Step 1 - Planning and Organization

Task 1a: Meeting with top management

TK Chemical Complex Ltd (Pulp and paper, Bangladesh)

• It was difficult to convince top management to start an energy efficiency project because the concepts of Cleaner Production and greenhouse gas reduction were new to them. “Energy efficiency” was a more familiar concept and top management associated this with money and not only with the environment.
  Lesson learnt: Energy efficiency is a concept known and liked by top management

  Urea Fertilizer Factory Ltd (Chemicals, Bangladesh)

• From a first meeting with plant management it became clear what the constraints and benefits were that would influence an energy assessment and should be considered

  • Constraints: old plant, lack of capital, low energy costs, Government owned plant with possible slow decision making, less economic incentive than commercial plants to reduce costs, and need to ensure that safety environment and production are not affected
  • Benefits: sound process design, an expert team within the plant, supportive site
  • management, low labor rates

  Lesson learnt: A first meeting with top management will help understand what factors will make an energy assessment easier or more difficult, which will need to be considered in the planning as part of preparing an assessment proposal.

  Abul Khair Steel Products Ltd (Iron and steel, Bangladesh)

• Based on the meeting with top management and the completion of the Energy Management Matrix, it appeared that the company has some energy and environmental initiatives in place, but these are mostly informal. Some of the recommendations made to management to strengthen overall environmental management included to establish:
• A well documented energy and environmental policy with clear objectives, responsibilities and targets
• An organogram for the company with clear responsibilities for energy and environment
• Appropriate awareness, motivational and promotional schemes to encourage production staff to come up with suggestions on how to improve energy efficiency
• A documented monitoring system that includes an information flow from production to top management
• Improved good housekeeping practices to prevent soil and ground water contamination.
• Development of an environmental management system with the possibility of accreditation to ISO14001 in the future
Lesson learnt: the meeting with top management is useful to identify what is needed from an energy management perspective to ensure energy efficiency improvements will continue in the future

  Anhui Tian Du Paper Co. Ltd (Pulp and paper, China)

• The external facilitators went through the Energy Management Matrix with top management to find out what the company is already doing to manage energy consumption. It was found that top management places an emphasis on staff training. The company has a training programme that trains staff in their vocation (e.g. electrical engineering), on new technologies before they are implemented (e.g. cogeneration), and operation of the plant (e.g. energy efficiency galls under this). Experts from universities and research institutes are invited to give training sessions on operation of the plant, which all cadre men are required to attend, but other interested staff can attend also, followed by an examination to test new knowledge and skills. For example, in August 2004, three teachers from Tianjin Science and Technology University gave 1.5-hour training sessions after work hours for six weeks to plant staff about papermaking techniques, equipments and technology development in China and around the world.
  Lesson learnt: Existing training programmes can be useful to deliver training on energy efficiency, rather than establishing a separate energy efficiency training programme

  Indocement (Cement, Indonesia)

• The company scored high on the Energy Management Matrix because it has many elements in place to ensure effective energy management, most notably:

  • A strong push from majority shareholder Heidelberg Cement group to strive for excellence in environmental and energy performance
  • An ISO 9001 certified quality management system and an ISO 14001 environmental management system, and plans for an ISO 17025 management system
  • A sophisticated on-line, real-time information system is in place at the modern Plant #11 and will be expanded to other plants. This system monitors and logs, among other things, the specific power and heat (thermal) consumption for clinker production, environmental emissions, such as dust, SOx and NOx
  • Monitoring of the community’s attitude towards the plant: one of the company’s Operating Success Parameters (OPS) is the Public Response’s Environmental Index

  Lesson learnt: High scores on the Energy Management Matrix indicate that there is sufficient basis for a successful energy assessment at the plant and for continuous improvements after that

  PT Semen Padang (Cement, Indonesia)

• Throughout the GERIAP project, top management was available to meet with the Team, BPPT (the external facilitators for the project in Indonesia) and the international consultant during each visit. This demonstrated a strong interest in the project and energy efficiency in general and inspired and motivated the Team enormously.
  Lesson learnt: Top management’s availability to meet with the Team on a regular basis is an important motivating factor.

Erel Cement Ltd (Cement, Mongolia)

• The company had not previously participated in energy efficiency or cleaner production process. Nor had any other (internal/external) assessment for energy and environmental conservation been conducted to date. However, an assessment of conversion from wet process to dry process was undertaken in the past, but costs were estimated at US$ 20 million, which is considered too high. Therefore the team could start from scratch.
  Lesson learnt: For companies that have not been involved in energy efficiency or cleaner production projects before and that have not undertaken formal energy assessments in-house, the Company Energy Efficiency Methodology can be applied without having to consider past activities.

Holcim ( Cement, Philippines)

• Because the company is working towards ISO 14001 certification of its environmental management system, top management wanted to be assured that the energy assessment as part of the GERIAP project fitted within this framework to avoid parallel environmental projects being carried out at the company. A meeting between top management and the external facilitator was organized to explain how Cleaner Production and energy efficiency fit in with an environmental management system as illustrated below:

Dankotuwa (Ceramics, Sri Lanka)

• Management expected that most of the options with high energy and greenhouse gas reductions would involve high investments that the company could not come up with. For this reason top management expressed interest in looking into the potential for CDM (Clean Development Mechanism) projects, as part of the feasibility analysis of options, to provide the investment capital. However, the GERIAP project focuses on options that make business sense and these would not be eligible as a CDM project, although it was possible to check if any of the identified unfeasible options could in principle meet CDM criteria.
  Lesson learnt: It is important to be clear with top management from start of what they can expect out of the project.

Holcim Lanka Cement (Cement, Sri Lanka)

• During the first meeting between the external facilitator, the company’s Environment Manager and top management (task 1a), the CFO of this company indicated that focus areas should be selected based on:

  • Projects already under investigation by the company’s Process Team to reduce GHG emissions
  • Areas where Holcim Cement Ltd could use external input and expertise
  • Areas where possible CP-EE options are likely to be low cost and/or with a short payback period, as the company had already committed significant funds to other GHG projects in the next years.
• Lesson learnt: This showed how important the first meeting with top management was, because now top management’s priorities could be considered in selecting focus areas. This way top management quickly approved the proposal for the detailed energy assessment and remained supportive of the project until the end.

Medigloves Ltd (Chemicals, Thailand)

• Immediately at the start of the GERIAP project it was clear that top management of this company is truly committed to improving energy efficiency. Throughout the project the plant’s Team and external facilitators were given total support and trust by top management, and this inspired them enormously to do whatever they could to save the company energy, GHG emissions and money. This greatly contributed to the success of the project at Medigloves .
  Lesson learnt: Top management’s commitment, support and trust are key ingredients for a successful assessment and implementation of options.

Siam White Cement Company Ltd, SWCC ( Cement, Thailand)

• This company approached TISTR, the Thai facilitating organization, to participate in the GERIAP project rather than the other way around. This reflected top management’s attitude towards environmental management: they want to grasp every opportunity to further improve their environmental performance.
  Lesson learnt: Even companies that are already advanced in environmental management can be open to participate in external projects because top management considers that there is always room for further improvement.

Several companies:

• This attached matrix compares the results for two companies: (a) a multinational company and (b) a family-owned company. The multinational company has many formal processes and systems in place (= high scores for policy/systems, organization, information systems and investment) but there appeared to be little ownership by the work floor staff (= low scores for training/awareness, which is mostly aimed at senior staff only, and motivation). The family-owned company has the opposite situation: informal processes and systems, but an incredibly high involvement and commitment from employees to help the company improve energy efficiency. Thanks to the Matrix scores, the Team knew it had to focus on involving work floor staff at the multinational company and on setting up formal committees, policies and systems at the family-owned company to make the project successful.
  Lesson learnt: The Energy Management Matrix is a useful tool to determine the strengths and weaknesses of company energy management.

Click to enlarge matrix

Other lessons learnt:

• Many Asian companies have a hierarchical management structure, and top management is not always open for change, especially if suggestions come from junior staff. Therefore ensure that a senior person with sufficient experience and credibility is present at the first meeting with top management to get them on board and listen to your ideas about an energy assessment
• To get top management commitment it is important to explain that the Methodology is easy to implement and will result in increased financial savings from energy reductions
• Be aware that different top managers may have different views about the importance and the potential of energy efficiency, and that this is often the result of lack of information they have received in the past
• Commitment from top management is not enough: commitment at all company levels is vital to the success of the project. Clear communication by top management to the rest of the company is the most effective way of achieving this
• In addition to a first meeting with top management, a half-day introductory seminar could also be organized for top management of several companies so that they can exchange ideas and experiences
• For demonstration projects it is helpful to conduct a simple viability assessment of companies intending to participate to avoid “drop-outs” along the way. This should assess top management support, likely changes in company ownership, structure and management, and the economic situation of the company. During the GERIAP project one company had to withdraw from the project due to bankruptcy and subsequent owner change
• Self-assessments mostly do not work in Asian companies because top management are worried about loosing face and will therefore give themselves higher scores than the real situation. For example, with the Energy Management Matrix it is therefore better for the external facilitator to ask questions about each energy topic and decide on a score based on top management’s answers, rather than asking top management to indicate the scores