PREMA Profitable Environmental Management PREMAnet e V Introduction

PREMA - Profitable Environmental Management ©PREMAnet e. V.

Introduction or: Lessons learned • Over 30 Years of „saving the environment“ tells us that the topic „Environment“ should not handled isolated and theoretical ©PREMAnet e. V.

Introduction or: Lessons learned • Over 30 Years of „saving the environment“ tells us that the topic „Environment“ should not handled isolated and theoretical but combined and practical ©PREMAnet e. V.

PREMA Profitable Environmental Management developed by : GIZ - Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) Gmb. H - German International Cooperation - implemented by: PREMAnet - Association of licensed trainers financed by: BMZ - German Ministry for Economic Cooperation and Development ©PREMAnet e. V.

Countries where PREMA has been implemented Europe: Germany, Rumania, Montenegro, Croatia, Bulgaria, Macedonia Centralamerica: Mexico, Costa Rica, El Salvador, Jamaica, Cuba, Guatemala, Nicaragua Latin America: Brazil, Bolivia, Chile, Ecuador, Peru, Venezuela, Uruguay Asia: Philippines, Indonesia, China, Vietnam, Thailand, India, Sri Lanka Africa/ Middle East: Zimbabwe, Zambia, Republic South Africa, Kenya, Nigeria, Algeria, Tunisia, Morocco, Ghana, Jordan, Egypt in total: > 40 countries ©PREMAnet e. V.

PREMA = triple win PREMA means a triple win for companies Economic efficiency Cost savings and increase in productivity Less waste, air emissions and effluents Environmental performance Enhanced capacity to implement changes Organisational Learning ©PREMAnet e. V.

Non-Product Output (NPO) Input Process Output desired final product Raw material Energy generation of NPO dis po Water Input-costs of NPO + Processing. Costs of NPO + sal of NP O Disposal. Costs of NPO Non-product output (NPO) = 10 -30% of total cost of production Total NPO-costs NPO = all material, energy and water which is used in the production process but does not end up in the final product. ©PREMAnet e. V.

Examples for Non-Product Outputs (NPO) • • • • Raw materials not up to requested quality standards Auxiliaries Rejects/ defects and costs for reprocessing Wastes (solid, liquid, toxic, non-toxic) (Waste) water Energy Emissions (including noise and odours) Losses in stock (due to storage conditions) Losses during manipulation and transportation (intern, extern) Packaging materials (with little exceptions) Client reclamation and client retours Losses due to insufficient maintenance Losses due to accidents Virtual NPO (opportunity costs = missed production) Production capacities used for reprocessing Machinery standstill times ©PREMAnet e. V.

Model NPO Flow Chart The main input appears on the top (in blue) Raw Material Non-Product Output (NPO) is shown on the right (in red) Additional inputs are shown on the left (in blue) . . water m³. . . . . k. Wh energy auxiliaries. . . . kg water. . . . m³ energy. . . . k. Wh auxiliaries. . kg water. . . . m³ energy. . . k. Wh auxiliaries. . kg waste water ……. . . m³ atmospheric. . . m³/kg emissions waste energy. . . k. Wh solid waste. . kg Production step 1 Intermediate Product 1 waste water …. . m³ atmospheric…. m³/kg emissions. . . . kg waste energy …k. Wh waste water. . . . kg m³ solid atmospheric. . . m³/kg emissions. . . . kg waste energy. . . k. Wh solid waste. . . kg Production step 2 Intermediate Product 2 etc. Production step 3 The final product is shown at the bottom of the process (in green) Final Product 3 ©PREMAnet e. V.

PREMA Cycle of Implementation 1 Flow analysis 6 2 Integration in company structure 5 Implementation of measures 4 Analysis of costs / environmental impact 3 Analysis of Causes Development of measures ©PREMAnet e. V.

What are the elements of a PREMA programme? PREMA is a 6 to 8 -month programme for innovation teams from medium-sized companies. Network meeting ~8 Network meeting ks e we Implementation of measures s w k ee Evaluation & Integration Cost Management (Eo. CM 2) Development of measures company visits by trainers Cost Management company visits (Eo. CM 1) by trainers Analysis and first measures Good Housekeeping company visits by trainers (GHK) ~8 ©PREMAnet e. V.

Metal industry China Substitution of raw materials achieves significant savings Procedure in the company From low quality The problem: raw materials… Low quality raw materials required three additional preprocessing steps, which lead to high rejects rate, energy losses and wastewater discharges The measures: NPO calculation helped the company to realize that it is better to pay higher for better quality raw materials than to pay more for the three preprocessing stages n Economic savings n Annual net savings: approx. 2. 5 Mio. € Additional costs: 250, 000 € n n Environmental impacts n Acid wastewater discharges are reduced by approx. 30% n Organisational development n Establishment of an internal PREMA team Stimulation of PREMAoriented re-assessment of additional processes . . to high quality steel n ©PREMAnet e. V.

Carpentry Germany Reorganisation of product range offered Procedure in the Company The problem: Cut according to customer requirements High amount of waste, since the timber cannot be optimally cut. Achieved environmental benefit • reduction of timber waste by 4 -5% • reduced resource (wood) use Economic benefit • investment costs: 1, 000 € for the extension of the storage room • annual saving: 15, 000 -30, 000 € through the reduction of raw material costs by 4 -5% • payback period: < 1 month The measure: Production of various pre-defined cut sizes for standard parts (steps and banister bars), which are stored in clear arrangement Organisational improvements Optimised use of timber • Increased awareness of the significance of the raw material wood and its costs among the staff ©PREMAnet e. V.

Food manufacturer China – Temperature control for full production during all seasons Action taken within the company The Problem and its Causes • High energy losses due to lack of insulation • Unreliable system for temperature control made use of main production unit during summer or winter impossible The Idea • Thermal isolation of all operating parts and of the factory building • Refurbishment of the production unit, installation of effective temperature control Economic benefits • Investment costs: 113, 636 € • Annual net savings: 39. 770 € (during the 1 st winter = 0, 5 year) • Payback period: app. 17 months Environmental benefits • Decreased energy losses • Less air pollution per amount of product Organisational benefits • Improvement of overall management capability and of professional level throughout the company Occupational Health & Safety Improvements • Improvement of health standards in order to comply with HACCP requirements

Food manufacturer China – Reduction of solid waste through incentive system Action taken within the company The Problem 3 % of bottles broken during filling process The Idea 2 % loss of glass bottles accepted by standard Application of a new policy costs whole company absorbs costs Economic benefits • Investment costs: None • Annual net savings: 972 € (if loss is reduced from 3 % to 2 %) • Payback period: immediate 2 % or more losses 2 % or less bottles broken additional costs, if more than 2 % benefit Filling unit absorbs additional costs Organisational benefits • Enhanced responsibility of the work unit and better selfmanagement 50 % filling unit staff 50 % company Environmental benefits • Reduction of solid waste (broken bottles)

Chemical manufacturer China Recycling of water for steam production (closed circuit) Action taken within the company The Problem and its Causes The Idea 15 % of the water used for steam production was directly released as waste water into the watertreatment plant Economic benefits • Investment costs: 477 € • Annual saving: 7, 070 € • Payback period: 0. 8 months Installation of a closed water circuit by rehabilitating existing tubes and pumps The new system of water re-cycling Environmental benefits • Less water consumption Organisational benefits • Staff learned to manage water in a closed circuit

PREMA® implementation in China Tianjin Changzhou/Yangzho u Hangzho u Guiyang ©PREMAnet e. V. 17

Results achieved through PREMA® in China n 11 training programs implemented in 5 cities n local partners: Environmental agencies, Productivity Promotion Centres, Consulting firms n 64 enterprises: with about 12 - 1, 300 employees n implemented measures: 840 n investments: 57. 7 Mio. CNY ≈ 5. 77 Mio. € n net economies per year: 123. 7 Mio. CNY ≈ 12. 37 Mio. € n average payback period: 5. 2 months ©PREMAnet e. V. 18

Realised economies Energy Water Steal * billion Potential economies in Chinese enterprises through PREMA ©PREMAnet e. V. 19

Which results could be achieved with PREMA®? Type of measure: Analysed Case Studies: 296 from 22 countries and 53 sectors ©PREMAnet e. V.

Which results could be achieved with PREMA®? Investment costs (US $) Analysed Case Studies: 296 from 22 countries and 53 sectors ©PREMAnet e. V.

Which results could be achieved with PREMA®? Payback period Analysed Case Studies: 296 from 22 countries and 53 sectors ©PREMAnet e. V.

Which results could be achieved with PREMA®? Environmental benefits (n = 348 effects) ©PREMAnet e. V.

Instruments belonging to the ‘PREMA family’ • Good Housekeeping (GHK) (with different check lists: …. ) • Environmental oriented Cost Management (Eo. CM) • PREMAplus • Sustainable Management of industrial Areas (SMIA) • Profitable Social Management (PSM) • Chemical Management (CM) ©PREMAnet e. V.