Trade & Investment 02-03-2010

Excellence

Reliability at work

Customized Logwall Systems

Longwall Mining Technology

Only Bucyrus can offer complete customized longwall systems for all seam thicknesses with integrated state-of-the-art control for maximum reliability andperformance. Whether for plow or shearer, all components work together perfectly,giving you enhanced control of cutting, conveying and roof support. Advanced visualization and unprecedented automation further boost productivity and safety.

Longwall systems engineered with excellence.

Bucyrus International, Inc. is a world leader in the design and manufacture of high-performance machinery and equipment for the surface and underground mining industries with a workforce of over 7,000 employees worldwide.

Bucyrus Czech Republic, headquartered in Ostrava, is a main production facility for longwall product components and a customer service center for providing the Czech mining industry with on-site service, repairs, overhauls, and spare part management.

The company also pursues extensive activities in comprehensive supplies, assembliesand modernizations of technological equipment for a number of industries.

www.bucyrus.com

February~March | 2010 € 6,90 | www.trade-investment.euFebruary~March | 2010 € 6,90 | www.trade-investment.eu

investmenttrade

“We owe our success to our staff, customers and shareholders,”says Gert Schwarzbach,

Managing Director,

50Hertz Offshore.

says Gert Schwarzbach,

Managing Director,

50Hertz Offshore.0Hertz Offshore.

Shell to axe 1,000

jobs as profits

plunge 69%

Russia unveils

its first stealth

fighter jet

Where Is the End

of Car Recalls?

ENTSO-E

TENNET

ABB

HAMON

GN NETCOM

E.ON SWEDEN

Drahomir RutaManaging Director

and President

of Pražská energetika, a.s.

TI_2010_02_obalka.indd 1TI_2010_02_obalka.indd 1 19.3.2010 14:33:2819.3.2010 14:33:28

Answers for energy.

Getting more and more energy from fewer and fewer resources is our never-ending mission.

In addition to excellent availability and utmost reliability, efficiency is a key requirement when it comes to supplying energy for the world’s steadily growing megacities. Basically, it’s all about making best use of all resources. We apply this principle across the entire energy conversion chain to take efficiency to totally new levels. Our new 800 kV transformer, for example, makes possible the efficient transmission of electric energy in the gigawatt range over distances of 1,000 kilometers and more. And our new generation of gas turbines makes combined cycle power plants deliver a record-breaking efficiency of more than 60 per cent. www.siemens.com/energy

How can we get by with less when the whole world keeps asking for more?

02_Efficiency_engl_A4.indd 1 18.02.2009 9:09:33 UhrTI_2010_02_obalka.indd 2TI_2010_02_obalka.indd 2 19.3.2010 14:34:4519.3.2010 14:34:45

Trade & Investment | www.trade-investment.eu 3 February-March 2010

As we settle into the second decade of the third millennium, there is a definite sense that it’s time to get back to business. The last ten years saw astounding developments in technology which changed the way in which we do business forever. There are fewer boundaries between us: with tele-video conferencing I can as easily meet with a cli-ent thousands of miles away as I can with my col-league in the next room. With smart phones, 3G and Wi-Fi I can work anywhere, any time. So, now we are faced with the challenge of putting this cap-ability to good use. How are we, the European business community, going to pull together and take best advantage of our new-found ability to easily communicate with one another?

However, whereas virtual boundaries have been lifted, physical ones have not. Just a few years ago hopping on a plane to attend a transatlantic con-ference was considered a basic business cost, but both budgetary pressure and a greater awareness of the environmental impact of air travel has forced us to think twice before packing our suitcases. In all, we are being forced to look at the world in a dif-ferent way, and the impact that environmental concerns now have on the way we do business can-not be underestimated. Over the last few months

I have been speaking with various players in the European energy sector, from those working close-ly with the technologies that control the flow of electricity to chief executives pioneering new mar-ket models. One subject prevails, and that is the concept of removing cross-border barriers to en-able countries to cooperate and invest in greener energy solutions.

Renewable energy is not an easily controlled, transported or marketable commodity. The grids designed to transport conventional energy must be adapted and developed to cope with the irre gular and variable quantities of green energies. Each re-newable source has its own characteristics that must be balanced against another – wind is vari-able and unpredictable; hydro is consistent. There-fore countries have to unite to take best advantage of their own particular resources, and connect their systems to enable energy to be distributed and stored at maximum efficiency. The obstacles facing all players in the energy market across Eu-rope are immense, both in importance (it’s a life or death situation for the planet) and complexity. With such a challenge at hand, it’s exceptionally gratifying to know that all over Europe business is saying “the only option is to work together.”

Gabrielle Brown

Copyright belongs to the publisher. Publication, copying or distribution of the magazine, of its part or of its content in any way in English or any other language without a written au-thorisation from the publisher is prohibited. The publication contains illustrations and photographs of ImageBase and Flickr. These pictures are used in accordance with the licence.

Editor in Chief : Lucia BalogEditor: Gabrielle BrownProduc tion D irec tor: Mgr. Lukáš ŠevčíkBusiness Development Managers: Peter HlozekMarek RottenbornAdver tis ing Manager: Katerina UrbanovaS ec tor Manager: Tomas Doubrava

Writers: Diane Mannion, Philip Bradbury, Ronan O’ConnorPrice of one issue: € 6.90Graphic design, t ypesetting and design layout, prepress: oranzovareklama.cz, grafi [email protected] ubscription: Handled by SEND Predplatne spol s r.o., Ve Zlibku 1800/77, 193 00 Prague 9 – Horni Pocernice, www.send.czWebsite: www.trade-investment.eu

Trade & Investment is a business magazine published by Smart Publications, s.r.o., Slovanska 16, 787 01 Sumperk, Czech Republic, registered with the commercial register in Ostrava, Czech Republic, registration number C 44339, business number 28606795.

Powerful Connections

TI_2010_02_final.indd 3TI_2010_02_final.indd 3 19.3.2010 13:32:4119.3.2010 13:32:41


Content

/ Editorial

Powerful Connections .....................................................................................................3

/ News from industry sectors

EnergyAutomotive .................................................................................................10Construction ...............................................................................................14Aerospace & Defence.................................................................................17Electronics ..................................................................................................22Banking & Finance .....................................................................................25Food & Drink ...............................................................................................28

/ Story

Where Is the End of Car Recalls?

/ Companies

ENTSO-E | The 2020 Vision ................................................................................................34

50HERTZ TRANSMISSION | Holding the Balance of Power ............................................. 38

TRANSELECTRICA | Green Electricity ...........................................................................44

TENNET | Electric Equilibrium for Europe .........................................................................50

ELES | Power Lines in Time .................................................................................................54

SVENSKA KRAFTNÄT | The Electric Highway

ENERGINET.DK | Pioneers in Wind Power.......................................................................62

ABB GROUP | Transforming Industry ..............................................................................66

ABB Czech Republic | We Save Energy ........................................................................72

SALZBURG AG | Infrastructure, Innovation and Diversity ............................................76

HAMON COOLING TOWERS | Staying Cool ...............................................................80

NLI | Vision, Courage and Success ........................................................................................84

GN NETCOM | Getting Set for Hands-Free ......................................................................88

E.ON SVERIGE | Seriously Green .....................................................................................94

INTERNATIONAL DIESEL SERVICE | Maximising Fuel Transport Efficiency ...........98

CENTRAL EUROPEAN GAS HUB | Euro-trade in Natural Gas ................................100

/ Technology newsHow to make buildings with glue ...................................................................................... 104

Cellphones secured by design .......................................................................................... 104

Computer power provides heat for Helsinki ........................................................................ 105

Nanotube transistors shrink smaller than silicon size .......................................................... 106

/ Interview

Drahomír Ruta

I am able to “switch on” when it comes to electricity

in Prague but also to “switch off ” after a busy day



says Managing Director and

President of Pražská energetika,

a.s. PRE Group is an important

electricity trader on the Czech

market and the regional opera-

tor of the distribution system for

Prague, the capital city and the

town of Roztoky. Drahomir Ruta

was born 63 years ago in Zatec.

He is married...

The telecommunications in-

dustry is notoriously fast mov-

ing, with innovative technolo-

gies constantly entering the

marketplace offering new so-

lutions for business and con-

sumer clients alike. GN Net-

com’s Chief Technology Officer

Leo Larsen talks to Gabrielle

Brown about their award-win-

ning Jabra hands-free head-

sets and the imminent boom

in the unified communications

market.

Shell, Britain’s second-biggest oil

company, will cut a further 1,000

jobs this year as it reported a bigger

than expected 69 per cent fall in

full-year profi ts and cautioned over

an “uncertain” outlook for 2010.

The Anglo-Dutch company report-

ed 2009 earnings of $9.8 billion

on a current cost of supplies basis,

against $31.4 billion for 2008.

The fi rst recall happened in Sep-

tember 2007 when Toyota had to

recall 55,000 Camry and Lexus cars

in the US due to fl oor mat faults.

Further recalls followed in the US

since October 2009 when 3.8 m

Toyota and Lexus vehicles were

recalled due to fl oor mat prob-

lems. This number increased to

4.2 m vehicles in November 2009.

Drahomír Ruta I am able to “switch on” when it comes to electricity

in Prague but also to “switch off ” after a busy day

GN NETCOM

Getting Set for Hands-Free

Energy

Shell to axe 1,000 jobs as profits plunge 69%


Toyota is to recall 8,000 Tacoma pick-up trucks in the US, over fears about defective front drive shafts.

p.108p.58

p.6p.30



Shell to axe 1,000 jobs as profits plunge 69%Shell, Britain’s second-biggest oil com-pany, will cut a further 1,000 jobs this year as it reported a bigger than expected 69 per cent fall in full-year profi ts and cau-tioned over an “uncertain” outlook for 2010. The Anglo-Dutch company report-ed 2009 earnings of $9.8 billion on a cur-rent cost of supplies basis, against $31.4 billion for 2008.

Peter Voser, chief executive of Shell, said: “Oil prices have increased compared to a year ago, but gas prices and refi ning margins have declined sharply, because of weaker demand and high industry inventory levels. We are not assuming that there will be a quick recovery, and the outlook for 2010 is uncertain”

Under its restructuring programme, Project Transition, Shell has already re-duced staff numbers by 5,000 over the

past year. It will add a further 1,000 to the tally, mainly from its downstream and corporate functions, as part of its plan to reduce underlying costs by $1 billion in 2010.

Shell also said it is likely to make more disposals this year, including around 15 per cent of its current refi ning capacity. The company sold $1.2 billion of “non-core” downstream assets last year, and last month said it would close its 130,000 barrels a day Montreal East refi nery in Canada.

Shell’s fi gures come after disappointing full-year numbers from BP, which also showed the eff ects of poor refi ning mar-gins. Fourth quarter oil and gas production fell to 3.3 million barrels of oil equivalent per day from 3.4 million barrels a year earlier. Adjusted earnings for the fourth quarter came in at $2.77 billion, against City forecasts of $2.9 billion.

The company is proposing a fourth-quar-ter dividend of $0.42 cents, as expected.

However, it has also announced a freezing of the next quarterly dividend at the same level. In recent years, the first quarter dividend has been increased on the fourth quarter and then held fl at for the remain-der of the year. Andrew Whittock, oil and gas analyst at Oriel Securities, said “Over-all, the fourth-quarter results are disap-pointing and the maintained fi rst-quarter dividend confi rms cash generation is not good enough”. The broker said it expect-ed to cut its current-year earnings forecasts by around 5 per cent. Shares in Shell fell nearly 2 per cent – down 30½p to £16.79½ – in early trading.

British Gas confirms plan to cut bills by 7%Centrica, the owner of British Gas, today confi rmed that it will reduce the average gas bill by 7 per cent which it claims will save the typical household £55 a year.

Energy



Nearly eight million British families are set to benefi t from the cut which Cen-trica said will be rolled out immediately.

Phil Bentley, managing director of British Gas, said today: “At British Gas, we know household budgets are stretched, and that our customers are concerned about the eff ect the recent cold weather will have on their winter fuel bills. I’m pleased we’re able to off er our customers some extra help with this gas price cut – and that we’re able to do this while it’s still winter, allowing our customers to really feel the benefi t.”

The cut follows steep falls in the wholesale price of gas since 2008 and is the fi rst of its kind by one of the UK’s “big six” energy suppliers since 2007. It could open the fl oodgates to reductions from rivals E.ON, EDF, ScottishPower, Scottish and Southern Energy and RWE npower.

In July 2008, the same month in which global oil prices peaked at a record $147 per barrel, British Gas lifted its gas prices by 35 per cent. But since then the whole-sale price of gas in the UK has plummet-ed, tracking oil which plunged sharply in the autumn of 2008 and hit lows of below $40 per barrel a year ago. Industrial de-mand for gas in the UK has fallen by about 10 per cent since 2007 because of the recession, with factories forced to reduce energy consumption. Meanwhile, supplies to the UK are plentiful, with two new liquefied natural gas (LNG) terminals opened in Milford Haven in South Wales last year. The boost to supply has helped to depress prices further.

The move by British Gas will also help to stave off public criticism of what are ex-

pected to be bumper profi ts of more than £500 million when the group unveils its full-year 2009 profi ts.

All of Britain’s energy companies have benefi ted from increased demand for the fuel during an unexpectedly cold Decem-ber and January. Citigroup has estimated that Centrica alone enjoyed an extra £40 million to £50 million profi t on the back of the cold weather.

Saipem awarded new offshore drilling contracts worth $370 millionSaipem has been awarded new off shore and onshore drilling contracts for a total value of approximately US$370 million. Saipem has been awarded two contracts for the charter of the semi-submersible rig Scarabeo 3, which is at present idle, for a total period of 9 months plus options starting from January 2010. The two con-tracts, signed with Total E&P Congo and Addax Petroleum, encompass the use of the rig in Congo for one drilling well plus one optional well, and in Nigeria for drill-ing activities for the duration of six months respectively.

Saipem has reached an agreement with the Egyptian company IEOC for the exten-sion of the contract for the charter of the Scarabeo 4 until June 2013. Sca rabeo 3 and 4 are second generation semi-submersible drilling rigs capable of operating in water depths of up to 1500 feet.

Within off shore drilling activities, Saipem has been awarded by Harrington Dubai the contract for the charter of the jack-up Perro Negro 3, also idle at present, for drilling activities in the Persian Gulf for a period of six months plus an option of 18 months. Perro Negro 3 is a jack-up capable of operating in water depths of up to 300 feet.

In onshore drilling Saipem has been awarded two contracts in Kazakhstan with ExxonMobil Kazakhstan Inc. (EMKI) for the decommissioning and transportation of two rigs owned by the client already operated by Saipem. Saipem will also carry out conversion activities on one of the two rigs.

Finally, Saipem has signed other new con-tracts with several clients for the charter of four rigs in Algeria and Peru, two of which are presently idle. The contracts encom-pass the utilisation of the rigs starting from the fi rst quarter of 2010 for a varying period of six months to two years.

Siemens to invest more than €250 million in India by 2012As it profi ts from ongoing growth in the emerging nations, Siemens is seeking to significantly expand its investment in India. Experts forecast that the Indian economy, for example, will grow seven percent in 2010 and eight percent the following year. “India is already one of the growth drivers worldwide and will remain so in the future. We’ve been optimally positioned here for over 140 years and intend to further strengthen our position,” said Peter Löscher, President and CEO of Siemens AG in New Delhi, where the en-tire Siemens Managing Board met for the fi rst time ever. Over the next three fi scal years through 2012, the company intends to invest more than €250 million in the country, thereby doubling its current an-nual investments. A major part of this will be invested in renewable energy and value-priced products business. The com-pany also wants to increase its market share in India to ten percent by the year 2012. With recently signed orders totalling over €500 million, primarily for energy technology, Siemens is well on its way.

The country’s power supply is of particu-lar concern to the Indian government. Currently about 30 percent of India’s

p



Energy

population has no access to power, which is why the Indian government is planning to add 150 gigawatts over the next seven years – an amount equal to Germany’s entire installed capacity. In addition, 20 percent of the energy mix should be generated from renewable sources by the year 2020. “Like many other nations around the globe, India is facing a green revolu-tion. We have the products and solutions for the country and we want to further expand our position as a green infrastruc-ture provider in India,” said Löscher. One Siemens project involves an investment of approximately €70 million in the con-struction of a wind turbine factory in India by 2012. The fi rst turbines are scheduled to leave the plant in a little over two years.

Siemens also intends to invest in its value-priced products business. Six new centres of competence for value-priced products from all Siemens Sectors will be estab-lished in India by the end of 2010. Plans call for the centres to manufacture a number of various products, including new products in the area of signalling technology as well as steam turbines. These centres will also be responsible for the entire value chain, from product de-sign, development and production to sales and marketing in India and abroad. “India will become a major centre for value-priced products. By the year 2020, we intend to generate revenue of about €1 billion with these products – both within the borders of India and beyond,” said Armin Bruck, CEO of Siemens Ltd., the Siemens Regional Company in In-dia.

Siemens has already started off strong in India in the new fi scal year 2010. In recent weeks, the company signed orders total-ling more than €500 million. In the next few years, Siemens will deliver power distribution technology to its customers Qatar General Electricity & Water Corpora-tion and Power Grid Corporation.

BP receives offer for its Retail Fuels and Convenience business in FranceBP has received an off er from Delek Europe B.V., one of the largest fuel retailers in Europe and a subsidiary of the Delek Group Ltd, to buy its French retail fuels and convenience business including se-lected fuels terminals.

The proposed purchase price is €180 mil-lion (approximately US$251 million), in cash, subject to working capital adjust-ments. On receipt of the off er to purchase BP’s approximately 416 petrol stations in France, BP has entered into a period of exclusivity with Delek Europe and has started discussions with the relevant works councils. The sale would also include in-terests or ownership in three fuel distribu-tion depots and it is expected to include a long term agreement for acceptance of fuel cards. The proposed transaction is currently expected to be completed in the second half of this year. Any fi nal trans-

action will be subject to works councils and regulatory approvals.

As well as an agreement for BP branding to remain on the forecourts for a number of years under a licensing agreement, BP would also continue to supply fuel includ-ing premium BP Ultimate fuels under a supply agreement. If the offer is ac-cepted and the deal is approved then BP would still continue to retain a signifi cant presence in France through its business to business fuels, bitumen, lubricants and aviation businesses. Staff currently work-ing for the retail business would transfer to the new owner.

Jean-Baptiste Renard, BP’s Head of Region for Europe and South Africa, said: “We believe the decision to sell is right for the business as it means the BP brand will stay on the forecourts, it is right for staff as their jobs would be retained, and it would give the new owners an opportu-nity to keep investing in the business.”

Zion Ginat, CEO Delek Benelux, com-mented: “Delek is excited to expand and develop its retail business in Europe through the proposed acquisition of BP’s marketing business in France. Delek is committed to drive value and to continue to strengthen the BP brand name in France for its customers and employees.”

Sardinia, home to Italy’s largest wind farm from Enel Green PowerForty new 1.5 MW wind turbines entered into service in the municipalities of Tula and Erula, in the province of Sassari, Sar-dinia, bringing the total capacity of the Sa Turrina Manna wind farm to 84 MW. Therefore, Sa Turrina Manna will become the largest Enel Green Power wind farm in Italy. Enel Green Power is the Enel Group Company that develops and operates plants using the full range of renewable energy sources, both in Italy and world-wide.

At full capacity, the new wind farm will produce some 126 million kWh, enough to meet the energy needs of some 46,000 households, a little under half the popu-lation of a city the size of Sassari, thus avoiding the atmospheric emission of 94,000 tons of carbon dioxide (CO2) and



consumption of approximately 47,000 tons of oil equivalent per year. The exten-sion work on Sa Turrina Manna was com-pleted in less than a year with due respect for the landscape and natural context of the area as well as of its existing activi-ties.

There are a now total of 3 Enel Green Power wind farms in operation in Sar-dinia, with a total capacity of 161 MW, generating over 240 million kWh of pow-er, and in 2010, work is scheduled to begin on the Portoscuso wind farm, that will have a potential capacity of some 100 MW.

In 2009, in Italy, Enel Green Power con-structed wind farms for 94 MW. This fi gure includes those installed during the year as well as those under construction.

Enel Green Power is the Enel Group Com-pany fully dedicated to the development and operation of plants generating en-ergy from renewable sources at the inter-national level, with presence in Europe and the Americas. Thanks to its 17.2 billion kWh generated from hydro, solar, wind and geothermal energy sources, Enel Green Power is the sector leader in Europe. The company’s plants are able to meet the consumption needs of some 6.5 mil-lion households, therefore cutting CO2 emissions by 13 million tons. With an in-stalled capacity of about 4,700 MW, Enel

Green Power is Italy’s leading player in the global renewables industry. The com-pany has over 500 plants operating world-wide, with a generation mix that includes wind, solar, hydro, geothermal and bio-mass energy sources.

Statoil says output may gain in 2010, cuts 2012 goal Statoil ASA, Norway’s largest oil and gas company, forecast output may rise as much as much as 0.7 percent in 2010, while it cut its production target for 2012 due to the weak gas market. The com-pany’s oil and gas production reach be-tween 1.925 and 1.975 million barrels of oil equivalent a day from 1.962 million barrels a day in 2009, the Stavanger-based company has said in a statement. The company reduced its output target for 2012 to between 2.1 and 2.2 million bar-rels of oil equivalent a day, from 2.2 million barrels of oil equivalent a day.

“We are positioned to continue our pro-duction growth towards 2012 despite the current weakness in the gas markets,” Chief Executive Offi cer Helge Lund said in the statement. “Statoil also has projects and resource potential to underpin prof-itable growth beyond 2012.”

Statoil, 67 percent owned by the govern-ment, is seeking to maintain domestic production and is expanding in countries such as Angola and the U.S. as Norwegian reserves dwindle. The country’s output is forecast to decline for a 10th year this year, according to the Norwegian Petroleum Directorate.

Statoil’s reserve replacement ratio rose to 73 percent last year from 34 percent in 2008, the company said. “The reserve replacement ratio of 73 percent for 2009 is improving from a low level, and based on our continued exploration success and growth portfolio, I am confi dent that we will improve this ratio going forward,” Lund said. “Statoil has a high quality port-folio of non-sanctioned projects that will create attractive returns for our sharehold-ers.”

The producer’s unit production costs will be between 35 and 36 kroner per barrel of oil equivalent in 2010, it said. Crude has averaged $77 a barrel in New York this year and is forecast to rise to $84 a barrel in the fourth quarter, according to a Bloomberg survey. Statoil is planning to drill 50 wells in 2010, it said.

Norway is the world’s sixth-largest oil exporter after Saudi Arabia, Russia, the United Arab Emirates, Iran and Kuwait. It’s also the second-largest gas exporter.



Automotive

Opel slashes jobs and demands state moneyIt has been months in the making. But fi nally, Nick Reilly, head of General Motors Europe, has announced the details of his plan to slim down the company’s Euro-pean unit Opel and return it to health. As expected, the radical restructure calls for signifi cant job cuts, considerable salary slashes and extensive aid from European governments.

“We have a plan that we believe will help us rebuild long-term profi tability,” Reilly told reporters at a press conference in Frankfurt. “We do need more help from European governments.” Specifi cally, GM is asking for €2.7 billion ($3.7 billion) in loans or loan guarantees from countries where Opel factories are located. Ger-many would be responsible for coming up with €1.5 billion of that amount, with half coming from the federal government

in Berlin and the remaining amount being coughed up by the German states con-cerned.

In total, some 8,300 jobs are set to be cut across Europe, with 3,900 jobs to be slashed in Germany. While no additional factories are to be closed down – the closure of Opel’s plant in Antwerp, Belgium was announced in January – the Opel factory in Bochum, Germany will lose 1,800 jobs.

Allegedly, Reilly also plans not to replace some 1,000 additional workers set to go into retirement. Reilly’s announcement once again puts the ball in the court of European governments. Last spring, Ber-lin spent weeks trying to come up with a plan to save Opel when it became clear that its parent company GM was heading for bankruptcy. Finally, a plan was cobbled together which foresaw the carmaker being sold to the Canadian-Austrian auto parts maker Magna and its Russian part-ner Sberbank. In November, however, GM

changed its mind and decided to hang on to Opel.

Whether Berlin, German state govern-ments and other European governments will be eager to come up with cash for Opel remains to be seen. Roland Koch, governor of the state of Hesse, said that he was sceptical of the plan.

“We will take a very close look at the plan presented today from GM,” he said. “Ac-cording to our fi rst impression, it will be necessary for GM, as the owner, to con-siderably increase its contribution to the restructuring.” GM has said it will provide €600 million of the €3.3 billion it says is needed to keep Opel operational.

Money from the federal pot may likewise be diffi cult to access. Assistance for Opel would come from the €115 billion German Economic Fund, put together to help Ger-man businesses struggling as a result of the fi nancial crisis. There are, however, a number of criteria that must be fulfi lled



before companies can access that fund – one of those being that the company must have been in good economic shape prior to the crisis. It is unclear whether Opel qualifi es.

Another key component of the plan like-wise looked to be in doubt. Reilly has demanded that labour unions forego €265 million worth of annual pay over the next fi ve years. Unions have refused, un-less GM hands the workers a share of the company and grants unions a say in further factory closures and job cuts. Opel work-ers were already outraged by GM’s deci-sion to slash jobs and close down the Antwerp factory. Currently, no further talks between labour and GM are sched-uled.

Reilly is hoping to return Opel to profi t-ability by 2012, primarily via a complete overhaul of Opel’s product line. A slew of new models are to be introduced this year and next with the battery-powered Am-pera set for release next year.

Sweden’s guarantee of Saab EIB loan wins EU approvalSweden’s guarantee of a European Invest-ment Bank loan to Saab Automobile won European Commission approval, clearing a regulatory hurdle for Spyker Cars NV’s purchase of the carmaker from General Motors Co.

The government guarantee of Saab’s pro-posed 400 million euro ($546 million) loan for developing technology won’t cause “any undue distortions of competition,” Neelie Kroes, the European Union’s com-petition commissioner, said. Saab is off er-ing “adequate remuneration” and collat-eral for the guarantee to meet aid rules, the EU said.

Spyker, the Dutch maker of the C8 Aileron sports car, agreed on Jan. 26 to buy Troll-haettan, Sweden-based Saab for $74 mil-lion in cash and $326 million in preferred shares in the new company that would emerge, to be called Saab Spyker Auto-mobiles. The EIB and Sweden’s National Debt Offi ce must give fi nal approvals for the loan.

“Today’s decision is defi nitely a step in the right direction,” said Johnny Kjellstroem, a deputy director at Sweden’s Ministry of Enterprise, Energy and Communications who is working on the Saab case. “This should make it easier for the EIB to approve

the loan. I’m optimistic this will be resolved in the end.”

Saab, which is among four brands that Detroit-based GM is shedding after exiting bankruptcy in July, was unprofi table for most of the two decades the Detroit-based carmaker owned it. Spyker said on Feb. 2 that it’s aiming for Saab to return to prof-it by 2012, with the business plan requir-ing about $1 billion in “in peak funding,” including the lending from the Luxem-bourg-based EIB.

Erik Sjulander, the National Debt Offi ce offi cial handling the Saab state-guarantee application, said he hasn’t received any information that the loan won’t receive approval.

Hyundai chairman ordered to pay automaker nearly $60 millionHyundai Motor Co. Chairman Chung Mong-koo was ordered by a South Ko-rean court to pay almost $60 million in damages to the automaker to compensate it for losses resulting from his business decisions.

The ruling in the civil case in the Seoul Central District Court follows Chung’s 2008 conviction of embezzlement and breach of trust. He was given a three-year sus-pended jail sentence before being par-doned by South Korean President Lee Myung-bak.

“This is a case that reveals the problem of family-run management that focuses on the interests of major stockholders and

the executives of Hyundai Motor,” the judges’ ruling said.

The suit was fi led in 2008 against Chung and Kim Dong-jin, vice president of parts supplier Hyundai Mobis, by a group of 14 minority shareholders and a non-governmental group called Solidarity for Economic Reform. Kim also was ordered to pay almost $47 million.

Solidarity for Economic Reform called the penalties too low and said it would appeal to a higher court. The group originally asked the court to force Chung and Kim to pay Hyundai 563.1 billion won (almost $481 million).

Renault to build factory in AlgeriaRenault is poised to announce the con-struction of a car factory in Algeria. A spokesman for Renault said no discus-sions had been concluded in Algeria but said the group is observing what is going on in a number of countries.

Le Monde, a French newspaper, said Re-nault would build the factory at Rouiba on the outskirts of the capital Algiers and would assemble the Logan and Sandero models, sold under the Dacia marque, as well as the Symbol, currently built in Tur-key. To conform with Algerian regulations, Renault would have a 49 percent stake in the venture, partnering with state-owned SNVI, although the French manufacturer would run the site.

Le Monde said Renault wanted to set up the factory to consolidate its number one position in the local car market. It sold 17,000 Dacia-badged vehicles and 39,000 Renaults last year, giving it almost a quar-ter of the market. “It couldn’t maintain



this level without a local investment,” the paper quoted a diplomat as saying. The project has yet to get the green light from Algerian authorities but would help the country’s ambition to build up an auto-mobile industry, Le Monde said.

Peugeot Citroen losses curbed by scrappage schemes French car maker Peugeot Citroen has reported a boost from car scrappage schemes despite reporting a 1.16 bn Euro ($1.6 bn) loss for 2009. It lost 962 m Euros in the fi rst six months of the year, but only 199 m Euros in the second half thanks to the eff ect of the scrappage deals.

But the company predicted continued tough times for the car market in the new year, with many schemes ended. Euro-pean car sales were expected to be down by 9%, the company said.

“Our fi nancial results for 2009 show a much improved performance in the second half, but still refl ect the severity of the crisis aff ecting the automotive industry,” com-mented Philippe Varin, Peugeot Citroen’s

chief executive. “In 2010, we expect the market conditions to be challenging, but... we should continue to grow our market shares.”

Peugeot Citroen sales for the year were down more than 10% at 48.4 bn euros – slightly better than analysts’ expectations. The company expects the Chinese mar-ket – now the biggest car market in the world – to continue to grow strongly in the coming year.

German auto sales crash in JanuaryAfter a year of successfully dodging a se-vere slump in car sales, 2010 has not started well for German carmakers. Janu-ary saw the worst fi gures for domestic German auto sales in 20 years. But indus-try experts disagree over whether the fi gures represent a simple market correc-tion after last year’s government-spon-sored cash for clunkers program or a sign of grimmer things to come.

Only 181,500 new vehicles were registered in January, according to the Association of International Motor Vehicles Manufac-turers (VDIK). The figure represents

a 4.2 percent drop relative January 2009, when year-on-year fi gures were already down roughly 14 percent. That slump led the German government to introduce its scrapping bonus programme which re-sulted in a signifi cant spike in domestic car sales.

In January, only Volkswagen was able to report an increase in sales, of 11 percent. Audi, BMW, Mercedes and Ford all saw slumps ranging between 10 percent and 20 percent. Porsche got hit the hardest, with a 32 percent dip.

VDIK President Volker Lange warned against doomsday scenarios, saying that January sales were at their “typical, low level.” His organization predicts that car sales in 2009 will not drop below 2.9 mil-lion vehicles. As a result of the cash-for-clunkers program, 2009 saw record sales of some 3.81 million vehicles.

Many, though, fear that those seeking to buy a new car, likely did so before the scrapping bonus program ended in Sep-tember. “This fi rst month hasn’t really been all that dramatic,” Ferdinand Dudenhöff er, head of the Center Automotive Research (Car) at the University of Duisburg-Essen, told Reuters. “The worst is yet to come.”

German carmakers are hoping that con-tinued high demand in rapidly developing countries like China, India and Brazil can compensate for weak sales at home.

Renault reports full-year loss, sees market declineRenault SA, France’s second-largest car-maker, reported its first annual loss in 13 years and forecast a 10 percent contrac-tion in European auto demand this year as governments phase out incentives.

The net loss was 3.1 billion euros ($4.3 bil-lion) compared with a 571 million-euro profi t a year earlier, Renault said in a state-ment today. Analysts had predicted a 2.6 billion-euro loss, the median of 10 es-timates compiled by Bloomberg. Revenue fell 11 percent to 33.7 billion euros.

“Pricing is going to continue to be ex-tremely competitive,” Chief Executive Of-ficer Carlos Ghosn told reporters and analysts at a conference. “That’s why we need to go further in cost reduction. 2010

Automotive



is going to be very tough on all car man-ufacturers in terms of pricing.”

The maker of Megane, Clio and Laguna cars said its results showed a “positive infl ection” in the second half as govern-ment subsidies propped up demand. PSA Peugeot Citroen, Renault’s larger domestic rival, has reported a bigger- than-expected second-half operating loss at its auto division after pricing pressure and a demand shift to cheaper models countered a recovery in deliveries.

Renault has almost doubled in Paris trad-ing in the past 12 months, compared with a 17 percent decline in the Bloomb-erg European Auto Manufacturers In-dex.

The carmaker posted a 396 million-euro operating loss, excluding one-time gains or costs, compared with a profi t of 326 mil-lion euros a year earlier. Operating loss at the auto division widened to 915 million euros from 174 million Euros.

Renault’s operating income was “a touch weaker than expected but no surprise after Peugeot,” London-based Credit Suisse analyst Stuart Pearson said. “The positive surprise is that they got their debt below 6 billion euros,” said Pearson, who has an “outperform” recommendation on the shares. “That’s about a billion better than we thought.”

Renault’s industrial net debt – which ex-cludes sales- fi nancing operations – fell to 5.92 billion euros as of Dec. 31 from 7.94 billion euros a year earlier, the com-pany said. Free cash fl ow was 2.1 billion euros, versus a negative 3 billion euros in 2008. Renault said it would target positive cash fl ow this year, without giving sales or earnings forecasts.

“There’s still a lot of uncertainty and volatility in 2010 and we don’t want to be changing it every month,” Ghosn said. Renault reined in wages, reduced inven-tories, halted development of three planned models and delayed projects in India and Morocco last year, in a bid to slash capital investment by 20 percent. The carmaker said it will continue its cost-reduction program this year and keep capital expenditure and research and development spending below a combined 10 percent of sales.

Renault said it’s on course to meet the 1.5 billion euros in additional synergies targeted last year with its 44 percent- owned affi liate Nissan Motor Co. Further integration will boost Renault’s free cash fl ow by 1 billion euros in 2010, Chief Fi-nancial Offi cer Thierry Moulonguet said. “Improvement in operating earnings will

be a major contributor to this improve-ment,” Moulonguet said at a briefi ng for reporters near Renault’s headquarters in the Paris suburb of Boulogne-Billan-court.

European states boosted auto demand last year with so- called “scrappage” pay-ments and subsidies to counter the eco-nomic slump, slowing the market contrac-tion to 5.7 percent in the second half from 24 percent in the fi rst and lifting sales of smaller vehicles.

Renault said Jan. 14 its vehicle sales fell 3.1 percent to 206,702 million cars and small trucks last year, as government in-centives helped to slow the 17 percent decline recorded in the fi rst half. Its Euro-pean market share rose by 0.5 point to 9.2 percent in 2009, according to Brussels-based European Automobile Manufactur-ers’ Association.

Ferrari 458 Italias ‘selling for £200k in UK’The fi rst examples of the new Ferrari 458 Italia supercar are trading for close to £200,000, price guide Glass’s Guide reports today. It claims wealthy enthusiasts are paying a £25,000 premium to jump the queue and get into one of the fi rst 458s in Britain. The Italia lists at £169,545 in the UK, with fi rst deliveries due for summer 2010.

Richard Crosthwaite, prestige car editor at Glass’s, said: ‘Clearly the recession hasn’t diminished buyers’ interest. It’s not unu-sual for the fi rst examples of such exclusive sports cars to change hands for infl ated prices before the fi rst owners take delivery, but the premium required to bag one of the early 458s is exceptionally high – a re-fl ection of just how desirable it is.

‘The 458 is likely to remain in short supply for some time, which will keep it in favour with the fashion-conscious supercar buyer and help to protect residual val-ues.’

Eco City Vehicles launches electric London taxiEco City Vehicles has launched an electric prototype of the Mercedes Vito taxi, which will it trial later this year to test its suitabil-ity for use as part of London’s iconic black taxi fl eet. “The eVito is the fi rst all-electric

wheelchair accessible taxi with a 25-foot turning circle to be launched in the world and a major step towards our goal to become a leading supplier of niche eco-friendly vehicles,” said CEO Peter DaCos-ta.

The fi rm, which sells and services cabs, said it developed the Mercedes eVito alongside its manufacturing partners Penso, Mercedes Benz UK and Zytek Au-tomotive. Since its launch in 2008, the Mercedes Vito has proved to be a serious competitor to Manganese Bronze, the maker of London’s traditional black taxis.

Eco City said last year the Vito now has a 30 percent share of new black cab taxi sales in London.

The company added the eVito would comply with clean air standards for the city’s taxis which have been proposed by the Mayor of London and are due to be introduced in time for the London Olym-pics in 2012.

“Subject to successful trials, the eVito together with the already popular Vito taxi, provides London with a great op-portunity to reduce air pollution with modern vehicles,” DaCosta added.

Shares in Eco City, which are up 85 percent in the last six months, rose 2 percent by valuing the company at 19.3 million pounds ($30.1 million).

Volkswagen recalls 200,000 cars in Brazil Volkswagen (VW) is recalling nearly 200,000 cars in Brazil because of a rear wheel problem. The company wants to determine whether rear wheel bearings are suffi ciently greased on the Novo Gol and Novo Voyage models made before July 2009.

VW says there is a possibility that a lack of lubrication could cause wheels to lock. In extreme cases they could loosen and even fall off . The vehicles were made in Brazil for the local market, VW’s third-largest.

This latest recall came a day after car maker Honda added another 437,700 cars, mainly in North America, to its existing global safety recall over airbag infl ation problems. Also, Toyota announced the recall of about 436,000 hybrid vehicles worldwide, including its latest Prius model, to fi x brake problems.



Wienerberger acquires long-established German brick producerWienerberger is expanding its activities in Southern Germany with the acquisition of the insolvent clay block producer Rim-mele. Rimmele is a long-established com-pany with high branch recognition and strong customer ties throughout the Swa-bian region. The brick plant in Ehingen is located 80 km southeast of Stuttgart and has a production capacity of roughly 100 million NF (= standard format for bricks). This transaction was completed in January in the form of an asset deal, whereby the parties have agreed not to disclose any in-formation on the purchase price. The ac-quired assets include a clay pit that has raw material reserves for the next 20 years. The Ehingen plant generated revenues of € 8.5 million in 2008, and 28 employees will now be transferred to continue opera-tions.

“Wienerberger was previously not repre-sented in Swabia, Rimmele’s primary market. We reacted quickly and used the opportunity presented by these bank-ruptcy proceedings to strengthen our regional portfolio in Germany”, explained Heimo Scheuch, Chief Executive Offi cer of Wienerberger AG. “Of course, we will

also be able to realize synergies in sales and administration with the integration of Rimmele into our German organization.” Asked if this marks a turning point for Wienerberger and the start of renewed acquisition activity in the future, Heimo Scheuch commented, “As long as there are no clear signs of economic recovery, the protection of liquidity will remain our top priority. The Rimmele acquisition is already included in our planned invest-ments for 2010 of roughly € 90 million.”

Skanska preferred-bidder for the Essex Building Schools for the Future (BSF) in the UK, within the Private Finance Initiative (PFI) programSkanska, through a preferred-bidder con-tract, has been selected for developing, constructing and maintaining three schools for Essex County Council, in the UK. The project will be conducted within the UK program for public private partner-ships, PFI (Private Finance Initiative), which

means that Skanska will assume respon-sibility for the fi nancing, design and con-struction of the new schools, as well as the maintenance of the schools for a total of 26 years commencing in 2011.

Skanska Infrastructure Development’s investment is estimated to amount to approximately GBP 6 M, about SEK 70 M, corresponding to a majority holding in the consortium that is responsible for the project. The consortium also includes RM plc, which is responsible for the schools’ information and communications systems. RM plc is an international provider of education solutions and the UK’s leading provider of ICT software, systems and infrastructure for schools.

This PFI project in Essex initially com-prises three new schools to be developed in cooperation with the local authorities within the Essex Local Education Partner-ship (the Essex LEP) of which the Skanska-RM consortium holds an 80 percent share. The partnership covers a total period of ten years and further schools will be de-veloped in future phases.

The construction assignment will be con-ducted by Skanska UK, which will also design and build a fourth school in addi-tion to the three in this PFI agreement. The contract for the four schools is esti-mated to amount to approximately GBP 70 M, approximately SEK 800 M.

Financial close for this contract, including the completion of negotiations and fi nanc-ing, is expected during 2010. Once this is fi nalized, the size of the company’s invest-ment and construction contract will be established. This will then be announced in a press release along with information on which quarter the construction con-tract will be included in Skanska UK’s order bookings and the timeframe for implementation.

Skanska already operates the UK’s fi rst LEP through the Bristol BSF program and has investments in two other PFI schools projects in the UK. Skanska’s other major PFI projects in the UK include the widen-ing of the M25 ring road in London, the street lighting network in Surrey and several large hospitals, such as Barts and The London Hospitals.

Skanska Infrastructure Development is a leader in the global Public Private Part-nerships (PPP) market. The business unit invests in, develops and operates roads, hospitals, schools, power plants and

Construction



other social infrastructure in partnership with the public sector.

Skanska UK reported revenues of SEK 17.9 billion in 2008, with about 4,900 employ-ees. The company is active in building and civil construction, utilities and building services.

STRABAG wins € 260 million contract, further solidifies its leadership on the Polish transportation infrastructure market STRABAG SE, Central and Eastern Europe’s largest construction group and the mar-ket leader in the transportation infrastruc-ture segment in Poland, announces a fur-ther success. The General Directorate for National Roads and Highways (GDDKiA) today awarded STRABAG the contract to build the 36.5 km section of the S7 Ex-pressway between Kalsk and Miłomłyn approximately 100 km northwest of War-saw.

Construction for the € 260 million (PLN 1.1 billion) contract will begin in March and is expected to end in July 2012. The works comprise the construction of the four-lane expressway, the conversion un-der traffi c of the parallel DK7 road as well as the construction of 27 bridges, four service areas and three junctions. Con-struction will be carried out by the STRA-BAG subsidiaries STRABAG Polska (51%) and HERMANN KIRCHNER Polska (49%).

With the new contract, STRABAG further solidifi es its leadership position on the Polish transportation infrastructure mar-

ket and raises its total order backlog in Poland to approximately € 2.6 billion.

“Due to the geological conditions and short construction period, this project requires a high level of technical know-how. We won out over the other estab-lished Polish bidders for this reason, with a price that is not only competitive but also economically justifi able,” says Hans Peter Haselsteiner, CEO of STRABAG SE.

STRABAG SE is one of Europe’s leading construction groups. With some 76,000 employees, STRABAG generated a con-struction output volume of €13.7 billion in the 2008 fi nancial year. From its core markets of Austria and Germany, STRABAG is present via its numerous subsidiaries in all countries of Eastern and South-East Europe, in selected markets in Western Europe and on the Arabian Peninsula. STRABAG’s activities span the entire con-struction industry (Building Construction and Civil Engineering, Transportation In-frastructures, Tunnelling) and cover the entire value-added chain in the fi eld of construction.

HOCHTIEF wins initial part-order to plan new city in QatarHOCHTIEF is involved in one of the world’s largest urban planning projects. Group subsidiary HOCHTIEF ViCon will coordinate the deployment of 3D technologies in the development of “Lusail City”. This new city of around 200,000 inhabitants is due to be implemented in Qatar by 2020. The owner and client is Qatari Diar, a state real estate investor and urban developer. The contract, which initially runs until 2011, is worth a single-digit million sum and represents a major business success for this relatively new HOCHTIEF subsidi-ary.

Lusail City will rise out of the desert sands on the Gulf coast north of Doha, the capital of Qatar. Ten urban quarters with residential areas, shopping streets, leisure facilities, schools, medical centres and two harbours are to be built on an area of around 37 square kilometres. Numerous companies around the world have been commissioned to plan the infrastructure and supply channels. HOCHTIEF ViCon will be working on behalf of the client to coordinate these planning measures with the assistance of its internally developed 3D model, which will facilitate liaison among the project participants. In a sec-

ond stage, HOCHTIEF ViCon will extend the model to include a time schedule (the 4th dimension as it were) for the construc-tion of Lusail City. The model will then serve to coordinate the construction com-panies involved, enabling them to agree the course of construction and document construction progress. In addition, experts of HOCHTIEF Construction will provide consultancy during overall project man-agement. HOCHTIEF ViCon is also involved in other HOCHTIEF projects in the Gulf region, such as the construction of Barwa Commercial Avenue, an eight-kilometre long shopping centre in Doha/Qatar.

Balfour Beatty secures £270 million of UK highways and rail new ordersBalfour Beatty, the international infra-structure group, announces today that it has won work valued at £270 million in the UK highway and rail sectors. Com-menting on the contract awards today, Balfour Beatty Chief Executive, Ian Tyler, said:

“We are delighted to have been selected to deliver these contracts. We have suc-cessfully completed many other projects for each of these key customers. Our ex-perienced regional teams will build on these strong relationships by success-fully delivering the unique requirements of each.”

Network Rail has selected Balfour Beatty to undertake major improvement work at Edinburgh’s Waverley Station. The £50 million contract, which is scheduled to begin in spring this year and to be com-pleted in 2013, comprises the renovation of the 34,000 sqm glass roof and associ-ated activities. It will provide passengers with a brighter station with new lighting and a completely reglazed roof.

Balfour Beatty has also won four signifi cant contracts in the UK highways sector: the A11 Fiveways to Thetford Improvement Highways Agency Early Contractor In-volvement (ECI) contract, with a scheme cost in excess of £106 million, to dual the last single carriageway section of the A11; two Construction Management Frame-work contracts for civil engineering works in the Highways Agency’s Area 10, cover-ing south Lancashire, Merseyside, Great-er Manchester and Cheshire and Area 9, covering Herefordshire, Staffordshire,



Warwickshire, Worcestershire and the West Midlands. Both contracts, which will be worth in excess of £20 million, are for four years with an option to extend them for a further three years; the one-year Mid-lands Framework 4 contract, for which Balfour Beatty is one of four contractors, is valued at £60 million to the company. The contract has a potential one-year extension. The structural works, surfacing and roadworks will be carried out in the Highways Agency’s Areas 7 and 9 in the Midlands; in joint venture, Balfour Beatty has been awarded the £35 million, A487 Porthmadog, Minff ordd and Tremadog Bypass contract by the Welsh Assembly Government. The project, which involves the design and construction of a 5.25 kilometre single carriageway road with

eight bridges and three retaining walls, is scheduled for completion in 2016.

Strategic partnership between VINCI and Qatari Diar In the context of a project of strategic partnership, Qatari Diar and VINCI entered into exclusive negotiations on August 31, 2009 in relation to the contribution of Cegelec in exchange for an equity holding in VINCI. Following the completion of the consultation process of VINCI’s and Cege-lec’s employee representative bodies, Qatari Diar and VINCI have signed a bind-ing agreement pursuant to which Qatari Diar commits to transferring 100% of the share capital of Cegelec to VINCI in ex-change for an equity holding in VINCI.

The agreement confi rms the main princi-ples of the transaction that were previ-ously announced on August 31, 2009. Upon completion of the transaction, Qatari Diar would become VINCI’s largest share-holder after the Group’s employee savings funds.

This transaction is based upon an ex-change ratio of 31.5 million VINCI shares for 100% of Cegelec. The VINCI shares delivered in exchange for the acquisition

of Cegelec will be a combination of new shares (issued pursuant to authorisation granted by the extraordinary shareholders’ meeting) and treasury shares. The con-templated proportion is two thirds of new shares and one third of treasury shares.

The transaction is deemed to have an economical effect as of July 1st, 2009. Therefore, Cegelec will not proceed to any dividend distribution for the FY 2009 before the completion of the contribution, and Qatari Diar will receive, for each Vinci share received in consideration of the contribution, an amount equal to the interim dividend paid by VINCI in Decem-ber 2009 and to any further dividend that would be paid by VINCI before the com-pletion of the contribution.

The completion of the transaction and its calendar remain, in particular, subject to clearance by the competent antitrust au-thorities in the EU and in other third coun-tries. In addition, independent appraisers (commissaires aux apports) have been appointed in order to opine on the valu-ation of the contributed Cegelec securities and on the exchange parity.

As announced on August 31, 2009, simul-taneously with the acquisition of a stake by Qatari Diar in VINCI as a result of the contribution of Cegelec, Qatari Diar will sign a stable shareholding agreement. This agreement, stipulates that a director proposed by Qatari Diar will be appoint-ed to the VINCI Board (subject to the ap-proval from the shareholders of VINCI) and will also be a member of the strategy and investment committee, given that Qatari Diar shall hold a minimum equity interest of 5% of the share capital of VINCI.

Subject to certain exceptions, the agree-ment also stipulates that Qatari Diar is to keep a stake in VINCI that could range between 5% and 8% for three years as from the completion of the contribution. VINCI will benefi t from a right of fi rst off er (or a pre-emptive right in certain cases) on any disposals by Qatari Diar of blocks of shares representing more than 1% of the share capital.

For VINCI, the contribution of Cegelec would be refl ected by growth in its an-nual revenues of circa €3 billion. The trans-action would be earnings-enhancing as early as 2010. This transaction, exclusive-ly carried out by an exchange of shares, would be neutral on VINCI’s debt ratios, as VINCI would take over only Cegelec’s fi nancial operating debt.

Construction



Aerospace and Defence

Russia unveils its first stealth fighter jetRussia has unveiled its new stealth fi ght-er jet, meant to boost the country’s age-ing arsenal of weaponry and be a rival to the US F-22 Raptor. The Sukhoi T-50, also called the PAK FA, made its maiden fl ight in Russia’s far east. Test pilot Sergei Bogdan said it was “easy and comfortable to pi-lot”.

Prime Minister Vladimir Putin said much work needed to be done before mass production began in 2015. Stealth tech-nology is meant to nearly eliminate a plane’s radar signature. The plane is be-ing developed by the Sukhoi company at its Komsomolsk-on-Amur production plant. The new jet has been developed in partnership with India. It is seen as a sig-nifi cant milestone in Russia’s eff orts to modernise its Soviet-era military hard-ware.

Sukhoi’s director Mikhail Pogosyan said he was convinced that the project would “excel its Western rivals in cost-eff ective-ness and will not only allow strengthening of the defence power of the Russian and Indian air forces, but also gain a signifi cant share of the world market”.

The company says the jet’s stealth features considerably enhance its combat eff ective-ness in all weathers. Its features include: all-weather capability, ability to use a take-off strip of just 300-400 metres, capacity for sustained supersonic fl ight including repeated in-fl ight refuelling, advanced avionics, simultaneous attacks on air and ground targets.

But analysts have denied the jet is a leap forward. “It’s just a prototype lacking new engines and a new radar,” military analyst Pavel Felgenhauer told the Associated Press news agency. Originally scheduled for 2007, the T-50’s maiden fl ight was repeatedly postponed because of technical problems. Observers of Russia’s recent military

modernisation drive say it has been plagued by delays and quality problems.

Premium AEROTEC takes over aircraft parts manufacture in BremenJust one year after its foundation, Pre-mium AEROTEC GmbH is expanding fur-ther. The former Airbus parts manufactur-ing unit in Bremen was integrated into Premium AEROTEC on 1 January 2010. This created a solid long-term basis for securing the future. Premium AEROTEC has expanded its business activities by taking over the former Airbus parts manufacturing unit in Bremen. This unit, with some 400 employees, became part of the company on 1 January 2010.

Premium AEROTEC itself began operations on 1 January 2009 and is a wholly owned



subsidiary of EADS N.V. Its foundation integrated the business operations of EADS’ Augsburg plant and Airbus’ Nor-denham and Varel plants. The parts man-ufacturing unit in Bremen is being run as part of the Nordenham plant. Premium AEROTEC’s core business covers the de-velopment and manufacture of metal and carbon fi bre composite aircraft structures and the associated equipment and pro-duction systems. The parts manufacturing unit in Bremen rounds off the company’s production portfolio of high-quality indi-vidual aircraft components. Among the parts produced by the unit are complex clips made from thermoplastic material for the new Airbus A350 XWB long-haul aircraft.

Hans Lonsinger, President and CEO wel-comed the employees of the Bremen-based parts manufacturing unit to Pre-mium AEROTEC and explained: “We are proud that this unit, with its many years of experience in the production of aero-structural components, is now part of our Group. Premium AEROTEC will continue its expansion course to become a glo-bally active, competitive and steadily growing company.”

Dr. Gerald Weber, Chairman of the Super-visory Board, emphasised Premium AEROTEC’s strategic importance in the fi eld of aircraft construction: “By taking over the Bremen-based parts manufactur-ing unit, the company will further con-solidate its already excellent position in the global aero-structures market.”

“We are facing the future with confi dence. The investments made in the Bremen based parts manufacturing unit and the work packages allocated to it, particularly those for the A350 XWB, have strength-ened Premium AEROTEC’s overall capa-bilities and possibilities. The employees have good future prospects at Premium AEROTEC. They are assured for years to come,” said Thomas Busch, Chairman of the General Works Council.

Premium AEROTEC GmbH has more than 6,000 employees and expects to generate revenues of about one billion euros for 2009. Its core business is the development and manufacturing of metal and carbon composite aerostructures and the associ-ated equipment and production systems. The company has production plants in Augsburg, Bremen, Nordenham and Varel.

General Dynamics UK successfully tests ASCOD SV armour systemMine-blast tests demonstrate FRES SV contender stands ready to off er British forces new levels of protection.

General Dynamics UK has this week com-pleted a series of demanding trials at the higher test levels required by the FRES SV programme to demonstrate that its AS-COD SV contender is already capable of delivering new levels of protection to British military personnel. The ASCOD SV system design withstood a number of attacks from the latest mine threats in its base confi guration. The system also ena-bles enhanced levels of blast protection to be fi tted, enabling protection against greater threats and providing the Army with the ability to adapt rapidly to evolv-ing operational scenario.

Commenting on the successful mine blast test, Steve Rowbotham, General Dynam-ics UK Vice President, Advanced Projects




and Technologies said, “This mine blast trial is a key milestone in demonstrating that ASCOD SV is the right answer for FRES SV. In addition to off ering tonnes of ca-pability and growth potential over the next 30 years, General Dynamics UK has demonstrated that ASCOD SV offers tonnes more protection to British military personnel today and in the future.”

Mine threats are regularly encountered by Allied forces on current operations in Afghanistan, sometimes with devastating eff ect to vehicles and their occupants. This specifi c testing of the high levels of integrated survivability of ASCOD SV pro-vides exacting evidence of the vehicles ability to aff ord maximum protection to the vehicle occupants.

These successful mine blast tests come only a month after the successful fi ring of the mandated CT40 Case Telescopic Weapon System by turret provider Lock-heed Martin INSYS. In addition to the MoD benefi ting signifi cantly from the commonality between the FRES SV Scout and Warrior programmes provided by Lockheed Martin’s turret, the FRES SV crew will benefi t from having the maxi-mum space to do their job while ensuring maximum protection, thanks to an in-novative turret ring confi guration and other features.

General Dynamics UK President and Man-aging Director, Sandy Wilson added: “We invested in these trials because protection is the essence of modern warfare. This proven solution, built into ASCOD SV from the start, will ensure that FRES SV delivers exceptional levels of protection to British soldiers from day one.”

Saab signs contract for air defence system RBS 70 to FinlandDefence and security company Saab has signed a contract on further deliveries of the RBS 70 ground based air defence sys-tem to the Finnish Army. The order has a value of MSEK 260. First deliveries of material are scheduled for 2011. “This is very positive and it further proves the capability of the RBS 70 system which until now has been exported to 18 coun-tries located on all fi ve continents,” says Tomas Samuelsson, Head of Business Area Dynamics. Saab serves the global market with world-leading products, services and solutions ranging from military defence to civil security. Saab has operations and employees on all continents and con-

stantly develops, adopts and improves new technology to meet customers´ changing needs.

Boeing awarded contract for major upgrade to French AWACS fleetThe Boeing Company today announced that it has been awarded a $324 million Foreign Military Sales contract from the Electronics Systems Center at Hanscom Air Force Base, Mass., to upgrade France’s fl eet of four E-3F Airborne Warning and Control System (AWACS) aircraft, as well as the fl eet’s ground system.

“This upgrade – the largest ever for French AWACS – will provide the fl eet with more actionable information and better situ-ational awareness,” said Steve Swanz, French AWACS program manager for Boe-ing. “New mission computers also will reduce the mission operator’s workload, allowing more time to be spent managing the battlespace.”

The French AWACS Mid-Life Upgrade is based on the U.S. AWACS Block 40/45 system, which dramatically enhances the potential for network-enabled operations; increases mission execution capability, reliability and eff ectiveness; and reduces life-cycle costs.

The upgrade will include:

A primary AWACS display, which increas-• es situational awareness through its in-

tuitive interface and detailed map da-tabase; Upgraded Identifi cation Friend or Foe • Interrogation, including Mode S and Mode 5 capability; An increase in the number of mission • consoles aboard each aircraft, from 10 to 14; Modern mission computing processing, • which enables improved AWACS mission performance through the use of ad-vanced battle management tools such as Automatic Air Tasking Orders and Airspace Coordination Order updates, resource and sensor management, and automated decision aids; Improved combat identifi cation capa-• bilities from integrated sensor and off -board datalinks; The Multi-Source Integration process, • which automatically integrates data from on- and off -board sources such as radar, Electronic Support Measures and Link 16, to provide signifi cantly improved tracking capabilities; Digital radio control and management • through the new mission computing subsystem; An open system architecture that ena-• bles rapid software upgrades and re-quires less hardware.

Air France Industries will begin installing the enhancements at its Le Bourget Airport facility near Paris in 2012. The entire fl eet is scheduled to complete this upgrade in the third quarter of 2015.

A unit of The Boeing Company, Boeing Defense, Space & Security is one of the world’s largest defense, space and security businesses specializing in innovative and capabilities-driven customer solutions,




and the world’s largest and most versatile manufacturer of military aircraft. Head-quartered in St. Louis, Boeing Defense, Space & Security is a $34 billion business with 68,000 employees worldwide.

Asia-Pacific airlines to acquire 8,000 new aircraft over next 20 yearsAirlines in Asia and the Pacifi c will acquire some 8,000 new passenger and cargo aircraft over the next 20 years, according to European aircraft manufacturer Airbus. Valued at USD1.2 trillion, the requirement represents one third of predicted global deliveries between now and 2028, with the region driving demand for larger air-craft types.

The manufacturer’s latest forecast for the region has been presented at the Singa-pore Airshow by John Leahy, Airbus Chief Operating Offi cer, Customers.

In the passenger market Airbus predicts that traffi c in the region will grow at an average annual rate of 5.9 per cent, while cargo traffi c will increase by 6.3 per cent per year. This compares with a global av-erage of 4.7 per cent for passenger traffi c and 5.2 per cent for air freight. As a result

of this growth and continuous fl eet re-placement, the region is expected to take delivery of some 880 very large aircraft, 2,570 twin aisle widebodies and 4,560 single aisle aircraft.

The high proportion of larger aircraft types refl ects the concentration of populations around main urban centres in the region, generating high density traffic on key intra-regional routes, as well as to capacity constrained international destinations in Europe and North America. Meanwhile, demand for single aisle aircraft in the region is expected to accelerate in the coming years, driven by the growth of low cost carriers and opening of new routes between secondary destinations, especially in China, India and South East Asia.

In the cargo sector, the region will con-tinue to dominate the global air freight market, with the dedicated freighter fl eet operated by Asia-Pacifi c airlines growing fi ve times to 1,500 aircraft. While many of these will be converted from passenger models, Airbus predicts that around 340 new production freighters will be deliv-ered to the region over the 20 year period. These will be predominantly widebody aircraft and will represent 40 per cent of expected global demand for new produc-tion freighters.

Presenting the details, John Leahy said that within 20 years the region would

overtake the US and Europe as the world’s largest air transport market, with Asia-Pacifi c airlines carrying over 30 per cent of global passenger traffi c and around 40 per cent of all air freight.

“To meet this demand larger aircraft will be needed to ease congestion and do more with less,” he said. “This will see air-lines from the region account for over 40 per cent of twin aisle deliveries and more than 50 per cent of the demand for very large aircraft, such as the A380. With a modern, eco-effi cient and comprehensive product line, including the only all-new aircraft in the very large segment, Airbus will be especially well placed to meet the needs of airlines in this region.”

The Asia-Pacifi c region is a core market for Airbus accounting for a quarter of all orders recorded by the company to date. Today there are some 1,430 Airbus aircraft in service with 66 operators across the region, with another 1,120 on order with customers for future delivery. This repre-sents 32 per cent of the company’s total backlog, refl ecting the importance of the region as the fastest growing market for new civil aircraft.

Airbus’ forecast for the Asia-Pacifi c region is derived from the company’s Global Market Forecast, which foresees total de-mand for almost 25,000 new passenger and freighter aircraft valued at USD 3.1 trillion between 2009 and 2028. This in-cludes foresees total demand for 1,700 very large aircraft, 6,250 twin aisle wide-bodies and almost 17,000 single aisle aircraft.

The Airbus product line comprises the best-selling A320 Family in the single aisle market, the popular A330/A340 and all-new A350 XWB in the twin aisle category and the fl agship A380 in the very large aircraft segment. In the freight market Airbus currently off ers the new mid-size A330-200F, set to enter service later this year.

Airbus aircraft list prices to increase from JanuaryAirbus has increased the list price of all its aircraft by an average of 5.8 per cent. The price increase is the fi rst since January



2008, and applies for all new aircraft from the beginning of January 2010.

The price increases were calculated ac-cording to the Airbus standard escalation formula over the January 2008 to January 2010 period.

“We have tried to keep prices down for as long as we can,” said John Leahy, Chief Operating Offi cer, Customers. “However, even with record aircraft deliveries and impressive orders in recent years, the continuing strength of the Euro against the US Dollar and the ongoing fi nancial challenges ahead have forced us to take action.”

An ongoing US Dollar weakness, an in-creased cost of materials as well as com-modities are all factors in the decision.

In its 40 year history, Airbus has become the leading aircraft manufacturer with the most modern and comprehensive family of airliners on the market, ranging in capacity from 100 to more than 500 seats. In this time, Airbus has sold almost 9,500 and delivered over 6,000 aircraft since the fi rst airliner entered service in 1974. Airbus’ backlog stands at almost 3,500 aircraft.

BAE Systems plc announces global settlement with United States Department of Justice and United Kingdom Serious Fraud OfficeBAE Systems plc, the U.S. Department of Justice and the UK Serious Fraud Offi ce have reached settlements in connection with the Justice Department investigation announced by the Company on 26th June 2007 and the Serious Fraud Office an-nounced by the Company on 3rd Novem-ber 2004.

Under the agreement with the Depart-ment of Justice, which requires court ap-proval, the Company will plead guilty to one charge of conspiring to make false statements to the U.S. Government in connection with certain regulatory fi lings and undertakings. The Company will pay a fine of $400 million and make addi-tional commitments concerning its ongo-ing compliance.

Under the agreement with the Serious Fraud Offi ce, the Company will plead guilty

to one charge of breach of duty to keep accounting records in relation to payments made to a former marketing adviser in Tanzania. The Company will pay an agreed penalty of £30 million comprising a fi ne to be determined by the Court with the balance paid as a charitable payment for the benefi t of Tanzania.

BAE Systems plc issued the following statement from Chairman Dick Olver con-cerning the settlement: “In 2000, the Company gave a commitment to the U.S. Government that it would establish and comply with defi ned U.S. regulatory re-quirements within a certain period and it subsequently failed to honour this com-mitment or to disclose its shortcom-ings.

In connection with the sale of a radar system by the Company to Tanzania in 1999, the Company made commission payments to a marketing adviser and failed to accurately record such payments in its accounting records. The Company failed to scrutinise these records ade-quately to ensure that they were reason-

ably accurate and permitted them to re-main uncorrected.

The Company very much regrets and ac-cepts full responsibility for these past shortcomings.

These settlements enable the Company to deal fi nally with signifi cant legacy is-sues. In the years since the conduct re-ferred to in these settlements occurred, the Company has systematically enhanced its compliance policies and processes with a view to ensuring that the Company is as widely recognised for responsible con-duct as it is for high quality products and advanced technologies.”

BAE Systems is the premier global defence, security and aerospace company deliver-ing a full range of products and services for air, land and naval forces, as well as advanced electronics, security, informa-tion technology solutions and customer support services. With approximately 105,000 employees worldwide, BAE Sys-tems’ sales exceeded £18.5 billion (US $34.4 billion) in 2008.



Electronics

Sony Europe named greenest company of 2009Leading Environmental Website, Environ-mental Graffi ti (www.environmentalgraf-fi ti.com), has selected Sony Europe for the greenest company of 2009 for its contin-ued commitment to eco friendly projects and initiatives.

“We were looking for companies that have proven over the last year that being en-vironmentally friendly and profi table can go hand in hand” said Chris Ingham-Brooke, Environmental Graffiti Editor. “What impressed us about Sony was their consistent activities throughout the year that showed they are using their technol-ogy in an innovative way to address en-vironmental problems”.

Sony Europe was particularly commend-ed for its creative green projects in 2009 which included the Forest Guard initiative that involved Sony Engineers working with a group of children to develop their idea to prevent wildfires. Not only do wildfi res cause terrible human devasta-tion, but they also have a huge environ-mental impact; the carbon dioxide they produce can equal that of several million cars on the road in a year.

Another activity was a partnership with the Prince’s Rainforest Project to help raise awareness of tropical deforestation. Sony Europe also hosted a series of sustainabil-ity lectures with the European Business school ESCP- EAP to debate the role of technology and business in solving climate issues.

“We are delighted with this recognition from Environmental Graffi ti who are such a highly respected eco website”, said Emily Young, General Manager of Envi-ronmental Communications, Sony Europe. “We will continue our work in 2010 to lead engaging environmental programmes that use our technology to fi nd solutions to mitigate the eff ects of climate change”.

Sony is a leading global innovator of au-dio, video, communications and informa-tion technology products for both the consumer and professional markets. Sony is renowned for its audio-visual products, such as the BRAVIA™ LCD high-defi nition television, Cyber-shot™ digital camera, Handycam® camcorder and Walkman® MP3 player as well as its VAIO™ personal computers and high-defi nition (HD) pro-fessional broadcast equipment, high-lighted by the XDCAM® HD. Offering a complete end-to-end HD value chain and with its electronics, music, pictures, game and online businesses, Sony is one of the world’s leading digital entertain-

ment brands, employing approximately 170,000 people worldwide.

New Ovi Maps with free navigation races past 1 million downloads in a week Nokia has announced that since the 21 January 2010 launch of the new version of Ovi Maps with free walk and drive navigation, there have been over 1.4 mil-lion downloads. The one million mark was reached just one week after the launch. “We’re averaging a download a second, 24 hours a day,” said Anssi Vanjoki, Execu-tive Vice President, Nokia. “When we an-nounced free walk & drive navigation we knew it would be a game-changer. The number of people now using their Nokia for navigation, and as a result looking for more location-aware software, is growing faster than even we predicted.”

The success of the new version Ovi Maps is a key part of Nokia’s strategy to lead the market in mobile maps, navigation and location-based services. By leveraging its investment in NAVTEQ, Nokia has been able to remove the costs associated with navigation for drivers and pedestrians and is quickly activating a massive user base to which it can off er new location features, content and services.

“This is great news for our 3rd party ap-plication developers. Within a matter of days there is an installed base of more than 1 million active users all potentially hungry for new and innovative location-aware apps,” continued Anssi Vanjoki. “For the operators too there is a growing op-portunity to sell more data-plans and



a complete navigation package to existing and new customers.”

As of 31 January 2010 the top fi ve coun-tries downloading the new version of Ovi Maps were: China, Italy, UK, Germany and Spain. The top fi ve most popular Nokia devices installing the download were: Nokia 5800 XpressMusic, Nokia N97 mini, Nokia N97, Nokia 5230 and Nokia E72.

“There is a huge appetite for GPS naviga-tion on mobile phones. We estimate there were already 25.9 million people actively using GPS navigation on their mobile phones at the end of 2009,” said Chris Jones, VP & Principal Analyst at research fi rm Canalys.

From next month, all new Nokia GPS-enabled smartphones will include the new version of Ovi Maps, pre-loaded with local country map data, with high-end walk and drive navigation and access to Lonely Planet and Michelin travel guides at no extra cost.

Ovi Maps covers more than 180 countries with car and pedestrian navigation for 74 countries, in 46 languages, and traffic information for more than 10 countries. There are more than 6000 3D landmarks

for 200 cities around the world. Lonely Planet and Michelin guides have informa-tion on more than 1,000 destinations globally.

Panasonic profits after cost-cutting Electronics group Panasonic has reported its second straight quarterly profi t follow-ing heavy cost-cutting.

Net profi t between October and Decem-ber came in at 32.3 bn yen ($360 m; £228 m), compared with a net loss of 63.1 bn for the same period a year earlier.

The turnaround was “due mainly to com-prehensive streamlining of management”, the fi rm said.

However, it maintained its forecast for a loss of 140 bn yen for the year to the end of March.

The company said that the market for consumer electronics remained diffi cult.

“In the electronics industry during the third quarter, despite visible signs of mar-ket recovery in regions such as China and

Asia, severe business conditions contin-ued,” it said.

The strong yen was also hampering ex-ports, it added.

At the end of last year, Panasonic bought a majority 50.2% stake in Sanyo, thirteen months after fi rst expressing an interest in its rival.

Motorola merger of Phone, Set-Top units sets it apart, Jha saysMotorola Inc. is combining its mobile-phone and set-top box units into one company to set it apart from rivals Apple Inc. and Research In Motion Ltd.

“It’s defi nitely a diff erentiator,” said Sanjay Jha, Motorola’s co-chief executive offi cer who will head the new company. Consum-ers want access to content “across three screens – TV, desktop, mobile,” he said.

Motorola, which developed the fi rst com-mercial mobile phone in 1983, is splitting itself into two publicly traded companies.



In addition to the phone and set-top box tie up, a second company will combine the enterprise mobility unit, which makes two-way radios and bar-code scanners, with the wireless networks business, Schaumburg, Illinois-based Motorola said yesterday.

The company is trying to revive its repu-tation as an innovator in consumer tech-nology as the lines blur between how people communicate and view entertain-ment. Combining Motorola’s wireless, video and rights management properties will let customers download TV shows, movies, personal videos at home or on their mobile devices, said Jha.

“The seas are parting into Old World tech and New World tech,” said Diane Garnick, an investment strategist at Invesco Ltd. in New York, which managed about $423 billion at the end of last year, including Motorola shares. “One of their businesses is going to go into the mature stage of the business cycle while the other one is going to capitalize on all this growth.”

The company has struggled to repeat the success it last had in 2004 with its Razr phone. Apple’s iPhone and RIM’s Black-Berry have taken the lead, capitalizing on

exploding growth in the smartphone market. That growth isn’t abating. World-wide smartphone sales are expected to jump 46 percent this year, according to a forecast by researcher Gartner Inc.

The split should be completed early next year, Motorola said. Jha assumed his new post yesterday, and current co-CEO Greg Brown will lead the second company.

Motorola’s handset business lost $132 mil-lion last quarter and hasn’t been profi t-able since the fourth quarter of 2006. Jha said on a conference call yesterday that he is “comfortable” the unit will return to profi tability this year. The company plans to release 20 mobile-phone models this year, he said.

In October 2008, management delayed a planned spinoff of the handset business amid the global recession. Billionaire in-vestor Carl Icahn, who pushed for a split earlier that year, applauded yesterday’s move. “It’s a great step for Motorola,” Icahn said. “It will strongly enhance sharehold-er value.” His company owned almost 120 million Motorola shares, or 5.2 percent of outstanding stock, at the end of Sep-tember.

The separation will occur through a tax-free stock dividend in the new companies to existing shareholders. Both companies will be “well capitalized,” Motorola said. The handset and set- top business will own the Motorola brand and license it free of royalties to Brown’s entity, the company said. “This gives Motoro-la a cleaner confi guration with a more compelling value proposition,” Brown said.

Motorola introduced its fi rst car radio in 1930 and two-way radio in 1940. A Mo-torola transponder aboard the Apollo 11 space capsule in 1969 relayed astronauts’ words back to Earth from the moon.

The deal may not appeal to all investors, said Tero Kuittinen, an analyst at MKM Partners LP in Greenwich, Connecticut. He called the phone and set-top box merger “an awkward hybrid.”

“Some people bought Motorola because they were hoping that it would be able to sell either the handset unit or the set-top box unit,” said Kuittinen, who recom-mends selling the shares. “I don’t think many people expected them to maintain them both in the same company.”

Electronics



Banking and Finance

Danske Bank sees difficult 2010Danish banks are not yet out of the crisis, but the country’s largest bank sees some light at the end of the tunnel. 2010 will still be an uphill battle for Danish banks, according to Danske Bank which has re-leased its 2009 accounts.

Results for the country’s largest bank were slightly better than anno horribilis 2008 but far from the boom years prior to the fi nancial crisis. The bank showed a 2009 result after tax of DKK 1.7 billion compared with DKK 1.0 billion in 2008 and almost DKK 15 billion in 2007.

“2010 is expected to be yet another chal-lenging year for the fi nancial sector, for Danske Bank and for the group’s custom-ers. The latest macroeconomic deve-lopment does, however, give hope for a gradual improvement in the business foundation,” the bank writes.

Danske Bank still envisages continuing major losses on bad loans. “Writedowns on loans are expected again this year to be at a high level, though lower than 2009,” the bank says. Bad loans cost Danske Bank DKK 25.7 billion in 2009.

The bank also says it expects Denmark will see positive growth in GDP at 1.7 per-cent and an increase in the interest rate of 0.5 percentage points both in Denmark and its other markets.

It also sees unemployment in Denmark continuing to grow and continued diffi -culty for Danes to borrow money.

Bank of England calls halt to bond purchase program Faced with rising infl ation and evidence that the country has fi nally emerged from recession, the Bank of England has an-nounced that it would not extend its mas-sive buying spree of government bonds that was intended as an economic stimu-lus. The move came just before a meeting of the European Central Bank, which left its benchmark rate at 1 percent amid signs that economic recovery in the Euro zone is still fragile and that lending by banks is still well below normal levels. The Bank of England also decided to leave its bench-

mark interest rate unchanged at 0.5 per-cent, where it has been since March 2009.

Regarding its asset purchases, known as quantitative easing, the Bank of England said that the “stock of past purchases, together with the low level of bank rate, would continue to impart a substantial monetary stimulus to the economy for some time to come.” The decision had been expected by analysts in the face of data showing economic activity picking up in Britain, and as annual infl ation has risen above the central bank’s 2 percent target.

Analysts expect both European central banks to leave rates at their current record lows until the second half of this year, at least. An uneven recovery in countries such as Germany, coupled with a debt crisis in Greece and 19 percent unemploy-ment in Spain, mean that policy makers will remain cautious about raising the cost of borrowing. Britain, which is outside the Euro zone, only emerged from recession at the end of last year – and then just barely.

The Bank of England had increased the budget for its asset-purchasing plan in November 2009 – the third time since it was introduced in March – but left it un-changed in December and January. In all, it has purchased around £200 billion, or $318 billion, of assets, mostly government bonds, in a program that is designed to

inject more cash into the weakened fi -nancial sector and ultimately bolster pri-vate credit.

Britain took longer to emerge from reces-sion than most of its continental neigh-bours, apparently because of the greater weight of personal debt in Britain. During the fourth quarter of last year, the British economy expanded by a limp 0.1 percent on the previous period, still down 3.2 per-cent from a year earlier, according to a preliminary estimate.

The economy in the Euro zone has per-formed better. The Market purchasing managers’ index for the Euro area, released Monday, clocked its fastest rise in two years. But while Germany and France are showing signs of modest growth, other countries, such as Ireland, remain troubled. The recovery in Britain is likely to be slug-gish because consumers face the prospect of higher taxes as well. Whichever politi-cal party wins the general election, due to be held by June, will have to focus on reducing the swollen budget defi cit.

The International Monetary Fund has predicted recently that the British econ-omy would expand by 1.3 percent this year, compared to 2.7 percent in the United States and 1.5 percent in Germany. British growth was forecast to pick up to 2.7 percent next year.

There are also concerns in Britain about infl ation, even as wages remain subdued.



In December, consumer prices climbed 2.9 percent from a year earlier, 1 percent-age point more a month earlier. Prices were pushed higher by energy costs and the expiration of a cut in value-added taxes. The weakness of the pound may have also contributed.

The bank said that infl ation is likely to have risen further in January, refl ecting the restoration of the V.A.T. rate to 17.5 per-cent. Pay growth has remained subdued, it added. The Bank of England’s last esti-mates showed infl ation would accelerate through 2 percent – its target – before dipping below that level around 2012. Over all, the most recent data are still sending mixed signals.

Deutsche Bank reports net income of EUR 5.0 billion for the year 2009 Deutsche Bank has reported unaudited fi gures for the fourth quarter and the full year 2009. For the year 2009, net income was EUR 5.0 billion, versus a net loss of EUR 3.9 billion for the year 2008. Income before income taxes was EUR 5.2 billion, versus a loss before income taxes of EUR 5.7 billion in 2008. Diluted earnings per share were EUR 7.59, versus negative EUR

7.61 in 2008. Pre-tax return on average active equity, per the bank’s target defi ni-tion, was 15%, versus negative 20% in 2008. The Tier 1 capital ratio was 12.6%, up from 10.1% at the end of 2008, while the Core Tier 1 ratio, which excludes hybrid instruments, was 8.7%, up from 7.0% at the end of 2008. The Management Board and Supervisory Board recommend a dividend of 75 cents per share, compared to 50 cents for 2008.

For the fourth quarter 2009, net income was EUR 1.3 billion, and earnings per share were EUR 2.00 on a diluted basis, versus a net loss of EUR 4.8 billion, or negative earnings per share of EUR 8.71 on a di-luted basis, in the fourth quarter 2008. Income before income taxes was EUR 756 million, versus a loss before income taxes of EUR 6.2 billion in the prior year quarter. Fourth quarter 2009 income before in-come taxes included a non-tax deductible noninterest expense of EUR 225 million relating to the proposed bank payroll tax in the United Kingdom. 2009 fourth quar-ter net income refl ects a tax benefi t of EUR 554 million, mainly due to a credit of EUR 790 million arising from the recogni-tion of deferred tax assets in the United States, which refl ects strong current per-formance and improved income projec-tions of Deutsche Bank entities within that tax jurisdiction.

Dr. Josef Ackermann, Chairman of the Management Board, said: “Deutsche Bank

achieved a great deal in 2009. We delivered very substantial profi tability, while simul-taneously reducing risk and balance sheet leverage. We used these good results to bolster our capital base, and our capital ratios are stronger than ever.” He added: “We also took decisive strategic action in 2009. We re-positioned core businesses, and widened our scope for profitable growth, both by organic investments and via targeted acquisitions. We also defi ned our management agenda for the post-crisis era. Looking forward, we see a clear trend to recovery, and stabilisation of fi nancial markets, although the eff ects of the recent crisis will take time to work through. The regulatory framework of our industry will also likely see changes. With our fi nancial strength and our strategic positioning, we are very well placed for both the chal-lenges and the opportunities of 2010.”

RBS / NatWest launch £1 bn fund in support of UK manufacturing sectorRBS and NatWest have pledged to make £1 billion of new loans available on com-petitive, fl exible terms to UK manufactur-ing businesses. The bank has ring-fenced a fund specifi cally for the manufacturing sector, with loans being off ered on com-petitive fi xed rates and with the option to defer repayments for up to three years.

The bank is launching its dedicated manufacturing fund in response to feed-back from customers in the sector who are anticipating growing demand for their products during 2010 and beyond. The fund will provide loans designed to help those businesses fi nance investment and ensure they are poised to take advantage of any opportunities that present them-selves as the market for their products and services begins to recover.

Data that have been published provide evidence for cautious optimism in a sec-tor which, with nearly 168,000 manufac-turing companies employing more than 2.5 million people, has a signifi cant role to play in the UK economy. The Purchasing Managers’ Index (PMI) survey of UK manufacturers staged a solid rebound in December 2009 to reach a two-year high, suggesting an underlying improvement in the performance of British industry.

Banking and Finance


Peter Ibbetson, chairman of business banking at NatWest and RBS, said: “We’re beginning to see some encouraging signs for the manufacturing sector, but we can’t forget the context they must be taken in, which is that this sector has been hit par-ticularly hard by the recession and its return to full health will not happen over-night. We want to ensure we are doing everything we can to assist the sector as conditions begin to improve. As we see many of our manufacturing customers turning their thoughts to investment in order to drive competitiveness, we want to send a clear message of support to them by creating a fund that is designed specifi cally to enable that investment. We believe the fi xed rate deals we are launch-ing today are better than you would fi nd anywhere else in the market currently.”

Alastair Murray, Group Finance Director of Dairy Crest Group PLC commented: “Anything that is designed to help UK manufacturers invest for growth should be welcomed. The fund should be seen as a positive initiative in this respect.”

The manufacturing fund is the latest in a series of initiatives launched by RBS and NatWest in support of UK businesses, including an SME Customer Charter, a cus-tomer support helpline, and a price prom-ise and committed overdrafts for SMEs.

UBS reports first profit in more than a year Swiss bank UBS has reported its fi rst quar-terly profi t for more than a year, helped by lower costs and a large tax credit. UBS made a pre-tax profi t of 1.2 bn Swiss francs ($1.1 bn; £722.9 m) in the three months to 31 December. This compares with a loss of 9.58 bn francs in the same period in 2008. The turnaround in the fi nal three months of the year helped the bank to cut its annual net loss to 2.7 bn Swiss francs last year. The bank’s profit in the final quarter of 2009, which was much bigger than analysts had expected, was partly down to a tax credit worth 480 m francs.

In a letter to shareholders, chief executive Oswald Gruebel said he was confi dent that the bank’s positive performance would continue. “We have taken decisive action to transform UBS and it is now a focused, effi cient and resilient fi rm,” he said. “We expect that our return to profi t-ability will increase clients’ confi dence in UBS and restore our reputation.”

However, the bank still suff ered from out-fl ows in the fi nal three months of 2009,

as clients took out 56.2 bn francs. Such withdrawals would continue “in the im-mediate future”, the bank said.

UBS also said it was confident that its long-running dispute with US tax au-thorities would be resolved. The US has accused UBS of hiding nearly $15bn in assets of US customers, and is seeking the account details of some of its US cli-ents.

Forint may weaken to 285 per Euro ahead of April vote, CIB Bank says The Hungarian forint may weaken to 285 per euro ahead of general elections in April and on investor concern of potential fi scal slippage because of the country’s

recession, CIB Bank said. Short-term forint depreciation from 280 to 285 to the euro “is on the cards” if global sentiment turns sour, CIB Bank, a unit of Intesa Sanpaolo SpA, said. Fiscal risks due to recession and political risks still loom and may increase with the approaching parliamentary elec-tions.

Hungary will hold a fi rst round of elections on April 11. The largest opposition party, Fidesz, which leads the governing Social-ist Party in opinion polls, has said the budget shortfall this year may be twice the government’s 3.8 percent target. Hun-gary pledged to cut spending and limit the budget defi cit to meet the terms of its International Monetary Fund-led bail-out last year.

CIB expects the forint to strengthen gradually after the elections and sees the currency potentially dipping below the 264 level.



Kraft and Cadbury: It ’s a wrapCadbury was fi nally acquired for £11.4 bn by the US food giant Kraft, closing the door on nearly 200 years of independence for the Dairy Milk maker. Kraft (KFT), which makes Philadelphia cream cheese and Oreo biscuits, said that holders of 71.7 per cent of Cadbury (CBY) shares had ac-cepted its fi nal off er, suffi cient for it to take control of the Bournville, Birming-ham-based manufacturer and create a company with global sales of $50 bn in 160 countries.

The rubber-stamping of the deal brings to an end the fi ve-month battle for Cadbury, which was often a bitter war of words until Kraft made its improved off er of 850p a share, including a special dividend of 10p.

It also came on the day that Lord Mandel-son met Irene Rosenfeld, the chief execu-tive and chairman of Kraft, to discuss UK job losses. Earlier yesterday, an entourage of Cadbury employees had protested outside Parliament. A representative of the Unite union reportedly said: “Ministers must make it abundantly clear that closures and mass redundancies will not be ac-cepted by the British government or the British people.” Kraft has not yet indicated how many jobs will be lost, as part of the deal’s slated $1.3 bn of restructuring costs.

Kraft will apply for Cadbury to be de-listed from the London Stock Exchange after 75 per cent of the UK company’s share-

holders sell their shares to Kraft, which they are widely expected to do. Once it receives acceptances of 90 per cent, the US giant will acquire the remaining Cad-bury shares.

Ms Rosenfeld said: “The combination of Kraft Foods and Cadbury creates a global powerhouse in snacks, confectionery and quick meals.” She added. “Together we have impressive global reach and an un-rivalled portfolio of iconic brands, with tremendous growth potential.”

On Monday, Unite’s national offi cer for food and drink, Jennie Formby, said: “Our workers at Cadbury are extremely worried that what was a bright future for them will be dimmer under Kraft.” She added: “The workforces have been kept in the dark too long. Specifi c questions have been put to Ms Rosenfeld by our Euro-pean colleagues, including will the take-over lead to the closure of existing plants and will there be lay-off s? All these ques-tions need urgent answers.”

Kraft acquired Terry’s chocolate in 1993 and vowed not to close its York headquar-ters. However, the US company sold off the building by 2005, as it moved produc-tion to Poland.

It made its fi rst indicative off er at 745p, but this was lambasted by Cadbury’s chair-man, Roger Carr, as being “derisory”. He also called Kraft a “low-growth conglom-erate” and went on to urge shareholders not to let it “steal your company”. Kraft publicly questioned whether Cadbury could actually meet its revised targets for the next three years. However, on

19 January, Kraft made a fi nal off er of 850p a share, which the board of Cadbury recommended.

Nestlé commits to nutritional programme in FranceNestlé France has signed three voluntary charters of commitment to nutritional progress for its brands Davigel, Maggi and Herta. Eugenio Minvielle, Head of Nestlé France, has pledged its commitment to-gether with Roselyne Bachelot-Narquin, Minister for Health and Sport.

In signing the voluntary charters, Nestlé has joined the national nutrition and health programme (Programme National Nutrition Santé, PNNS) which is backed and recognised by the French government.

As part of the PNNS, the aim is to reduce the intake of salt, simple sugars and trans-fatty acids, while increasing the consump-tion of complex sugars, fi bre, fruit and vegetables. Under the charters, Nestlé France will also be implementing educa-tional campaigns for consumers and on-going nutritional training for employees while actively promoting a balanced diet.

The recent Nestlé France pledge adds to the total of 14 charters signed since the existence of the system in February 2007.

28 February- F -March 2010

Food and Drink


Coca Cola sales boosted by new marketsThe world’s largest soft drinks company reported profi ts of $6.82bn (£4.36bn) for 2009 – a rise of 17% on the previous year. It also saw a strong end to the year with fourth-quarter profi ts up 55%, and global sales up 5%. Sales grew sharply in devel-oping markets including China, India and Brazil. That made up for a slight fall in sales in North America, although the company’s Coke Zero brand bucked the trend, in-creasing its sales by more than 10%.

Global sales of the Coca Cola drink itself rose 4% in the fourth quarter. “We ended this year on a high note,” commented Muhtar Kent, chairman and chief executive of the Coca Cola Company.

He added that the company’s leading brands allowed it grow even under “chal-lenging economic conditions”.

The company behind the Sprite, Fanta and Minute Maid brands has turned its attention to newer markets in recent years as US consumers cut back on their con-sumption of soft drinks. The eff ects of the recession, as well as a move toward health-ier alternatives, have been blamed.

Diageo hits out at UK tax regimeThe head of Diageo, the world’s biggest spirits maker, has criticised the UK tax regime, and says if it worsens his com-pany will consider moving abroad. Chief executive Paul Walsh told the BBC World Service that it was already “very diffi cult” to employ staff in the UK where they could face a 50% tax rate. He also said corpora-tion tax needed to be cut and called for a more simplified and unwavering tax regime.

However, the Treasury said the UK was an attractive place to do business. “At 28% the UK’s corporation tax rate is now at its lowest-ever level,” a Treasury spokesman said. “The UK continues to have the lowest corporation tax rate of the major G7 economies.”

A number of companies have already relocated their tax bases away from the UK including advertising giant WPP, pub-lishing group Informa and temporary offi ce supplier Regus. Last August, phar-maceutical fi rm Reckitt Benckiser also said it was considering shifting its tax head-quarters out of the UK.

Mr Walsh said Diageo, which employs 6,000 people at its London headquarters, said it still enjoyed being based in London, but warned it might be forced to relocate. “But if the tax regime becomes so egre-gious, either for corporates or individuals we would have no option but to look at alternatives,” he said. “The UK has become progressively a less attractive location to base oneself in,” he added.

He refused to comment on speculation that the company – which owns brands such as Johnnie Walker whisky, Smirnoff

vodka and Guinness stout – had been off ered incentives by the Swiss govern-ment to locate there.

Mr Walsh was speaking after Diageo re-ported a dip in its half-year profi ts. Pre-tax profi t for the six months to December 2009 fell slightly to £1.39 bn from £1.41 bn a year ago. The drinks fi rm said it had been a “challenging” six months as the con-sumer environment remained weak, but added it was in the early stages of recov-ery.

Mr Walsh said the fi rst quarter of the com-pany’s fi nancial year had been tough as expected, with sales down 6%, but sales in the second quarter had picked up by 2%. “If you look at the second quarter it’s clear that the US and Europe remain pretty slow but markets such as Asia, Latin America and Africa are quite buoy-ant,” he said.

In July, Diageo announced plans to close its Johnnie Walker bottling plant in Kil-marnock and its Port Dundas grain dis-tillery in Glasgow. Despite strong protests, the company has confi rmed that the clo-sures will go ahead, with about 900 jobs lost as a result.



Where Is the End

of Car Recalls?

Toyota is to recall 8,000 Tacoma pick-up trucks in the US, over

fears about defective front drive shafts. The recall involves four-wheel drive Tacomas built from mid-

December 2009 to early February 2010. The move is the latest in a string

of recalls in the past few months, totalling more than 8.5 million Toyota vehicles

around the world.



The fi rst recall happened in September 2007 when Toyota had to recall 55,000 Camry and Lexus cars in the US due to fl oor mat faults. Further recalls followed in the US since October 2009 when 3.8 m Toyota and Lexus vehicles were recalled due to floor mat problems. This number increased to 4.2m vehicles in November 2009. In January 2010 2.3 m Toyota vehi-cles were recalled due to accelerator pedal problems, of those, 2.1 m were al-ready involved in the fl oor mat recall, and another 1.1 m cars followed for the same problem. In February 2010 1.8 m Toyotas were recalled for pedal faults in Europe and in the same month further recalls followed: in Japan and US 200 new Prius-es were recalled for reports of brake fault. Also, 7,300 Camry vehicles were recalled in the US over potential brake tube prob-lems. The models aff ected over the years were the IQ, Aygo, Yaris, Auris, Corolla, Avensis, Verso, Tacoma, RAV4, Lexus, Camry, Matrix, Avalon, Highlander, Tundra and Sequoia.

The problem of PriusOf all the recalled cars there were 436,000 hybrid vehicles worldwide, including Toyota’s latest Prius, a highly fuel-effi cient model on which Toyota had based many of its hopes. 1.2 million Priuses have been sold worldwide since 1997. Last year, it was Toyota’s third-best-selling car in the United States, behind the Camry and the Corolla.

The Prius was drawn into the mounting crisis for Toyota in early February as Jap-anese offi cials ordered the company to investigate complaints that the brakes on its 2010 Prius model sometimes failed to work immediately on bumpy or slippery roads. U.S. safety offi cials also said they had received dozens of similar reports.

The company said the 2010 Prius has a new type of regenerative brake system diff erent from the ones used in previous generations. With regenerative braking, energy from the wheels is used to help recharge the car’s battery. However, the Prius and other hybrid models also rely on electronic systems that combine re-generative braking with conventional brake pads, so that the battery can absorb as much energy as possible while the pads do most of the work of stopping the car. The car also has an anti-lock brake sys-tem.

Mr Yokoyama, the quality control execu-tive, said that the new Priuses had expe-rienced “a slight unresponsiveness” of the brakes that could be easily resolved by pressing harder on the brake pedal. Basi-cally, Toyota determined that the problem had occurred as the car had switched from regenerative to conventional brakes just as the anti-lock brake system had kicked in.

In what became a pattern, however, Toy-ota seemed slow to communicate the extent of the problem or reveal details of its response. Finally, the Japanese con-sumer aff airs minister, Mizuho Fukushima, summoned Toyota executives to explain the problems aff ecting the Prius. She told the company to investigate the problems and report back to her, and to take steps to prevent unease among Toyota own-ers.

Fixing the problemsIn February, company president Akio Toyoda publicly apologised for the prob-lems and pledged to set up a new quality control committee. Also, Toyota dealers were taking extra steps to support custom-

ers during the recalls. Many Toyota deal-ers off ered extended service hours, and some stayed open 24 hours a day until all customer vehicles were fi xed. Others were adding greeters to their service drives, dedicating body shop capacity to expedite repairs, providing free car washes and oil changes, increasing owner communica-tion and providing complimentary main-tenance service, among other customer-focused activities. To support these eff orts, Toyota sent cheques of between $7,500 and $75,000 to its dealers in acknowledge-ment of the additional costs they were assuming to make it easier for customers to have the necessary repairs done quick-ly and conveniently.

A slow reaction of the European CommissionThe fi rst problems with sticking accelera-tors in some Toyotas surfaced more than a year ago in Britain and Ireland. But it was only in February 2010, long after a global recall began, that the European Commission issued its first consumer alert.



The commission’s warning was posted on 5th February to the relatively obscure web site of the commission’s Rapid Alert System for Non-Food Products. It said some Toy-ota “products pose a risk of injuries be-cause there is a possibility that the ac-celerator pedal mechanism may, in rare instances, mechanically stick in a par-tially depressed position or return slowly to the idle position.” The warning said that Toyota had taken “voluntary corrective actions.”

A group of government experts met at the European Commission headquarters to discuss exchanging information on the Toyota problems. The commission out-lined an information-sharing plan, but there was no decision to change the sys-tem in place, which lets carmakers decide when to notify national agencies, said Ton van Lierop, a commission spokesman.

In addition, the safety alerts are issued only once companies take corrective ac-tion, other commission offi cials empha-sized.

Stephen Russell, the secretary general of ANEC, a European consumer standards association, said the problems at Toyota were a test for European regulators. He said oversight of car safety was among “gray areas when it comes to the con-sumer interest and where we would wel-come greater eff orts in the areas of noti-fi cation and enforcement between the European Commission and member states.”

Not only ToyotaToyota is, however, not the only one to have problems with faulty vehicle parts. Also Honda is recalling 378,000 addition-al vehicles in the US because the driver’s side air bag may deploy too forcefully, causing an injury or death. The company announced the recall of 440,000 vehicles for that reason last year as well. The ex-panded recall affects 2001-2 Accord, Civic, Odyssey and CR-V models, and some 2002 Acura TLs. The automaker said it was

aware of 12 accidents that resulted in 11 injuries and one fatality.

Honda’s fi rst move to address the problem came in November 2008, when it recalled 3,900 Civics and Accords from the 2001 model year. Last July, Honda sent anoth-er letter to the National Highway Traffi c Safety Administration (USA), saying it was expanding the recall to cover 440,000 other vehicles. That move prompted an investigation by the safety agency, which said it was evaluating the “timeliness” of Honda’s recalls. The agency noted that “failure to respond promptly, truthfully and completely” could subject Honda to signifi cant civil penalties. John Mendel, executive vice president for sales at Hon-da, said that the automaker had not de-layed but that it took time to fi gure out the extent of the problem. Mr Mendel said this was not Honda’s largest recall.

A day after Honda’s recall Volkswagen also recalled nearly 200,000 cars in Brazil be-cause of a rear wheel problem. The com-pany wants to determine whether rear




wheel bearings are suffi ciently greased on the Novo Gol and Novo Voyage mod-els made before July 2009.

In the past other car makers had large-scale recalls, for example: in October 2009, Ford completed a recall aff ecting 14 mil-lion vehicles with potentially faulty cruise control deactivation switches; in August 2008, GM recalled some 850,000 vehicles with potentially faulty windscreen wiper systems; in December 2007, Chrysler re-called some 575,000 vehicles with poten-tial gear problems.

The latest recallAccording to the latest news Toyota has been voluntarily recalling „a small produc-tion run of certain 2010 model-year Tacoma 4WD trucks“. „The front shaft in these vehicles may include a component that contains cracks developed during the manufacturing process,“ the com-pany said in a statement. The cracks could lead to the front drive shaft separating and falling from the truck, causing drivers to lose control of the vehicle. Toyota said it would start notifying owners by mail in mid-March. The shafts were built by en-gineering fi rm Dana.

The latest recall comes as a blow to Toy-ota as it seeks to revive trust in its vehicles. The problems with Toyota vehicles have battered the company’s stock, which has already dropped signifi cantly. Spooked investors have been keeping a close eye on the situation. Many are already taking fl ight, as can be seen by sharp falls in the share price. Toyota‘s reputation could be tarnished for years.

Toyota is on a verge of „capitulation to irrelevance or death“......as Mr Akio Toyoda said already in Octo-ber 2009. At the time, long before the latest safety scares, a slew of quality and safety problems had sent Toyota‘s reputa-tion sliding. The decline was there for all to see. It was written into the company‘s sales and earnings reports, which revealed months of steady decline. Selling more cars than General Motors (GM) and thus

becoming the world‘s biggest carmaker had never formally been a target for the Japanese carmaker.

But volume growth had: in 2002, when the company‘s global market share stood at little more than 10%, then Toyota pres-ident Fujio Cho outlined a plan to reach 15% soon after 2010.

A year ago, when GM stumbled towards bankruptcy, Toyota‘s ascent into the top slot was inevitable. In 2008, Toyota sold 8.9 million, while GM sold 8.3 million ve-hicles. But the rot had already set in; Toyota had just issued its fi rst-ever profi t warning for the year as a whole. Then, in spring 2009, it reported a 436.9 bn yen ($4.4 bn at the time) operating loss for the fi scal year to March. The company was in crisis mode.

In June, Mr Toyoda stepped in at the helm of the huge carmaker, four months after former Toyota president Katsuaki Watan-abe was ousted in a humiliating ritual in front of some 400 Toyota executives. Akio Toyoda was clear in his criticism: the executives running the company that his grandfather Sakichi Toyoda founded had run it into the ditch. „Toyota has become too big and distant from its customers,“ he said in his autumn speech, castigating the fi rm‘s executives for their „undisci-plined pursuit of more“ and for their ar-rogance, which he referred to as „hubris born of success“.

Within weeks of taking charge, Mr Toyoda was informed of an accident in which an

off-duty traffic officer and three of his relatives had died. The accelerator getting caught in the fl oor mat of the brand-new Lexus was deemed a possible cause. „Four precious lives have been lost,“ Mr Toyoda said at the time. „I off er my deepest con-dolences.“ A recall of 3.8 million Toyotas followed, involving a so-called „semi-permanent fl oor mat installation proc-ess“ – or rip-zipping the driver‘s side mat to the seat rails.

Toyota estimates its losses will reach $2bn in costs and lost sales from its worldwide recall of vehicles that might have faulty gas pedals, although this fi gure does not include other potential problems – for instance, reported issues with the brakes on the carmaker‘s Prius model.

But the losses could escalate if it turns out that the trust and reputation the com-pany has built up over a period of decades have been demolished almost overnight. Crisis communication consultant John Huntley, managing director of John Hunt-ley Training, says such concerns are well founded. „Something has gone wrong and it seems people may have died,“ he points out. „I think it‘s going to take Toy-ota years to get out of this one.“ To Mr Huntley, there is no doubt: Toyota had to face the music, as failure to do so could have been even more disastrous. And for what they are worth, Toyota‘s apologies have been a useful fi rst step in terms of alleviating the situation.



ENTSO-E

The 2020 Vision

The European Network of Transmis-

sion System Operators for Electricity

(ENTSO-E) was created to consolidate

and continue the valuable work of its

predecessor associations and, several

months ahead of schedule, it is already

implementing the new responsibilities

the Third European Energy Package has

assigned to it. Diane Mannion looks at

the functions of ENTSO-E.

Under the third package of measures adopted by the European Commission, the energy market will become more competitive allowing greater consumer choice, fairer pricing, cleaner energy and security of supply. There will also be an increased focus on renewable energy. In order to reach these goals the Commission plans to develop increased solidarity amongst EU members, sustained cross-

border energy trade and investment, and more eff ective national regulators.

ObjectivesWith these objectives in mind ENTSO-E was formed in accordance with EC Regu-lation 714/2009 as a pan European net-work of Transmission System Operators (TSO’s). However, the concept of TSO net-working isn’t completely new. Prior to the formation of ENTSO-E, there were six separate Associations, which represented TSO’s in diff erent countries or regions of Europe. The function of these Associations was to enhance co-operation between groups of TSO’s.

TSO’s plan, fi nance, build, operate and maintain the electricity grid infrastructure for the transmission of electric power on

high voltage electricity networks. They also provide access to the grid for electric-ity generating and supply companies, distributors, and traders. A major aspect of their tasks is secure and reliable opera-tions.

ENTSO-E encompasses the functions of all of the previous associations but with even deeper and wider co-operation across Europe concerning the transmission of electricity, which is essential if the aims of the third energy package are to be met. This applies in particular to its targets relating to the use of renewable energy. As well as promoting the interests of the TSO’s, ENTSO-E will have an active role in the European electricity legislative proc-ess, via the development of its Ten-Year Network Plans and Network Codes.

Konstantin StaschusSecretary General

DaniePreside



Renewable energyUnder the European Ten Year Network Development Plan (TYNDP), which is one of ENTSO-E’s main deliverables, Europe’s energy policy objectives relating to the use of renewable energy sources must be refl ected. The plan states that EU Members are to reduce their greenhouse gas emis-sions by 20%, increase the use of renew-able energy by 20% and save energy by 20%, by the year 2020, and has been named the ‘20-20-20 strategy’. At present the use of renewable energy sources for electricity is approximately 13%. How-ever, the 2020 goal of integrating 20% of renewable energy into total consumption means that about 33% of electricity con-sumption will be generated from renew-ables, since heating and transport cannot accommodate renewable energy as eas-

ily. This is a great challenge for the electric-ity supply system and the TSOs.

The main focus for renewable energy in the initial stages is in the use of wind turbines, but other renewable energy sources contribute as well. These include hydro power, photovoltaic power, solar thermal power, biomass and others. ENTSO-E’s Secretary General, Konstantin Staschus comments,

‘This special focus on wind power was chosen by ENTSO-E and ERGEG (the Eu-ropean Regulator’s Group for Electricity and Gas), and is supported by the Euro-pean Commission, acknowledging that wind energy is set to shoulder the great-est part of renewable energy growth over the next years.’

Hydro power is already making a signifi -cant contribution to energy supplies, and

the use of solar power is forecast to in-crease in many countries in the future. Europe is likely to remain at the forefront in the utilization of renewable energy despite the fact that some parts of the world are fortunate in having more ex-tensive renewable energy resources.

Balancing supplyEnergy from the sun and from wind fl uc-tuates constantly. It is the job of the TSO’s to balance this irregular supply of energy with demand, so that we will always have adequate energy available regardless of the weather conditions. With the requisite increase in the use of renewable energy this task becomes an even bigger chal-lenge. This is why further collaboration between European TSO’s was necessary.

Daniel DobbeniPresident

Malgorzata KlaweVice Chairwoman of the Board



ENTSO-E

The 2020 Vision

The future use of Smart Grids in transmis-sion and distribution is also important in meeting demand as they will be able to help customers adjust their use of electric-ity in response to market conditions and renewable energy availability. They can thus help integrate the supply of electric-ity from renewable sources.

In order to achieve all the objectives that are set out in the third package, and to ensure system reliability, market integra-tion, equal access to the grid, etc., ENTSO-E is drafting Network Codes. These will set out the standards that all users must work towards to ensure system security, trans-

parency and effi ciency, and will be legally binding. These Network Codes have to comply with the framework guidelines set by the European Regulators in their new Agency ACER. To facilitate its work, ENTSO-E is made up of three committees, which carry out functions related to Systems De-velopment, Systems Operation and the Market.

BenefitsFor market integration and renewable energy integration, the role of the Euro-pean TSOs – and also of their association

ENTSO-E – will be crucial. This will mean that large investments in the European grid have to be made – partly planned jointly – within ENTSO-E. These investments will bring about more benefi ts to the whole of the electricity industry and to the con-sumer than what they cost, as Konstantin Staschus states, ‘…even though the over-all costs of the transmission network will likely go up, fi rst the corresponding in-crease of customer rates would be very small, and second, any such increase should be more than off set by correspondingly lower costs of generation, trade and supply of electricity.’

Klaus KleinekorteChairman System Operations



This will not necessarily mean that electric-ity prices will be lower than they are at present, but it will mean that they will be lower than they would have been without the involvement of the Net-work.

For the best possible long term develop-ments, ENTSO-E will continue to focus on Research and Development. There are many challenges ahead of the TSO’s;

as well as commitments to the use of re-newable energy, many parts of the grid infrastructure need replacing as they are nearing the end of their life spans. This will entail major investments over the coming decades, and ENTSO-E will look at the most cost eff ective ways to achieve this. One means is its major new R & D plan called ‘Eurogrid 2020’ as well as the Ten-Year Network Development Plan.

ENTSO-E’s President, Daniel Dobbeni comments, ‘Meeting Europe’s ambitious renewable energy targets and reducing European emissions will happen provided the role of the grids is considered as be-ing part of the solution – as is already the case for wind generation. The back bone of Europe’s Energy Future is the European transmission system, as has been the case for the past century.’



50HERTZ TRANSMISSIONHolding the Balance of Power

By Philip Bradbury

We all expect that whatever switch we

turn on, power will be delivered. Wheth-

er it ’s heating for our house, lighting for

our streets, cash registers for our shops

or machinery for our factories, we

expect – without question – that they

will go every time we switch them on.

We don’t expect any less.

However, what we don’t expect is to have to balance that expectation with the needs of the planet – that’s someone else’s job. That someone else, in the North-Eastern part of Germany, is 50Hertz Transmission, formerly known as Vattenfall Europe Trans-mission, the operator of the “power high-ways”. If that highway broke down, your lights, heating, cash registers and machin-ery may not go. When that power transmis-sion system is working perfectly, it is easy to forget about it and then become con-

cerned that massive power structures could be endangering nesting daw, kes-trel, and hobby falcon and/or osprey.

50Hertz has to delicately balance both concerns.

Change of name and upgrading transparency and non-discriminationAs a very public signal to all concerned, Vattenfall Europe Transmission and its subsidiary Vattenfall Europe Baltic Off -shore Grid, which is in charge of the con-nection of offshore wind farms to the mainland grid, have undergone a name change – to 50Hertz Transmission and 50Hertz Off shore, respectively. This name

change as of January 2010 makes a pub-lic statement that the transmission system operator is run in a completely independ-ent and non-discriminatory way and is taking the EU’s Third Energy Package ex-tremely seriously.

The new name “50Hertz” stands for a sta-ble frequency as the basis for a reliable, high quality power supply service for our society.

Mr Gert Schwarzbach, Managing Director of 50Hertz Off shore, explained that until 2008 some of the functions of these two (above) companies were performed by services from diff erent divisions of the energy utility Vattenfall. In 2008 a “carve out” process was started to ensure all functions were performed independ-ently from the rest of the Vattenfall Group. This ensured that the two companies could stand on their own.



This process also led to the renaming of the two companies. In parallel to this re-structuring, the sale of the two companies from the Vattenfall Group has been launched and is anticipated to be com-pleted by 2010.

Transparency and non-discriminationTransparency relates to the fact that the ownership, management and information of the business must be entirely apparent at all times.

Non-discrimination means that outside suppliers must have the same market-relevant information as suppliers within the Group. This is overseen by the Equal Treatment Expert within the Group. Additionally this is overseen by the Ger-

man regulatory authority the so-called “Bundesnetzagentur”.

Scope of the companiesCurrently, 50Hertz ensures a safe and se-cure electricity supply for more than 18 million people and employs over 600 employees. Its structures link Denmark, Poland, and the Czech Republic with Ger-many. 50Hertz Transmission is responsible for the operation, maintenance, planning, and expansion of the 380/220 kilovolt transmission grid throughout the German Federal States of Thuringia, Sa xony, Saxony-Anhalt, Bran denburg, Berlin, Mecklenburg-Western Pomerania, and Hamburg. This transmission grid covers an area larger than 109,000 km² and runs a length of approx. 9,700 km.

50Hertz is a real facilitator of the deve-lopment of electricity from renewable sources. Renewable energy has priority on the 50Hertz grid. In the supply area of 50Hertz are connected:

• 10,300 MW of power from wind farms,

• 500 MW of power from solar energy sources,

• 1,000 MW of power from biomass sources,

All continue to develop with high growth rates.

This year the fi rst off shore wind farm in the German part of the Baltic Sea will be connected to the mainland grid. Up to 4000 MW from other off shore wind farms will follow.




Environmental concernsTo balance the energy needs of so many customers with the sensitivity of the en-vironment – with such a large and complex infrastructure – is not an easy task. Also, their environmental activities are gover-ned by the Federal State and seven dif-ferent “Länder” (German states).

A recent pilot project, with the support of the EU Commission, is the Ecological Management of Forest Aisles – a special development to ensure the least possible infl uence on the environment from power transmission lines.

Some of other environmental initiatives undertaken by 50Hertz are:

• Installing over 300 nesting aids – for instance boxes, baskets, and aerie un-derlays – on pylons to support num-bers of daw, kestrel, and hobby falcon, as well as osprey known for their pre-dilection for brooding on transmis-sion pylons.

• In heavily wooded areas, they are im-plementing a new corridor manage-ment policy to care for and develop these habitats.

• In agricultural areas, the ground un-der pylons support indigenous grass-es, shrubs and partial wood crops, all of which serve as ‘islands of retreat’ and stepping stone habitats. Where

technically possible, they protect all naturally occurring plant growth.

• Close cooperation with NGOs, such as WWF and Germanwatch, in the “Re-newables Grid Initiative” to support a socia lly and environmentally sound development of the grid as pre-condi-tion to integrate more renewable en-ergy into the electric system.



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Balancing energy, finance, user and environmental needs50Hertz Transmission is mandated to pur-chase all electricity from renewable en-ergy that is produced in its area. And this is already today a huge amount of more than 12.000 MW, a third of all production capacities in its area. If there are high winds, the wind farms will produce more energy. This may not be matched by an increase in energy demand!

By law the company is obliged to purchase that renewable energy at a specifi ed price. It must then sell that energy at the pow-er exchange at market prices, which are usually much less than the price to be paid to the producer. That gap between the

subsidized price and market price has to be fi nanced, somehow. The cost of fi nance can often push the company into a tight fi nancial situation before it is refl ected in the grid rates.

Transmission system operation is a natu-ral monopoly and therefore subject to strict regulation. The company is charged with making no profi ts, and normally also no losses. In a good year it breaks even. The management team of 50Hertz has the unenviable task of ma naging this massive enterprise with fi ne precision and sensitivity. This balancing act is carried out in many areas by hard daily work:

• Balancing energy produced with en-ergy needed at any second,

• Balancing costs, expenses and fi nance,• Balancing power consumer demands

with environmental concerns.

So, with constantly growing demands for integrating new (renewable) producers – and the consequent need to enlarge the grid – with the need for a stable legal and environmental accountability, Mr Schwarz-bach says they owe their success to three things:

1. Their very experienced and commit-ted staff ,

2. Their customers, mainly the electricity distribution companies, they have a close relationship with, and

3. Their shareholders who provide the much-needed fi nancial strength for operations and grid expansion.

It’s a fi ne balance between so many things and they continually strive to get it better each year.


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TRANSELECTRICA SA

Green Electricity

Transelectrica is the Transmission System

Operator (TSO) for Romania, which just

a few years ago began trading publicly

on the Bucharest Stock Exchange. Diane

Mannion interviews the Director General,

Adrian Baicusi, about the company ’s

various roles, its ‘green’ policy and how

it has been affected by recent changes

to the European electricity market.

As the Transmission Systems Operator (TSO) for Romania, Transelectrica operates, maintains and develops the transmission grid, providing transmission services for electricity transactions between market participants in Romania and the regional markets, among Central European and South East European countries. It ensures the stable and reliable operation of the Romanian Power System and is respon-sible for electricity transmission services,

power system and wholesale electricity market operation, and transmission grid and market infrastructure development. It guarantees a regulated third party access to the Romanian electricity transmission network under transparent, non-discrimi-natory and fair conditions to all market participants.

Through its main subsidiaries, OPCOM (the market operator and power exchange), TELETRANS (the ITC operator) and OMEPA (the metering operator), Transelectrica fulfi lls several other core functions.

OPCOM is the Commercial Operator of the electricity market, which responds to the various platforms for trading in elec-tricity. OMEPA looks after the metering system for the wholesale electricity mar-ket and TELETRANS is a Telecommunica-tions and IT Operator. These refl ect the

current operations of the company, which have been developing ever since Trans-electrica was set up in the year 2000.

EmergencePrior to 2000, the Romanian Electricity Authority known as CONEL was set up in 1998. CONEL came about as a result of restructuring of the former autonomous company RENEL following the Romanian Government’s decision to liberalise the electricity market. CONEL was a national commercial company with three subsi-diaries, that carried out various functions:

Electrica for electricity supply and dis-• tribution (at present split into eight subsidiaries, fi ve of them being priva-tised – ENEL, E.ON and CEZ;





TRANSELECTRICA SA

Green Electricity

Termoe• lectrica and Hidroelectrica for electricity generation on thermal and hydro sources. They produce and sell electricity.

During this period of change, in 1998 the Romanian Energy Regulatory Authority (ANRE) was established. The fi nal stage in the liberalisation process was to have a Transmission System Operator; hence the creation of Transelectrica, which now employs approximately 2200 people and operates according to its unique license and other secondary legislation set out by ANRE.

Environmental measuresOne of the main focuses for Transelectrica relates to the environment. It has a ‘green certifi cate’ scheme operated through its subsidiary OPCOM. Under the scheme suppliers are required to buy a certain amount of energy that has been gener-ated from renewable energy sources in order to be awarded a green certifi cate by ANRE. The Romanian Government’ s strat-egy also provides the increased production

of renewable energy sources in the electric-ity sector. Transelectrica receives many demands for grid access from investors in green energy. One of the sources used is wind power. However, because the fl uctu-ating nature of wind, the system also has to rely on other power sources.

Together with using renewable energy sources, consideration is given to the im-pact on the environment. This involves monitoring pollutants and preserving the natural environment in accordance with Transelectrica’s environmental policy. En-vironmental impact is viewed in relation


to people, air, soil, water, fl ora and fauna, and the company takes the appropriate measures to reduce the effects of the power grid. Some of the steps taken in-clude: reducing and/or eliminating the magnetic and electrical fi eld eff ect, reduc-ing the number of facilities using oil, im-plementing water-oil separators in the rain drainage system and sealing the reten-tion tanks of the autotransformers.

Transelectrica sees the connection of re-newable energy sources into the transmis-sion grid as one of the challenges for the future. They have to ensure that these energy sources are integrated in a way that is safe and reliable.

Other plans for the future involve the modernisation of transmission lines, sub-stations and interconnection capacities, and implementing the latest technologies and IT solutions to increase transmission reliability and reduce power losses. The company also has several major interna-tional interconnection projects with other European countries at various de-velopmental stages, which stands them in good stead with regard to anticipated changes in electricity trading in Europe.

European prospectsAs a result of the European Third Legisla-tive Package (2009) which has established the European Network of Transmission System Operators for Electricity (ENTSO-E) and will create the new European regula-tor – ACER -, there is a renewed drive to develop regional electricity markets and integrate them in a seamless pan-Europe-an single electricity market.

Adrian Baicusi, the Director General of Transelectrica comments:

‘We consider that the future of Europe relies on the unique European electricity transmission grid.’

The Government decided to make an initial public offering on the Bucharest Stock Exchange in order to develop the capital market starting with Transelectrica. This launch was seen as a success, resulting in an increase in net capital of approximate-ly 33 million euros, which has been used to fi nance the grid development and mod-ernisation. This example is being followed by other companies such as Transgaz.

As electricity cannot be stored, it is in-stantaneously generated and consumed. Therefore any extra energy generated is exported, and any defi cits are imported. Transelectrica works in conjunction with other European TSOs to manage the import, export and transit of electricity with neigh-bouring countries. Their activities involve setting the mathematical pattern of the system area for which the cross border capacities are established. Traditionally Romania has dealt with Bulgaria, Serbia, and Hungary, but it is preparing to extend the network into Moldova, the Ukraine and Turkey. Mr Baicusi states:

‘The most spectacular events are to happen on the Eastern boundary of Europe when Turkey, Ukraine and the Republic of Moldo-va will have been integrated into the con-tinental part of ENTSO-E.’

As to the long term prospects, Mr Baicusi adds: ‘There is a great potential in Europe’s South Eastern region, however this will emerge in the following 5 years.’



Tractebel Engineering (GDF SUEZ), a subsidiary of GDF SUEZ Energy Ser-vices, is an engineering and consul-tancy company with more than 100 years of experience worldwide in en-ergy and complex infrastructure projects.

Its Romanian company, Tractebel En-gineering S.A., was set up in 1997 and operated till October 1st, 2009, under the trading name of TRAPEC S.A. As recognition of its maturity and its ca-pabilities, in October 2009 the com-pany has adopted the name and the branding of its parent company, Tractebel Engineering.

The mission of Tractebel Engineering (ROMANIA) is to address the local and regional market, through projects de-veloped for public and private compa-nies in order to support them to meet their objectives of efficiency, safety and environmental protection.

Since 1997, the company has developed energy projects, i.e. power generation, electrical substations and HV-lines, power systems studies, energy effi-ciency, district heating systems, and

consultancy projects financed by Eu-ropean institutions and banks; as well as large infrastructure projects.

Tractebel Engineering (ROMANIA) is providing engineering and consultancy for the key actors of the Romanian energy sector, such as Transelectrica, Electrica, Termoelectrica, Electrocent-rale, Nuclearelectrica and others. Also, it is involved in projects developed by private players or by turnkey contrac-tors.

Some recent projects managed by Tractebel Engineering (ROMANIA) can be mentioned:

• Engineering for a new 120 MW com-bined cycle cogeneration unit in Bucharest South Power Plant;

• Framework contract on system stud-ies for connection to the grid of new generators in Romania;

• Congestion management in Roma-nian Transmission System;

• Modernisation of important 400 kV Substations in the Romanian System (Roşiori, Bucharest South, Slatina, Gutinaş, etc.);

• New 400 kV Gădălin-Suceava Over-head Transmission Line;

• Extension of 400 kV Tariverde Substa-tion (to connect wind generators);

• New 110/20 kV Cotroceni Park Sub-station (to supply the largest com-mercial center in Romania);

• Modernisation of the 110/20/6 kV Bartolomeu Substation;

• Consultancy for EU/EBRD Energy Efficiency Financing Facility (EEFF) Project in Romania;

• Design for connection to utilities of a new 190 MW combined-cycle unit in Bucharest West Power Plant.

The multidisciplinary team of experts of Tractebel Engineering (ROMANIA) is in the ideal position to develop a global vision for your projects and to propose you innovative, reliable solutions at every stage. More details on the com-pany you can find visiting the Bucharest office, Al. Constantinescu str, 6 or by surfing www.tractebel-engineering-gdfsuez.com.

CHOOSE EXPERTS, FIND PARTNERS


Trade & Investment | www.trade-investment.eu 50 February-March 2010Trade & Investment | www.trade-investment.eu

TENNET

Electric Equilibrium for Europe

Dutch Transmission System Operator (TSO)

TenneT ’s Director of Corporate Develop-

ment Mr Lex Hartman talks to Gabrielle

Brown about how the recent acquisition

of German grid operator transpower

signals the imminent integration of

electricity markets across Europe.

The Dutch TSO Tennet, responsible for the Netherlands’ electricity grid and ensuring the secure and continuous supply of elec-tricity to the country, is poised to change the face of the European electricity mar-ket. When TenneT bought transpower they created the fi rst cross-border TSO in the world, demonstrating a landmark step towards the establishment of an intercon-nected Northern European electricity system, capable of supporting the com-plex flow of energy from renewable sources while providing consumers with lower, more stable prices.

The role of the TSOAs a TSO, TenneT is responsible for the infrastructure supporting the transmission of electricity, ensuring it is safe, reliable and balanced. As Mr Hartman explains, it is the balancing of the system which is

perhaps the most involving aspect to a TSO’s function: “At every second of the day you need to have a balance between demand and supply, and if you don’t, there is a chance of a blackout. Since the lib-eralization of the Dutch electricity market in 1998 in theory everyone is free to pro-duce electricity and everyone is free to buy electricity. Therefore, our responsibil-ity is to ensure that when there is demand, the producers supply the required amount. If they don’t, then we have to ‘jump in’ and produce it for them; and we will either bill the consumer or the producer for this. That, in essence, is how we provide the incentive for the supply to meet de-mand.”

This layman’s explanation of an incredibly complicated system helps us to under-stand that in addition to being responsi-ble for the technical operation of the system, the TSO is essentially the facilita-tor of an open and fair electricity market for producers, suppliers and traders alike. The most pressing challenge for TenneT, however, is to ensure the smooth opera-tion of the system as the amount of renew-ably sourced electricity supplied to and from the grid increases. With an unquan-tifi able commodity such as wind, gener-ating energy at an unpredictable and

uncontrollable rate, the onus is on TSOs across Europe (all members of ENSO-E [European Network of TSOs for Electricity]) to unite to create a fl exible European elec-tricity system, from both a technical and market perspective.

TenneT’s responsibilities to the Netherlands and EuropeTenneT identifi es its objectives into three distinct areas of responsibility. The fi rst is simply to ensure effi ciency and to regulate the system in the Netherlands. Secondly, to continue the work involved in success-fully integrating what was the work of regional transmission grids under one organization. The third and last responsi-bility is most pertinent after the recent acquisition of transpower and that is to help facilitate the move from a Dutch electricity market to a larger, European market. “Holland is a small country, and the electricity market is therefore also small. That means there is a diff erence in our prices compared with Europe. But soon there will not be a Dutch market, or a Belgium market, or a UK market etc.



transpower, the gateway to an efficient European gridTenneT acquired transpower in November 2009 after considering and anticipating the option for around six years. The inte-gration of the company, Mr Hartman explains, should be fairly smooth. “We had the same agenda. We are the same kind of company, we have the same interests, same goals. We can now focus on in align-ing our systems, rehabilitating the grids and coordinating all our investments into further connecting our combined electric-ity system.”

The more effi cient use of Germany’s wind power across the two countries will be a focal point, and therefore investing in the connection to Norway, with its exten-sive hydropower capability, will also be high on the agenda. “Our high targets for wind power, 6,000 megawatts by 2020, mean that connections to Norway are very interesting. Wind is not reliable, so we will need the energy storage capacity that Norway’s hydro plants can provide.”

One of TenneT’s projects nearing comple-tion is BritNed, a subsea electricity link between Great Britain and the Netherlands due to be in operation by the fi rst quarter of 2011. Again, the diff erences between how and when electricity is used between the two countries enables power to fl ow in both directions, and to provide greater effi ciency. Specifi cally, Mr Hartman ex-plains that “in Holland we have gas heat-ing, so consumption of electricity at night is low; in the UK more heating is powered by electricity, so levels of usage are higher. Plus, the one-hour time diff erence allows for even more fl exibility across the sys-tem.”

Put simply, it is the differences across countries in Europe that is driving each TSO to unite and integrate, and co-invest in their grids for the benefi t of one an-other’s consumers. It’s an incredibly positive proposition, and Mr Hartman concludes by stressing his enthusiasm for TenneT’s acquisition of transpower “It’s really important as we go forward and look at things at a European level instead of a country level. We have to facilitate the market for producers and consumers, and this is the best way to do it. It really is a landmark transaction.”

Looking at the ambitions for renewable energy sources such as wind and hydro, we can’t work at a local level any more. We have to coordinate our operations and co-invest in improving and adjusting our grids so that they will facilitate this change.”

Mr Hartman went on to illustrate this scenario by giving the example of the relationship between the German and the Dutch grid. When a lot of electricity is generated by wind in Germany, it will fl ow to where the grid is strongest. If this exceeds the amount the German grid can contain, the electricity will fl ow to the Dutch grid. In the new market, with cross-border systems, countries will be able to combine resources to ensure the balance is achieved even with the complex ebb and fl ow of wind-generated electricity, and consumers will be able to benefit from more stable and lower prices. Coun-tries more dependent on wind power, such as Germany, will be able to use the ‘stored’ hydro power located in other countries, such as Norway. “This coopera-tion is therefore benefi cial from a socio-economic perspective also.”


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ELEKTRO-SLOVENIJA

Power Lines in Time

Slovenia’s electricity grid yesterday, today and tomorrowTransmission system operator (TSO)

Elektro-Slovenija, d.o.o. (ELES) main-

tains the exclusive right to operate

Slovenia’s electricity grid. Put simply,

its responsibility is to provide the

country with an uninterrupted supply

of electricity, maintain and develop the

transmission network and, increasingly,

enable the transmission of electricity

between the power systems of neigh-

bouring countries.

An international approachBeing a member of the European Network of Transmission System Operators for Electricity Network (ENTSO-E), ELES is engaged in various projects and know-ledge-sharing ventures to improve elec-tricity systems across Europe. Signifi cantly, due to Slovenia’s geographical position ELES spans three European regions (Cen-tral-Eastern, Central-Southern and South-Eastern) and participates in various working groups within the framework of these associations. Specifi cally, ELES represent-atives contribute to the activities of the

International Council for Large Electrical Systems (CIGRÉ), one of the oldest profes-sional organizations in the fi eld, where technical knowledge is shared on the subjects of the development, operation and maintenance of electricity systems.

A long tradition in transmissionToday Slovenia’s electricity comes from a combination of sources including hydro, thermal and nuclear plants and consists of facilities operating on 44 kV, 220 kV and 11 kV. The country’s power transmission



activities began in 1924 with the construc-tion of the fi rst transmission lines, then operating on 80 kV. Slovenia and ELES is markedly proud of the country’s contribu-tion to the history of ‘electrotechnology’ and has even published an in-depth ac-count of the ‘transmission timeline’. No-tably, by the end of the nineteenth cen-tury, Slovenia was already internationally renowned for its expertise in the industry on account of the famous Slovene writer and scientist Jožef Stefan (1835-1893) whose work the Law of Radiation remains one of the fundamental laws on heat transfer.

Slovenia continued to make an impact on transmission history when ELES experts

project-managed the construction of the Krško Substation, completed in 2002, which at the time was one of the most modern remote-controlled facilities of its kind. The project saw ELES’ largest invest-ment for two decades and involved ex-tremely advanced technology. Employing a series of domestic contractors, engineers and design professionals enabled ELES to gain valuable experience for future con-struction projects.

More recently, ELES again made a sig-nifi cant investment when it completed a 400/110kV transformer at the Okroglo Substation, which was installed to ensure a smooth supply to northern central Slov-enia and ameliorate the negative impact

of the Jesenice steelworks on the opera-tion of the national grid. Ongoing invest-ment in the reconstruction and develop-ment of Slovenia’s electricity infrastructure is central to ELES’ objective of ensuring the transmission system remains secure and robust.

Maintaining Slovenia’s landscapeNaturally, with investment into new and improved transmission systems comes the challenge of ensuring infrastructure has as little impact on the surrounding



ELEKTRO-SLOVENIJA

Power Lines in Time

landscape as possible. To plan the develop-ment work so that any surrounding nature is not adversely aff ected, ELES cooperates with several organisations. These are for example the Institute of Landscape and Architecture in Slovenia’s capital Ljubljana and the company Oikos, svetovanje za razvoj, Ltd., which is the largest company in this fi eld in Slovenia.

Transmission operators across Europe face the same challenges when it comes to issues relating to the environment. There-fore, ELES participates in international expert organizations that collaborate to find means to tackle ecological is-

sues, addressing for example the design and construction of power lines and look-ing at electromagnetic radiation. The objec-tive is to consider the challenges from a practical perspective and then identify scientifi c solutions that can then be imple-mented.

Investing in peopleAs much as it invests in infrastructure, ELES makes a point of investing heavily in its staff ’s expertise. With over 550 employees the organization ensures professional de-

velopment for staff by fostering an environ-ment of knowledge sharing. Recognising that the majority of staff are expected to work with technologically demanding de-vices, ELES is cognisant of the fact that knowledge is fast becoming its most valu-able asset. Therefore, the company not only makes a point of attracting talented individuals (60% of staff have a university degree) but also makes considerable invest-ments in staff training programmes – to the extent that ELES has its own in-house education centre.

This focus on professional development is strengthened by providing all stakeholders


with a clearly defi ned set of corporate val-ues. This ties together all elements of the business, from the social and natural en-vironment in which it operates, to the busi-ness partners involved, to the owner – the state. The values put an emphasis on cor-porate social responsibilities, stating that ELES will maintain ‘a positive and respect-ful attitude towards its immediate and broader social and commercial environ-ments’ while achieving its practical objec-tive of ‘effi cient operations’.

From a small power line in 1924 to twenty-fi rst century state-of-the-art infrastructure, Slovenia has already played a signifi cant role in establishing the European electric-ity system. Therefore, as national transmis-sion systems become international, we can expect ELES to be a key player in ensuring Europe’s electricity grid is operated by highly experienced and knowledgeable experts with a sound technological, envi-ronmental and social awareness.

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SVENSKA KRAFTNÄT

The Electric Highway

Svenska Kraftnät administrates and runs

Sweden’s national electrical grid, ensuring

the constant and secure flow of electricity

across the country, and beyond. Technical

Director Sture Larsson talks to Gabrielle

Brown about expansion, efficiency and

the challenges posed by the government’s

environmental objectives.

Svenska Kraftnät is the state-owned util-ity responsible for managing Sweden’s national grid. Within the energy sector the organization’s work is well known, but to the general public the technology that ensures a reliable fl ow of electricity is not something that is widely understood or appreciated. “We will never be as well known as the larger players in the market,” says Mr Larsson who explains that being

the backbone behind Sweden’s electric-ity supply is largely a behind-the-scenes responsibility.

Supporting a transparent marketplace The Swedish electricity market was re-formed in 1996 when it became possible for electricity consumers to choose their own supplier. The intention was to have a broader exchange of power across na-tional borders and Svenska Kraftnät was set the objective of promoting the de-velopment of the market by providing

a neutral platform for the market actors. A power exchange mechanism was es-tablished all over Nordic countries being administered by Nord Pool, the fi rst cross-border power exchange in the world.

Nord Pool’s objective is to organize and operate a secure and fair marketplace for trading electricity. All market actors feed any data that have an implication for the electricity market into Nord Pool, such as how much capacity is available, in the form of an ‘urgent market message’, known as a ‘UMM’. Being responsible for the ‘main artery’ of the electricity supply, Svenska Kraftnät also feeds in information such as available capacity on the national grid and on the interconnectors. “The main principle is that anything that has an eff ect



on market performance and price develop-ment must be communicated directly and with no delays.” Nord Pool operates on the basis that all information is shared on an equal basis to all concerned. The objective is to achieve a maximum level of transpar-ency across all factors that could have an impact on the market’s performance, and to eliminate any form of market abuse.

Achieving non-stop supplyMany factors can hinder the transportation and delivery of electricity – a power line becoming disconnected during bad weather is a common example. Svenska

Kraftnät therefore ensures that Sweden’s electricity supply is not interrupted through the application of a three-pronged approach, having:

Thousands of protection systems meter-1. ing all parameters, such as voltage and current, on all lines, that react by discon-necting any faulty lines if something abnormal is detected

Reserves held in order to cope with the 2. loss of a power line or important station anywhere in the country

Operational procedures to reconnect 3. disconnected systems and undertake repairs wherever they occur

Mr Larsson explains that incidents occur several hundred times a year, but because

of the effi cacy of the above measures they don’t have an impact on the supply. “We are doing what is being done in most power systems all over the world. Our performance is good, though that’s not to say there aren’t other countries doing better.”

The green challengeIn Sweden, environmental policy aff ects and directs developments in the energy sector. Mr Larsson suggests that the big-gest environmental objective set by the government to Svenska Kraftnät is to modify the grid to allow for up to 30 terawatt hours of wind power. “This creates many challenges for us in preparing to



SVENSKA KRAFTNÄT

The Electric Highway

handle such huge volumes of wind power. The amount is immense in relation to the presently installed capacity.” The impact of this amount of wind power is not only on the grid’s capacity to transport the energy across the country, but also to balance the system. “Wind power is not a controllable or easily predictable source of energy. So in addition to upgrading the capacity of our transmission system we will have to become the driving force behind develop-ing the system to facilitate this balancing. The effi cient use of hydropower as a regu-lator is one such balancing system, but price-driven demand-side regulating fa-cilities will also have to be developed.”

The demand for electricity, regardless of the source, is increasing, but there will always be resistance to expansions in elec-tricity infrastructure, whether this is be-cause of aesthetic concerns or for deeper reasons relating to the impact on the local and regional environment. “This is a uni-

versal concern,” says Mr Larsson, “we have to comply with Swedish legislation and follow strict procedures for reaching an agreement with home owners, farmers and forestry interests etc. What we do is be open minded to the various demands and requirements, dealing with all stake-holders openly and carefully. We will try to modify our designs and routing of power lines, for instance, as long as it doesn’t jeopardise the technical capacity that we need to accomplish, for example if the expansion is to accommodate the transportation of wind power.”

In the case of wind power, there is a com-plicated confl ict of interests, although one motive is shared: to preserve the environ-ment. However, sometimes the choice has to be made between respecting the local environment and satisfying global envi-ronmental concerns. “Sometimes we can consider installing underground cable, but it is not possible everywhere,” explains Mr

Larsson, acutely aware of the dilemma and asserting that decisions are always made on a case-by-case basis. “It is apparent that these issues take a lot more time in Sweden than in other countries. Here it is quicker to get a permit to build wind power stations than it is to build the lines to transport it.”

Local and cross-border electricity exchangesSvenska Kraftnät already manages the successful transportation and exchange of electricity between Nordic countries, and to the rest of the continent. This con-cept of cross-border electricity exchange is set to continue, and Svenska Kraftnät is already building new interconnectors, in-cluding one linking to the Baltic countries. The aim is to further increase the capacity for cross-border trade, a goal very much



in line with both environmental and mar-ket objectives set by the European Union.

At the other end of the spectrum is the notion of consumers generating their own electricity and then being able to supply their surplus reserves back to the grid. “I do not see any substantial technical problems with this concept; it may introduce new challenges when it comes to forecasting and managing the balance, but this would not be a signifi cant problem,” Mr Larsson says, adding that the greatest challenge would be in administrating the process and instigating market instruments to en-courage consumers to bring their electric-ity to the market.

Svenska Kraftnät may not broadcast its achievements, but amidst a backdrop of tough environmental policy and regulatory demands, the organization successfully delivers a robust electricity supply across Sweden and, increasingly, further afi eld.



ENERGINET.DK

Pioneers in Wind Power

Denmark is the world leader in wind

power, with 20% of the country ’s

electricity generated by wind turbines.

Speaking to Gabrielle Brown, Peter

Jørgensen, Vice President of Electricity

Division for Energinet.dk, discusses the

technology, politics and strategy behind

Denmark ’s wind power revolution.

Energinet.dk is the state-owned not-for-profi t company responsible for the gas and electricity transmission systems in Denmark. The company’s work involves maintaining the secure supply of electric-ity and gas as well as monitoring the en-ergy market and contributing to it operat-ing in as transparent conditions as possible. In line with the Danish govern-ment’s fi rm commitment to the environ-ment, Energinet’s obligations stretch

further to researching green energy solu-tions and developing the infrastructure that will be capable of accommodating it.

Mr Jørgensen’s role as Vice President of Electricity Division is not only concerned with the technical aspects of improving and modifying how electricity is supplied, but it also demands he acts as a senior advisor on the political and strategic im-plications of system development. In fact, the concepts of development and change are fundamental to Energinet’s operations, with Mr Jørgensen frequently referring to there currently being a ‘paradigm shift’ in the Danish energy system. “It is exciting. The European Union has given Denmark the target of a 30% renewable energy share by 2025; this is one of the highest targets in the EU. The electricity sector

will take the brunt of this burden, and we expect that within the next 10-15 years 50% of electricity will come from wind power.”

The bigger pictureWith Denmark already being the world leader in its integration of wind power, Mr Jørgensen is keen to point out that the most challenging, and interesting, development will be in determining where the remaining 50% of electricity will come from, and how it will balance the unpre-dictable and uncontrollable nature of wind power. “The other 50% is the most interesting part. The amount of wind power fed into the system can vary from zero, when there’s almost no wind, to the

Photo by Helene Hoeyer Mikkelsen



maximum electricity consumption in the country, so you need a very fl exible sys-tem.”

Mr Jørgensen suggests that hydro electric-ity is in many respects the ideal partner to wind: “Wind and hydro are a perfect match. Hydro has long-term variation – you can store energy in dams, but you might have some dry years. With wind, you have the opposite: short-term varia-tions. So they are ideal to balance each other.”

Intelligence-driven supply and demandNumerous factors have to be taken into consideration when preparing the electric-

ity system for a more irregular means of electricity generation. Mr Jørgensen sum-marizes the measures as three key objec-tives:

The development of a robust interna-tional transmission system, with intercon-nectors to neighbouring countries so that fluctuations in wind can be balanced across a large geographical area, includ-ing both the Nordic and the Continental system.

Achieving high fl exibility within Denmark’s own system both on generation and de-mand. For example, when the wind is blowing and the price of electricity is low, demand should increase, and vice versa.

Incorporating intelligence into the system so that electricity is used, produced or stored at the most optimal times to ensure

an effi cient utilization of the electricity system and a high security of supply. For example, consumers could turn their heat-ing off for two hours while there is no wind, when the price will be at its peak.

This concept of using intelligence to con-trol demand and maximize effi ciency is perhaps the most revolutionary develop-ment. Consumers could, for example, charge up their electric cars when there is a lot of wind, and then take the stored energy from the battery and re-supply it back to the system when there is none. Of course, it would be extremely involving if consumers were expected to monitor and adjust their energy consumption manually. “This process would be com-mercialized. The electricity supplier would install a device in your home that auto-mates the system, though you would be



ENERGINET.DK

Pioneers in Wind Power

able to operate how fl exible the system is at any time. For example, if you needed to charge your electric car you could override the system and buy regardless of cost.”

This concept of the supplier controlling appliances in the consumer’s home is known as a ‘smart grid’, and somewhat unsurprisingly Denmark is taking the lead in realizing this capability. “We are rather far in this development, it’s not paperwork or talk, it’s actioned,” says Mr Jørgensen, who goes on to explain that this action is in the form of the present Cell Controller Project and the planned ECOGRID.EU project, funded by the EU and involving Energinet amongst other industry partners. After extensive research into adapting the electricity system to manage the increase in wind power generated supply, and the

smart grid concept, the project will be putting the fi ndings into practice during a full-scale demonstration on Denmark’s Bornholm island, where the prototype for the future Danish energy system will be developed.

Therefore, the ‘paradigm shift’, explains Mr Jørgensen, is from an electricity system where you have infl exible demand and controllable generation to one where gen-eration fl uctuates and demand must there-fore be fl exible.

Going undergroundAlthough the benefi ts of drawing energy from renewable sources are widely known and appreciated, the means by which this

energy is transported remains diffi cult as it requires robust infrastructure. “The ma-jority of expansion will be in off shore wind power comparable in size to the big pow-er plants. So, in order to transport the gen-erated power, we have to expand our transmission systems,” says Mr Jørgensen, mindful of the sacrifi ces that have to be made on a local level in order to look after global concerns.

However, Denmark, yet again, is at the forefront of implementing infrastructure that has less of an impact on the local landscape. The Danish government this year ruled that all new power lines be un-derground, with the last overhead cable being completed by 2016 at the latest. This is no easy feat and there is still signifi cant

Photo by Palle Peter Skov



research and development needed before the ruling becomes practicable.

A changing marketWith electricity coming from an unpredict-able, ever-changing source, the electricity market will be comparatively diffi cult to

gauge. Without quantifi able sources, such as oil, coal and gas, new incentives will have to be devised to attract investors, and fast-regulating reserves will be needed to ensure the market can operate eff ectively.

Despite such multifarious factors and chal-lenges to consider, Mr Jørgensen is un-swervingly confi dent that Denmark will

meet its commitment of renewable en-ergy comprising at least 30% of energy consumption by 2025. “Our politicians are committed to this. We have support, not just political but also fi nancial. So, yes, it is a challenge, and it takes enormous com-mitment, but I am confi dent that we will reach our goal.”

Photo by Palle Peter Skov



ABB GROUP

Transforming Industry

For the world renowned ABB Group things

just keep getting better. Already one of

the world’s leading engineering compa-

nies, with 120,000 employees, the group

reached a record figure of $1.8 billion

for cash from operations in the fourth

quarter of 2009. Diane Mannion takes

a look at ABB’s latest achievements.

To say that the ABB Group is a world leader is something of an understatement. Since the company was established 120 years ago, they have been responsible for many cutting edge power and automa-tion technologies that have revolutionised key industries, and the group continues to stay at the forefront when it comes to technology. With nine research centres and 6,000 scientists, the ABB Group is

constantly striving to produce more ad-vanced technologies that aff ect the daily lives of people in 100 countries.

Cutting edgeHere are just a few of the incredible in-novations that the ABB Group has been involved in:

High voltage direct current (HVDC) – This was introduced by the ABB Group in the 1950’s and has had a huge eff ect on the way in which electricity is delivered to consumers on a global scale. It has won major environmental and technical awards, and facilitates the transportation of enormous volumes of electric power over thousands of kilometres with very

little losses and minimal impact on the Environment.

Industrial Robots – The ABB Group now has 160,000 robots in operation world-wide, which is the largest of any manu-facturer. Since the robots were introduced 40 years ago they have revolutionised numerous industrial operations, resulting in tremendous gains in productivity and reduced operational costs.

Substations – ABB is the world’s leading supplier of substations, which it has been building since the 1900’s. Continual tech-nological advancements mean that the group is constantly improving the reliabil-ity and effi ciency of electricity transmis-sion and distribution systems throughout the world.



DivisionsNowadays the group consists of fi ve divi-sions, which are Power Products, Power Systems, Discreet Automation and Motion, Low Voltage Products and Process Auto-mation. Each of these has a number of sub-divisions. Additionally, the group has eight regional managers in specifi c regions of the world, which cover the continents of Europe, America, Asia and Africa. Such is the vast size of the ABB Group that just one of the fi ve main divisions, the Power Products division, is subdivided into three further business units, which are High Voltage Products and Systems, Medium Voltage Products and Systems, and Trans-former Products.

If we take a look at one of these sub-divi-sions, the Transformer Products sub-divi-sion, it presents another success story. ABB is a leading worldwide manufacturer of transformers, and produces two catego-ries, which are dry-standard and liquid-fi lled. There are a range of dry-standard types suitable for a range of industries, and orders for these are increasing as they reduce environmental contamination and fi re hazard.

Liquid-fi lled transformers are used in util-ity, industrial and commercial applications, and as with the dry-standard types, they conform to a number of strict industrial and international standards. There are over 20 types of liquid-fi lled transformers, suitable for indoor and outdoor use.

Demand for transformer products is huge, and the ABB Group recently won an order for ultrahigh voltage transformers in India. The order, worth $18 million, is to supply 765 kilovolt power transformers to the Power Grid Corporation of India (PGCIL). These transformers will reinforce India’s national power transmission network, and will be fi tted at the Satna substation in Madhya Pradesh. There are also future plans for turnkey solutions at the Bilaspur, Agra, Wardha and Seoni substations.

SustainabilityThe ABB Group places a strong emphasis on sustainability, which includes energy effi ciency as well as environmental and



ABB GROUP

Transforming Industry

social concerns. The company describes its view on sustainability, as follows:

“For ABB, sustainability is about balancing economic success, environmental steward-ship and social progress to benefi t all our stakeholders.”

The ABB Group has defi ned seven priorities in relation to sustainability. These are:

Energy effi ciency, which helps to reduce • costs as well as emissionsClima• te changeManaging environment impact• Health and safety issues• Corporate Responsibility• Product innovation• Sustainability in the supply chain•

Through these seven priorities the ABB Group can help to counter the eff ects of climate change; as they state …

“These priorities refl ect growing concern over climate change and what the com-pany can contribute to mitigate it through energy efficient products and systems, innovation, and how the Group manages its own environmental impact.”

Latest achievementsThe list of achievements of the ABB Group continues to grow. The company recently received an ‘Engineers’ Choice’ award from ‘Control Engineering’ magazine, in the ‘Dashboard Software-Energy’ category, for their cpmPlus Energy Manager. This soft-ware product helps customers to control their energy use in order to cut costs and improve effi ciency. Readers of the maga-zine voted the cpmPlus Energy Manager the best product in its category for 2009.

As well as the order for high voltage power transformers in India, the ABB Group has

also recently received orders for a $17 mil-lion project in Kazakhstan and for the provision of electrical and automation equipment in Saudi Arabia. Furthermore, it received TUV certifi cation for its Safety Execution Centre in Buenos Aires, meaning that the system fulfi ls international safety standards. Notably, this is the fi rst TUV cer-tifi cation to be granted in Latin America.

However, the company does not rest on its laurels. The ABB Group’s plans for 2011 are to improve performance even further, drive innovation, attract and retain a skilled workforce, and focus on sustainability. ABB’s vision states:

‘As one of the world’s leading engineering companies, we help our customers to use electrical power efficiently, to increase industrial productivity and to lower envi-ronmental impact in a sustainable way. Power and productivity for a better world.’




SFS unimarket macht ihre Kunden wettbewerbsfähigerSFS unimarket ist ein spezialisierter Zuliefer- und Logistik-partner für Produkte der Befestigungstechnik, Werkzeuge, Beschläge sowie für chemisch-technische Produkte. Die Kernkompetenzen im C-Teile Management wurden stark ausgebaut, Investitionsprogramme bei den Logistikdienst-leistungen resultieren in Verbesserungen in Sachen Schnelligkeit und Verlässlichkeit.

Optimierte C-Teile LogistikEine wesentliche Zielsetzung von SFS unimarket liegt in der Herstellung von in-novativen Logistiksystemen. Die zeit- und kostenoptimierte Beschaffung und Bevor-ratung diversifizierter Produktgruppen zielt dabei auf die langfristige Verbesserung vom Nutzen und die ökonomische Effizienz der industriellen Wertschöpfungsketten beim Kun-den ab. ABB, als weltweit führender Hersteller von Ener-gie- und Automationstechnik, nutzt die turnLOG®-Systeme bereits an 57 Arbeitsplätzen mit insgesamt 665 Artikeln.

Gewinner des European Award for Logistics ExcellenceDie jüngste Entwicklung von SFS unimarket, die auf RFID basierende Logistiklösung für C-Teile turnLOG®, hat weg-weisenden Charakter. Diese Gemeinschaftsentwicklung von SFS unimarket und Intellion gewann im Jahr 2008 bereits den Swiss Logistics Award, und konnte im Jahr 2009 als logis(tis)che Weiterentwicklung den Siegertitel der European Logistics Association für sich beanspruchen.Detaillierte Informationen hierzu finden Sie auch unter www.sfsunimarket.biz/ela

Optimised logistics for C-category partsSFS unimarket makes its customers more competitiveSFS is a specialist supply and logistics partner for faste-ning products, tools, architectural hardware and chemical/technical products. Its core competences in the manage-ment of C-category parts have been significantly expan-ded and investment programmes dedicated to logistics

services result in improved speed and reliability.

Optimised logistics for C-category partsProducing innovative logistics systems is one of SFS unimarket’s main objectives. In this context the time- and cost-optimised pro-

curement and stocking of diversified product groups aims to generate long-term improvements in the utilisation and economic efficiency of customers’ industrial value chains. ABB, a world-leading energy and automation engineering group, is already operating the turnLOG® systems at 57 workstations for a total of 665 items.

Winner of the European Award for Logistics ExcellenceSFS unimarket’s latest development, the turnLOG® RFID-based logistics solution for C-category parts, is trailblazing in nature. This joint development by SFS unimarket and Intellion already won the Swiss Logistics Award in 2008, and as a further logi(sti)cal development carried off the title awarded by the European Logistics Association in 2009. You will also find detailed information about this at www.sfsunimarket.biz/ela

Prozesskostensenkung mit den Logistik-systemen von SFS unimarket Schweiz

Reducing process costs with logistics systems from SFS unimarket Switzerland

SFS unimarket AGBefestigungstechnik, CH-9435 Heerbruggwww.sfsunimarket.biz

T +41 71 727 52 00F +41 71 727 52 19

No. 1 in European Logistics Excellence




ABB CZECH REPUBLIC

We Save Energy

We have interviewed Ms Barbara Frei,

General Manager of ABB Czech Republic

1. How has your company managed to build its key position in the Czech market within your industry sector?

ABB has been present in the Czech market through its products since the 1970s. Since the beginning of the 1990s, ABB has been investing signifi cant sums of money, as one of the fi rst foreign investors, in acqui-sitions of Czech companies as well as in creating joint ventures and thus has been able to build its strong position on the Czech and Slovak markets. At that time the investments of ABB seemed optimal primarily due to the combination of a relatively quick penetration on these markets, a skilled workforce and a func-tioning infrastructure. Although the main goal of the acquisitions at that time had

been the production capacities, we cannot ignore the emphasis on engineering pro-fessions and existing know-how. Today ABB in Czech Republic, as well as worldwide,is a leading supplier of top technologies for power engineering and production automation and stands on 5 main pillars – divisions: products for power engineering, systems for power engineering, products for automation, systems for automation and robotics.

2. What do you see as the main milestones in the company develop-ment during the last ten years? How did the Czech market change during that time, and what are the custom-ers mainly focusing on at present?

After a really rocket start of the acquisitions made by ABB during 1992 to 1993, when the number of employees exceeded 7,000,

in the next six years we could see a natu-ral optimization and a segregation of the “non-key“ sectors. Measured again by the number of employees, ABB „decreased“ to 5,000 but was able to maintain a con-tinuous increase of its production rate. At that time ABB had energy production, energy transfer and distribution, and also industrial automation segments.

The decision to establish a joint- venture with Alstom where we invested all ac-tivities connected to the production of energy (production of turbines, boilers, big electric generators, desulphurization plants, etc.) was a fundamental milestone for ABB in Czech Republic. The subsequent 50% share sale in the joint venture to Alstom in 2000 had completed the whole transaction and the total number of em-ployees stabilized on 2,700. Naturally, the



Czech market has changed in the last 15 years. The main change on customers’ side has been the eff ort to concentrate only on a so called „core business“, which also brings about a reduction of engineer-ing capacities.

Our partners, i.e. engineering organiza-tions supplying their solutions to the end users, gradually consolidate either through integration or sales. The companies which remain on the market today represent an indisputable quality.

3. How do you take the constantly stricter environmental requirements into consideration in your strategy?

Our motto is “Power and productivity for a better world“. It means that we want to improve the world by saving energy. We save due to top technical solutions which

in their consequence always result in sav-ings. Efficient energy utilisation tech-nologies have already been responsible for 45% of the company revenues. We can, of course, demonstrate this on specifi c steps that ABB has taken in the fi eld of energy savings and environmental impact reduction: the effi cient solution for the Swedish wood processing group Sodra where energy consumption decreased by 80% due to the replacement of standard hydraulic engines with power effi cient frequency controlled drives. ABB supplied a complex energy and automation solu-tion for one of the biggest solar thermal power plants in the world (the solar ther-mal power plant Extresol 1 and 2 and the fi eld of solar collectors in Extremadure in Western Spain). The two power plants together produce enough energy for sup-plying 60,000 Spanish households with

clean energy which contributes to the reduction of CO2 emissions by 298,000 metric tons per year. ABB also helped The Wall Street Journal not only to get a new look but also signifi cant savings of energy. Thanks to the ABB‘s automation solutions for 17 printing machines, the American edition of The Wall Street Journal has since 2007 had a new, narrower size which has been saving millions of dollars of annual production costs for the Dow Jones pub-lishing house and has ensured high print quality.

4. How has the economic recession aff ected your company and how do you see the future development of the company?

As our CEO, Joe Hogan, has recently said, in spite of the current economic crisis the long term growth factors remain the same



ABB CZECH REPUBLIC

We Save Energy

for ABB: the steadily growing demand for electric energy, the quick recovery of emerging markets, and the need to sup-ply renewable energy via existing distribu-tion systems require solutions for more extensive and better energy infrastructure, effi cient energy utilisation and an increase of industrial productivity. Of course, we still continue to make signifi cant invest-ments in the research and development of new technologies. The energy sector has not been dramatically aff ected by the impact of the worldwide economic reces-sion. Industry in general, and in particular the automotive industry and subsequent-ly the metallurgy, have been experiencing signifi cant decline. For ABB, which brings both power engineering and industrial solutions, the situation has been so far stabilised.

5. Which sector is crucial for you and which one has better prospects with regards to the future development?Do you plan to penetrate new sectors?

The strength of ABB lies in high technical quality products. We do not aim to dra-matically change the scope of our activi-

ties. The position of ABB in the future as well as today is in two sectors: the power engineering and the industrial sectors, while even in the middle of the deepest recession, which the world has experi-enced in the last 50 years, we have con-tinued to invest in new technologies. Moreover, we took new steps towards extending our product range and we have recently started a new activity Technol-ogy Ventures. Thus we will supplement our own activities in research and devel-opment by means of investments which shall secure our long-term access to the most signifi cant technologies from their very origin. The aim is to be even more fl exible so that we can eff ectively focus on quickly growing industries.

6. Are you preparing any new revolutionary products? How much do you cooperate with your custom-ers during the development of your products?

We do! In cooperation with our main power engineering customers we are preparing a new equipment for electric energy distribution networks, the so called “smart grids“. They should consequently

be able to provide better services to end consumers and prevent energy wasting. And that is possible by rational behaviour of well informed end users.

7. How do you foresee the future development of power engineering and what will be the role of ABB?

The energy supply in general and the related issues – energy savings, meaning-ful utilization of renewable sources, safe-ty of deliveries (in particular from poten-tially critical regions), raw material supplies, environmental protection, the role of nu-clear power plants (and the development of a new generation of so called rapid reactors, which are able to process current nuclear “waste“) and the need to effi-ciently utilise the existing domestic sources – these are all some of the most complicated tasks of the contemporary civilization. We are not exaggerating much when we say that while the 19th century was the century of industrial revolution, the 20th century was the century of in-formational revo lution and that the 21st century will be the century of power en-gineering revolution.




SALZBURG AG

Infrastructure, Innovation and Diversity

Serving the people of Salzburg Salzburg AG, one of Austria’s most

diverse public utilities, is responsible

for the region’s transport, energy, water

and telecommunications infrastruc-

ture, and has numerous projects on the

horizon. Dr Franz Appesbacher, Head of

Energy Trading, talks to Gabrielle Brown

about how such a diverse organization

can achieve success across all its opera-

tions, and specifically how its natural

gas business will enable a secure and

greener energy service for the region.

Salzburg, capital of the federal state of Salzburg in Austria, is a popular tourist destination with visitors fl ocking to the picturesque Alpine city to enjoy its world-

famous baroque architecture and pay homage to Amadeus Mozart’s birthplace. However, the citizens of Salzburg state are also fortunate to live in a region sup-ported by fi rst-rate public services and enviably effi cient energy systems. Salzburg AG, the public utility responsible for the region’s infrastructure, is vehemently dedicated to improving the electricity, natural gas, water, telecommunications and public transport infrastructure for the people of Salzburg. It’s a vast portfolio, but one in which each element continues to thrive.

“Public opinion polls show that 90% of our customers are proud of us, and more than 80% see us as friendly and trustwor-thy. We know that when equivalent com-panies do polls, we are shown to be bet-ter across our portfolio than others who specialize in only one area,” says Dr Ap-pesbacher.

Smooth operationsThe concept of being welcoming and open comes across very clearly in Salzburg AG’s website. Senior executives are pic-tured appearing relaxed and approach-able and there’s very much a sense that the company is keen to engage with its customers on a very personal level. Dr Ap-pesbacher describes the company as be-ing “the lifeline of Salzburg”, so the idea of connecting people (through transport and communications infrastructure) and enabling the safe and secure fl ow of en-ergy (electricity and gas) is paramount.

Ensuring success across all areas of op-erations must pose one of the greatest challenges to the organization, and with around 2,000 employees the utility is one of the largest in Austria. Dr Appesbacher explains that this achieved by keeping



every employee motivated and account-able for Salzburg AG’s success. “We set challenging targets, and this goes for every employee, from the CEO down.” This ‘sales culture’ is further supported by a thorough risk management plan.

Supporting a robust and greener energy systemLike any European organization involved in the energy market, Salzburg AG’s work in this area is dictated by the need to develop, implement and manage green-er energy solutions. Dr Appesbacher as-serts that Salzburg AG is able to diff eren-tiate itself from its competitors by having a robust setup of 27 hydro power plants –

more than four-fi fths of electricity sold to customers in Salzburg comes from hydro-electric power production. Again, the people of Salzburg are at the forefront of Dr Appesbacher’s thoughts, as he affi rms that they are “very proud of their environ-ment.” In addition, he doesn’t fail to men-tion the importance of preserving the city for the tourist trade and ensuring their experience of the region will leave them confi dent of its green credentials, and that their impact on the environment is mini-mal.

Improving natural gas suppliesSalzburg AG is heavily involved in improv-ing the region’s natural gas supplies and creating services that make best use of

the resource. There are many benefi ts of natural gas compared with other fossil fuels. For one, it is the cleanest burning fossil fuel, with few polluting by-products being emitted into the atmosphere. This also means that it doesn’t leave behind any residues or odours. Natural gas is also more effi cient to transport, being supplied via pipelines and delivered direct to the end user.

“With our gas operations, the main focus is the end customer: ensuring stable prices and a secure supply,” explains Dr Appesbacher. Salzburg AG supplies around 32,000 households via a 2,000km natural gas network extending from the north to the south of Austria, with the gas pro-vided by suppliers in Russia, Norway, Germany and Austria.

Salzburg AG provides a secure, consistent supply of gas, working in partnership with



SALZBURG AG

Infrastructure, Innovation and Diversity

E.ON Ruhrgas, the leading company in the pan-European gas market, responsible for the European gas business from ex-ploration to supply. “We have a wide port-folio in order to minimize the risk of dis-ruption to supply, with various contracts with gas storage plants across Austria. We are also a big player in the Tauern Gas Pipeline (TGL) project, which will connect the signifi cant German gas market with the equally large Italian market, via Aus-tria.” The aim of the TGL is to secure gas supply for the next 20 to 30 years, and meet Austria’s demand of some 9 bil-lion m³ of natural gas a year, as well as secure supplies across Europe. Dr Ap-pesbacher points out that natural gas is the best complement to renewable en-ergy, such as hydro and wind, which can fl uctuate and are comparatively diffi cult

to control. “We see gas enabling us to provide a fl exible, reliable energy serv-ice.”

Providing efficient and environmentally sound energy optionsSalzburg AG’s involvement in natural gas initiatives is seen very much in the context of ensuring that Salzburg’s ‘lifeline’ is in-creasingly environmentally sound, across all areas of operation. Dr Appesbacher explains how compressed natural gas (CNG) has enabled the region to improve the green credentials of its public trans-portation services: “Many of our buses run

on CNG and we have many CNG fi lling stations.”

Biomass is also an area where Salzburg AG is contributing to improving the re-gion’s carbon footprint, where for exam-ple plant waste (woodchip, dead trees) is used to generate electricity or produce heat, and Salzburg AG is currently involved in a number of biogas production pro-jects.

Substantiating the company’s commit-ment to providing a diverse mix of en-ergy sources to achieve greener and more secure services for the region, Dr Ap-pesbacher explains that Salzburg AG is also “very active in the construction of hydro power plants – river plants as well as sto rage power plants.”


Salzburg’s success storyAs polls prove, Salzburg AG has won the confidence of its customers. I asked Dr Appesbacher to sum up what he considered to defi ne the organization’s success. “Al-though being formed by a merger in 2000 of two separate utilities serving Salzburg, we came together to become one of the most successful and innovative public utilities in Austria. We have achieved op-timal preparation for the liberalization of the electricity and natural gas market and we have many new markets: telecoms, internet and touristic public transport. We’ve also secured numerous successful joint ventures.”

At ten years old, Salzburg AG and has proven that with clear direction, lateral thinking and an unswerving dedication to the people of the region, success can be achieved across all areas of such a versatile public utility.



HAMON COOLING TOWERS

Staying Cool

The manufacture and installation of

Cooling Towers is where Hamon Inter-

national started over a hundred years

ago, and this element of the company

continues to thrive. Diane Mannion takes

a look at the Cooling Towers Business Unit.

When it comes to Engineering, Procure-ment and Contracting (EPC) companies, Hamon is in the major league. With rev-enues of 380 million Euros in 2009, the company is employing more than 1.000 staff throughout 20 countries and fi ve continents. Its activities are many compris-ing of design, manufacture and installa-tion, project management and after sales services. During its existence Hamon can boast of many successes including involve-ment in the Eiff el Tower.

The company is divided into fi ve business units – Cooling Systems, Heat Exchangers, Air Pollution Control Europe, Air Pollution Control US and Chimneys. Of these fi ve, the Cooling Systems Business Unit is the most established, although not the largest.

Strong foundationsWhen the company fi rst began, its core activities were in the development of Cooling Towers. That was over a hundred years ago, when two French brothers started trading in France and Belgium respectively. Both of the brothers concen-trated on the production of cooling tow-ers initially, but moved into the energy business following expansion in the min-

ing and heavy industry sectors. They merged to form the Hamon Group in the 1990’s.

Hamon has come a long way since the early days, and the latest fi gures indicate that its success is set to continue. In par-ticular, the Cooling Towers Business Unit signed new contracts during the 3rd quar-ter of 2009 for a total value of 17 million Euros. Furthermore, it has secured an or-der for the construction of a 30 cells plume abated cooling tower in the UK, and a con-tract for Super Large Cooling Towers for the State Nuclear Electric Power Planning Design and Research Institute of China. New orders for the whole year 2009 made 110 million Euros.

The year 2009 has been very successful as the revenue of the group increased by



4% compared to 2008. Hamon Cooling Systems Business Unit’s earnings before interest and taxes have improved by 29% compared to 2008, thanks to the higher revenue, the professional execution of the jobs and a strict costs management at all levels. Hamon Cooling Systems also employed a total staff of 482 in 2009, and sold to a number of world markets includ-ing Europe, the Middle East and Asia.

Cooling towersThe Cooling Towers Business Unit supplies and installs equipment for a variety of industries worldwide, and is one of the world leaders in its fi eld. Customers include, amongst others: power plants, chemical

plants, the paper industry, steel mills and sugar mills. With such a diverse clientele, the company has built up a vast knowledge and experience to cater for individual client specifi cations. To meet customer requirements Hamon Cooling Towers of-fers a broad range of options relating to layout, arrangement, structure, internal materials and mechanical requirements.

Additionally, their wet cooling systems can be standard or made to measure. They can provide cooling towers for any type of industrial water, sea water or low pH solutions, and all their designs take ac-count of effi ciency, longevity, power sav-ing and Environmental awareness. In fact, they include advice relating to Environ-mental impact as standard with all their Cooling Tower installations. They also take

care of repair and maintenance, and have a centre in France dedicated to the supply of spare parts.

Types of towersThere are a number of diff erent kinds of Cooling Tower dependant on require-ments, and diff erent fi lls to suit the type of water. The Natural Draft Cooling Towers (NDCT) were built for large power plants in the 70’s and 80’s, but there was a reduc-tion in the demand for this type from the 80’s onwards due to the reduction in power plants and the fact that NDCT’s were incorrectly linked to pollution due to their size and visible impact. However, opinion has changed regarding these



HAMON COOLING TOWERS

Staying Cool

towers and they are now considered en-vironmentally friendly, because they gen-erate large amounts of power saving. Other advantages of this type of tower are that they have no mechanical noise, require limited maintenance and have a long life expectancy. Hamon has designed and built over 300 NDCT’s in total, and continues to improve their performance. A variation of this type of tower is the fan assisted type (FANDC), which is suitable for certain cir-cumstances, for instance, when there are height restrictions, or when fans are need-ed to boost the air fl ow due to climatic conditions.

Mechanical Draft Cooling Towers (IDCT) can be built in any size and in diff erent materials such as steel, wood and concrete. A number of issues are considered when designing this type of tower; the available plot area, water quality, air pollution, local labour costs, and noise and plume limita-tion are all contributory factors. To deal

with the problem of plume visibility in areas where this could be a problem, such as residential areas, Hamon off er another solution in the form of Plume Abated Cool-ing Towers (PABCT). These are a type of IDCT, so they have all the features of Me-chanical Draft Cooling Towers but with the added advantages of no plume visibility, cost eff ectiveness and outstanding per-formance in terms of evaporative cooling towers.

Continuous research and developmentProspects are good for Hamon Cooling Systems and the 2008 annual report indi-cated an intention to sustain growth levels related to supply and installation of new units and refurbishment of older towers. Given the present economic climate this upward trend is impressive. The company

also intends to continue investment in Research and Development, and make more use of renewable energy. The MD, Francis Lambilliotte, remarked in his 2008 Annual Report Statement:

‘Of course, we’ve invested in the techno-logical performances of our products, which explains the wealth of talent re-cruited with an R&D bias. Amongst other things, we’re working on a natural draft hybrid tower that produces less plume and we’ve also got a new fan-assisted natural draft tower that is considerably less high than a traditional concrete tower: 80 meters instead of 160/180 m. They off er the ad-vantage of being able to blend in with the environment more easily...’

‘... Tomorrow, I hope that we’ll be at the heart of both traditional energy projects with environmental protection systems and also in renewable energy projects, clearly a source of development for the future.’


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NLI GROUP

Vision, Courage and Success

If you want to know how to survive, profi -

tably and successfully, in today’s uncertain

economic climate, ask those who’ve

weathered – successfully – yesterday ’s

uncertain economic climate. NLI has a long

and successful history and, despite several

times of economic downturn, when

competitors fell by the wayside; vision,

courage and action has seen the company

succeed where others have not.

HistoryThis large company is still a private com-pany, headed by Mr Nordheim-Larsen. NLI started in a small mechanical work-shop in Mjøndalen, Norway, in 1946, and has grown signifi cantly in the last 63 years, in terms of turnover, areas of competence and number of employees. The last fi ve years, in particular, have been marked by

signifi cant expansion and diversifi cation, not least geographically, but also into new market areas. Despite the current eco-nomic climate, which has aff ected the industry detrimentally, NLI has high ambi-tions and looks to the future with a solid fi nancial base and eyes open to potential in this diffi cult time.

Why the success?Back in the 1970’s, the group was mainly supplying engineering equipment to Norway’s traditional industries, such as the forestry and aluminium, as it had done for the previous 30 years. These industries experienced a massive downturn and many of NLI’s competitors struggled or failed. But not NLI. Why? One of the an-swers is that Mr Nordheim-Larsen was not only a visionary but acted, courageously,

on his perception of the future. He realised that the industries that had supported his company for so long were doomed to a long downturn and that NLI needed to diversify in other industries.

Oil and gas exploration came to Norway at this time and so that was a natural target for expansion. NLI started reorient-ing their systems and expertise to this growing market. Then later, by the early 2000’s, many of Norway’s traditional en-gineering workshops were feeling the bite of another economic downturn. Though the market was low, Mr Nordhe-im-Larsen not only saw the potential but also dared to act and acquired companies with their own technologies – technolo-gies that complemented NLI’s. Mr Nord-heim-Larsen knew the hard economic times would not last. His company start-ed acquiring struggling businesses that were in line with both the NLI expertise



and the oil and gas industry market. In the last 10 years NLI has continued to grow both organically and by acquisi-tion.

Two other success factorsMr Tor-Martin Røed, Chief Operational Offi cer Marketing for NLI, sees that, be-sides vision and courage to act, there are two other factors to their success. Firstly they concentrate on what their particular skills are and they develop those with total focus. It is always tempting to leap into other markets or acquisitions that show promise but, unless they have synergies with NLI’s core competencies, they are rejected. They look closely at where their skills are and continue to develop those further.

Secondly, they have a high focus on developing their people. Because the company has a large percentage of high-ly skilled and educated people, the con-tinuing training and development of everyone, from management on down, is a top priority.

Globalisation and emerging marketsBecause of its involvement in the oil and gas industry, NLI has had to embrace the whole world and, also, compete with the whole world. In general they have ap-proached this challenge by establishing a wide network of suppliers in low cost countries. Today that is one of their main focus areas. Their business in Poland came as a part of their growth in mechanical engineering, being a daughter of a Norwe-

gian company they acquired. Nevertheless, it has been an important element for them both with respect to capacity and price.

Along with embracing a wider business community, they have recently been em-bracing the new technologies in renew-able energy. These technologies include fl oating off shore windmills, CO2 capture and wave power.

Quality productsThe oil and gas industry is necessarily conscious of quality control – even the smallest problems can lead to catastroph-ic environmental, humanitarian and fi -nancial consequences. NLI are certifi ed for ISO 14001 (Environmental Management Standard) OHSAS 18001 (Health and Safe-ty Management Standard), ISO 9001-2000 (Quality System Standard) and ISO 3834-2



NLI GROUP

Vision, Courage and Success

(Welding Management Standard) and, despite the cost and eff ort to maintain these standards, they know it is essential to continue to produce products of the highest standard – customers demand it and the long-term viability of NLI depends on it.

Quality peopleAll new employees must undergo the NLI training program at the in-house Compe-tence Centre. The main objectives of the Competence Centre are to continuously improve their processes and routines for recruitment, introduction and develop-ment of new employees. The Competence Centre programs focus equally on both professional and social development. NLI strives to create the best choice for their employees, customers and partners and in order to ensure and follow up on the development of employees, they estab-lished their own Competence Centre.

Because the training is for everyone and because the fl at management structure ensures eff ective communication through the group, it is relatively easy for employ-ees to move from one company or func-tion to another. This ensures everyone has wider opportunities for advancement and skill enhancement.

All management personnel must attend the Human Resources training program and there are specifi c NLI training pro-grams for every specifi c group of employ-ees in the group – accounting, sales, procurement, engineering and so on. They also run their own Project Management courses and there is a continual updating and expanding of courses provided to keep staff up to date with skills, technology, legal and environmental changes.

NLI undertake massive engineering projects. Therefore, their rigorous health and safety training programs are essential, as Mr Røed said, to maintain production quality standards and, more importantly,

“so everybody gets back safely to their families every day”. The caring nature of the company shows itself in other ways too; from the short communication lines (allowing everyone to be heard easily) to the ease of movement between divisions and functions.

Management structureFor a company with over 1,000 staff , it is surprisingly lacking in bureaucracy. Mr Tor-Martin Røed explained that there are very short communication lines and communication between everyone, con-stantly, is a large focus of management. Within such a large group, there could be confl icts of functions between diff erent companies. In order to avoid confl ict of interest between their own companies and to manage the interfaces between their clients in a proper way, NLI has established a management structure with a Management Group being res-ponsible for all activities across NLI. In addition to the owner, who is also CEO, this consists of the CFO, COO Marketing, COO Fabrication and COO Technology. The two latter ones are also acting as Working Chairmen for their respective companies. This structure underlines the short lines of communication and ability to act and respond quickly if re-quired. In addition there are several other means of securing and improving the co-operation across the group such as regular meetings comprising the group managing directors or meetings for marketing personnel etc.

Current businessUnder the NLI umbrella is a complete supplier of engineering and manufactur-ing services, technological products and process solutions within the oil and gas, land-based industry, maritime industry and civil construction works (bridges and buildings). They take full responsibility for the entire process, from concept develop-ment to the delivery of the fi nal product, including project management, engineer-ing, structural steel, pipe-work, electrical and instrumentation, surface treatment, installation, assembly, testing and com-missioning.

Their current locations are: Tønsberg (head offi ce), Odda, Arendal, Grenland,



UAB GKF “Sparnai” performs mechanical metal processing works according to individual orders following ISO 9001:2008 requirements. Our main partners are companies from laser, aviation, medicine, telecommunication, oil, railway, textile in-dustries. Quality, flexibility and on time delivery – that’s what we are valued for.

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Experts in high precision metal processing

Larvik, Sandefjord, Krokstadelva, Lier-byen, Kjeller and Gdansk (Poland). The challenge of absorbing many diff erent languages and cultures necessitates an effective and efficient communication management system. Such is the nature of a large international company. For example, one of the NLI companies had people from 15 diff erent nations work-ing for it, at one time. While ensuring respect for differences, it is vital that NLI’s strong management and training systems – developed with great rigour over the past 10 years – are maintained so that there is consistency of operations between divisions, companies and func-tions.

Current economic climateNLI has suffered through this current economic slump and they have had to review permanent and temporary staff numbers. Their order backlog has reduced and many projects are on hold. The civil engineering work in Norway dropped immediately after the financial crisis occurred, but while they now see that part of the business is recovering, the oil and gas work has taken longer to taper off. Mr Røed does not anticipate that 2010 will be a good year but he says that the company has made the necessary

adjustments to cope with the current crisis. With the typical NLI attitude of vision and courage, he says that the company is very aware that: fi rstly, the economy will return to better times, and secondly, that with the economic down turn and potentially many struggling companies in mind, there could be many profi table acquisition opportunities available for NLI. Dealing with today’s very real prob-lems while keeping an active eye on the future has kept NLI at the forefront of every market they’ve been involved in. In Mr Tor-Martin Røed’s words, “We continue to look behind to learn and forward for opportunities.”

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GN NETCOM


The telecommunications industry is

notoriously fast moving, with innova-

tive technologies constantly entering

the marketplace offering new solutions

for business and consumer clients alike.

GN Netcom’s Chief Technology Officer

Leo Larsen talks to Gabrielle Brown

about their award-winning Jabra hands-

free headsets and the imminent boom in

the unified communications market.

GN Netcom is one of the world’s leading and fastest growing suppliers of hands-free communications solutions, producing wireless headsets for mobile users and both wireless and corded headsets for contact centres and general offi ce users. The company’s Jabra products, the world’s best selling Bluetooth headsets, have re-ceived numerous awards for their pioneer-ing technology and design. “Our products deliver outstanding sound quality but their interoperability is also exceptional. Our headsets work, and work well, with many diff erent systems and applications,” says Mr Larsen, explaining what it is about

his technology that sets it apart from the competition.

Working smartWorking with a headset rather than a tra-ditional telephone handset has two sig-nifi cant advantages. Firstly, because you are able to sit upright and move your body freely you are less likely to suff er from repetitive strain injuries – you will not fi nd yourself hunched uncomfortably over the phone. Secondly, with no need to hold on to a handset, and with wireless head-sets you won’t be chained to a fi xed point, you can be more productive; using your hands to type or being able to walk to another area in your office to use the printer, for example.

“To take the issue of wellbeing further,” says Mr Larsen “Jabra headsets meet the requirements of protective regulations, meaning that individuals using our prod-ucts will not be exposed to loud or un-

pleasant noises. This means that you are best protected and staff working for hours at a time in contact centres will work bet-ter and not suff er stress.”

Looks versus capabilityToday, technology, design and to a certain extent fashion are becoming increas-ingly interdependent. Some mobile phones, for example, are designed as much as a fashion accessory as a means of communication. Mr Larsen explained that for Jabra the market has very diff erent requirements. “The mobile business is driven by trends in looks and design par-ticularly, to the extent that you will give up something, such as sound quality, to have a smaller and s marter product – and that goes for all products in the consumer area, not just in telecommunications. We have diff erent expectations in technology too; for example we all accept that a mo-



bile phone won’t work going through a tunnel, but we expect a landline to be robust and work all the time.”

Jabra headsets aimed at professional cli-ents, particularly contact centres, are far more technology driven. They combine wired and wireless, DECT and Bluetooth technologies (whereas the mobile market is largely Bluetooth only) and package these in a far more conservative fashion. The importance of comfort, durability and reliability take precedent over up-to-the-minute design.

A technological roadmapPioneering technology is clearly at the heart of the Jabra brand. Maintaining not only a fi rm grasp of the very latest devel-opments in wireless and Bluetooth tech-nologies but also being a part of those developments proves vital to the brand’s



GN NETCOM


continuing success. Importantly, tech-nologies are developed and evolved in-house.

GN Netcom has dedicated resources for tracking emerging and disruptive tech-nologies, keeping a fi rm eye on trends and also predicting – road mapping – the likely future developments in wireless and Bluetooth technologies. Product portfo-lios are constantly evaluated to ensure they’re at the forefront of their market.

It’s an ongoing, fundamental task, but be-ing future-savvy means the company is poised to take advantage of new tech-nologies and move quickly when markets pick them up and run with them – often

at great speed. When Bluetooth exploded on to the scene earlier this decade, Mr Larsen explains that although there was perhaps an element of surprise, it was welcome and Jabra products were able to keep pace and evolve to meet, and surpass, clients’ expectations.

Unified communicationsSo, what does the future hold? Without hesitation, Mr Larsen asserts that the next big thing will be unifi ed communications, where you have only one network which

accommodates email, instant messaging, video and voice conferencing. “We are taking the lead in this area. For instance, we are the first to introduce Microsoft-approved products for their unifi ed com-munications solutions.”

With unifi ed communications, the PC be-comes the core of all communications activity. The traditional offi ce phone could therefore be rendered useless. Mr Larsen proposes that as the PC becomes the focus, and as communications technologies con-tinue to be developed around that concept, the phone as we know it will be left behind. This development is the biggest opportu-nity for Jabra: as the PC keyboard replaces the traditional dialling pad, headsets be-come the obvious interface through which to speak and listen.

Surprisingly, it isn’t technology, or even cost, posing the most complex challenge to Jabra. Instead, it’s more people’s pre-conceptions about being without their handsets, and feeling uncomfortable at the idea of seeing colleagues “walking and talking with their hands waving about”. Mr Larsen explains that the fi rst challenge is to get the products in front of the clients, and for them to be open-minded. You could liken it to the initial rejection of mobile phone technologies, which at fi rst were thought to be ostentatious and unneces-sary.


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e-mail: [email protected] web: www.secl.cc


From telephone to toolAs you would expect, the Jabra product range is broad, with varying cost options. But being state of the art, Jabra headsets are not a low-cost option for businesses. Mr Larsen has no reservations about the brand’s status however; he stresses that low-cost headsets will serve a certain pur-

pose, but they will not be of a quality good enough to last, and potentially not suitable for long-term use. Jabra products have been designed to improve effi ciency in the workplace; they are a professional business tool, not just a ‘telephone headset’.

With unifi ed communications fi xed fi rmly on the horizon Mr Larsen is positive about the future for Jabra, but he’s also aware

that the market needs a gentle nudge in order to equip itself for this change. “I hope that businesses come to see that hands-free solutions can have a positive impact on their workplaces. We know and understand the benefi ts that our headsets provide, but in order for this to be recognised, more businesses have to be open to trying them.” A challenge you’d be foolish to refuse.

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Tianjin Lishen Battery Joint-Stock Co., Ltd. is a Hi-Tech enterprise with proprietary intellectual property and core technology, and specialized in lithium ion battery R&D, production and sales. Lishen was established on December 25th, 1997, with headquarters located in Tianjin Hi-Tech Industry Park. Lis-hen’s product portfolio consists of hundreds of types of Li-ion batteries, including cylindrical, prismatic, polymer and power battery.

Sticking to quality, technology, internationalization and high-end orientation, Lishen is dedicated to providing customers with total energy solutions. Lishen has fixed its corporation vision as “world-class technology and quality, mankind-enjoyed green power.” Backed by the State Enterprise Technology Centre, UL accredited laboratory and Post-Doctoral Workstation, Lishen has taken the lead to set up automatic production lines, perfect manufacturing control, and quality management system in China. As the product performance and quality are among the first-class in the world, Lishen’s products have been awarded China Well-known Brand and China Famous Trademark.

With advanced technology, excellent techniques, first-class quality, good credit and quick response to the market demand, Lishen has been successfully supplying batteries to world famous high-end customers like Samsung, Apple, Motorola, Nokia, TTI, Black & Decker, Vodafone, Lenovo, GN Netcom, etc. And a powerful marketing network covering key international markets has been established.

In the future, Lishen will continue to closely follow the development trend of lithium ion battery technology, and keep up with the market demands. Besides keeping remarkable shares in portable device battery market, Lishen will enhance the investment in EV/HEV power battery business, so as to leap into the top 5 LIB players in the world, thus make significant contributions to the new energy industry of China.

Tianjin Lishen Battery Joint-Stock Co., Ltd.

No.38 Haitai South Road, Huayuan Technological Park Binhai Hi-tech Industrial Development Area, Tianjin, ChinaTel.: 0086-22-23866683, www.lishen.com.cn



E.ON SVERIGE

Seriously Green

E.ON Sverige is at the forefront of Swe-

den’s commitment to reducing carbon

emissions and providing customers with

power from renewable energy sources.

Environmental Director Mattias Örtenvik

talks to Gabrielle Brown about the

importance of providing customers with

clear advice, viable green alternatives

and E.ON’s commitment to reducing cit-

ies’ carbon footprints.

E.ON Sverige fi rst introduced an environ-mental policy in 1969, decades before the words ‘green’ or ‘renewable’ were as closely associated with business as they are today. E.ON continues to set the environmental standards as a leading energy provider, but as Mattias Örtenvik explains, this does not mark a huge shift in its existing strat-

egy, “E.ON already had a strong portfolio of renewable energy sources, including hydro and nuclear, and in the last twenty years made extensive change from fossil fuels to bio fuels.” So, rather than increas-ing political and market pressure forcing it to review its products E.ON simply car-ried on in the direction it was already heading.

Power politicsIn Sweden politics has been the main driving force behind businesses applying environmental policy across their opera-tions, with the introduction of ‘green taxes’, applied to electricity and especially to carbon dioxide. Therefore, the demand

for green energy products already exists in Sweden and E.ON’s target client base doesn’t need to be sold the concept. “The political agenda is very important and the market has asked for this in a fairly clear way,” says Mr Örtenvik, who goes on to explain that the incentive then is for E.ON to inform its market precisely what it has to off er in terms of greener energy prod-ucts.

In answer to my question about how the recession had aff ected businesses’ attitude to reducing their energy consumption and turning to more environmental energy options Mr Örtenvik said, “In order to achieve greater energy effi ciency compa-nies have to make an investment. It requires an initial, upfront cost, so the recession has not helped in this respect.



But it has perhaps triggered some busi-nesses to look at rationalizing their energy costs.”

Knowledge is powerA brief look at E.ON Sverige’s website will tell you the company is committed to educating clients as to how to reduce energy consumption, providing various tools and quizzes that aid with monitoring usage. However, Mr Örtenvik explains that this is largely directed at the mass market, which is several steps behind business when it comes to engaging in energy issues. The business-to-business market is notably more mature and companies will for some time have considered the

impact of energy consumption not only on their overheads but also as part of the requirement to create greener brands. “Over the last fi ve years, due to the climate issues, environmental policy has moved into the strategic area. There is a more obvious link between the environment and its impact on business. In Sweden, as soon as you have a product it has to have a green element to it; it gives it an appeal.”

I asked Mr Örtenvik to tell me what the fi rst step a business should take is in order to reduce its carbon footprint: “First and foremost before any energy-saving meas-ures are made you must have an in-depth understanding of where and how you are using energy. This knowledge can be used as a platform for you to not only pick the

low-hanging fruit, i.e. take immediate measures, but also prepare your long-term agenda, taking into account all the appro-priate cost-benefi t considerations.”

Creating sustainable citiesAs well as in the boardroom, general envi-ronmental awareness throughout most of Sweden’s city centres is fairly high. Mr Örtenvik proposes that this is perhaps because Sweden already had climate-effi cient electricity systems as well as low-carbon heat options before climate change became such a hot topic. E.ON Sverige’s sustainable city projects are a result of the company’s recognition that all levels



E.ON SVERIGE

Seriously Green

of society must be engaged in order to make further headway with climate, renew-able energy and energy effi ciency objec-tives. The project divides its focus into three areas for attention: fi rstly, reviewing and investing in large-scale energy systems; secondly, looking at local energy systems, namely heat, transport and waste; and thirdly understanding how alternatives can be made attractive to customers to

give them the incentive to reduce their carbon footprints. Mr Örtenvik adds that the heat business is the backbone of the sustainable city concept because by nature it is a local business – district heating sys-tems are not connected in the way that the electricity grid is. Whichever city you live in, you will receive your heating from a local source.

The integration of greener energy, trans-port and waste systems is central to the concept. Mr Örtenvik stresses that the sus-tainable city concept is a platform for a public-private partnership, with collabo-ration between energy providers, munici-palities and other local players. “We really use our approach around sustainable city as a base for local schemes, with a strong cooperation from local business and


authorities.” Mr Örtenvik himself drives a biogas car and has made considerable investments in his home in order to reduce energy consumption. There are other things he would like to do in order to reduce his own carbon footprint but explains that it comes back to what kind of options are available, and the

sustainable city is all about off ering viable, practical alternatives.

A greener futureThe future for E.ON Sverige is that of an extreme dedication to reducing CO2 emis-sions across E.ON’s Nordic operations, manifest in a commitment of 58 billion

Swedish Krona (SEK) over the next six years which will be invested in projects including new wind farms, making the existing elec-tricity grid far more weatherproof and updating the hydro electric power infra-structure. The objective is to reduce CO2 emissions by four-million tonnes. This is not only a momentous business objective; it’s a serious commitment to the benefi t of our planet.



INTERNATIONAL DIESEL SERVICE

Maximising Fuel Transport Efficiency

International Diesel Service (IDS) is the

European business to business arm of the

Kuwait Petroleum Corporation, one of

the world’s leading oil producers. Ronan

O’Connor examines how they operate their

network of stations and lead the way in

security and pricing in the industry.

Even though fuel prices are about as con-sistent as stock market values, for inter-national haulage fi rms, the hunt for the lowest fuel prices is constant. With around 600 fuelling stations spread across Europe from Moscow to Ireland, IDS delivers the lowest fuel prices to its customers via an ingenious and innovative business model.

It is a strategy that has been developed for the company’s unique customer base, as Khaled Al-Bader, marketing coordina-tor at IDS explains. ‘The business model revolves around the long haul require-ments of international haulage fi rms. We have quick pumps, a good network of stations, spanning the continent from Ireland to Moscow. All of our stations are

strategically placed and are normally lo-cated about 1 kilometre from the main highways. This allows us to avoid more expensive land costs of having a station right beside the highway. This lower cost is then passed on to our customers in lower prices. We also keep our costs down by off ering very little services at our sta-tions,’ he said.

IDS supplies its stations through agree-ments with local fuel suppliers all across Europe. Kuwait Petroleum Corporation, its parent company, has two refi neries in Europe: one in Europoort, Holland and another in Sicily. However, the agreements with fuel companies are based on location, as it makes no logistical sense for IDS to move fuel from Italy to stations in Poland or elsewhere.

Beyond offering the provision of the cheapest diesel, biodiesel and AdBlue, IDS maintains its position at the top of the market by making its business fi nan-cially rewarding. ‘We also off er our custom-ers a number of other fi nancial and secu-

rity services that improve our business model. We off er a NOVI service, which off ers the customers the net of VAT on their invoices. This allows us to claim back the VAT on behalf of our customers, and gives our customers the benefi t of having less money tied up while they are waiting for their rebates. It improves the cash fl ow of our customers,’ Mr Al-Bader explained.

Online securityOne of the trump cards in IDS’s business model is the level of online access and security on offer. All of the company’s services are available online. This begins with an electronic customer service sys-tem, called Iaccount. It allows customers to see all transactions and pump prices and all card actions. This service is pro-vided free to all customers and is con-stantly being enhanced and upgraded, according to Mr Al-Bader. Customers can also order extra cards or cancel cards on-line. In the beginning of 2010 an e-invoic-



ing service will be launched, adding an-other layer to the online off ering.

As can be imagined, the outlay of big haul-age companies on diesel can be huge. In an attempt to eliminate any element of misuse of company resources, IDS off ers clients a number of security features that keeps it ahead of its peers in the market.

According to Mr Al-Bader, ‘One unique aspect of our company is that we are com-pletely online and operate in real time. With our competitors, when a truck goes to a station and uses their card to get fuel, the card can be accepted or declined. But if a card has already been cancelled, there is a delay of a number of hours before this is recognised at all stations. Some com-petitors boast that their card systems are updated twice a day. All IDS stations are connected to a server and every card is checked centrally every time a card re-quests fuel. ‘

IDS also off ers its customers a number of other security features. For instance, they

can restrict the access of cards to a certain route or even to one station, allowing them to keep track of their drivers and minimise the potential abuse of their account. And they have recently added another layer of security to their card system, allowing cli-ents to block the cards’ use at weekends, when their statistical analysis showed that most misuse of cards was taking place.

There are a number of competitors in the market for the international haulage busi-ness, coming from fuel companies and fuel traders. ‘The problem with the fuel traders is that they don’t have their own stations. They have agreements with fuel companies, so their customers come and fuel with them at diff erent stations. It is an interest-ing concept, but they cannot control the fuel prices at the stations. We are the mar-ket leader in off ering a secure service to our clients; we are like a bank. The others do their best to keep up with us, but they cannot off er a service like the immediate blocking of cards,’ said Mr Al-Bader.

Challenges and growthDespite the eff ect that the recession has had on many businesses, IDS remains strong in the marketplace, as they can off er lower fuel prices than that of their competitors, as Mr Al-Bader explains: ‘The whole road transport sector was aff ected by the economical crisis. Because of our strong low cost business model, we were able to weather the storm. We did get a slight dip in volume at the beginning of 2008, however, the gap differential be-tween budget and actual is thinning.’

In this environment, IDS has looked at rationalising its current network to off er customers a better standard of service. This is not to say that the company is downsizing, but that it needs to track the popularity of sites as the European road network develops. While looking at the western operation to maximise effi ciency, IDS is also looking to emerging economies for growth. ‘We are looking at expanding eastwards – that is where the money is,’ said Mr Al-Bader.



CENTRAL EUROPEAN GAS HUB

Euro-trade in Natural Gas

The Central European Gas Hub (CEGH)

was set up over four years ago, but with

the growth in gas trading, its future

role is expanding. Diane Mannion

interviews the Chief Executive Officer,

Mr Harald Wüstrich, about the latest

developments.

On 11th December 2009 the natural gas spot market was launched by the Central European Gas Hub (CEGH) with further plans to launch a futures market in the spring of 2010. The launch has been seen as a success so far, as Mr Harald Wüstrich, Chief Executive Officer of CEGH, com-ments: ‘Launching the “CEGH gas exchange of Wiener Börse” was successful since 13 customers had been registered at the

very beginning... Trading activities started intensively...’

Central European Gas HubCEGH is already one of the biggest gas hubs in Continental Europe, and prior to launching the spot market there were already 90 registered traders using CEGH for over the counter (OTC) trading amount-ing to 2 billion m3 of natural gas per month. According to Mr Wüstrich, CEGH has the potential to become the biggest Central European gas hub in the future: ‘The Vi-enna-based CEGH has a considerable

competitive edge over other gas hubs in Europe thanks to its geographical position at the heart of Central Europe… Further-more, one of its major trading points along with large gas storage facilities are in close proximity, off ering additional advantages for trading at the CEGH,’ he says.

The Central European Gas Hub was es-tablished in 2005 by the Austrian com-pany, OMV, in response to the growing demand for gas trading in Europe. Nota-bly, in the period from October 2005 un-til October 2009 monthly trading volumes for gas have increased tenfold. CEGH’s functions are, fi rstly, to carry out all the processes associated with gas trading such as title transfer, and transportation between diff erent Transmission System





Operators (TSO’). Secondly, is operation of the gas exchange spot market, which was launched in conjunction with Wien-er Börse AG (the Vienna Stock Ex-change).

Baumgarten gas stationIn practice CEGH acts in co-operation with several different TSO’s, particularly in Baumgarten, OMV’s main gas compressor station, which handles a third of all Russian gas exports to Western Europe. Here four TSO’s are connected, namely OMV, TAG, BOG and Eustream. Mr Wüstrich describes the activities that take place here: ‘CEGH obtained an important role as central matching agent, while it integrates trad-ing activities in between these networks and connects them via wheeling services. From this platform, the traders can easily exit their gas quantities to the relevant transportation systems or even to storage, which is also connected by CEGH via wheeling service to Baumgarten. The transportation contracts and capacity management are carried out by the re-spective TSO.’

Trade currently takes place between Aus-tria and its neighbouring countries, which

include Hungary, Italy, Slovenia, Slovakia and Germany.

ParticipantsAlthough OMV Gas & Power is currently the 100% shareholder in CEGH, there are plans for this to change in the future. Ini-tially, Wiener Börse AG will have a 20% stake in CEGH with further steps taken to allocate a 30% share for Gazprom, and 20% for Centrex, subject to approval by the EU Commission. OMV will retain a 30% shareholding. Gazprom’s involvement is bound to have an impact as it is the world’s largest gas company.

The existing sole shareholder, OMV Gas & Power GmbH, already plays a pivotal role in the European gas logistic system. It was the fi rst western European country to begin importing gas from Russia back in 1968, and currently transports more than 66 billion cubic metres (bcm) per annum of natural gas through their pipe-line grid in Austria. OMV’s main gas com-pressor station in Baumgarten is one of the most important gas turntables in Western Europe, and has storage facilities with a capacity of 2.3 bcm’s, which repre-sents half of the gas storage capacities throughout Austria as a whole. As well as

Baumgarten, OMV also has other storage facilities.

CEGH developed the gas exchange in co-operation with Wiener Börse AG, and European Commodity Clearing AG (ECC). The role of Wiener Börse is vital for the trading of commodities, and trade is car-ried out using the internationally recog-nised Xetra system of electronic trading, which is market-proven. ECC, which is based in Leipzig, has an agreement with CEGH for clearing and settlement serv-ices for the European energy market. It makes trading easier and less risky for members by managing the fi nancial set-tlement of transactions and clearing of gas volumes with other markets that it introduces. CEGH also co-operates close-ly with the European Federation of En-ergy Traders (EFET), which plays a sig-nificant part in terms of contractual requirements. All terms and conditions must fall in line with the Austrian Exchange Act, and be approved by the appropriate authorities. This means that traders can benefit from the security of this legal framework.

The futureIn May 2007 OMV and Gazprom formu-lated a Memorandum of Understanding,

CENTRAL EUROPEAN GAS HUB

Euro-trade in Natural Gas



and this agreement is at the heart of plans to develop the CEGH as the most impor-tant gas hub in Continental Europe. Re-garding Gazprom’s involvement in the CEGH, Mr Wüstrich advises:

‘...Gazprom’s participation would enhance security of supply at CEGH and at the same time secure liquidity of short-term trading activities. With GAZPROM, the largest gas supplier to Europe will be directly involved in CEGH. This ensures that the trading of gas from Russia will be actively pursued. Gazprom’s involvement is a clear commit-ment to opening the Eastern European market for modern market mechanisms and contributes signifi cantly to supply security in Western Europe. The trading of gas from Russia will thus complement the long term contracts.’

With these plans in place CEGH can de-velop trade even further afi eld, although new companies wanting to trade on the gas exchange have to conclude several agreements. However, CEGH is confi dent of being able to expand its trading ac-tivities in the future, as Mr Wüstrich states: ‘The CEGH has a special position as an Eastern gas hub in Continental Europe and together with its partners CEGH seeks to become the biggest hub in the region, with the opening of the markets towards South-ern and South-Eastern Europe providing new economic opportunities for traders.’



Technology news

How to make buildings with glueScientists in Germany have discovered a way of making adhesives used in construction more heat-resistant. More buildings held together with glue may be the result.

Heat-resistant adhesives are permitting new forms of construction. Scientists at the Fraunhofer Institute for Wood Research in Braunschweig, northern Germany, have developed a way to harden adhesives that will permit con-struction work to continue on the Metropol Parasol in Seville, Spain, a planned group of mushroom-shaped buildings by Berlin architect J Mayer H to be erected as an attraction in the city‘s Plaza de la Encarnacion square.

Load-bearing elements are to be at-tached to each other with adhesives rather than with screws, but the adhe-sive intended for the task only worked up to temperatures of 60 degrees Cel-sius, which caused concern that the structures might come apart in the searing heat of the Spanish sun. The Braunschweig-based researchers have suggested making the adhesive more heat-resistant through a process known as „tempering“.

„Once the construction components have been glued together they are reheated – and that leads to a harden-ing reaction,“ says construction tech-nology expert Dirk Kruse. The research-ers believe that will enable the glue to retain its adhesive power up to 70 de-grees. „It will help to increase the use of adhesive technology in construc-tion,“ says Kruse.

„We have tried to do quite a bit in terms of making phones useless after theft and therefore not worth stealing, but there‘s still a very large market for stolen phones,“ says Steve Babbage, security technologies manager at Vo-dafone Group in Newbury, UK, who was one of the judges.

As well as making phones less desir-able to thieves, the Mobile Phone Se-curity Challenge also set competitors the task of improving the security of data stored on phones and improving financial security ahead of the antici-pated adoption of so-called „m-com-merce“, the use of mobile devices as credit cards or to make small cash pay-ments.

Cellphones secured by design If you‘re forever leaving your cellphone on the kitchen table or bus, you may have use for a Bluetooth device that immediately sounds an alarm and locks the phone if the two gadgets move beyond a set distance apart. The device also regularly backs-up data from the phone, and would alert you if a thief were to make off with your handset.

Dubbed the „i-migo“, it‘s one of three designs to win the UK‘s Mobile Phone Security Challenge to design crime-proof cellphones. The other winners include an authentication card which approves small payments made via the cellphone when it is swiped across the handset, and a method to marr y a handset to a specific SIM card, there-by reducing the appeal of stolen hand-sets.

The competition is part of an initiative by the UK‘s Home Office and Design Council to find solutions to problems that the cellphone industry has failed to tackle. It was judged by a panel of design and telecoms experts including representatives from Vodafone and Nokia.

104 February- F -March 2010


105 February-March 2010

„The rapidly developing nature of mo-bile technology means safeguards must be incorporated at the drawing-board stage if we are to stop criminals prof-iting from this type of crime,“ says Alan Campbell, a UK Home Office minis-ter.

Current m-commerce phones being used in countries like Japan require users to enter a password in order to access a virtual wallet and make secure transactions. But this can be time-consuming and has also prompted concerns about „shoulder-surfing“, or thieves watching customers type in a pin before robbing them.

Here, surplus heat from hundreds of computer servers in a new data centre located beneath Uspenski Cathedral, one of the city’s main tourist attrac-tions, will be captured and pumped to heat hundreds of homes and busi-nesses across the Finnish capital. “This will be the greenest and most energy-efficient data centre in the world,” Juha Sipilä, the project manager for Hels-ingin Energia, the company behind the scheme, said.

In Helsinki, where winter temperatures often plunge to minus 30C, hardly anyone owns a domestic heating boil-er. Instead, water is heated centrally at combined heat and power (CHP) plants to 115C and piped directly to tens of thousands of homes and pub-lic buildings.

Helsingin Energia is the operator of Helsinki‘s district heating network, a 1,350km (850-mile) network of un-derground pipes, tunnels and pumping stations that supplies hot water to 450,000 people across one of the world’s coldest capital cities.

The data centre will be cooled using seawater from the Baltic, which falls below 8C from November to May, with the excess heat pumped back into the city’s heating system – a solution that Mr Sipilä hopes will help to crack a pressing problem for the world’s IT industry.

Data centres consume vast amounts of energy – about 3 per cent of all the electricity generated in Britain, for ex-ample. About two-thirds of the total is used simply for cooling.

The winning „touch-safe“ design aims to combat this by encouraging people to carry with them a radio-frequency identification (RFID) card or patch, which would need to be swiped across the phone in order to authorise small payments, while an additional PIN would also be required for larger trans-actions.

„The majority of phone thieves are not into confrontation,“ explains Robert Bult of the Design Council‘s Design Out Crime initiative. „You can also see the benefits for the merchant in terms of people not fiddling around getting their PIN wrong.“

Prototypes of all three winning designs has been presented at the Mobile World Congress in Barcelona, Spain.

www.newscientist.com

Computer power provides heat for HelsinkiOutside, the temperature is a bone-chilling minus 14C and Helsinki is strug-gling with its iciest winter since 1982, but deep inside a former bomb shelter carved from the bedrock beneath an Orthodox cathedral, the city’s power company is building what will soon be the world’s most high-tech municipal heating system.



That figure is growing steadily with the brisk expansion of so-called cloud computing, whereby the internet is evolving into a central store for data and processing for millions of busi-nesses around the world. Global emis-sions of carbon dioxide from data centres are now equivalent to about a third of the total from aviation and are rising by 10 per cent per year.

“For technology companies like Goog-le and IBM, this is a very big issue,” Matti Roto, of Academica, a Finnish IT firm involved in the project, said. “The cost of paying for all that energy is huge – quite apart from the emissions – so it is very important to find solutions to improve efficiency.” Only about 40 per cent of the energy consumed by a typical data centre is used for computing, Mr Roto said, with the rest needed simply to cool down the com-puters. This centre’s power usage ef-fectiveness – the central measurement of data centre efficiency – will be an unprecedented figure of less than one. The lowest figure for other centres has been 1.5.

The Academica server centre due to enter service in April is a pilot and will supply enough hot water to heat 1,000 flats. Mr Roto has plans for a much bigger scheme including 2,000 square metres of server racks.

There are fears that this growth is threatened as engineers run out of ways to shrink silicon transistors and cram more power into chips. Finding new ways to make smaller transistors has become a priority. But while carbon nanotubes had been considered a po-tential saviour, making transistors with them has proved to be difficult.

Performance in such transistors is lim-ited by an effect that creates an electri-cal barrier at each point a nanotube joins any metal, impeding current flow. This seemed a deal-breaker because

He believes that Nordic countries may have stumbled across a lucrative new business opportunity to tap into the growing £7 billion global server mar-ket. A similar project is under way in Iceland, which will use geothermal energy to power servers and cold sea-water for cooling. Google has also an-nounced plans recently to site a giant server centre in Finland.

Nanotube transistors shrink smaller than silicon sizeIs there anything carbon nanotubes can‘t do? Using them to make transis-tors about half the size of the silicon ones available today suggests they might help maintain the continual growth of computing power that we have come to rely on.

Technology news



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a nanotube in a transistor must connect to two metal electrodes, with a third „gate“ electrode placed nearby. Using fatter nanotubes reduced the size of the electrical barriers, but goes against the computer scientists‘ goal of con-stantly making things smaller.

Now Aaron Franklin and colleagues at IBM‘s Watson Research Center in York-town Heights, New York state, have

found a way to use thinner tubes to build a competitive nanotube transis-tor.

„That success is largely due to its geometry,“ says Franklin. His team placed the gate electrode, which con-trols the transistor, below the nanotube instead of in its usual position above it. This makes it possible to position the two closer together, and increases the gate‘s influence on electrons inside the nanotube, enabling them to punch through the electronic barriers. Moving the nanotube and gate electrode clos-

er together also makes it possible to shrink the device‘s length down to 15 nanometres. „That‘s about half the length of the best silicon technology on the market today,“ says Franklin.

„This is great work that helps shed light on the scaling of carbon nanotube transistors,“ says Yu Cao at Arizona State University in Tempe, who was not in-volved with the study. But Cao adds that nanotubes are still not ready for commercialisation. For example, physi-cally manipulating them to build de-vices is tricky. Franklin agrees. It‘s dif-ficult to predict whether nanotubes can yet compete with si l icon, he says.

www.newscientist.com



I am able to “switch on” when it comes to electricity in Prague but also to “switch off ” after a busy day

for my family, dog and hobbies with which I try to spend as much time as possible.

I like travelling and I travel a lot, espe-cially with my family. My four grandchil-dren are now an essential part of the family and I really love them. I try to spend as much time as possible with them as this is something that has a great meaning for me and enriches my life. Any small thing about them makes me happy, for example the fact that three of the grand-children have learnt to swim during a holiday with me and my wife.

Logically I have only very little time for other hobbies. I like reading but I only have time for it during relaxing holidays. If I arrange my own holiday then it is mostly the kind where you get to travel around and learn new things so I do not take a book on these trips. Instead I take my camera. I’ve been taking photographs since I was fi fteen but not so long ago I got myself a new camera with various accessories. Photography technology went through a huge development in the last decade and it enables specialities and shots in high quality. I take pictures not only of my family and holidays but I also try to capture interesting details that others don’t even notice. Consequently I also like working with the computer where I store

and process the photo-graphs. Because I don’t like the computer presentation of the photos I usually print them out as a “photo book “ or I print them out and tack them into a photo album which I always have handy.

Another of my hobbies is music. When I was young I learnt to play piano which I sometimes also play today. But as with everything that requires time I am limited in this activity. I can say that nowadays I only play piano at Christmas and my reper-toire has shrunken to car-ols…

At the weekends I also do some gardening. Although it is a never-ending work, it brings me a much needed relaxation and joy of getting some fresh air. And unlike with jogging or sports the result after this work is visible.

says Managing Director and President of

Pražská energetika, a.s.

PRE Group is an important electricity

trader on the Czech market and the

regional operator of the distribution

system for Prague, the capital city and

the town of Roztoky.

Drahomir Ruta was born 63 years ago

in Zatec. He is married with two adult

sons and four grandchildren. He lives in

a common house in Prague with his wife.

He usually spends his weekends near

Plzen. He likes his job but he also likes

other activities.

From my own point of view there is noth-ing extraordinary about my day at work. I get up at 6 am every morning and I take care of my dog – I have a cocker spaniel, my second one already. After that I drink a cup of tea and set out for work. Most of the time I drive to work but if circum-stances require it, I take the subway. Even if the distance remains the same, travelling to work takes more and more time as the traffi c is getting heavier all the time. And I do not even stop, say in a gym, I really go straight to work.

I spend my working hours partly in my offi ce and partly on meetings. Even though I think I don’t have a problem with com-munication in any form, still I like best talking to people face to face. My desk is unfortunately just rarely empty, but I try to focus my attention to the main and most important tasks of the day and re-solve the most things I can. My work con-sists of some routine things including signing of documents and decisions, but also of fi nding solutions to problems con-cerning the operations and development of the company. A proper communication with my colleagues is very important, including some regular meetings.

I consider lunch a signifi cant part of the day; I think it is an important ritual. But with me it is not the same scenario every day; it changes according to the circum-stances, i. e. it can be a business lunch with some partners or I have my lunch in the company canteen. Also, I’m not fas-tidious when it comes to food. I prefer lighter meals but I can eat classical Czech meals, too. I definitely would not skip lunch, though.

Many times it is already evening when I get home and that is when I have time


Answers for energy.

Getting more and more energy from fewer and fewer resources is our never-ending mission.

In addition to excellent availability and utmost reliability, efficiency is a key requirement when it comes to supplying energy for the world’s steadily growing megacities. Basically, it’s all about making best use of all resources. We apply this principle across the entire energy conversion chain to take efficiency to totally new levels. Our new 800 kV transformer, for example, makes possible the efficient transmission of electric energy in the gigawatt range over distances of 1,000 kilometers and more. And our new generation of gas turbines makes combined cycle power plants deliver a record-breaking efficiency of more than 60 per cent. www.siemens.com/energy

How can we get by with less when the whole world keeps asking for more?

02_Efficiency_engl_A4.indd 1 18.02.2009 9:09:33 UhrTI_2010_02_obalka.indd 2TI_2010_02_obalka.indd 2 19.3.2010 14:34:4519.3.2010 14:34:45

Excellence

Reliability at work

Customized Logwall Systems

Longwall Mining Technology

Only Bucyrus can offer complete customized longwall systems for all seam thicknesses with integrated state-of-the-art control for maximum reliability andperformance. Whether for plow or shearer, all components work together perfectly,giving you enhanced control of cutting, conveying and roof support. Advanced visualization and unprecedented automation further boost productivity and safety.

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Bucyrus International, Inc. is a world leader in the design and manufacture of high-performance machinery and equipment for the surface and underground mining industries with a workforce of over 7,000 employees worldwide.

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The company also pursues extensive activities in comprehensive supplies, assembliesand modernizations of technological equipment for a number of industries.

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February~March | 2010 € 6,90 | www.trade-investment.euFebruary~March | 2010 € 6,90 | www.trade-investment.eu

investmenttrade

“We owe our success to our staff, customers and shareholders,”says Gert Schwarzbach,

Managing Director,

50Hertz Offshore.

says Gert Schwarzbach,

Managing Director,

50Hertz Offshore.0Hertz Offshore.

Shell to axe 1,000

jobs as profits

plunge 69%

Russia unveils

its first stealth

fighter jet

Where Is the End

of Car Recalls?

ENTSO-E

TENNET

ABB

HAMON

GN NETCOM

E.ON SWEDEN

Drahomir RutaManaging Director

and President

of Pražská energetika, a.s.

TI_2010_02_obalka.indd 1TI_2010_02_obalka.indd 1 19.3.2010 14:33:2819.3.2010 14:33:28

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Trade & Investment 02-03-2010