC is a forgotten enemy of the climate. the degased polyurethane foam is taken away for free by cement plants to be used as substitute fuel. and many other features.000 kilometers by car. separation technology. Our customers are public and private waste disposal companies with an annual throughput of at least 100. it emits about 2. In our plant they are recorded for external environment-friendly disposal or destroyed immediately. But there is still only one plant for sustainably recycling refrigerator or freezer appliances – which was developed by us. An UNTHA recycling plant from Terra Nova . In those plants – like in most automated recycling plants – Siemens components such as the vibration resistant and maintenance-free controller Simatic S7 are employed. The importance of professional disposal becomes apparent through an example: When a car drives 10. For the large refrigerators popular in the USA. How profitable is recycling? As opposed to other fields of business. this topic ranks significantly behind CO2 in public discussions. Even though products containing CFC have been banned from European markets since 1995. and an international supplier of recycling plants specializing in shredding technology. UNTHA manufactures solutions comprising hoisting devices. From single machines to turnkey plants. which correspond to 30. A technologically advanced and efficiently designed plant ensures that the recycling is at least a zero-sum game. But the disposal and destruction of CFC means expenses for the disposing business in any case. Plastics can be sold to companies specializing in their recycling.Industry Journal | 02 | 2011 | Markets 33 “The demand in the USA and China is on the rise” UNTHA Recyclingtechnik GmbH (UNTHA recycling technologies Ltd. So it is a growth market? In countries like the USA or China the demand for these plants will surely grow.
attractive. Experts expect Brazil to be among the top five of the world’s largest economies in less than two decades. high domestic demand. Vast natural resources.34 Industry Journal | 02 | 2011 | Markets Brazil – booming. an upcoming middle class. and laid back The euphoric mood of the emerging nations as well as the BRIC states and their vast growth are the talk of the whole world – which mostly thinks of China and India only. . a central position in Latin America. a reformed economy and society. The partly undiscovered jewel is the B in BRIC – Brazil. and ambitious employees make South America’s largest country an interesting market.
as well as already being the world’s largest exporter of iron. sometimes more. At the moment. as does the domestic one: 200 million people.” Haddad sinks onto his chair and takes a sip of strong coffee. and establish contact to Brazilian entrepreneurs. large parts of the population have climbed into the middle class. samba.5 percent in 2010. With breathtaking speed. talk to government representatives. a lot of contracts are nearing completion. The company Petrobras has discovered huge deposits of crude oil off the Brazilian coast. The income rises in all income groups. So is everybody doing business with them after a short time. coffee. The demand explodes. He still is a little out of breath when he arrives a quarter of an hour late for the meeting. In the last 30 years. oil and gems. It listed an increase of 7. represent a potentially gigantic market. Sugarloaf Mountain and Amazon. Its percentage has risen from 35 to 51 since 2006. The country will soon be the most important food producer of the world. This is a gigantic economic factor. go to trade fairs. He arrived in Brazil only this morning. The global economic crisis seems to have left Brazil without a mark. We normally calculate an hour. a lot of them young and consumptionoriented. Experts estimate that this could catapult the country into the top five of the world’s crude-oil exporters. Copacabana? Brazil is more – a lot more – than the stereotype says. The Asian boom speeds up the growth of the Latin American territorial state. Haddad laughs as he makes his apologies: “That’s nothing. It has a lot of natural reserves such as natural gas. It is a crucial stage. soccer. “At the moment. the gap is closing between it and the world’s richest countries.” Euphoric mood in Latin America’s booming country: Brazil. The CEO of the Brazil Board of the Association of German Industry (BDI) has been visiting German companies in the country without a break ever since. “Planning is different round here.Industry Journal | 02 | 2011 | Markets 35 Rafael Haddad has just struggled through São Paulo’s traffic jam again. the economy of South America’s largest country is among the most dynamic of the world. considering the explosion of the global population that is leading to an increased demand for food. Extremely rich in natural resources Basis for the advance are a bunch of treasures: It is the world’s fifth-largest country and almost its entire territory can be used for agriculture. Thanks to the welfare programs of ex-President Luiz Inácio Lula da Silva . He still has a lot to do: visit more companies.” The Brazilians are more easy-going in that matter.
The growth dynamics go hand in hand with an investment boom. automotive. chemicals. China. computers. This means unprecedented growth for the internal market. TVs. Refineries. “Christo Redentor” spreads his arms protectively over the city on the Corcovado mountain. Energy demand is rising as well.and waterpower. Germany. mostly for infrastructural developments. “because we are very strong and innovative in those key industries. The soccer world championship 2014 and the 2016 Olympics – Brazil has to be prepared by then. It is no surprise that Brazil holds the seventh position in the global ranking of economies. President Dilma Rousseff wants to speed up the approval processes for dykes and roads as well as for ports for ships and planes with a decree. The Brazilians cannot afford potholes and power failures any more. A growing class of consumers has emerged that has a lot of catching up to do: refrigerators. offshore oil-production plants and wind farms are on the project developers’ and construction companies’ lists as well. dykes. Next to natural gas and oil. China. India. Japan and Russia. A gigantic playground for investors. ethanol and nuclear power. CEO of the Brazil Board of the Association of German Industry. Directly behind the USA. airports. engineering. Together with the private sector. Rafael Haddad. electronics or security – “the business opportunities for German companies are extraordinary. And so the country is being turned into a gigantic construction site. ports. better food and prettier flats. Spain and France. Roads. According to a prognosis by Goldman Sachs. flats and sports facilities are being built everywhere. It is a crucial stage. infrastructure. the government wants to spend a thousand billion US dollars by 2014. Especially Next to no sector is exempt from the boom. Whether it is energy. furnishings.” says BDI expert Haddad. Brazil counts on wind. cars.” The German economy has observed the development for some time – as opposed to countries such as the USA. this holds true for low-wage families as well. which are mostly exported.36 Industry Journal | 02 | 2011 | Markets The statue of Christ – the landmark of Rio de Janeiro. subways. the country will be number three or four in 2035 at the latest. The world’s seventh-largest economy because the entire world will be looking at it very soon. which made a .
” Christoph von Waldow.000 cars. automation and energy as well as developing their medical sector. houses. and the adjoining hinterland.200 German companies are already in the country. Uruguay.Industry Journal | 02 | 2011 | Markets 37 decided push in the last three years. the port of Duisburg signed a bulk order for the design of a logistics concept for the development of Santos. Bridgehead to the free-trade area Mercosur 1. has most recently made a turnover of some 1. and wants to invest hundreds of millions of Euros in northeastern Brazil. The Germans reacted and established the BDI’s Brazil Board in order to strengthen the economic relations between Germany and Brazil. Chemical giant BASF plans a production site for acrylic acid. such as heavy machinery. Venezuela and Chile. Attractive market for niche suppliers The economic miracle attracts medium-sized companies from Germany as well. Often they are niche suppliers like GERB Schwingungsisolierungen (vibration insulations) from Berlin. Recently. The company invests heavily in infrastructure. the German share in the creation of value in industrial production has already reached ten percent. Paraguay. turbines. This year. According to the BDI. .) says. Business and private people can feel at home in this county. the basic material for nappies. for instance. Latin America’s largest port. The company cushioned the terraces of São Paulo’s gigantic Morumbi stadium. the German-Brazilian chamber of commerce expects some 60 economic delegations in São Paulo. Head of the Duisburger Hafen AG (Port of Duisburg plc. Western lifestyle meets Latin American ease – and a remarkable economic growth in many sectors. The “Berliners” ventured to South America 20 years ago and have a production site in São Paulo.8 billion Euros in fiscal year 2010 (This is an increase of over 32 % compared to 2009). which has been one of the most important companies in Brazil for many a day. For many of them. Great names are represented – from Siemens to Daimler and Volkswagen and all the way to Bosch. track systems and bridges. we have to be close to our customers and markets. says. Managing Director of GERB in Berlin.” Erich Starke. “But where are the Germans?” President Lula asked during a state visit to Berlin at the end of 2009. consisting of Argentina. Siemens. Brazil is the bridgehead to the Latin American free-trade area Mercosur. some of them since many years. “We want to be a pioneer for the national industry when it comes to the placing of orders later on. Car manufacturer BMW doubled their sales in 2010 and sold 18. “As a niche supplier. GERB specializes in everything that has to be insulated and elastically embedded. They make up 90 percent of the local businesses.
his program of reform and the opening to the world came a strong change of mood. from periods of hyperinflation. for example: Even after a long working day. Siemens built the country’s first telegraph line between Rio de Janeiro and Rio Grande do Sul. Nevertheless: A lot of established businesses watch the current euphoria skeptically. Brazil expert of the trade association Lateinamerikaverein (Latin America Association) in Hamburg. As early as 1867. Somebody trying to find cheap labor in a Brazilian metropolis will hardly succeed. political instability and their economical consequences.” says von Waldow.1 billion Euros. he is always impressed by the South Americans’ dynamics and will to advance. Siemens employs more than 10.38 Industry Journal | 02 | 2011 | Markets Siemens in Brazil Siemens was one of the first European companies to venture towards Brazil.8 billion Euros was implemented with Brazilian customers and orders were secured for 2.” Rösler remembers. especially at specialist companies such as GERB. the Brazilian subsidiary of the Group is among the most important companies of this South American country and has contributed substantially to development and modernization of the infrastructure. a turnover of 1. travels the country. The Brazilians are full of vigor. The shown casting machine was supplied by Siemens VAI. But the scars of the past still smart.800 people in Brazil and is the country’s largest electric company. It is complemented by one or two years of experience at different stations in the parent company. When Peter Rösler. The desire for self-improvement is enormous. companies from the Western countries with a systematic in-house training system are favored. as well as the social security and good wages that German companies in Brazil can offer. “But the great quality of training at the Brazilian universities is a huge advantage. Most companies prefer to employ native employees. Removal of a slab in the Brazilian steelworks ThyssenKrupp CSA.” The salaries on management level have almost reached the European level and factory workers are well paid. Especially among the career-oriented younger people. Highly qualified specialists from Brazil The formulas for success of foreign companies in Brazil resemble each other in many aspects. Too long they have suffered from the exchange rates’ rollercoaster rides. many Brazilians get additional training. They know that a lot has changed fundamentally. The search for specialists is not made easier by the current boom. Unlike many other countries. . In 2010. Rösler: “This is an incentive for Brazilian specialists.” Education. Today. Training on the job has proven to be a success. which they recruit from the country’s universities. “With President Lula’s assumption of office in 2003. That the country has become more stable and reliable. “The Brazilians themselves were skeptical not so long ago. That the economical development has largely been severed from changes in the political mood. And that strong domestic economic activity has significantly reduced the dependence on the global economy. Brazil does not have its own vocational training system.
On an island off Rio de Janeiro.000 barrels a day from them. Siemens will have built two new plants for the country’s oil and gas industry and one for medical appliances. An annual output of some five million tons of steel was installed in the steelworks of ThyssenKrupp CSA in the federal district of Rio de Janeiro by Siemens VAI. sometimes from a depth of more than 1. from public infrastructure to power supply.100 meters. Siemens counts among the best employers of the country: the Brazilian magazine “Gestão RH” voted Siemens among the “Top 100” businesses for exemplary personnel development and among the best ten businesses in personnel management for the fourth time running. Petrobras will have tripled its daily production volume by 2020. By 2016. head of the Petrobras research center. alarm and emergency shutdown. Together. In addition to this.2 billion barrels. Petrobras produces some 300. as well as communication support the production. Siemens technologies for process-gas use. they contain an estimated 1.” says Carlos Tadeu da Costa Fraga. According to their own estimates. Siemens systems provide half of Brazil’s power. Petrobras is the world’s fifth-largest oil company. One of the most impressive success stories of Siemens is the implementation of automation systems on 13 oil platforms in 2010. and all the way to healthcare technology. Siemens is successful in the steel industry as well. The orders have a value of 600 million US dollars. 160 kilometers off the Brazilian coast lie the Barracuda and Caratinga oil fields. A project with a volume of some 20 million Euros is currently being implemented in the steel plant of ArcelorMittal in Jõao Monlevade in the federal district Minas Gerais. The company is one of Siemens’ most important customers in Brazil. Siemens is building its own research and development center in the Parque Technologico – close to Petrobras’ research center. With a most recent annual turnover of some 96 billion Euros and a daily production volume of more than two million barrels of crude oil. . “For this.Industry Journal | 02 | 2011 | Markets 39 All business sectors of the company are represented in the country: from industrial plants to building and lighting technologies. we need partners that can cope with such gigantic volumes – partners like Siemens.
But nevertheless: at the end of the day this is tough business and one should know the rules of it. especially in the urban centers. for example. Businesspeople quickly learn the unwritten rules. profit from the strong German community. Small talk about family.” Nevertheless: Brazil is a good portal into the emerging countries for Western companies. Or follow the natives’ example and throw on jeans and T-shirt in the evening. Newcomers do well to establish a network very quickly. tax and customs regulations. for instance. And always have some 50 Euros in cash with you to be able to buy your way out of robberies.000 Germans or people with German ancestry live in São Paulo alone. High bureaucratic effort A further specific obstacle of the country is the inefficient bureaucracy: complicated approval procedures. They make up five percent of the population. Partnerships are very important. The cultures and languages are closer than the ones of India and China. preferably over a good meal. diamonds. “Cultural differences are easy to underestimate. You feel at home quickly. and the country. then about the building and machines and finally about sales? “A Brazilian may start with sales and turn to production afterwards. soccer. Not even a different attitude towards punctuality and commitment can change this. More than 500. where facts and arguments are presented in a more friendly manner in most cases.” Sentences like that – unthinkable in Brazil.5% 4. German companies.40 Industry Journal | 02 | 2011 | Markets High crime rates remain a specific regional problem. oil. too.5% 6.” Brazil expert Rösler says. “Brazilians are used to directing their attention at many aspects simultaneously. Take a taxi to business dinners. He advises finding a Brazilian partner who is familiar with the authorities. as well as taking off your watch. natural gas. can take almost two hours.700 billion US dollars 5. people are very warm-hearted. Brazilian figures Population 196 million Gross domestic product 2010 Inflation rate 2011 (estimate) Unemployment rate 2011 (estimate) Economic growth 2011 (estimate) Budget deficit 2010 Most important natural reserves: 1.6% iron ore. “You made a mistake here: The figures are not correct this way. because Brazil works differently than Europe.” BDI expert Haddad says. the market with its ever-new requirements. tin .5% 2. for example.” Rösler knows. First talk about the plot. one way or the other: Do not take a stroll on the beaches of Rio in a business outfit. for example. new terms of tender and new projects. They include a less direct style of negotiation than in Western countries. “All this is very complex.
Wolfram Mexico: Fluorite India: Graphite Congo: Cobalt. Tantalum Australia: Manganese. Indium. Germanium. Silver. Investigation of the deposits of 14 particularly rare and important raw materials for the manufacture of industrial goods Rich blessings Many rare raw materials are found in countries that do not normally appear on large companies’ radars. They could be the ones profiting most from the global economic boom. on the other in form of increasingly scarce raw materials. Neodymium. Magnesium. the competition for these valuable raw materials has started and it is bound to increase. This could change the structure of our world’s economy. There could be more deposits of rare earths under the sea as on dry land. South Africa: Platinum metals Rare earths under deep water According to the magazine “Nature Geoscience”. Rare Earths. gadolinium. The demand increases – and so 120 does the scarcity of raw materials. Zinc Source: EU Raw Materials Supply Group 2010. There are next to no large deposits of rare earths around the world. Australia 5 India 3 FACTS & FIGURES . neodymium. 297 It could be a tight fit here Be it the manufacture of LEDs. lanthanum. They are indispensable for the manufacture of several modern technologies. A lot of them have highly specific characteristics. or tantalum. Own research.1 229 Global extraction of rare earths 2009 (in %) Brazil 0. touch screens. The term was coined at a time in which those metals were found primarily in rare minerals and were isolated from them in the form of oxides (“earths”). Tantalum Rwanda: Tantalum Brazil: Niobium. Keys to technologies 17 important technology metals are subsumed under the term “rare earths”.3 Source: US Geological Survey. Increase in demand 2006–2030 (in %) 2 Investigated global reserves of rare earths 2010 (in %) China 37 CIS 19 USA 13 Source: EU Commission Source: US Geological Survey.5 China 97 Malaysia 0. Fluorite. scientists estimate that one square kilometer on the bottom of the Pacific Ocean could contain enough rare earths to cover 20% of the annual global demand. Gallium. Around the world. They are distributed on countless mineral deposits (predominantly in China) and mostly salvaged as a by-product of the extraction of other metals. Graphite. Nickel. which make them indispensable for the manufacture of high-tech goods. Canada: Cobalt Russia: Platinum metals USA: Beryllium Japan: Indium China: Antimony. and europium. 13 other raw materials are counted among the rare earths. Next to neodymium. mobiles. or capacitors – nothing works without rare metals such as gallium. catalysts. 66 35 India 2. indium. strong magnets.Industry Journal | 02 | 2011 | Markets 41 Raw materials The global economy is running at full steam and demands fuel. Beryllium. Wolfram. On the one hand in form of energy. But suitable mining measures are lacking.
42 Industry Journal | 02 | 2011 | People To watch .
Industry Journal | 02 | 2011 | People To watch 43 People to watch: Jigar Shah “More than half of all CO2 emissions could be cut” Jigar Shah is CEO of the U. who was born in India. and Brazilian cows. foundation Carbon War Room. Shah. The British billionaire Sir Richard Branson founded the organization that fights for the drastic reduction of CO2 emissions all over the world. talks with Industry Journal about financing models for green technologies. . the failure of the market economy.S.
this is not always true. We bring together various experts as well – to deal with global warming. former solar entrepreneur and CEO of Carbon War Room in his office in Washington DC. Is it not quite often just a simple lack of money? That’s right. And the economic crisis has made financing very difficult. however. Why this analogy? What has global warming in common with a world war? It is as dangerous as World War I and II put together. let us talk about climate protection – even if your organization’s name implicates less peaceful topics. Today. We are thinking big in this endeavor and only take up projects that have the potential to avoid at least one gigaton of CO2 emissions. Mr. we try and answer this question in order to remove the reasons afterwards. more people die in natural disasters than in wars. All of us love low initial costs. But contrary to a military conflict. though. The devastating earthquake in Japan is only one piece of a huge pattern. Does the market economy fail where CO2 emissions are concerned? In several cases. But unfortunately. if potential customers can afford them. I really am of this opinion. Winston Churchill coined the term “War Room. But for many green projects one has to put down a lot of cash up front. You say that the use of energy-efficient technologies is already feasible today.” It was here he assembled military strategists as well as scientists. They do not know. . entrepreneurs. Shah. People notice that things like that are becoming increasingly frequent and threatening. But suppliers want payment for their technologies. One would think that the market will always choose the most cost-efficient option.44 Industry Journal | 02 | 2011 | People To watch Jigar Shah (36). we of Carbon War Room focus on positive and constructive ways of solving this problem. We are currently analyzing 25 sectors – from the field of energy to industry and all the way to forestry – and seek to find ways to reduce CO2 emissions. Why is it not happening? At the moment. All of them worked together to develop a strong military strategy. and bankers during World War II. Savings become apparent noticeably later – this process goes against intuition. Why do you think that you as a private organization can move something in a case where even massive efforts of politics failed? We calculated that 50 percent of today’s global CO2 emissions could already be saved cost-efficiently and with existing technologies.
The owners of buildings are just not prepared to pay for refurbishments. The value of many buildings has decreased since the financial crisis. Therefore. It is responsible for three percent of the global CO2 emissions. It is similar to the efficiency categorization of fridges. We are talking about a gigantic amount of investment – 1. we introduced an efficiency ranking for ships that made their consumption transparent for customers. . For a conventional loan financing following the usual calculation to be feasible.000 billion US dollars. What has the Carbon War Room de facto achieved until now? Our first great successes are in the area of shipping. He has invested all his occupational energies in the Carbon War Room ever since. In that time span. The person Jigar Shah (36) is CEO of the Carbon War Room. Are there other examples of success? We are only two years old. the market economy had failed – a non-profit organization such as the Carbon War Room was required to make a difference. for instance. because they were able to pass on 70 percent of fuel costs to their customers. Why should you succeed where even Fortune-500 businesses with large financial departments seem to fail. At the moment we are concerning ourselves with the energy efficiency of office buildings. for example.Industry Journal | 02 | 2011 | People To watch 45 This is the reason why some deals. which increases the difficulty of financing. for example. To fit in the autopilots in spite of that. But in reality. The Carbon War Room does not want to be a Think Tank but rather a Do Tank. and Accenture into the process. Therefore we analyze. With 60. the investment would have to lead to immediate savings of at least 15 percent of the amount invested. the savings did not amount to this. Many technologies that can lower the CO2 emissions of ships by 30 percent have already been developed in the 1970s and 1980s. In that case. where he founded the solar company Sun Edison in 2004. what can be done in those cases. He developed the business model of Sun Edison for a concept competition of Harvard Business School and won the first prize. an off-balance-sheet transaction would be required. namely in profitably employing green technologies? Take UPS. In addition to that. But ship owners did not introduce these technologies. a huge investment would be necessary. Two years ago. We adapt them for the construction industry at the moment. modern financing models are already in existence. Unfortunately. In these cases we can give support with our expertise. In this case. the engineer sold his business for 200 million US dollars. we integrated large consulting companies such as McKinsey. Cap Gemini. do not come to fruition. which cannot be shown in balance sheets in a standardized way. He was born in India and lives in the USA. who could not distinguish between efficient and less efficient ships until then.000 ships worldwide. It became the largest of its kind in the USA. The logistics company knows that it could fly more efficiently with autopilots in the cockpit. one successfully implemented initiative is really good. Great technologies are already available for this sector as well. savings of 30 percent are significant. For cases like that. which are really interesting for both partners. The crux of our work is the creative financing of projects. UPS is not an expert for this kind of project financing. To fit this technology into all planes. the borrowing costs and amortization rates are paid back over many years through kerosene savings. This transparency will lead to the assertion of efficient ships. even though the modernization of buildings would make financial sense in the long run.
attention goes where the best marketing is. Capital investors alongside Branson are. the main focus is on the energy efficiency of commercial buildings. Gregor Robertson. Models like this already exist and they achieve competitive returns for the financing banks. Toronto. founder of the South African telecommunication company Econet Wireless. rail traffic. and Mark Shuttleworth. mayors. which future technologies will yield the highest returns? You would think so. Washington DC. too. Copenhagen. Vancouver hosted the Olympic Winter Games in February 2010 and they were the first to host CO2-neutral Olympics. The Carbon War Room has a program for CO2 neutral cities. a free operating system based on Linux. This is the core idea of our philosophy: every approach to saving carbon dioxide has to be economically feasible. Chairman of the supervisory board is the former president of Puerto Rico. the Kreditanstalt für Wiederaufbau (KfW development bank). Don’t such investment companies know best. founder of the Virgin group. investment consultant Shelly Meyers of Palisades Management. even brand-new nuclear power stations are not cost-efficient in most countries. If countries such as China manage to build a safe nuclear power station in a cost-efficient way. Because according to scientific insights we need those volumes to remain below the global warming target of a maximum of two degrees Celsius.46 Industry Journal | 02 | 2011 | People To watch What do these models look like? It is pay-as-you-save financing that can be entered off-balance-sheet. The Carbon War Room identified 25 so-called “battles. The non-profit organization aims to reduce global CO2 emissions drastically. and Chicago are participating. who is renowned for his sustainability policies around the world. founder of the Orion Renewable Energy Group. forestry. The work of the Carbon War Room consists of three military-sounding sectors: “Intelligence and Reconnaissance” collects information and backgrounds. An overview of the Carbon War Room The Carbon War Room was founded in Washington DC in 2009. The tremendous changes we want to initiate cannot be asserted in any other way. You are interested in venture capital as well.” in each of which one gigaton of CO2 could be saved annually – more than two percent of the global emissions in the same time span. wouldn’t you? In reality. and industrial applications cannot be financed with them. Initiator of the Carbon War Room is the British billionaire Sir Richard Branson. We assess data to find possible CO2 reductions in the dimension of a gigaton. . One could say that venture capital follows the hype. We bring together local banks. In the course of “Battle Operations” the organization considers itself an operative driver of innovation. It has 20 employees and brings people like scientists. Vancouver. Boudewljn Poelman. These credits are repaid from energy savings. the money of venture capitalists piles up in a few mainstream sectors such as wind and solar power. On the other hand. Does nuclear power feature in your calculations for the possible CO2 reduction? No. and investors together to quickly implement green technologies. As opposed to other forms of a new energy infrastructure. What is the Carbon War Room’s general position as regards nuclear power? We do not select winners or losers as a general rule.). Now we want to give an incentive for cities to participate in a kind of competition to be the first to be truly green. Lithuanian entrepreneur Vladas Lasas (Skubios Sluntos Ltd. shipping. “Communications and Logistics” deals with new media to better spread the knowledge gained. Strive Maslylwa. New York City. for example. José María Figueres. thanks to waterpower and green building standards. and pension funds. Michael Haas. who founded the Ubuntu Project. Is this mainly about renewable energies? No. many lucrative innovations in aviation. What does it entail? We developed the Green Capital-Global Challenge from our conversations with the mayor of Vancouver. London. Until now. entrepreneurs. founder of the Dutch Postcode Lottery. Birmingham. We are still trying to find interested cities in Germany.
Doubling the amount of cattle normally means doubling the required space as well. The sector as such is flying relatively efficiently already. supporting the Carbon War Room financially. I made a business out of solar energy as a service. An admixture of 50 percent of fuel from renewable sources is held to be risk-free. Another topic is renewable fuel for planes. Mr. If planes could land in continuous descent. We want to make green technologies easier to use and to employ this principle in various sectors. But to implement it on all airports worldwide is a huge challenge.carbonwarroom. because it would be about a new generation of aviation control. Richard Branson. Branson is founder and CEO of the airline Virgin Atlantic. too. But cattle farming leads to a large amount of legal deforestation. Sun Edison makes buying solar power easier. We try and find ways to pay for the seed at the moment. founder of the Carbon War Room. Airlines have tested this principle successfully. How does this match your goals of CO2 reduction? Richard is one of our founding members. wants to take a tourist into space soon. The next big step would have systemic consequences. about 15 percent of kerosene could be saved on each flight. Brazil is the largest beef supplier to China. customers buy solar power for a fixed price for a couple of years. How big is the potential of agriculture? One of our approaches concerns Brazilian cattle farming. And this is my inspiration for the Carbon War Room.Industry Journal | 02 | 2011 | People To watch 47 Inventive not dogmatic – the Carbon War Room (www. which means without waiting loops as well. which are more efficient. And we protect the rain forest. How committed is the Carbon War Room in the aviation sector? That’s a difficult field. How do you employ your entrepreneurial experiences for the Carbon War Room? Sun Edison was an innovative business model. . At the moment. though. For most OECD countries. nuclear power is not a cost-efficient way to reduce their CO2 emissions. not a new technology. you come from the solar energy sector and sold your start-up Sun Edison for 200 million US dollars in 2009. and founded a Formula 1 racing team 2009. But there are new varieties of grass and cattle. Sun Edison finds investors and locations. Shah. We should easily convince Brazilian farmers: They will make more profit if their cows grow faster and need less grazing area. One cow needs one hectare of grazing area.com) creates attention with its external presentation as well. we are glad that a gigaton of CO2 has not been produced by other means of power generation. because every interruption of an approach costs a lot of fuel. But the manufacturers of those fuels cannot yet scale this. we are trying to find out how we can help. Each of them have their personal carbon footprint – nobody is perfect. It already is cost-efficient today.
offers of financial support. A broad awareness for the fact that energy-saving measures do pay off and are easy to implement is slow in building up. don’t squander Thousands of small and medium-sized enterprises in Germany literally pour their money down the drain – for avoidable energy costs. . and service providers whose offers pay off in next to no time.48 Industry Journal | 02 | 2011 | Management Save. And this despite the fact that there are competent consultants giving free advice.
so the plants are often dirty. municipalities. A decentralized distribution of the compressors would be better. . others care less about it – independent of the size of the company or its line of business.” Objectively. for example.500 employees. Germany. prevents lights constantly burning in a storage facility that is rarely frequented. as well as cooling and cooling water systems. which advises some 1. Compressed air becomes hot and the excess heat can be used for heating. “And due to missing reflectors. inTec advised the medium-sized business to use Simatic powerrate for WinCC. and avoided through the equalization of the start-up processes. cooling. such as pump systems and heat supply. and employees that are aware of these issues in lighting. By now.” Marx says.Industry Journal | 02 | 2011 | Management 49 When Gerd Marx visits businesses.000 companies and deals with nearly 20. The management wanted to meet the DIN EN 16001 standard for energy efficiency. he always makes the same experience: “The importance of energy efficiency depends mostly on the management”.” Nearly half the energy is lost in this way. and administrative bodies annually. an option for the process visualization system Simatic WinCC for the analysis and interpretation of energy consumption values. A simple motion detector.” Marx explains. “As a result it can happen that of the ten or twelve bar at the entry of the pressurized air network only six or seven bar reach the consumer.” Another big savings potential lies in the area of pressurized air.000 individual requests from companies. But it does not stop here: with the help of the energy measurement system consumption peaks will be recognized. too. Schneider Plastics Works Ltd. pressurized air. and heating. “Next to modern illuminants. which feeds a network of pipes that grows over the years. “For some managers this is a high-priority topic. sensors can contribute significantly to saving power. “The companies do not want to spend money on cleaning. Because there are high savings potentials everywhere – in the smallest businesses as well as in companies with thousands of employees. effective from 2013. more than 100 injection-molding machines produce plastics components for the automotive industry. this is hard to understand. The family business has an annual turnover of nearly 300 million Euros and more than 2. the light is not efficiently focused and directed to where it is needed. A lot of energy is wasted in other areas. an up-to-date energy management system. to implement systems for the recording of energy data and for the creation of energy management structures. Up to 70 percent of energy is wasted The potential is particularly high in lighting: up to 70 percent of the energy is wasted here.” Marx says. the energy adviser of the Energy Agency of North Rhine-Westphalia (Energieagentur Nordrhein-Westfalen) says. Energy experts esti- Economical injection-molding machines At Dr. Even though saving energy would be comparatively easy here. in the Bavarian Kronach. Sometimes another one is added next to it – but the problem remains: the machines have to push the pressurized air through long pipes. as early as possible. the cross-sectional technologies prove to be energy drains time and again: a lot could be saved through modern technologies. for example.” Outdated fluorescent tubes in combination with inefficient ballast add their part to wasting power. The power meters that were already installed were connected to the Programmable Logic Control (PLC) Simatic S7-300 to process the measuring values. to track energy flows. It is among the leading plastics processors for the automotive industry. In many cases. He has worked for 17 years for the publicly financed organization. A system for heat recovery can help saving. and asked inTec Industry Automation Ltd from Erlangen. And Marx has visited a lot of companies. one central compressor is used. In particular. “This means that the compressor’s pressure is turned up until enough arrives at the end. Simatic powerrate shows the measuring values and documents their progress. and there are always leakages.
energy efficiency is unfortunately only a side issue for them in many cases – as opposed to big businesses.” The government wants to lend a hand in this matter: the “special fund for energy efficiency in SMEs” is raised by the Federal Ministry of Economy and the Reconstruction Loan Company (KfW) and subsidizes energy efficiency consulting with up to 80 percent of its cost. It verifies the experiences of energy advisor Marx: “In SMEs.” Seefeldt says. “Due to their multitude of tasks. But are they really doing this? “Especially in small and medium-sized companies (SMEs) there are still a lot of obstacles. a leading scientific consulting company for economy and governments.” Seefeldt knows. Last year. German businesses that do not systematically address energy efficiency issues will suffer from tax disadvantages in future: companies in the production sector get a discount of 40 percent on taxes on power and heating costs at the moment. because entrepreneurs would rather use reserve funds for investments than to borrow. which have staff positions for it.de) addresses private consumers and businesses committed to the efficient use . Seefeldt researched the role and importance of energy efficiency in SMEs within a study. Only a simple application is required. businesses would be well advised to rethink their energy management. “Approaching a bank is unpopular. This means that learning about the legislative framework and savings possibilities as well as acting accordingly will become indispensable for most businesses for economical reasons. the schemes often fail in practice due to financing issues. Medium-sized companies lag behind Therefore. Its “initiative for energy efficiency” (www. in ventilation another 25 percent. With the Sentron Powermanager software energy consumption and measurands can be analyzed (r. too. Award for energy efficiency measures Since 2005.). From 2013 onwards.50 Industry Journal | 02 | 2011 | Management Energy management systems create transparency and reduce energy costs (above).initiativeenergieeffizienz. a lot of functions are customized for the CEO. mate the savings potential in this area to be an average 30 percent. “SMEs do not like to use their own capital for processes which are not connected to their core business.” reports Friedrich Seefeldt of Prognos AG. this privilege will probably be connected to the condition that an energy management system according to the DIN 16001 standard is implemented. Additionally. SMEs are supported with loans at reduced rates of interest for investments leading to savings of at least 20 percent in the case of replacement investments or 15 percent in the case of new investments.” Financing is an obstacle But even if there is the will to investment in energy efficiency measures. they have been supported by the German energy agency (dena) in this matter.
On the other it is a large and costly energy consumer.” Steffen Joest. divisional director of dena. but bestow the Energy Efficiency Award every year as well. They could be integrated into the existing communication structure of the company. “The winners receive a cash prize of 30. This means that they can focus on what they do best and what is most important to them: their core business. Accordingly. Because a significant increase in the power consumption of individual machines can be an indicator for mechanical wear or leakages. 12 consumption measuring devices of the Sentron PAC3200 type were installed. such as a heating system. causing a high peak in consumption. the company has 700 employees and produces some 1. it can take up to ten years until the investment pays off.” Seefeldt argues. “We do not only provide information and support. Another bonus: Simatic powerrate for WinCC provides information regarding necessary maintenance of the machines. KG produces Maultaschen in the Swabian Crailsheim. Another advantage: “The companies do not have to concern themselves with the complex topic of energy any more. Siemens solution partner Heitec AG recommended the use of Simatic powerrate for WinCC in order to achieve transparency. For power measurement. On the one hand it is necessary for ensuring a high product quality. as winners are lauded publicly.000 Euros altogether.5 million pieces a day. the experts realized that at the beginning of a shift a couple of cooling compressors started at the same time. Today. Bürger GmbH & Co. the settings were changed – and the overall consumption reduced by over ten percent. In the production of the stuffed pasta. With the help of the sensors. the consumption profile that has now become constant will help the food producer to get more favorable purchase prices in future negotiations with their energy provider. of power. Bürger’s most important goal was to lower the energy costs of the plant without impairing the process quality. Only if entire energy supply systems. Apart from that. But in many cases the opposite can be proven easily: “A lot of measures already pay off after two to four years. Because according to prevailing stereotypes. investments in energy efficiency cost more than they help save in a reasonable time. have to be replaced.Industry Journal | 02 | 2011 | Management 51 Efficient cooling systems Since some 80 years. or parts of it. .” Even more interesting for businesses is the PR aspect. optimized cooling technology is of central importance. on behalf of their customers – even the procurement of energy is included. Because there is an increasing number of energy service providers on the market that finance and even operate the entire energy system. One of the biggest challenges remaining for energy advisers is to do away with old prejudices.” the expert Seefeldt says. But SMEs do not even have to make these capitalintensive investments themselves anymore and thereby strain their balance. reports.
and show the return on investment that can be expected. “First of all. “Most of them have only one electricity meter at the central point of infeed. The result is a value that shows the position of the company in comparison to other locations. “This is about the current state.” Lang reports. Siemens’ experts conduct a computer-assisted interview with their customers. The company provides a comprehensive product range for enhanced energy efficiency. Even Lang cannot make a general statement on how long the entire process.52 Industry Journal | 02 | 2011 | Management Higher efficiency through integration Identify. It deals with 22 topics in ten categories.” How elaborate the energy optimization really becomes depends on the individual case: in discrete production plants. the optimization is way more complicated. too. implement – this is how Siemens’ holistic approach can be summarized. we can start a targeted search for energy-saving measures. or sectors. It spans from measures that can be implemented quickly and cost-effectively to the installation of a heat-recovery system. because the sustainability of the energy efficiency measures can be controlled in the best way with it. to separate measuring devices (Sentron PAC). whereas the analysis by two experts can take five to ten days onsite plus additional work afterwards.” To achieve this. too. In addition to consultancy. evaluate. the energy management option powerrate. head of professional services energy management at Siemens. First indications for energy-saving potentials result from it. information that is missing in most companies.” And the feasibility study can take a couple of months. It spans from components on the automation level. takes: “The first stage can be concluded in one day in most cases.Data). and first thoughts on how they can be met.” explains Engelbert Lang. Siemens’ experts expand the analysis. we have to create awareness for this topic. In most cases the experts recommend the introduction of a technical energy management system. and gas quite often leads to sudden insights: “Customers suddenly realize that the power consumption on production-free weekends is disproportionally high when compared to times of production.” The detailed analysis that includes all energy media such as power. countries. which is based on the communication protocol PROFINET. Siemens offers project management and implementation. heat. for instance in the chemical industry. In continuous processes. Energy-saving potentials in small and medium-sized businesses lighting pressurized air pump systems cooling and cooling water systems heat supply ventilation systems up to 70% up to 50% up to 30% up to 30% up to 30% up to 25% Source: dena . “How much power is used by the individual parts of the plant is unknown. for example in the automotive industry. such as frequency converters and soft starters that already provide energy data. and all the way to the visualization (Simatic WinCC) and process control system Simatic PCS 7 as well as to the management level (B. The result is a detailed implementation concept. “We assess every measure according to savings potential and investment needed. Siemens has set up a special team focusing on energy optimization in the process industry.” says Lang. which is efficient in the midand long-term. The new energy efficiency profile PROFIenergy. The consultants now have enough information to initiate the third stage of the energy optimization program: “As soon as we know where and when most of the energy is used. the savings targets.” Lang says. It is used by the company to support its customers in energy optimization – from initial consulting to analysis of details and feasibility studies and all the way to implementation. In the next step. a lot can be gained from switching off machines – on weekends as well as during breaks and disturbances. For cases like this. supports the selective shutdown of the plants. Transparency regarding the individual consumers as well as the flows of energy has to be obtained. from the first analysis to the end of the measures.
This emphasizes the importance of switching machines and equipment to sleep mode when they are not in use and of optimizing a factory’s energy consumption through production control – without affecting the production. and innovative storage technologies can make this work. Intelligent software.Industry Journal | 02 | 2011 | Management 53 The system consultants Electric power is bound to become considerably more expensive and may not always be available in unlimited quantities. microgrids as part of energy management. .
and compressors over time can increase the efficiency of plants.” reports Klasen. They were able to measure the typical power consumption of individual parts of the plant as well as the power consumption during downtimes and in the different operational phases of a plant.” says Klasen. High energy consumption during idle periods And this consumption is significant: “One of the plants that we examined consumed an average of 34 kilowatts of power during production. such as short waiting times on equipment or technical problems. presses. machines. Therefore. Germany. saving costs and reducing the CO2 footprint. According to Klasen their duration may also vary considerably –short breaks of a few tens of seconds up to five minutes account for about one-third. This is more than an embarrassing knowledge gap: only they who know the energy consumption of pumps. he examined the power consumption of machines in the automotive industry – in October of last year. AIT staff. “During our long-term investigations. it is hardly known what parts of the plant consume how much energy. 15 min) 12 10 8 6 4 2 0 Weekend Weekend Energy consumption during non-production periods to date: approx. while others occur in an unpredictable manner. . This is why Professor Frithjof Klasen from the Institute for Automation & Industrial IT (AIT) of the University of Applied Sciences of Cologne. 60 percent of energy consumption during production. “Each measuring cycle took seven days. “This load during standstill is equivalent to the average consumption of about 50 households.” Such interruptions can have a variety of causes: some are scheduled (for example on a weekend). Unbelievable but true: Even in modern industrial plants and factories.54 Industry Journal | 02 | 2011 | Management Potential energy savings with PROFIenergy Load profile (kWh values. and we captured all values once per second. Germany. and no less than 17 kilowatts during idle periods – this means 50 percent for doing nothing. and the associated electrical loads is largely unknown. we took measurements at different levels – from the main feed to the plants to individual consumers. It is only obvious how many kilowatt-hours are delivered by the electric utility – but details about how this total amount is distributed among individual production lines.” This combination of a long measuring period and short measuring intervals provided the experts from Cologne with detailed insights of the energy flows. better information about the usage of valuable energy is indispensable from an economic and ecological point of view. Energy savings of up to 80 percent with PROFIenergy. in Hanover. wants to make the industrial power consumption more transparent: On behalf of the PROFIBUS usersʼ organization (PNO). showed up in plants of Daimler in Sindelfingen and Volkswagen Nutzfahrzeuge (Volkswagen utility vehicles). equipped with measuring equipment for power consumption and for the analysis of production control data.
The result is “PROFIenergy” – an energy efficiency profile that builds on the popular Profinet communication protocol and in which plant control. “In a typical production line.” Another reason is that many of today’s industrial plants are not even designed for this kind of standby operation. “In a factory. “Many plants must be “emptied” first before they can be switched off – otherwise you get problems during the next start-up due to products that were left in the machines after switch-off. . These are smaller versions of the intelligent power grids of the future (Smart Grids). “Since a great number of machines are involved in the manufacture of a vehicle.000 Euros can be achieved. so that the operators prefer to keep the machines running even during idle periods. and expert Klasen estimates that they will have a significant market share in about five years: “The automotive manufacturers already specify PROFIenergy in their tenders for new machines and plants. A software program in the PROFIenergy components will then decide which components can be switched off or switched to an energy-saving mode. PROFIenergy helps energy savings For this reason. This is based on the idea that the controller does not need to know anything about the inner workings of the machines – the manufacturer knows much more about them. and equipment from different manu- facturers can be interconnected easily and without major extra costs thanks to the common standard.” according to Klasen. the energy costs can be reduced by a mid-range six-figure amount per year. so that the equipment can be switched off and on without a problem.” says Klasen about the issue. every notebook PC today has a standby mode that helps increase battery life. this can be very complex because the interaction of numerous components must be taken into consideration. and electrical consumers interact. And why are idle plants not simply switched off in order to conserve expensive electric power during the breaks? After all. the plant controller will send an instruction to all connected devices via the Profinet network (“30-minute lunch break!”). AIDA (the automation initiative of German automotive manufacturers) and the PROFIBUS users’ organization began to develop a standard for improved power management in mid-2008. the new standard saves about 70 percent of the energy during standstills and can thus reduce the overall power consumption by about onethird. communication network.” calculates Klasen.Industry Journal | 02 | 2011 | Management 55 while longer standstills of at least 30 minutes accounted for about 25 percent. in which energy producers and consumers as well as energy storage devices and networks are interconnected to achieve an intelligent balance of supply and demand. “Switching off via the main circuit-breaker is still state of the art. The first machines with PROFIenergy have been available since 2010.” While some companies have already implemented isolated solutions to be able to switch their machines to standby during standstills. this requires tailored software that is expensive and requires a high level of maintenance. for example. some plants of the automotive industry still require half the energy used for normal operation at standstill.” From Smart Grid to microgrid The individual switch-off of machines and components is a major prerequisite to turn production plants into microgrids. This eliminates the need for expensive isolated solutions. annual savings of about 7. Shortly before the lunch break. Today. “There are often problems during restart. It does not even matter if the idle time is just a few minutes or several days long – the machine “knows” which state it should assume in each case. And it is the manufacturer that programs the standby software.” And for good reason: According to the measurements of the efficiency experts from Cologne.
This is already done today in some cases in order to avoid load peaks.56 Industry Journal | 02 | 2011 | Management Storage chambers for electric power They are an indispensable element of our future energy supply from the Smart Grid: power storage systems.” This will also include that parts of a plant are switched off when power gets too expensive. However. this idea can also be adopted for production plants – and rising energy costs will make sure that this will be done. Vice versa. temporarily switch off the ventilation and air-conditioning. There is only one type of storage today that is available for large amounts: pumped-storage plants. When the demand increases again. But who decides when which machine can go on a break without having the production process suffer? This would be the responsibility of the superordinate level (Manufacturing Ex- . the excess power is temporarily stored and fed back into the grid as required. but in the future the companies will need to adjust their production to the availability of energy as well. This presents a complex optimization challenge to the automation experts: on the one hand. are intelligent power meters in private households that do not only provide the customers with detailed information on their power consumption but can also selectively switch individual electric loads on and off. By 2012. companies will have to implement intelligent power management. “Today. the plants are optimized for maximum productivity. The gas can be stored in underground caverns and used to drive turbines as required (hydrogen generation and back-conversion into electricity with an overall efficiency of about 40 percent). This means that when. For example.” says Lang.” Even parts of the production can go on a break if intermediate products from a warehouse are not available. only a few suitable sites exist. Alternatively. excess power is used to pump water from a lower into a higher basin. The latter is actively researched in Erlangen. Basically. The technology has been proven for many decades and has an efficiency of about 80 percent. they can run the washing machine at night when the power demand is low. with the expansion of renewable energy. while supply and demand must always be precisely balanced on the power grid. and the cost of building their own pumped-storage plant is simply prohibitive for companies. energy costs need to be minimized. However. a prerequisite for such scenarios is that automation technology and power supply will converge in the future. driving a generator. the water is allowed to flow downwards. the yield from sources like wind and solar power varies widely. a component of the Smart Grid. Director of Professional Services Energy Management in the Industry Sector of Siemens. “Some savings measures are relatively simple – whenever the power is expensive. it is possible to generate methane instead and feed it into the gas network. and on the other hand there must be absolutely no negative effect on production. the wind is blowing particularly strongly and the wind farms deliver too much electricity. where the company develops electrolyzers that produce hydrogen from electricity. Siemens will build a demonstra- Smart meters. “In the future. After all.” predicts Engelbert Lang. the system can. in other words when the wind is not blowing. electric loads can be removed from the grid when there is a high demand for electrical power – a refrigerator can easily be switched off for a few hours without spoiling its contents. or use the hydrogen as a fuel or basic material for the chemical energy. “After all. Here. Intelligent software saves energy PROFIenergy is a first step in this direction because it allows for the first time parts of a plant to be switched off and on again over the network. for example. Other methods are still in the development state – such as pressurized air or hydrogen storage systems. for example. supply and prices will fluctuate considerably more than today – which makes an economically reasonable energy mix indispensable.
A factor of ten and more is possible. products are already available that make energy flows transparent and enable effective power management. “Powerrate” is an add-on for the Simatic automation system from Siemens. Intelligent factory control will also include permanent communications with the power utility. Martin Tackenberg from Siemens Corporate Technology. in which two liquid electrolytes in tanks are used to store the energy. Christian Urbanke. electricity will not flow just in “one direction” in the future: “Many companies have emergency power generators that can be regionally combined to form virtual power plants of some tens of megawatts of power.” With this model. This can already be used to optimize the contracts with the energy suppliers – the future of energy-efficient production has already begun. depending on the battery type and load profile. according to Tackenberg. . ecution System. the cost of this storage capacity should not exceed 100 Euros per kilowatt-hour. “However. and fill certain warehouses with a stock of intermediate products. In addition. which determines the energy consumption of machines or entire parts of plants and permits “load management by switch-off.Industry Journal | 02 | 2011 | Management 57 tion unit that fits in a container and is able to convert a maximum of 300 kilowatts of excess electric power into hydrogen. MES) that knows the shift plans and break times and takes the interdependencies within the entire production line. However.” says Dr. “This kind of small intermediate storage unit can make perfect sense at the factory level since the price of electricity may vary widely in the future. and Environment of Siemens Corporate Technology. and a first version of such an “Operations Manager” is already running in the lab. more suitable for companies as intermediate storage are batteries (efficiency: greater than 90 percent). can.000 Euros per kilowatt-hour of storage capacity. for example. so that the companies will temporarily change from power consumers to power producers.and downstream pretreatment processes like etching or cutting. Static grid operation has to become a flexible infrastructure enabling fast communication between producer and consumer. the costs are between 200 and 1. such as lithium ion or redox flow batteries.” says the expert.” Currently. “These can be powered up in case of high demand. that will in turn send the “sleep” or “wake up” commands to machines and components. special intermediaries would remotely control these virtual power plants and supply the electricity to the power utilities. head of Electronics. Is all this only a dream of the future? Not quite: in addition to the PROFIenergy energy saving standard. at least in the case of difficult grid conditions.” Siemens is working intensively on the development of such software solutions. It sends its commands to the individual plant controllers in the factory buildings. initiate independent up. “When the energy is available at a low price. such as SAP R/3. Energy. “The control system compares the current electricity offering with the production planning. The challenge for the developers consists of developing algorithms that consider energy price and demand profiles (for example for cold) as well as the necessary energy usage and the possibility for intermediate storage.” explains Dr.” The B.DATA power management system from Siemens provides a companywide overview of energy costs and permits direct integration with the enterprise software.
the management made a hard decision and went for a highly complicated. The procurement of spare parts would have taken months. faster repair instead – with uncertain outcome. Taking the risk paid off. Therefore.58 Industry Journal | 02 | 2011 | Management What to do in case of fire It is a vision that frightens every entrepreneur: a fire paralyzes the entire business. . For a Chinese steel manufacturer the nightmare became reality.
Specialists from the steel manufacturer and drive experts of SFAE develop a plan for the repair in close cooperation. spare parts business. What to do? An emergency plan does not exist – too extraordinary and unlikely the case that now occurred. Each day of production loss costs the steelworker millions. not only considerable costs would be contracted in case of unsuccessful repair. It is vital to anticipate as many contingencies as possible and to include them in the concept. Moreover. (SFAE) is headquartered in Beijing. benchmarks. A crisis-management team is formed. A fast decision has to be made. a fire breaks out in the control center of furnace No. The experts analyze the damages between mountains of charred cables and cabinets. On May 8. maintenance. SFAE receives an order to repair the plant within a single month. After a few days it is definite: The repair could be feasible.Industry Journal | 02 | 2011 | Management 59 Fire. but trial runs and approvals for frictionless normal operation as well. The management decides to risk a few days of uncertainty and to ask their long-standing service partner Siemens Factory Automation Engineering (SFAE) for advice and support. Success through service Siemens Factory Automation Engineering Ltd. What tools and test devices could be necessary? Could technical units and maintenance devices such as ultrasonic cleaning devices and network analysis units be needed? Everything that could possibly be required has to be available immediately – otherwise there is no way to keep to the schedule. there are not enough materials and spare parts available on-site for repair. examples. The risk of failure is high – from the technical as well as the financial point of view. This increases the complexity of repairs. It is a catastrophe for the company. the company has a really big problem. Because nothing goes without the converters and the furnace has to be taken out of operation. The management decides to take the risk – the financial losses of many months of production standstill would be too high. 2010. It was the first operating company that Siemens had invested in China's automation field and ranks among the 50 best businesses of China’s electrical industry (2010). A hazardous decision The responsible people long for blueprints. The services of SFAE include. The risk of having to order the spare parts after all and to lose several valuable weeks is even higher.000 customers. One would be back at the start. This is more than ambitious. Because in the worst case. Nearly 120 frequency converters are ablaze. low-voltage cabinet manufacturer and automation engineering solution provider. Lack of materials and spare parts The matter is made even more difficult by the fact that not only the fire has caused heaviest damages: well-meaning employees have cut masses of cables to remove charred parts of the plant. 2 of a Chinese steel manufacturer – only one month after commissioning. and experiences to help them make the right decision. Its task: Find out if and how the damaged parts can be repaired in short time instead of waiting for months for replacements. This is dramatic in itself. because in those four weeks not only the repairs have to be carried out. A small task force arrives on the spot in a matter of hours. best service” and set up 23 regional offices. but a risk remains. Never before has a repair like this been carried out on so complex a scale. for example. All of a sudden. Nobody would be envied for this task. providing professional products and services to over 4. But there has never been a comparable incident in the whole world. . SFAE is the professional Siemens automation and drives service center. But the fact that procuring replacements for the damaged and destroyed frequency converters will take four months is even worse. and repairs. SFAE has always held to the principle of “Customer first. in-house and field services.
1. and connected anew. employees cut several cables. the status of the project recorded. they take care of tasks such as the disposal of destroyed parts and materials. one week ahead of schedule. Only authorized persons may enter the damage area from now on. The multitude of employees. First of all. Bit by bit. Undamaged units have to serve as models. On July 4. Difficult conditions Work is extremely hard: the plant is full of dust and pollutants. The fire in the control center of furnace No. This requires a lot of mutual trust. ten hours at a time. and competencies has to be coordinated quickly and efficiently. The fire has left only the frame of some converters. the division of working areas. solutions developed. 2 has heavily damaged some 120 frequency converters. And finally there is success where many did not believe in it any more. Everybody works from morning until ten at night with only one short break for lunch. the storage of materials and tools. In normal circumstances. To repair the 120 damaged or destroyed frequency converters. demanding the permanent wearing of protective masks – six. but there is no time now. it is cleaned. teams.60 Industry Journal | 02 | 2011 | Management Between charred cables and cabinets a small task force from Siemens Service Factory Automation Engineering analyzes the damages. either reassembled or exchanged. Subsequent meetings in the apartments last until the small hours: difficulties have to be discussed. 120 frequency converters repaired – and losses of millions avoided. costs and contract details have to be negotiated in a fair process between equals. Everything has to be planned and coordinated carefully. In the damage area. plans are drawn weeks in advance for processes like this. cable by cable. the plant is working smoothly again. the team shuts off the damaged areas and mounts guards. Responsibilities have to be assigned and a powerful as well as efficiently cooperating unit has to be formed. As it is nearly impossible to estimate the repair effort from the beginning. Good cooperation is vital Everybody involved realizes quickly that the form of cooperation determines the success of the venture. and the next day’s work prepared. . but about money as well. In order to dispose of charred plant parts. eight. 2010. This is not only about technology. Following a structured and clear plan. not only electronics experts are required. especially in an emergency situation like this is. nearly every piece has to be taken to parts with meticulous care. as well as the registration and procurement of spare parts.600 parts were exchanged. In only three weeks. There is no room for solo runs. This is only possible with a project team that works independently.
7 Germany –7.4 Argentina –4. its economical importance grows due to increasing power prices – especially for sectors with high power demand. Liquid fuels 70. World Energy Projections plus 2009. building technologies.000 trillion BTUs (British Thermal Unit) of fuel in 2030.1 Canada –10. information technology and IT services. 38 2004 2010 2020 2030 2004 2010 2020 2030 Oil (barrel) Coal (ton) Gas (BTU) Source: Hamburgisches WeltWirtschaftsinstitut. According to estimates of the Deutsche Energieagentur (German Energy Agency). Australia –8. PricewaterhouseCoopers CO2 emissions have to be reduced to meet the global warming target of a maximum 2 °C by 2050. turnovers.3 Japan –3. Siemens AG. PricewaterhouseCoopers calculated how much the G20 states would have to cut compared to their economic performance. “The world will now have to reduce its CO2 emissions by 3. only Spain and Russia exceeded their targets. engineering and plant construction.9 EU –5.000 Natural gas 63.000 48.1 Source: Low Carbon Economy Index 2010. Global power consumption 2030 Prices for fossil sources of energy explode Price trend 2004–2030 (nominal.4 South Korea –13.000 60.1 India –3.000 43.000 175.000 42. Transport and traffic.000 3.000 26.” the study says.8 Italy –9. in US dollars) 120 75 50 35 58 44 77 Asia: 46% America: 25% 4 5 2010 7 2020 11 2030 Western Europe: 13% Eastern Europe/CIS states: 8% Africa/Near and Middle East 8% Source: Energy efficiency and environment protection. and the energy industry are among the sectors obtaining highest Source: McKinsey & Co.0 Brazil –3.5 France –4.3 Saudi Arabia –37. industries with high power demand.2 South Africa –10. this is the largest part. From 2000 to 2009. International Energy Annual 2006. Demand increases by 28% by 2030 Consumption (in trillion BTU) The global industry alone will use 246.0 USA –6.8 percent each year to be able to meet the climate protection targets.2 Turkey –3.9 FACTS & FIGURES . At the same time.Industry Journal | 02 | 2011 | Management 61 Energy efficiency Energy efficiency accounts for 54 percent of the global climate protection measures.7 China –17.000 2004 Coal Power Renewable Energies Total 246. in %) 0 Spain +2.9 Great Britain –6.6 Russia +1. Sources: Siemens AG: EIA. Success factor energy efficiency Companies for which energy and energy efficiency are of strategic importance generated a global 36 trillion Euros in 2008.7 Indonesia –5.000 60. This is about 40 percent of the entire turnover.000 2006 2030 2006 2030 2006 2030 2006 2030 2006 2030 2006 2030 Spain and Russia are CO2-savings champions Deviation from the CO2 reduction target (2009.000 4.3 Mexico –17.
For a long time. And Kurzweil’s fame is on the rise. Ray Kurzweil’s current vision is about artificial intelligence.62 Industry Journal | 02 | 2011 | People to watch People to watch: Raymond Kurzweil A man’s dream If he did not hold 19 honorary doctorates. . But the latest innovations support his theses that span from autopilot cars to learning computers and all the way to voice-operated industrial robots. About a world in which man and machine become one. did not bring spectacular inventions to market for decades. and was not frequently right with his apparently insane predictions – we would not take him seriously. had not been honored as an inventor by President Clinton. even ardent believers in progress took this for science fiction.
It implies that the number of transistors on a chip will double once every two years. they are real. He is surrounded by admirers at a reception in the Time & Life Building. 15 years afterwards. when he was only 17 years old. More than 50 percent of our body will be constituted from non-biological particles by then. successful inventions Even if his vision of immortality sounds quite daring – the man undeniably is a genius of technology. or get one implanted to raise their intellectual capabilities. A survey conducted by the renowned TIME magazine ranked him 31 among the world’s 100 most influential people. microstructure technology. two neat Wall Street bankers with briefcases. Maybe he really does remember. They will locate the signs of wear and repair them. This will be the threshold of a new era – Singularity. he is pulling together and advancing the developments of sectors such as the decoding of genomes. So it is hardly a miracle that the following of Kurzweil is constantly increasing. In 1999. Kurzweil’s soft voice preaches radical thoughts. nanotechnology. salt-grain-small endoscopic cameras were inconceivable just a few years ago. the information scientist has explained how our lives will be changed by artificial intelligence. he wrote a computer program for classical music. so his prediction. Brains on hard drives Standing on the stage of the Time & Life Building. If somebody other than Kurzweil predicted something of the like. According to Kurzweil. The scientific community regards him as a global instance. and the electronic keyboard “Kurzweil 250”.” He is referring to Moore’s law. a reading device for blind people (first customer: Stevie Wonder). The small man in front of him smiles and nods: is everything all right at home? Then he hurries to the stage. Daring theses. . former President Bill Clinton awarded the National Medal of Technology. In predicting when a chess computer would defeat a human champion. New York. Kurzweil is not surprised at all. His marketing has constantly improved over the years. Three years later he was admitted to the National Inventors Hall of Fame. He takes it for granted that progress is exponential and not linear. and three for social networks. the 63-year-old had already achieved considerable reputation in the 1960s. and artificial intelligence. which is named after Gordon Moore. I just missed by a few years sometimes. Tiniest robots will travel through our bodies in a couple of years. Disposable. Today’s super-fast progress in bio. to him. Only recently.” he confidently states. Kurzweil is anything but a nutcase. though. we will reach Singularity: Human existence as we take it for granted today will not exist anymore. just around the corner from Rockefeller Center. A veritable triumph for the New York-born man: “I have never been really wrong. people have started listening in earnest to his seemingly surreal theses. “It took 400 years for the book to become a mass product. man will turn into cyborg about the year 2030. They can upload their brains on a hard drive. hardly anybody would take the theses seriously. he was wrong by only one single year (1997 instead of 1998).Industry Journal | 02 | 2011 | People to watch 63 Raymond Kurzweil has made it. he made prognoses. Even in those days. For more than 20 years. They would be dis- missed as the science fiction fantasies of a seriously disturbed mind. the founder of Intel.and nanotechnology seems to confirm a lot of his assumptions. seven for the cell phone. Later on he invented – amongst others – the flatbed scanner. the highest US award for inventors. until humanity has reached immortality through merging with hyper-intelligent robots and people do not have to rely on their bodies anymore. Man will merge with computers and become immortal. such as in the 1980s the global linking of computers. There could hardly be more diversity: a colored man in a kaftan. Today. 50 years for the telephone. As an inventor. In 1965. do you remember me?” the latter asks shyly. He holds 19 honorary doctorates and has friends with considerable resources in the financial and investment sector. At the moment. “Ray. and a nanotechnologist from California with his wife. Definitely. Life expectancy will increase rapidly.
Director of the Microsoft Medical Media Lab. One thing is certain: Even in the USA. They react faster. Last year. At the University of Southern California in Los Angeles. researchers use a machine called “Simon” for practicing simple movements of the body with autistic children. accidents will happen less frequently and street capacity will double. In partnership with the phy- . The system is not perfect yet – but it is already obvious that the robots will be better drivers than their human counterparts. and most scientists did not acknowledge the theses. Kurzweil founded Singularity University. IBM’s supercomputer “Watson” made it into the headlines around the world when it showed itself to be vastly superior to human champions on the quiz show “Jeopardy”. and muscles that could revolutionize transplantation medicine in a couple of years. The first Toyota Prius prototypes are already cruising the highways around Silicon Valley on their test drives. but the robots are constantly widening their scope through learning algorithms. humanoid robots teaching children. In 2008. Their colleagues in San Diego use a robot that looks like a small Martian for teaching simple vocabulary. It throws together young enthusiasts and wellestablished masterminds such as Michael Gillam. Media reactions were cautions. Scientists in North Carolina grow artificial bladders. The reactions are programmed. and do not get tired. It hosts an annual “Singularity Summit”. A one-hour talk by the guru costs 50. on the other hand. If the technology is used comprehensively. The company Hanson Robotics.” It is not only a movement– it is a business as well. a nation famous for its belief in technology. But reality seems to confirm Kurzweil’s predictions. its courses are 40 times overbooked. though. A university as an utopist’s Davos Another multiplier of Kurzweil’s ideas is the Singularity Institute for Artificial Intelligence in San Francisco. The era in which humans have had to learn the language of computers to operate them is nearing its end. The artificial teachers have one decisive advantage: they never get impatient. Google. Cars steered by machines. By now. Kurzweil is certainly not what one could call modest. produces robots that look like humans. and all the way to encountering robots. kidneys. voice-operated industrial computers (see box). According to “Wired”. which is said to be the Davos of utopists. California. as the cars need less safety distance. is working on software that will automatically steer a car. It is situated in the Research Center of NASA in Moffett Field. the Fraunhofer Institut für Zuverlässigkeit und Mikrointegration (Fraunhofer institute for reliability and microintegration) in Berlin presented an endoscopic camera. the merging of man and machine is considered tough stuff. Progress in medical technology is baffling as well. too – as teachers. have 360-degree panorama vision. the first of them could revolutionize our everyday life. Only a couple of years from now.64 Industry Journal | 02 | 2011 | People to watch The future has begun The rapid advancement of information technology makes developments possible that appeared to be unthinkable or unreachable only a short while ago. Robots could soon reach a new level in interhuman affairs. “Kurzweil transformed Singularity from a speculation to a social movement. The course program spans from life-prolonging diets to genetic testing. This will drastically change and speed up many production processes as well.000 US dollars. Researchers of the renowned Carnegie Mellon University invented the “NeverEnding Language Learning” system. Researchers in Israel are testing a chip that is meant to compensate the loss of brain functions of Parkinson’s patients. for instance. it became a bestseller. the US magazine for intellectuals. They converse and can even show emotions. It is as small as a grain of salt and so inexpensive that it can be disposed of after a single use. And just recently. When Kurzweil published his 650page work “The Singularity Is Near” in 2005. This software is learning all the time and through this constantly improves its communication skills.
“In virtual reality. or so he says – using DNA from the grave and his own stored memories. He lives in one of Boston’s tranquil suburbs.” says Kurzweil. Considering this. In 2045. Berkeley. phosphatidylcholine. the “Anti-Aging MultiPack” containing capsules of the allegedly life-prolonging substances resveratrol.” Huebner says.Industry Journal | 02 | 2011 | People to watch 65 Just like the private life of many intellectual eccentrics. At the same time this takes away the fear of superior and hostile machines. His goal is to become old enough to achieve endless life through technology. “Artificial Intelligence is nice. At that time. rich. he created a three-dimensional virtual alter ego for himself. One does not have to be a visionary to prophesy that the popularity of Kurzweil’s utopias will continue to increase. as Kurzweil believes. however.” Criticism of the scientific approach Somebody as radical. On his biological age at this point he does not comment. when –according to his prediction – Singularity begins. Kurzweil. the „avatar“ was unknown to most people. To him. They carry the promise of immortality – a dream as old as humankind. He has been married for 35 years to the psychologist Sonya Kurzweil. . accuses Kurzweil of methodical weakness: he did not sufficiently substantiate his famous predictions. everybody can be whatever they want and even take on the role of their own partner. On the wall behind his desk is an oil painting of his father. An avatar called Ramona. The headquarters of his company is a solid concrete building. Voice and movement came from the inventor himself – in real time. The philosopher John Searle of University of California. had an avatar called Ramona as his alter ego. In 2001. are convinced that the speed of innovation will not increase. his children Ethan and Amy studied at conservative Stanford University. “My biological age is 20 years below my real one.” is Kurzweil’s message. There is. this is a taste of what will be possible in the Singular world: adopting various identities and the practically limitless living of fantasies. but slow down considerably: “Progress in this century will certainly not match the one of the hundred past. He says: “Progress is a part of our civilization. and famous always has critics that have to be taken seriously. the visionary will be 97 – in reality. it is quite well that Kurzweil can always fall back on the claim that most of his prognoses refer to dates in the far future. sician Terry Grossman he founded a company selling a broad range of expensive wellness products on a Website. this was unbelievable. It does complement and not replace us. Kurzweil’s is a model of stability. for example. such as the physicist Jonathan Huebner. Is that his way of coping with trauma? One thing is sure: Death is something the 63-year-old man finds hard to accept. Virtuality changes identities Ten years ago.” he says – although he does not really look as if he were 43. and ubiquinol. Others. a concert pianist who died aged 58. Kurzweil himself takes a vast amount of vitamins and minerals every day. Kurzweil would like to revive him.
. for example – just like f | glass from the eastern part of Germany. And it consumes a vast amount of energy. So it is an advantage for a company to produce more economically than the competition. The medium-size company has built one of the most innovative and energy-efficient flat glass works of the world from scratch in next to no time. Its production for the construction. By 20 percent. automotive. and solar industries is technologically challenging.66 Industry Journal | 02 | 2011 | Innovation The optimum is just about good enough Glass is one of the oldest and one of the most innovative materials of the world at the same time.
this amounts to savings of several million Euros annually. f | glass has officially named it after the daughter. It is the heart and soul of f | glass’ production plant. received an order from a joint venture of the Dutch Scheuten Group and the German Interpane Industrie AG: They were to set up a float glass production in Germany that could compete on an international level. a small town in the eastern part of Germany. But this furnace is something special. Furnaces. Maartje has been in action since about three years. joined them a short time after that.Industry Journal | 02 | 2011 | Innovation 67 They call him Maartje. In that year.000 cubic meters of natural gas – the equivalent of one million kilowatt hours or the consumption of a one-family house in 50 years –. it is boiling red-hot. But Maartje is the name patron for the melting furnace of one of the world’s most innovative. Order for a new. It uses some 20 percent less energy than conventional glass furnaces. for instance. Inside of Maartje. At a daily energy consumption of more than 100. energy-efficient. The construction of a production plant for flat glass suitable for a multitude of industrial uses and for the solar industry in particular was planned. Thomas Belgardt. Herbert Köhler and Wolfgang Räbiger. competitive plant To really get to know and appreciate Maartje. two experts with decades of experience in the glass industry. industrial robots – such things do not normally get named. and a small technological miracle. It began in 2007. machines. . too. The company produces flat glass in Osterweddingen. who is responsible for processing. 365 days a year. one has to go back in time a little bit. 24 hours a day. Maartje is the name of the daughter of one of f | glass’ partners. and sustainable glass manufacturers.
A conveyor belt transports the mixture to the furnace where it melts at a temperature of 2. which is the highest that can be reached by technology. and its output to a lesser extent. Short construction time. commissioning. Storage. which are carted away with 50 trucks day after day to be delivered to customers around the world. too. who shares the position of managing director of f | glass with Räbiger today. The product characteristics of high-quality flat glass make it indispensable in many fields of business. Because the entire production process breaks down if it fails only once. its size. Failsafe performance was decisive in the design of the furnace. or both. They are a part of the . An ambitious goal through and through. automated. The storage alone is as large as ten football pitches. too. This would result in enormous financial losses. The melting furnace plays an important part in this. It is more of an international object lesson for sustainable and energy-efficient glass production due to many innovative details. whereas tremendous 2. But the plant sets benchmarks with its short construction time. The primary reasons for its low energy consumption compared to other melting furnaces are its superior isolation and a range of constructive measures meant to further energy savings: A unique system for heat retention ensures that the furnace only becomes lukewarm on its outside.000 square meters. The surface tension of both materials makes sure that extremely smooth glass surfaces are forming. The daily production of float glass amounts to 700 tons. Energy efficiency and permanent operation Permanent operation and energy efficiency. dolomite. and shards. was the center of the planning team’s attention from the word go. f | glass employs some 280 people and occupies premises of some 400. But modern production methods for flat glass used for industrial purposes made with the float glass method are a technologically complex. depending on the customer’s order.000 degrees Celsius. quartz sand. Not only the melting furnace. and energy consuming process (see box). The now viscous glass material is brought onto a layer of liquid tin in a continuous process. Goods of inferior quality are unknown here. A challenging task in itself. Its energy efficiency. Those materials are mixed in the batch house according to individual recipes – depending on the desired glass quality. Afterwards. curing. and transport take place in the logistics center. Humankind has the recipe for manufacturing glass since approximately 5. In the next step. There are the slats for air intake in the outer wall next to the lehr. maximum efficiency To meet their own demands.” says Belgardt. the customer-specific refining. mixed with ingredients such as lime and metal oxides. the glass is carefully cooled down in the lehr.68 Industry Journal | 02 | 2011 | Innovation How float glass is made Float glass is a variety of flat glass. Its basic materials are white glass sand. finally. The thickness varies between three and 12 millimeters. which is nearly 160 meters long. But the three visionaries were not satisfied: “We wanted to build the most advanced and energy-efficient plant in the world that delivers the best product quality. everything at f | glass revolves around those factors.000 years – primarily molten quartz sand. blowing devices remove the remaining foreign particles. such as a coating. but the entire energy system of the production plant is designed for the utmost efficiency and sustainability. from the construction to the automotive industry and all the way to the manufacturers of solar and photovoltaic plants.000 degrees Celsius prevail inside of it. the two industry managers started to build a glass plant designed for maximum energy efficiency and process security with only a small team and handpicked external partners in only 15 months time. it floats over the tin and spreads out evenly. The last steps of the process are the cutting and. which is produced with the so-called float method. One of the world’s largest and most efficient float glass plants came into being in Osterweddingen near Magdeburg – literally on the green field. Because the glass is lighter than the metal.
The employees in the control center direct batch. A replacement module immediately takes over in case of a failure in the control system. building’s ventilation and open or close according to the outside temperature. energy values. too. the raw materials are precisely measured and brought together. One of the first ones in the glass industry around the world. which centrally controls and monitors all production processes. and exhaust fumes.” At a last resort. Energy recovery by steam turbine The greatest influence on the plant’s sustainable operation has a steam turbine. for instance. is made by Siemens and the heart of a complex energy recovery system. The recipe has to be exact up to the per mille range. managing director of f | glass (l. This means that the production can be shifted during uptime – for example toward thicker or thinner glasses or ones with a different recipe or specification. f | glass can perform so-called campaign-changes within very short time. or the commissioning – the entire production and distribution process is automated at f | glass. which are stored under the ground. It uses the plant’s exhaust air to generate power. it increases the procedural safety. This means that we could cope with an outage of the external power supply. “The knowledge that all processes are secured so well lets me sleep soundly. No matter if it is the delivery and mixing of raw materials. “The steam turbine does not only save energy. A purification system for exhaust fumes is integrated into in the process of using the exhaust heat in order to conform to environment protection stipulations. And they need power. In this way. This is the equivalent of nearly nine billion kilowatt hours – sufficient to supply power to a European city with over a million inhabitants for a couple of weeks.Industry Journal | 02 | 2011 | Innovation 69 Thomas Belgardt. there are three emergency power generators to supply the plant with power. the utilities are its blood circuit. quality control. Thanks to the precise and secure processes. To ensure a stable operation in every situation. production. the process control system is of an uncompromisingly redundant design – similar to nearly every important part of the plant. In the so-called batch house.” says Räbiger. This means that the company can easily meet the varying demands of its international customers comprehensively and without long waiting times. This demands highest precision. the melting process. Their most important tool is the process control system Simatic PCS 7 from Siemens. His company generates more than half of the power it requires in the innovative energy recovery plant (r. It works with electrostatic deposition in the electrostatic precipitator. It goes without saying that the operation of the melting furnace is ensured in case of emergencies: f | glass has access to a reserve of nearly 900 million cubic meters of natural gas.).” Wolfgang Räbiger says. the processing and refining of the glass surfaces. We generate 60 percent of our power with it. . they contribute to tempering the air of the room without additional energy consumption.). f | glass had made the compatibility with Simatic PCS 7 a prerequisite as early as in the tender stage for the mechanical and plant engineering. “The furnace is the heart of our plant.
• Functional modules and libraries that are customized to sector-specific demands facilitate the configuration. It is completely integrated into Totally Integrated Automation (TIA) and uses standardized hardware and software components that can be connected to the MES level (Manufacturing Execution System). ensure that the entire production of a day is always sold out. to the distributed multi-user system with Client/Server-architecture. too: Maartje will continue to play a part in all those considerations. one thing is certain: “The material glass is just at the beginning of its evolution. Simatic PCS 7 offers decisive advantages to glass manufacturers: • Time savings trough the use of a common engineering tool for the entire process.” And another thing is sure. • Redundant control and Profibus communication for highly available processes ensure interruption-free operation. • Control of configuration from all workstations. even more energy efficient end environmentfriendly solutions. With its cutting-edge and efficient production.70 Industry Journal | 02 | 2011 | Innovation Simatic PCS 7 in the glass industry Simatic PCS 7 is the distributed process control system (Distributed Control System. they are working on new. its innovative finishing technologies.” according to Räbiger. • Expandability and modifiability – even online. Simatic PCS 7 is the director in the 160 meter long production plant and thus ensures process safety. Improvements are already in progress But the two visionaries are by no means satisfied. The waste glass is automatically transferred into a large shard storage and fed back into the production circuit later on. • Controls over Ethernet with up to 10/100 Mbit/s and Profibus DP and PA for the communication on process level. Thomas Belgardt and Wolfgang Räbiger feel optimally prepared for the future. Outsiders do not notice much during a campaign change. Business is good. Maartje will surely work for 20 years. for instance for the automation of very large production plants or integrated plants. . DCS) from Siemens. Conventional furnaces have an average service life of twelve to 15 years. and a logistics concept that is designed for a fast flow of goods. • Consistent visualization of all process data at all workstations. Attractive new customers. apart from a short and controlled output of waste glass. Because for Räbiger. • Scalability – from the small single system. “We are proud of the furnace. for instance for a supply or intermittent plant. And we will be able to go on using it for a long time. users can flexibly react to new demands in production facilities. With their partners – and especially intensive with Siemens –. Through this. mainly from abroad.
and higher innovative strength. Europe is giving the long-expected signal. Last March. and changing investor expectations as well. learning effects. Moreover. Previously.” Spokespeople of the Federal Association of German Industries (BDI) take a different position and oppose a one-sided increase of climate targets in the EU. it is a decisive step for the growth opportunities and competitive position of Europe. the European Commission introduced their “Agenda for a low-carbon economy by 2050”. When considering factors and side effects such as technological progress. This is at least an assumption of traditional economic models. It will make the international process of climate protection more dynamic. CO2 emissions in the European Union are meant to fall by 25 percent by 2050. It sounds too good to be true: Better protection of the environment leads to growth. According to it. even the 30 percent mark could be reached. They fear that the climate targets will only lead to a displacement of production and emissions to regions with lower climate . enhanced competitive ability. the climate targets of the European Union aimed at a considerably lower emissions reduction of 20 percent related to the figures of the base year 1990. If the EU’s ambitious climate agenda is good or bad news is a matter of debate among experts. A new study by leading European scientists comes to a revolutionarily different conclusion.Industry Journal | 02 | 2011 | Innovation 71 Europe gets a green shock Restrictive guidelines for the protection of the environment issued by governments are rather unpopular with the economy. When considering projects for climate protection from outside Europe as well. because they lead to rising costs and lower international competitiveness. The German Minister of the Environment. the EU’s ambitious climate protection policy will speed up economic growth and create six million new jobs by 2020. welcomes the model: “Finally. Norbert Röttgen. Or so EU politicians and internationally renowned scientists say.
.. With a corresponding increase of the climate target.72 Industry Journal | 02 | 2011 | Innovation protection stipulations. What sounds like the formula for the squaring of the circle is based on conclusive arguments: “In conventional economic models a reduction of greenhouse gas emissions leads to additional Economic growth by 2020* at a … Country Germany France Great Britain Italy Netherlands Sweden Spain . The opposite is true.6 percent by 2020 (green growth scenario) compared to the maintenance of the 20 percent mark (business as usual scenario). There could be six million new jobs.3 1.1 7 * Related to base year 1990.5 5 3..0 30% 2..6 3.. Growth and lower CO2 emissions But will more ambitious climate protection targets really lead the European economies into a dead end? Not at all – economic growth and a reduction of greenhouse gas emissions are not mutually exclusive. Source: European Climate Forum. too. the total economic growth in the EU would rise by 0.4 2. CO2 reduction by 20% 8.. with Carlo Jaeger of the Potsdam-Institute of climate research (PIK) responsible. related to base year 1990 Unemployment rate 2020 (in %)* at a … Country Germany France Great Britain Italy Netherlands Sweden Spain .. National Technical University of Athens..1 2.1 4. but an obstacle to the development of the European economy. there are immediate suspicions that the result does not accidentally coincide with the interests of the commissioning party.1 2.. But neutrality and seriousness of this study are undisputable: It was conducted by a group of internationally renowned scientists from Oxford University.4 3. and the European Climate Forum. At least this is what the latest study “A New Growth Path for Europe” commissioned by the Federal Ministry of the Environment shows..9 5.3 2. CO2 reduction by .6 *Gross national income in % p.5 8.6 5.7 3.6 3. The so-called Carbon Leakage would not only be detrimental to the fight against global warming.3 3.7 2. Six million new jobs The study shows that targeting a reduction of CO2 emissions by 30 percent rather than 20 percent by 2020 could provide a sustainable stimulus for the European economy: The share of investments in the gross national income could rise from 18 to 22 percent.6 30% 5.8 1.0 2. The economic output would rise by 620 billion Euros. CO2 reduction by . Université Paris 1 Pantheón-Sorbonne.4 7.8 10.3 4. Where studies like this are concerned. CO2 reduction by 20% 1.8 2.a.
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costs in the short run, which are justified by the avoidance of long-term damages,” leading author Carlo Jaeger explains. “But we show that a credible commitment to low-emissions economies, together with an ambitious goal and supportive political measures, could mean a winwin scenario for Europe.” In other words: The hitherto applied models showing the connection between climate protection measures and economic growth focused on two main aspects – the replacement of fossil fuels with regenerative sources of energy and the reduction of energy consumption. According to common assumption, both cause additional costs. Those have to be accepted in order to avoid the even higher costs unchecked climate change causes in the long run. This results in the following equation: the higher the emissions reductions, the higher the growth losses. New evaluation of economical effects “A New Growth Path for Europe” breaks with this logic, because it is the view of the authors that conventional simulations ignore important
economic effects, which partly arise in the form of inevitable positive side effects. Among them are learning effects (learning by doing), which result from investments in the environmental sector, as well as results of the overall and specific technological progress. In addition to that, investors expect an acceptable return and thus create further economical pressure and will to innovate. The authors of the study include those aspects in their model and assume a self-enhancing, positive loop that will lead the European economy on a sustainable green growth path. Investments through new climate targets The forces meant to leverage this economical perpetuum mobile unfold through the following mechanism: If the European Union commits to a new growth strategy that does not only require an ambitious increase of the economic performance but equally ambitions targets for CO2 emissions as well, new investments are needed. Those will lead to learning processes in the economy as well as the development and distribu-
The modernization of buildings such as the Siemens headquarters (architect’s sketch) in Munich, Germany, will contribute considerably to meeting the climate targets and therefore to an increase of the gross national income from 18 to 22 percent and to the creation of 6 million new jobs by 2020.
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tion of new technologies in turn. Productivity and competitiveness will increase, growth is stimulated, and this has a positive influence on investors’ expectations. According to the authors, some prerequisites still have to be fulfilled for this mechanism to work. Credibility is a decisive factor. The EU has to fix on consistent climate policy programs and measures. The proceeds of European emissions trading have to be invested in measures for the reduction of emissions in Eastern Europe, for instance. Tax relief programs will further the readiness for climate-friendly investment. Higher energy efficiency is much needed For scientists and the EU Commission alike, higher energy efficiency and the development of renewable sources of energy play a central role. Both require substantial investment, for example for the refurbishment of buildings, the modernizing of the energy infrastructure, and environmentally friendly mobility. Independent of the results of the study, the EU Commission estimates that the reduction of emissions by at least 80 percent that they hope to realize by 2050 (related to the 1990 figures) would require investments of 270 billion Euros annually. The high price would be partially offset, and could even lead to profit. Because on the one hand, the costs caused by damage to the environment would fall. On the other hand, the savings potential of oil and gas consumption amounts to 320 billion Euros annually. All sectors profit Simulations within the study show that all sectors of the European economy would profit from this investment boost, from agriculture to industry and all the way to services. The construction industry in particular would profit, because meeting the climate goals vitally depends on optimizing the energy efficiency of buildings. The argument that a pioneering role of Europe in climate protection does not make any sense from a global point of view is not valid for the authors of the study. The economic advantages of a 30 percent target in emissions reduction are completely independent of the question if a new international climate agreement will be agreed on after the end of the first stage of the Kyoto Protocol in 2012.
The past economic and financial crisis has been a litmus test for current economic models. It revealed their deficits and signaled the need for improvement. This holds true for simulations showing the economical consequences of climate protection measures as well. Until now, most models have not considered the impact of climate protection investments on learning processes, technological progress, and the role of investors’ expectations. The result: The economical opportunities of climate protection have been insufficiently assessed. The study “A New Growth Path for Europe”, though, considers learning processes and technological development triggered by investment in its simulations. Investors’ expectations are no longer projected from past figures, but calculated according to future conditions. In consequence, the behavioral patterns of the entire economy change. Ideally, the expectation of higher growth becomes a self-fulfilling prophecy. But this model is only a first step. The development of complex models able to show effects like that is a huge task. A start has been made: In February 2011 AMPERE (Assessment of Climate Change Mitigation Pathways and Evaluation of the Robustness of Mitigation Cost Estimates) got under way. The project under the leadership of the Potsdam-Institute for Climate Impact Research (PIK) aims to evaluate the cost of climate change more reliably in order to deliver a dependable basis for decisions concerning emissions reduction and technology promotion to governments. To achieve this, teams of researchers from 12 countries gather with their computer models. “The cost estimates that have been delivered until now have to be placed on a broader basis,” PIK project leader Elmar Kriegler says.
Given that, even a solo effort by Europe would be economically worthwhile. In their simulations, the scientists only considered measures that have been agreed on in the minimum consensus of the “Convention of Copenhagen”. If the benchmark for emissions targets is raised by future conventions of the world climate conference, the growth curve of the European economy could become even steeper.
Download the study at www.european-climate-forum.net
Industry Journal | 02 | 2011 | Innovation 75
Innovations: a driving force for growth
1. Siemens: 2,135 2. Philips: 1,765 3. BASF: 1,707 4. Samsung: 1,691 5. Qualcomm: 1,682 6. Panasonic/Robert Bosch: 1,400 each 8. Sony: 1,286 9. LG: 1,263 10. Bayer: 1,123 11. Mitsubishi: 1,096 12. Ericsson: 1,095 13. General Electric: 1,084 14. Research in Motion: 907 15. Roche: 811 16. Alcatel: 773 17. Hitachi: 741 18. Huawei: 730 19. 3M: 710 20. Johnson & Johnson: 709
Experts estimate that the world economy will grow by 4 percent in 2011. Innovations play an essential part in this.
The European patent office registered 235,000 patent applications in 2010. Three European companies are at the top of the applicants list.
World champion in innovation
The Global Innovation Index 2011 ranks the innovative strength of 125 countries. Among the 80 decisive factors are: technology transfer, R&D expenditure, patent applications, intensity of competition, science, ecology, education, bureaucracy, financing, and political framework conditions. Rank Country 1 Switzerland 2 Sweden 3 Singapore 4 Hong Kong 5 Finland
How progress pays off
Stock yield of particularly innovative companies 2007–2009 (in % p.a.)
16.5 12.4 12.0
Score 63.82 62.12 59.64 58.80 57.50 56.96 56.57 56.33 56.31 55.96 55.10 54.89 54.10 54.03 53.79 53.68 52.65 52.60 50.75 50.32 ... 46.43 ... 37.75 ... 35.85 ... 34.52
6 Denmark 7 USA 8 Canada 9 The Netherlands 10 Great Britain 11 Iceland 12 Germany 13 Ireland 14 Israel 15 New Zealand 16 South Korea 17 Luxembourg 18 Norway 19 Austria 20 Japan ... ... 29 China ... ... 47 Brazil ... ... 56 Russia Computing/ Electronics 137
Source: Booz & Company 2010
North and South America
Source: BCG Senior Executive Innovation Survey 2010
What prevents innovation
Survey of 600 top managers from North America and Europe (information in %) Focus on further development not on new business models Short-term profit considerations instead of long-term approaches Lack of business owners in the company Little learning from mistakes and lacking willingness to take risks 45 43 37 26
Source: Accenture/Economist Intelligence Unit 2008
R&D expenditure in industries
2009 in bn. USD, global
Software/Internet 34 Chemicals/Energy 37 Industrials 51
Aerospace/Defense 22 Consumer 20 Telecom 10 Other 8
Automotive 73 Healthcare 113
... ... 62 India
Source: INSEAD eLab 2011
FACTS & FIGURES
p.com Contributors to this issue Christian Buck.siemens.das-amt. p.com/industryjournal .feedback-communication. efficiency. Jeanette Ohlerth (Siemens AG) Andreas Jung (das AMT GmbH & Co. p. p. KG Andreas Jung (CEO) Tiessenkai 10 24159 Kiel.industry@siemens. Be one of the first to learn about and profit from the latest developments for more productivity. Germany Copyright © Siemens AG 2011 All rights reserved.: p. Germany journal. p. Andrea Wiedemann. 32. always up-to-date Keep your finger on the pulse of innovation. Inc.de Concept Matias Ernst. KG) Hendrik Leyendecker (feedback communication GmbH) Print Mediahaus Biering GmbH Freisinger Landstrasse 21 80939 Munich. 48 Thinkstock: p. 29 right. or subscribe free to the printed magazine at www. 63 © Courtesy of Kurzweil Technologies. pp. 28. Christine Mattauch.de Always well-informed. Germany www. Germany www. p. Andreas Jung.biering. All information provided in this document refers to general technical possibilities and characteristics that do not always apply as described in every individual case.net Photo credits Getty images: Cover. 65 All other images: Copyright Siemens AG Published by Siemens AG Industry Sector Communications Werner-von-Siemens-Str. 51 right © William George Wadman: p. 50 91052 Erlangen. Thomas Thiele. Creation feedback communication GmbH Hendrik Leyendecker (CEO) Hannah Egelseer (project management) Mario Kienel (art direction) Geisseestrasse 63 90439 Nuremberg. 37. Jochen v. p. p. 33 © Bürger GmbH: p.76 Industry Journal | 02 | 2011 Publication information Industry Journal Creating sustainable value through technological leadership Editorial staff das AMT Gesellschaft für individuelle Kommunikation mbH & Co. 62 © Fraunhofer-Gesellschaft: p. 34/35. 2. Germany www. Anja Dilk. Martin Wiedemann Editor Gerald Odoj Siemens AG Industry Sector Communications Erlangen. Stefanie Heinrich. 53. Nele Husmann. Mirjam Müller. 29 left. Plüskow. 58 © Jens Brosemann: pp. Reproduction of this publication and use of its content are subject to prior consent. 14 left © UNTHA Recyclingtechnik GmbH: p. and flexibility! Simply download the latest issue as a PDF file. Technical details are subject to change. 6/7 © LANXESS 2007–2011: p.
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