Christer Öjdemark
Transcript of Christer Öjdemark
Globalisering av en
svensk miljöinnovation
Christer Öjdemark
13:e oktober 2011
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Globalisation of …..
The Envac internalisation process
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….. a Swedish clean-tech invention:
Envac invented the automated waste collection system in 1961
Traditional Waste Handling ”State-of-the-art collection in Paris 1950”
Still the same
principle
Traditional Waste Handling
Traditional Waste Handling
We eliminate the waste trucks and the waste bins!
We see our system as a utility and a part of urban infrastructure
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Global leader in automated waste collection
Global market share >75% during last 50 years
>700 installations in 30 countries and 35 offices in 20 countries…
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Some milestones
• 1961: Envac built first system in the world
50 years 11th October 2011
• 1971: Disney World Orlando
• 1975: Roosevelt Island New York
• 1992: Olympic Village Barcelona
• 1996: Yongin Suji, Seoul
• 1998: Word EXPO Lisbon
• 1999: Hong Kong HA standardize in ARCS
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Some milestones
• 2000: Hammarby Sjöstad, Stockholm
• 2003: 101 Financial Tower, Taipei
• 2005 Jumeriah Beach Residence, Dubai
• 2006 Jin-sha-zhou, Guangzhou, China
• 2007 Hac Sa Wan, Macau
• 2008 Wembley New City, London
• 2009 Kimpo New Town, Korea
• 2010 KAFD Riyadh Saudi Arabia
Key business drivers
• Increasing urbanization
– > 50% live in cities and increasing ≈1% per year
– 60 millions moving in to urban areas every year
– 15 millions only in China (≈ 60.000 in Sweden)
• Increasing waste volumes
– in developed countries: 1-2% per year
– in developing countries: 5-10 % per year
• Increasing demand for source separation.
– EU packaging directive 1995
– EU landfill directive 1999
– Recycling of paper and plastics now a global trend
Key business drivers
• Increasing demand for sustainable solutions
– need for low energy solutions with lower CO2 – emissions.
– reduce traffic in inner cities – lower emissions – no night collections
– better hygiene – littering – noise – smell – animals (rats, ect)
• Demand for improved working conditions
– new work laws and regulations, especially in Nordic countries
• “Climate change” debate
– waste is on the political agenda.
– 3-5% of global CO2 –emission, from waste management activities
– could instead become a net reducer by applying modern technologies
A rational solution
• Fully automated system
• 100% availability for waste disposal
• Lower Life Cycle Cost
• Releases valuable space
A sustainable solution
Environmentally, socially and economically
• Reduced emissions and traffic
• Supports separation at source
• Silent, clean and hygienic technology
• Improved living standard
You have to be unique to get success! Our unique selling points
How to develope a global business?
Traditional internationalisation
How to develope a global clean-tech business?
• Swedish environmental companies are
SME’s.
• New markets are not the traditional
Industrial markets.
• Customers are often local governments.
• Large content of services, systems,
knowhow ect.
• Limited personal & financial resources
and export experience
• Higher risk taking to go to China, Brazil,
India ect.
• Corruption, networking capacity
• The traditional sales channels with
agents, distributors are not optimal.
Challenges:
Characteristics:
The Envac Internationalisation process
Market channels:
• Direct sales: Export ad-hoc sales from 1971 to 2003 to many markets in
Europe, North America, South America, Middle East, Asia.
• Started Sales company in Germany in the 80:ies.
• Licensing technology to several Japanese companies in the 80:ies,
Mitsubishi, Hitachi, NKK.
• Agents / distributors: In several markets in the 70-90:ies without any
success.
• J/V with local partners in Holland 2000: Bad experience .
• Acquisitions & Mergers: No candidates available
• Strategy since 2003; Fully owned sales companies.
Envac AB
Envac Group
Envac Environmental
Technology, Shanghai
Envac Far East, Hongkong
Envac Environmental
Technology, Beijing
Envac Macau
Envac Dubai
Region Southeast Asia
and China
Envac Abu-Dhabi
Envac India
Envac Korea Co. Ltd
Region South Korea
Envac Scandinavia,
Sweden
Envac U.K.
Envac Norway
Envac Denmark
Centralned b.v.,
Holland (33%)
Region South Europe
and Americas Region North Europe
Envac Qatar
Region Middle East
and India
Envac Iberia, Spain
Envac France
Envac Italy
Envac Portugal
Envac Canada
Envac Brazil
Envac Finland Guangzhou Envac
Environmental Technology, Guangzhou – 65%
Envac Environmental
Technology, Tianjin
Envac Singapore
Envac Malaysia
Envac Optibag, Sweden
Success factors
• Market condition fits the product.
• High level of new construction
of residential buildings.
• Projects are financially justified.
• Strong local presence.
Select and develop new geographical
markets
Key success factors to develop a new market.
• How does our
product fit the
specific
conditions on
the market?
– Fractions
– Customers
– Competitors
– Legal aspects
– Structure of
collecting market
– Political attitudes
(top-down
approach)
– References
• Construction
market for
residential
buildings?
• Collection
market?
• Market for
special
applications?
• Economical
situation in the
market?
• Determine the
cost benefits for
the customers
– Pay-back time
– Alternative cost
– Increase of value of
buildings
– Value for free space
• Financing of
projects?
Description
Project
financial
justification
Starting Points
Customer
interest
Market on
priority list
Pilot project
Next Step
Build a
strong local
organisation
Market volume
potential Product fit the market
Key success factors to develop a new market.
Build a strong local
organisation
Project financial
justification
High volume of
residential construction Product fit the market
Systems business characteristics
• A business with
– high growth potential
– high profit margin potential
– moderate entrance and exit barriers
– often scattered and weak competition
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The offering
100% uncertainty
0% uncertainty
Technical
solution
Calculus Partners
Implementation
Competitive position
Contract/
Customer
Technical Review Commercial Review
0% uncertainty
100% uncertainty
• A very complex and high risk business,
(if not properly controlled and managed)
Tacit knowledge/technology
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Knowlege Structured Tacit
Visible
Components, pipes,
exhausters, PLC, compressors
………….
x
Hidden
DMS, Envac Academy, EAP2.0,
Fan calc, Erosion calc, LDT,
Design Centre …….
Experience in: design,
software, installations, after-
sales service, applications,
materials, source
separation, vacuum
technology, International
differences.......
Tacit knowledge/technology
• During the introduction phase (years 1-5) on a new market
we are trying to reduce the complexity of the technology,
and we do not talk about this knowledge.
• When local companies are starting to compete with us,
they have no understanding of the tacit knowledge and
thereby underestimate the complexity and difficulties.
• Most of them fail in the first installations and thereby create
bad image for our technology.
The SymbioCity Concept A Swedish Partnership Initiative between the Swedish Government and
Swedish companies:
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The Swedish experience Integrated planning Scalable solutions
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The model for SymbioCity is Hammarby Sjöstad
The Envac concept:
• Source separation of waste
• Waste-to-Energy - District Heating
• Organic - Biogas
• Dry recyclables - Recycling
• Reduced heavy traffic
• Reduced CO2 footprint
• Reduced noise level
• Improved air quality
• Increased building density
• Less space needed for waste handling
• More green areas and pedestrian zones
• Improved quality of life
• Improved working conditions
The Hammarby model
What can the authorities do to support us?
• Reference installations.
– ex. Hammarby Sjöstad, Bo01, Norra Djurgårdsstaden
• Networking support from politicians (national & local) to open doors.
– ex. SymbioCity, CENTEC in China
• Project financing.
– ex. SEIF (Swedish Export Infrastructure Fund)
• Less fragmentation of official support.
– ex. Exportrådet – Invest Sweden
• Use Sida funds to invest/buy reference projects in developing countries
from Swedish companies.
To develope a global system business?
Conclusions: Key success factors for Envac
The offering
Turnkey solution and full service
Process
Manage risk:
- standardization
- structure tacit knowledge
- internal networking and knowledge sharing
Distribution
Own sales / production companies:
- local employees
- full ownership/management control
Manufacturing
No production
2004 – 2011 - 2015
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0
1000
2000
3000
4000
5000
6000
7000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
MSEK
Envac Group
ORDERSRECEIVED
REVENUES
Order Backlog
Earnings
The China
challenge
China
OECD
GDP development
Envac structure in China
Envac Hong Kong (Regional office for Southeast Asia&China) 1998
Envac Shanghai Environmental Technology Co. Ltd 2004
Envac Beijing Environmental Technology Co. Ltd 2005
Guangzhou Envac Environment Technology Co. Ltd 2005
- J/V (Envac 65% / Guangri 35%)
Envac Macau Ltd 2006
Envac Tianjin Environmental Technology Co. Ltd 2009
Why are Envac in China?
1. The worlds largest potential market.
– Construction of apartments in China is 6-8 millions per year (50% of global production of apartments - Sweden produces 10-20.000 per year)
– China is eager to adopt new technologies.
– Environmental protection is a focus area for the government in the new 5-year plan.
– Swedish environmental technology has a very high reputation and image in China.
2. Purchase components at low cost.
– A prerequisite to be competitive in China market.
– Lower our production costs to increase our global competitiveness.
Experiences from China
• Contacts on high level is incredibly important. Difficult to achieve, takes
long time and decision makers are constantly changing. CENTEC + JUNO
• Important to have local Chinese personal and an environment to keep key
people in the company.
• Project execution is much faster then in Europe.
• Quality mind set is often low and decision making is often short term based.
• Corruption exists and is difficult to handle, with Swedish ”code of conduct”
• Necessary to adopt products to local conditions and cost levels. To sell European standard is not possible, when you get local competition.
The owner
Six business areas
Total turnover: US$ 7.800 million
EBT: US$ 530 million
No of employees: 19 000
(Investments in several listed companies)
The Stena Sphere 2010
The business areas within the Stena Sphere
Turnover SEK 10,3 billion
No of employees 5 800
Ferry operations Offshore drilling
Turnover SEK 6,1 billion
No of employees 968
Shipping
Turnover SEK 4,7 billion
No of employees 7937
Property
Turnover SEK 2,1 billion
No of employees 262
Turnover SEK 28,6 billion
No of employees 2 800
Stena Metall
Turnover SEK 3,7 billion
No of employees 1791
New Business
5. The Stena Sphere