And, as the supplier's role has changed, it has gone beyond providing a piece of equipment or a commodity product. Often, the supplier is seen more as a partner with contracts tied to measured and documented performance on quality and production volume. With producers' customers also focusing on their environmental footprint, suppliers also find the need to quantify and communicate environmental impact related to water, energy, air, waste, safety and asset management.
Nalco, an Ecolab Company, is one such company, with more than $800 million in sales annually across the papermaking spectrum. Although perhaps most well known as a chemical supplier, it has evolved such that technology and environmental sustainability have both become critical parts of its offerings by introducing an eROITMvalue creation approach. The eROI program documents and communicates both quantified environmental and financial results delivered to customers. This approach highlights the achieved results that Nalco products and services deliver when increasing efficiencies while minimizing natural resource consumption.
In pursuit of this goal Nalco has engaged its Research, Development & Engineering (RD&E) functions to innovate in a new way - Cradle to CradleTM, as opposed to Cradle to Grave. Within this model (brain child of Bill McDonough, etc.), Ecolab is working to move from eco-efficiency to eco-effectiveness, mimicking nature to ensure that little to nothing is wasted.
In the industry right now, there are three trends emerging: structured demand, consolidation and globalization. The first shows graphic paper demand finally decoupling from GDP because of the growth of electronic media. Packaging demand follows the manufacturing footprint. And, of course, demand for environmental sustainability may trump all as consumers demand more transparency with operations.
Consolidation can be a two edged-sword for suppliers depending on reputation with acquired companies. To Nalco, globalization means aligning and growing with its customers. This involves focusing on key accounts (customers Nalco believes will be in the "fight" for the long-term) and the number of applications per site.
In 2012, the emphasis is on Brazil, Russia, India and China areas. The company invests 2.2% of sales in RD&E, about $80 million this year and it tries for a vitality rate of 25-28%, that is, the number of its products invented within the past five years.
In this era of sustainability, Nalco's eROI approach is critical to help producers substantiate their sustainability commitment and raise the bar to improve the industry's environmental reputation. Richard Bendure is group vice president, Americas. He is also responsible for global marketing and technology for the paper and water sectors.
Productivity had to increase but costs needed to come down. "It was the raw material piece we emphasized: brightness, strength and reduced fiber consumption," Bendure adds.
Raw material such as water, fiber and recovered paper have become more expensive and, because making paper is the most water intensive process in the world, when water use is reduced (as well as energy and virgin fiber), the interaction of the materials becomes more complicated.
"In 2009," Bendure continues, "despite being the world's largest water treatment company, we did not have a comprehensive approach to help customers reach their objectives in reducing water consumption, etc.
"We talked with all our customers, not just those in pulp and paper, and pulled out some themes. We linked what we already did and took it to the next step, communicating our eROI value consistently and concisely. We knew we needed quantification of the result. Automation and control has enabled us to measure," Bendure explains. "That was the huge step, beyond the buzzwords, to day-to-day improvements of the inputs."
To execute the eROI value creation mindset, Nalco uses a process called Create and Maintain Value. Bendure says it is all about understanding the customer's goal (e.g., reducing energy costs by 5%) and understanding it at a site level. "We will build it into a plan for that site and then gain written agreement from the customer on the initiative. And then, every quarter, we quantify the results against the target. This drives our behavior as the supplier."
Most industrial processes, particularly pulp and paper, are highly variable. Bendure says this is when the combination of eROI results and technology work best. Understanding the variability is the key to being able to recognize the economics, he adds. "The solution on Day 1 may not be the same for Day 2. You need to connect the variability to automation. Therefore, the solution can adapt to the scenario. Automation and technology are the keys."
To be successful, a supplier must learn a customer’s business “inside and out”
Grade by grade
To those involved with specific paper grades, eROI documentation has numerous touch points: paper machine efficiency, chemical, water and energy savings, filler use, grade development, air quality and even safety.
It also ties in to reducing a customer's total cost of operation. For example, raw material cost is still about 50% of a mill's total spend. This is followed by water and energy at more than 21%. This of course may vary based on the grade and processes.
"We try to ensure that everyone understands the interrelationship between mill processes and the effect a change in one process area can have in other downstream mill processes. We look at the mill holistically," explains Steve Hoefs, senior industry development manager.
On the board and packaging side (containerboard and cartonboard), Nalco's Agenda 2020 goals are to help mills reduce energy intensity by 25%, reduce fresh water use by 50%, develop new, sustainable packaging and achieve a 20-50% improvement in weight performance ratios.
"It can be difficult to reach the goals for board and packaging because of the lower quality recovered fiber available," says Brian Duffy, senior industry development manager, board and packaging grades.
Still, there is a "show me" aspect to it. Paper properties and results remain the end game for producers. "You have to be able to show them process variabilities they were not aware of," says Duffy and his colleagues. "We attempt to learn our customers' businesses inside and out, working on-site as part of their teams," adds Duffy. "We've led the industry in developing solutions and services that help papermakers operate their businesses more effectively. Through the CMV process we have trained their employees, improved their efficiency and conserved resources. Ultimately, we solve the problems no one else could see."
Based on customer demands, some of the big retailers are driving these developments, demanding their suppliers use less packaging. The next generation board and packaging will need to have an improved life cycle, lighter weighting, which, of course, is tied to environmental compatibility and improved sustainability.
In the graphic grades, David Sirois, senior industry development manager, paper, global graphic grades, points out that there are significant differences in the drivers for each region. In Asia, the focus is on ash loading, strength improvement, increasing the use of high-yield pulp and reducing costs. In Latin America, it's all about asset productivity. In North America and Europe, perhaps reflecting the relative age of the mills, asset productivity, cost reduction and grade development are emphasized.
Sirois, and the other grade specialists, pointed to the new technologies that Nalco has developed (see sidebar).
Sirois spoke of the PARETO Mixing Technology. "It's not a silver bullet," he stresses. "If there is bad chemistry, you'll have well mixed bad chemistry. You need to add the right chemicals at the right feed point. It allows the use of process water as the injection fluid for improved mixing of the additive and savings in water and energy."
In tissue and towel, Nalco separates the sector into the premium and value (away from home or AfH) grades. Premium grades are sheet property driven: strength, softness absorbency, quality (no odor). The value grades are more cost driven, where resource and fiber management are key. In both, as with almost everything else, sustainability is an important player.
Chris Futral is global strategic business manager, tissue and towel grades. Even in China, Futral notes, where in restaurants it still may be a luxury to receive a paper napkin, with the rise of the middle class, customers are becoming more critical of tissue properties.
Futral labels Nalco's offerings in the sector: "from the river to the reel," that is incoming water treatment to effluent treatment.
Nalco is putting a big effort in developments to help packaging grade paper producers
For the pulp and paper industry, sustainability often meant: "We grow trees." How does a supplier help its customers get beyond that? Emilio Tenuta, vice president, corporate sustainability, says industries are in a continuum. "Before sustainability, performance was the driver ("Always Deliver"). Over time, as sustainability became a bigger driver, it was a case of doing more with less (Total Impact). Still, the producer had to Always Deliver. Over time as consumers became more aware of environmental issues and demanded more of producers, Business to Business dealings became more closely aligned with Business to Consumer dealings. "Different industries may be in different places, but they are all moving in the same direction," Tenuta adds.
This is the Positive Impact end of the continuum. "We are moving from conservation to stewardship; the kind of societal impact you make where the whole supply chain is involved. What you do or supply does affect others."
This total impact principle has three components, according to Tenuta:
- Being credible with its own internal operations;
- The eco-efficiency it drives for its customers;
- The societal impact it makes.
This is a type of ripple effect. "If water is the issue, what is the impact of our solutions downstream?"
To Tenuta, the definition of sustainability differs not only industry by industry, but customer to customer. "It's doing the same with less consumption. In some respects, it has become a ‘greenwash' word. It needs to become a behavioral change."
In the end, though, Tenuta says that sustainability cannot "be void of the economic component. That's why our eROI value approach is so important. Are we driving value? Will it provide a total impact? In the end, what's good for the environment usually makes good business sense."
Conversely if one is a market leader, Tenuta adds that chances are, "You'll have the right things going for you. Companies want to be more transparent. Show not that what we've done is less bad, but what we've done has a positive impact to their bottom line and society."
What are these technologies?
|To improve machine runnability and operating efficiency, there is 3D Trasar Technology for Boilers. In one tissue application, the technology was installed in the feedwater system to monitor deaerator mechanical performance and optimize the feed of oxygen scavenger to treat to the level of oxygen present in the system and to minimize feedwater corrosion. It helped the mill save 5,000 gal/day of water and saved more than $60,000/yr in natural gas use.
The 3D Technology can also be applied to cooling system operation and membranes. In the former, it helped a paper mill in northern Europe reduced its wastewater volume by almost 20,000 m3/yr reducing treatment costs by more than Euro 10,000/yr. In the latter, it helped a large graphics paper mill in China reduce fresh water intake by more than 250,000 m3/day and reduce chemical costs by more than $75,000/yr.
METRIX technology for strength and productivity helped a linerboard mill reduce its basis weight resulting in a savings of more than $1 million annually.
FillerTEK technology helps raise sheet filler content while maintaining sheet properties. One mill increased its filler content by 4%, saving more than 20,000 tonnes/yr of fiber. This also led to a reduction in dryer steam consumption for a combined savings of over $15,700,000/yr. The OxiPRO microbial control technology provides real time monitoring and control of microbial contamination. Customized to the individual mill, it led to a production increase of more than 6,000 tonnes/yr for one uncoated freesheet mill in Asia while reducing biocide costs by more than $400,000/yr for a total savings of over $1,300,000/yr.
These and other Nalco applications have been featured in PPI in recent issues (e.g., PPI, July 2012, p. 40; PPI, December 2011, p. 41.