Essential Expertise for Water, Energy and Air


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Essential Expertise for Water, Energy and Air: By David Flitman, Senior Executive Vice President & President, Water and Process Services, Nalco Company

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Essential Expertise for Water, Energy and Air

  1. 1. Alliance to Save Energy<br />Essential Expertise for Water, Energy and Air<br />David Flitman<br />President, Water and Process Services<br />
  2. 2. Essential Expertise for Water, Energy, and Air<br />Our Strengths<br /><ul><li>Diverse Customers and Industries Served
  3. 3. Global Reach, $4.3B in 2010 Sales
  4. 4. Industry Experts, 13,000 employees
  5. 5. Customer Focused, Integrated Approach
  6. 6. Industry Leading Technology</li></ul>Our expertise provides<br />our customers:<br />Environmental sustainability<br /><ul><li> providing cleaner water
  7. 7. using less water
  8. 8. creating energy savings</li></ul>Economic sustainability<br /><ul><li> reducing costs
  9. 9. maximizing production
  10. 10. preserving assets</li></ul>Social sustainability<br /><ul><li> focusing on safety</li></li></ul><li>Governments Role in Our Water/Energy Future<br />Access to clean, abundant water is a critical issue in many parts of the world, including many parts of the United States.<br />Water and energy are interdependent and need to be viewed holistically. <br />Some government policies and practices create barriers to efficiency measures that deter American competitiveness.<br /><ul><li>Example 1: New Source Review triggered when power plants improve operating efficiency.
  11. 11. Example 2: Government procurement practices emphasize price-per-pound over total cost of operation.</li></ul>3<br />
  12. 12. Water & Energy are Interdependent<br />Water needs for Energy<br />Energy needs for Water<br /><ul><li>Thermoelectric Cooling
  13. 13. Hydropower
  14. 14. Energy Resources Extraction
  15. 15. Fuel Production
  16. 16. Emission Management
  17. 17. Treatment
  18. 18. Conditioning for Use
  19. 19. Transport & Conveyance
  20. 20. Production (e.g. desalination)
  21. 21. Pumping</li></li></ul><li>Industry Mega Trends<br />Common challenges to efficient water usage exist across industries<br /><ul><li>Outdated and inefficient production infrastructure
  22. 22. Unfavorable production locations (especially international) with water intensive operations in areas with small water supply
  23. 23. Historical perceptions about water as low cost (or free) input
  24. 24. Perception that more efficient systems and processes are expensive and have long payback periods</li></ul>5<br />
  25. 25. Removing Barriers Creates Jobs and Increases Competiveness<br />Sound policies can help the industrial sector to implement technologies to bridge the water-energy nexus and help their bottom line.<br />Reducing barriers for private sector energy users can drive adoption of off-the-shelf efficiency technologies that will save businesses and consumers money, conserve water and make America more energy independent   <br />Concepts such as New Source Review provisions in the Clean Air Act are well-intended (preventing air quality deterioration)<br />Unintended impact is efficiency projects are delayed for years or never started by utilities in order to avoid triggering new source review. Basic business concept of continuous improvement is stifled by element of law.<br />Alternative mechanism needed to allow efficiency gains without extensive pre-construction permit processes. <br />If utility can turn a higher percentage of fuel into useable electricity, those efficiency gains can translate into lower energy costs for customers, increased competitiveness and job growth.<br />6<br />
  26. 26. Government Procurement Practices<br />Industry often uses Net Present Value, Return on Investment or Total Cost of Operation to decide on whether to invest in efficiency.<br />Cash constraints, though, can deter the right investments.<br />10% water and energy savings common with treatment upgrades<br />Government budget cycles often restrict efficiency projects to those that deliver returns in the same fiscal year.<br />Lowest-total-cost decisions requiremore work to justify than price-per-pound based awards. <br />Payback periods for many efficiencyprojects can run several years.<br />At today’s government cost ofcapital, even 10-year paybackprojects make economic sense. <br />7<br />
  27. 27. 8<br />Substantial Potential Exists for Savings<br />– In Government and Across the Economy<br />
  28. 28. Raw <br />Materials<br />Greenhouse Gases<br />Boiler Water Pre- treatment<br />Boiler<br />Production Process<br />Raw Water Treatment<br />Wastewater Treatment<br /> Finished <br />Product<br />Waste Water<br />Water<br />Solid <br />Waste<br />Recycle<br />Cooling Tower<br />Energy<br />Recycle<br />Water is an Integrating Force in Most Industrial Operations<br />Direct government savings opportunities are concentrated in boiler and cooling water areas.<br />9<br />
  29. 29. Where are We Going?<br />When you save water you save energy. Real-time monitoring and automation enables peak performance.<br />Simulation, prediction and optimization<br />Most Efficient Use of Water<br />and Energy Out<br />Boiler<br />Cooling<br />Total Water and <br />Energy In<br />Membranes<br />Wastewater<br />Minimize Waste Out<br />Process<br />10<br />
  30. 30. How Water and Energy Connect<br />11<br />Evaporation<br />Hot Water<br />Cold Water<br />Cooling water treatment is provided for comfort and process cooling across most market segments<br /><ul><li>Scale Control
  31. 31. Corrosion Control
  32. 32. Microbial Fouling Control</li></ul>Clean heat transfer surfaces result in greater operational efficiencies, lower overall cost for the customer and reduced environmental impact by conserving water, improving energy efficiency, reducing greenhouse gasses and protecting customer assets.<br />
  33. 33. How Water and Energy Connect<br />Boiler water treatment is offered for heating and process steam production in all major market segments<br />12<br /><ul><li>Pre-treatment(oxygen scavengers)
  34. 34. Internal Treatment(scale & corrosion control)
  35. 35. Condensate Treatment(corrosion control)</li></ul>Proper boiler water treatment prevents deposits and corrosion ensuring reliable and safe production of steam at reduced energy and water consumption and greenhouse gas levels.<br />
  36. 36. Generating Measurable Results<br />Water and Chemical<br /> Cost Savings<br />Plant:Gallatin Steel<br />Region:North America<br />Situation:<br /><ul><li>Media fouling in Direct Contact Water filtration system reducing capacity and efficiency</li></ul>Application:Nalco CAT-FLOC® technology <br />eROI Benefits:<br /><ul><li>179 million gallons of water saved
  37. 37. 2.3 million kWh of energy saved
  38. 38. 9,000 tons reduction of CO2
  39. 39. 410 tons reduction of waste sludge generated
  40. 40. $125,000 in annual savings</li></ul>13<br />U.S. edition of Wall Street Journal<br />
  41. 41. Generating Measurable Results<br />Water and Maintenance<br /> Cost Savings<br />Plant: Dow Freeport<br />Region: North America<br />Situation:<br /><ul><li>Water supply challenges
  42. 42. Heat transfer inefficiency
  43. 43. Unscheduled production outages</li></ul>Application:3D TRASAR®technology for Cooling Water<br />eROI Benefits:<br /><ul><li>1 billion gallons of water saved annually
  44. 44. Improved system reliability
  45. 45. Reduced maintenance
  46. 46. Estimated $4,000,000 in annual maintenance cost savings
  47. 47. Substantial energy savings</li></ul>Global edition of Wall Street Journal<br />3D TRASAR for Cooling Water won a 2008 Presidential Green Chemistry Award<br />14<br />
  48. 48. Generating Measurable Results<br />Energy Savings<br />Plant:VA Hospital – Fayetteville<br />Region:North America<br />Situation:<br /><ul><li>Difficulty in cleaning air handling units created energy drain and created challenges in air experience</li></ul>Application:Nalco COIL-FLO® technology for advanced coil cleaning <br />eROI Benefits:<br /><ul><li>$87,000 in annual energy cost savings
  49. 49. 10-month payback period
  50. 50. 1.74 million kWh of energy saved
  51. 51. 1026 tons reduction of CO2
  52. 52. Improved air quality for patients and staff</li></ul>15<br />
  53. 53. Nalco Technologies Save Water and Energy<br />3D TRASAR® Technology for Cooling Water saves our customers 2,600 gallons of water per second.<br />PARETO™ Mixing Technology is saving customers 20,410 Btus per second.<br />16<br />
  54. 54. Essential Expertise for Water, Energy and Air<br /><ul><li>Unparalleled, global expertise
  55. 55. Industry-focused innovation
  56. 56. Committed to sustainability</li></ul>© 2011 Nalco Company. Nalco, the tagline, logo, PORTA-FEED, 3D TRASAR, eROI, CAT-FLOC, PARETO, APEX, CoilFlo, BREAXIT, PRISM, RESOLV, SMART Solutions, TULIP, FillerTEK and DC-PRO are trademarks of Nalco Company. All other trademarks are property of their respective owners.<br />17<br />
  57. 57. Forward-Looking Statements and Regulation G<br />This presentation includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, business trends and other information that is not historical information. When used in this presentation, the words “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts,” or future or conditional verbs, such as “will,” “should,” “could” or “may,” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, management’s examination of historical operating trends and data are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs and projections will be achieved.<br />There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this presentation. Important factors that could cause our actual results to differ materially from the forward-looking statements we make in this presentation. Such risks, uncertainties and other important factors include, among others: our leverage; limitations on flexibility in operating our business contained in our debt agreements; increases in interest rates as a result of our variable rate indebtedness; pricing pressure from our customers; technological change and innovation; risks associated with our non-U.S. operations; fluctuations in currency exchange rates; high competition in the markets in which we operate; adverse changes to environmental, health and safety regulations; operating hazards in our production facilities; inability to achieve expected cost savings; difficulties in securing or changes in the pricing of the raw materials we use; our significant pension benefit obligations and the current underfunding of our pension plans; our ability to realize the full value of our intangible assets; our ability to attract and retain skilled employees, particularly research scientists, technical sales professionals and engineers; and our ability to protect our intellectual property rights. There may be other factors that may cause our actual results to differ materially from the forward-looking statements.<br />All forward-looking statements attributable to us or persons acting on our behalf apply only as of the date of this presentation and are expressly qualified in their entirety by the cautionary statements included in this presentation. We undertake no obligation to update or revise forward-looking statements which may be made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events.<br />Non-GAAP measures may be discussed in today’s presentation. Management believes that discussion of these measures provides investors with additional insight into the ongoing operations of Nalco Holding Company. Non-GAAP measures are reconciled to the closest GAAP measure in schedules attached to our earnings releases, which may be found at Adjusted EBITDA and Pro Forma EBITDA are non-GAAP measures used to determine compliance with the Company’s debt covenants or to assess the ongoing performance of the business. Free Cash Flow is defined as Cash from Operations less Capital Expenditures and Minority Interest charges. In addition, Nalco may discuss sales growth in terms of nominal (actual), organic (nominal less foreign currency and acquisition/divestiture/merger/joint venture impacts), and real (organic growth less that portion of the growth which consists of price increases that simply pass along higher raw and purchased material costs). The non-GAAP measures should not be viewed as an alternative to GAAP measures of performance. Furthermore, these measures may not be consistent with similar measures provided by other companies.<br />18<br />
  58. 58. Cautionary Statements Regarding Forward-Looking Information <br />  This communication contains certain statements relating to future events and our intentions, beliefs, expectations and predictions for the future which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Words or phrases such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “we believe,” “we expect,” “estimate,” “project,” “may,” “will,” “intend,” “plan,” “believe,” “target,” “forecast” (including the negative or variations thereof) or similar terminology used in connection with any discussion of future plans, actions or events generally identify forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding benefits of the merger, integration plans and expected synergies, the expected timing of completion of the merger, and anticipated future financial and operating performance and results, including estimates for growth. These statements are based on the current expectations of management of Nalco and Ecolab, as applicable. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements included in this communication. These risks and uncertainties include (i) the risk that the stockholders of Nalco may not adopt the merger agreement, (ii) the risk that the stockholders of Ecolab may not approve the issuance of Ecolab common stock to Nalco stockholders in the merger, (iii) the risk that the companies may be unable to obtain regulatory approvals required for the merger, or that required regulatory approvals may delay the merger or result in the imposition of conditions that could have a material adverse effect on the combined company or cause the companies to abandon the merger, (iv) the risk that the conditions to the closing of the merger may not be satisfied, (v) the risk that a material adverse change, event or occurrence may affect Nalco or Ecolab prior to the closing of the merger and may delay the merger or cause the companies to abandon the merger, (vi) the risk that an unsolicited offer by another company to acquire shares or assets of Nalco or Ecolab could interfere with or prevent the merger, (vii) problems that may arise in successfully integrating the businesses of the companies, which may result in the combined company not operating as effectively and efficiently as expected, (viii) the possibility that the merger may involve unexpected costs, unexpected liabilities or unexpected delays, (ix) the risk that the credit ratings of the combined company or its subsidiaries may be different from what the companies currently expect, (x) the risk that the businesses of the companies may suffer as a result of uncertainty surrounding the merger and (xi) the risk that disruptions from the transaction will harm relationships with customers, employees and suppliers. <br /> Other unknown or unpredictable factors could also have material adverse effects on future results, performance or achievements of Nalco, Ecolab and the combined company. For a further discussion of these and other risks and uncertainties applicable to the respective businesses of Nalco and Ecolab, see the Annual Reports on Form 10-K of Nalco and Ecolab for the fiscal year ended December 31, 2010 and the companies’ other public filings with the SEC. These risks, as well as other risks associated with the merger, will be more fully discussed in the joint proxy statement/prospectus that will be included in the Registration Statement on Form S-4 that Ecolab will file with the SEC in connection with the merger. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this communication may not occur. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this communication. Neither Nalco nor Ecolab undertakes, and each of them expressly disclaims, any duty to update any forward-looking statement whether as a result of new information, future events or changes in their respective expectations, except as required by law.<br /> Additional Information and Where to Find it <br /> Ecolab will file with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 that will include a joint proxy statement of Nalco and Ecolab that will also constitute a prospectus of Ecolab relating to the proposed transaction. WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION about Nalco, Ecolab and the proposed merger. Investors and security holders will be able to obtain these materials (when they are available) and other documents filed with the SEC free of charge at the SEC’s website, In addition, copies of the registration statement and joint proxy statement/prospectus (when they become available) may be obtained free of charge by accessing Nalco’s website at by clicking on the “Investors” link and then clicking on the “SEC Filings” link or by writing Nalco at 1601 West Diehl Road, Naperville, Illinois 60563, Attention: Corporate Secretary or by accessing Ecolab’s website at by clicking on the “Investor” link and then clicking on the “SEC Filings” link or by writing Ecolab at 370 Wabasha Street North, Saint Paul, Minnesota, 55102, Attention: Corporate Secretary and security holders may also read and copy any reports, statements and other information filed by Nalco or Ecolab with the SEC, at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or visit the SEC’s website for further information on its public reference room. <br />Participants in the Merger Solicitation <br /> Nalco, Ecolab and certain of their respective directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding Nalco’s directors and executive officers is available in its proxy statement filed with the SEC by Nalco on March 14, 2011 in connection with its 2011 annual meeting of shareholders, and information regarding Ecolab’s directors and executive officers is available in its proxy statement filed with the SEC by Ecolab on March 18, 2011 in connection with its 2011 annual meeting of shareholders. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the registration statement and joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.<br />Non-Solicitation<br />This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.<br />19<br />