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Energy Management Solutions and “C” Level Attention to Energy Efficiency NGA Policy Acadamy Meeting Brad Runda, Manager Energy October 16, 2012
Energy
Management
Solutions and “C”
Level Attention to
Energy Efficiency
NGA Policy
Acadamy
Meeting
Brad Runda, Manager
Energy
October 16, 2012
Agenda
Saint-Gobain - Who we are
Energy Management Solutions
“C” Level Attention to Energy Efficiency
Saint-Gobain – Who we are
Worlds largest building materials company, Headquarters in Paris
Global sales 2011 $58.6 B; 195,000 Employees
North America Headquarters in Valley Forge, PA
North America 2011 : $7.7 B sales; 19,000 Employees
135 manufacturing plants throughout North America; Four Divisions; 18 business units. Building materials distributor with more than 160 outlets
Building Materials
Innovative Materials
Glass Containers
Building Materials Distribution
Saint-Gobain North America Sites
#2 in glass containers in US
15 plants, 4,371 employees
Only glass company with ENERGY STAR labeled plants
Glass Packaging
Innovative Materials
#1 or #2 in most activities
67 plants
6,978 employees
Abrasives
16 plants
2,362 people
Ceramics
18 plants
1,685 people
Performance Plastics
18 plants
2,091 people
Crystals
5 plants
274 people
ADFORS
5 plants
382 people
Glass
5 plants
184 people
Construction Products
Leader in US and Canadian markets
58 plants
5,724 employees
Roofing
13 plants
1,435 people
Vinyl
Siding
9 plants
1,188 people
Fiber Cement
Siding
3 plants
276 people
Pipe &
Foundations
2 plants
180 people
Gypsum
20 plants
1,199 people
Ceilings
4 plants
358 people
Insulation
7 plants
977 people
EXTERIOR INTERIOR
$10,000,000 Payroll
$ 380,107 state withholding taxes
$ 85,898 unemployment taxes
150 employees
2 Manufacturing Sites (Saint-
Gobain Abrasive Materials and
ADFORS)
4 Distribution Sites (Norandex)
Saint-Gobain in Alabama
$2,053,249 income and franchise taxes
$1,010,031 state withholding taxes
$285,384 unemployment taxes
240 employees
110 more to be hired
6 Manufacturing Sites (NorPro,
CertainTeed Roofing and Gypsum,
Saint-Gobain Abrasives)
1 Under Construction (NorPro)
2 Distribution Sites (Norandex)
Saint-Gobain in Arkansas
$ 44,500,000 Payroll
$ 2,126,044 state withholding taxes
$ 555,766 unemployment taxes
635 employees
4 Manufacturing Sites (Verallia,
Saint-Gobain Abrasives,
CertainTeed Fence Deck and
Rail)
5 Distribution Sites (Norandex)
Saint-Gobain in Illinois
$ 4,500,000 Payroll
$ 221,652 state withholding taxes
$ 81,649 unemployment taxes
72 employees
1 Manufacturing Site
(CertainTeed Gypsum
2 Distribution Sites (Norandex)
Saint-Gobain in Iowa
Agenda
Saint-Gobain - Who we are
Energy Management Solutions
“C” Level Attention to Energy Efficiency
Energy is a Primary Component of
our Overall Business Strategy
Ambition
Worldwide leadership in the habitat and construction markets, with innovative solutions to meet the fundamental global challenges of growth, energy and the environment
Setting an internal example for energy efficiency is key to our business. It provides benefits in:
Cost Savings
External Marketing Activities
Process Understanding and Improvement
Environmental Objectives
Energy as a part of Saint-Gobain’s Strategy -
Sustainability
We intend to invent and build the house of the future; a house that is as efficient as possible to meet the ongoing sustainable development needs of mankind.
Products, services
Investment, people/expertise, jobs
Internally, we want to be exemplary in our behavior, as part of our strategy for Operational Excellence.
We associate improving energy efficiency with our overall environmental responsibility.
Energy efficiency improvements are the most cost effective way to reduce greenhouse gas emissions.
Saint-Gobain
North America
Corporate
Energy Policy
25/10/2012 16
Critical Components for Success
As part of our centrally managed energy program, all business
units require adoption of these strategic principles in order to
maximize and sustain savings:
Adoption of energy reduction goals at a business unit level
and at a facility level, tied to incentive compensation
Mandate of facility metering to identify savings
opportunities and consumption reduction
Appoint Energy Champions at Business Unit level and
creation of Energy Teams at the facility level
Budget for energy related projects and services
25/10/2012 17
Resources
Saint-Gobain Energy Manager Compressed Air services
Combustion services
Lighting Turnkey
Lighting Direct Purchase
Motor audits
Power Factor Correction
Metering
Steam
HVAC
CHP/WHR
Energy Purchasing
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Energy Portal Content
Technology Information
Vendor Presentations
Internal Success Stories – Projects and Kaizens
ENERGY STAR Partner Presentations
Energy Incentive Programs
Energy Technology Update
Metering - Standard & Basic Equipment
Process Improvement
Procurement and Procurement Strategy
Links – ENERGY STAR, DOE
Energy Conference Presentations
19
2012 Energy Conference Agenda
Q&A With CEO
Recognition for Outstanding Achievement
Energy Portal Review, Technology Update
External Speakers, including ENERGY STAR Partner company
Plant Presentations:
Engineering Decisions made with New Plant, Shutdown Procedures, Business Unit Energy Activities (two businesses), Clean Rooms, Kiln Projects, Metering Projects, Pump Changes, Culture Change Activities, Product Savings due to Improved Energy Control, Kaizen Success Story
Training: Combustion; Heat Recovery
Plant Tour
ENERGY STAR – Voluntary Program
Saint-Gobain Participation
Active participant and supporter of the program
Proven, effective techniques guided by Industry
Valuable tools and program resources
Industry collaboration
Valuable recognition
DOE Better Buildings Better Plants –
Voluntary Program
Saint-Gobain – Challenge Partner
Committed to 25% improvement over 10 years
Improved access to ORNL
Energy efficiency ideas
Advanced manufacturing techniques
Assessments and technical collaboration
Saint-Gobain as source and resource for expertise.
Its about people and jobs
US Housing Starts April 2012 = 516K
1/2000 1/2002 1/2004 1/2006 1/2008 1/2010 1/2012
2200
2000
1800
1600
1400
1200
1000
800
600
400
(1000’s)
Thanks for the Great Advice, But…
Plants designed to run 24X7
Temporarily or permanently closed
Operating as little as 4 days per month
Reduced shifts
Reduced technical resources available
Reduced and limited capital available
Internal Challenges
Efficiency Success Despite Challenges
Two Approaches: Culture Change and Project
Culture Change: Strong focus on Low-cost / No-cost initiatives
Near Term
Target ‘Low Hanging Fruit’ First
Easy to do, immediate savings, keeps people engaged, establishes the proper baseline
Project: Capital investments to improve infrastructure
Longer Term
Traditional utility incentive programs clearly encourage energy efficiency projects.
Do incentives make plants and companies more profitable and more likely to employ people?
Incentives are often viewed as state and utility investment in energy efficiency, but they are made with industry money diluted by overhead and utility profits.
Higher rates make it less likely for a company to invest in a plant, less likely to grow jobs, less likely to remain competitive.
Industry is required to pay twice to receive incentives – first in the rates, then via a capital investment.
Industry prefers inducements that promote profitability and job growth, not cost increases.
Incentives – Love Hate Relationship
Agenda
Saint-Gobain - Who we are
Energy Management Solutions
“C” Level Attention to Energy Efficiency
United States Viewpoint
Fundamentals Stay Strong
Innovation remains a distinct U.S. competitive advantage (energy)
Deep entrepreneurial culture
Energy related products and initiatives
Huge appetite for business investment and risk taking
Quality of graduate level education
Ability to quickly and cost-effectively react to business conditions (example: reaction to the 2009 crisis)
North America: Conclusions
A complex, diverse economy with significant growth potential
A region where many complex variables are at play at the economic, political, social and market levels
Where Saint-Gobain’s diversity of portfolio, markets, technologies offers unique ability to be nimble and capitalize on the shifting trends
Will continue to be a core region that generates value and ideas for the larger group
A bright future
“C” Level Attention to Energy Efficiency
Success sells!
Successes lead to increased senior management support for greater attention in energy efficiency
Capital
Resources
Strategy
Leverage the credibility from results of low cost initiatives and increased awareness into funding for capital investments.
Credibility over time equals trust
“C” Level Attention to Energy Efficiency
Saint-Gobain’s 2011 Energy Savings equate to the energy required to produce:
836 million typical glass containers
Shingles for new roofs on over 1.1 million typical houses
Insulation for 163,000 typical homes
Four year improvement of 11.9% energy-per-unit
Ancillary benefits
Energy Related Communications Headquarters
CEO Letter
CertainTeed Advertisement
Customer Event
“C” Level Attention to Energy Efficiency
0
10
20
30
40
50
60
70
1 2 3 4 5
Do
lla
rs
Year
Energy Savings
Annual Savings
Aggregated Savings
Questions?
