Globalisering av ensvensk miljöinnovation Christer Öjdemark 13:e oktober 2011
Globalisation of ….. The Envac internalisation process 2
….. a Swedish clean-tech invention:Envac invented the automated waste collection system in 1961 3
Traditional Waste Handling”State-of-the-art collection in Paris 1950”
Traditional Waste Handling Still the same principle
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
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… 8
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 9
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 10
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
You have to be unique to get success!Our unique selling pointsA sustainable solutionEnvironmentally, socially and economically• Reduced emissions and traffic• Supports separation at source• Silent, clean and hygienic technology• Improved living standard A rational solution• Fully automated system• 100% availability for waste disposal• Lower Life Cycle Cost• Releases valuable space
How to develope a global business? Traditional internationalisation
How to develope a global clean-tech business? Characteristics: Challenges:• Swedish environmental companies are • Limited personal & financial resources SME’s. and export experience• New markets are not the traditional • Higher risk taking to go to China, Brazil, Industrial markets. India ect.• Customers are often local governments. • Corruption, networking capacity• Large content of services, systems, • The traditional sales channels with knowhow ect. agents, distributors are not optimal.
The Envac Internationalisation processMarket 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 Group Envac ABRegion Southeast Asia Region Middle East Region South Europe Region South Korea Region North Europe and China and India and Americas Envac Far East, Hongkong Envac Korea Co. Ltd Envac Dubai Envac Scandinavia, Envac Iberia, Spain Sweden Envac Macau Envac Qatar Envac France Envac Optibag, Sweden Envac Environmental Envac Abu-Dhabi Envac Denmark Envac Italy Technology, Shanghai Envac India Envac Environmental Envac Portugal Envac Norway Technology, Beijing Envac Brazil Envac Environmental Envac U.K. Technology, Tianjin Envac Canada Guangzhou Envac Envac Finland Environmental Technology, Guangzhou – 65% Centralned b.v., Envac Singapore Holland (33%) Envac Malaysia
Select and develop new geographicalmarketsSuccess factors• Market condition fits the product.• High level of new construction of residential buildings.• Projects are financially justified.• Strong local presence.
Key success factors to develop a new market. Starting Points Next Step Customer Build a Project interest Market volume strong local Product fit the market financial Market on potential organisation justification priority list Pilot project Description • How does our • Construction • Determine the product fit the market for cost benefits for specific residential the customers conditions on buildings? – Pay-back time the market? – Alternative cost • Collection – Fractions – Increase of value of market? buildings – Customers – Value for free space – Competitors • Market for – Legal aspects • Financing of special – Structure of projects? applications? collecting market – Political attitudes • Economical (top-down approach) situation in the – References market?
Key success factors to develop a new market. High volume of Project financial Build a strong local Product fit the market residential construction justification organisation
Systems business characteristics The offering• A business with – high growth potential – high profit margin potential – moderate entrance and exit barriers – often scattered and weak competition Technical Review Commercial Review Partners Calculus Implementation Technical solution Contract/ Customer• A very complex and high risk business, 100% uncertainty (if not properly controlled and managed) 0% uncertainty 0% uncertainty 100% uncertainty Competitive position 22
Tacit knowledge/technologyKnowlege Structured Tacit Components, pipes,Visible exhausters, PLC, compressors …………. x DMS, Envac Academy, EAP2.0, Experience in: design, Fan calc, Erosion calc, LDT, software, installations, after-Hidden Design Centre ……. sales service, applications, materials, source separation, vacuum technology, International differences....... 23
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 ConceptA Swedish Partnership Initiative between the Swedish Government andSwedish companies:The Swedish experience Integrated planning Scalable solutions 25
The model for SymbioCity is Hammarby SjöstadThe Envac concept: • Source separation of waste • Waste-to-Energy - District Heating • Organic - Biogas • Dry recyclables - Recycling The Hammarby model • 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 26
To develope a global system business?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.
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
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 The Stena Sphere 2010 Six business areas Total turnover: US$ 7.800 million EBT: US$ 530 million No of employees: 19 000 (Investments in several listed companies)
The business areas within the Stena Sphere Ferry operations Offshore drilling Turnover SEK 10,3 billion Turnover SEK 6,1 billion No of employees 5 800 No of employees 968 Property Shipping Turnover SEK 4,7 billion Turnover SEK 2,1 billion No of employees 7937 No of employees 262 Stena Metall New Business Turnover SEK 28,6 billion Turnover SEK 3,7 billion No of employees 2 800 No of employees 17915. The Stena Sphere