trade & investment 06-07-2010

June~July | 2010 € 6,90 | www.trade-investment.eu

Nor wegian company

develops world´s

largest wind turbine

VINCI wins contrac t

to upgrade London’s

Vic toria Tube station

BP ‘s Ever-Growing

Oil Spill

RWEAMPRIONELIAFACCESL SHIPPINGALBERT ZIEGLER

S andra BojićSales and Marketing

Director of M-Profil d.o.o.

„Forged steel is the best form and the highest quality of steel,“

June~July | 2010 € 6,90 | www.trade-investment.eu

investmenttrade

says Dr Manfred Diederichs,

Managing Director,

Dirostahl – Karl Diederichs KG

nkt cables group GmbHCarlswerk - 1.7 LaborSchanzenstrasse 6-20D-51063 CologneTel: +49 (0) 221 676-0www.nktcables.com

Innovation and thinking ahead have always been high priorities for nkt cables – both in terms of environmental responsibility and finding creative processes, products and complete solutions. We develop, manufacture and market power cables and cable systems for electrical installations as well as for electricity distribution and transmission. Within development of catenary railway systems we are among the world leaders. Read more on nktcables.com

We lead the way in innovative cable solutions

Trade & Investment | www.trade-investment.eu 3 June-July 2010

I was recently discussing the energy market with a former colleague and in error referred to the process of ‘making energy’. Of course, he picked me up on my mistake, asserting that you can’t ‘create energy’ – the amount of available energy on Earth remains roughly constant, though trans-mutable, and therefore our options are to find ways of getting the most out of existing reserves or to develop new means to harness energy as it presents itself in nature, such as from wind, wave or solar power.

This led me to contemplate how very complicated the energy sector is, politically, technologically and environmentally. There is no other industrial sector comparable in terms of the sheer magnitude of value, both economically and to our survival. Chief-level executives at the helm of the big power companies are tasked with the impossible chal-lenge of balancing the huge, immediate demand for energy with the necessity of maintaining a long-term vision: are we protecting the planet? Are we adequately prepared to sustain ourselves when fossil fuel reserves are used up? Should we now abandon our use of fossil fuels altogether?

We are still searching for answers, but what we do know is that the si tuation is being fiercely de bated, and all the while research, develop-

ment and investment continue to explore our options. The oil spill crisis in America has generated some highly charged rhetoric on the subject of power, in all its guises. We have different types of super-powers trying to under stand what went wrong. But, in many ways, we know the answer. We know that oil is a minefield commodity; its power is awesome yet it is intensely vulnerable. The question now is how to maintain an energy in-dustry that takes a more careful and considered approach, and ensure that those responsible for contributing to this revolution are appropriately rewarded for their efforts.

The very palpable events in the US represent the shakeup that business has had globally. We are all poised to take a more cautious approach to our work; but ‘cautious’ does not necessarily mean ‘ambitious’ must take a back seat. On the contrary, ambitions are being realised by more ingenious means. Now is a time for looking at how to take what we already have, and make sure we get the absolute maximum out of it. This not only draws a parallel to the global energy situation, but also recognises that consumption and frivolous invest-ment are evidently wasteful pursuits best swapped

for innovation within a framework of cor-porate, environmental and socio-

economic respon sibility.

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-

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Editor in Chief : Lucia Balog

Editor: Gabrielle Brown

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Peter Hlozek

Marek Rottenborn

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Writers: Diane Mannion, Philip Bradbury, Ronan O’Connor

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Re-energising

Business


Content

/ Editorial

Re-energising Business ............................................................................... 3

/ News from industry sectors

Energy ........................................................................................................... 6

Automotive ................................................................................................... 8

Construction ................................................................................................ 10

Electronics ................................................................................................... 12

Banking & Finance ...................................................................................... 14

Aerospace & Defence

/ Story

BP’s Ever-Growing Oil Spill

/ Companies

ELIA | Europe’s Electric Hub ................................................................................................24

RWE GROUP | High Energy

AMPRION | The Power of Partnership ..............................................................................32

GRADSKA PLINARA ZAGREB | Past, Present and Future .........................................36

KARL DIEDERICHS KG – DIROSTAHL | True as Steel .............................................40

MARIBORSKA LIVARNA MARIBOR | Turning on the Tap and Radiating Success ....44

M-PROFIL | Building Business ..........................................................................................48

FACC | The Way to Success ..................................................................................................52

ESL SHIPPING | Cool Cruising..........................................................................................56

WIENER LINIEN | Model Railways ...................................................................................60

NAC NORDIC AIR AND SEA CARGO | Your Local Nordic Carrier ............................64

ALBERT ZIEGLER | Emergency Supplies ........................................................................68

/ Technology news

Amazing ‘pulse of darkness’ ray tech birthed in US gov labs .................................................... 72

Brown chemists report promising advance in fuel-cell technology .......................................... 72

Arrayit Corporation technology may provide vital clues to detoxification of the oceans .............. 73

/ Interview

Sandra Bojić:“For me the two things in life that I cannot live without are my music and my wonderful six year old son.”


says Ms Sandra Bojić, the Sales

and Marketing Director of M-

Profil. Her role is a demanding

one in a thriving company that

specialises in the production of

metal components for the con-

struction industry. This 15 year

old company is based in Croatia

and is growing continually, with

plans to expand...

RWE AG is already a major

force in the energy industry,

but its acquisition of Essent

NV in September 2009 is likely

to take its position in the mar-

ket to an even higher level.

Diane Mannion discusses the

impact of this merger and the-

future for RWE.

On 30th September 2009 RWE

announced its acquisition of

the Dutch company Essent NV.

Emirates, the Dubai-based inter-

national airline, placed an order

with Airbus for an additional 32

A380 aircraft, taking the total

fi rm order for the iconic fl agship

of the 21st century to 90 super-

jumbos.

The order for the additional air-

craft has a list price of US$ 11.5

billion (AED 42.2).

On April 20, less than a month

after President Barack Obama

announced a sweeping new fede-

ral program to promote off shore

oil and gas development in the

Gulf of Mexico and the Atlantic

Ocean, the U.S. was hit with what

has become the biggest oil spill in

its history.

Sandra Bojić “For me the two things in life that I cannot live with-

out are my music and my wonderful six year old son,”

RWE GROUP

High Energy

Aerospace & Defence

Emirates orders 32 Airbus A380 Super Jumbos valued at

US$ 11.5B; adds to 58 previously ordered A380 aircraft


Obama’s announcement surprised some

of his environmental supporters

p.74p.28

p.16p.20


Energy

As Obama flies in, BP finally has cause for hopeEngineers with BP were preparing last

night to place a new containment device

over the crippled Gulf of Mexico oil well

in advance of a third visit to the region

this morning by President Barack

Obama.

While the threat of failure remained high,

the US Coast Guard reported that the

company’s fl eet of robotic submersibles

had succeeded in cutting off the broken

and twisted riser pipe from the well after

more than two days of trying. It cleared

the way for the latest “top-hat” dome to

be put in place. It is “a signifi cant step

forward”, Admiral Thad Allen told

reporters.

The crisis off the Louisiana coast continues

to manifest itself on multiple fronts, from

political to fi nancial, and ecological. The

National Centre for Atmospheric Research

issued a warning that oil from the leak

could fl oat around the tip of Florida and

show up on the US East Coast as far as

North Carolina within weeks. Two leading

Wall Street rating agencies downgraded

BP, stating the growing risks of long-term

damage to its reputation and its bottom

line. Both Fitch Ratings and Moody’s cited

worries about growing liabilities for the

company in l ikely clean-up and

compensation costs. The White House

said the US government was yesterday

sending BP a $69 million bill for costs so

far in its response to the spill.

For Mr Obama, the problem remains

convincing a sceptical public that he has

done enough to respond to the

catastrophe. He is facing deep political

peril from the ruptured well and the risks

get higher with every day that passes

without it being plugged. Analysts

speculate that the spill could overwhelm

his agenda in the crucial few months

before mid-term elections, at a time when

Democrats already face a big Republican

comeback.

“We did respond aggressively,” Carol

Browner, the top energy aide to Mr Obama,

said last night, but also admitted there

were “things we should have done more

quickly”, at the start of the crisis in April.

That included, she said, releasing

Government estimates of the scale of the

leak. Insinuating that the company may

have downplayed the rate, she said: “BP

has a fi nancial interest in the fl ow-rate.

They will pay a per-barrel, per-day fi ne.”

Ominous comparisons continue to surface

between Mr Obama’s unexpected plight

and the Iran hostage crisis that lasted 444

days. Mr Obama “will have to hope he

doesn’t end up as Jimmy Carter”, wrote

David Broder, the veteran commentator

in The Washington Post. Mr Carter lost his

1980 re-election bid after being battered

by his failure to resolve the hostage stand-

off .

With the President coming and a

conference call planned with analysts

today, Anthony Hayward, BP’s CEO, can

only hope that the “top-hat” will work as

planned. Last night he said it would be at

least 24 hours before it was fi tted and

refused to accept suggestions that BP

should not pay out $10bn in dividends

due to investors shortly.

Hitherto every eff ort to stop the leak has

failed. The “top-hat” should allow for the

siphoning of at least some of the leaking

oil and gas to a ship on the surface. But

diffi culties in making a clean cut when

shearing off the riser pipe mean it is

unlikely to fi t tightly.

So far Louisiana has suff ered the worst

ecological damage since the 20 April blast

on the Deepwater Horizon drilling rig that

killed 11 workers. The slick has eclipsed

the 1989 Exxon Valdez disaster as the

worst oil spill in US history. The north-

eastwards drift of the slick has put coastal

residents in Alabama and Mississippi on

red alert while the authorities in Pensacola

have been warned to expect to see oil

come ashore as early as this weekend.

“BP has ruined the island, our way of life,

and our tranquillity,” lamented Vickie

Connolly, who owns a pub on Alabama’s

Dauphin Island that has seen tar balls and

debris wash up.

Some experts had warned that cutting

off the broken pipe could increase the

rate of fl ow of oil from the well by as much

as 20 per cent until the “top-hat” was fi rmly

in place. Admiral Allen last night said it

was too soon to know if that was

happening. The Government thinks the

well is spilling as many as 19,000 gallons

every day.

US backlash: Tide of anger reaches forecourtAmericans fed up with BP and the response

to the spill in the Gulf of Mexico are taking

to the forecourt and to Facebook to let

the company know their feelings.

The Reverend Jesse Jackson has been

among those calling for a boycott of BP

stations across the United States while as

many as 300,000 people have joined a

boycott-BP page on Facebook.

Also popular are T-shirts showing the

petal-sunburst “Beyond Petroleum” logo

of the company turning black.

A tide of disgust at the energy giant will

serve further to damage its reputation

but may have little direct impact on its

bottom line, experts say. Revenue from

petrol stations represents only a fraction

of the company’s earnings. Most of the

garages are run by independent owners

who may suffer more than the

company.

“I would urge consumers to think about

who actually gets hurt with their boycotts,”

said John Kleine, executive director of a

trade group representing BP petrol station

owners and operators who also depend

on attached convenience shops.

“Ultimately, small, local entrepreneurs and

their families are the ones who get hurt,

and not necessarily BP.”

Norwegian company develops world´s largest wind turbineAs fossil fuels continue to diminish and

climate change poses an ever-increasing

threat, scientists around the world are

searching for new and more efficient

methods of generating energy. Wind

energy is one of the more promising

alternative energy sources and Norwegian

scientists are currently in the development

stages of what promises to be the world’s

largest wind turbine. As if creating the

biggest wind turbine in the world was not

enough, it also fl oats. Current plans for

the world’s largest wind turbine have the

machine standing 533 feet tall.


The proposed rotor diameter of this

machine is 475 feet. Obviously, these

gargantuan dimensions make it diffi cult

to imagine many places able to

accommodate such a device. Fortunately,

the floating design makes the turbine

suitable for open ocean use.

In addition to being the world’s largest

wind turbine, the proposed machine

(which is to be built by the Norwegian

compan Sway), will also be the most

powerful. A single fl oating turbine will be

able to generate 10-megawatts to power

more than 2,000 homes. These fi gures

make this proposed new design at least

three times more powerful than the

existing wind turbines in use today.

The fl oating design gives this generator

a huge advantage over other wind-power

generators because the device can be

placed in deeper water. The machine’s

tower is a fl oating pole fi lled with ballast

beneath the ocean’s surface. This gives

the world’s largest wind turbine a low

center of gravity, which prevents tipping.

The generator is anchored to the sea fl oor

with a single pipe and a suction anchor.

This design allows the turbine to tilt 5-8

degrees as well as rotate freely to generate

power from any wind direction.

Sway plans on installing the device in

2011. The prototype of this machine will

cost an estimated $67.5 million dollars.

Sway plans on testing the design on land

fi rst in Oeygarden, Southwestern Norway.

If the design is successful, Sway will

continue testing seafaring prototypes.

Currently, Norway is one of the world’s

top oil and gas producers. Despite this

fact, Norway generates most of its own

power from hydroelectric plants. Norway’s

dedication to designing and building the

world’s largest wind turbine showcases

the countries commitment to alternative

energy, and serves to further illustrate

how important this cause actually is. If

the world’s largest wind turbine is a

success, it will mark a major stride in

humanity’s quest to reduce its dependence

on fossil fuels.

Smart chips nomitor solar panel performance There’s a lot of talk about making power

meters and the electric grid “smart”

enough to handle additional energy from

solar panels. National Semiconductor

wants to make the solar panels themselves

smarter. They’ve developed a chip that

integrates into the junction boxes of solar

panels, optimizing power production.

National Semi calls it SolarMagic. The

technology was released over years ago,

but was only available as an add-on and

only now is it integrable. SolarMagic helps

minimize a major problem for solar panels:

shading. When just a few solar cells within

a panel become shaded, it can cause

failure in the entire string of cells and

reduce output for the whole solar array.

SolarMagic chips are designed to adjust

the voltage and current of the panels in

that array to assure that they are all the

same, increasing overall power output.

The chip also works like a smart meter by

collecting information and data on system

performance, then relaying it over the

internet for easy monitoring.

SunEdison retrofitted SolarMagic chip

sets into one of its existing installations

and reportedly found that performance

increased by 20 percent. According to

National Semiconductor, the first new

panels with integrated SolarMagic chips

— costing 12 cents per watt — will be

unveiled at the Intersolar Europe

conference in Munich, Germany.

Japanese solar hydrogen electrolysis reduces voltage 50%One of the problems of brute force

electrolysis has always been the amount

of energy it takes to split water into

hydrogen and oxygen. The use of diff erent

kinds of metal or chemical catalysts, sound

wave frequencies and other methods to

loosen the bonds between hydrogen and

oxygen atoms have met with encouraging

success.

And, another attempt at lowering the

voltage requirements of splitting water

has gained laboratory success by Japanese

researchers. The Solar Light Energy

Conversion Group, the Energy Technology

Research Institute and the National

Institute of Advanced Industrial Science

and Technology have developed a

tungsten oxide (WO3) photocatalyst that

along with solar energy reduces the

voltage requirements for producing

hydrogen by 50-percent.

According to the press release, “The high

effi ciency of the WO3 photocatalyst was

achieved using a new method—treatment

of the surface of the photocatalyst with

Cesium (Cs). The activity of the treated

catalyst is more than ten times that of

untreated catalysts. The quantum yield

of the new photocatalyst is 19% under

visible light of wavelength 420 nm and is

approximately 50 times the previously

reported values (0.4%)*. The use of solar

energy can reduce the voltage required

for water electrolysis by almost 50%.

Hence, the low-cost production of

hydrogen is expected.”

One of the main arguments that critics

have of producing hydrogen (even from

renewable methods such as solar) is that

it takes too much energy to produce H2

and why not just store this energy in

batteries. By signifi cantly lowering the

voltage needed to produce hydrogen fuel

from water, this argument is taken

away.

Hydrogen cars have a longer range and

much quicker refueling times than battery

electric vehicles and if the production of

hydrogen is cost effective this means

that one more hurdle will be crossed in

the realization of a hydrogen-based

transportation system.


Automotive

Ford offers payouts to Mercury dealers based on percentage of businessFord Motor Company is off ering the 1,700

dealerships with a Mercury franchise a

cash compensation for the loss of the

brand.

The compensation fi gures, delivered to

dealers in packets this morning, range

from the very low thousands up to about

$200,000, sources said.

Ford announced on Wednesday it would

discontinue the Mercury brand. It will

cease production on all Mercury vehicles

in the fourth quarter. There will be no 2010

model year Mercury products.

The dealer compensation is based on a

three-year sales average of Mercury as a

percentage of a dealership’s total sales. It

also factors in repayment for signage and

parts and a blue-sky value, told Ken

Czubay, Ford’s U.S. sales chief.

“We feel that the compensation we’re

off ering them is reasonable and fair,” said

Mark Fields, Ford’s president of the

Americas in an interview with reporters.

“It is beyond what the franchise agreement

states. It is beyond what state law states.

It’s well beyond what other competitors

have done in the marketplace.”

For example, most Mercury parts are

commingled with Ford parts, Czubay said.

Ford will let dealers keep all the Mercury

parts and pay them 100 percent of the

value of those parts.

“If 10 percent of a dealer’s business was

Mercury business and he had $1 million

in parts inventory, he’d have theoretically

$100,000 in Mercury parts,” Czubay said.

“We said you keep the parts and we’ll

write you a check for $100,000. No one in

the industry has ever done anything like

that.”

But one dealer, who asked not to be

identifi ed, said Ford off ered him nearly

$200,000. He said that’s not enough, given

he invested millions in a new Mercury-

Lincoln showroom just three years ago.

Another dealer said his Lincoln-Mercury

store’s annual revenues are about $2

million and that he sells about 350 Mercury

units per year. “So even if they give me

$500,000, it’s not enough,” the dealer said.

“And now my property isn’t worth as

much.”

According to sources, the formula gives

dealers whose Mercury sales were 0 to 25

percent $1,500 per unit retailed annually.

Dealers with 26 to 50 percent Mercury

sales get $1,650 per unit, those with 51

to 75 percent get $2,000 per unit, and

those with 76 to 100 percent get

$2,500.

“We’ve gone above and beyond,” Czubay

said. “At a time like this, you may think the

franchise was worth more than what

people are willing to pay for it. But I can

assure you that from how we addressed

it with our dealers, this was very fair and

rounded up.”

Mercedes-Benz unveils new 2011 SL550 Night EditionMercedes-Benz USA announced today

the limited-edition 2011 SL550 Night

Edition. Based on the iconic SL-Class

coupe/roadster, the highlight of the SL550

Night Edition is its matte-fi nish designo

magno night black paint and Black

premium leather interior. Limited to just

100 units, this exclusive model will be

available in U.S. showrooms in early

2010.

The special designo magno night black

paint finish -- specially developed

exclusively for the SL550 Night Edition

-- works particularly well with the dramatic

design of the SL-Class. The Night Edition

rolls on 19-inch AMG fi ve-spoke light-alloy


wheels in a two-tone, high-gloss fi nish,

silver-painted front brake calipers with

“Mercedes-Benz” script and darkened

headlamps/tail lights help distinguish the

exclusive status of the SL550 Night

Edition.

The interior features a striking contrast of

dark Black premium leather and bright

chrome trim, with numerous fi ne details.

The newly-designed seats have arrow-

shaped seams and silver-colored

contrasting features, while the sports

steering wheel, shift lever and roof lining

are trimmed in black. The trim strip of the

wind-deflector has a high-gloss finish

complimented by the silver-colored vents

of the AIRSCARF® system, which bathes

the driver in warm air when the convertible

top is down during cooler weather.

VW says Italdesign buy will boost its growth strategyVW will acquire a 90 percent stake in

Italdesign Giugiaro S.p.A., VW announced

at the beginning of June this year.

The Giugiaro family will retain 10 percent

in the 42-year-old automotive styling and

engineering company that is famous for

designing cars such as the fi rst-generation

VW Golf.

VW CEO Martin Winterkorn said Italdesign

will make an important contribution to

the automaker’s 2018 global growth

strategy.

“The Volkswagen Group will be continuing

its model initiative over the coming years

and will benefi t from the capacity and

competence of Italdesign,” Winterkorn

said in a statement.

Italdesign Chairman Giorgetto Giugiaro

said his company will have a more secure

future within the VW Group.

“We have grown from a small studio to a

substantial industrial organization which

is able to deal with global automakers.

There are times when individual egoism

has to step back to ensure the future

sustainability of jobs,” he told reporters at

a press conference here to announce the

VW acquisition.

VW, Europe’s largest car company, aims

to become the world’s largest automaker

by 2018 with sales of 10 million vehicles

a year, compared with 6.29 million last

year. The German-based company needs

more designers and engineers to help

reach the goal. In 2010 alone, VW Group

plans to add 60 models, including

upgrades.

VW has cooperated with Italdesign for

decades with Giugiaro designing not only

the fi rst-generation Golf, but also concepts

for important models such as the fi rst VW

Passat, Scirocco and Audi 80.

Italdesign is also working on VW’s new

Up family of minicars.

Work on new Mini variants

Giugiaro said Italdesign, which currently

has contracts with other automakers

including BMW, will work exclusively for

VW Group brands in future. “They have

enough brands to fi ll all our resources,”

he said.

For existing contracts, including the

engineering for BMW’s new Mini roadster

and coupe cars, the decision on whether

Italdesign will continue with projects is

up to clients, Giugiaro said.

“We are ready to complete all the projects

we are working on and we will guarantee

100 percent secrecy. It is up to our clients

to decide if they want to continue,” he

said.

Enzo Pacella, Italdesign CEO, said the

company has about another year of work

on the Mini roadster and coupe.

Under VW control, Italdesign will be run

by a seven-member board of directors,

that will include four members from VW.

Winterkorn said he and Audi CEO Rupert

Stadler will be on the board, together and

two other VW group executives. Giugiaro

and his son Fabrizio will have seats on the

board.

VW did not give any details on the price

it paid for a 90.1 percent stake in Italdesign,

which has annual sales of more than 100

million euros ($122 million).

VW Chief Financial Offi cer Hans Dieter

Poetsch said the two companies had

decided not to make public the price of

the transaction, but added that Italdesign

had a positive development in the past

years despite the global crisis, “so we paid

a substantial price for something good.”

Piech connectionVW Chairman Ferdinand Piech, who is a

close friend of Giugiaro, was at Italdesign’s

headquarters in Moncalieri, 15km south

of Turin, for the announcement. He did

not attend a press conference but was

present when Winterkorn and Giugiaro

spoke to Italdesign’s staff .

Piech spent the summer of 1972 working

at the Italdesign to learn about design

and engineering from Giugiaro.

Italdesign was co-founded by Giugiaro in

1968 and currently has 975 employees

and 800 computer aided design

workstations. VW said it will acquire its

Italdesign shares through Audi’s Italian

subsidiary Lamborghini Holding S.p.A. A

VW spokesman said this was being done

to keep the company’s Italian operations

bundled together.


Construction

VINCI wins contract to upgrade London’s Victoria Tube stationTransport for London (TfL) has awarded

the contract to upgrade Victoria Tube

station to VINCI BAM Nuttall Ltd, the

consortium comprising Taylor Woodrow

(VINCI Construction UK) and BAM Nuttall

Ltd.

The project calls for modernising and

improving access to one of London

Underground’s busiest and most

congested stations, with 80 million

passengers a year.

The station will be upgraded in two

phases.

• The fi rst phase includes building a

new entrance and a new ticket hall.

Works will start in 2011 and should be

completed in 2016.

• The second phase involves installing

new lifts and escalators in the existing

ticket hall, which will be doubled in

size. Delivery of this phase is scheduled

for 2018.

This further success follows on from the

contract won by VINCI BAM Nuttall in

December 2009 to upgrade London’s

Tottenham Court Road Tube station.

Skanska to build Statoil’s new office in Oslo (assignment for IT Fornebu totals NOK 1.3

billion, approximately SEK 1.6 billion)

Skanska has been commissioned to build

an offi ce in Oslo. The contract amount is

NOK 1.3 billion, approximately SEK 1.6

billion, which will be included in order

bookings for the second quarter of

2010.

The customer is the Norwegian company

IT Fornebu, which is developing the former

airport area, Fornebu, in western Oslo.

The new building will be the offi ce of the

Norwegian energy company Statoil.

The contract pertains to an offi ce building

with fi ve connected nine fl oor buildings.

The project comprises a total of 66,800

square meters. “Naturally, we are pleased

to be entrusted with this major and key

project. It will contribute strongly to our

order bookings and I am convinced that

the owner and tenants will benefi t from

the modern and functional premises,” says

Petter Eiken, President of Skanska Norway.

Skanska will participate in the design


process, which will commence immediately.

Construction will start in January 2011 and

the project is scheduled for completion

in September 2012.

Skanska will implement the project under

its Green Workplace concept, which is

Skanska Norway’s own initiative for

environmental labeling of construction

sites. The aim is to reduce energy

consumption for such items as lighting

and heating. The concept also imposes

requirements on vehicles and chemical

products.

Skanska Norway focuses on construction

and civil engineering operations. The unit

has approximately 4,100 employees. In

2009, Skanska Norway reported revenue

of about SEK 11 billion. In Norway, Skanska

is also active in the development of

housing projects and public-private

partnerships.

STRABAG wins new large orders worth € 156 million in Romania and Abu Dhabi Central and Eastern Europe’s largest

construction company, has won two new

large orders in Romania and Abu Dhabi.

In Romania, STRABAG AG signed an

agreement for the rehabilitation of

national road DN 67B. The client is

Romania’s national road construction

agency CNADNR SA. In a joint venture

with two Romanian road construction

companies, STRABAG will modernise 188.2

km of the national road between Scoarţa

and Piteşti over a period of 36 months.

The total value of the order is € 89 million,

with STRABAG’s share amounting to € 62

million (70 %). Construction is to begin in

summer 2010.

In Abu Dhabi, STRABAG subsidiary Ed.

Züblin AG has been hired to build the

“non-process buildings” for the expansion

of the Takreer Refinery in Ruwais. The

turnkey project, commissioned by the

Abu Dhabi Oil Refi ning company (Takreer),

comprises 17 buildings as well as access

roads and extensive outdoor facilities on

a total space of 205,273 m². Construction

will begin in June 2010 and is expected

to last 38 months. STRABAG’s share is

100 %.

New orders for over EUR 1 billion in Asia-Pacific areaRemediation of Hunter River riverbed in

Australia - Extended services for mines in

Indonesia and Australia.

HOCHTIEF subsidiary Leighton has

received orders with a total value of

around EUR 1.07 billion through its

participating interests: Thiess Services is

remediating a stretch of river bed in the

south arm of the Hunter River in New

South Wales, Australia. The project is worth

almost EUR 283 million (A$ 405 million).

Leighton Asia will mine coal in the

Indonesian MSJ mine for a further six years

and receive a total of around EUR 772

million (A$ 1.1 billion) in return. Leighton

Contractors was recently commissioned

to perform additional services in the

Woodie Woodie Mine in Western Australia

for three years for almost EUR 119 million

(A$ 170 million).

On the Hunter River, Thiess Services is

remediating a section of the river adjacent

to a former steelworks on behalf of BHP

Billiton. As part of the contract it will also

be building the necessary facilities and

ensuring the proper disposal of

contaminants. The company has already

been involved in the project performing

early works for twelve months and has

now begun the actual remediation. This

will take until 2012. Leighton Asia will

increase production at the MSJ mine in

the north of the Indonesian region of East

Kalimantan to eight million tons of coal

per annum and remove the overburden.

Production at the Woodie Woodie Mine

is set to be increased to around 1.4 million

cubic metre per month by the end of 2011.

Leighton Contractors will load and haul

bulk waste materials at the manganese

ore mine.


Electronics

Fujitsu, Toshiba to merge mobile-phone businessesFujitsu Ltd and Toshipa Corp announced

in the middle of June 2010 plans to merge

their mobile-phone businesses, aiming

to become the number one provider of

mobile phones in Japan.

According to the agreement, Toshiba will

transfer its mobile-phone business to a

new company to be established October

1. Fujitsu will then acquire a majority of

the shares in the company. Further details

of the planned merger were not

released.

The move comes as competition in the

mobile-phone market, particularly in

smart phones, is intensifying. On

Wednesday, top handset maker Nokia

warned that it could miss its Q2 handset

division sales target on lower than

expected ASPs (average selling prices)

and mobile-device volumes. Nokia also

said it expects its mobile-device value

market share to be slightly lower in 2010,

compared to 2009.

Nokia, which had about 35% of the

worldwide handset market in Q1, has faced

increased competition in smart phones as

Apple‘s iPhone continues to fl y off shelves,

RIM‘s Blackberry remains a popular

business-side choice, and devices

based on open-source Android

platform gain momentum.

Fujitsu and Toshiba made note

of smart phones in their

announcement and said they

plan to develop new handsets

for markets in and outside

Japan.

Fujitsu manufactures mobile

phones for sale through its

partner NTT Docomo Inc.

Meanwhile, Toshiba in Japan

provides its handsets through

sales partners KDDI Corp, NTT

Docomo, and Softbank Mobile

Corp.

The two companies plan to sign a fi nal

contract at the end of July.

European research program targets energy-aware electronics designSeveral major semiconductor industry

companies including ON Semiconductor,

Numonyx, NXP, and STMicroelectronics

have teamed with European design

centers, universities, and institutes to

establish standards and contribute to

building a solid energy-aware electronics

design base for Europe.

The partners in the new publicly funded

research program, dubbed „END - Models,

Solutions, Methods and Tools for Energy-

Aware Design,“ have begun a three-year

ENIAC (European Nanoelectronics Initiative

Advisory Council) project to pursue energy

efficiency through a holistic approach

that unifies, under a common design

platform, the development of modeling,

simulation, design, and EDA techniques

for a wide range of devices and systems.

The partners made specifi c note of digital

blocks, analog/RF blocks, and discrete

components. The project will also address

the conception and experimentation of

new power supply systems, with particular

emphasis on energy management

aspects.

„The ultimate objective of the END project

is to bring innovative energy-aware design

solutions and EDA technologies into the

product development of the industrial

partners of the Consortium,“ said Salvatore

Rinaudo, END project coordinator and

industrial and multisegment sector CAD

R&D director at STMicroelectronics, in a

statement today. „We will enable the

design and manufacture of electronic

circuits that will be at the basis of the

green information society of the future.“

END‘s project goals include the

development of power models for non-

bulk CMOS devices, a unifi ed low-power

design methodology for heterogeneous

systems and SOC devices, energy-effi cient

building blocks for heterogeneous

systems, energy-effi cient IP components

for SOCs, energy management of systems

based on multiple, heterogeneous

supplies, and demonstrators of solar

energy and wireless sensor systems.

The project will cost approximately $15.5

million (12.6 million Euros), with funding

provided by both the ENIAC joint

undertaking and from the public

authorities of Belgium, Greece, Italy, and

Slovakia. The ENIAC joint undertaking is

a public-private partnership with the

European Commission, member states,

associated states and European R&D

actors, and levers private and national

investments.

Handset competition pushes Nokia Q2 estimate downNokia lowered its Q2 estimates at the end

of June, pointing to the recent depreciation

of the Euro and the competitive handset


environment, making particular note of

the high-end of the market.

Nokia, the top mobile-phone maker with

about 35% of the market in Q1, has faced

increased competition in smart phones

as Apple‘s iPhone continues to fly off

shelves, RIM‘s Blackberry remains a popular

business-side choice, and devices based

on open-source Android platform gain

momentum.

The Finland-based company today said

it now expects its devices and services

group‘s net sales to be at the lower end

of, or slightly below, its previously

expected range of $8.24 billion to $8.86

billion (EUR 6.7 billion to EUR 7.2 billion)

for Q2. Nokia noted lower than previously

expected ASPs (average selling prices)

and mobile-device volumes. The company

in Q1 reported sales of about $8.24 billion

(EUR 6.7 billion) from the group.

Nokia also provided an update on its full-

year 2010 outlook. The company continues

to expect industry mobile-device volumes

to be up approximately 10% in 2010 and

continues to target its mobile-device

volume market share to be fl at in 2010,

both as compared to 2009. However, Nokia

now expects its mobile-device value

market share to be slightly lower in 2010,

compared to 2009. That compares to

Nokia‘s previous target to increase its

mobile-device value market share slightly

in 2010, compared to 2009.

Nokia is slated to provide its Q2 results

and more details on its 2010 full-year

outlook on July 22.

ARM, Freescale, IBM, Samsung, ST-Ericsson, TI form Linux companyWith major industry alignment and

resource investment in open-source

projects, Linaro looks to advance Linux

for ARM-based Web-centric consumer

devices, such as smart phones, tablets,

and digital TVs.

Six major electronics industry companies

are putting their weight behind open

source, announcing the formation of a

not-for-profit company committed to

providing new resources and industry

alignment for software developers using

Linux on SOCs.

The company Linaro starts up with support

from ARM, Freescale, IBM, Samsung, ST-

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Ericsson, and Texas Instruments, all of

which will invest resources in open-source

projects that can then be used by Linux-

based distributions.

Linaro‘s goal is to provide „a stable and

optimized base for distributions and

developers by creating new releases of

optimized tools, kernel, and middleware

software validated for a wide range of

SOCs, every six months.“

Linaro‘s fi rst software and tools release is

due out in November, and will provide

optimizations for the latest range of ARM

Cortex-A family of processors.

Linaro pointed to Linux-based distributions

such as well-known Android, smart-

phone-focused LiMo, and MeeGo, the

recently announced merged Moblin-

Maemo software platform from Intel and

Nokia, as possible users of its releases.

Traditionally, open-source software

developers have focused on the enterprise

and computing markets. Alternatively,

Linaro noted use of its releases for Web-

centric consumer devices, such as smart

phones, tablets, and digital televisions, as

well as automotive entertainment and

enterprise equipment.

„The dramatic growth of open-source

software development can now be seen

in Internet-based, always-connected

mobile and consumer products,“ said Tom

Lantzsch, executive offi cer of Linaro and

ARM‘s executive VP of corporate

development, in a statement. „Linaro will

help accelerate this trend further by

increasing investment on key open-source

projects and providing industry alignment

with the community to deliver the best

Linux-based products for the benefi t of

the consumer.“

Linaro said it aims to unite the open-source

engineering resources within its member

companies with the broad open-source

community and intends to work in

partnership with the Linux Foundation to

align on core operating principles.

Supporting a typical open-source open-

door-like policy, Linaro said it is a growing

organization with additional partners

expected to join and invited interested

companies to discuss membership with

its executives.


Banking and Finance

Allianz chief wants bigger piece of indexed-life marketGary C. Bhojwani says the annuity player

believes that agents selling the firm’s

popular indexed annuities have the skills

to also sell indexed life insurance

Allianz Life Insurance Company of North

America, already a major player in the

indexed-annuity arena, is looking to grab

a bigger share of the indexed-life-insurance

market.

“We’re currently looking specifi cally at

indexed life,” president and chief executive

Gary C. Bhojwani, president and chief

executive of Allianz, said in an interview

with InvestmentNews. “Indexed life is small

enough where we can be focused, and

when we look at the underlying expertise

required to market it, it’s consistent with

our distribution force.”

The carrier manufactures the top-selling

indexed annuity, the MasterDex X,

according to researcher AnnuitySpecs.

Mr. Bhojwani said that many of the

insurance agents who currently sell

indexed annuities have the know-how to

sell indexed life insurance eff ectively.

To increase its presence in the indexed-life

space, Allianz will have to compete against

the likes of Aviva USA and Pacific Life

Insurance Co., the fi rst and second top

sellers of the product for the first

quarter.

“It’s a smart move for Allianz Life,” said

Sheryl Moore president and chief executive

of AnnuitySpecs.com. “All annuities are

capital intensive, and they’re not very

profi table. But life insurance products can

make it a better profi t. Coming out of a

capital anorexic environment, this is how

you off set profi tability.”

Allianz will continue developing its annuity

line as well, Mr. Bhojwani said. Recent

meetings with broker-dealer and

wirehouse executives, he said, revealed

that many fi rms’ top priority is to grow

annuity sales in 2010 and 2011 as advisers’

center more on income planning.

The insurer in either late summer or early

fall expects to release a annuity product

that will address infl ation. Allianz also has

plans drawn up for a registered indexed

annuity but won’t take it to market anytime

soon.

Mr. Bhojwani also noted that the company

has taken a “serious” look at a hybrid

annuity product with long-term-care

features, but Allianz is “not at a point where

we can do something about it.”

A just-released study from Allianz,

“Reclaiming the Future,” revealed that

people continue to be nervous about the

prospect of retiring, as 92% of the 3,257

adults polled said they believe there is a

“retirement crisis.” Fully 35% of the polled

adults feel “totally unprepared” for

retirement, but an even greater

concentration – 54% – of those in their

late 40s feel that way.

Making those individuals aware of

annuities and their benefi ts begins at the

adviser level, Mr. Bhojwani said.

“There’s a signifi cant eff ort to educate on

the reality of annuities and retirement,”

Mr. Bhojwani said. “We’re in the business

of selling annuities, but we don’t want the

importance of education to get lost in

pushing products.”

Money managers see pay dirt in oil crisisEmerging markets, natural gas, renewable

energy are among a variety of promising

sectors


As a result of BP PLC’s oil spill in the Gulf

of Mexico, many money managers see a

host of investing opportunities in

emerging markets, natural gas, renewable

e n e r g y, c l e a n u p t e c h n o l o g i e s ,

environmental consulting and, in some

cases, the oil industry itself.

For instance, given the potential damage

to the fi shing industry in the gulf, it is a

good time to invest in countries that have

big fi shing industries, managers said.

“All the shrimp farms in South America

are gearing up for large volumes,” said

David R. Kotok, chairman and chief

investment offi cer of Cumberland Advisors,

which manages $1.4 billion in assets.

Hooked on PeruPeru, which produces 10% of the world’s

fi sh catch, is more attractive in the wake

of the BP debacle, he said. Cumberland

just added BlackRock Inc.’s iShares MSCI

All Peru Capped Index ETF (EPU) to its

portfolios.

“I would have added Peru anyway, but

this incident gives it a kicker,” Mr. Kotok

said.

A more obvious bet for managers is natural

gas, which many believe will get a boost

as the price of energy rises in light of

upcoming regulation. President Barack

Obama’s moratorium on deep-water

drilling also is expected to increase the

price of oil.

Tom Lydon, a registered investment

adviser and president of Global Trends

Investments, is holding on to two

exchange-traded funds that invest in

natural gas: United States Natural Gas

Fund (UNG) and First Trust Portfolios LP’s

First Trust ISE Revere Natural Gas ETF

(FCG).

Although the renewable-energy sector

has shown weakness, managers anticipate

that this market will take off as the Obama

administration opens up the market for

renewable energy in the United States.

The Standard & Poor’s Global Clean Energy

Index was down 35.8% year-to-date as of

last Wednesday, and solar-company stocks

in particular have taken a beating. But in

the long term, Sam Jones, president of All

Season Financial Advisors, which has $100

million in assets under management,

thinks that stocks of such companies as

First Solar Inc. (FSLR) and SunPower Corp.

(SPWR) are good bets.

He also is looking at stocks of technology

companies that enable renewable energy,

such as Cisco Systems Inc. (CSCO).

Kevin Landis, the portfolio manager of

Firsthand Capital Management Inc.’s

Alternative Energy Fund (ALTEX), thinks

that as the costs of gas and oil rise as a

result of increased regulation, there will

be a runup in the battery-operated car

sector.

One stock he likes is A123 Systems Inc.

(AONE), which produces high-powered

ion batteries for cars.

“The cost of producing energy from coal

and oil will go up, and therefore, the value

of any form of energy goes up,” Mr. Landis

said.

Bruce Jenkyn-Jones, managing director

at Impax Asset Management Group PLC

and co-manager of Pax World Management

LLC’s Global Green Fund (PGRNX), also

likes companies involved with the cleanup

of the spill.

“I think the water treatment and pollution

control sector is compelling, specifi cally

companies that are treating and recycling

the oil,” he said.

Mr. Jenkyn-Jones likes Clean Harbors Inc.

(CLH), which handles hazardous waste,

and Nalco Holding Co. (NLC), which

conducts water treatment. He also likes

companies involved with environmental

testing, such as Thermo Fisher Scientifi c

Inc. (TMO), and water pumping, such as

Idex Corp. (IEX) and Pentair Inc. (PNR).

“In the short term, we are looking for

companies that could benefi t in the next

quarter,” Mr. Jenkyn-Jones said.

In the longer term, however, he thinks

that environmental consultants are a good

investment.

“One can speculate that regulation will

tighten around off shore drilling in general

and create opportunities for the

environment age,” Mr. Jenkyn-Jones

said.

Some hedge fund managers are discussing

which company stocks to short in the

wake of the oil spill.

For example, one hedge fund manager,

who asked not to be identifi ed, mentioned

the possibility of shorting stocks of local

banks in the gulf region because they do

a lot of commercial loans, and clearly,

many businesses will be hurt, he said.

The BP spill and the moratorium on deep-

water drilling will benefi t onshore and

shallow-water drilling, said Craig Hodges,

president of Hodges Capital Management

Inc. and co-portfolio manager of the $450

million Hodges Fund (HDPMX) and $40

mil l ion Hodges Small Cap Fund

(HDPSX).

He likes Atwood Oceanics Inc. (ATW) and

Rowan Companies Inc., (RDC), both of

which participate in shallow-water

drilling.

“Their business may get stronger,” Mr.

Hodges said.

He even thinks that Transocean Ltd. (RIG),

which owned and operated the rig that

exploded April 20, is a good investment.

Last week, Transocean’s stock hit an

18-month low, closing the week at TK,

down TK% since April 20.

“We like Transocean,” Mr. Hodges said.

“They have gotten hit harder than BP, but

BP is responsible, and they are the ones

who are going to be paying for this.”

Transocean was a top holding for The

Hodges Fund as of May 31.

Keeping the faithAlthough most investors are steering clear

of BP, MMA Praxis Mutual Funds group is

maintaining its investment.

The faith-based fund group, which is part

of Mennonite Mutual Aid Inc., prides itself

on being a socially conscious investment

fi rm and doesn’t think that investing in

BP goes against its philosophy, said Mark

Regier, director of stewardship investing

at MMA.

As of April 30, the MMA Praxis International

Fund (MPIAX) had a 1.9% weighting in

shares of BP.

“There are some fi nancial reasons for not

selling,” Mr. Regier said.

Shares of BP plummeted to a 15- month

low last week. The stock closed at TK Friday,

down TK% since April 20.

MMA also wants to give BP some time to

see how it handles the oil spill, Mr. Regier

said.

“I think we will be concerned in four to

six months if we don’t know what

happened,” he said.

“When it comes to a crisis like this, there

is a tendency to react to the implications,

but we want to know what the problem

was, what the solution will be — and see

what their response is to fixing every-

thing.”


Aerospace and Defence

Details of new Japanese ‘helicopter destroyer ’Rumors that the Japan Maritime Self-

Defense Force’s third “aircraft carrying

destroyer” would mark a major improvement

in size and capability over the Hyuga class

ships now entering service have been

confi rmed.

The new 22DDH will be 248 meters long

and 39 meters in beam, and displace more

than 24,000 tons. This makes her almost

50 percent larger than the Hyuga class

and places an unbearable semantic strain

on the use of the term “destroyer” to

describe these ships. To put the size of

the ship into context, she is comparable

with a World War II Essex-class fleet

carrier.

Illustrations of the 22DDH show her to be

a full-fl edged helicopter carrier with no

real destroyer characteristics. The

superstructure is very similar to that of

the Hyuga class with the diff erence that

the 01 deck is extended forward, probably

to accommodate a vertical launch silo for

air defense missiles. The point defenses

of the new ships are more than doubled,

with three Phalanx Mk 15 mountings and

two RAM launchers replacing the pair of

Phalanx mounts on the older ship.

Signifi cantly, while one of the Phalanx

mounts on the Hyuga is situated forward

on the flight deck, and thus obstructs

fi xed-wing operations, the 22DDH has all

of its mounts located on sponsons clear

of the fl ight deck itself.

The fl ight deck layout on the 22DDH diff ers

signifi cantly from that of the Hyuga class.

One of the lifts has been moved from the

centerline to the deck-edge position. The

added width of the fl ight deck has been

used to shift the axis of air operations

clear of the remaining centerline elevator.

The number of munitions elevators

feeding the fl ight deck has been increased

from two to four.

A vertical launch silo built into the rear of

the fl ight deck on the Hyuga has been

removed, once again reducing obstructions

to fl ight operations. Flight deck operations

capacity has been increased from two to

seven helicopters.

Japanese accounts suggest that one of

the reasons for the drastic increase in size

of the 22DDH design is a planned shift to

the V-22 Osprey as the primary air group

element for these ships. It is not clear

whether these would be replacements

for or supplemental to the SH-60Ks that

equip the Hyuga class. These accounts

also make it clear that the F-35B short

takeoff and vertical landing variant of the

Joint Strike Fighter is seen as a key system

for these ships. Apparently, provision for

the operation of UAVs is being included

within the design.

Pentagon contract announcementThe Missile Defense Agency (MDA) is

pleased to announce the award of advisory

and assistance services contracts to

– ALATEC, Inc., Huntsville, Ala.

(HQ0147-10-D-0002);

– Computer Sciences Corporation,

Huntsville, Ala. (HQ0147-10-D-0003);

and

– Tetra Tech-EMC, Camarillo, Calif.

(HQ0147-10-D-0004).

Each fi rm is being awarded an indefi nite-

delivery/indefi nite-quantity contract to

provide advisory and assistance services

to the Chief of Staff Directorate (DS)

MDA.

The contractors will assist DS in providing

agency operations support services for

the Ballistic Missile Defense System.

This procurement is managed by the

Missile Defense Agency Engineering and

Support Services Program Office. This

offi ce is responsible for centrally managing

the acquisition of advisory and assistance

services for the agency.

These contracts are being competitively

awarded under the full and open

(unrestricted) Request for Proposal HQ0147-

09-R-0002. Each contract has a not-to-

exceed ordering ceiling of $270,462,000.

The companies will have the opportunity

to bid on each individual task order.

Work under these contracts will be

performed in Huntsville, Ala. and other

MDA locations. The performance period

is through June 2015. Obligations will be

made by task orders using Research,

Development, Test and Evaluation

funds.

Defence Secretary sets out his prioritiesSecretary of State for Defence, Dr Liam

Fox, has written a message to all military

and civilian personnel setting out his

objectives, priorities and intent for how

policy will be translated into action in the

months ahead.

Dr Fox’s full message to all military and

civilian staff follows:

“Following discussions with my MOD

ministerial colleagues, PUS [Permanent

Under Secretary], CDS [Chief of the

Defence Staff ], and other members of my

top team, I have agreed the following

objectives and priorities for the remainder

of 2010.

“Afghanistan will remain the top priority.

Our people in theatre must get the best

possible support. Counter-insurgency

needs strategic patience but by the end

of the year I expect that we can show

significant progress with the mission,

building on previous achievements,

consolidating ISAF’s hold in central

Helmand, and accelerating the training

of the Afghan security forces that is already

ahead of target.

“Achieving success in Afghanistan must

not prevent us from conducting our other

operational commitments eff ectively or

from preparing to meet other contingencies,

particularly in the Middle East. I shall be

conducting a thorough stocktake of our

contingency plans in the months ahead.

“The focus for many of us in the next six

months, and my second priority, will be

on conducting a cross-Government,

policy-led, resource-informed Strategic

Defence and Security Review [SDSR]. I am

determined that this exercise will bring

defence policy, plans, commitments and

resources into balance, and produce over

time a transformative change to British

Defence. This will not be a salami-slicing

review but one which provides coherent

long-term policy direction and takes the

tough choices required to produce the

Armed Forces and wider defence

capabilities the country will need in the

decades ahead.

“One reason why tough choices are

needed is that the Government has

inherited a forward defence programme

that is simply unaff ordable against likely

future resources. We need to break out of


the culture by which key equipment

programmes are regularly delayed for

aff ordability reasons. I have set in hand

work to review all the major equipment

and support contracts to ensure the future

programme is coherent with future

defence needs and can be aff orded.

“At the heart of the SDSR will be a thorough

examination of our force structure, looking

at the overall shape, size and role of Armed

Forces personnel and MOD civil servants,

including the Reserve Forces. I am,

however, determined that the Armed

Forces and the MOD Civil Service should

continue to employ high quality people.

We will need to ensure we motivate the

people who will continue to provide the

core of defence capability. In recognition

of the demands the country places on our

Service personnel, I will also look to

improve the package of welfare and

healthcare for those who serve, particularly

in the area of mental health, and to make

improvements to accommodation

wherever possible within budgetary

constraints.

“In every aspect of Defence, and particularly

in the support area, I shall be looking to

bear down on costs, seeking improved

value for money and greater effi ciency

wherever possible. As part of this work I

intend to follow through on the com-

mitment in the Coalition Agreement to

reduce the MOD’s running costs by 25 per

cent. This will require some tough decisions

with impact in many areas of the

Department.

“The SDSR will inevitably impact on how

Defence is structured and organised. I

intend to establish a Defence Reform Unit

to help plan and implement these changes.

Mindful of the scale of other challenges,

this work will proceed on a separate track

with a view to completion by this time

next year, though early high level fi ndings

may have to be woven into the SDSR.

“Internationally, the core of UK security

must remain NATO, which should be our

instrument of fi rst choice for collective

security challenges. The US will be our

major partner but we will also step up

bilateral co-operation with France and

other partners, and revitalise a broad

programme of defence diplomacy. I also

intend to revitalise our approach to

defence exports. This has the potential to

both increase UK infl uence and safeguard

UK defence jobs. Within NATO, I shall be

arguing the case for accelerating the

process of reform, giving the alliance a

more robust new strategic concept, and

taking a more strategic approach to

European burden-sharing.

“Finally, I expect also to reset the MOD’s

relationship with the defence industry to

refl ect our changed economic circumstances

and push ahead with the process of

acquisition reform. More than ever the

focus will in future be on getting the Armed

Forces the equipment they need when

they need it, at a price we can aff ord. To

that end I intend to update and improve

the Defence Industrial Strategy.

“The year ahead promises to be very

challenging for all of us. The operational

tempo looks set to stay high and there is

a real prospect of having to deal with

additional contingencies. We will need to

complete the SDSR in less than half the

time it took to conduct the last major

defence review. And the global and

national financial situation provides a

stark backdrop.

“But I hope that, like me, you also regard

the period ahead as an opportunity to put

Britain’s defence on a stronger, more stable

footing. You will all have the opportunity

to contribute to this programme of change.

My ministerial team and I have been greatly

impressed with the professionalism and

frankness with which we have been

welcomed into the MOD, and find the

bravery, dedication and capability of our

personnel to be genuinely inspiring. What

you do matters to every man, woman and

child in the United Kingdom.

“I look forward to working with you in the

period ahead.”


Aerospace and Defence

Emirates orders 32

Airbus A380 Super

Jumbos valued at

US$ 11.5B; adds to

58 previously ordered

A380 aircraft

Emirates, the Dubai-based international

airline, placed an order with Airbus for an

additional 32 A380 aircraft, taking the

total fi rm order for the iconic fl agship of

the 21st century to 90 super-jumbos.

The order for the additional aircraft has a

list price of US$ 11.5 billion (AED 42.2).

The agreement was signed today during

a ceremony at the Berlin Air Show by His

Highness (H.H.) Sheikh Ahmed Bin Saeed

Al-Maktoum, Chairman and Chief

Executive, Emirates Airline and Group and

Tom Enders, Airbus President and CEO,

which was witnessed by German

Chancellor Angela Merkel and other

dignitaries.

“This latest order, adding to 58 A380s

previously ordered, affirms Emirates’

strategy to become a world leading carrier

and to further establish Dubai as a central

gateway to worldwide air travel. The A380

is our flagship in terms of passenger

comfort, innovation, operating and


environmental efficiency and revenue

generation,” said H.H. Sheikh Ahmed Bin

Saeed Al-Maktoum. “Our latest commitment

signals Emirates’ confi dence in the growth

to come in a thriving aviation sector as we

build our fl eet for tomorrow,” he added.

“Emirates supported the development of

the A380 from the earliest days, a project

employing tens of thousands of Europe’s

best people and today’s increased order,

is the best endorsement I can imagine.

On behalf of all of us at Airbus, we thank

Emirates for their support. The A380 is

indeed a remarkable eco-effi cient aircraft,

a profi t generator for airlines and a great

flying experience for passengers,” said

Tom Enders.

Emirates, the second-largest airline in the

world in available seat-kilometres, is on

track to become one of the largest airlines

in the world. In addition to the orders

placed today, Emirates has 48 Airbus 380s,

70 Airbus 350s, 18 Boeing 777-300s and

7 Boeing air freighters on order totaling

143 wide-body aircraft worth more than

$US 48 billion.

In a year where the aviation industry was

rocked by the economic downturn,

Emirates Airline recently reported its 22nd

year of profi t, up 416 percent to close at

US$ 964 million (AED 3.5 billion) over its

2008-09 profi ts of US$ 187 million (AED

686 million).

From the delivery of its fi rst A380 in July

2008, to receiving it 10th A380 on 7th

June 2010 from the Airbus plant in

Hamburg, Emirates is now serving eight

international destinations with the super-

jumbo aircraft including London Heathrow,

Toronto, Paris, Jeddah, Bangkok, Seoul,

Sydney and Auckland.

The airline will start A380 services to

Beijing from 1st August, Manchester from

1st September and will return service to

New York’s John F. Kennedy (JFK) airport

on 1st October.

Emirates’ looks forward to expanding the

list of destinations at more than 100

airports around the world as A380s

become ready.


BP’s Ever-GrowingOil Spill

On April 20, less than a month

after President Barack Obama

announced a sweeping new

federal program to promote offshore oil and gas development in

the Gulf of Mexico and the Atlantic Ocean, the U.S. was hit with

what has become the biggest oil spill in its history.

On that Tuesday night, 52 miles off shore

of Louisiana in nearly 5,000 feet of water,

BP’s Deepwater Horizon exploratory

drilling rig was closing down its operations.

After months of drilling, it had reached a

reservoir 15,000 feet beneath the seafl oor,

found oil and gas, and was in the process

of capping the borehole with cement,

sealing it for later commercial production,

when a massive blast rocked the rig.

The exact cause of the blowout, fi re, and

explosion will be determined in the

months ahead, but government and

industry experts speculate that a cap of

cement and drilling mud—used to seal

the exploratory well—gave way to the

pressure of oil and gas pushing up from

the reservoir. The high-pressured oil and

gas then blasted to the ocean surface,

ignited, set the rig ablaze, and killed 11

workers.

Resting on the ocean fl oor, a key last-ditch

safety device—the four-story-high

blowout preventer—should have kicked

in, pinching and closing the well. But when

it failed to crush and block the borehole,

BP, President Obama, and the nation could

only stand by and watch the disaster

unfold.

Just weeks earlier, on March 31, Obama

had laid out his plan to expand off shore

oil and gas exploration and development.

He stressed the importance of balancing

“the need to harness domestic energy

resources and the need to protect

America’s natural resources,” adding that

he and Interior Secretary Ken Salazar “will

employ new technologies that reduce the

impact of oil exploration. We’ll protect

areas that are vital to tourism, the

environment, and our national security.

And we’ll be guided not by political

ideology, but by scientifi c evidence.”

Obama’s announcement surprised some

of his environmental supporters, as well

as elected offi cials from several coastal

states, but the President appeared

comfortable in the knowledge that the


U.S. had not had a major oil rig spill in the

Gulf of Mexico, despite increasingly

technologically complex drilling operations

at record depths of a mile or more beneath

the surface. Now, two-and-a-half-months

later, the BP oil rig accident has set another

record of sorts as the largest oil spill in

U.S. history at more than 20 million gal,

far outstripping the 11 million gal of the

1989 Exxon Valdez off the coast of Alaska

and the 4.3 million gal of the 1969 Santa

Barbara spill off California’s coast.

The spill may soon rank as the world’s

biggest off shore blowout, surpassing the

1979 Ixtoc I rig spill in the southern Gulf

of Mexico. That blowout, which released

138 million gal over nine months, also

occurred when the blowout preventer

failed during a well-sealing operation.

Eventually, Mexican-government-run oil

fi rm Pemex, the rig’s owner, drilled relief

wells and sealed the borehole, a fate

increasingly likely for Deepwater

Horizon.

BP’s spill reveals shortcomings with the

government’s and industry’s ability to

plan for or control a deepwater leak, clean

up the aftermath, and account for its

environmental impact. Indeed, in

testimony before Congress, well owner

BP and drilling rig owner and operator

Transocean repeatedly explain that they

are learning more about oil spills through

this tragedy.

The government has appeared unable to

stop the fl ow or clean up the mess. Obama

has had to rely on BP to even determine

the size of the leak, estimates of which

were far from accurate. BP estimated the

rate at 1,000 to 5,000 barrels per day. Now,

government scientists say the flow is

12,000 to 19,000 bbl per day, or 500,000

to 800,000 gal per day.

Yet Obama continues to support oil

exploration and production, he explained

at a press briefi ng on May 27. “Where I

was wrong was in my belief that the oil

companies had their act together when

it came to worst-case scenarios.”

As it continues unabated, the deepwater

spill in the Gulf has exposed critical gaps

in our knowledge of oil-spill science. Many

questions have surfaced about the spill’s

long-term eff ects under the sea, on the

surface, and on the shore. Experts’ most

pressing questions and concerns focus

on possible underwater plumes of oil and

the fate of small oil droplets created by

chemical dispersants.

In the past month, several independent

research teams have found evidence of

underwater oil plumes. On May 12,

scientists from the University of Mississippi

and the University of Southern Mississippi

aboard the Pelican research vessel

reported the fi rst signs of one—a six-mile-

wide plume about 28 miles southwest of

the wellhead and fl oating between 3,200

and 4,500 feet below the surface. More

recently, a University of South Florida

(USF) team detected what could be an

even larger underwater plume about 42

miles northeast of the wellhead. Both

teams mapped these plumes using

fl uorometers to detect the fl uorescence

signatures of the oil’s aromatic compounds,

along with either sonar or light-scattering

instruments to detect oil droplets fl oating

in the water.

However, the National Oceanic &

Atmospheric Administration has remained

cautious about calling these teams’

observations underwater oil plumes and

attributing the possible plumes to the

spill. In a June 2 telephone press

conference, NOAA Administrator Jane

Lubchenco said that the agency wanted

to wait for more definit ive gas

chromatography and mass spectrometry

data on water samples collected by the

cruises—along with others gathered by

NOAA’s own research vessels—before

weighing in.

But a University of Georgia researcher,

Samantha Joye, who worked with the

Pelican team and has now returned to the

Gulf on another expedition, reported on

her blog that her team had collected water

samples north of the wellhead that when

fi ltered were shown to contain oil. These

observations lend some credibility to the

underwater plume hypothesis, says

chemist Jeff rey Scott of the Washington,

D.C.-based environmental group Oceana.

And on June 8, the South Florida

researchers and NOAA offi cials announced

that GC/MS analysis of samples from the

USF expedit ion indicates oi l at

concentrations of about 0.5 ppm. But they

could not yet confi rm whether the oil had

come from the spill.

Early media reports attributed the possible

plumes to BP’s underwater injection of

chemical dispersants at the source of the

leak. Dispersants are mixtures of solvents

and surfactants that break up oil into small

droplets, which stay in the water column

longer than larger droplets. The underwater

dispersant method had never been tried

before this spill. Previously, planes had

sprayed dispersants onto oil slicks to force

the oil to sink below the surface so it was

less likely to wash ashore and impact

coastal environments. Gulf cleanup crews

have also used this standard dispersant

method.

Experts say that although dispersants

probably enhance these plumes, the

hovering underwater oil clouds could be

caused by the spill itself. “When the Pelican

showed those mile-long oil plumes, I

wasn’t surprised by that, because you’re

going to get natural dispersion,” says

aquatic toxicologist Mr. Mitchelmore of

the University of Maryland’s Center for

Environmental Science.

The more time oil spends in the water

column, the greater the amount of the

oil’s more soluble—and more toxic—

compounds can dissolve into the

ocean.

A stalled plume eventually breaks up and

spreads out through the water column.

A plume that reaches upwelling areas,

such as the De Soto Canyon 80 miles

northeast of the wellhead, could spread

oil even farther, because these regions

act like conveyor belts that pull water and

nutrients from deep waters to the surface.

But any oil that doesn’t degrade or dissolve

into the water column will eventually

reach the surface.

To combat these surface slicks, BP has

sprayed about 780,000 gal of chemical

dispersants as of June 7 in an attempt to

keep oil from hitting the Gulf Coast.

Environmental groups and some scientists

have raised concerns about this

unprecedented rate of dispersant use. In

the 1979 Ixtoc I blowout spill, crews sprayed

about 2.5 million gal of dispersants onto

oil slicks, but over a nine-month period.

“Where I was wrong was in my belief that

the oil companies had their act together

when it came to worst-case scenarios.”

In particular, observers have pointed to

the toxicities of BP’s dispersant choices,

Corexit 9500 and Corexit 9527, as troubling.

On May 20, the Environmental Protection

Agency ordered BP to search for a less

toxic alternative.

Observers and EPA also demanded that

BP disclose the chemical makeup of the

dispersants. But the company initially

refused, claiming that the compositions

were the proprietary information of Nalco,

which manufactures the Corexit line.

But most experts worry little about

Corexit’s toxicity. “Compared to the toxicity

of the oil, the incremental increase in

toxicity of the dispersant itself is pretty

negligible,” Oceana’s Short says.

The bigger environmental concern,

experts say, is therefore not the dispersants

themselves but what the chemicals do to

the oil. By itself, oil is more toxic than

dispersants alone, but less so than


dispersed oil. In the Corexit toxicity

experiments, oil alone had an LC50 of

10.72 ppm. When spill response teams

approve dispersant use, they assume that

the vast water column will dilute the

dispersed oil and mitigate its increased

toxicity.

Many of the region’s important organisms,

such as blue fi n tuna and shrimp, use the

wetlands at some point in their lifetime.

Out in the Gulf ’s waters, adults breed

during the late spring and early summer.

Their eggs then fl oat to shore and the

larvae grow in the wetlands, protected

from predators.

In a June 4 report of a meeting sponsored

by the UNH research center, oil-spill

experts recommended continued use of

dispersants, but suggested that response

teams should establish ecological

assessment teams to reevaluate the trade-

off decision on the basis of data of

dispersed oil-plume locations and

concentrations.

But holes in the scientifi c literature hinder

proper evaluation of the environmental

trade-off s between wetlands and water

column when massive amounts of

dispersants enter the picture, other experts

say. Some scientists believe that they can’t

properly estimate the harm that this spill’s

load of dispersed oil will cause the water

column, because they lack suffi cient and

fundamental data on how dispersants

affect oil’s fate, what creatures live in

deepwater ecosystems, how laboratory

toxicity tests translate to actual conditions

in the ocean, and how oil aff ects organisms

over the long term.

One source of confusion stems from the

m e t h o d s u s e d t o m e a s u r e o i l

biodegredation. Studies often monitor

drops in oxygen levels as a proxy for

microbial activity, because microbes

consume oxygen while they digest oil.

Researchers question whether the lower

oxygen levels could also signal that the

microbes are digesting the dispersants’

surfactant molecules instead of oil

compounds. “If you look at structures of

the surfactant molecules that are known,

there are a lot of very edible pieces on

there from a microbial perspective,”

Valentine says.

As contradictory biodegradation results

hinder the ability of scientists to model

dispersed oil’s fate, missing pieces in

toxicity data make it diffi cult to predict

the spill’s environmental impact.

First, the Gulf spill is exposing a relatively

unstudied ecosystem—the deep ocean—

to oil. Although biologists have studied

organisms that live in the Gulf’s wetlands

and those that spawn in the water column,

they have almost no data on the organisms

that live at depths around the leaking

wellhead. Also, aquatic toxicologist

Mitchelmore says, it’s unclear how many

species living near the ocean’s surface

dive down to these depths to feed.

“Ultimately, we don’t know what’s even

down there to ascertain risks,” Mitchelmore

says. “It is just one huge black box.”

Even the toxicity data scientists have for

species that live near the ocean’s surface

have question marks.

When organisms absorb or even eat small

amounts of oil over a period of time, their

cells divert energy from growth and

reproduction to defending themselves

from the toxic oil. As a result, later in these

organism’s life cycles, they develop growth

defects that limit their viability. Also

because oil’s toxic aromatic compounds

act like narcotics or anesthetics, nonlethal

doses can slow fi sh and disrupt their ability

to respond to predators or to catch prey.

“It’s a more subtle way of killing something,”

Mitchelmore says of chronic toxicity.

The end results of chronic toxicity in the

Gulf will probably take years to decades

for scientists to fully appreciate, Mitchelmore

says. But early signs may appear in the

yields from next year’s fisheries, she

adds.

All of these now-glaring scientific

unknowns have led experts to call for

more oil-spill research to better prepare

us for the next megaspill.

“This is one big ongoing experiment,”

Mitchelmore says. “We’re going to be

learning a lot from this spill, and that’s

wrong. We need basic information ahead

of time.”

More research will become increasingly

important as oil exploration continues into

unstudied ecosystems, such as ultra-deep

water and the Arctic, Kinner and McKinney

say. Understanding how oil behaves and

what organisms could be aff ected in these

new areas will be crucial.

Stakeholders from industry to regulators

did not collect enough of this data before

moving from continental-shelf drilling to

deepwater drilling, McKinney says. Instead,

they relied too much on what the

community had learned from spills on the

continental shelf and applied it to the

deep.

“That was inappropriate,” McKinney says.

“There are huge diff erences, and we did

not invest in an adequate risk assessment

to make sure that we were balancing the

benefi ts from the production against the

potential environmental harm. And we’re

learning that harm the hard way now.”

Obama underscored this lack of pre-

paration for the worst and reliance on the

past to predict the future at his late-May

briefi ng. “The fact that oil companies now

have to go a mile underwater and then

drill another 3 miles below that in order

to hit oil tells us something about the

direction of the oil industry,” he said.

“Extraction is more expensive, and it is

going to be inherently more risky.”

The President then announced a series of

potentially sweeping reforms within the

Minerals Management Service, the part

of the Department of Interior that oversees

off shore oil and gas drilling and production

in federal waters. Only hours before the

briefi ng, Salazar had forced MMS head S.

Elizabeth Birnbaum to resign.

Among reforms announced by the

President and Salazar were new, tougher

operating standards for off shore energy

companies and a six-month moratorium

on new deepwater drilling. The requirements

were based on recommendations of a

federal agency report, the so-called 30-day

report, ordered by President Obama and

completed on May 27.

The moratorium stops exploratory drilling

in water deeper than 500 feet, half the

depth normally considered to be

“deepwater.” Consequently, 33 permitted

exploratory wells currently being drilled

in the deepwater in the Gulf of Mexico

must halt drilling at the fi rst safe stopping

point, Salazar explained.

But operating production facilities will be

allowed to keep pumping, Salazar said.

That means that some 3,500 production

rigs and facilities operating in federal Gulf

waters and 46 deepwater production rigs

will keep working. Each rig can support

multiple wells, so the actual number of

operating wells is about 30,000, according

to MMS budget documents.

MMS figures show that the deepwater

wells are highly productive. Indeed, the

recent 30-day report says wells drilled at

those greater and technologically complex



depths in the Gulf of Mexico produce 80%

of U.S. off shore oil and 45% of U.S. off shore

gas.

Salazar and MMS documents say only 55

federal inspectors are working in the Gulf,

and they are expected to oversee drilling

and production on 3,500 rigs and platforms.

Salazar has announced his intention to

increase by 10% the total number of MMS

inspectors, currently 62, charged with the

herculean task of overseeing operations

on all the drilling rigs and production

platforms operating in all waters in the

Gulf, Pacifi c, and Alaska.

The exploratory moratorium will stay in

place, Salazar said, until a commission

created by Obama to investigate the BP

oil spill has completed its review, which

is due in six months. Much will turn on

what this commission fi nds. Its charge is

to examine the root cause of the accident

and spill and make recommendations to

improve federal laws, regulations, and

industry off shore practices. The seven-

member panel will be led by former EPA

administrator William K. Reilly and former

Florida Sen. Robert Graham. It is but one

of a host of bodies examining the blowout,

including BP, MMS, and the National

Academy of Engineering.

Along with the exploratory drilling

moratorium, Salazar canceled future lease

sales in the Gulf of Mexico and a proposed

lease sale off the coast of Virginia. Salazar

also suspended proposed exploratory

drilling in the Arctic region, which is

expected to fi gure big in the future of

international offshore oil production.

Salazar said the Administration will take

a “cautious approach” in the Arctic and, in

light of BP’s failure to control and clean

up the Gulf spill, postponed Shell’s

proposal to drill up to fi ve exploration

wells in the Arctic this summer in the

Chukchi and Beaufort Seas.

The 30-day report pointed to two primary

failures in the drilling process that may

have led to the BP disaster: the “loss of

well control” and the failure of the blowout

preventer. BP’s blowout preventer had

been modified to speed the drilling

process, according to several reports.

Hence, Salazar ordered that blowout

preventer equipment on all floating

drilling rigs in the outer continental shelf

must be reinspected and recertifi ed to

ensure that the devices will operate as

originally designed and that any

modifications have not compromised

design or operation. Operators must also

provide independent verifi cation that the

recertifi ed blowout preventer will operate

properly.

Salazar also announced his intention to

separate MMS into three parts: an offi ce

for developing energy sources including

wind and renewable energy, in addition

to oil and gas; a bureau for regulatory

enforcement; and an office to collect

revenues from the use of federal lands by

private companies. Last year, MMS

collected $13 billion from oil companies

producing in federal waters.

This confl ict in oil and gas promotion,

collecting revenues, and regulation has

been a longtime problem for MMS but

one that the Interior Department

acknowledged only recently.

Last month, a report by the Department

of Interior’s Offi ce of Inspector General

found a busy revolving door between

MMS inspectors and the oil rig operators

and managers MMS is to regulate.

Triggering the investigations were

anonymous allegations of inspectors

accepting gifts, including dinners, tickets

for and transportation to sporting events,

and hunting and fishing trips. The

allegations also include falsifi cation of

inspection reports.

The report examined one company in

particular, Island Operating, and its

relationship with MMS’s Lake Charles

District Offi ce, in Louisiana.

It found ample examples of company-paid

social activities and MMS inspectors

accepting industry jobs. However, the

MMS district manager noted that the MMS

inspectors and company representatives

“are all oil industry,” are from the same

part of the country, and grew up in the

same towns.

“Almost all of our inspectors have worked

for oil companies out on these same

platforms,” the district manager said.

“They’ve been with these people since

they were kids.”

Also last month, Salazar announced he

would request appropriations to more

than double MMS’s current budget for oil

rig inspectors of $23 million to $52 million.

He also announced he would seek

legislation to eliminate a congressionally

mandated provision requiring MMS to

process all industry applications for

exploration within 30 days. This narrow

time window forces MMS to process

applications without completing an

adequate environmental review, which

proved to be the case with the BP

explosion. He proposed tripling the

amount of time to 90 days.

Nearly all the reforms require congressional

approval through appropriations and in

some cases legislation. A hard road lies

ahead. Congress is sharply split, with some

members having deep and longtime ties

to the oil and natural gas industry and the

jobs and revenues they have provided.

As Congress works through drilling

reforms, the Administration and BP are

working to stop the fl ow of oil and clean

up the oil that’s already leaked. Until the

relief wells are ready, which won’t be

until August, efforts such as the

containment cap lowered over the

leaking well early this month are being

employed to capture some of the oil and

gas billowing from the ocean fl oor. As

for the oil plumes and slicks in the ocean

and washing up on Gulf shores, chemical

dispersants will continue to play a role

in this cleanup.

For more information and the whole

article visit: http://pubs.acs.org/


ELIA

Europe’s Electric Hub

It may be one of Europe’s more compact

countries, but sharing its borders with

France, the Netherlands, Germany and

Luxembourg, Belgium is the very heart

of North-West Europe. Therefore, when

it comes to developments in Europe to

connect and correlate electricity systems

across the region, Belgian transmissi-

on system operator Elia is leading the

way. Chief Transmission Officer Mr Roel

Goethals talks to Gabrielle Brown about

Elia’s pioneering efforts to unite and

reinforce the grids of Europe.

Elia is responsible for the transmission of

Belgium’s electricity and owns all the

country’s 150–380kV grid and almost all

of its 30–70kV grid infrastructure. Its prime

responsibilities are threefold: first, to

develop and maintain the system’s

infrastructure; second, to ensure there is

a balance between electricity generation

and consumption; and third to act as the

market facilitator – i.e. to take measures

to improve the functioning of the

electricity market.

Since 19 May 2010, Elia has also owned a

60% stake in one of the four German

transmission system operators, 50Hertz

Transmission. This acquisition is in line

with Elia’s strategy of contributing to the

creation of a regional electricity market

in Central Western Europe (Benelux, France

and Germany). It also represents a major

step to ensure the security of supply to a

diverse customer base with a broad and

green ‘energy mix’.

Mr Goethals explains that his role is

primarily focused on achieving that crucial

balance between supply and demand:

“My responsibility is to the transmission

department and overseeing the real-time

operation of the grid via the regional and

national control centres. This involves

managing our system services, but my

overall objective is to ensure the grid is

balanced.”

New market mechanismsAs is the situation for transmission system

operators ( TSOs) across Europe,

responsibilities towards the market side

Trade & Investment | www.trade-investment.eu 25 June-July 2010Trade & Investment | www.trade-investment.eu

of the business have become more

signifi cant since the market’s deregulation

a decade ago. Therefore Mr Goethals’s role

will perhaps be more strategic than in

previous years. “In the context of the

deregulation of the electricity market our

responsibilities have evolved from being

responsible for the maintenance and

development of the grid to being the

market facilitator.”

“Concerning market mechanisms, we were

involved in the creation of the BELPEX

stock exchange, where in effect three

diff erent stock exchanges have created a

single platform to which customers have

transparent access.” This is realised through

a ‘trilateral coupling’ of Belgium’s power

exchange with the French (Powernext)

and Dutch (APX) power exchanges. This

market coupling means that buyers and

sellers on the exchange automatically

benefit from cross-border exchanges:

cheaper electricity generation in one

country can meet demand and reduce

prices in another. Market coupling will be

extended to the Central West European

and Nordic markets in autumn 2010.

Leading ENTSO-E and CORESOSignificantly, as this market expands

beyond Belgium, and because the country’s

grid forms a key connection between

France, Europe’s largest electricity exporter,

and the markets of Northern Europe, Elia’s

scope has broadened immeasurably.

“Although we are a comparatively small

TSO and a small country, Elia is

geographically at the centre of Europe so

we are very much infl uenced by what is

happening with the fl ows around us. We

are one of the most interconnected

countries in Europe and therefore we have

to be at the forefront of the developments

in the European market. We have evolved

from a nationally operational company to

one that is acting in a broader context.”

Not only is Elia physically at the centre of

Europe’s electricity system but also the

organisation’s CEO Daniel Dobbeni is

President of the European Network of

Ttransmission System Operators for

Electricity (ENTSO-E). In this role Mr

Dobbeni plays a hugely signifi cant part


ELIA

Europe’s Electric Hub

in coordinating all TSOs throughout

Europe in their mission to achieve a

seamless, pan-European electricity

market.

Another pioneering organisation with Elia

at the helm is CORESO, founded in

February 2009 by Elia and the French TSO,

RTE and later joined by NGET, the British

TSO, CORESO is the fi rst regional technical

coordination centre in Europe, providing

non-stop integrated forecasts relating to

grid security to national control centres.

CORESO signalled the fi rst step towards

operational cooperation between TSOs

in Europe whose collaboration will be key

to managing cross-border electricity fl ows

and developments to the infrastructure

that will prove essential to accommodating

power from renewable sources. “We

monitor the grids 24 hours a day, seven

days a week. You can compare CORESO

to an air-traffic control tower,” says Mr

Goethals.

Elia in its work with CORESO is continually

looking at methods to better monitor the

grid’s capacity and its variations. Their

intention is to look at the genuine, as

opposed to the theoretical, capacity on a

particular section of the grid at any one

time. Mr Goethals explains, “For instance,

if there is wind or sun then the capacity

of the overhead line can change – it varies

according to temperature. Therefore we

are developing tools and processes that

can optimise capacity, and this will help

us to maintain the grid’s security, even

with the increase of the less-controllable

renewable power.” This knowledge-

harvesting and sharing exercise will allow

TSOs to build up an accurate picture of

the grid’s capacity and will then enable

them to keep the ever-changing flows

under control. This is particularly relevant

to projects relating to smart grids, where

new technology will be needed to control

the power in-feed from wind farms in order

to ensure energy is bought, sold, stored

and supplied in the most effi cient way.

Research and development is keyEvidently, Elia is a pioneer when it comes

to bringing TSOs together to meet Europe-

wide operational and strategic challenges.


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However, the integration of Europe’s

electricity systems in terms of the technical

developments needed in order to ensure

that systems can accommodate the

complex oscillations of renewably sourced

power remains as one of the more

demanding tasks. “On the technical side

we are facing developments that pose

major challenges. Adopting our systems

to cope with renewable energy sources

is one such challenge, where the fl ow of

power is less controllable and intermittent.

In north Germany you’re looking at

25.000 MW of power which can vary

according to the speed of the wind. In a

few seconds there can be a huge change

and this infl uences the fl ow here through

Belgium. We have to invest a lot in order

to be able to transport this renewable

energy,” explains Mr Goethals.

“We’re also looking at developing high-

performance power lines, so that with the

same sections of cables you can transport

more energy.” With the European Union’s

goal of cutting energy consumption by

20% by 2020, together with reducing CO2

emissions by 20% and generating 20% of

the energy it consumes from renewable

sources, Mr Goethals stresses that projects

are, “still significantly in need of

considerable research and development.

There are lots of ideas and lots of new

technologies but the next step is to see

how to implement these in an EU context.

This is where we need to do more R&D.”

I asked Mr Goethals to sum up how Elia

had changed over the last ten years. “We

have gone from being focused on simply

‘keeping the lights on’ to now having a

mission to develop the European electricity

market in a reliable, sustainable and

efficient way.” In short, from small

beginnings come great things. With Elia

confi dently guiding operational, market

and R&D projects, Europe appears

favourably poised to meet its 2020

objectives.


RWE GROUP

High Energy

RWE AG is already a major force in the

energy industry, but its acquisition of

Essent NV in September 2009 is likely

to take its position in the market to an

even higher level. Diane Mannion discus-

ses the impact of this merger and the

future for RWE.

On 30th September 2009 RWE announced

its acquisition of the Dutch company

Essent NV, fi nalising a transaction that

had been planned since January 2009. Mr

Jürgen Grossmann, CEO of RWE AG

describes this acquisition as, “the highlight

of the past year.” He goes on to say, “RWE

and Essent are ideal partners. Essent makes

our portfolio more international and more

robust: in terms of electricity generation,

retail, renewables and energy trading.”

Leading allianceEssent NV is the largest energy company

in the Netherlands with a turnover of 5.7

billion euros and a gross profi t of 1,464

million euros in 2009. If you also consider

that RWE’s revenue for 2009 was 47.7

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Dr.-Ing. Jürgen Grossmann


RWE GROUP

High Energy

billion Euros and its operating income

was 7.1 billion Euros, it will give you some

idea of the size of this new partnership.

Integration of one giant company into

another is a massive undertaking, which

will take until the end of 2010 to complete.

RWE have now formed a management

team for this new branch of the company

from a mix of Essent and RWE staff . Mr

Grossmann comments that this team is,

“working in close cooperation with its

German counterparts”, and states that

“the level of collaboration is excellent.”

Apart from being the largest energy

company, Essent is the leading producer

of sustainable energy in the Netherlands.

It also has over 150 years experience

supplying gas and over 90 years in the

generation, supply, transmission and

trading of electricity. It is a member of the

Central European Gas Hub (CEGH), which

is one of the largest gas hubs in continental

Europe.

RWE is a group of seven divisions with

operations in Germany, both in power

generation, and sales and distribution; N

Power in the UK; and various operations

in Central and Eastern Europe. It also has

a renewables division called RWE Innogy;

RWE Dea, which concentrates on upstream

gas and oil; and RWE Supply and Trading,

which focuses on trading and gas

midstream. Essent is the new addition to

this group, with its headquarters in the

Netherlands and Belgium. RWE is the

biggest power producer in Germany and

third largest in the UK, and the company

also operates outside Europe.

The acquisition of Essent by RWE is just

one of the continual developments taking

place in this forwarding thinking and

expanding company, which employs more

than 70,000 staff and supplies gas to

approximately 8 million customers and

electricity to more than double that

number. The number of customers

continues to increase, and the company

fl ourishes despite the recession. RWE is

one of the fi ve leading utility companies

in Europe, in terms of generation, trading,

transmission and supply of gas and

electricity, and this latest acquisition will

strengthen its position further, especially

regarding renewables.

Climate protectionIn describing the company’s developments

in 2009, Mr Grossmann states: “To cite just

one example: between now and 2013,

RWE is planning to commission new power

plants and electricity generation plants

based on renewable energy with some

14,000 megawatts of capacity.”


RWE aims to invest 1 billion euros per annum into developing

renewable energy mainly through wind farms and biomass fuel

production. A planned wood pellet production plant will provide

raw materials for biomass used in Europe. This plant will be the

largest in the world and be situated in the USA. Mr Grossmann

favours the use of biomass over wind or sun as a renewable

energy source as he says, “unlike wind and sun, biomass is not

volatile and is always available.”

A total of 7 billion Euros is to be spent annually on environmentally

friendly and fl exible generation capacity until 2013. Aside from

the 1 billion that is earmarked for renewables, the total of 7 billion

also covers expenditure on power plants, grids and open-cast

mines. The objective for the company’s investment in green

energy is for 75% of RWE’s electricity generating capacity to be

either low-carbon or CO2 free by 2025.

The company recognises the growing signifi cance of climate

protection and energy effi ciency in meeting shifting customer

needs regarding energy effi cient products, both for consumers

and businesses, and includes the development of electric cars,

and electric heat pumps amongst its areas of concentration. The

heat pumps reduce CO2 emissions by 40% compared to

conventional oil-fi red heating. RWE will also be allocating 90

million euros to various climate protection projects that take

place at the Coal Innovation Centre in Niederaussem, which is

the base for these R & D activities.

Continual advancementApart from investment in climate protection RWE is proactive in

other areas. Mr Grossmann comments, “We cannot aff ord to make

the mistake of considering climate protection in isolation. Economic

effi ciency and security of supply are equally important.”

As part of its future plans the company is constructing a gas

line from the Caspian region to Western Europe, which should

be complete within three to four years. This will further the

supply of gas and reduce the need to rely on imports. RWE is

also modernising and expanding its electricity distribution grids

to distribute energy generated from wind. Mr Grossmann sums

up the company’s views regarding its proactive approach by

stating, “When it comes to product development, we remain

alert to every market trend.”

Additionally, RWE is expanding internationally and expects 60%

of its investments to be in international markets, and 50% of its

earnings to come from international operations, by 2013. This

compares to 34% in 2009. For the coming year RWE aims to

surpass the impressive achievements seen in 2009. Mr Grossmann

states: “Ideas, investments and innovations are what we need

to maintain our competitive edge. RWE is changing in this

competitive world. We are becoming greener, more international

and more robust. We have set ourselves a fast pace and some

big targets…” This view is summed up in RWE’s motto for 2009:

“Make big things happen.”

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AMPRION

The Power of Partnership

By Philip Bradbury

The Third EU Energy Liberalisation requi-

rements of transparency and non-discri-

mination has meant that the Indepen-

dent Transmission Operators (ITOs) must

make massive changes to their organisa-

tions’ structures, ownership and ways of

doing business. Transparency relates to

the fact that the ownership, manage-

ment and information of the business

must be entirely apparent at all times.

Non-discrimination means that all custo-

mers and suppliers must have the same

market-relevant information and they

must all be treated the same.

Amprion GmbH has taken four large steps

towards the creation of an ITO-structure.

1. Staff integration

Amprion previously had 300 people

working for it, with another 550 people

who contracted to them. These 550 people

have since been brought into the Amprion

company as full employees. This now

means that Amprion is a totally self-

suffi cient entity with all its own expertise

and staffi ng needs now in-house.

2. Name change

In September 2008 they changed their

name to Amprion, to signal that they were

independent from their current owner,

RWE AG.

3. Appointment of independent

member to Supervisory Board

In December 2009, Hartmut Schauerte

was appointed as the independent

member of six-member Supervisory Board.

Hartmut Schauerte was, for many years,

a member of the German Bundestag and

he was the former State Secretary in the

Federal Economics Ministry. Mr Schauerte’s

independence and his long experience

as someone who has dealt with energy

policy at the top political level will provide

Amprion with worthwhile expertise in

implementing the Third EU Energy

Liberalisation requirements.

“As an independent member of the

Supervisory Board, Hartmut Schauerte will

apply his expertise to closely monitor the


independence of Amprion. In choosing

him, we are implementing a further

requirement of the Third EU Energy

Liberalisation and are strengthening the

independence of our transmission system

operator. In this way, we make sure that

Amprion gradually becomes an

‘Independent Transmission System

Operator’ in line with EU directives” said

Jürgen Grossmann, Chairman of the

Amprion Supervisory Board.

4. Move to new offi ces

The company moved its offices and is

separated from other RWE companies.

This is yet another signal to the market

that Amprion is managed independently

from its parent, RWE.


AMPRION

The Power of Partnership

Overseen by BundesnetzagenturLike all other ITOs, Amprion is overseen

by the German regulatory authority, the

Bundesnetzagentur. This authority controls

the business of all ITO’s, including the

annual approval of grid fees, approval of

all investments and as an appeal authority

for complaints from the customers of ITOs.

Amprion pride themselves on the fact

that they have had no appeals in the last

six years.

As well as the huge cost and eff ort involved

in complying with Third EU Energy

Liberalisation, Mr Marian Rappl, Head of

Corporate Communications/Public Aff airs

for Amprion GmbH, told us that the

company has other challenges too:

Challenge of power from renewable sourcesThe environmental benefi t of sourcing

power from renewable sources is

undeniable. However, there is a cost to

that and one of the costs is that most of

Germany’s renewable-sourced power

(mainly from wind) is not where most of

the power is consumed.

Previously, power plants were built where

the power was most needed – where

populations and industries were of highest

concentration. However, they cannot

command the wind to blow when and

where we want it to! Most of Germany’s

wind power generation is in the north of

Germany - mostly from off -shore wind

turbines and the number of on-shore ones

is increasing all the time. The strategic

problems with this are two-fold: New lines

need to be built, taking the power from

the north, down to central and southern

Germany and the inability to store wind

power. Previously, power could be saved

with a two-dam system. When power

production exceeded supply, it could be

used to pump water from the lower to

the higher dam. Then, when more power

was needed, it could be generated by

releasing water from the higher to the

lower dam. This cannot be done with wind

power and so the balancing of power

production and usage is more diffi cult to

attain – for example, less power is needed

at night but the wind doesn’t stop blowing

just because the sun has gone down!

Challenge of uninterrupted powerGermany has the lowest interruption time

of power in Europe. Amprion serves

27 million people and links Luxembourg,

the Netherlands, France, Switzerland and

Austria with Germany. It has had no

interruption to its power supply. It

manages this by always having two lines

to feed power to all of its customers. This

benefi ts its customers but it obviously

increases the cost of delivering that

power.

Challenge of new investments and technologiesMainly because of the need to transport

power further (as per 1. above) Amprion’s

ten-year plan is to expand their supply

network by 800 kilometres of new lines.

This will cost three billion euros. They are

also developing several new technologies

and three of them are:

A high temperature line. The higher the

voltage through a line, the hotter it gets

and there is a limit of around 100 degrees

for steel lines. This obviously restricts the

voltage that can go through so Amprion

are developing lines that are made mainly

of porcelain and aluminium – they will be

able to take higher temperatures and,

therefore, larger power loads.

Underground lines. These are made in a

ducting system where there is a special

gaseous layer between the line and its

outer shell. This type of line is currently

being trialled at Frankfurt airport, under

the runway.

Lines made of cable. These can take larger

power loadings than the current power

lines. This system needs twelve 380-volt

cables, in parallel, and these will be in a

pilot project in use in 2015.

Challenge of environmental protectionGiven that Amprion has 11,000 kilometres

of electricity grid and is the third largest

grid operator in Europe, supplying electricity

to a massive 73.1 square kilometres, its

environmental impact is a high priority

management focus. The protection of the

environment and preservation of the natural

foundations for life are key precepts for

action at Amprion GmbH.

Two of its several environmental initiatives

are:

1. Bio-top management. For a power grid

to cross a forest, the trees below the

line need to be felled. Once the line is

installed, Amprion then manages the

ground below to sustain as much of the

natural fl ora and fauna as is possible.

With 10,500 hectares of bio-top to

administer, this is a huge project.

2. Bird protection. Amprion has tar-

geted particular bird species and,

where they abound, the company

has installed equipment so that the

birds can see the lines and do not

injure themselves against it.

Mr Marian Rappl said that while the current

economic climate had reduced the power

usage of some of their industrial customers,

the eff ect of the credit crunch on Amprion

was minimal. Asked what were three

things that had made Amprion so

successful, Mr Rappl said it was:

That the company was very good at using

innovation and continues to bring in new

technology,

that they were well linked to other

transmission system operators and that

they understood themselves to be partners

(not competitors) with their customers, the

government and the regulatory agencies.

It was this working together that made the

future brighter for all concerned.


GRADSKA PLINARA Z AGREB

Past, Present and Future

By Gabrielle Brown

As natural gas is increasingly being seen

as the greener, most economical fossil

fuel, it ’s a poignant time to look back

and review how the gas industry has

developed over time. Croatia’s capital,

Zagreb, first made use of gas as an ener-

gy source in the middle of the nineteen-

th century. Now, Gradska plinara Zagreb

(Zagreb City Gas) and Gradska plinara

Zagreb – Opskrba (Zagreb City Gas - Sup-

ply) share the responsibility of ensuring

the city ’s gas supply is safe, secure and,

now being natural gas, environmentally

sound.

Gradska plinara

Zagreb – history

It was as far back as 1862 when Zagreb

City Council made the decision to build

a coal gas factory. Just one year later, some

three-hundred gas lamps illuminated the

Zagreb streets and squares, and soon after

gas supply was extended to the city’s

households. Local shareholders took over

the gasworks in 1873 and gas consumption

increased day by day until when in 1877

it reached 437,828 m³.

In 1900 the City of Zagreb repurchased

all gasworks shares from shareholders

and the gasworks was reorganized and

named Gradska plinara Zagreb (‘Zagreb

City Gas‘). As the town grew, the gas

network also expanded, amounting to

72 km in 1930 and then increasing to

114km by 1940.

A particularly noteworthy period for

Gradska plinara Zagreb from a marketing

perspective was between the two World

Wars. During this time, not only did the

company launch a vigorous advertising

campaign promoting the use of gas for

cooking and heating, but they also


GRADSKA PLINARA Z AGREB

Past, Present and Future

organized for cooking courses to be held

(a hands-on means to demonstrate the

benefits of cooking with gas) and for

newsletters on the subject to be distributed

to households across the city .

In 1955, Zagreb was supplied with natural

gas from Croatian gas fi elds. Plants for the

production of city gas from natural gas

were put into operation in 1958. Then, in

1978, imported natural gas was introduced

to Zagreb via the gas trunk line. This is

when the process of replacing the city

gas with natural gas began. As consumers

were switching to natural gas, old pipelines

were replaced. In 1993, the last plant for

the production of city gas was closed and

since then only natural gas has been

distributed.

Operations todayBased on the relevant legislative

regulations and in accordance with the

EU Directive (55/2003), the network

management was separated from the

energy trading operations in April 2008

by the founding of a new company:

Gradska plinara Zagreb – Opskrba d.o.o.

( Zagreb City Gas – Supply Ltd.).

Gradska plinara Zagreb – Opskrba – overviewPut simply, Gradska plinara Zagreb –

Opskrba is responsible for natural gas

procurement and supply to the end user.

Founded by Zagrebački Holding, a company

100% owned by the City of Zagreb, the

company has equity amounting to HRK 40

million and a staff of 147 employees,

transposed from the distribution system

operator Gradska plinara Zagreb.

Gradska plinara Zagreb – Opskrba is the

sole supplier of compressed natural gas in

the Republic of Croatia. A vehicle fi lling

plant for Zagreb public transport is currently

under construction and there are 60 buses

and some 300 lightweight delivery vehicles

and cars using this type of fuel at present.

In 2009 Gradska plinara Zagreb – Opskrba

supplied gas to 252,000 buyers in the City

of Zagreb and to parts of Zagreb County.

Some 450 million m³ of natural gas was

supplied, 65% to households and 35% to

industrial customers. The company

portfolio also includes a laboratory for

repairing, gauging and testing gas-meters

and other measuring equipment. Total

revenue for 2009 amounted to HRK 923

million, and the profi t after tax was some

HRK 11 million.

Gradska plinara Zagreb – overviewGradska plinara Zagreb is the distribution

system operator for the area of the City of

Zagreb and part of Zagreb County. With

Trade & Investment | www.trade-investment.eu

a staff of 419 it is wholly owned by the City

of Zagreb. The distribution network of the

gas pipeline with three pressure levels

extends for 70km east–west and for 30km

north–south, and has a total length of

3,600 km. Natural gas enters the system

at five take-over measuring-reduction

stations and is then further distributed by

the pipelines through 300 reduction

stations to the customer.

Gradska plinara Zagreb is certified ISO

9001:2000, HRN EN ISO 9001:2002 and

IQNet. Continued investment in

mainstreaming the existing network and

in planning the introduction of gas in new

areas have resulted in the company

establishing itself as the leading gas

distributor in Croatia.

As well as natural gas distribution, Gradska

plinara Zagreb provides additional

services in the areas of the construction

and re construction of pipelines, house

con nection and distribution system

elements, testing pipelines for leakage,

gas installation testing and gas-meter

replacement.

In 2009, the company achieved a total

income of HRK 327 million, with profi t

after tax amounting to HRK 7 million.

A bright, green futureWith constant improvement in the quality

of services, both Gradska plinara Zagreb

– Opskrba and Gradska plinara Zagreb,

along with their buyers and partners, are

poised to respond to challenges posed

by their market competitors. They are also

intent in maintaining and reinforcing their

status as Croatia’s leading natural gas

distribution and supply companies.

The success of the group is dependent

on its highly qualified staff who are

encouraged to develop and apply new

knowledge and technologies, with a

notable focus on exploiting the advantages

of natural gas as the most environmentally

acceptable and economically cost-eff ective

energy commodity.

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Since 1994 our main activity is to perform the reconstruction of gas pipelines, water mains, gas metering stations, gas installations, heating

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KARL DIEDERICHS KG – DIROSTAHL

True as Steel

Fast-growing, innovative businesses

tend to steal the limelight over steady,

traditional setups. But speaking to

Gabrielle Brown, Dr Manfred Diederichs,

Managing Director of the open-die

forging company Dirostahl – Karl Diede-

richs KG, explains how his 400-year-old

business thrives by offering clients years

of experienced craftsmanship and time-

honoured customer service.

There’s something deeply heartening

about Dr Diederichs’ traditional approach

to business. Forging is the oldest form of

metalworking, and the Diederichs’ family

established their forging business in 1550.

Still located in the Bergisches Land, a

region in Nordrhein-Westfalen, Germany,

where Dirostahl – Karl Diederichs KG

thrives today, with a staff of 480. Its

unhindered success is largely down to

employing the values of loyalty and

stability across all aspects of its

operations.

The Diederichs’ forging business was

initially powered by water, with a water

wheel driving the hammer used to shape

and compresses the metal into its desired

shape. “My ancestors initially made small

items, such as horseshoes, but then in

1919 my grandfather moved the

workshops up to the top of the mountain

because instead of needing to be near

the water, it became more important to

be near the train station.” By this time,

steam power and later on hydraulic presses

had replaced the water wheel driven

hammer, and the Diederichs were able to

broaden the range and size of their

products.

Dr Diederichs is enthusiastic and proud

of the craft to which his family has


remained continuously committed.

“Forged steel is the best form and the

highest quality of steel. The forging

process makes for stronger metal than if

the part is only cast because the grain is

compressed tightly and the grains line up

in a continuous formation, according to

the shape of the part.”

The steel bars, shafts, discs, plates and

rings made by Dirostahl are used across

numerous engineering applications in

many industries, from automobile

manufacture to the fabrication of

suspension bridges. One particularly

typical application with investment in

offshore wind farms prevailing across

Europe is in the construction of gear boxes

used in wind turbines. Although Dirostahl’s

clients are largely Europe based, the

company’s products are shipped onwards

as far as China, where local forges cannot

yet match the Dirostahl’s centuries of

experience.

A case of David beating Goliath?Open-die forging, the forging undertaken

by Dirostahl, is more suited to short-run

production. The ‘die’ is the fl at surface that

the metal work-pieces come into contact

with as they are hit by the hammer and

being ‘open’ means that the work-piece

is not enclosed by the die. Therefore, the

metalworker must turn and adjust the

work-piece against the die to achieve the

desired shape. “We start with pieces

weighing 15–16kg and go up to 32,000kg.

With this broad range of weight we can

create all forms – shafts, rings, blocks,

square parts. All dimensions and forms

that can be forged, we do forge.”

Being so versatile gives Dirostahl the

advantage against the larger, mass-

producing forging firms. Variety and

versatility beats quantity. “Some of the


big forging companies have closed today

because in comparison, open-die forging

is a flexible and quick option. We are

forging the pieces in ones and twos, and

it’s all on demand. Everything is made

according to order. We don’t have

stock.”

Again, there is something heartening

about this demand-led production model.

Whereas the big forging workshops will

set up enormous presses and produce

huge quantities that then have to be

pushed to the market, Dirostahl works at

the highest level of effi ciency; there is

little room for waste or dead stock.

“Good old-fashioned customer service”There’s no sign at Dirostahl that having

its roots planted fi rmly in the past in any

way holds the company back. In fact, its

commitment to traditional business

practices, and an all-too-rare awareness

of the value of continuity, is what maintains

clients’ loyalty. “I have members of staff

who have been here for years and years

– more than 25 years. Our clients know

that they can speak to the same person

again and again over the years. Having

this familiarity is important, because many

of our clients work in the same way and

have family owned businesses them-

selves.”

Dr Diederichs adds that his sales staff

makes a point of always meeting clients

face to face and that he himself has an

open-door policy, whereby if a client

wants to speak to him, they will be put

through directly. “When people call me,

they speak to me, not to my secretary.

I am always accessible.” The concept of

KARL DIEDERICHS KG – DIROSTAHL

True as Steel


taking responsibility and being account-

able is embodied in the business’s name

– not just ‘Dirostahl’ but ‘Dirostahl - Karl

Diederichs’, so when colleagues and

clients speak to Dr Diederichs, they know

he is representing the company in

earnest.

Local corporate citizenshipThe Bergische Land has accommodated

Dirostahl and the Diederichs family for

four centuries, so it is no surprise that

loyalty and commitment go beyond the

factory and into the local community.

Once more, rather than being as a result

of top-level policy on corporate social

responsibility, or similar, Dirostahl is an

active member of the local community

simply because the company is inherently

ingrained in local culture. It also appears

to be a culture of celebration and fun,

with Dr Diederichs and his staff taking

part in local carnivals, dragon boat racing

and processions, where Dirostahl staff

perform traditional metal-smithing on

their own decorated fl oat.

Continuing to thriveWhile maintaining traditional values,

Dirostahl continues to invest in equipment

and technology to improve effi ciency and

broaden capability. “We are preparing a

new hall for turning big shafts and we’re

investing in a new heat treatment

operation,” says Dr Diederichs, mentioning

just a couple of developments underway

at present. He also anticipates business

gathering pace as the recession of the last

two years recedes. “We have managed to

keep going as normal and we now hope

that business will start to improve…we

are ready!”

Open-die forging can only be successful

as a customer-focused business, with

production being solely driven by cus-

tomer requirements and products made

to particular specifi cations. As Dirostahl

and the Diederichs family demonstrate,

being able to provide customers with a

dedicated and steady service goes hand

in hand with this philosophy. It’s all about

the personal touch, and Dr Diederichs

very much gives me the impression that

his business is in many ways all about the

people, as much as the craftsmanship

they trade.


MARIBORSKA LIVARNA MARIBOR

Turning on the Tap and Radiating Success

By Philip Bradbury

When two Austrian brothers (Josef and

Hans Bühl, both engineers) started their

non-ferrous foundry, they could not

have imagined what the business was

to become. In 1924 they moved their

foundry to Maribor on Motherjeva ulica,

Slovenia, where Mariborska livarna

Maribor (MLM) is still sited.

Josef and Hans started their business with

founding brass as fl ats, rods and tubes.

The logical development from this was to

produce other non-ferrous metals like

aluminium and copper.

HistoryHowever, as Mr Branko Žerdoner, Chairman

of the Board, explained, the company’s

range of products – and the way it produces

them – has expanded considerably in the

ensuing 86 years. In 1945 the foundry

underwent a complete restoration,

following damage from World War II. This

restoration project included the addition

of die casting machinery. MLM had started

making components for the automotive

industry, which requires huge quantities

of identical products. The die casting

process ensured the precise production

of these massive quantities of components,

something that was impossible with the

foundry process.

In 1949 MLM implemented their pressure

die casting programme. The company was

the fi rst industrial company in Yugoslavia

with this type of production, thus

becoming a signifi cant supplier of the

developing mechanical, automobile and

electrical industries.

BrandingMLM started out by producing quantities

of brass that others incorporated in their

own branded products. Then they moved

on producing their own branded products

as well.


In 1967 MLM introduced the Armal brand

of sanitary taps, characterised by high

quality, reliability and modern shape. In

four decades, Armal became the leading

brand in Slovenia, Croatia, Bosnia and

Herzegovina, and Serbia. The proof is that

there is at least one sanitary tap in almost

three quarters of households in these

markets. Today, around one million Armal

taps are produced a year and MLM is the

fi fth largest producer of taps in Europe.

In 1974 MLM began producing the Aklimat

aluminium radiators. With these, MLM

found a new market niche opportunity.

Aklimat brand is today the synonym of

quality and occupies an important position

in traditional markets of Eastern Europe

and Russia. The advantage of Aklimat

radiators is the high level of adaptability

to the needs of customers.

Today’s marketMLM’s current production is shared by

three categories of products:

One third is forged and semi-finished

products made from copper and copper

alloys: rods of various shapes and

dimensions, wires, pressed parts and

workpieces, one third is branded products

– Armal taps, Aklimat radiators and one

third is products for the automotive

industry – mainly gearing and anti-

vibration parts.

The consequences of the credit crunch Mr Branko Žerdoner started with MLM in

2002 and, at that time, the company’s

turnover was 50 million euros. For the year

ended June 2008, the turnover had

doubled to 100 million euros.

Then the credit crunch hit and their gross

sales (turnover) for the year to June 2009

was 60 million euros – a 40% drop in

business. Because of this, the company

has had to shed a number of employees

and to rethink its whole strategy. However,

it has not diminished their resolve to grow

the company and, recently, they signed

an agreement with Volkswagen to produce

automobile parts – mainly a new gear box

for a car due to roll out in 2011 – and MLM

is currently spending around 1 million

euros on new plant to produce these

components. No extra employees for this

project will be employed as many of the

current staff will be retrained in the new

technology involved.


MARIBORSKA LIVARNA MARIBOR

Turning on the Tap and Radiating Success

Employee trainingThe reputation of the company and its

products are totally reliant on the

employees’ skill and training and, in

recognition of this, MLM invest (on

average) forty hours a year of training in

every staff member. They run their own

in-house school and the training includes

all relevant engineering trades and skills,

as well as marketing, fi nance, IT and – most

importantly – communication skills.

The factors of successWhen asked what the main reasons that

MLM had survived and grown – despite

world wars, credit crunches and many

other challenges – Mr Branko Žerdoner

answered with typical humility. Taking no

credit for himself, he cited the advantages

of MLM’s and Slovenia’s geographic,

fi nancial and cultural position:

There is no language barrier and they can

deal with anyone in Europe.

The company is very open to accepting

experts from outside Slovenia. To illustrate

this point, Mr Žerdoner explained that his

three closest colleagues at the company

were from Bordeaux, Vienna and Frankfurt.

As he said, the company is a very “colourful”

one, with many nationalities involved.

There are two large airports nearby and

MLM is very near a highway. Transport

access is, then, well provided.

Slovenia is blessed with large existing

industrial complexes and its wages are

relatively low, so its products were very

attractive to Western Europe, where most

of MLM’s products are exported to.

MLM has a huge focus on its employees

having constant customer contact and

this ensures that the company is acutely

aware of the changing needs of its

markets.

Current focusAt the moment, MLM exports 80% of its

products, with only 20% going to Slovenia.

A full 54% of its output goes to EU

countries. The German-speaking countries

are its main market focus at the moment

and the recent deal with Volkswagen is

proof of the benefi t of this policy. Also,

with Austria nearby, there are many

opportunities close at hand.

The company has four main divisions:

Alutec, which manufactures various tools

and aluminium pressure die castings,

some intended for their own production

of sanitary taps and radiators. The majority

of the castings are for the automobile,

electrical and mechanical industries. They

develop innovative solutions for the

specifi c needs of the most demanding

global clients - from the concept, through

to the prototype and to the mass

production of products.

Baker, which manufactures semi-fi nished

products made from copper and copper

alloys: rods of various shapes and

dimensions, wires, pressed parts and

workpieces. High dynamics of investments

and rich construction and technological

know-how enable the production of

quality products intended for a broad

circle of consumers.


Armal, the leading brand of kitchen and bathroom sanitary

taps in Slovenia, Croatia, Bosnia and Herzegovina, and

Serbia.

Aklimat, which has been manufacturing aluminium

radiators and fi ttings for their installation since 1974.

The futureThe experience of doubling sales from 2002 to 2007 and

then seeing them drop by 40% a year later, has meant

that the management of MLM is justifi ably cautious about

forecasting the future. However, their current (conservative)

budget is that their sales for the next year will rise by 16-

32% to 70 or 80 million euros.

This result is impressive, given the current credit crisis,

and something the two Austrian brothers - Josef and Hans

Bühl – could never have dreamed of!

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Trade & Investment | www.trade-investment.eu 48 June-July 2010Trade & Investment | www.trade-investment.eu

M-PROFIL

Building Business

M-Profil, a thriving Croatia-based

company specialising in the production

of metal building components, has ex-

perienced fifteen years of uninterrupted

growth. Sales and Marketing Director

Ms Sandra Bojić talks to Gabrielle Brown

about M-Profil’s commitment to quality

and innovation, and its plans to branch

out into the Western European market.

Like many South Eastern European count-

ries the last decade saw a period of boom

for the Croatian construction industry,

with signifi cant development in the cities

and as more and more holiday makers

were drawn to the country. Zabok-based

M-Profi l, a manufacturer of prefabricated

metal construction components used in

the building of shopping centres, ware-

houses, sports premises, residential and

administrative developments, to name

but a few, was founded in 1995 and has

gone from strength to strength since.

“The business has experienced fairly

extensive growth over the last fifteen

years, and our products and services have

evolved also. Initially we sold and

assembled roofs; now our expertise is in

providing a range of products including

steel constructions, metal sheets and

insulated sandwich panels, and we off er

a tailor-made service so our products can

be installed directly on the building site”

explains Ms Bojić.


High standards and innovationM-Profi l has grown from being a four-man

outfit to a company of 520 employees.

Despite now being considered large in

Croatia, the company’s mission is to

maintain the same standards and level of

quality that is perhaps more easily

accomplished across smaller operations.

Ms Bojić describes how quality is achieved

at M-Profi l: “We have invested and advanced

the technology used in our production for

steel structures and sandwich panels. We’ve

also successfully applied ISO 9000 and ISO

14000 to quality assurance control systems.”

Ongoing training for staff is also central to

M-Profi l’s culture, ensuring they have a

sound understanding of customers’ needs

and are up-to-date with the latest

developments in the market.

Innovation also plays a large part in

M-Profil’s corporate strategy. “We are

contributing to a European project to

develop panel technology as much as

possible – and our task is to provide

samples and disseminate our knowledge

of the current and evolving technologies

involved.” Ms Bojić explained also that

M-Profi l was preparing for an event where

this knowledge will be shared amongst

colleagues across the construction industry

in the region – the fi rst event of its kind.

A flexible and comprehensive serviceM-Profil offers its clients a ‘turn-key

solution’, meaning the quality service is

as important as the product. I asked Ms

Bojić to describe how this concept

originated: “As the demand for steel

products expanded we soon realised that

we would have to expand our operations.

We invested in neighbouring countries

where labour costs were lower, and we

acquired companies that had production

facilities that would complement our

range. So today we can off er a complete

solution to customers.” Under M-Profi l’s

umbrella are six companies that together

off er customers a comprehensive range

of products and services, covering

fi eldwork, concrete, asphalt, the erection

of steel structures and installing sandwich

panels for walls and roofs. Clients with

existing projects can have their building

constructed to specifi ed requirements or


M-Profi l can plan and undertake the entire

project on the client’s behalf.

Providing such a versatile range of products

and services allows M-Profil to quickly

adapt to meet the market’s demands. “We

are considered to be lucky in a way because

when the Croatian construction industry

in Croatia was growing we were growing

too. And the investments that we made

in neighbouring countries opened new

markets for us and made it possible for us

to quickly and effi ciently react to customers’

needs, not only in Croatia but also in the

neighbouring countries.”

Equally, being agile suits the current market

state which, although demand might not

be growing at the pace it was, still

comprises customers who see the benefi ts

of going to one customer who can provide

them with an all-inclusive service, and

deliver the goods quickly. “Time is money,

and we‘re ready to respond at the shortest

notice. Even though we are large, we are

still ‘small’! We are a limited company, so

there is very little bureaucracy involved in

decision making. So, we can save our

customers money by ensuring short

delivery times and getting projects

underway fairly quickly.”

Developing innovative productsM-Profil constantly monitors new pro-

ducts being produced and launched

around Europe to assess the viability

of producing something similar and

taking it to market in Croatia. They are

currently bringing to market a new

insulation product BENTOTEX, a geo-

synthetic clay liner (GCL) which Ms Bojić

explains has highly developed properties

yet remains cost-effective. It is produced

at M-Profil’s facilities in Serbia and the

company is in the process of promoting

it throughout Croatia.

However, it’s the steel construction

products that remain the most profitable

for M-Profil and they are likely to do so

for the foreseeable future. “The real-

estate agents predicted that the

expansion in the construction industry

is set to continue in Croatia. Here in the

capital Zagreb we have seen considerable

expansion, but there is still a lot of room

to expand elsewhere in other cities, and

then later to Bosnia and Serbia. There

is plenty of room for growth.”

The futureM-Profil, while happy to continue deve-

loping the Croatian market, intend to

broaden their appeal to meet the de-

mand outside South-Eastern Europe.

“Over the last ten years the real-estate

market in Croatia has flourished,

definitely. But two years ago we decided

that the mass market is not enough for

us strategically – we have to find other

opportunities. We have to place our

products in Western Europe with more

competitive prices.”

In preparation for taking this step

M-Profil is in the process of acquiring

certification in production standards

not yet enforced in Croatia but obli-

gatory elsewhere in Europe. Their

aspirations are perhaps a little more

modest than at the beginning of the

millennium, but they are positive

nonetheless. “We hope to continue to

grow. But yes, maybe at a lesser rate

than over the last ten years.” At any

rate, M-Profil’s focus and unhindered

enthusiasm are an accomplishment in

themselves.

M-PROFIL

Building Business


FACC

The Way to Success

FACC AG (founded in 1989, headquar-

tered in Ried im Innkreis, Austria) is

a leading company specializing in the

development, design and manufacture

of composite components and systems

for civil aircraft. With 1,581 employees

it serves customers like Airbus, Boeing,

Bombardier Aerospace, Embraer, EADS,

Eurocopter, BAE-Systems, Diehl Aircabin,

Mitsubishi Heavy Industries, Rolls-Roy-

ce, Sikorsky, Sukhoi and many others.

FACC achieved a great turnover of 265.3

million EUR in 2009 (a growth compared

to 251.9 million EUR in 2008) mostly by

exporting its products to countries such

as USA, Canada, Germany, France, Italy,

Spain, England, Japan, China, Australia,

Brazil, Russia, etc.

The new ownershipAs well as other news, there has been a

significant change in the ownership

structure of FACC AG. The acquisition of

the majority of FACC AG by the international

aerospace company Xi’an Aircraft Industry

(Group) Company Ltd. (XAC) and the

private equity company Advanced Treasure

Limited (ATL), announced in October, was

fi nalised on December 3, 2009: XAC and

ATL are now formally the majority owners

of FACC AG. Through a Chinese and an

Austrian ownership association they own

91.25% of the shares.

The new owner will reinforce the successful

international growth strategy that FACC

pursued under the former owners and

provide the company access to new capital

as well as to the fast growing markets of

China and the Asia-Pacifi c region. “The

rapid development of the Chinese

aerospace industry offers FACC many

opportunities and it is important for us

to integrate ourselves in the world. The

transaction will bring positive results for

both parties as well as a positive future,”

said Geng Ruguang, Vice President of

XAC’s parent company AVIC. FACC will

remain a stand-alone independent

corporate entity with the current

management team under the leadership

of CEO Walter Stephan.


Innovation is the key to success“In 2009, in addition to the changes in

ownership structure, one topic took

precedence for FACC AG and became a

focus of our work: innovation,” says Mr

Stephan. “It is important to constantly

improve the competitiveness of both FACC

and that of our customers,” he continues.

By innovation Mr Stephan does not

necessarily mean developing new products

just for the sake of having to off er something

new. It means, rather, that new technologies

must fulfil certain requirements to be

considered truly innovative. A good

example is the spoiler FACC has developed

that weighs 30% less and is considerably

less complicated to install due to a new

integrated composite fi tting.


FACC

The Way to Success

But why focus on innovation at this point?

Mr Stephan explains: “Due to current

economical conditions with stagnating

turnover, innovation has become more

important than ever before, especially for

a relatively small but strongly growth-

oriented company like FACC. For this

reason innovation is a central factor for

us in our quest for successful profi table

growth in the future. Today’s innovation

is meant to ensure that FACC can continue

to see strong growth in the coming years,

in spite of stagnation in the aviation

industry. We have always been able to

achieve this in past recessions - in 1994

as well as in 2002. This makes us optimistic

that we can cope with the current

downturn.”

And what do the plans for innovation include?“The aviation industry is currently in a

phase in which a technological revolution

is taking place where a rather high

percentage of the total weight of an

airplane is of fi ber composite materials,”

explains Mr Stephan. So FACC is currently

working on making fiber composite

materials more ‘aff ordable’. This should be

taken care of with new production

technologies such as the RTM (Resin

Transfer Moulding) process, as well as new

material developments. In addition, the

eff orts of FACC to increasingly involve low

wage countries in the procurement

process help increase customers’ benefi ts

and their competitiveness.

In order to ensure that FACC remains

leader in innovation in the area of

composites, they also reorganized their

research area in mid 2009 and created an

additional profit centre called “FACC

Solutions” to complement the existing

Aerostructures, Engine & Nacelles and

Interiors profi t centres. FACC Solutions,

headed by Johannes Noisternig, combines

the engineering offices of Vienna and

Bratislava (Slovakia) and the R&D

department of Ried and cooperates closely

with the produc t development

departments of the three profi t centres.

Key technology: New RTM productionIn summer 2009, a new kind of RTM and

preform production was started up at

FACC. This is the world’s only production

machinery for the industrial manufacturing

of aviation-approved RTM components.

RTM is a process whereby preforms are

installed into a closed mould, injected

with resin and then cured by applying

pressure and heat. In contrast to the

conventional lay-up process of autoclave

technology, the RTM process makes it

possible to produce substantially more

complex geometries. The new process is

currently being used at FACC for the

manufacturing of centre hinge fi ttings

(CHF) for the A330/A340 spoiler and can

also be adapted to be used for other

projects, such as the A350 spoiler.


The revolutionary production method at FACC presents

a solution in which production times and energy costs

can be considerably reduced. The new RTM method and

machinery had previously only been tested under

laboratory conditions. Due to FACC’s spirit of innovation,

the process is being used for the fi rst time in the industry

and makes industrial serial production of performs and

RTM components possible. And as an added feature, the

introduction of the new RTM process made it possible to

improve processes and automation.

FACC – the best supplierIn a ceremony held in November 2009, Embraer awarded

FACC with the Supplier of the Year 2009 Award in the

category of “Development Program”. By awarding this

trophy, the Brazilian aircraft manufacturer wanted to pay

tribute to the excellence of its best suppliers in terms of

quality, fl exibility, delivery reliability, customer support

and innovation. “From the very fi rst, innovation was one

of the key growth drivers at FACC. We are very proud that

our eff orts gained recognition with this award, confi rming

FACC as the best development partner of Embraer,” said

Mr Stephan when he accepted the award in São José dos

Campos.

Willy Messerschmidt Strasse 2, 88471 Laupheim, Germany Tel: +49 (07392) 16 991 53| Fax: +49 (07392) 96 29 72

E-mail: [email protected], www.enikon.com

EnikonWe are providing preparation work for painting and decorating (washing, puttying and grinding), primer and final coating of aircraft interior components.


ESL SHIPPING

Cool Cruising

By Gabrielle Brown

Finnish company ESL Shipping operates

a versatile fleet across often ice-stricken

seas. CEO Markus Karjalainen describes

how his company maintains its expertise

in such a challenging environment and

discusses notable developments in his

and his clients’ market conditions.

ESL Shipping transpor ts dr y raw

materials in the Baltic Sea region, an

e x t r e m e l y t e s t i n g e nv i r o n m e n t

demanding ships equipped to cope

with sub-zero temperatures. These

ice-strengthened vessels enable goods

to be transported year round and ESL’s

shallow-drafted fleet are capable of

travelling in the region’s notoriously

shallow ports.

In 2009 ESL had a fleet of 16 vessels

and has just recently invested in a new

ship, bigger than any in the existing

fleet and due to be launched in early

2012, so business is clearly look set

to remain strong for ESL. “We own a

large, interchangeable fleet, allowing

us to provide a flexible and reliable

service,” says Mr Karjalainen, though

adding that, “the size of harbours and

depth of shipping channels in the

Baltic Sea sets hard limits on vessel

sizes.” The Baltic region, however,

offers a growing market for ESL, with

opportunities for transporting huge

quantities of raw materials from Russia

as well as consumer and industrial

goods. ESL’s current clients largely

operate in the energy, steel and

chemical industries.

ESL Shipping was founded as a result

of its parent company Aspo, a con-

glomerate of specialised business-to-

bu si ness brands, identifying the

financial benefits of buying its own

ship to transport the coal and coke it

was importing to serve domestic

energy needs in Finland. The MS

Arkadia was bought in 1949 and from

there grew a fleet of ships all equipped

to deal with the unforgiving conditions

of the Baltic. In fact the Finnish mer-

chant navy now comprises 15% ESL

Shipping vessels, which are all manned

by Finnish crews and sail under the

Finnish flag.


ESL, energy, and the environmentI t ’s a n i n te re s t i n g t i m e fo r t h e

transportation industry within the

context of environmental concerns.

There is increasing pressure to reduce

the amount of goods transported via

road, so marine transport appeals as

an alternative where the route allows

it . In addition, shipping’s appeal

increases as ships become capable of

tak ing on larger loads, thereby

operating more efficiently, and as

technological improvements enable

ships’ emission levels to decrease.

Coal continues to make up a large

portion of ESL Shipping’s cargo, so

the business is naturally engaged with


issues surrounding the future of coal

as an energy source. There are some

interesting outcomes to the debate:

should the demand for coal diminish

then ESL is equipped to transport

other energy supplies, such as biomass

fuel commodities. However, with

increasing research into how coal can

be more efficiently used, this reduction

in demand could well be only in the

short term. “The industry now does

not so much question the role of coal

as a source of energy, but rather

focuses on solutions for limiting its

adverse impacts,” says Mr Karjalainen.

Such solutions include recovering

carbon dioxide emissions, research

into which will begin in 2015 in Finland

at the Meri-Pori coal plant. Should this

research show favourable results then

the demand for coal could in fact

increase in the long term.

Supporting steel productionESL Shipping serves numerous steel

industry clients in the Nordic region

for whom they transport not only iron

ore and pellets but also coking gas

and l imestone used in the steel

manufacturing process. With a tight

network of clients in the industry ESL

sai ls long-haul under ful l cargo,

keeping costs down for the client and

ensuring ESL operates at maximum

efficiency. Part of ESL’s commitment

to clients is to follow the ‘just on time’

principal; in the case of steel industry

clients, who rely on small, frequent

shipments, ESL ensures it has a regular,

reliable transport schedule.

Even during the recession ESL Shipping

saw a constant demand from steel

industry clients, and this looks set to

continue for the foreseeable future.

“Our customers in the steel industry

are successful in their own niche

businesses and produce products with

a high degree of added value,” says

Mr Karjalainen.

ESL SHIPPING

Cool Cruising

Preferred supplierof sustainable

ship designs for the Baltic Sea.

Time is not still

So why waste yours on static bilge water treatment?In a pitching and rolling environment, only a dynamic system

like Alfa Laval’s PureBilge offers continuous bilge water

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Even when you are far away from home, you can rely on us to manage your port call quickly and efficiently.

www.wilhelmsen.com/shipsservice

ESL poised to benefit from Tonnage TaxA new Tonnage Tax soon to be introduced by the

Finnish Parliament will effectively mean that ESL

Shipping will be tax exempt. This law is already in

place in numerous European countries, so its approval

in Finland will see ESL’s potential earnings improve.

“It’s important for us to finally be on a level playing

field with competing shipping companies in other

countries,” says Mr Karjalainen.

Specialised successIn 2009 ESL Shipping’s net sales totalled EUR 63.8

million with an operating profit of EUR 14.7 million.

Considering the decline in transported cargo and

overall business environment this was a sound result.

The Baltic Sea is, however, a comparatively stable

market, and by having established such a strong

capability to manoeuvre across the waters whatever

the conditions, together with strong client relations

throughout the Nordic region, ESL Shipping is in an

enviably strong position. “We are well versed in the

features and practices of the harbours we sail to. The

Baltic Sea will remain ESL Shipping’s home market,”

says Mr Karjalainen.


WIENER LINIENModel Railways

With a turnover of 416.9 million euros

gross in 2008, and an increase of 1.34%

in passengers to a record 803.6 million,

Wiener Linien is truly a model railway.

Diane Mannion speaks to the Chief

Communications Officer, Mr Answer

Lang, about the secrets of the company ’s

success.

It was back in 1865 that the fi rst horse

drawn tram passed through the streets

of Vienna, but it wasn’t until 1899 that the

first public transport company was

founded in the city. Wiener Linien, as we

know it today, began in 1949, and after

that date the City of Vienna attained full

ownership. Nowadays Wiener Linien is

still 100% owned by the city of Vienna,

which contributes 30% towards running

costs, with Wiener Linien meeting the

remaining 70%.

Currently Wiener Linien transports 803.6

million passengers, which represents 35%

of all journeys made in the city of Vienna

compared to 32% made by car. This means

that public transport is more widely used

in Vienna than in any other major city in

Europe. This figure continues to grow,

with an increase of 1.34% of users in

2008.

So why is the Vienna transport system so

successful and so widely used by members

of the public? The Chief Communications

Offi cer of Wiener Linien Gmbh & Co, Mr

Answer Lang, attributes this to several

factors. Firstly, public transport in Vienna

is cheaper than in most other European

countries. The second reason is due to

effi ciency as Vienna has a very modern

underground system, which is only 30

years old, and the bus and train services

are frequent. Thirdly, the public transport

system is very accessible. 97% of public

transport vehicles can be reached by

disabled people, and the public transport

system in general covers 96% of Vienna.

Customer serviceApart from the growth of the company,

crucially, in a recent customer service

survey, 92% of respondents indicated that

they were happy with the service provided.

With regard to customer satisfaction, Mr

Lang comments: “Our staff are specifi cally

educated in customer services, and receive

periodical training where the main points

relating to customer services are repeated.”

Mr Lang also believes that a great deal of

the customer satisfaction relates again to

accessibility. Their transport systems are

barrier free and are therefore easily

accessible to the disabled, people with

pushchairs and the elderly.


New U2 Line Plan


WIENER LINIENModel Railways

Representatives from Wiener Linien

regularly meet with other public transport

companies all over Europe to share ideas

on improving systems. When asked what

recommendations he would make to other

public transport companies who want to

raise their standards, Mr Lang advises:

“Customer service is the most important,

and investment in equipment such as

trains and buses to keep them up to a

modern standard. To increase the number

of users there has to be an attractive price

level, and it is important to focus on what

is affordable so that the company can

fi nance the system. Therefore we have to

fi nd a balance; prices cannot be too low

for the company to aff ord them, but they

cannot be too high. I believe that Wiener

Linien are good at getting this balance

right with regard to pricing.”

The effi cient public transport system also

makes Vienna an attractive place for

companies who want to conduct business

there. As Vienna is a congress city, it is

important for people to be able to travel

easily from the airport to the Congress

Centre, and the public transport system

facilitates this.

In 2008 Wiener Linien rose to the challenge

of transporting 1.2 million football fans

that came to Austria for the European cup.

This meant that on match days the number

of passengers increased by up to 800,000.

Preparations for these extra requirements

took place over several years leading up

to EURO 2008 ensuring that the provision

of public transport was a success.


Klip WienWiener Linien is involved in the ‘Klip Wien’

climate protection programme in Vienna.

This programme focuses on a reduction

in CO2 emissions and has set targets for

CO2 reduction. As part of those targets,

by 2020, travel by public transport should

reach 40% of the total transport methods

used in Vienna, and car travel should be

reduced to 25%. The city is already well

on the way to meeting that target as 35%

of all journeys in Vienna are currently made

by public transport.

Apart from its involvement in the Klip

Wien programme, Wiener Linien is also

active in other areas concerned with the

environment. One of its technical measures

is heat storage. So, for example, when a

tram is breaking it develops heat which

is normally lost in the atmosphere, but

the company saves that heat so that it can

be re-used. Another way in which the

company looks after the environment is

by only using buses that have reduced

emissions and, in fact, this is a primary

requirement when purchasing new

buses.

Latest developmentsPlans to extend the U2 line in the

underground network by over 5 kilometres

will bring the total underground network

in Vienna to almost 80 kilometres. This is

the next stage in the company’s proposals

and is already fully financed. This will

include six more stations bringing the

total to 101 stations. Next will be the

extension of line number one to the South,

with six more stations intended. The

company’s plans will take until 2019 to

execute.

With regard to other developments Mr

Lang states: “The most impressive

development of the last years is the

development of a tramway, together with

Siemens, of which the entrance height is

19 centimetres; therefore it is possible to

get into the tram directly from the

sidewalk. These are called ultra low fl oor

(ULF) trams and are great for pushchairs,

wheelchairs and other users.” ULF trams

have been in service for eight years now,

and Wiener Linien will be increasing the

number of ULF vehicles to 300 by 2014.

- Subways

- Tunnels

- Bridges

- Roads, Highways

- Building Construction

- Building physics

- Building supervision

A-1040 Vienna, Mommsengasse 31Tel. +43(1) 505 56 87-0, [email protected]

Tunnel Rannersdorf Subway Vienna


NAC NORDIC AIR AND SEA CARGO

Your Local Nordic Carrier

With a history dating back to 1919, NAC

Nordic Air & Sea Cargo is an establis-

hed company providing clients with a

range of tailor-made logistics services.

Speaking to Gabrielle Brown, Product

Manager Mr Jan Boklund explains how

the company ’s local knowledge and

dedication to meeting clients’ specific

needs - no matter how challenging - sets

them apart from the competition.

Mr Boklund has an exceptionally varied

role and his responsibilities extend from

business development, through quality

control to operations management. Based

in NAC Nordic’s Swedish headquarters in

Jönköping, Mr Boklund is dedicated to

ensuring the NAC brand is represented

and embodied by all elements of the

business. “I ensure that our agents and

clients always receive the best level of

service and that our conduct refl ects all

that NAC stands for.” This is no easy feat

when you consider that NAC provides its

air freight and shipping services to clients

worldwide and has twenty offi ces located

throughout Scandinavia.

Local knowledge servicing clients worldwideWith operations in Denmark, Finland,

Norway and Sweden, NAC makes a point

of exploiting its staff ’s local knowledge

to provide clients with all the benefi ts of

a large organization coupled with the

specialist expertise that comes from

working on a smaller, regional scale. “We

maintain a detailed local knowledge. This

is a key focus for our business. Whereas

our competitors might operate from two

or three offi ces, we have a more diluted,

widespread presence, which means our

staff are familiar with local businesses.”

Without such a comprehensive coverage

of the Nordic region, NAC would not be

able to exploit every possible avenue of

opportunity for its clients. The company’s

specialised local knowledge enables it to

approach each client’s’ requirements

individually, appreciating the opportunities

and limitations that every region provides

and customizing the service accordingly.


Providing a one-stop personalized shopNAC describes itself as being a ‘one-stop-

shop’ meaning its clients should be able

to turn to the company for assistance with

all elements of logistics. “We’ve always

been able to off er our clients more than

a straightforward cargo or freight service,

but this concept of offering a fully

integrated solution for clients has

intensifi ed in the last fi ve years.” says Mr

Boklund who goes on to say that clients

today expect to have only one point of

contact to address all their logistics

needs.

On its website, NAC states that its

philosophy is to ‘identify customers’ needs


NAC NORDIC AIR AND SEA CARGO

Your Local Nordic Carrier

and satisfy those needs for every shipment

handled‘. This objective of treating every

shipment as a special project means that

each transaction is dealt with not by a

formulaic process but instead by

individually probing and exploring how

best to ensure all needs are met. “We are

open to the challenge, whatever it

involves. This is our strength. We rarely

refuse our agents’ or clients’ requests. But

if we do have to decline, we will only do

so once we have investigated all

opportunities. We do extensive research

and planning, and we do so quickly,” says

Mr Boklund.

Another stated aim of NAC’s is to keep

the lines of communication between

themselves and their clients as open as

possible. This is not only applied to existing

clients but also to potential customers,

even if their requirements cannot be met

by NAC at the time. NAC makes a point of

keeping all parties informed and updated,

regardless of the potential for the project

to go beyond the initial research stages.

A globally competitive operationNAC’s primary objective is to fulfil the

requirements of its foreign agents, who

do not have their own facilities in

Scandinavia. It is therefore NAC’s role to

act as their agents’ ’Scandinavian branch’

of operations, and ensure that they are

competitive. “Most of our shipments are

payable abroad - we have shipments from

most of the main exporters here in

Sweden. We have to enable them to

remain competitive, and we continuously

develop our service to be as fl exible and

as accommodating as possible.”

Recently NAC organized for a series of

factories to be transported abroad.

Although it was a complex and involving

task, the company was able to deliver by

utilizing a combination of its air freight

and ocean freight facilities, and of course

its network of around 100 well-informed

staff. “We hope to exceed our agents’

expectations. This means getting back to

them quickly - like we would if we were

a small company - but providing a

competitive service like that of the large

corporation. And whether our clients are

small or large, we off er the same personally

focused service.”

On the horizonThis year will see NAC launch an entirely

new website. “It will give our agents a

proper feeling of being represented by

us,” explains Mr Boklund. This development

is in line with a general sense that business

is on the up – not just for NAC but for

industry across Europe. Whereas 2009 saw

a 35% reduction in turnover for NAC, the

mood for the future is one of optimism.

“Everything’s looking good for this year.

I see growth across industries with all sorts

of exports, even if this growth will be at

a steadier pace than we have come to

expect.”


FreightnetInternational


ALBERT ZIEGLER

Emergency Supplies

Albert Ziegler GmbH & Co. KG produce

a comprehensive range of appliances

and equipment for the fire service, from

engines to hoses, and have been doing

so since1891. Ziegler ’s Sales Director for

Export, Mr Jörg Hitzler, talks to Diane

Mannion about this successful family

owned company.

To purchase a fire engine from Albert

Ziegler GmbH & Co, you can pay anything

from under 100,000 euros up to a

staggering 1 million euros. The price is

not surprising, however, when you

consider the technology that goes into

the most expensive vehicle, the Airport

Crash Tender Z8.

This vehicle is fully equipped with a

hydraulic telescopic boom, which has

electrically swivelling and tilting spotlights,

a remote control monitor on the top of

the vehicle, a piercing unit and a thermal

camera if required. This enables the crew

to access and see into high areas and to

fi ght in-cab fi res on aircrafts by spraying

water inside the cab of the aeroplane. The

water tank carries a plentiful supply

amounting to 13,500 litres, and there is

also a 1,600 litre foam tank. Other onboard

equipment includes a Dynawatt generator,

integrated lights for illumination of the

surroundings, equipment lockers, an

electro hydraulic front winch and a rear

view camera. These are just a few of the

numerous items that are included with

the Airport Crash Tender Z8, but it gives

you a brief glimpse of the sophistication

of these vehicles.

The company Albert Ziegler produces around 600

vehicles a year and these vary in size up

to a tremendous 43 tonnes, which is the


Airport Crash Tender Z8. Nearly all of the

vehicles are custom made, although

sometimes the same chassis is used. This

is bought in from chassis manufacturers

and is often customised for fi re engines.

The range of vehicles is incredible and

these are adapted to suit the purpose, so

for example, the company supplies quick

response light rescue vehicles, fi re fi ghting

vehicles for bush and forest fi res and fi re

fi ghting vehicles for industry, in addition

to the Airport Crash Tender Z8 mentioned

above. Depending on the type of vehicle

quite a few options can be realized, such

as pneumatic light masts, hydraulic

winches, built in generators, roof or

bumper monitors, special foam admixing

systems, CAFS-units and others.

The company was founded in 1891, and

although it started out as a fire hose

weaving mill, it soon went on to produce

and sell hose maintenance and fire-

fi ghting equipment. Nowadays it produces

the entire range of fi re fi ghting apparatus

and accessories including vehicles, pumps,

monitors and hoses, and it supplies fi re

departments throughout the world with

fi re fi ghting equipment and uniforms. The

only item that Ziegler produces which

isn’t fi re related but can be used for fi re

fi ghting as well is the anti-riot vehicle, and

the company has vast experience in this

fi eld. Ziegler’s number one market for all

products is in Germany, which accounts

for 75% of turnover.

Mr Hitzler advised that in terms of size

Ziegler is ranked in the first five fire

equipment producing companies in

Europe and the top 10 worldwide.

Competition is fierce with countless

smaller companies supplying various local

authorities. Although still a family owned

company Ziegler achieved a considerable

turnover of 160 million euros in the last

fi nancial year and income is increasing

steadily. When asked how the company


manages to stay at the top in such a

competitive industry, Mr Hitzler comments

that it is down to: “Good reliability, leading

in quality and being one step ahead in

development.” He also points out that

there are many other successful companies

in the industry.

Safety Because of the nature of the industry

safety is a prerequisite and Ziegler’s

employees go to great lengths to ensure

that their vehicles and apparatus have

integral safety features. For example, they

always mount the superstructure on a

mounting frame which is fi xed onto the

chassis in a secure manner. For many years

the company has received DIN EN ISO

9001 certifi cation and has to undergo

regular audits in order to meet the

required standards.

Fire crews need to ensure that they can

access equipment quickly and safely so

Ziegler vehicles are built with this in mind.

The equipment lockers are arranged in a

way that is practical and makes them easy

to remove. In low level vehicles the side

flap below the drop shutter for the

equipment lockers doubles as a walk-on

ramp, and this has a non-skid surface.

Electronic controls are simple and safe to

operate. The vehicles themselves are

extremely rugged and built to last. They

are also strong enough to take the weight

of fi re crews who sometimes need to stand

on the roof of the vehicle. Not without

reason the company’s slogan is: “ZIEGLER,

we provide safety”.

Innovations Ziegler staff work in close cooperation

with other countries and are continually

improving their products and services.

They also have to follow road regulations

which have changed a lot over the years

with regards to envi ronmenta l

considerations.

In terms of new innovations, Ziegler

unveiled their ALPAS system for the fi rst

time at the Interschutz fair in 2000. ALPAS

stands for Aluminium Panel System, which

is a revolutionary design and has been

hugely successful. It replaces the previous

model of a steel frame covered with plastic

or aluminium, and has a high resistance

to torsion and bending. Apart from its

rigidity, the ALPAS system allows for

ALBERT ZIEGLER

Emergency Supplies

The Quality Connection

New product development, upgrading, improvement:

operating, switching, interfacing and distributing - LEONI your partner for

electric, electronic and mechanical development. Starting from the layout

draft of our electrical circuit, we offer tailor made solutions from assembly

up to installation and also legal and offi cial controls and inspections.

www.leoni-special-vehicles.com

The best connection for special vehicles

fl exibility in customising the design and

the interior fi xtures for diff erent customers.

For Ziegler function is more important

than design but they often get requests

from clients to customise vehicles for

aesthetic purposes.

The company presented other new ideas

at the International Trade Fair Interschutz

2010 at Leipzig in June. (Mr Hitzler was

unable to disclose any details at the time

of the interview as these innovations were

planned to be exhibited for the fi rst time

at the trade fair.)

With regard to future objectives, the

company states: “We strive for consistent

growth through continuous improvement

of our productivity and competitiveness.

Ziegler is the market leader in selected

business segments. Our aim is to further

strengthen our excellent positioning.”

72 June-July 2010Trade & Investment | www.trade-investment.eu

Technology news

Amazing ‘pulse of darkness’ ray tech birthed in US gov labsUS government boffins say they have

invented a fiendishly cunning new kind

of laser running on quantum dots

which, rather than producing pulses

of light, actually emits pulses of intense

darkness.

Unsurprisingly but mildly sinisterly,

the new invention has been dubbed

the “dark pulse laser”. It works using

extremely clever quantum dots which

unlike regular boring quantum dots

are made out of “nanostructured

semiconductor materials” grown in

special US government labs.

“Quantum dots are known for unusual

behaviour,” according to a statement

issued by the labs in question. When

electricity is put into these dots, the

nano cunningness causes them all to

behave like individual atoms and thus

they all emit light at the same frequency

in time with each other – hence it is

coherent laser light.

But that’s not the clever part. The clever

part is this:

The new laser depends on the qdots’

unusual energy dynamics, which have

the effect of stabilizing dark pulses.

After emitting light, qdots recover

energy from within rapidly (in about 1

picosecond) but more slowly (in about

200 picoseconds) from energy inputs

originating outside the qdots in the

laser cavity. This creates a progression

of overall energy gains gradually giving

way to overall energy losses. Eventually,

the laser reaches a steady state of

efficiently and last a long time. The

precious metal platinum has been the

catalyst of choice for most researchers,

but it has several drawbacks: it’s expensive

and it breaks down over time in fuel-cell

reactions. The researchers at Brown have

demonstrated that a nanoparticle with a

palladium core and an iron-platinum shell

outperforms commercially available pure-

platinum catalysts, and lasts longer. In

laboratory tests, the new palladium/iron-

platinum nanoparticles generated 12

times more current than the pure platinum

ones, with the output remaining consistent

over 10,000 cycles - whereas the platinum

models began to deteriorate after 1,000

cycles. Vismadeb Mazumder, a graduate

student and co-author of the study, says

“[T]his is a very good demonstration that

catalysts with a core and a shell can be

made readily in half-gram quantities in

the lab, they’re active, and they last. The

next step is to scale them up for commercial

use, and we are confi dent we’ll be able to

do that.” Their fi ndings were reported in

the Journal of the American Chemical

Society.

repeated brief intensity dips—a drop

of about 70 percent—from the con-

tinuous light background.

Thus the laser, brilliantly, is able to

almost turn itself off and go dark. In

itself this would be rather unimpressive,

but the dark pulse laser goes briefly

dark and then comes back on in just

90 picoseconds. As the dark-pulse can

be measured, the laser is thus a means

of measuring time very precisely.

The boffins of the US National Institute

of Standards and Technology, who

unlocked the secrets of darkness, are

chuffed as ninepence with their new

kit. They consider that it could be

handy in the next generation of optical

atomic ultraclocks and/or superpowered

networking and comms kit of the

future.

Brown chemists repor t promising advance in fuel- cell technology Chemists at Brown University and the Oak

Ridge National Laboratory, both in the

United States, are reporting a promising

advance in fuel-cell technology. Fuel cells

require a catalyst that can operate

72 Junne-July 2010

Arrayit Corporation technology may provide vital clues to detoxification of the oceansArrayit Corporation is a leader in life

sciences and healthcare technology,

reports today that the company has

installed its patented and proprietary

NanoPrint(TM) LM60 Enterprise Level

advance microbial genomics by pin-

pointing the critical role hundreds of

diff erent microorganisms play in various

ocean sub-environments. Oceanic

microbes sustain life on earth by providing

oxygen, nutrients and bioremediation

functions at all ocean depths including

the ocean fl oor.

Arrayit Corporation Executive Todd

Martinsky said, “We are pleased that CSRIO

chose NanoPrint(TM) to further oceanic

microbial research. This information is vital

to global ecology including understanding

and implementing the most effi cient means

of remediating the oil spill in the Gulf of

Mexico.” Arrayit Corporation President Dr.

Mark Schena added, “Ocean bacteria

naturally degrade millions of metric tons

of oil each year by converting hydrocarbons

seeping from the ocean fl oor into harmless

CO2 and H

2O. Arrayit is proud to facilitate

scientifi c research into natural processes

such as these that are keys to neutralizing

massive ecological challenges.”

Microarrayer at the Commonwealth

Scientific and Industrial Research

Organization (CSRIO) in Hobart, Tasmania,

Australia. The CSRIO is supplementing its

next generation sequencing technology

with the Arrayit microarray platform for

additional speed, throughput and

aff ordability.

Arrayit’s microarray platform empowers

the CSRIO to manufacture microarrays,

glass substrates or “chips” containing

microscopic DNA spots that enable the

rapid identifi cation of bacteria and other

microbes present in the Indian Ocean and

Tasman Sea. The Environmental Genomics

Team at the Marine and Atmospheric

Research and Wealth from Oceans,

National Research Flagship is seeking to


“For me the two things in life that I cannot live without are my music and my wonderful six year old son,”

says Ms Sandra Bojić, the Sales and

Marketing Director of M-Profil. Her role

is a demanding one in a thriving com-pany that specialises in the production

of metal components for the construc-

tion industry. This 15 year old company

is based in Croatia and is growing

continually, with plans to expand into

the European market. Since M-Profil was

founded the staff has increased from

4 people to 520, and the company is

constantly developing innovative new

products.

Sandra Bojić, the Sales and Marketing

Director of M-Profi l, is 37 years of age, and

was born on the Adriatic coast, in the town

of Split. Interestingly, this town was also

the birth place of the Roman Emperor,

Diocletian. Ms Bojić lives with her partner

and son in a house with a garden.

As well as being responsible for the

marketing strategy for the whole of

M-Profi l, Ms Bojić participates in meetings

as part of a supervisory board and is a

member of the European project ‘EASIE’

(Ensuring Advancement in Sandwich

Construction through Innovation and

Exploitation). Ms Bojić combines her busy

work schedule with caring for her six year

old son.

Here she describes a typical day in her

life:

“My alarm usually wakes me at 6.15 am,

and I then get my son ready for kinder-

garten. We eat breakfast as a family; my

son, my partner and me, and this usually

consists of a quick fruit snack. By 6.50 am

I am on the road and on the way to the

offi ce. I dress formally for work and mostly

wear Croatian brands.

When I arrive at work the fi rst thing I do

is check my emails. I communicate a lot

by email, but also by telephone and face

to face when dealing with colleagues and

clients. Attendance at meetings is also a

signifi cant part of my role, and I believe

that excellent communication and

delegation of tasks is very important.

I enjoy the diversity of my job and the

dynamics involved. I spend much of my

work time developing our customer

network and dealing with marketing

issues. My position involves a degree of

travel by car and plane, which I enjoy,

although I do miss my family if I am away

for lengthy periods.

At 10 am I usually take brunch, which I

buy from our outsourced canteen. I fi nd

it relaxing to listen to the radio during

brunch, but for me the most important

meal of the day is lunch. I eat this with my

family usually at about 4pm as I fi nish

work at 3.30 pm on most days. I cook

seasonal food for my family and we gather

around the table and discuss our daily

activities during the meal. On special

occasions we will eat out at a restaurant

when I will indulge in the occasional glass

of wine. I also have a sweet tooth and a

nice piece of quality chocolate or some

ice cream is always a welcome treat.

In the evenings I like to set time aside for

my son, when we do diff erent activities

such as drawing, painting, writing or

simply playing children’s games. We don’t

watch TV as a family and I catch up with

the news by reading e-newspapers. I fi nd

that I don’t have enough time for hobbies,

but on those rare moments when I do

have some time, I like to do clay modeling

and I fi nd it helps me unwind at the end

of the day.

At weekends we spend time with friends

and I occasionally go to the theatre with

my best friend. I also like to go biking now

and again and in the Winter I go to ‘Tai Bo’

classes.

As each working day draws to a close

I usually summarize my day and set goals

for what I want to achieve tomorrow.

I don’t read novels at bedtime. In fact, my

current reading material is a parenting

book that helps me to focus on how to

reach a balance between being a great

mum and being successful in what I do

for a living.”

The support of her family is a constant in

Ms Bojić’s life. She has a number of

passions, one of which is the Mediterranean

lifestyle. Ms Bojić was also heavily

infl uenced by the two and a half years she

spent in London in the UK. By far her

biggest passions though are her family

and her music, as she says, “for me the

two things in life that I cannot live without

are my music and my wonderful six year

old son.”

Her motto in life is, “live and let live a great

life”. When summing up the characteristics

that define her as a person, Ms Bojić

comments that they are, “strong will and

perseverance.”

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trade & investment 06-07-2010

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