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

29

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


No of employees 968

Shipping


No of employees 7937

Property


No of employees 262


No of employees 2 800

Stena Metall


No of employees 1791

New Business

5. The Stena Sphere

Christer Öjdemark

Business

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