Longwall Mining Technology

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

“We owe our success to

our staff, customers Shell to axe 1,000
jobs as profits
and shareholders,” plunge 69%
says Gert Schwarzbach,
Managing Director, Russia unveils
0Hertz Offshore.
50Hertz
its first stealth
fighter jet

Where Is the End

of Car Recalls?
Customized Logwall Systems

Only Bucyrus can offer complete customized longwall systems for all seam ENTSO-E
thicknesses with integrated state-of-the-art control for maximum reliability and
performance. Whether for plow or shearer, all components work together perfectly, TENNET
giving you enhanced control of cutting, conveying and roof support. Advanced
visualization and unprecedented automation further boost productivity and safety.
ABB
HAMON
Longwall systems engineered with excellence.
GN NETCOM
Bucyrus International, Inc. is a world leader in the design and manufacture of high-
performance machinery and equipment for the surface and underground mining
E.ON SWEDEN
industries with a workforce of over 7,000 employees worldwide.

Bucyrus Czech Republic, headquartered in Ostrava, is a main production facility for

longwall product components and a customer service center for providing the Czech
mining industry with on-site service, repairs, overhauls, and spare part management.

The company also pursues extensive activities in comprehensive supplies, assemblies Drahomir Ruta
and modernizations of technological equipment for a number of industries.
Managing Director
and President
www.bucyrus.com of Pražská energetika, a.s.
Reliability at work

TI_2010_02_obalka.indd 1 19.3.2010 14:33:28

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

Getting more and more energy from fewer and fewer resources is
our never-ending mission.
In addition to excellent availability and utmost reliability, efficiency is a key requirement when it comes to supplying
energy for the world’s steadily growing megacities. Basically, it’s all about making best use of all resources. We apply this
principle across the entire energy conversion chain to take efficiency to totally new levels. Our new 800 kV transformer,
for example, makes possible the efficient transmission of electric energy in the gigawatt range over distances of 1,000
kilometers and more. And our new generation of gas turbines makes combined cycle power plants deliver a record-
breaking efficiency of more than 60 per cent. www.siemens.com/energy

Answers for energy.

TI_2010_02_obalka.indd 2 19.3.2010 14:34:45

 Powerful Connections

As we settle into the second decade of the third
millennium, there is a definite sense that it’s time
to get back to business. The last ten years saw
astounding developments in technology which
changed the way in which we do business forever.
There are fewer boundaries between us: with tele-
video conferencing I can as easily meet with a cli-
ent thousands of miles away as I can with my col-
league in the next room. With smart phones, 3G
and Wi-Fi I can work anywhere, any time. So, now
we are faced with the challenge of putting this cap-
ability to good use. How are we, the European
business community, going to pull together and
take best advantage of our new-found ability to
easily communicate with one another?
However, whereas virtual boundaries have been
lifted, physical ones have not. Just a few years ago
hopping on a plane to attend a transatlantic con-
ference was considered a basic business cost, but
both budgetary pressure and a greater awareness
of the environmental impact of air travel has forced
us to think twice before packing our suitcases. In
all, we are being forced to look at the world in a dif-
ferent way, and the impact that environmental
concerns now have on the way we do business can-
not be underestimated. Over the last few months
I have been speaking with various players in the
European energy sector, from those working close-
ly with the technologies that control the flow of
electricity to chief executives pioneering new mar-
ket models. One subject prevails, and that is the
concept of removing cross-border barriers to en-
able countries to cooperate and invest in greener
energy solutions.
Renewable energy is not an easily controlled,
transported or marketable commodity. The grids
designed to transport conventional energy must
be adapted and developed to cope with the irregular
and variable quantities of green energies. Each re-
newable source has its own characteristics that
must be balanced against another – wind is vari-
able and unpredictable; hydro is consistent. There-
fore countries have to unite to take best advantage
of their own particular resources, and connect
their systems to enable energy to be distributed
and stored at maximum efficiency. The obstacles
facing all players in the energy market across Eu-
rope are immense, both in importance (it’s a life or
death situation for the planet) and complexity. With
such a challenge at hand, it’s exceptionally gratifying
to know that all over Europe business is saying “the
only option is to work together.”
Gabrielle Brown

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

Editor in Chief : Lucia Balog Writers: Diane Mannion, Philip Bradbury, Ronan O’Connor
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Trade & Investment | www.trade-investment.eu 3 February-March 2010

TI_2010_02_final.indd 3 19.3.2010 13:32:41

 Content

/ Editorial
Powerful Connections .....................................................................................................3

/ News from industry sectors

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

/ Story

Where Is the End of Car Recalls?

/ Companies
ENTSO-E | The 2020 Vision ................................................................................................34
50HERTZ TRANSMISSION | Holding the Balance of Power ............................................. 38
TRANSELECTRICA | Green Electricity ...........................................................................44
TENNET | Electric Equilibrium for Europe .........................................................................50
ELES | Power Lines in Time .................................................................................................54
SVENSKA KRAFTNÄT | The Electric Highway
ENERGINET.DK | Pioneers in Wind Power.......................................................................62
ABB GROUP | Transforming Industry ..............................................................................66
ABB Czech Republic | We Save Energy ........................................................................72
SALZBURG AG | Infrastructure, Innovation and Diversity ............................................76
HAMON COOLING TOWERS | Staying Cool ...............................................................80
NLI | Vision, Courage and Success ........................................................................................84
GN NETCOM | Getting Set for Hands-Free ......................................................................88
E.ON SVERIGE | Seriously Green .....................................................................................94
INTERNATIONAL DIESEL SERVICE | Maximising Fuel Transport Efficiency ...........98
CENTRAL EUROPEAN GAS HUB | Euro-trade in Natural Gas ................................100

/ Technology news
How to make buildings with glue ...................................................................................... 104
Cellphones secured by design .......................................................................................... 104
Computer power provides heat for Helsinki ........................................................................ 105
Nanotube transistors shrink smaller than silicon size .......................................................... 106

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

Trade & Investment | www.trade-investment.eu 4 February-March 2010

TI_2010_02_final.indd 4 19.3.2010 13:33:08

 6
Energy
Shell to axe 1,000 jobs
as profits plunge 69%

Shell, Britain’s second-biggest oil an “uncertain” outlook for 2010.

company, will cut a further 1,000 The Anglo-Dutch company report- p.
jobs this year as it reported a bigger ed 2009 earnings of $9.8 billion
than expected 69 per cent fall in on a current cost of supplies basis,

30
full-year profits and cautioned over against $31.4 billion for 2008.

p.
Where Is the End of Car Recalls?
Toyota is to recall 8,000 Tacoma pick-up trucks in the US,
over fears about defective front drive shafts.

The first recall happened in Sep-
tember 2007 when Toyota had to
recall 55,000 Camry and Lexus cars
in the US due to floor mat faults.
Further recalls followed in the US
since October 2009 when 3.8 m
Toyota and Lexus vehicles were
recalled due to floor mat prob-
lems. This number increased to
4.2 m vehicles in November 2009.

GN NETCOM
Getting Set for Hands-Free
The telecommunications in-
dustry is notoriously fast mov-
ing, with innovative technolo-
gies constantly entering the
marketplace offering new so-
lutions for business and con-
sumer clients alike. GN Net-
com’s Chief Technology Officer
Leo Larsen talks to Gabrielle
Brown about their award-win-
ning Jabra hands-free head-
sets and the imminent boom
in the unified communications
market.

Drahomír Ruta 58 p.

108
I am able to “switch on” when it comes to electricity
in Prague but also to “switch off ” after a busy day

says Managing Director and tor of the distribution system for

President of Pražská energetika,
a.s. PRE Group is an important
electricity trader on the Czech
market and the regional opera-
Prague, the capital city and the
town of Roztoky. Drahomir Ruta
was born 63 years ago in Zatec.
p.
He is married...

Trade & Investment | www.trade-investment.eu 5 February-March 2010

TI_2010_02_final.indd 5 19.3.2010 13:33:13


Shell to axe 1,000 jobs
as profits plunge 69%
Shell, Britain’s second-biggest oil com-
pany, will cut a further 1,000 jobs this year
as it reported a bigger than expected 69
per cent fall in full-year profits and cau-
tioned over an “uncertain” outlook for
2010. The Anglo-Dutch company report-
ed 2009 earnings of $9.8 billion on a cur-
rent cost of supplies basis, against $31.4
billion for 2008.
Peter Voser, chief executive of Shell, said:
“Oil prices have increased compared to
a year ago, but gas prices and refining
margins have declined sharply, because
of weaker demand and high industry
inventory levels. We are not assuming that
there will be a quick recovery, and the
outlook for 2010 is uncertain”
Under its restructuring programme,
Project Transition, Shell has already re-
duced staff numbers by 5,000 over the
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 6
Energy
past year. It will add a further 1,000 to the
tally, mainly from its downstream and
corporate functions, as part of its plan to
reduce underlying costs by $1 billion in
2010.
Shell also said it is likely to make more
disposals this year, including around 15
per cent of its current refining capacity.
The company sold $1.2 billion of “non-
core” downstream assets last year, and
last month said it would close its 130,000
barrels a day Montreal East refinery in
Canada.
Shell’s figures come after disappointing
full-year numbers from BP, which also
showed the effects of poor refining mar-
gins. Fourth quarter oil and gas production
fell to 3.3 million barrels of oil equivalent
per day from 3.4 million barrels a year
earlier. Adjusted earnings for the fourth
quarter came in at $2.77 billion, against
City forecasts of $2.9 billion.
The company is proposing a fourth-quar-
ter dividend of $0.42 cents, as expected.
However, it has also announced a freezing
of the next quarterly dividend at the same
level. In recent years, the first quarter
dividend has been increased on the fourth
quarter and then held flat for the remain-
der of the year. Andrew Whittock, oil and
gas analyst at Oriel Securities, said “Over-
all, the fourth-quarter results are disap-
pointing and the maintained first-quarter
dividend confirms cash generation is not
good enough”. The broker said it expect-
ed to cut its current-year earnings forecasts
by around 5 per cent. Shares in Shell fell
nearly 2 per cent – down 30½p to £16.79½ –
in early trading.
British Gas confirms
plan to cut bills by 7%
Centrica, the owner of British Gas, today
confirmed that it will reduce the average
gas bill by 7 per cent which it claims will
save the typical household £55 a year.
6 February-March 2010
19.3.2010 13:33:25
 Nearly eight million British families are
set to benefit from the cut which Cen-
trica said will be rolled out immediately.
Phil Bentley, managing director of British
Gas, said today: “At British Gas, we know
household budgets are stretched, and
that our customers are concerned about
the effect the recent cold weather will
have on their winter fuel bills. I’m pleased
we’re able to offer our customers some
extra help with this gas price cut – and
that we’re able to do this while it’s still
winter, allowing our customers to really
feel the benefit.”
The cut follows steep falls in the wholesale
price of gas since 2008 and is the first of
its kind by one of the UK’s “big six” energy
suppliers since 2007. It could open the
floodgates to reductions from rivals E.ON,
EDF, ScottishPower, Scottish and Southern
Energy and RWE npower.
In July 2008, the same month in which
global oil prices peaked at a record $147
per barrel, British Gas lifted its gas prices
by 35 per cent. But since then the whole-
sale price of gas in the UK has plummet-
ed, tracking oil which plunged sharply in
the autumn of 2008 and hit lows of below
$40 per barrel a year ago. Industrial de-
mand for gas in the UK has fallen by about
10 per cent since 2007 because of the
recession, with factories forced to reduce
energy consumption. Meanwhile, supplies
to the UK are plentiful, with two new
liquefied natural gas (LNG) terminals
opened in Milford Haven in South Wales
last year. The boost to supply has helped
to depress prices further.
The move by British Gas will also help to
stave off p
public criticism of what are ex-
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 7
pected to be bumper profits of more than
£500 million when the group unveils its
full-year 2009 profits.
All of Britain’s energy companies have
benefited from increased demand for the
fuel during an unexpectedly cold Decem-
ber and January. Citigroup has estimated
that Centrica alone enjoyed an extra £40
million to £50 million profit on the back
of the cold weather.
Saipem awarded new
offshore drilling
contracts worth
$370 million
Saipem has been awarded new offshore
and onshore drilling contracts for a total
value of approximately US$370 million.
Saipem has been awarded two contracts
for the charter of the semi-submersible
rig Scarabeo 3, which is at present idle,
for a total period of 9 months plus options
starting from January 2010. The two con-
tracts, signed with Total E&P Congo and
Addax Petroleum, encompass the use of
the rig in Congo for one drilling well plus
one optional well, and in Nigeria for drill-
ing activities for the duration of six months
respectively.
Saipem has reached an agreement with
the Egyptian company IEOC for the exten-
sion of the contract for the charter of the
Scarabeo 4 until June 2013. Scarabeo
3 and 4 are second generation
semi-submersible drilling rigs capable
of operating in water depths of up to
1500 feet.
Within offshore drilling activities, Saipem
has been awarded by Harrington Dubai
the contract for the charter of the jack-up
Perro Negro 3, also idle at present, for
drilling activities in the Persian Gulf for
a period of six months plus an option of
18 months. Perro Negro 3 is a jack-up
capable of operating in water depths of
up to 300 feet.
In onshore drilling Saipem has been
awarded two contracts in Kazakhstan with
ExxonMobil Kazakhstan Inc. (EMKI) for the
decommissioning and transportation of
two rigs owned by the client already
operated by Saipem. Saipem will also
carry out conversion activities on one of
the two rigs.
Finally, Saipem has signed other new con-
tracts with several clients for the charter of
four rigs in Algeria and Peru, two of which
are presently idle. The contracts encom-
pass the utilisation of the rigs starting
from the first quarter of 2010 for a varying
period of six months to two years.
Siemens to invest
more than €250
million in India
by 2012
As it profits from ongoing growth in the
emerging nations, Siemens is seeking to
significantly expand its investment in
India. Experts forecast that the Indian
economy, for example, will grow seven
percent in 2010 and eight percent the
following year. “India is already one of the
growth drivers worldwide and will remain
so in the future. We’ve been optimally
positioned here for over 140 years and
intend to further strengthen our position,”
said Peter Löscher, President and CEO of
Siemens AG in New Delhi, where the en-
tire Siemens Managing Board met for the
first time ever. Over the next three fiscal
years through 2012, the company intends
to invest more than €250 million in the
country, thereby doubling its current an-
nual investments. A major part of this will
be invested in renewable energy and
value-priced products business. The com-
pany also wants to increase its market
share in India to ten percent by the year
2012. With recently signed orders totalling
over €500 million, primarily for energy
technology, Siemens is well on its way.
The country’s power supply is of particu-
lar concern to the Indian government.
Currently about 30 percent of India’s
7 February-March 2010
19.3.2010 13:33:27

population has no access to power, which
is why the Indian government is planning
to add 150 gigawatts over the next seven
years – an amount equal to Germany’s
entire installed capacity. In addition, 20
percent of the energy mix should be
generated from renewable sources by the
year 2020.“Like many other nations around
the globe, India is facing a green revolu-
tion. We have the products and solutions
for the country and we want to further
expand our position as a green infrastruc-
ture provider in India,” said Löscher. One
Siemens project involves an investment
of approximately €70 million in the con-
struction of a wind turbine factory in India
by 2012. The first turbines are scheduled
to leave the plant in a little over two
years.
Siemens also intends to invest in its value-
priced products business. Six new centres
of competence for value-priced products
from all Siemens Sectors will be estab-
lished in India by the end of 2010. Plans
call for the centres to manufacture
a number of various products, including
new products in the area of signalling
technology as well as steam turbines.
These centres will also be responsible for
the entire value chain, from product de-
sign, development and production to
sales and marketing in India and abroad.
“India will become a major centre for
value-priced products. By the year 2020,
we intend to generate revenue of about
€1 billion with these products – both
within the borders of India and beyond,”
said Armin Bruck, CEO of Siemens Ltd.,
the Siemens Regional Company in In-
dia.
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 8
Energy
Siemens has already started off strong in
India in the new fiscal year 2010. In recent
weeks, the company signed orders total-
ling more than €500 million. In the next
few years, Siemens will deliver power
distribution technology to its customers
Qatar General Electricity & Water Corpora-
tion and Power Grid Corporation.
BP receives offer for
its Retail Fuels and
Convenience business
in France
BP has received an offer from Delek Europe
B.V., one of the largest fuel retailers in
Europe and a subsidiary of the Delek
Group Ltd, to buy its French retail fuels
and convenience business including se-
lected fuels terminals.
The proposed purchase price is €180 mil-
lion (approximately US$251 million), in
cash, subject to working capital adjust-
ments. On receipt of the offer to purchase
BP’s approximately 416 petrol stations in
France, BP has entered into a period of
exclusivity with Delek Europe and has
started discussions with the relevant works
councils. The sale would also include in-
terests or ownership in three fuel distribu-
tion depots and it is expected to include
a long term agreement for acceptance of
fuel cards. The proposed transaction is
currently expected to be completed in
the second half of this year. Any final trans-
action will be subject to works councils
and regulatory approvals.
As well as an agreement for BP branding
to remain on the forecourts for a number
of years under a licensing agreement, BP
would also continue to supply fuel includ-
ing premium BP Ultimate fuels under
a supply agreement. If the offer is ac-
cepted and the deal is approved then BP
would still continue to retain a significant
presence in France through its business
to business fuels, bitumen, lubricants and
aviation businesses. Staff currently work-
ing for the retail business would transfer
to the new owner.
Jean-Baptiste Renard, BP’s Head of Region
for Europe and South Africa, said: “We
believe the decision to sell is right for the
business as it means the BP brand will
stay on the forecourts, it is right for staff
as their jobs would be retained, and it
would give the new owners an opportu-
nity to keep investing in the business.”
Zion Ginat, CEO Delek Benelux, com-
mented: “Delek is excited to expand and
develop its retail business in Europe
through the proposed acquisition of BP’s
marketing business in France. Delek is
committed to drive value and to continue
to strengthen the BP brand name in France
for its customers and employees.”
Sardinia, home to
Italy’s largest wind
farm from Enel
Green Power
Forty new 1.5 MW wind turbines entered
into service in the municipalities of Tula
and Erula, in the province of Sassari, Sar-
dinia, bringing the total capacity of the
Sa Turrina Manna wind farm to 84 MW.
Therefore, Sa Turrina Manna will become
the largest Enel Green Power wind farm
in Italy. Enel Green Power is the Enel Group
Company that develops and operates
plants using the full range of renewable
energy sources, both in Italy and world-
wide.
At full capacity, the new wind farm will
produce some 126 million kWh, enough
to meet the energy needs of some 46,000
households, a little under half the popu-
lation of a city the size of Sassari, thus
avoiding the atmospheric emission of
94,000 tons of carbon dioxide (CO2) and
8 February-March 2010
19.3.2010 13:33:29
 consumption of approximately 47,000
tons of oil equivalent per year. The exten-
sion work on Sa Turrina Manna was com-
pleted in less than a year with due respect
for the landscape and natural context of
the area as well as of its existing activi-
ties.
There are a now total of 3 Enel Green
Power wind farms in operation in Sar-
dinia, with a total capacity of 161 MW,
generating over 240 million kWh of pow-
er, and in 2010, work is scheduled to
begin on the Portoscuso wind farm, that
will have a potential capacity of some
100 MW.
In 2009, in Italy, Enel Green Power con-
structed wind farms for 94 MW. This figure
includes those installed during the year
as well as those under construction.
Enel Green Power is the Enel Group Com-
pany fully dedicated to the development
and operation of plants generating en-
ergy from renewable sources at the inter-
national level, with presence in Europe
and the Americas. Thanks to its 17.2 billion
kWh generated from hydro, solar, wind
and geothermal energy sources, Enel
Green Power is the sector leader in Europe.
The company’s plants are able to meet
the consumption needs of some 6.5 mil-
lion households, therefore cutting CO2
emissions by 13 million tons. With an in-
stalled capacity of about 4,700 MW, Enel
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 9
Green Power is Italy’s leading player in
the global renewables industry. The com-
pany has over 500 plants operating world-
wide, with a generation mix that includes
wind, solar, hydro, geothermal and bio-
mass energy sources.
Statoil says output may
gain in 2010, cuts
2012 goal
Statoil ASA, Norway’s largest oil and gas
company, forecast output may rise as
much as much as 0.7 percent in 2010,
while it cut its production target for 2012
due to the weak gas market. The com-
pany’s oil and gas production reach be-
tween 1.925 and 1.975 million barrels of
oil equivalent a day from 1.962 million
barrels a day in 2009, the Stavanger-based
company has said in a statement. The
company reduced its output target for
2012 to between 2.1 and 2.2 million bar-
rels of oil equivalent a day, from 2.2 million
barrels of oil equivalent a day.
“We are positioned to continue our pro-
duction growth towards 2012 despite the
current weakness in the gas markets,”
Chief Executive Officer Helge Lund said
in the statement. “Statoil also has projects
and resource potential to underpin prof-
itable growth beyond 2012.”
Statoil, 67 percent owned by the govern-
ment, is seeking to maintain domestic
production and is expanding in countries
such as Angola and the U.S. as Norwegian
reserves dwindle. The country’s output is
forecast to decline for a 10th year this year,
according to the Norwegian Petroleum
Directorate.
Statoil’s reserve replacement ratio rose to
73 percent last year from 34 percent in
2008, the company said. “The reserve
replacement ratio of 73 percent for 2009
is improving from a low level, and based
on our continued exploration success and
growth portfolio, I am confident that we
will improve this ratio going forward,”
Lund said. “Statoil has a high quality port-
folio of non-sanctioned projects that will
create attractive returns for our sharehold-
ers.”
The producer’s unit production costs will
be between 35 and 36 kroner per barrel
of oil equivalent in 2010, it said. Crude has
averaged $77 a barrel in New York this
year and is forecast to rise to $84 a barrel
in the fourth quarter, according to
a Bloomberg survey. Statoil is planning
to drill 50 wells in 2010, it said.
Norway is the world’s sixth-largest oil
exporter after Saudi Arabia, Russia, the
United Arab Emirates, Iran and Kuwait. It’s
also the second-largest gas exporter.
9 February-March 2010
19.3.2010 13:33:30

Opel slashes jobs and
demands state money
It has been months in the making. But
finally, Nick Reilly, head of General Motors
Europe, has announced the details of his
plan to slim down the company’s Euro-
pean unit Opel and return it to health. As
expected, the radical restructure calls for
significant job cuts, considerable salary
slashes and extensive aid from European
governments.
“We have a plan that we believe will help
us rebuild long-term profitability,” Reilly
told reporters at a press conference in
Frankfurt. “We do need more help from
European governments.” Specifically, GM
is asking for €2.7 billion ($3.7 billion) in
loans or loan guarantees from countries
where Opel factories are located. Ger-
many would be responsible for coming
up with €1.5 billion of that amount, with
half coming from the federal government
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 10
Automotive
in Berlin and the remaining amount being
coughed up by the German states con-
cerned.
In total, some 8,300 jobs are set to be cut
across Europe, with 3,900 jobs to be
slashed in Germany. While no additional
factories are to be closed down – the
closure of Opel’s plant in Antwerp, Belgium
was announced in January – the Opel
factory in Bochum, Germany will lose
1,800 jobs.
Allegedly, Reilly also plans not to replace
some 1,000 additional workers set to go
into retirement. Reilly’s announcement
once again puts the ball in the court of
European governments. Last spring, Ber-
lin spent weeks trying to come up with
a plan to save Opel when it became clear
that its parent company GM was heading
for bankruptcy. Finally, a plan was cobbled
together which foresaw the carmaker
being sold to the Canadian-Austrian auto
parts maker Magna and its Russian part-
ner Sberbank. In November, however, GM
changed its mind and decided to hang
on to Opel.
Whether Berlin, German state govern-
ments and other European governments
will be eager to come up with cash for
Opel remains to be seen. Roland Koch,
governor of the state of Hesse, said that
he was sceptical of the plan.
“We will take a very close look at the plan
presented today from GM,” he said. “Ac-
cording to our first impression, it will be
necessary for GM, as the owner, to con-
siderably increase its contribution to the
restructuring.” GM has said it will provide
€600 million of the €3.3 billion it says is
needed to keep Opel operational.
Money from the federal pot may likewise
be difficult to access. Assistance for Opel
would come from the €115 billion German
Economic Fund, put together to help Ger-
man businesses struggling as a result of
the financial crisis. There are, however,
a number of criteria that must be fulfilled
10 February-March 2010
19.3.2010 13:33:32
 before companies can access that fund –
one of those being that the company must
have been in good economic shape prior
to the crisis. It is unclear whether Opel
qualifies.
Another key component of the plan like-
wise looked to be in doubt. Reilly has
demanded that labour unions forego
€265 million worth of annual pay over the
next five years. Unions have refused, un-
less GM hands the workers a share of the
company and grants unions a say in further
factory closures and job cuts. Opel work-
ers were already outraged by GM’s deci-
sion to slash jobs and close down the
Antwerp factory. Currently, no further
talks between labour and GM are sched-
uled.
Reilly is hoping to return Opel to profit-
ability by 2012, primarily via a complete
overhaul of Opel’s product line. A slew of
new models are to be introduced this year
and next with the battery-powered Am-
pera set for release next year.
Sweden’s guarantee of
Saab EIB loan wins EU
approval
Sweden’s guarantee of a European Invest-
ment Bank loan to Saab Automobile won
European Commission approval, clearing
a regulatory hurdle for Spyker Cars NV’s
purchase of the carmaker from General
Motors Co.
The government guarantee of Saab’s pro-
posed 400 million euro ($546 million) loan
for developing technology won’t cause
“any undue distortions of competition,”
Neelie Kroes, the European Union’s com-
petition commissioner, said. Saab is offer-
ing “adequate remuneration” and collat-
eral for the guarantee to meet aid rules,
the EU said.
Spyker, the Dutch maker of the C8 Aileron
sports car, agreed on Jan. 26 to buy Troll-
haettan, Sweden-based Saab for $74 mil-
lion in cash and $326 million in preferred
shares in the new company that would
emerge, to be called Saab Spyker Auto-
mobiles. The EIB and Sweden’s National
Debt Office must give final approvals for
the loan.
“Today’s decision is definitely a step in the
right direction,” said Johnny Kjellstroem,
a deputy director at Sweden’s Ministry of
Enterprise, Energy and Communications
who is working on the Saab case. “This
should make it easier for the EIB to approve
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 11
the loan. I’m optimistic this will be resolved
in the end.”
Saab, which is among four brands that
Detroit-based GM is shedding after exiting
bankruptcy in July, was unprofitable for
most of the two decades the Detroit-based
carmaker owned it. Spyker said on Feb. 2
that it’s aiming for Saab to return to prof-
it by 2012, with the business plan requir-
ing about $1 billion in “in peak funding,”
including the lending from the Luxem-
bourg-based EIB.
Erik Sjulander, the National Debt Office
official handling the Saab state-guarantee
application, said he hasn’t received any
information that the loan won’t receive
approval.
Hyundai chairman
ordered to pay
automaker nearly
$60 million
Hyundai Motor Co. Chairman Chung
Mong-koo was ordered by a South Ko-
rean court to pay almost $60 million in
damages to the automaker to compensate
it for losses resulting from his business
decisions.
The ruling in the civil case in the Seoul
Central District Court follows Chung’s 2008
conviction of embezzlement and breach
of trust. He was given a three-year sus-
pended jail sentence before being par-
doned by South Korean President Lee
Myung-bak.
“This is a case that reveals the problem of
family-run management that focuses on
the interests of major stockholders and
the executives of Hyundai Motor,” the
judges’ ruling said.
The suit was filed in 2008 against Chung
and Kim Dong-jin, vice president of parts
supplier Hyundai Mobis, by a group of
14 minority shareholders and a non-
governmental group called Solidarity for
Economic Reform. Kim also was ordered
to pay almost $47 million.
Solidarity for Economic Reform called the
penalties too low and said it would appeal
to a higher court. The group originally
asked the court to force Chung and Kim
to pay Hyundai 563.1 billion won (almost
$481 million).
Renault to build
factory in Algeria
Renault is poised to announce the con-
struction of a car factory in Algeria.
A spokesman for Renault said no discus-
sions had been concluded in Algeria but
said the group is observing what is going
on in a number of countries.
Le Monde, a French newspaper, said Re-
nault would build the factory at Rouiba
on the outskirts of the capital Algiers and
would assemble the Logan and Sandero
models, sold under the Dacia marque, as
well as the Symbol, currently built in Tur-
key. To conform with Algerian regulations,
Renault would have a 49 percent stake in
the venture, partnering with state-owned
SNVI, although the French manufacturer
would run the site.
Le Monde said Renault wanted to set up
the factory to consolidate its number one
position in the local car market. It sold
17,000 Dacia-badged vehicles and 39,000
Renaults last year, giving it almost a quar-
ter of the market. “It couldn’t maintain
11 February-March 2010
19.3.2010 13:33:37

this level without a local investment,” the
paper quoted a diplomat as saying. The
project has yet to get the green light from
Algerian authorities but would help the
country’s ambition to build up an auto-
mobile industry, Le Monde said.
Peugeot Citroen losses
curbed by scrappage
schemes
French car maker Peugeot Citroen has
reported a boost from car scrappage
schemes despite reporting a 1.16 bn Euro
($1.6 bn) loss for 2009. It lost 962 m Euros
in the first six months of the year, but only
199 m Euros in the second half thanks to
the effect of the scrappage deals.
But the company predicted continued
tough times for the car market in the new
year, with many schemes ended. Euro-
pean car sales were expected to be down
by 9%, the company said.
“Our financial results for 2009 show a much
improved performance in the second half,
but still reflect the severity of the crisis
affecting the automotive industry,” com-
mented Philippe Varin, Peugeot Citroen’s
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TI_2010_02_final.indd 12
Automotive
chief executive. “In 2010, we expect the
market conditions to be challenging, but...
we should continue to grow our market
shares.”
Peugeot Citroen sales for the year were
down more than 10% at 48.4 bn euros –
slightly better than analysts’ expectations.
The company expects the Chinese mar-
ket – now the biggest car market in the
world – to continue to grow strongly in
the coming year.
German auto sales
crash in January
After a year of successfully dodging a se-
vere slump in car sales, 2010 has not
started well for German carmakers. Janu-
ary saw the worst figures for domestic
German auto sales in 20 years. But indus-
try experts disagree over whether the
figures represent a simple market correc-
tion after last year’s government-spon-
sored cash for clunkers program or a sign
of grimmer things to come.
Only 181,500 new vehicles were registered
in January, according to the Association
of International Motor Vehicles Manufac-
turers (VDIK). The figure represents
a 4.2 percent drop relative January 2009,
when year-on-year figures were already
down roughly 14 percent. That slump led
the German government to introduce its
scrapping bonus programme which re-
sulted in a significant spike in domestic
car sales.
In January, only Volkswagen was able to
report an increase in sales, of 11 percent.
Audi, BMW, Mercedes and Ford all saw
slumps ranging between 10 percent and
20 percent. Porsche got hit the hardest,
with a 32 percent dip.
VDIK President Volker Lange warned
against doomsday scenarios, saying that
January sales were at their “typical, low
level.” His organization predicts that car
sales in 2009 will not drop below 2.9 mil-
lion vehicles. As a result of the cash-for-
clunkers program, 2009 saw record sales
of some 3.81 million vehicles.
Many, though, fear that those seeking to
buy a new car, likely did so before the
scrapping bonus program ended in Sep-
tember. “This first month hasn’t really been
all that dramatic,” Ferdinand Dudenhöffer,
head of the Center Automotive Research
(Car) at the University of Duisburg-Essen,
told Reuters. “The worst is yet to come.”
German carmakers are hoping that con-
tinued high demand in rapidly developing
countries like China, India and Brazil can
compensate for weak sales at home.
Renault reports full-
year loss, sees market
decline
Renault SA, France’s second-largest car-
maker, reported its first annual loss in
13 years and forecast a 10 percent contrac-
tion in European auto demand this year
as governments phase out incentives.
The net loss was 3.1 billion euros ($4.3 bil-
lion) compared with a 571 million-euro
profit a year earlier, Renault said in a state-
ment today. Analysts had predicted
a 2.6 billion-euro loss, the median of 10 es-
timates compiled by Bloomberg. Revenue
fell 11 percent to 33.7 billion euros.
“Pricing is going to continue to be ex-
tremely competitive,” Chief Executive Of-
ficer Carlos Ghosn told reporters and
analysts at a conference. “That’s why we
need to go further in cost reduction. 2010
12 February-March 2010
19.3.2010 13:33:38
 is going to be very tough on all car man-
ufacturers in terms of pricing.”
The maker of Megane, Clio and Laguna
cars said its results showed a “positive
inflection” in the second half as govern-
ment subsidies propped up demand.
PSA Peugeot Citroen, Renault’s larger
domestic rival, has reported a bigger-
than-expected second-half operating loss
at its auto division after pricing pressure
and a demand shift to cheaper models
countered a recovery in deliveries.
Renault has almost doubled in Paris trad-
ing in the past 12 months, compared
with a 17 percent decline in the Bloomb-
erg European Auto Manufacturers In-
dex.
The carmaker posted a 396 million-euro
operating loss, excluding one-time gains
or costs, compared with a profit of 326 mil-
lion euros a year earlier. Operating loss at
the auto division widened to 915 million
euros from 174 million Euros.
Renault’s operating income was “a touch
weaker than expected but no surprise
after Peugeot,” London-based Credit Suisse
analyst Stuart Pearson said. “The positive
surprise is that they got their debt below
6 billion euros,” said Pearson, who has an
“outperform” recommendation on the
shares. “That’s about a billion better than
we thought.”
Renault’s industrial net debt – which ex-
cludes sales- financing operations – fell
to 5.92 billion euros as of Dec. 31 from
7.94 billion euros a year earlier, the com-
pany said. Free cash flow was 2.1 billion
euros, versus a negative 3 billion euros in
2008. Renault said it would target positive
cash flow this year, without giving sales
or earnings forecasts.
“There’s still a lot of uncertainty and
volatility in 2010 and we don’t want to be
changing it every month,” Ghosn said.
Renault reined in wages, reduced inven-
tories, halted development of three
planned models and delayed projects in
India and Morocco last year, in a bid to
slash capital investment by 20 percent.
The carmaker said it will continue its cost-
reduction program this year and keep
capital expenditure and research and
development spending below a combined
10 percent of sales.
Renault said it’s on course to meet the
1.5 billion euros in additional synergies
targeted last year with its 44 percent-
owned affiliate Nissan Motor Co. Further
integration will boost Renault’s free cash
flow by 1 billion euros in 2010, Chief Fi-
nancial Officer Thierry Moulonguet said.
“Improvement in operating earnings will
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 13
be a major contributor to this improve-
ment,” Moulonguet said at a briefing for
reporters near Renault’s headquarters in
the Paris suburb of Boulogne-Billan-
court.
European states boosted auto demand
last year with so- called “scrappage” pay-
ments and subsidies to counter the eco-
nomic slump, slowing the market contrac-
tion to 5.7 percent in the second half from
24 percent in the first and lifting sales of
smaller vehicles.
Renault said Jan. 14 its vehicle sales fell
3.1 percent to 206,702 million cars and
small trucks last year, as government in-
centives helped to slow the 17 percent
decline recorded in the first half. Its Euro-
pean market share rose by 0.5 point to
9.2 percent in 2009, according to Brussels-
based European Automobile Manufactur-
ers’ Association.
Ferrari 458 Italias
‘selling for £200k in UK’
The first examples of the new Ferrari 458
Italia supercar are trading for close to
£200,000, price guide Glass’s Guide reports
today. It claims wealthy enthusiasts are
paying a £25,000 premium to jump the
queue and get into one of the first 458s
in Britain. The Italia lists at £169,545 in the
UK, with first deliveries due for summer
2010.
Richard Crosthwaite, prestige car editor
at Glass’s, said: ‘Clearly the recession hasn’t
diminished buyers’ interest. It’s not unu-
sual for the first examples of such exclusive
sports cars to change hands for inflated
prices before the first owners take delivery,
but the premium required to bag one of
the early 458s is exceptionally high – a re-
flection of just how desirable it is.
‘The 458 is likely to remain in short supply
for some time, which will keep it in favour
with the fashion-conscious supercar
buyer and help to protect residual val-
ues.’
Eco City Vehicles
launches electric
London taxi
Eco City Vehicles has launched an electric
prototype of the Mercedes Vito taxi, which
will it trial later this year to test its suitabil-
ity for use as part of London’s iconic black
taxi fleet. “The eVito is the first all-electric
wheelchair accessible taxi with a 25-foot
turning circle to be launched in the world
and a major step towards our goal to
become a leading supplier of niche eco-
friendly vehicles,” said CEO Peter DaCos-
ta.
The firm, which sells and services cabs,
said it developed the Mercedes eVito
alongside its manufacturing partners
Penso, Mercedes Benz UK and Zytek Au-
tomotive. Since its launch in 2008, the
Mercedes Vito has proved to be a serious
competitor to Manganese Bronze, the
maker of London’s traditional black taxis.
Eco City said last year the Vito now has
a 30 percent share of new black cab taxi
sales in London.
The company added the eVito would
comply with clean air standards for the
city’s taxis which have been proposed by
the Mayor of London and are due to be
introduced in time for the London Olym-
pics in 2012.
“Subject to successful trials, the eVito
together with the already popular Vito
taxi, provides London with a great op-
portunity to reduce air pollution with
modern vehicles,” DaCosta added.
Shares in Eco City, which are up 85 percent
in the last six months, rose 2 percent by
valuing the company at 19.3 million
pounds ($30.1 million).
Volkswagen recalls
200,000 cars in
Brazil
Volkswagen (VW) is recalling nearly
200,000 cars in Brazil because of a rear
wheel problem. The company wants to
determine whether rear wheel bearings
are sufficiently greased on the Novo Gol
and Novo Voyage models made before
July 2009.
VW says there is a possibility that a lack
of lubrication could cause wheels to lock.
In extreme cases they could loosen and
even fall off. The vehicles were made in
Brazil for the local market, VW’s third-
largest.
This latest recall came a day after car
maker Honda added another 437,700 cars,
mainly in North America, to its existing
global safety recall over airbag inflation
problems. Also, Toyota announced the
recall of about 436,000 hybrid vehicles
worldwide, including its latest Prius model,
to fix brake problems.
13 February-March 2010
19.3.2010 13:34:04

Wienerberger acquires
long-established
German brick producer
Wienerberger is expanding its activities
in Southern Germany with the acquisition
of the insolvent clay block producer Rim-
mele. Rimmele is a long-established com-
pany with high branch recognition and
strong customer ties throughout the Swa-
bian region. The brick plant in Ehingen is
located 80 km southeast of Stuttgart and
has a production capacity of roughly
100 million NF (= standard format for bricks).
This transaction was completed in January
in the form of an asset deal, whereby the
parties have agreed not to disclose any in-
formation on the purchase price. The ac-
quired assets include a clay pit that has raw
material reserves for the next 20 years. The
Ehingen plant generated revenues of € 8.5
million in 2008, and 28 employees will
now be transferred to continue opera-
tions.
“Wienerberger was previously not repre-
sented in Swabia, Rimmele’s primary
market. We reacted quickly and used the
opportunity presented by these bank-
ruptcy proceedings to strengthen our
regional portfolio in Germany”, explained
Heimo Scheuch, Chief Executive Officer
of Wienerberger AG. “Of course, we will
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 14
Construction
also be able to realize synergies in sales
and administration with the integration
of Rimmele into our German organization.”
Asked if this marks a turning point for
Wienerberger and the start of renewed
acquisition activity in the future, Heimo
Scheuch commented, “As long as there
are no clear signs of economic recovery,
the protection of liquidity will remain our
top priority. The Rimmele acquisition is
already included in our planned invest-
ments for 2010 of roughly € 90 million.”
Skanska preferred-
bidder for the Essex
Building Schools for
the Future (BSF) in the
UK, within the Private
Finance Initiative
(PFI) program
Skanska, through a preferred-bidder con-
tract, has been selected for developing,
constructing and maintaining three
schools for Essex County Council, in the
UK. The project will be conducted within
the UK program for public private partner-
ships, PFI (Private Finance Initiative), which
means that Skanska will assume respon-
sibility for the financing, design and con-
struction of the new schools, as well as
the maintenance of the schools for a total
of 26 years commencing in 2011.
Skanska Infrastructure Development’s
investment is estimated to amount to
approximately GBP 6 M, about SEK 70 M,
corresponding to a majority holding in
the consortium that is responsible for the
project. The consortium also includes RM
plc, which is responsible for the schools’
information and communications systems.
RM plc is an international provider of
education solutions and the UK’s leading
provider of ICT software, systems and
infrastructure for schools.
This PFI project in Essex initially com-
prises three new schools to be developed
in cooperation with the local authorities
within the Essex Local Education Partner-
ship (the Essex LEP) of which the Skanska-
RM consortium holds an 80 percent share.
The partnership covers a total period of
ten years and further schools will be de-
veloped in future phases.
The construction assignment will be con-
ducted by Skanska UK, which will also
design and build a fourth school in addi-
tion to the three in this PFI agreement.
The contract for the four schools is esti-
mated to amount to approximately GBP
70 M, approximately SEK 800 M.
Financial close for this contract, including
the completion of negotiations and financ-
ing, is expected during 2010. Once this is
finalized, the size of the company’s invest-
ment and construction contract will be
established. This will then be announced
in a press release along with information
on which quarter the construction con-
tract will be included in Skanska UK’s
order bookings and the timeframe for
implementation.
Skanska already operates the UK’s first
LEP through the Bristol BSF program and
has investments in two other PFI schools
projects in the UK. Skanska’s other major
PFI projects in the UK include the widen-
ing of the M25 ring road in London, the
street lighting network in Surrey and
several large hospitals, such as Barts and
The London Hospitals.
Skanska Infrastructure Development is
a leader in the global Public Private Part-
nerships (PPP) market. The business unit
invests in, develops and operates roads,
hospitals, schools, power plants and
14 February-March 2010
19.3.2010 13:34:04

other social infrastructure in partnership
with the public sector.
Skanska UK reported revenues of SEK 17.9
billion in 2008, with about 4,900 employ-
ees. The company is active in building and
civil construction, utilities and building
services.
STRABAG wins € 260
million contract,
further solidifies its
leadership on the
Polish transportation
infrastructure market
STRABAG SE, Central and Eastern Europe’s
largest construction group and the mar-
ket leader in the transportation infrastruc-
ture segment in Poland, announces a fur-
ther success. The General Directorate for
National Roads and Highways (GDDKiA)
today awarded STRABAG the contract to
build the 36.5 km section of the S7 Ex-
pressway between Kalsk and Miłomłyn
approximately 100 km northwest of War-
saw.
Construction for the € 260 million (PLN
1.1 billion) contract will begin in March
and is expected to end in July 2012. The
works comprise the construction of the
four-lane expressway, the conversion un-
der traffic of the parallel DK7 road as well
as the construction of 27 bridges, four
service areas and three junctions. Con-
struction will be carried out by the STRA-
BAG subsidiaries STRABAG Polska (51%)
and HERMANN KIRCHNER Polska (49%).
With the new contract, STRABAG further
solidifies its leadership position on the
Polish transportation infrastructure mar-
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 15
ket and raises its total order backlog in
Poland to approximately € 2.6 billion.
“Due to the geological conditions and
short construction period, this project
requires a high level of technical know-
how. We won out over the other estab-
lished Polish bidders for this reason, with
a price that is not only competitive but
also economically justifiable,” says Hans
Peter Haselsteiner, CEO of STRABAG SE.
STRABAG SE is one of Europe’s leading
construction groups. With some 76,000
employees, STRABAG generated a con-
struction output volume of €13.7 billion
in the 2008 financial year. From its core
markets of Austria and Germany, STRABAG
is present via its numerous subsidiaries
in all countries of Eastern and South-East
Europe, in selected markets in Western
Europe and on the Arabian Peninsula.
STRABAG’s activities span the entire con-
struction industry (Building Construction
and Civil Engineering, Transportation In-
frastructures, Tunnelling) and cover the
entire value-added chain in the field of
construction.
HOCHTIEF wins initial
part-order to plan
new city in Qatar
HOCHTIEF is involved in one of the world’s
largest urban planning projects. Group
subsidiary HOCHTIEF ViCon will coordinate
the deployment of 3D technologies in the
development of “Lusail City”. This new city
of around 200,000 inhabitants is due to
be implemented in Qatar by 2020. The
owner and client is Qatari Diar, a state real
estate investor and urban developer. The
contract, which initially runs until 2011,
is worth a single-digit million sum and
represents a major business success for
this relatively new HOCHTIEF subsidi-
ary.
Lusail City will rise out of the desert sands
on the Gulf coast north of Doha, the
capital of Qatar. Ten urban quarters with
residential areas, shopping streets, leisure
facilities, schools, medical centres and two
harbours are to be built on an area of
around 37 square kilometres. Numerous
companies around the world have been
commissioned to plan the infrastructure
and supply channels. HOCHTIEF ViCon
will be working on behalf of the client to
coordinate these planning measures with
the assistance of its internally developed
3D model, which will facilitate liaison
among the project participants. In a sec-
ond stage, HOCHTIEF ViCon will extend
the model to include a time schedule (the
4th dimension as it were) for the construc-
tion of Lusail City. The model will then
serve to coordinate the construction com-
panies involved, enabling them to agree
the course of construction and document
construction progress. In addition, experts
of HOCHTIEF Construction will provide
consultancy during overall project man-
agement. HOCHTIEF ViCon is also involved
in other HOCHTIEF projects in the Gulf
region, such as the construction of Barwa
Commercial Avenue, an eight-kilometre
long shopping centre in Doha/Qatar.
Balfour Beatty secures
£270 million of UK
highways and rail
new orders
Balfour Beatty, the international infra-
structure group, announces today that it
has won work valued at £270 million in
the UK highway and rail sectors. Com-
menting on the contract awards today,
Balfour Beatty Chief Executive, Ian Tyler,
said:
“We are delighted to have been selected
to deliver these contracts. We have suc-
cessfully completed many other projects
for each of these key customers. Our ex-
perienced regional teams will build on
these strong relationships by success-
fully delivering the unique requirements
of each.”
Network Rail has selected Balfour Beatty
to undertake major improvement work
at Edinburgh’s Waverley Station. The £50
million contract, which is scheduled to
begin in spring this year and to be com-
pleted in 2013, comprises the renovation
of the 34,000 sqm glass roof and associ-
ated activities. It will provide passengers
with a brighter station with new lighting
and a completely reglazed roof.
Balfour Beatty has also won four significant
contracts in the UK highways sector: the
A11 Fiveways to Thetford Improvement
Highways Agency Early Contractor In-
volvement (ECI) contract, with a scheme
cost in excess of £106 million, to dual the
last single carriageway section of the A11;
two Construction Management Frame-
work contracts for civil engineering works
in the Highways Agency’s Area 10, cover-
ing south Lancashire, Merseyside, Great-
er Manchester and Cheshire and Area 9,
covering Herefordshire, Staffordshire,
15 February-March 2010
19.3.2010 13:34:07

Warwickshire, Worcestershire and the West
Midlands. Both contracts, which will be
worth in excess of £20 million, are for four
years with an option to extend them for
a further three years; the one-year Mid-
lands Framework 4 contract, for which
Balfour Beatty is one of four contractors,
is valued at £60 million to the company.
The contract has a potential one-year
extension. The structural works, surfacing
and roadworks will be carried out in the
Highways Agency’s Areas 7 and 9 in the
Midlands; in joint venture, Balfour Beatty
has been awarded the £35 million, A487
Porthmadog, Minffordd and Tremadog
Bypass contract by the Welsh Assembly
Government. The project, which involves
the design and construction of a 5.25
kilometre single carriageway road with
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TI_2010_02_final.indd 16
Construction
eight bridges and three retaining walls,
is scheduled for completion in 2016.
Strategic partnership
between VINCI and
Qatari Diar
In the context of a project of strategic
partnership, Qatari Diar and VINCI entered
into exclusive negotiations on August 31,
2009 in relation to the contribution of
Cegelec in exchange for an equity holding
in VINCI. Following the completion of the
consultation process of VINCI’s and Cege-
lec’s employee representative bodies,
Qatari Diar and VINCI have signed a bind-
ing agreement pursuant to which Qatari
Diar commits to transferring 100% of the
share capital of Cegelec to VINCI in ex-
change for an equity holding in VINCI.
The agreement confirms the main princi-
ples of the transaction that were previ-
ously announced on August 31, 2009.
Upon completion of the transaction, Qatari
Diar would become VINCI’s largest share-
holder after the Group’s employee savings
funds.
This transaction is based upon an ex-
change ratio of 31.5 million VINCI shares
for 100% of Cegelec. The VINCI shares
delivered in exchange for the acquisition
of Cegelec will be a combination of new
shares (issued pursuant to authorisation
granted by the extraordinary shareholders’
meeting) and treasury shares. The con-
templated proportion is two thirds of new
shares and one third of treasury shares.
The transaction is deemed to have an
economical effect as of July 1st, 2009.
Therefore, Cegelec will not proceed to
any dividend distribution for the FY 2009
before the completion of the contribution,
and Qatari Diar will receive, for each
Vinci share received in consideration of
the contribution, an amount equal to the
interim dividend paid by VINCI in Decem-
ber 2009 and to any further dividend that
would be paid by VINCI before the com-
pletion of the contribution.
The completion of the transaction and its
calendar remain, in particular, subject to
clearance by the competent antitrust au-
thorities in the EU and in other third coun-
tries. In addition, independent appraisers
(commissaires aux apports) have been
appointed in order to opine on the valu-
ation of the contributed Cegelec securities
and on the exchange parity.
As announced on August 31, 2009, simul-
taneously with the acquisition of a stake
by Qatari Diar in VINCI as a result of the
contribution of Cegelec, Qatari Diar will
sign a stable shareholding agreement.
This agreement, stipulates that a director
proposed by Qatari Diar will be appoint-
ed to the VINCI Board (subject to the ap-
proval from the shareholders of VINCI)
and will also be a member of the strategy
and investment committee, given that
Qatari Diar shall hold a minimum equity
interest of 5% of the share capital of VINCI.
Subject to certain exceptions, the agree-
ment also stipulates that Qatari Diar is to
keep a stake in VINCI that could range
between 5% and 8% for three years as
from the completion of the contribution.
VINCI will benefit from a right of first offer
(or a pre-emptive right in certain cases)
on any disposals by Qatari Diar of blocks
of shares representing more than 1% of
the share capital.
For VINCI, the contribution of Cegelec
would be reflected by growth in its an-
nual revenues of circa €3 billion. The trans-
action would be earnings-enhancing as
early as 2010. This transaction, exclusive-
ly carried out by an exchange of shares,
would be neutral on VINCI’s debt ratios,
as VINCI would take over only Cegelec’s
financial operating debt.
16 February-March 2010
19.3.2010 13:34:08

Russia unveils its first
stealth fighter jet
Russia has unveiled its new stealth fight-
er jet, meant to boost the country’s age-
ing arsenal of weaponry and be a rival to
the US F-22 Raptor. The Sukhoi T-50, also
called the PAK FA, made its maiden flight
in Russia’s far east. Test pilot Sergei Bogdan
said it was “easy and comfortable to pi-
lot”.
Prime Minister Vladimir Putin said much
work needed to be done before mass
production began in 2015. Stealth tech-
nology is meant to nearly eliminate
a plane’s radar signature. The plane is be-
ing developed by the Sukhoi company at
its Komsomolsk-on-Amur production
plant. The new jet has been developed in
partnership with India. It is seen as a sig-
nificant milestone in Russia’s efforts to
modernise its Soviet-era military hard-
ware.
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 17
Aerospace and Defence
Sukhoi’s director Mikhail Pogosyan said
he was convinced that the project would
“excel its Western rivals in cost-effective-
ness and will not only allow strengthening
of the defence power of the Russian and
Indian air forces, but also gain a significant
share of the world market”.
The company says the jet’s stealth features
considerably enhance its combat effective-
ness in all weathers. Its features include:
all-weather capability, ability to use a take-
off strip of just 300-400 metres, capacity
for sustained supersonic flight including
repeated in-flight refuelling, advanced
avionics, simultaneous attacks on air and
ground targets.
But analysts have denied the jet is a leap
forward. “It’s just a prototype lacking new
engines and a new radar,” military analyst
Pavel Felgenhauer told the Associated Press
news agency. Originally scheduled for 2007,
the T-50’s maiden flight was repeatedly
postponed because of technical problems.
Observers of Russia’s recent military
modernisation drive say it has been plagued
by delays and quality problems.
Premium AEROTEC takes
over aircraft parts
manufacture in Bremen
Just one year after its foundation, Pre-
mium AEROTEC GmbH is expanding fur-
ther. The former Airbus parts manufactur-
ing unit in Bremen was integrated into
Premium AEROTEC on 1 January 2010.
This created a solid long-term basis for
securing the future. Premium AEROTEC
has expanded its business activities by
taking over the former Airbus parts
manufacturing unit in Bremen. This unit,
with some 400 employees, became part
of the company on 1 January 2010.
Premium AEROTEC itself began operations
on 1 January 2009 and is a wholly owned
17 February-March 2010
19.3.2010 13:34:11

subsidiary of EADS N.V. Its foundation
integrated the business operations of
EADS’ Augsburg plant and Airbus’ Nor-
denham and Varel plants. The parts man-
ufacturing unit in Bremen is being run as
part of the Nordenham plant. Premium
AEROTEC’s core business covers the de-
velopment and manufacture of metal and
carbon fibre composite aircraft structures
and the associated equipment and pro-
duction systems. The parts manufacturing
unit in Bremen rounds off the company’s
production portfolio of high-quality indi-
vidual aircraft components. Among the
parts produced by the unit are complex
clips made from thermoplastic material
for the new Airbus A350 XWB long-haul
aircraft.
Hans Lonsinger, President and CEO wel-
comed the employees of the Bremen-
based parts manufacturing unit to Pre-
mium AEROTEC and explained: “We are
proud that this unit, with its many years
of experience in the production of aero-
structural components, is now part of our
Group. Premium AEROTEC will continue
its expansion course to become a glo-
bally active, competitive and steadily
growing company.”
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 18
Aerospace and Defence
Dr. Gerald Weber, Chairman of the Super-
visory Board, emphasised Premium
AEROTEC’s strategic importance in the
field of aircraft construction: “By taking
over the Bremen-based parts manufactur-
ing unit, the company will further con-
solidate its already excellent position in
the global aero-structures market.”
“We are facing the future with confidence.
The investments made in the Bremen
based parts manufacturing unit and the
work packages allocated to it, particularly
those for the A350 XWB, have strength-
ened Premium AEROTEC’s overall capa-
bilities and possibilities. The employees
have good future prospects at Premium
AEROTEC. They are assured for years to
come,” said Thomas Busch, Chairman of
the General Works Council.
Premium AEROTEC GmbH has more than
6,000 employees and expects to generate
revenues of about one billion euros for
2009. Its core business is the development
and manufacturing of metal and carbon
composite aerostructures and the associ-
ated equipment and production systems.
The company has production plants in
Augsburg, Bremen, Nordenham and Varel.
General Dynamics
UK successfully tests
ASCOD SV armour
system
Mine-blast tests demonstrate FRES SV
contender stands ready to offer British
forces new levels of protection.
General Dynamics UK has this week com-
pleted a series of demanding trials at the
higher test levels required by the FRES SV
programme to demonstrate that its AS-
COD SV contender is already capable of
delivering new levels of protection to
British military personnel. The ASCOD SV
system design withstood a number of
attacks from the latest mine threats in its
base configuration. The system also ena-
bles enhanced levels of blast protection
to be fitted, enabling protection against
greater threats and providing the Army
with the ability to adapt rapidly to evolv-
ing operational scenario.
Commenting on the successful mine blast
test, Steve Rowbotham, General Dynam-
ics UK Vice President, Advanced Projects
18 February-March 2010
19.3.2010 13:34:12
 and Technologies said, “This mine blast
trial is a key milestone in demonstrating
that ASCOD SV is the right answer for FRES
SV. In addition to offering tonnes of ca-
pability and growth potential over the
next 30 years, General Dynamics UK has
demonstrated that ASCOD SV offers
tonnes more protection to British military
personnel today and in the future.”
Mine threats are regularly encountered
by Allied forces on current operations in
Afghanistan, sometimes with devastating
effect to vehicles and their occupants.
This specific testing of the high levels of
integrated survivability of ASCOD SV pro-
vides exacting evidence of the vehicles
ability to afford maximum protection to
the vehicle occupants.
These successful mine blast tests come
only a month after the successful firing
of the mandated CT40 Case Telescopic
Weapon System by turret provider Lock-
heed Martin INSYS. In addition to the
MoD benefiting significantly from the
commonality between the FRES SV Scout
and Warrior programmes provided by
Lockheed Martin’s turret, the FRES SV
crew will benefit from having the maxi-
mum space to do their job while ensuring
maximum protection, thanks to an in-
novative turret ring configuration and
other features.
General Dynamics UK President and Man-
aging Director, Sandy Wilson added: “We
invested in these trials because protection
is the essence of modern warfare. This
proven solution, built into ASCOD SV from
the start, will ensure that FRES SV delivers
exceptional levels of protection to British
soldiers from day one.”
Saab signs contract
for air defence system
RBS 70 to Finland
Defence and security company Saab has
signed a contract on further deliveries of
the RBS 70 ground based air defence sys-
tem to the Finnish Army. The order has
a value of MSEK 260. First deliveries of
material are scheduled for 2011. “This is
very positive and it further proves the
capability of the RBS 70 system which
until now has been exported to 18 coun-
tries located on all five continents,” says
Tomas Samuelsson, Head of Business Area
Dynamics. Saab serves the global market
with world-leading products, services and
solutions ranging from military defence
to civil security. Saab has operations and
employees on all continents and con-
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 19
stantly develops, adopts and improves
new technology to meet customers´
changing needs.
Boeing awarded
contract for major
upgrade to French
AWACS fleet
The Boeing Company today announced
that it has been awarded a $324 million
Foreign Military Sales contract from the
Electronics Systems Center at Hanscom
Air Force Base, Mass., to upgrade France’s
fleet of four E-3F Airborne Warning and
Control System (AWACS) aircraft, as well
as the fleet’s ground system.
“This upgrade – the largest ever for French
AWACS – will provide the fleet with more
actionable information and better situ-
ational awareness,” said Steve Swanz,
French AWACS program manager for Boe-
ing. “New mission computers also will
reduce the mission operator’s workload,
allowing more time to be spent managing
the battlespace.”
The French AWACS Mid-Life Upgrade is
based on the U.S. AWACS Block 40/45
system, which dramatically enhances the
potential for network-enabled operations;
increases mission execution capability,
reliability and effectiveness; and reduces
life-cycle costs.
The upgrade will include:
• A primary AWACS display, which increas-
es situational awareness through its in-
tuitive interface and detailed map da-
tabase;
• Upgraded Identification Friend or Foe
Interrogation, including Mode S and
Mode 5 capability;
• An increase in the number of mission
consoles aboard each aircraft, from
•
10 to 14;
Modern mission computing processing,
which enables improved AWACS mission
performance through the use of ad-
vanced battle management tools such
as Automatic Air Tasking Orders and
Airspace Coordination Order updates,
resource and sensor management, and
automated decision aids;
• Improved combat identification capa-
bilities from integrated sensor and off-
board datalinks;
• The Multi-Source Integration process,
which automatically integrates data from
on- and off-board sources such as radar,
Electronic Support Measures and Link
16, to provide significantly improved
•
tracking capabilities;
Digital radio control and management
through the new mission computing
subsystem;
• An open system architecture that ena-
bles rapid software upgrades and re-
quires less hardware.
Air France Industries will begin installing
the enhancements at its Le Bourget Airport
facility near Paris in 2012. The entire fleet
is scheduled to complete this upgrade in
the third quarter of 2015.
A unit of The Boeing Company, Boeing
Defense, Space & Security is one of the
world’s largest defense, space and security
businesses specializing in innovative and
capabilities-driven customer solutions,
19 February-March 2010
19.3.2010 13:34:13

and the world’s largest and most versatile
manufacturer of military aircraft. Head-
quartered in St. Louis, Boeing Defense,
Space & Security is a $34 billion business
with 68,000 employees worldwide.
Asia-Pacific airlines
to acquire 8,000
new aircraft over
next 20 years
Airlines in Asia and the Pacific will acquire
some 8,000 new passenger and cargo
aircraft over the next 20 years, according
to European aircraft manufacturer Airbus.
Valued at USD1.2 trillion, the requirement
represents one third of predicted global
deliveries between now and 2028, with
the region driving demand for larger air-
craft types.
The manufacturer’s latest forecast for the
region has been presented at the Singa-
pore Airshow by John Leahy, Airbus Chief
Operating Officer, Customers.
In the passenger market Airbus predicts
that traffic in the region will grow at an
average annual rate of 5.9 per cent, while
cargo traffic will increase by 6.3 per cent
per year. This compares with a global av-
erage of 4.7 per cent for passenger traffic
and 5.2 per cent for air freight. As a result
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 20
Aerospace and Defence
of this growth and continuous fleet re-
placement, the region is expected to take
delivery of some 880 very large aircraft,
2,570 twin aisle widebodies and 4,560
single aisle aircraft.
The high proportion of larger aircraft types
reflects the concentration of populations
around main urban centres in the region,
generating high density traffic on key
intra-regional routes, as well as to capacity
constrained international destinations in
Europe and North America. Meanwhile,
demand for single aisle aircraft in the
region is expected to accelerate in the
coming years, driven by the growth of
low cost carriers and opening of new
routes between secondary destinations,
especially in China, India and South East
Asia.
In the cargo sector, the region will con-
tinue to dominate the global air freight
market, with the dedicated freighter fleet
operated by Asia-Pacific airlines growing
five times to 1,500 aircraft. While many of
these will be converted from passenger
models, Airbus predicts that around 340
new production freighters will be deliv-
ered to the region over the 20 year period.
These will be predominantly widebody
aircraft and will represent 40 per cent of
expected global demand for new produc-
tion freighters.
Presenting the details, John Leahy said
that within 20 years the region would
overtake the US and Europe as the world’s
largest air transport market, with Asia-
Pacific airlines carrying over 30 per cent
of global passenger traffic and around
40 per cent of all air freight.
“To meet this demand larger aircraft will
be needed to ease congestion and do
more with less,” he said. “This will see air-
lines from the region account for over 40
per cent of twin aisle deliveries and more
than 50 per cent of the demand for very
large aircraft, such as the A380. With
a modern, eco-efficient and comprehensive
product line, including the only all-new
aircraft in the very large segment, Airbus
will be especially well placed to meet the
needs of airlines in this region.”
The Asia-Pacific region is a core market
for Airbus accounting for a quarter of all
orders recorded by the company to date.
Today there are some 1,430 Airbus aircraft
in service with 66 operators across the
region, with another 1,120 on order with
customers for future delivery. This repre-
sents 32 per cent of the company’s total
backlog, reflecting the importance of the
region as the fastest growing market for
new civil aircraft.
Airbus’ forecast for the Asia-Pacific region
is derived from the company’s Global
Market Forecast, which foresees total de-
mand for almost 25,000 new passenger
and freighter aircraft valued at USD 3.1
trillion between 2009 and 2028. This in-
cludes foresees total demand for 1,700
very large aircraft, 6,250 twin aisle wide-
bodies and almost 17,000 single aisle
aircraft.
The Airbus product line comprises the
best-selling A320 Family in the single aisle
market, the popular A330/A340 and all-
new A350 XWB in the twin aisle category
and the flagship A380 in the very large
aircraft segment. In the freight market
Airbus currently offers the new mid-size
A330-200F, set to enter service later this
year.
Airbus aircraft list
prices to increase from
January
Airbus has increased the list price of all
its aircraft by an average of 5.8 per cent.
The price increase is the first since January
20 February-March 2010
19.3.2010 13:34:15
 2008, and applies for all new aircraft from
the beginning of January 2010.
The price increases were calculated ac-
cording to the Airbus standard escalation
formula over the January 2008 to January
2010 period.
“We have tried to keep prices down for
as long as we can,” said John Leahy, Chief
Operating Officer, Customers. “However,
even with record aircraft deliveries and
impressive orders in recent years, the
continuing strength of the Euro against
the US Dollar and the ongoing financial
challenges ahead have forced us to take
action.”
An ongoing US Dollar weakness, an in-
creased cost of materials as well as com-
modities are all factors in the decision.
In its 40 year history, Airbus has become
the leading aircraft manufacturer with
the most modern and comprehensive
family of airliners on the market, ranging in
capacity from 100 to more than 500 seats.
In this time, Airbus has sold almost 9,500
and delivered over 6,000 aircraft since the
first airliner entered service in 1974. Airbus’
backlog stands at almost 3,500 aircraft.
to one charge of breach of duty to keep
accounting records in relation to payments
made to a former marketing adviser in
Tanzania. The Company will pay an agreed
penalty of £30 million comprising a fine
to be determined by the Court with the
balance paid as a charitable payment for
the benefit of Tanzania.
BAE Systems plc issued the following
statement from Chairman Dick Olver con-
cerning the settlement: “In 2000, the
Company gave a commitment to the U.S.
Government that it would establish and
comply with defined U.S. regulatory re-
quirements within a certain period and it
subsequently failed to honour this com-
mitment or to disclose its shortcom-
ings.
In connection with the sale of a radar
system by the Company to Tanzania in
1999, the Company made commission
payments to a marketing adviser and
failed to accurately record such payments
in its accounting records. The Company
failed to scrutinise these records ade-
quately to ensure that they were reason-
ably accurate and permitted them to re-
main uncorrected.
The Company very much regrets and ac-
cepts full responsibility for these past
shortcomings.
These settlements enable the Company
to deal finally with significant legacy is-
sues. In the years since the conduct re-
ferred to in these settlements occurred,
the Company has systematically enhanced
its compliance policies and processes with
a view to ensuring that the Company is
as widely recognised for responsible con-
duct as it is for high quality products and
advanced technologies.”
BAE Systems is the premier global defence,
security and aerospace company deliver-
ing a full range of products and services
for air, land and naval forces, as well as
advanced electronics, security, informa-
tion technology solutions and customer
support services. With approximately
105,000 employees worldwide, BAE Sys-
tems’sales exceeded £18.5 billion (US $34.4
billion) in 2008.

BAE Systems plc

announces global
settlement with
United States
Department of Justice
and United Kingdom
Serious Fraud Office
BAE Systems plc, the U.S. Department of
Justice and the UK Serious Fraud Office
have reached settlements in connection
with the Justice Department investigation
announced by the Company on 26th June
2007 and the Serious Fraud Office an-
nounced by the Company on 3rd Novem-
ber 2004.
Under the agreement with the Depart-
ment of Justice, which requires court ap-
proval, the Company will plead guilty to
one charge of conspiring to make false
statements to the U.S. Government in
connection with certain regulatory filings
and undertakings. The Company will pay
a fine of $400 million and make addi-
tional commitments concerning its ongo-
ing compliance.
Under the agreement with the Serious
Fraud Office, the Company will plead guilty

Trade & Investment | www.trade-investment.eu 21 February-March 2010

TI_2010_02_final.indd 21 19.3.2010 13:34:16


Sony Europe named
greenest company
of 2009
Leading Environmental Website, Environ-
mental Graffiti (www.environmentalgraf-
fiti.com), has selected Sony Europe for the
greenest company of 2009 for its contin-
ued commitment to eco friendly projects
and initiatives.
“We were looking for companies that have
proven over the last year that being en-
vironmentally friendly and profitable can
go hand in hand” said Chris Ingham-
Brooke, Environmental Graffiti Editor.
“What impressed us about Sony was their
consistent activities throughout the year
that showed they are using their technol-
ogy in an innovative way to address en-
vironmental problems”.
Sony Europe was particularly commend-
ed for its creative green projects in 2009
which included the Forest Guard initiative
that involved Sony Engineers working
with a group of children to develop their
idea to prevent wildfires. Not only do
wildfires cause terrible human devasta-
tion, but they also have a huge environ-
mental impact; the carbon dioxide they
produce can equal that of several million
cars on the road in a year.
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 22
Electronics
Another activity was a partnership with
the Prince’s Rainforest Project to help raise
awareness of tropical deforestation. Sony
Europe also hosted a series of sustainabil-
ity lectures with the European Business
school ESCP- EAP to debate the role of
technology and business in solving climate
issues.
“We are delighted with this recognition
from Environmental Graffiti who are such
a highly respected eco website”, said
Emily Young, General Manager of Envi-
ronmental Communications, Sony Europe.
“We will continue our work in 2010 to lead
engaging environmental programmes
that use our technology to find solutions
to mitigate the effects of climate change”.
Sony is a leading global innovator of au-
dio, video, communications and informa-
tion technology products for both the
consumer and professional markets. Sony
is renowned for its audio-visual products,
such as the BRAVIA™ LCD high-definition
television, Cyber-shot™ digital camera,
Handycam® camcorder and Walkman®
MP3 player as well as its VAIO™ personal
computers and high-definition (HD) pro-
fessional broadcast equipment, high-
lighted by the XDCAM® HD. Offering
a complete end-to-end HD value chain
and with its electronics, music, pictures,
game and online businesses, Sony is one
of the world’s leading digital entertain-
ment brands, employing approximately
170,000 people worldwide.
New Ovi Maps with
free navigation
races past 1 million
downloads in a week
Nokia has announced that since the
21 January 2010 launch of the new version
of Ovi Maps with free walk and drive
navigation, there have been over 1.4 mil-
lion downloads. The one million mark was
reached just one week after the launch.
“We’re averaging a download a second,
24 hours a day,” said Anssi Vanjoki, Execu-
tive Vice President, Nokia. “When we an-
nounced free walk & drive navigation we
knew it would be a game-changer. The
number of people now using their Nokia
for navigation, and as a result looking for
more location-aware software, is growing
faster than even we predicted.”
The success of the new version Ovi Maps
is a key part of Nokia’s strategy to lead the
market in mobile maps, navigation and
location-based services. By leveraging its
investment in NAVTEQ, Nokia has been
able to remove the costs associated with
navigation for drivers and pedestrians
and is quickly activating a massive user
base to which it can offer new location
features, content and services.
“This is great news for our 3rd party ap-
plication developers. Within a matter of
days there is an installed base of more
than 1 million active users all potentially
hungry for new and innovative location-
aware apps,” continued Anssi Vanjoki. “For
the operators too there is a growing op-
portunity to sell more data-plans and
22 February-March 2010
19.3.2010 13:34:17
 a complete navigation package to existing
and new customers.”
As of 31 January 2010 the top five coun-
tries downloading the new version of Ovi
Maps were: China, Italy, UK, Germany and
Spain. The top five most popular Nokia
devices installing the download were:
Nokia 5800 XpressMusic, Nokia N97 mini,
Nokia N97, Nokia 5230 and Nokia E72.
“There is a huge appetite for GPS naviga-
tion on mobile phones. We estimate there
were already 25.9 million people actively
using GPS navigation on their mobile
phones at the end of 2009,” said Chris
Jones, VP & Principal Analyst at research
firm Canalys.
From next month, all new Nokia GPS-
enabled smartphones will include the
new version of Ovi Maps, pre-loaded with
local country map data, with high-end
walk and drive navigation and access to
Lonely Planet and Michelin travel guides
at no extra cost.
Ovi Maps covers more than 180 countries
with car and pedestrian navigation for 74
countries, in 46 languages, and traffic
information for more than 10 countries.
There are more than 6000 3D landmarks
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 23
for 200 cities around the world. Lonely
Planet and Michelin guides have informa-
tion on more than 1,000 destinations
globally.
Panasonic profits after
cost-cutting
Electronics group Panasonic has reported
its second straight quarterly profit follow-
ing heavy cost-cutting.
Net profit between October and Decem-
ber came in at 32.3 bn yen ($360 m;
£228 m), compared with a net loss of
63.1 bn for the same period a year earlier.
The turnaround was “due mainly to com-
prehensive streamlining of management”,
the firm said.
However, it maintained its forecast for
a loss of 140 bn yen for the year to the
end of March.
The company said that the market for
consumer electronics remained difficult.
“In the electronics industry during the
third quarter, despite visible signs of mar-
ket recovery in regions such as China and
Asia, severe business conditions contin-
ued,” it said.
The strong yen was also hampering ex-
ports, it added.
At the end of last year, Panasonic bought
a majority 50.2% stake in Sanyo, thirteen
months after first expressing an interest
in its rival.
Motorola merger of
Phone, Set-Top units
sets it apart, Jha says
Motorola Inc. is combining its mobile-
phone and set-top box units into one
company to set it apart from rivals Apple
Inc. and Research In Motion Ltd.
“It’s definitely a differentiator,” said Sanjay
Jha, Motorola’s co-chief executive officer
who will head the new company. Consum-
ers want access to content “across three
screens – TV, desktop, mobile,” he said.
Motorola, which developed the first com-
mercial mobile phone in 1983, is splitting
itself into two publicly traded companies.
23 February-March 2010
19.3.2010 13:34:25

In addition to the phone and set-top box
tie up, a second company will combine
the enterprise mobility unit, which makes
two-way radios and bar-code scanners,
with the wireless networks business,
Schaumburg, Illinois-based Motorola said
yesterday.
The company is trying to revive its repu-
tation as an innovator in consumer tech-
nology as the lines blur between how
people communicate and view entertain-
ment. Combining Motorola’s wireless,
video and rights management properties
will let customers download TV shows,
movies, personal videos at home or on
their mobile devices, said Jha.
“The seas are parting into Old World tech
and New World tech,” said Diane Garnick,
an investment strategist at Invesco Ltd.
in New York, which managed about $423
billion at the end of last year, including
Motorola shares. “One of their businesses
is going to go into the mature stage of
the business cycle while the other one is
going to capitalize on all this growth.”
The company has struggled to repeat the
success it last had in 2004 with its Razr
phone. Apple’s iPhone and RIM’s Black-
Berry have taken the lead, capitalizing on
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 24
Electronics
exploding growth in the smartphone
market. That growth isn’t abating. World-
wide smartphone sales are expected to
jump 46 percent this year, according to
a forecast by researcher Gartner Inc.
The split should be completed early next
year, Motorola said. Jha assumed his new
post yesterday, and current co-CEO Greg
Brown will lead the second company.
Motorola’s handset business lost $132 mil-
lion last quarter and hasn’t been profit-
able since the fourth quarter of 2006. Jha
said on a conference call yesterday that
he is “comfortable” the unit will return to
profitability this year. The company plans
to release 20 mobile-phone models this
year, he said.
In October 2008, management delayed
a planned spinoff of the handset business
amid the global recession. Billionaire in-
vestor Carl Icahn, who pushed for a split
earlier that year, applauded yesterday’s
move. “It’s a great step for Motorola,” Icahn
said. “It will strongly enhance sharehold-
er value.” His company owned almost
120 million Motorola shares, or 5.2 percent
of outstanding stock, at the end of Sep-
tember.
The separation will occur through a tax-
free stock dividend in the new companies
to existing shareholders. Both companies
will be “well capitalized,” Motorola said.
The handset and set- top business will
own the Motorola brand and license
it free of royalties to Brown’s entity,
the company said. “This gives Motoro-
la a cleaner configuration with a more
compelling value proposition,” Brown
said.
Motorola introduced its first car radio in
1930 and two-way radio in 1940. A Mo-
torola transponder aboard the Apollo 11
space capsule in 1969 relayed astronauts’
words back to Earth from the moon.
The deal may not appeal to all investors,
said Tero Kuittinen, an analyst at MKM
Partners LP in Greenwich, Connecticut.
He called the phone and set-top box
merger “an awkward hybrid.”
“Some people bought Motorola because
they were hoping that it would be able
to sell either the handset unit or the set-
top box unit,” said Kuittinen, who recom-
mends selling the shares. “I don’t think
many people expected them to maintain
them both in the same company.”
24 February-March 2010
19.3.2010 13:34:27

Danske Bank sees
difficult 2010
Danish banks are not yet out of the crisis,
but the country’s largest bank sees some
light at the end of the tunnel. 2010 will
still be an uphill battle for Danish banks,
according to Danske Bank which has re-
leased its 2009 accounts.
Results for the country’s largest bank were
slightly better than anno horribilis 2008
but far from the boom years prior to the
financial crisis. The bank showed a 2009
result after tax of DKK 1.7 billion compared
with DKK 1.0 billion in 2008 and almost
DKK 15 billion in 2007.
“2010 is expected to be yet another chal-
lenging year for the financial sector, for
Danske Bank and for the group’s custom-
ers. The latest macroeconomic deve-
lopment does, however, give hope for
a gradual improvement in the business
foundation,” the bank writes.
Danske Bank still envisages continuing
major losses on bad loans. “Writedowns
on loans are expected again this year to
be at a high level, though lower than 2009,”
the bank says. Bad loans cost Danske Bank
DKK 25.7 billion in 2009.
The bank also says it expects Denmark
will see positive growth in GDP at 1.7 per-
cent and an increase in the interest rate
of 0.5 percentage points both in Denmark
and its other markets.
It also sees unemployment in Denmark
continuing to grow and continued diffi-
culty for Danes to borrow money.
Bank of England calls
halt to bond purchase
program
Faced with rising inflation and evidence
that the country has finally emerged from
recession, the Bank of England has an-
nounced that it would not extend its mas-
sive buying spree of government bonds
that was intended as an economic stimu-
lus. The move came just before a meeting
of the European Central Bank, which left
its benchmark rate at 1 percent amid signs
that economic recovery in the Euro zone
is still fragile and that lending by banks is
still well below normal levels. The Bank of
England also decided to leave its bench-
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 25
Banking and Finance
mark interest rate unchanged at 0.5 per-
cent, where it has been since March
2009.
Regarding its asset purchases, known as
quantitative easing, the Bank of England
said that the “stock of past purchases,
together with the low level of bank rate,
would continue to impart a substantial
monetary stimulus to the economy for
some time to come.” The decision had
been expected by analysts in the face of
data showing economic activity picking
up in Britain, and as annual inflation has
risen above the central bank’s 2 percent
target.
Analysts expect both European central
banks to leave rates at their current record
lows until the second half of this year, at
least. An uneven recovery in countries
such as Germany, coupled with a debt
crisis in Greece and 19 percent unemploy-
ment in Spain, mean that policy makers
will remain cautious about raising the cost
of borrowing. Britain, which is outside the
Euro zone, only emerged from recession
at the end of last year – and then just
barely.
The Bank of England had increased the
budget for its asset-purchasing plan in
November 2009 – the third time since it
was introduced in March – but left it un-
changed in December and January. In all,
it has purchased around £200 billion, or
$318 billion, of assets, mostly government
bonds, in a program that is designed to
inject more cash into the weakened fi-
nancial sector and ultimately bolster pri-
vate credit.
Britain took longer to emerge from reces-
sion than most of its continental neigh-
bours, apparently because of the greater
weight of personal debt in Britain. During
the fourth quarter of last year, the British
economy expanded by a limp 0.1 percent
on the previous period, still down 3.2 per-
cent from a year earlier, according to
a preliminary estimate.
The economy in the Euro zone has per-
formed better. The Market purchasing
managers’ index for the Euro area, released
Monday, clocked its fastest rise in two
years. But while Germany and France are
showing signs of modest growth, other
countries, such as Ireland, remain troubled.
The recovery in Britain is likely to be slug-
gish because consumers face the prospect
of higher taxes as well. Whichever politi-
cal party wins the general election, due
to be held by June, will have to focus on
reducing the swollen budget deficit.
The International Monetary Fund has
predicted recently that the British econ-
omy would expand by 1.3 percent this
year, compared to 2.7 percent in the
United States and 1.5 percent in Germany.
British growth was forecast to pick up to
2.7 percent next year.
There are also concerns in Britain about
inflation, even as wages remain subdued.
25 February-March 2010
19.3.2010 13:34:28

In December, consumer prices climbed
2.9 percent from a year earlier, 1 percent-
age point more a month earlier. Prices
were pushed higher by energy costs and
the expiration of a cut in value-added
taxes. The weakness of the pound may
have also contributed.
The bank said that inflation is likely to
have risen further in January, reflecting
the restoration of the V.A.T. rate to 17.5 per-
cent. Pay growth has remained subdued,
it added. The Bank of England’s last esti-
mates showed inflation would accelerate
through 2 percent – its target – before
dipping below that level around 2012.
Over all, the most recent data are still
sending mixed signals.
Deutsche Bank reports
net income of EUR 5.0
billion for the year
2009
Deutsche Bank has reported unaudited
figures for the fourth quarter and the full
year 2009. For the year 2009, net income
was EUR 5.0 billion, versus a net loss of
EUR 3.9 billion for the year 2008. Income
before income taxes was EUR 5.2 billion,
versus a loss before income taxes of EUR
5.7 billion in 2008. Diluted earnings per
share were EUR 7.59, versus negative EUR
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 26
Banking and Finance
7.61 in 2008. Pre-tax return on average
active equity, per the bank’s target defini-
tion, was 15%, versus negative 20% in
2008. The Tier 1 capital ratio was 12.6%,
up from 10.1% at the end of 2008, while
the Core Tier 1 ratio, which excludes hybrid
instruments, was 8.7%, up from 7.0% at
the end of 2008. The Management Board
and Supervisory Board recommend
a dividend of 75 cents per share, compared
to 50 cents for 2008.
For the fourth quarter 2009, net income
was EUR 1.3 billion, and earnings per share
were EUR 2.00 on a diluted basis, versus
a net loss of EUR 4.8 billion, or negative
earnings per share of EUR 8.71 on a di-
luted basis, in the fourth quarter 2008.
Income before income taxes was EUR 756
million, versus a loss before income taxes
of EUR 6.2 billion in the prior year quarter.
Fourth quarter 2009 income before in-
come taxes included a non-tax deductible
noninterest expense of EUR 225 million
relating to the proposed bank payroll tax
in the United Kingdom. 2009 fourth quar-
ter net income reflects a tax benefit of
EUR 554 million, mainly due to a credit of
EUR 790 million arising from the recogni-
tion of deferred tax assets in the United
States, which reflects strong current per-
formance and improved income projec-
tions of Deutsche Bank entities within
that tax jurisdiction.
Dr. Josef Ackermann, Chairman of the
Management Board, said: “Deutsche Bank
achieved a great deal in 2009. We delivered
very substantial profitability, while simul-
taneously reducing risk and balance sheet
leverage. We used these good results to
bolster our capital base, and our capital
ratios are stronger than ever.” He added:
“We also took decisive strategic action in
2009. We re-positioned core businesses,
and widened our scope for profitable
growth, both by organic investments and
via targeted acquisitions. We also defined
our management agenda for the post-crisis
era. Looking forward, we see a clear trend
to recovery, and stabilisation of financial
markets, although the effects of the recent
crisis will take time to work through. The
regulatory framework of our industry will
also likely see changes. With our financial
strength and our strategic positioning,
we are very well placed for both the chal-
lenges and the opportunities of 2010.”
RBS / NatWest launch
£1 bn fund in support
of UK manufacturing
sector
RBS and NatWest have pledged to make
£1 billion of new loans available on com-
petitive, flexible terms to UK manufactur-
ing businesses. The bank has ring-fenced
a fund specifically for the manufacturing
sector, with loans being offered on com-
petitive fixed rates and with the option
to defer repayments for up to three years.
The bank is launching its dedicated
manufacturing fund in response to feed-
back from customers in the sector who
are anticipating growing demand for their
products during 2010 and beyond. The
fund will provide loans designed to help
those businesses finance investment and
ensure they are poised to take advantage
of any opportunities that present them-
selves as the market for their products
and services begins to recover.
Data that have been published provide
evidence for cautious optimism in a sec-
tor which, with nearly 168,000 manufac-
turing companies employing more than
2.5 million people, has a significant role
to play in the UK economy. The Purchasing
Managers’ Index (PMI) survey of UK
manufacturers staged a solid rebound in
December 2009 to reach a two-year high,
suggesting an underlying improvement
in the performance of British industry.
26 February-March 2010
19.3.2010 13:34:31
 Peter Ibbetson, chairman of business as clients took out 56.2 bn francs. Such recession, CIB Bank said. Short-term forint
banking at NatWest and RBS, said: “We’re withdrawals would continue “in the im- depreciation from 280 to 285 to the euro
beginning to see some encouraging signs mediate future”, the bank said. “is on the cards” if global sentiment turns
for the manufacturing sector, but we can’t sour, CIB Bank, a unit of Intesa Sanpaolo
forget the context they must be taken in, UBS also said it was confident that its SpA, said. Fiscal risks due to recession and
which is that this sector has been hit par- long-running dispute with US tax au- political risks still loom and may increase
ticularly hard by the recession and its thorities would be resolved. The US has with the approaching parliamentary elec-
return to full health will not happen over- accused UBS of hiding nearly $15bn in tions.
night. We want to ensure we are doing assets of US customers, and is seeking the
account details of some of its US cli- Hungary will hold a first round of elections
everything we can to assist the sector as
on April 11. The largest opposition party,
conditions begin to improve. As we see ents.
Fidesz, which leads the governing Social-
many of our manufacturing customers
ist Party in opinion polls, has said the
turning their thoughts to investment in
budget shortfall this year may be twice
order to drive competitiveness, we want
to send a clear message of support to
Forint may weaken to the government’s 3.8 percent target. Hun-
gary pledged to cut spending and limit
them by creating a fund that is designed
specifically to enable that investment. We
285 per Euro ahead of the budget deficit to meet the terms of
its International Monetary Fund-led bail-
believe the fixed rate deals we are launch- April vote, CIB Bank says out last year.
ing today are better than you would find
anywhere else in the market currently.” The Hungarian forint may weaken to 285 CIB expects the forint to strengthen
per euro ahead of general elections in gradually after the elections and sees the
Alastair Murray, Group Finance Director
April and on investor concern of potential currency potentially dipping below the
of Dairy Crest Group PLC commented:
“Anything that is designed to help UK fiscal slippage because of the country’s 264 level.
manufacturers invest for growth should
be welcomed. The fund should be seen
as a positive initiative in this respect.”
The manufacturing fund is the latest in
a series of initiatives launched by RBS and
NatWest in support of UK businesses,
including an SME Customer Charter, a cus-
tomer support helpline, and a price prom-
ise and committed overdrafts for SMEs.

UBS reports first profit

in more than a year
Swiss bank UBS has reported its first quar-
terly profit for more than a year, helped
by lower costs and a large tax credit. UBS
made a pre-tax profit of 1.2 bn Swiss francs
($1.1 bn; £722.9 m) in the three months
to 31 December. This compares with a loss
of 9.58 bn francs in the same period in
2008. The turnaround in the final three
months of the year helped the bank to cut
its annual net loss to 2.7 bn Swiss francs
last year. The bank’s profit in the final
quarter of 2009, which was much bigger
than analysts had expected, was partly
down to a tax credit worth 480 m francs.
In a letter to shareholders, chief executive
Oswald Gruebel said he was confident
that the bank’s positive performance
would continue. “We have taken decisive
action to transform UBS and it is now
a focused, efficient and resilient firm,” he
said. “We expect that our return to profit-
ability will increase clients’ confidence in
UBS and restore our reputation.”
However, the bank still suffered from out-
flows in the final three months of 2009,

TI_2010_02_final.indd 27 19.3.2010 13:34:34


Kraft and Cadbury:
It’s a wrap
Cadbury was finally acquired for £11.4 bn
by the US food giant Kraft, closing the
door on nearly 200 years of independence
for the Dairy Milk maker. Kraft (KFT), which
makes Philadelphia cream cheese and
Oreo biscuits, said that holders of 71.7 per
cent of Cadbury (CBY) shares had ac-
cepted its final offer, sufficient for it to
take control of the Bournville, Birming-
ham-based manufacturer and create
a company with global sales of $50 bn in
160 countries.
The rubber-stamping of the deal brings to
an end the five-month battle for Cadbury,
which was often a bitter war of words
until Kraft made its improved offer of 850p
a share, including a special dividend of
10p.
It also came on the day that Lord Mandel-
son met Irene Rosenfeld, the chief execu-
tive and chairman of Kraft, to discuss UK
job losses. Earlier yesterday, an entourage
of Cadbury employees had protested
outside Parliament. A representative of
the Unite union reportedly said: “Ministers
must make it abundantly clear that closures
and mass redundancies will not be ac-
cepted by the British government or the
British people.” Kraft has not yet indicated
how many jobs will be lost, as part of the
deal’s slated $1.3 bn of restructuring
costs.
Kraft will apply for Cadbury to be de-
listed from the London Stock Exchange
after 75 per cent of the UK company’s share-
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 28
Food and Drink
19 January, Kraft made a final offer of 850p
a share, which the board of Cadbury
recommended.
Nestlé commits
to nutritional
programme in France
Nestlé France has signed three voluntary
charters of commitment to nutritional
progress for its brands Davigel, Maggi and
Herta. Eugenio Minvielle, Head of Nestlé
France, has pledged its commitment to-
gether with Roselyne Bachelot-Narquin,
Minister for Health and Sport.
holders sell their shares to Kraft, which
they are widely expected to do. Once it
receives acceptances of 90 per cent, the
US giant will acquire the remaining Cad-
bury shares.
Ms Rosenfeld said: “The combination of
Kraft Foods and Cadbury creates a global
powerhouse in snacks, confectionery and
quick meals.” She added. “Together we
have impressive global reach and an un-
rivalled portfolio of iconic brands, with
tremendous growth potential.”
On Monday, Unite’s national officer for
food and drink, Jennie Formby, said: “Our
workers at Cadbury are extremely worried In signing the voluntary charters, Nestlé
that what was a bright future for them has joined the national nutrition and
will be dimmer under Kraft.” She added: health programme (Programme National
“The workforces have been kept in the Nutrition Santé, PNNS) which is backed and
dark too long. Specific questions have recognised by the French government.
been put to Ms Rosenfeld by our Euro-
As part of the PNNS, the aim is to reduce
pean colleagues, including will the take-
the intake of salt, simple sugars and trans-
over lead to the closure of existing plants
fatty acids, while increasing the consump-
and will there be lay-offs? All these ques-
tion of complex sugars, fibre, fruit and
tions need urgent answers.”
vegetables. Under the charters, Nestlé
Kraft acquired Terry’s chocolate in 1993 France will also be implementing educa-
and vowed not to close its York headquar- tional campaigns for consumers and on-
ters. However, the US company sold off going nutritional training for employees
the building by 2005, as it moved produc- while actively promoting a balanced diet.
tion to Poland. The recent Nestlé France pledge adds to
It made its first indicative offer at 745p, the total of 14 charters signed since the
but this was lambasted by Cadbury’s chair- existence of the system in February
man, Roger Carr, as being “derisory”. He 2007.
also called Kraft a “low-growth conglom-
erate” and went on to urge shareholders
not to let it “steal your company”. Kraft
publicly questioned whether Cadbury
could actually meet its revised targets for
the next three years. However, on
28 February-
FFebruary-March
-March 2010
19.3.2010 13:34:36

Coca Cola sales
boosted by new
markets
The world’s largest soft drinks company
reported profits of $6.82bn (£4.36bn) for
2009 – a rise of 17% on the previous year.
It also saw a strong end to the year with
fourth-quarter profits up 55%, and global
sales up 5%. Sales grew sharply in devel-
oping markets including China, India and
Brazil. That made up for a slight fall in sales
in North America, although the company’s
Coke Zero brand bucked the trend, in-
creasing its sales by more than 10%.
Global sales of the Coca Cola drink itself
rose 4% in the fourth quarter. “We ended
this year on a high note,” commented
Muhtar Kent, chairman and chief executive
of the Coca Cola Company.
He added that the company’s leading
brands allowed it grow even under “chal-
lenging economic conditions”.
The company behind the Sprite, Fanta
and Minute Maid brands has turned its
attention to newer markets in recent years
as US consumers cut back on their con-
sumption of soft drinks. The effects of the
recession, as well as a move toward health-
ier alternatives, have been blamed.
However, the Treasury said the UK was an
attractive place to do business. “At 28%
the UK’s corporation tax rate is now at its
lowest-ever level,” a Treasury spokesman
said. “The UK continues to have the lowest
corporation tax rate of the major G7
economies.”
A number of companies have already
relocated their tax bases away from the
UK including advertising giant WPP, pub-
lishing group Informa and temporary
office supplier Regus. Last August, phar-
maceutical firm Reckitt Benckiser also said
it was considering shifting its tax head-
quarters out of the UK.
Mr Walsh said Diageo, which employs
6,000 people at its London headquarters,
said it still enjoyed being based in London,
but warned it might be forced to relocate.
“But if the tax regime becomes so egre-
gious, either for corporates or individuals
we would have no option but to look at
alternatives,” he said. “The UK has become
progressively a less attractive location to
base oneself in,” he added.
He refused to comment on speculation
that the company – which owns brands
such as Johnnie Walker whisky, Smirnoff
vodka and Guinness stout – had been
offered incentives by the Swiss govern-
ment to locate there.
Mr Walsh was speaking after Diageo re-
ported a dip in its half-year profits. Pre-tax
profit for the six months to December
2009 fell slightly to £1.39 bn from £1.41 bn
a year ago. The drinks firm said it had been
a “challenging” six months as the con-
sumer environment remained weak, but
added it was in the early stages of recov-
ery.
Mr Walsh said the first quarter of the com-
pany’s financial year had been tough as
expected, with sales down 6%, but sales
in the second quarter had picked up by
2%. “If you look at the second quarter it’s
clear that the US and Europe remain
pretty slow but markets such as Asia,
Latin America and Africa are quite buoy-
ant,” he said.
In July, Diageo announced plans to close
its Johnnie Walker bottling plant in Kil-
marnock and its Port Dundas grain dis-
tillery in Glasgow. Despite strong protests,
the company has confirmed that the clo-
sures will go ahead, with about 900 jobs
lost as a result.

Diageo hits out at UK

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

TI_2010_02_final.indd 29 19.3.2010 13:34:40

 Where Is the End Toyota is to recall 8,000 Tacoma
pick-up trucks in the US, over
fears about defective front
drive shafts. The recall involves four-

of Car Recalls? wheel drive Tacomas built from mid-

December 2009 to early February
2010. The move is the latest in a string
of recalls in the past few months, totalling
more than 8.5 million Toyota vehicles
around the world.

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TI_2010_02_final.indd 30 19.3.2010 13:34:49

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

The problem of Prius

Of all the recalled cars there were 436,000
hybrid vehicles worldwide, including
Toyota’s latest Prius, a highly fuel-efficient
model on which Toyota had based many
of its hopes. 1.2 million Priuses have been
sold worldwide since 1997. Last year, it
was Toyota’s third-best-selling car in the
United States, behind the Camry and the
Corolla.
The Prius was drawn into the mounting
crisis for Toyota in early February as Jap-
anese officials ordered the company to
investigate complaints that the brakes
on its 2010 Prius model sometimes failed
to work immediately on bumpy or slippery
roads. U.S. safety officials also said they
had received dozens of similar reports.
The company said the 2010 Prius has
a new type of regenerative brake system
different from the ones used in previous
generations. With regenerative braking,
energy from the wheels is used to help
recharge the car’s battery. However, the
Prius and other hybrid models also rely
on electronic systems that combine re-
generative braking with conventional
brake pads, so that the battery can absorb
as much energy as possible while the pads
do most of the work of stopping the car.
The car also has an anti-lock brake sys-
tem.
Mr Yokoyama, the quality control execu-
tive, said that the new Priuses had expe-
rienced “a slight unresponsiveness” of the
brakes that could be easily resolved by
pressing harder on the brake pedal. Basi-
cally, Toyota determined that the problem
had occurred as the car had switched from
regenerative to conventional brakes just
as the anti-lock brake system had kicked
in.
In what became a pattern, however, Toy-
ota seemed slow to communicate the
extent of the problem or reveal details of
its response. Finally, the Japanese con-
sumer affairs minister, Mizuho Fukushima,
summoned Toyota executives to explain
the problems affecting the Prius. She told
the company to investigate the problems
and report back to her, and to take steps
to prevent unease among Toyota own-
ers.
Fixing the problems
In February, company president Akio
Toyoda publicly apologised for the prob-
lems and pledged to set up a new quality
control committee. Also, Toyota dealers
were taking extra steps to support custom-
ers during the recalls. Many Toyota deal-
ers offered extended service hours, and
some stayed open 24 hours a day until all
customer vehicles were fixed. Others were
adding greeters to their service drives,
dedicating body shop capacity to expedite
repairs, providing free car washes and oil
changes, increasing owner communica-
tion and providing complimentary main-
tenance service, among other customer-
focused activities. To support these efforts,
Toyota sent cheques of between $7,500
and $75,000 to its dealers in acknowledge-
ment of the additional costs they were
assuming to make it easier for customers
to have the necessary repairs done quick-
ly and conveniently.
A slow reaction of the
European Commission
The first problems with sticking accelera-
tors in some Toyotas surfaced more than
a year ago in Britain and Ireland. But it
was only in February 2010, long after
a global recall began, that the European
Commission issued its first consumer
alert.

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TI_2010_02_final.indd 31 19.3.2010 13:34:54


The commission’s warning was posted on
5th February to the relatively obscure web
site of the commission’s Rapid Alert System
for Non-Food Products. It said some Toy-
ota “products pose a risk of injuries be-
cause there is a possibility that the ac-
celerator pedal mechanism may, in rare
instances, mechanically stick in a par-
tially depressed position or return slowly
to the idle position.”The warning said that
Toyota had taken “voluntary corrective
actions.”
A group of government experts met at
the European Commission headquarters
to discuss exchanging information on the
Toyota problems. The commission out-
lined an information-sharing plan, but
there was no decision to change the sys-
tem in place, which lets carmakers decide
when to notify national agencies, said Ton
van Lierop, a commission spokesman.
In addition, the safety alerts are issued
only once companies take corrective ac-
tion, other commission officials empha-
sized.
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 32
Where Is the End of Car Recalls?
Stephen Russell, the secretary general of
ANEC, a European consumer standards
association, said the problems at Toyota
were a test for European regulators. He
said oversight of car safety was among
“gray areas when it comes to the con-
sumer interest and where we would wel-
come greater efforts in the areas of noti-
fication and enforcement between the
European Commission and member
states.”
Not only Toyota
Toyota is, however, not the only one to
have problems with faulty vehicle parts.
Also Honda is recalling 378,000 addition-
al vehicles in the US because the driver’s
side air bag may deploy too forcefully,
causing an injury or death. The company
announced the recall of 440,000 vehicles
for that reason last year as well. The ex-
panded recall affects 2001-2 Accord,
Civic, Odyssey and CR-V models, and some
2002 Acura TLs. The automaker said it was
aware of 12 accidents that resulted in 11
injuries and one fatality.
Honda’s first move to address the problem
came in November 2008, when it recalled
3,900 Civics and Accords from the 2001
model year. Last July, Honda sent anoth-
er letter to the National Highway Traffic
Safety Administration (USA), saying it was
expanding the recall to cover 440,000
other vehicles. That move prompted an
investigation by the safety agency, which
said it was evaluating the “timeliness” of
Honda’s recalls. The agency noted that
“failure to respond promptly, truthfully
and completely” could subject Honda to
significant civil penalties. John Mendel,
executive vice president for sales at Hon-
da, said that the automaker had not de-
layed but that it took time to figure out
the extent of the problem. Mr Mendel said
this was not Honda’s largest recall.
A day after Honda’s recall Volkswagen also
recalled nearly 200,000 cars in Brazil be-
cause of a rear wheel problem. The com-
pany wants to determine whether rear
32 February-March 2010
19.3.2010 13:34:59
 wheel bearings are sufficiently greased
on the Novo Gol and Novo Voyage mod-
els made before July 2009.
In the past other car makers had large-
scale recalls, for example: in October 2009,
Ford completed a recall affecting 14 mil-
lion vehicles with potentially faulty cruise
control deactivation switches; in August
2008, GM recalled some 850,000 vehicles
with potentially faulty windscreen wiper
systems; in December 2007, Chrysler re-
called some 575,000 vehicles with poten-
tial gear problems.
The latest recall
According to the latest news Toyota has
been voluntarily recalling„a small produc-
tion run of certain 2010 model-year
Tacoma 4WD trucks“. „The front shaft in
these vehicles may include a component
that contains cracks developed during
the manufacturing process,“ the com-
pany said in a statement. The cracks could
lead to the front drive shaft separating
and falling from the truck, causing drivers
to lose control of the vehicle. Toyota said
it would start notifying owners by mail in
mid-March. The shafts were built by en-
gineering firm Dana.
The latest recall comes as a blow to Toy-
ota as it seeks to revive trust in its vehicles.
The problems with Toyota vehicles have
battered the company’s stock, which has
already dropped significantly. Spooked
investors have been keeping a close eye
on the situation. Many are already taking
flight, as can be seen by sharp falls in the
share price. Toyota‘s reputation could be
tarnished for years.
Toyota is on a verge
of „capitulation
to irrelevance or
death“...
...as Mr Akio Toyoda said already in Octo-
ber 2009. At the time, long before the
latest safety scares, a slew of quality and
safety problems had sent Toyota‘s reputa-
tion sliding. The decline was there for all
to see. It was written into the company‘s
sales and earnings reports, which revealed
months of steady decline. Selling more
cars than General Motors (GM) and thus
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 33
becoming the world‘s biggest carmaker
had never formally been a target for the
Japanese carmaker.
But volume growth had: in 2002, when
the company‘s global market share stood
at little more than 10%, then Toyota pres-
ident Fujio Cho outlined a plan to reach
15% soon after 2010.
A year ago, when GM stumbled towards
bankruptcy, Toyota‘s ascent into the top
slot was inevitable. In 2008, Toyota sold
8.9 million, while GM sold 8.3 million ve-
hicles. But the rot had already set in;
Toyota had just issued its first-ever profit
warning for the year as a whole. Then, in
spring 2009, it reported a 436.9 bn yen
($4.4 bn at the time) operating loss for
the fiscal year to March. The company was
in crisis mode.
In June, Mr Toyoda stepped in at the helm
of the huge carmaker, four months after
former Toyota president Katsuaki Watan-
abe was ousted in a humiliating ritual in
front of some 400 Toyota executives. Akio
Toyoda was clear in his criticism: the
executives running the company that his
grandfather Sakichi Toyoda founded had
run it into the ditch. „Toyota has become
too big and distant from its customers,“
he said in his autumn speech, castigating
the firm‘s executives for their „undisci-
plined pursuit of more“ and for their ar-
rogance, which he referred to as „hubris
born of success“.
Within weeks of taking charge, Mr Toyoda
was informed of an accident in which an
off-duty traffic officer and three of his
relatives had died. The accelerator getting
caught in the floor mat of the brand-new
Lexus was deemed a possible cause. „Four
precious lives have been lost,“ Mr Toyoda
said at the time. „I offer my deepest con-
dolences.“ A recall of 3.8 million Toyotas
followed, involving a so-called „semi-
permanent floor mat installation proc-
ess“ – or rip-zipping the driver‘s side mat
to the seat rails.
Toyota estimates its losses will reach $2bn
in costs and lost sales from its worldwide
recall of vehicles that might have faulty
gas pedals, although this figure does not
include other potential problems – for
instance, reported issues with the brakes
on the carmaker‘s Prius model.
But the losses could escalate if it turns out
that the trust and reputation the com-
pany has built up over a period of decades
have been demolished almost overnight.
Crisis communication consultant John
Huntley, managing director of John Hunt-
ley Training, says such concerns are well
founded. „Something has gone wrong
and it seems people may have died,“ he
points out. „I think it‘s going to take Toy-
ota years to get out of this one.“ To Mr
Huntley, there is no doubt: Toyota had to
face the music, as failure to do so could
have been even more disastrous. And for
what they are worth, Toyota‘s apologies
have been a useful first step in terms of
alleviating the situation.
33 February-March 2010
19.3.2010 13:35:09

Konstantin Staschus
Secretary General
The European Network of Transmis-
sion System Operators for Electricity
(ENTSO-E) was created to consolidate
and continue the valuable work of its
predecessor associations and, several
months ahead of schedule, it is already
implementing the new responsibilities
the Third European Energy Package has
assigned to it. Diane Mannion looks at
the functions of ENTSO-E.
Under the third package of measures
adopted by the European Commission,
the energy market will become more
competitive allowing greater consumer
choice, fairer pricing, cleaner energy and
security of supply. There will also be an
increased focus on renewable energy. In
order to reach these goals the Commission
plans to develop increased solidarity
amongst EU members, sustained cross-
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 34
ENTSO-E
The 2020 Vision
border energy trade and investment, and
more effective national regulators.
Objectives
With these objectives in mind ENTSO-E
was formed in accordance with EC Regu-
lation 714/2009 as a pan European net-
work of Transmission System Operators
(TSO’s). However, the concept of TSO net-
working isn’t completely new. Prior to the
formation of ENTSO-E, there were six
separate Associations, which represented
TSO’s in different countries or regions of
Europe. The function of these Associations
was to enhance co-operation between
groups of TSO’s.
TSO’s plan, finance, build, operate and
maintain the electricity grid infrastructure
for the transmission of electric power on
Da ni e
Pr es id e
high voltage electricity networks. They
also provide access to the grid for electric-
ity generating and supply companies,
distributors, and traders. A major aspect
of their tasks is secure and reliable opera-
tions.
ENTSO-E encompasses the functions of
all of the previous associations but with
even deeper and wider co-operation
across Europe concerning the transmission
of electricity, which is essential if the aims
of the third energy package are to be met.
This applies in particular to its targets
relating to the use of renewable energy.
As well as promoting the interests of the
TSO’s, ENTSO-E will have an active role in
the European electricity legislative proc-
ess, via the development of its Ten-Year
Network Plans and Network Codes.
34 February-March 2010
19.3.2010 13:35:16
Da ni el Do bb en
i
Pr es id en t
Renewable energy
Under the European Ten Year Network
Development Plan (TYNDP), which is one
of ENTSO-E’s main deliverables, Europe’s
energy policy objectives relating to the
use of renewable energy sources must be
reflected. The plan states that EU Members
are to reduce their greenhouse gas emis-
sions by 20%, increase the use of renew-
able energy by 20% and save energy by
20%, by the year 2020, and has been
named the ‘20-20-20 strategy’. At present
the use of renewable energy sources for
electricity is approximately 13%. How-
ever, the 2020 goal of integrating 20% of
renewable energy into total consumption
means that about 33% of electricity con-
sumption will be generated from renew-
ables, since heating and transport cannot
accommodate renewable energy as eas-
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 35
ily. This is a great challenge for the electric-
ity supply system and the TSOs.
The main focus for renewable energy in
the initial stages is in the use of wind
turbines, but other renewable energy
sources contribute as well. These include
hydro power, photovoltaic power, solar
thermal power, biomass and others.
ENTSO-E’s Secretary General, Konstantin
Staschus comments,
‘This special focus on wind power was
chosen by ENTSO-E and ERGEG (the Eu-
ropean Regulator’s Group for Electricity
and Gas), and is supported by the Euro-
pean Commission, acknowledging that
wind energy is set to shoulder the great-
est part of renewable energy growth over
the next years.’
Hydro power is already making a signifi-
cant contribution to energy supplies, and
Malgorzata Klawe
Vice Chairwoman of the Board
the use of solar power is forecast to in-
crease in many countries in the future.
Europe is likely to remain at the forefront
in the utilization of renewable energy
despite the fact that some parts of the
world are fortunate in having more ex-
tensive renewable energy resources.
Balancing supply
Energy from the sun and from wind fluc-
tuates constantly. It is the job of the TSO’s
to balance this irregular supply of energy
with demand, so that we will always have
adequate energy available regardless of
the weather conditions. With the requisite
increase in the use of renewable energy
this task becomes an even bigger chal-
lenge. This is why further collaboration
between European TSO’s was necessary.
35 February-March 2010
19.3.2010 13:35:24

The future use of Smart Grids in transmis-
sion and distribution is also important in
meeting demand as they will be able to
help customers adjust their use of electric-
ity in response to market conditions and
renewable energy availability. They can
thus help integrate the supply of electric-
ity from renewable sources.
In order to achieve all the objectives that
are set out in the third package, and to
ensure system reliability, market integra-
tion, equal access to the grid, etc., ENTSO-E
is drafting Network Codes. These will set
out the standards that all users must work
towards to ensure system security, trans-
Trade & Investment | www.trade-investment.eu
Klaus Kleinekorte
Chairman System Operations
TI_2010_02_final.indd 36
ENTSO-E
The 2020 Vision
parency and efficiency, and will be legally
binding. These Network Codes have to
comply with the framework guidelines set
by the European Regulators in their new
Agency ACER. To facilitate its work, ENTSO-E
is made up of three committees, which
carry out functions related to Systems De-
velopment, Systems Operation and the
Market.
Benefits
For market integration and renewable
energy integration, the role of the Euro-
pean TSOs – and also of their association
ENTSO-E – will be crucial. This will mean
that large investments in the European
grid have to be made – partly planned
jointly – within ENTSO-E. These investments
will bring about more benefits to the whole
of the electricity industry and to the con-
sumer than what they cost, as Konstantin
Staschus states, ‘…even though the over-
all costs of the transmission network will
likely go up, first the corresponding in-
crease of customer rates would be very
small, and second, any such increase should
be more than offset by correspondingly
lower costs of generation, trade and supply
of electricity.’
36 February-March 2010
19.3.2010 13:35:31
 This will not necessarily mean that electric-
ity prices will be lower than they are
at present, but it will mean that they
will be lower than they would have been
without the involvement of the Net-
work.
For the best possible long term develop-
ments, ENTSO-E will continue to focus on
Research and Development. There are
many challenges ahead of the TSO’s;
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 37
as well as commitments to the use of re-
newable energy, many parts of the grid
infrastructure need replacing as they are
nearing the end of their life spans. This
will entail major investments over the
coming decades, and ENTSO-E will look at
the most cost effective ways to achieve
this. One means is its major new R & D
plan called ‘Eurogrid 2020’ as well as the
Ten-Year Network Development Plan.
ENTSO-E’s President, Daniel Dobbeni
comments, ‘Meeting Europe’s ambitious
renewable energy targets and reducing
European emissions will happen provided
the role of the grids is considered as be-
ing part of the solution – as is already the
case for wind generation. The backbone
of Europe’s Energy Future is the European
transmission system, as has been the case
for the past century.’
37 February-March 2010
19.3.2010 13:35:33

By Philip Bradbury
We all expect that whatever switch we
turn on, power will be delivered. Wheth-
er it’s heating for our house, lighting for
our streets, cash registers for our shops
or machinery for our factories, we
expect – without question – that they
will go every time we switch them on.
We don’t expect any less.
However, what we don’t expect is to have
to balance that expectation with the needs
of the planet – that’s someone else’s job.
That someone else, in the North-Eastern
part of Germany, is 50Hertz Transmission,
formerly known as Vattenfall Europe Trans-
mission, the operator of the “power high-
ways”. If that highway broke down, your
lights, heating, cash registers and machin-
ery may not go. When that power transmis-
sion system is working perfectly, it is easy
to forget about it and then become con-
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 38
50HERTZ TRANSMISSION
Holding the Balance of Power
cerned that massive power structures
could be endangering nesting daw, kes-
trel, and hobby falcon and/or osprey.
50Hertz has to delicately balance both
concerns.
Change of name
and upgrading
transparency and
non-discrimination
As a very public signal to all concerned,
Vattenfall Europe Transmission and its
subsidiary Vattenfall Europe Baltic Off-
shore Grid, which is in charge of the con-
nection of offshore wind farms to the
mainland grid, have undergone a name
change – to 50Hertz Transmission and
50Hertz Offshore, respectively. This name
change as of January 2010 makes a pub-
lic statement that the transmission system
operator is run in a completely independ-
ent and non-discriminatory way and is
taking the EU’s Third Energy Package ex-
tremely seriously.
The new name “50Hertz” stands for a sta-
ble frequency as the basis for a reliable,
high quality power supply service for our
society.
Mr Gert Schwarzbach, Managing Director
of 50Hertz Offshore, explained that until
2008 some of the functions of these two
(above) companies were performed by
services from different divisions of the
energy utility Vattenfall. In 2008 a “carve
out” process was started to ensure all
functions were performed independ-
ently from the rest of the Vattenfall Group.
This ensured that the two companies
could stand on their own.
38 February-March 2010
19.3.2010 13:35:35
 This process also led to the renaming of
the two companies. In parallel to this re-
structuring, the sale of the two companies
from the Vattenfall Group has been
launched and is anticipated to be com-
pleted by 2010.
Transparency and
non-discrimination
Transparency relates to the fact that the
ownership, management and information
of the business must be entirely apparent
at all times.
Non-discrimination means that outside
suppliers must have the same market-
relevant information as suppliers within
the Group. This is overseen by the Equal
Treatment Expert within the Group.
Additionally this is overseen by the Ger-
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 39
man regulatory authority the so-called
“Bundesnetzagentur”.
Scope of the
companies
Currently, 50Hertz ensures a safe and se-
cure electricity supply for more than 18
million people and employs over 600
employees. Its structures link Denmark,
Poland, and the Czech Republic with Ger-
many. 50Hertz Transmission is responsible
for the operation, maintenance, planning,
and expansion of the 380/220 kilovolt
transmission grid throughout the German
Federal States of Thuringia, Saxony, Saxony-
Anhalt, Brandenburg, Berlin, Mecklenburg-
Western Pomerania, and Hamburg. This
transmission grid covers an area larger
than 109,000 km² and runs a length of
approx. 9,700 km.
50Hertz is a real facilitator of the deve-
lopment of electricity from renewable
sources. Renewable energy has priority
on the 50Hertz grid. In the supply area of
50Hertz are connected:
• 10,300 MW of power from wind
farms,
• 500 MW of power from solar energy
sources,
• 1,000 MW of power from biomass
sources,
All continue to develop with high growth
rates.
This year the first offshore wind farm in
the German part of the Baltic Sea will be
connected to the mainland grid. Up to
4000 MW from other offshore wind farms
will follow.
39 February-March 2010
19.3.2010 13:35:36
 50HERTZ TRANSMISSION
Holding the Balance of Power

Environmental
concerns
To balance the energy needs of so many
customers with the sensitivity of the en-
vironment – with such a large and complex
infrastructure – is not an easy task. Also,
their environmental activities are gover-
ned by the Federal State and seven dif-
ferent “Länder” (German states).
A recent pilot project, with the support
of the EU Commission, is the Ecological
Management of Forest Aisles – a special
development to ensure the least possible
influence on the environment from power
transmission lines.
Some of other environmental initiatives • In heavily wooded areas, they are im- technically possible, they protect all
undertaken by 50Hertz are: plementing a new corridor manage- naturally occurring plant growth.
• Installing over 300 nesting aids – for ment policy to care for and develop
• Close cooperation with NGOs, such as
instance boxes, baskets, and aerie un- these habitats.
WWF and Germanwatch, in the “Re-
derlays – on pylons to support num- • In agricultural areas, the ground un- newables Grid Initiative” to support
bers of daw, kestrel, and hobby falcon, der pylons support indigenous grass- a socially and environmentally sound
as well as osprey known for their pre- es, shrubs and partial wood crops, all development of the grid as pre-condi-
dilection for brooding on transmis- of which serve as ‘islands of retreat’ tion to integrate more renewable en-
sion pylons. and stepping stone habitats. Where ergy into the electric system.

Trade & Investment | www.trade-investment.eu 40 February-March 2010

TI_2010_02_final.indd 40 19.3.2010 13:35:37

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Balancing energy,
finance, user and
environmental needs
50Hertz Transmission is mandated to pur-
chase all electricity from renewable en-
ergy that is produced in its area. And this
is already today a huge amount of more
than 12.000 MW, a third of all production
capacities in its area. If there are high
winds, the wind farms will produce more
energy. This may not be matched by an
increase in energy demand!
By law the company is obliged to purchase
that renewable energy at a specified price.
It must then sell that energy at the pow-
er exchange at market prices, which are
usually much less than the price to be paid
to the producer. That gap between the
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 42
50HERTZ TRANSMISSION
Holding the Balance of Power
subsidized price and market price has to
be financed, somehow. The cost of finance
can often push the company into a tight
financial situation before it is reflected in
the grid rates.
Transmission system operation is a natu-
ral monopoly and therefore subject to
strict regulation. The company is charged
with making no profits, and normally also
no losses. In a good year it breaks even.
The management team of 50Hertz has
the unenviable task of managing this
massive enterprise with fine precision and
sensitivity. This balancing act is carried
out in many areas by hard daily work:
• Balancing energy produced with en-
ergy needed at any second,
• Balancing costs, expenses and finance,
• Balancing power consumer demands
with environmental concerns.
So, with constantly growing demands for
integrating new (renewable) producers –
and the consequent need to enlarge the
grid – with the need for a stable legal and
environmental accountability, Mr Schwarz-
bach says they owe their success to three
things:
1. Their very experienced and commit-
ted staff,
2. Their customers, mainly the electricity
distribution companies, they have
a close relationship with, and
3. Their shareholders who provide the
much-needed financial strength for
operations and grid expansion.
It’s a fine balance between so many things
and they continually strive to get it better
each year.
42 February-March 2010
19.3.2010 13:35:40
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Transelectrica is the Transmission System
Operator (TSO) for Romania, which just
a few years ago began trading publicly
on the Bucharest Stock Exchange. Diane
Mannion interviews the Director General,
Adrian Baicusi, about the company’s
various roles, its ‘green’ policy and how
it has been affected by recent changes
to the European electricity market.
As the Transmission Systems Operator
(TSO) for Romania, Transelectrica operates,
maintains and develops the transmission
grid, providing transmission services for
electricity transactions between market
participants in Romania and the regional
markets, among Central European and
South East European countries. It ensures
the stable and reliable operation of the
Romanian Power System and is respon-
sible for electricity transmission services,
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 44
TRANSELECTRICA SA
Green Electricity
power system and wholesale electricity
market operation, and transmission grid
and market infrastructure development.
It guarantees a regulated third party access
to the Romanian electricity transmission
network under transparent, non-discrimi-
natory and fair conditions to all market
participants.
Through its main subsidiaries, OPCOM (the
market operator and power exchange),
TELETRANS (the ITC operator) and OMEPA
(the metering operator), Transelectrica
fulfills several other core functions.
OPCOM is the Commercial Operator of
the electricity market, which responds to
the various platforms for trading in elec-
tricity. OMEPA looks after the metering
system for the wholesale electricity mar-
ket and TELETRANS is a Telecommunica-
tions and IT Operator. These reflect the
current operations of the company, which
have been developing ever since Trans-
electrica was set up in the year 2000.
Emergence
Prior to 2000, the Romanian Electricity
Authority known as CONEL was set up in
1998. CONEL came about as a result of
restructuring of the former autonomous
company RENEL following the Romanian
Government’s decision to liberalise the
electricity market. CONEL was a national
commercial company with three subsi-
diaries, that carried out various functions:
• Electrica for electricity supply and dis-
tribution (at present split into eight
subsidiaries, five of them being priva-
tised – ENEL, E.ON and CEZ;
44 February-March 2010
19.3.2010 13:35:41
 Trade & Investment | www.trade-investment.eu 45 February-March 2010

TI_2010_02_final.indd 45 19.3.2010 13:36:04


• Termoelectrica and Hidroelectrica for
electricity generation on thermal and
hydro sources. They produce and sell
electricity.
During this period of change, in 1998 the
Romanian Energy Regulatory Authority
(ANRE) was established. The final stage in
the liberalisation process was to have
a Transmission System Operator; hence
the creation of Transelectrica, which now
employs approximately 2200 people and
operates according to its unique license
and other secondary legislation set out by
ANRE.
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 46
TRANSELECTRICA SA
Green Electricity
Environmental
measures
One of the main focuses for Transelectrica
relates to the environment. It has a ‘green
certificate’ scheme operated through its
subsidiary OPCOM. Under the scheme
suppliers are required to buy a certain
amount of energy that has been gener-
ated from renewable energy sources in
order to be awarded a green certificate by
ANRE. The Romanian Government’ s strat-
egy also provides the increased production
of renewable energy sources in the electric-
ity sector. Transelectrica receives many
demands for grid access from investors in
green energy. One of the sources used is
wind power. However, because the fluctu-
ating nature of wind, the system also has
to rely on other power sources.
Together with using renewable energy
sources, consideration is given to the im-
pact on the environment. This involves
monitoring pollutants and preserving the
natural environment in accordance with
Transelectrica’s environmental policy. En-
vironmental impact is viewed in relation
46 February-March 2010
19.3.2010 13:36:26
 to people, air, soil, water, flora and fauna,
and the company takes the appropriate
measures to reduce the effects of the
power grid. Some of the steps taken in-
clude: reducing and/or eliminating the
magnetic and electrical field effect, reduc-
ing the number of facilities using oil, im-
plementing water-oil separators in the
rain drainage system and sealing the reten-
tion tanks of the autotransformers.
Transelectrica sees the connection of re-
newable energy sources into the transmis-
sion grid as one of the challenges for the
future. They have to ensure that these
energy sources are integrated in a way
that is safe and reliable.
Other plans for the future involve the
modernisation of transmission lines, sub-
stations and interconnection capacities,
and implementing the latest technologies
and IT solutions to increase transmission
reliability and reduce power losses. The
company also has several major interna-
tional interconnection projects with
other European countries at various de-
velopmental stages, which stands them
in good stead with regard to anticipated
changes in electricity trading in Europe.
European prospects
As a result of the European Third Legisla-
tive Package (2009) which has established
the European Network of Transmission
System Operators for Electricity (ENTSO-E)
and will create the new European regula-
tor – ACER -, there is a renewed drive to
develop regional electricity markets and
integrate them in a seamless pan-Europe-
an single electricity market.
TI_2010_02_final.indd 47
Adrian Baicusi, the Director General of
Transelectrica comments:
‘We consider that the future of Europe
relies on the unique European electricity
transmission grid.’
The Government decided to make an initial
public offering on the Bucharest Stock
Exchange in order to develop the capital
market starting with Transelectrica. This
launch was seen as a success, resulting in
an increase in net capital of approximate-
ly 33 million euros, which has been used
to finance the grid development and mod-
ernisation. This example is being followed
by other companies such as Transgaz.
As electricity cannot be stored, it is in-
stantaneously generated and consumed.
Therefore any extra energy generated is
exported, and any deficits are imported.
Transelectrica works in conjunction with
other European TSOs to manage the import,
export and transit of electricity with neigh-
bouring countries. Their activities involve
setting the mathematical pattern of the
system area for which the cross border
capacities are established. Traditionally
Romania has dealt with Bulgaria, Serbia,
and Hungary, but it is preparing to extend
the network into Moldova, the Ukraine and
Turkey. Mr Baicusi states:
‘The most spectacular events are to happen
on the Eastern boundary of Europe when
Turkey, Ukraine and the Republic of Moldo-
va will have been integrated into the con-
tinental part of ENTSO-E.’
As to the long term prospects, Mr Baicusi
adds: ‘There is a great potential in Europe’s
South Eastern region, however this will
emerge in the following 5 years.’
19.3.2010 13:36:28
TI_2010_02_final.indd 48 19.3.2010 13:36:32
 Tractebel Engineering (GDF SUEZ),
a subsidiary of GDF SUEZ Energy Ser-
vices, is an engineering and consul-
tancy company with more than 100
years of experience worldwide in en-
ergy and complex infrastructure
projects.
Its Romanian company, Tractebel En-
gineering S.A., was set up in 1997 and
operated till October 1st, 2009, under
the trading name of TRAPEC S.A. As
recognition of its maturity and its ca-
pabilities, in October 2009 the com-
pany has adopted the name and the
branding of its parent company,
Tractebel Engineering.
The mission of Tractebel Engineering
(ROMANIA) is to address the local and
regional market, through projects de-
veloped for public and private compa-
nies in order to support them to meet
their objectives of efficiency, safety and
environmental protection.
Since 1997, the company has developed
energy projects, i.e. power generation,
electrical substations and HV-lines,
power systems studies, energy effi-
ciency, district heating systems, and
TI_2010_02_final.indd 49
consultancy projects financed by Eu-
ropean institutions and banks; as well
as large infrastructure projects.
Tractebel Engineering (ROMANIA) is
providing engineering and consultancy
for the key actors of the Romanian
energy sector, such as Transelectrica,
Electrica, Termoelectrica, Electrocent-
rale, Nuclearelectrica and others. Also,
it is involved in projects developed by
private players or by turnkey contrac-
tors.
Some recent projects managed by
Tractebel Engineering (ROMANIA) can
be mentioned:
• Engineering for a new 120 MW com-
bined cycle cogeneration unit in
Bucharest South Power Plant;
• Framework contract on system stud-
ies for connection to the grid of new
generators in Romania;
• Congestion management in Roma-
nian Transmission System;
• Modernisation of important 400 kV
Substations in the Romanian System
(Roşiori, Bucharest South, Slatina,
Gutinaş, etc.);
• New 400 kV Gădălin-Suceava Over-
head Transmission Line;
• Extension of 400 kV Tariverde Substa-
tion (to connect wind generators);
• New 110/20 kV Cotroceni Park Sub-
station (to supply the largest com-
mercial center in Romania);
• Modernisation of the 110/20/6 kV
Bartolomeu Substation;
• Consultancy for EU/EBRD Energy
Efficiency Financing Facility (EEFF)
Project in Romania;
• Design for connection to utilities of
a new 190 MW combined-cycle unit
in Bucharest West Power Plant.
The multidisciplinary team of experts
of Tractebel Engineering (ROMANIA) is
in the ideal position to develop a global
vision for your projects and to propose
you innovative, reliable solutions at
every stage. More details on the com-
pany you can find visiting the Bucharest
office, Al. Constantinescu str, 6 or by
surfing www.tractebel-engineering-
gdfsuez.com.
CHOOSE EXPERTS, FIND PARTNERS
19.3.2010 13:36:35

Dutch Transmission System Operator (TSO)
TenneT’s Director of Corporate Develop-
ment Mr Lex Hartman talks to Gabrielle
Brown about how the recent acquisition
of German grid operator transpower
signals the imminent integration of
electricity markets across Europe.
The Dutch TSO Tennet, responsible for the
Netherlands’ electricity grid and ensuring
the secure and continuous supply of elec-
tricity to the country, is poised to change
the face of the European electricity mar-
ket. When TenneT bought transpower
they created the first cross-border TSO in
the world, demonstrating a landmark step
towards the establishment of an intercon-
nected Northern European electricity
system, capable of supporting the com-
plex flow of energy from renewable
sources while providing consumers with
lower, more stable prices.
The role of the TSO
As a TSO, TenneT is responsible for the
infrastructure supporting the transmission
of electricity, ensuring it is safe, reliable
and balanced. As Mr Hartman explains, it
is the balancing of the system which is
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 50
TENNET
Electric Equilibrium for Europe
perhaps the most involving aspect to
a TSO’s function: “At every second of the
day you need to have a balance between
demand and supply, and if you don’t, there
is a chance of a blackout. Since the lib-
eralization of the Dutch electricity market
in 1998 in theory everyone is free to pro-
duce electricity and everyone is free to
buy electricity. Therefore, our responsibil-
ity is to ensure that when there is demand,
the producers supply the required amount.
If they don’t, then we have to ‘jump in’ and
produce it for them; and we will either bill
the consumer or the producer for this.
That, in essence, is how we provide the
incentive for the supply to meet de-
mand.”
This layman’s explanation of an incredibly
complicated system helps us to under-
stand that in addition to being responsi-
ble for the technical operation of the
system, the TSO is essentially the facilita-
tor of an open and fair electricity market
for producers, suppliers and traders alike.
The most pressing challenge for TenneT,
however, is to ensure the smooth opera-
tion of the system as the amount of renew-
ably sourced electricity supplied to and
from the grid increases. With an unquan-
tifiable commodity such as wind, gener-
ating energy at an unpredictable and
uncontrollable rate, the onus is on TSOs
across Europe (all members of ENSO-E
[European Network of TSOs for Electricity])
to unite to create a flexible European elec-
tricity system, from both a technical and
market perspective.
TenneT’s
responsibilities to the
Netherlands and Europe
TenneT identifies its objectives into three
distinct areas of responsibility. The first is
simply to ensure efficiency and to regulate
the system in the Netherlands. Secondly,
to continue the work involved in success-
fully integrating what was the work of
regional transmission grids under one
organization. The third and last responsi-
bility is most pertinent after the recent
acquisition of transpower and that is to
help facilitate the move from a Dutch
electricity market to a larger, European
market. “Holland is a small country, and
the electricity market is therefore also
small. That means there is a difference in
our prices compared with Europe. But
soon there will not be a Dutch market, or
a Belgium market, or a UK market etc.
50 February-March 2010
19.3.2010 13:36:36

Looking at the ambitions for renewable
energy sources such as wind and hydro,
we can’t work at a local level any more.
We have to coordinate our operations and
co-invest in improving and adjusting our
grids so that they will facilitate this
change.”
Mr Hartman went on to illustrate this
scenario by giving the example of the
relationship between the German and
the Dutch grid. When a lot of electricity
is generated by wind in Germany, it will
flow to where the grid is strongest. If this
exceeds the amount the German grid can
contain, the electricity will flow to the
Dutch grid. In the new market, with cross-
border systems, countries will be able to
combine resources to ensure the balance
is achieved even with the complex ebb
and flow of wind-generated electricity,
and consumers will be able to benefit
from more stable and lower prices. Coun-
tries more dependent on wind power,
such as Germany, will be able to use the
‘stored’ hydro power located in other
countries, such as Norway. “This coopera-
tion is therefore beneficial from a socio-
economic perspective also.”
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 51
transpower,
the gateway
to an efficient
European grid
TenneT acquired transpower in November
2009 after considering and anticipating
the option for around six years. The inte-
gration of the company, Mr Hartman
explains, should be fairly smooth. “We had
the same agenda. We are the same kind
of company, we have the same interests,
same goals. We can now focus on in align-
ing our systems, rehabilitating the grids
and coordinating all our investments into
further connecting our combined electric-
ity system.”
The more efficient use of Germany’s wind
power across the two countries will be
a focal point, and therefore investing in
the connection to Norway, with its exten-
sive hydropower capability, will also be
high on the agenda. “Our high targets for
wind power, 6,000 megawatts by 2020,
mean that connections to Norway are
very interesting. Wind is not reliable, so
we will need the energy storage capacity
that Norway’s hydro plants can provide.”
One of TenneT’s projects nearing comple-
tion is BritNed, a subsea electricity link
between Great Britain and the Netherlands
due to be in operation by the first quarter
of 2011. Again, the differences between
how and when electricity is used between
the two countries enables power to flow
in both directions, and to provide greater
efficiency. Specifically, Mr Hartman ex-
plains that “in Holland we have gas heat-
ing, so consumption of electricity at night
is low; in the UK more heating is powered
by electricity, so levels of usage are higher.
Plus, the one-hour time difference allows
for even more flexibility across the sys-
tem.”
Put simply, it is the differences across
countries in Europe that is driving each
TSO to unite and integrate, and co-invest
in their grids for the benefit of one an-
other’s consumers. It’s an incredibly
positive proposition, and Mr Hartman
concludes by stressing his enthusiasm for
TenneT’s acquisition of transpower “It’s
really important as we go forward and
look at things at a European level instead
of a country level. We have to facilitate
the market for producers and consumers,
and this is the best way to do it. It really
is a landmark transaction.”
51 February-March 2010
19.3.2010 13:36:38
CG Power Systems Belgium NV
CG Power Systems Belgium (formerly Pauwels Trafo Belgium), headquartered
in Mechelen - Belgium, is one of the world leaders in the design and
manufacturing of three-phase distribution and power transformers, and a
fast growing competitor in the market of substations, turn-key solutions and
services. CG Power Systems has manufacturing units in Belgium, Ireland,
USA, Canada, Indonesia and Hungary.

Contact
CG Power Systems Belgium NV
Antwerpsesteenweg 167, B-2800 Mechelen, Belgium
T: +32 15 283 333 F: +32 15 283 300

belgium@cgglobal.com - www.cgglobal.com

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TI_2010_02_final.indd 52 19.3.2010 13:36:47

adverte
 For the very best transformers only
mit Transformatoren B.V.
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Smit was founded nearly 100 years ago, but

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TI_2010_02_final.indd 53 19.3.2010 13:36:51

advertentie Trade & Investment Mag. Smit.indd 1 11-02-10 09:38

Slovenia’s electricity
grid yesterday, today
and tomorrow
Transmission system operator (TSO)
Elektro-Slovenija, d.o.o. (ELES) main-
tains the exclusive right to operate
Slovenia’s electricity grid. Put simply,
its responsibility is to provide the
country with an uninterrupted supply
of electricity, maintain and develop the
transmission network and, increasingly,
enable the transmission of electricity
between the power systems of neigh-
bouring countries.
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 54
ELEKTRO-SLOVENIJA
Power Lines in Time
An international
approach
Being a member of the European Network
of Transmission System Operators for
Electricity Network (ENTSO-E), ELES is
engaged in various projects and know-
ledge-sharing ventures to improve elec-
tricity systems across Europe. Significantly,
due to Slovenia’s geographical position
ELES spans three European regions (Cen-
tral-Eastern, Central-Southern and South-
Eastern) and participates in various working
groups within the framework of these
associations. Specifically, ELES represent-
atives contribute to the activities of the
International Council for Large Electrical
Systems (CIGRÉ), one of the oldest profes-
sional organizations in the field, where
technical knowledge is shared on the
subjects of the development, operation
and maintenance of electricity systems.
A long tradition
in transmission
Today Slovenia’s electricity comes from
a combination of sources including hydro,
thermal and nuclear plants and consists
of facilities operating on 44 kV, 220 kV and
11 kV. The country’s power transmission
54 February-March 2010
19.3.2010 13:36:52
 activities began in 1924 with the construc-
tion of the first transmission lines, then
operating on 80 kV. Slovenia and ELES is
markedly proud of the country’s contribu-
tion to the history of ‘electrotechnology’
and has even published an in-depth ac-
count of the ‘transmission timeline’. No-
tably, by the end of the nineteenth cen-
tury, Slovenia was already internationally
renowned for its expertise in the industry
on account of the famous Slovene writer
and scientist Jožef Stefan (1835-1893)
whose work the Law of Radiation remains
one of the fundamental laws on heat
transfer.
Slovenia continued to make an impact on
transmission history when ELES experts
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 55
project-managed the construction of the
Krško Substation, completed in 2002,
which at the time was one of the most
modern remote-controlled facilities of its
kind. The project saw ELES’ largest invest-
ment for two decades and involved ex-
tremely advanced technology. Employing
a series of domestic contractors, engineers
and design professionals enabled ELES to
gain valuable experience for future con-
struction projects.
More recently, ELES again made a sig-
nificant investment when it completed
a 400/110kV transformer at the Okroglo
Substation, which was installed to ensure
a smooth supply to northern central Slov-
enia and ameliorate the negative impact
of the Jesenice steelworks on the opera-
tion of the national grid. Ongoing invest-
ment in the reconstruction and develop-
ment of Slovenia’s electricity infrastructure
is central to ELES’ objective of ensuring
the transmission system remains secure
and robust.
Maintaining Slovenia’s
landscape
Naturally, with investment into new and
improved transmission systems comes
the challenge of ensuring infrastructure
has as little impact on the surrounding
55 February-March 2010
19.3.2010 13:36:54

landscape as possible. To plan the develop-
ment work so that any surrounding nature
is not adversely affected, ELES cooperates
with several organisations. These are for
example the Institute of Landscape and
Architecture in Slovenia’s capital Ljubljana
and the company Oikos, svetovanje za
razvoj, Ltd., which is the largest company
in this field in Slovenia.
Transmission operators across Europe face
the same challenges when it comes to
issues relating to the environment. There-
fore, ELES participates in international
expert organizations that collaborate
to find means to tackle ecological is-
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 56
ELEKTRO-SLOVENIJA
Power Lines in Time
sues, addressing for example the design
and construction of power lines and look-
ing at electromagnetic radiation. The objec-
tive is to consider the challenges from
a practical perspective and then identify
scientific solutions that can then be imple-
mented.
Investing in people
As much as it invests in infrastructure, ELES
makes a point of investing heavily in its
staff ’s expertise. With over 550 employees
the organization ensures professional de-
velopment for staff by fostering an environ-
ment of knowledge sharing. Recognising
that the majority of staff are expected to
work with technologically demanding de-
vices, ELES is cognisant of the fact that
knowledge is fast becoming its most valu-
able asset. Therefore, the company not
only makes a point of attracting talented
individuals (60% of staff have a university
degree) but also makes considerable invest-
ments in staff training programmes – to
the extent that ELES has its own in-house
education centre.
This focus on professional development is
strengthened by providing all stakeholders
56 February-March 2010
19.3.2010 13:36:56
 with a clearly defined set of corporate val-
ues. This ties together all elements of the
business, from the social and natural en-
vironment in which it operates, to the busi-
ness partners involved, to the owner – the
state. The values put an emphasis on cor-
porate social responsibilities, stating that
ELES will maintain ‘a positive and respect-
ful attitude towards its immediate and
broader social and commercial environ-
ments’ while achieving its practical objec-
tive of ‘efficient operations’.
From a small power line in 1924 to twenty-
first century state-of-the-art infrastructure,
Slovenia has already played a significant
role in establishing the European electric-
ity system. Therefore, as national transmis-
sion systems become international, we can
expect ELES to be a key player in ensuring
Europe’s electricity grid is operated by
highly experienced and knowledgeable
experts with a sound technological, envi-
ronmental and social awareness.
By Gabrielle Brown

www.oikos.si
A comprehensive package of support services
for infrastructure projects of all sizes!
• Advice on infrastructure siƟng
and related land use issues
• Sectoral studies for investment related
environmental issues (waste
management, noise, risk etc.)
• Strategic Environmental Assessment (SEA)
and
Environmental Impact Assessment (EIA)
• Design of miƟgaƟon measures
• Search for EU and other funding sources
We have more than 20 years of experience in the field of various
types of impact assessment, environmental management, strategic
planning and development in Central Europe and the Balkans… and
we are keen to share our experience with you!
Oikos d.o.o.
Jarška cesta 30, 1230 Domžale
SLOVENIA
Phone: 00386-(0)1-7226-400
Fax: 00386-(0)1-7214-807
info@oikos.si „A treasure of pracƟcal soluƟons“

TI_2010_02_final.indd 57 19.3.2010 13:36:57


Svenska Kraftnät administrates and runs
Sweden’s national electrical grid, ensuring
the constant and secure flow of electricity
across the country, and beyond. Technical
Director Sture Larsson talks to Gabrielle
Brown about expansion, efficiency and
the challenges posed by the government’s
environmental objectives.
Svenska Kraftnät is the state-owned util-
ity responsible for managing Sweden’s
national grid. Within the energy sector
the organization’s work is well known, but
to the general public the technology that
ensures a reliable flow of electricity is not
something that is widely understood or
appreciated. “We will never be as well
known as the larger players in the market,”
says Mr Larsson who explains that being
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 58
SVENSKA KRAFTNÄT
The Electric Highway
the backbone behind Sweden’s electric-
ity supply is largely a behind-the-scenes
responsibility.
Supporting
a transparent
marketplace
The Swedish electricity market was re-
formed in 1996 when it became possible
for electricity consumers to choose their
own supplier. The intention was to have
a broader exchange of power across na-
tional borders and Svenska Kraftnät was
set the objective of promoting the de-
velopment of the market by providing
a neutral platform for the market actors.
A power exchange mechanism was es-
tablished all over Nordic countries being
administered by Nord Pool, the first cross-
border power exchange in the world.
Nord Pool’s objective is to organize and
operate a secure and fair marketplace for
trading electricity. All market actors feed
any data that have an implication for the
electricity market into Nord Pool, such as
how much capacity is available, in the
form of an ‘urgent market message’, known
as a ‘UMM’. Being responsible for the ‘main
artery’ of the electricity supply, Svenska
Kraftnät also feeds in information such as
available capacity on the national grid
and on the interconnectors. “The main
principle is that anything that has an effect
58 February-March 2010
19.3.2010 13:37:03
 on market performance and price develop-
ment must be communicated directly and
with no delays.” Nord Pool operates on the
basis that all information is shared on an
equal basis to all concerned. The objective
is to achieve a maximum level of transpar-
ency across all factors that could have an
impact on the market’s performance, and
to eliminate any form of market abuse.
Achieving non-stop
supply
Many factors can hinder the transportation
and delivery of electricity – a power line
becoming disconnected during bad
weather is a common example. Svenska
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 59
Kraftnät therefore ensures that Sweden’s
electricity supply is not interrupted
through the application of a three-
pronged approach, having:
1. Thousands of protection systems meter-
ing all parameters, such as voltage and
current, on all lines, that react by discon-
necting any faulty lines if something
abnormal is detected
2. Reserves held in order to cope with the
loss of a power line or important station
anywhere in the country
3. Operational procedures to reconnect
disconnected systems and undertake
repairs wherever they occur
Mr Larsson explains that incidents occur
several hundred times a year, but because
of the efficacy of the above measures they
don’t have an impact on the supply. “We
are doing what is being done in most
power systems all over the world. Our
performance is good, though that’s not
to say there aren’t other countries doing
better.”
The green challenge
In Sweden, environmental policy affects
and directs developments in the energy
sector. Mr Larsson suggests that the big-
gest environmental objective set by the
government to Svenska Kraftnät is to
modify the grid to allow for up to 30
terawatt hours of wind power. “This creates
many challenges for us in preparing to
59 February-March 2010
19.3.2010 13:37:05

handle such huge volumes of wind power.
The amount is immense in relation to the
presently installed capacity.”The impact of
this amount of wind power is not only on
the grid’s capacity to transport the energy
across the country, but also to balance the
system. “Wind power is not a controllable
or easily predictable source of energy. So
in addition to upgrading the capacity of
our transmission system we will have to
become the driving force behind develop-
ing the system to facilitate this balancing.
The efficient use of hydropower as a regu-
lator is one such balancing system, but
price-driven demand-side regulating fa-
cilities will also have to be developed.”
The demand for electricity, regardless of
the source, is increasing, but there will
always be resistance to expansions in elec-
tricity infrastructure, whether this is be-
cause of aesthetic concerns or for deeper
reasons relating to the impact on the local
and regional environment. “This is a uni-
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 60
SVENSKA KRAFTNÄT
The Electric Highway
versal concern,” says Mr Larsson, “we have
to comply with Swedish legislation and
follow strict procedures for reaching an
agreement with home owners, farmers
and forestry interests etc. What we do is
be open minded to the various demands
and requirements, dealing with all stake-
holders openly and carefully. We will try
to modify our designs and routing of
power lines, for instance, as long as it
doesn’t jeopardise the technical capacity
that we need to accomplish, for example
if the expansion is to accommodate the
transportation of wind power.”
In the case of wind power, there is a com-
plicated conflict of interests, although one
motive is shared: to preserve the environ-
ment. However, sometimes the choice has
to be made between respecting the local
environment and satisfying global envi-
ronmental concerns. “Sometimes we can
consider installing underground cable, but
it is not possible everywhere,” explains Mr
Larsson, acutely aware of the dilemma and
asserting that decisions are always made
on a case-by-case basis. “It is apparent that
these issues take a lot more time in Sweden
than in other countries. Here it is quicker
to get a permit to build wind power stations
than it is to build the lines to transport it.”
Local and cross-border
electricity exchanges
Svenska Kraftnät already manages the
successful transportation and exchange
of electricity between Nordic countries,
and to the rest of the continent. This con-
cept of cross-border electricity exchange
is set to continue, and Svenska Kraftnät is
already building new interconnectors, in-
cluding one linking to the Baltic countries.
The aim is to further increase the capacity
for cross-border trade, a goal very much
60 February-March 2010
19.3.2010 13:37:06
 in line with both environmental and mar-
ket objectives set by the European Union.
At the other end of the spectrum is the
notion of consumers generating their own
electricity and then being able to supply
their surplus reserves back to the grid. “I do
not see any substantial technical problems
with this concept; it may introduce new
challenges when it comes to forecasting
and managing the balance, but this would
not be a significant problem,” Mr Larsson
says, adding that the greatest challenge
would be in administrating the process
and instigating market instruments to en-
courage consumers to bring their electric-
ity to the market.
Svenska Kraftnät may not broadcast its
achievements, but amidst a backdrop of
tough environmental policy and regulatory
demands, the organization successfully
delivers a robust electricity supply across
Sweden and, increasingly, further afield.

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TI_2010_02_final.indd 61 19.3.2010 13:37:09


Photo by Helene Hoeyer Mikkelsen
Denmark is the world leader in wind
power, with 20% of the country’s
electricity generated by wind turbines.
Speaking to Gabrielle Brown, Peter
Jørgensen, Vice President of Electricity
Division for Energinet.dk, discusses the
technology, politics and strategy behind
Denmark’s wind power revolution.
Energinet.dk is the state-owned not-for-
profit company responsible for the gas
and electricity transmission systems in
Denmark. The company’s work involves
maintaining the secure supply of electric-
ity and gas as well as monitoring the en-
ergy market and contributing to it operat-
ing in as transparent conditions as
possible. In line with the Danish govern-
ment’s firm commitment to the environ-
ment, Energinet’s obligations stretch
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TI_2010_02_final.indd 62
ENERGINET.DK
Pioneers in Wind Power
further to researching green energy solu-
tions and developing the infrastructure
that will be capable of accommodating
it.
Mr Jørgensen’s role as Vice President of
Electricity Division is not only concerned
with the technical aspects of improving
and modifying how electricity is supplied,
but it also demands he acts as a senior
advisor on the political and strategic im-
plications of system development. In fact,
the concepts of development and change
are fundamental to Energinet’s operations,
with Mr Jørgensen frequently referring to
there currently being a ‘paradigm shift’ in
the Danish energy system. “It is exciting.
The European Union has given Denmark
the target of a 30% renewable energy
share by 2025; this is one of the highest
targets in the EU. The electricity sector
will take the brunt of this burden, and we
expect that within the next 10-15 years
50% of electricity will come from wind
power.”
The bigger picture
With Denmark already being the world
leader in its integration of wind power,
Mr Jørgensen is keen to point out that
the most challenging, and interesting,
development will be in determining where
the remaining 50% of electricity will come
from, and how it will balance the unpre-
dictable and uncontrollable nature of
wind power. “The other 50% is the most
interesting part. The amount of wind
power fed into the system can vary from
zero, when there’s almost no wind, to the
62 February-March 2010
19.3.2010 13:37:11
 maximum electricity consumption in the
country, so you need a very flexible sys-
tem.”
Mr Jørgensen suggests that hydro electric-
ity is in many respects the ideal partner
to wind: “Wind and hydro are a perfect
match. Hydro has long-term variation –
you can store energy in dams, but you
might have some dry years. With wind,
you have the opposite: short-term varia-
tions. So they are ideal to balance each
other.”
Intelligence-driven
supply and demand
Numerous factors have to be taken into
consideration when preparing the electric-
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 63
ity system for a more irregular means of
electricity generation. Mr Jørgensen sum-
marizes the measures as three key objec-
tives:
The development of a robust interna-
tional transmission system, with intercon-
nectors to neighbouring countries so that
fluctuations in wind can be balanced
across a large geographical area, includ-
ing both the Nordic and the Continental
system.
Achieving high flexibility within Denmark’s
own system both on generation and de-
mand. For example, when the wind is
blowing and the price of electricity is low,
demand should increase, and vice versa.
Incorporating intelligence into the system
so that electricity is used, produced or
stored at the most optimal times to ensure
an efficient utilization of the electricity
system and a high security of supply. For
example, consumers could turn their heat-
ing off for two hours while there is no
wind, when the price will be at its peak.
This concept of using intelligence to con-
trol demand and maximize efficiency is
perhaps the most revolutionary develop-
ment. Consumers could, for example,
charge up their electric cars when there
is a lot of wind, and then take the stored
energy from the battery and re-supply it
back to the system when there is none.
Of course, it would be extremely involving
if consumers were expected to monitor
and adjust their energy consumption
manually. “This process would be com-
mercialized. The electricity supplier would
install a device in your home that auto-
mates the system, though you would be
63 February-March 2010
19.3.2010 13:37:19

able to operate how flexible the system is
at any time. For example, if you needed to
charge your electric car you could override
the system and buy regardless of cost.”
This concept of the supplier controlling
appliances in the consumer’s home is
known as a ‘smart grid’, and somewhat
unsurprisingly Denmark is taking the lead
in realizing this capability. “We are rather
far in this development, it’s not paperwork
or talk, it’s actioned,” says Mr Jørgensen,
who goes on to explain that this action is
in the form of the present Cell Controller
Project and the planned ECOGRID.EU
project, funded by the EU and involving
Energinet amongst other industry partners.
After extensive research into adapting the
electricity system to manage the increase
in wind power generated supply, and the
Photo by Palle Peter Skov
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 64
ENERGINET.DK
Pioneers in Wind Power
smart grid concept, the project will be
putting the findings into practice during
a full-scale demonstration on Denmark’s
Bornholm island, where the prototype for
the future Danish energy system will be
developed.
Therefore, the ‘paradigm shift’, explains Mr
Jørgensen, is from an electricity system
where you have inflexible demand and
controllable generation to one where gen-
eration fluctuates and demand must there-
fore be flexible.
Going underground
Although the benefits of drawing energy
from renewable sources are widely known
and appreciated, the means by which this
energy is transported remains difficult as
it requires robust infrastructure. “The ma-
jority of expansion will be in offshore wind
power comparable in size to the big pow-
er plants. So, in order to transport the gen-
erated power, we have to expand our
transmission systems,” says Mr Jørgensen,
mindful of the sacrifices that have to be
made on a local level in order to look after
global concerns.
However, Denmark, yet again, is at the
forefront of implementing infrastructure
that has less of an impact on the local
landscape. The Danish government this
year ruled that all new power lines be un-
derground, with the last overhead cable
being completed by 2016 at the latest. This
is no easy feat and there is still significant
64 February-March 2010
19.3.2010 13:37:27
 ter Skov
y Palle Pe
Photo b
research and development needed before
the ruling becomes practicable.
A changing market
With electricity coming from an unpredict-
able, ever-changing source, the electricity
market will be comparatively difficult to
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 65
gauge. Without quantifiable sources, such
as oil, coal and gas, new incentives will
have to be devised to attract investors, and
fast-regulating reserves will be needed to
ensure the market can operate effectively.
Despite such multifarious factors and chal-
lenges to consider, Mr Jørgensen is un-
swervingly confident that Denmark will
meet its commitment of renewable en-
ergy comprising at least 30% of energy
consumption by 2025. “Our politicians are
committed to this. We have support, not
just political but also financial. So, yes, it is
a challenge, and it takes enormous com-
mitment, but I am confident that we will
reach our goal.”
65 February-March 2010
19.3.2010 13:37:29

For the world renowned ABB Group things
just keep getting better. Already one of
the world’s leading engineering compa-
nies, with 120,000 employees, the group
reached a record figure of $1.8 billion
for cash from operations in the fourth
quarter of 2009. Diane Mannion takes
a look at ABB’s latest achievements.
To say that the ABB Group is a world
leader is something of an understatement.
Since the company was established
120 years ago, they have been responsible
for many cutting edge power and automa-
tion technologies that have revolutionised
key industries, and the group continues
to stay at the forefront when it comes to
technology. With nine research centres
and 6,000 scientists, the ABB Group is
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 66
ABB GROUP
Transforming Industry
constantly striving to produce more ad-
vanced technologies that affect the daily
lives of people in 100 countries.
Cutting edge
Here are just a few of the incredible in-
novations that the ABB Group has been
involved in:
High voltage direct current (HVDC) – This
was introduced by the ABB Group in the
1950’s and has had a huge effect on the
way in which electricity is delivered to
consumers on a global scale. It has won
major environmental and technical
awards, and facilitates the transportation
of enormous volumes of electric power
over thousands of kilometres with very
little losses and minimal impact on the
Environment.
Industrial Robots – The ABB Group now
has 160,000 robots in operation world-
wide, which is the largest of any manu-
facturer. Since the robots were introduced
40 years ago they have revolutionised
numerous industrial operations, resulting
in tremendous gains in productivity and
reduced operational costs.
Substations – ABB is the world’s leading
supplier of substations, which it has been
building since the 1900’s. Continual tech-
nological advancements mean that the
group is constantly improving the reliabil-
ity and efficiency of electricity transmis-
sion and distribution systems throughout
the world.
66 February-March 2010
19.3.2010 13:38:04

Divisions
Nowadays the group consists of five divi-
sions, which are Power Products, Power
Systems, Discreet Automation and Motion,
Low Voltage Products and Process Auto-
mation. Each of these has a number of
sub-divisions. Additionally, the group has
eight regional managers in specific regions
of the world, which cover the continents
of Europe, America, Asia and Africa. Such
is the vast size of the ABB Group that just
one of the five main divisions, the Power
Products division, is subdivided into three
further business units, which are High
Voltage Products and Systems, Medium
Voltage Products and Systems, and Trans-
former Products.
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TI_2010_02_final.indd 67
If we take a look at one of these sub-divi-
sions, the Transformer Products sub-divi-
sion, it presents another success story.
ABB is a leading worldwide manufacturer
of transformers, and produces two catego-
ries, which are dry-standard and liquid-
filled. There are a range of dry-standard
types suitable for a range of industries,
and orders for these are increasing as they
reduce environmental contamination and
fire hazard.
Liquid-filled transformers are used in util-
ity, industrial and commercial applications,
and as with the dry-standard types, they
conform to a number of strict industrial
and international standards. There are
over 20 types of liquid-filled transformers,
suitable for indoor and outdoor use.
Demand for transformer products is huge,
and the ABB Group recently won an order
for ultrahigh voltage transformers in India.
The order, worth $18 million, is to supply
765 kilovolt power transformers to the
Power Grid Corporation of India (PGCIL).
These transformers will reinforce India’s
national power transmission network, and
will be fitted at the Satna substation in
Madhya Pradesh. There are also future
plans for turnkey solutions at the Bilaspur,
Agra, Wardha and Seoni substations.
Sustainability
The ABB Group places a strong emphasis
on sustainability, which includes energy
efficiency as well as environmental and
67 February-March 2010
19.3.2010 13:38:06

social concerns. The company describes
its view on sustainability, as follows:
“For ABB, sustainability is about balancing
economic success, environmental steward-
ship and social progress to benefit all our
stakeholders.”
The ABB Group has defined seven priorities
in relation to sustainability. These are:
• Energy efficiency, which helps to reduce
costs as well as emissions
• Climate change
• Managing environment impact
• Health and safety issues
• Corporate Responsibility
• Product innovation
• Sustainability in the supply chain
Through these seven priorities the ABB
Group can help to counter the effects of
climate change; as they state …
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TI_2010_02_final.indd 68
ABB GROUP
Transforming Industry
“These priorities reflect growing concern
over climate change and what the com-
pany can contribute to mitigate it through
energy efficient products and systems,
innovation, and how the Group manages
its own environmental impact.”
Latest achievements
The list of achievements of the ABB Group
continues to grow. The company recently
received an ‘Engineers’ Choice’ award from
‘Control Engineering’ magazine, in the
‘Dashboard Software-Energy’ category, for
their cpmPlus Energy Manager. This soft-
ware product helps customers to control
their energy use in order to cut costs and
improve efficiency. Readers of the maga-
zine voted the cpmPlus Energy Manager
the best product in its category for 2009.
As well as the order for high voltage power
transformers in India, the ABB Group has
also recently received orders for a $17 mil-
lion project in Kazakhstan and for the
provision of electrical and automation
equipment in Saudi Arabia. Furthermore,
it received TUV certification for its Safety
Execution Centre in Buenos Aires, meaning
that the system fulfils international safety
standards. Notably, this is the first TUV cer-
tification to be granted in Latin America.
However, the company does not rest on
its laurels. The ABB Group’s plans for 2011
are to improve performance even further,
drive innovation, attract and retain a skilled
workforce, and focus on sustainability.
ABB’s vision states:
‘As one of the world’s leading engineering
companies, we help our customers to use
electrical power efficiently, to increase
industrial productivity and to lower envi-
ronmental impact in a sustainable way.
Power and productivity for a better world.’
68 February-March 2010
19.3.2010 13:38:08
 Trade & Investment | www.trade-investment.eu 69 February-March 2010

TI_2010_02_final.indd 69 19.3.2010 13:38:14

 No. 1 in European Logistics Excellence
Prozesskostensenkung mit den Logistik-
systemen von SFS unimarket Schweiz
SFS unimarket macht ihre Kunden wettbewerbsfähiger
SFS unimarket ist ein spezialisierter Zuliefer- und Logistik-
partner für Produkte der Befestigungstechnik, Werkzeuge,
Beschläge sowie für chemisch-technische Produkte. Die
Kernkompetenzen im C-Teile Management wurden stark
ausgebaut, Investitionsprogramme bei den Logistikdienst-
leistungen resultieren in Verbesserungen in Sachen
Schnelligkeit und Verlässlichkeit.
Optimierte C-Teile Logistik
Eine wesentliche Zielsetzung von SFS
unimarket liegt in der Herstellung von in-
novativen Logistiksystemen. Die zeit- und
kostenoptimierte Beschaffung und Bevor-
ratung diversifizierter Produktgruppen zielt dabei auf die
langfristige Verbesserung vom Nutzen und die ökonomische
Effizienz der industriellen Wertschöpfungsketten beim Kun-
den ab. ABB, als weltweit führender Hersteller von Ener-
®
gie- und Automationstechnik, nutzt die turnLOG -Systeme
bereits an 57 Arbeitsplätzen mit insgesamt 665 Artikeln.
Gewinner des European Award for Logistics Excellence
Die jüngste Entwicklung von SFS unimarket, die auf RFID
®
basierende Logistiklösung für C-Teile turnLOG , hat weg-
weisenden Charakter. Diese Gemeinschaftsentwicklung
von SFS unimarket und Intellion gewann im Jahr 2008
bereits den Swiss Logistics Award, und konnte im Jahr
2009 als logis(tis)che Weiterentwicklung den Siegertitel der
European Logistics Association für sich beanspruchen.
Detaillierte Informationen hierzu finden Sie auch unter
www.sfsunimarket.biz/ela
SFS unimarket AG T +41 71 727 52 00
Befestigungstechnik, CH-9435 Heerbrugg F +41 71 727 52 19
www.sfsunimarket.biz
TI_2010_02_final.indd 70
Reducing process costs with logistics
systems from SFS unimarket Switzerland
Optimised logistics for C-category parts
SFS unimarket makes its customers more competitive
SFS is a specialist supply and logistics partner for faste-
ning products, tools, architectural hardware and chemical/
technical products. Its core competences in the manage-
ment of C-category parts have been significantly expan-
ded and investment programmes dedicated to logistics
services result in improved speed and reliability.
Optimised logistics for C-category parts
Producing innovative logistics systems is one
of SFS unimarket’s main objectives. In this
context the time- and cost-optimised pro-
curement and stocking of diversified product
groups aims to generate long-term improvements in the
utilisation and economic efficiency of customers’ industrial
value chains. ABB, a world-leading energy and automation
engineering group, is already operating the turnLOG®
systems at 57 workstations for a total of 665 items.
Winner of the European Award for Logistics Excellence
SFS unimarket’s latest development, the turnLOG® RFID-
based logistics solution for C-category parts, is trailblazing
in nature. This joint development by SFS unimarket and
Intellion already won the Swiss Logistics Award in 2008,
and as a further logi(sti)cal development carried off the title
awarded by the European Logistics Association in 2009.
You will also find detailed information about this at
www.sfsunimarket.biz/ela
19.3.2010 13:38:19
TI_2010_02_final.indd 71 19.3.2010 13:38:21

We have interviewed Ms Barbara Frei,
General Manager of ABB Czech Republic
1. How has your company managed
to build its key position in the Czech
market within your industry sector?
ABB has been present in the Czech market
through its products since the 1970s. Since
the beginning of the 1990s, ABB has been
investing significant sums of money, as
one of the first foreign investors, in acqui-
sitions of Czech companies as well as in
creating joint ventures and thus has been
able to build its strong position on the
Czech and Slovak markets. At that time
the investments of ABB seemed optimal
primarily due to the combination of
a relatively quick penetration on these
markets, a skilled workforce and a func-
tioning infrastructure. Although the main
goal of the acquisitions at that time had
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TI_2010_02_final.indd 72
ABB CZECH REPUBLIC
We Save Energy
been the production capacities, we cannot
ignore the emphasis on engineering pro-
fessions and existing know-how. Today
ABB in Czech Republic, as well as
worldwide,is a leading supplier of top
technologies for power engineering and
production automation and stands on 5
main pillars – divisions: products for
power engineering, systems for power
engineering, products for automation,
systems for automation and robotics.
2. What do you see as the main
milestones in the company develop-
ment during the last ten years? How
did the Czech market change during
that time, and what are the custom-
ers mainly focusing on at present?
After a really rocket start of the acquisitions
made by ABB during 1992 to 1993, when
the number of employees exceeded 7,000,
in the next six years we could see a natu-
ral optimization and a segregation of the
“non-key“ sectors. Measured again by the
number of employees, ABB „decreased“
to 5,000 but was able to maintain a con-
tinuous increase of its production rate.
At that time ABB had energy production,
energy transfer and distribution, and also
industrial automation segments.
The decision to establish a joint- venture
with Alstom where we invested all ac-
tivities connected to the production of
energy (production of turbines, boilers,
big electric generators, desulphurization
plants, etc.) was a fundamental milestone
for ABB in Czech Republic. The subsequent
50% share sale in the joint venture to
Alstom in 2000 had completed the whole
transaction and the total number of em-
ployees stabilized on 2,700. Naturally, the
72 February-March 2010
19.3.2010 13:38:22
 Czech market has changed in the last
15 years. The main change on customers’
side has been the effort to concentrate
only on a so called „core business“, which
also brings about a reduction of engineer-
ing capacities.
Our partners, i.e. engineering organiza-
tions supplying their solutions to the end
users, gradually consolidate either through
integration or sales. The companies which
remain on the market today represent an
indisputable quality.
3. How do you take the constantly
stricter environmental requirements
into consideration in your strategy?
Our motto is “Power and productivity for
a better world“. It means that we want to
improve the world by saving energy. We
save due to top technical solutions which
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 73
in their consequence always result in sav-
ings. Efficient energy utilisation tech-
nologies have already been responsible
for 45% of the company revenues. We can,
of course, demonstrate this on specific
steps that ABB has taken in the field of
energy savings and environmental impact
reduction: the efficient solution for the
Swedish wood processing group Sodra
where energy consumption decreased by
80% due to the replacement of standard
hydraulic engines with power efficient
frequency controlled drives. ABB supplied
a complex energy and automation solu-
tion for one of the biggest solar thermal
power plants in the world (the solar ther-
mal power plant Extresol 1 and 2 and the
field of solar collectors in Extremadure in
Western Spain). The two power plants
together produce enough energy for sup-
plying 60,000 Spanish households with
clean energy which contributes to the
reduction of CO2 emissions by 298,000
metric tons per year. ABB also helped The
Wall Street Journal not only to get a new
look but also significant savings of energy.
Thanks to the ABB‘s automation solutions
for 17 printing machines, the American
edition of The Wall Street Journal has since
2007 had a new, narrower size which has
been saving millions of dollars of annual
production costs for the Dow Jones pub-
lishing house and has ensured high print
quality.
4. How has the economic recession
affected your company and how do
you see the future development of
the company?
As our CEO, Joe Hogan, has recently said,
in spite of the current economic crisis the
long term growth factors remain the same
73 February-March 2010
19.3.2010 13:38:25

for ABB: the steadily growing demand for
electric energy, the quick recovery of
emerging markets, and the need to sup-
ply renewable energy via existing distribu-
tion systems require solutions for more
extensive and better energy infrastructure,
efficient energy utilisation and an increase
of industrial productivity. Of course, we
still continue to make significant invest-
ments in the research and development
of new technologies. The energy sector
has not been dramatically affected by the
impact of the worldwide economic reces-
sion. Industry in general, and in particular
the automotive industry and subsequent-
ly the metallurgy, have been experiencing
significant decline. For ABB, which brings
both power engineering and industrial
solutions, the situation has been so far
stabilised.
5. Which sector is crucial for you and
which one has better prospects with
regards to the future development?
Do you plan to penetrate new
sectors?
The strength of ABB lies in high technical
quality products. We do not aim to dra-
matically change the scope of our activi-
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TI_2010_02_final.indd 74
ABB CZECH REPUBLIC
We Save Energy
ties. The position of ABB in the future as
well as today is in two sectors: the power
engineering and the industrial sectors,
while even in the middle of the deepest
recession, which the world has experi-
enced in the last 50 years, we have con-
tinued to invest in new technologies.
Moreover, we took new steps towards
extending our product range and we have
recently started a new activity Technol-
ogy Ventures. Thus we will supplement
our own activities in research and devel-
opment by means of investments which
shall secure our long-term access to the
most significant technologies from their
very origin. The aim is to be even more
flexible so that we can effectively focus
on quickly growing industries.
6. Are you preparing any new
revolutionary products? How much
do you cooperate with your custom-
ers during the development of your
products?
We do! In cooperation with our main
power engineering customers we are
preparing a new equipment for electric
energy distribution networks, the so called
“smart grids“. They should consequently
be able to provide better services to end
consumers and prevent energy wasting.
And that is possible by rational behaviour
of well informed end users.
7. How do you foresee the future
development of power engineering
and what will be the role of ABB?
The energy supply in general and the
related issues – energy savings, meaning-
ful utilization of renewable sources, safe-
ty of deliveries (in particular from poten-
tially critical regions), raw material supplies,
environmental protection, the role of nu-
clear power plants (and the development
of a new generation of so called rapid
reactors, which are able to process current
nuclear “waste“) and the need to effi-
ciently utilise the existing domestic
sources – these are all some of the most
complicated tasks of the contemporary
civilization. We are not exaggerating much
when we say that while the 19th century
was the century of industrial revolution,
the 20th century was the century of in-
formational revolution and that the 21st
century will be the century of power en-
gineering revolution.
74 February-March 2010
19.3.2010 13:38:26
TI_2010_02_final.indd 75 19.3.2010 13:38:27

Serving the people
of Salzburg
Salzburg AG, one of Austria’s most
diverse public utilities, is responsible
for the region’s transport, energy, water
and telecommunications infrastruc-
ture, and has numerous projects on the
horizon. Dr Franz Appesbacher, Head of
Energy Trading, talks to Gabrielle Brown
about how such a diverse organization
can achieve success across all its opera-
tions, and specifically how its natural
gas business will enable a secure and
greener energy service for the region.
Salzburg, capital of the federal state of
Salzburg in Austria, is a popular tourist
destination with visitors flocking to the
picturesque Alpine city to enjoy its world-
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TI_2010_02_final.indd 76
SALZBURG AG
Infrastructure, Innovation and Diversity
famous baroque architecture and pay
homage to Amadeus Mozart’s birthplace.
However, the citizens of Salzburg state
are also fortunate to live in a region sup-
ported by first-rate public services and
enviably efficient energy systems. Salzburg
AG, the public utility responsible for the
region’s infrastructure, is vehemently
dedicated to improving the electricity,
natural gas, water, telecommunications
and public transport infrastructure for the
people of Salzburg. It’s a vast portfolio,
but one in which each element continues
to thrive.
“Public opinion polls show that 90% of
our customers are proud of us, and more
than 80% see us as friendly and trustwor-
thy. We know that when equivalent com-
panies do polls, we are shown to be bet-
ter across our portfolio than others who
specialize in only one area,” says Dr Ap-
pesbacher.
Smooth operations
The concept of being welcoming and
open comes across very clearly in Salzburg
AG’s website. Senior executives are pic-
tured appearing relaxed and approach-
able and there’s very much a sense that
the company is keen to engage with its
customers on a very personal level. Dr Ap-
pesbacher describes the company as be-
ing “the lifeline of Salzburg”, so the idea
of connecting people (through transport
and communications infrastructure) and
enabling the safe and secure flow of en-
ergy (electricity and gas) is paramount.
Ensuring success across all areas of op-
erations must pose one of the greatest
challenges to the organization, and with
around 2,000 employees the utility is one
of the largest in Austria. Dr Appesbacher
explains that this achieved by keeping
76 February-March 2010
19.3.2010 13:38:32
 every employee motivated and account-
able for Salzburg AG’s success. “We set
challenging targets, and this goes for
every employee, from the CEO down.”
This ‘sales culture’ is further supported by
a thorough risk management plan.
Supporting a robust
and greener energy
system
Like any European organization involved
in the energy market, Salzburg AG’s work
in this area is dictated by the need to
develop, implement and manage green-
er energy solutions. Dr Appesbacher as-
serts that Salzburg AG is able to differen-
tiate itself from its competitors by having
a robust setup of 27 hydro power plants –
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 77
more than four-fifths of electricity sold to
customers in Salzburg comes from hydro-
electric power production. Again, the
people of Salzburg are at the forefront of
Dr Appesbacher’s thoughts, as he affirms
that they are “very proud of their environ-
ment.” In addition, he doesn’t fail to men-
tion the importance of preserving the city
for the tourist trade and ensuring their
experience of the region will leave them
confident of its green credentials, and that
their impact on the environment is mini-
mal.
Improving natural
gas supplies
Salzburg AG is heavily involved in improv-
ing the region’s natural gas supplies and
creating services that make best use of
the resource. There are many benefits of
natural gas compared with other fossil
fuels. For one, it is the cleanest burning
fossil fuel, with few polluting by-products
being emitted into the atmosphere. This
also means that it doesn’t leave behind
any residues or odours. Natural gas is also
more efficient to transport, being supplied
via pipelines and delivered direct to the
end user.
“With our gas operations, the main focus
is the end customer: ensuring stable
prices and a secure supply,” explains Dr
Appesbacher. Salzburg AG supplies around
32,000 households via a 2,000km natural
gas network extending from the north to
the south of Austria, with the gas pro-
vided by suppliers in Russia, Norway,
Germany and Austria.
Salzburg AG provides a secure, consistent
supply of gas, working in partnership with
77 February-March 2010
19.3.2010 13:38:36

E.ON Ruhrgas, the leading company in
the pan-European gas market, responsible
for the European gas business from ex-
ploration to supply. “We have a wide port-
folio in order to minimize the risk of dis-
ruption to supply, with various contracts
with gas storage plants across Austria. We
are also a big player in the Tauern Gas
Pipeline (TGL) project, which will connect
the significant German gas market with
the equally large Italian market, via Aus-
tria.” The aim of the TGL is to secure gas
supply for the next 20 to 30 years, and
meet Austria’s demand of some 9 bil-
lion m³ of natural gas a year, as well as
secure supplies across Europe. Dr Ap-
pesbacher points out that natural gas is
the best complement to renewable en-
ergy, such as hydro and wind, which can
fluctuate and are comparatively difficult
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 78
SALZBURG AG
Infrastructure, Innovation and Diversity
to control. “We see gas enabling us to
provide a flexible, reliable energy serv-
ice.”
Providing efficient
and environmentally
sound energy options
Salzburg AG’s involvement in natural gas
initiatives is seen very much in the context
of ensuring that Salzburg’s ‘lifeline’ is in-
creasingly environmentally sound, across
all areas of operation. Dr Appesbacher
explains how compressed natural gas
(CNG) has enabled the region to improve
the green credentials of its public trans-
portation services: “Many of our buses run
on CNG and we have many CNG filling
stations.”
Biomass is also an area where Salzburg
AG is contributing to improving the re-
gion’s carbon footprint, where for exam-
ple plant waste (woodchip, dead trees) is
used to generate electricity or produce
heat, and Salzburg AG is currently involved
in a number of biogas production pro-
jects.
Substantiating the company’s commit-
ment to providing a diverse mix of en-
ergy sources to achieve greener and more
secure services for the region, Dr Ap-
pesbacher explains that Salzburg AG is
also “very active in the construction of
hydro power plants – river plants as well
as storage power plants.”
78 February-March 2010
19.3.2010 13:38:38
 Salzburg’s
success story
As polls prove, Salzburg AG has won the
confidence of its customers. I asked Dr
Appesbacher to sum up what he considered
to define the organization’s success. “Al-
though being formed by a merger in 2000
of two separate utilities serving Salzburg,
we came together to become one of the
most successful and innovative public
utilities in Austria. We have achieved op-
timal preparation for the liberalization of
the electricity and natural gas market and
we have many new markets: telecoms,
internet and touristic public transport.
We’ve also secured numerous successful
joint ventures.”
At ten years old, Salzburg AG and has
proven that with clear direction, lateral
thinking and an unswerving dedication to
the people of the region, success can be
achieved across all areas of such a versatile
public utility.

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TI_2010_02_final.indd 79 19.3.2010 13:38:41


The manufacture and installation of
Cooling Towers is where Hamon Inter-
national started over a hundred years
ago, and this element of the company
continues to thrive. Diane Mannion takes
a look at the Cooling Towers Business Unit.
When it comes to Engineering, Procure-
ment and Contracting (EPC) companies,
Hamon is in the major league. With rev-
enues of 380 million Euros in 2009, the
company is employing more than 1.000
staff throughout 20 countries and five
continents. Its activities are many compris-
ing of design, manufacture and installa-
tion, project management and after sales
services. During its existence Hamon can
boast of many successes including involve-
ment in the Eiffel Tower.
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 80
HAMON COOLING TOWERS
Staying Cool
The company is divided into five business
units – Cooling Systems, Heat Exchangers,
Air Pollution Control Europe, Air Pollution
Control US and Chimneys. Of these five, the
Cooling Systems Business Unit is the most
established, although not the largest.
Strong foundations
When the company first began, its core
activities were in the development of
Cooling Towers. That was over a hundred
years ago, when two French brothers
started trading in France and Belgium
respectively. Both of the brothers concen-
trated on the production of cooling tow-
ers initially, but moved into the energy
business following expansion in the min-
ing and heavy industry sectors. They
merged to form the Hamon Group in the
1990’s.
Hamon has come a long way since the
early days, and the latest figures indicate
that its success is set to continue. In par-
ticular, the Cooling Towers Business Unit
signed new contracts during the 3rd quar-
ter of 2009 for a total value of 17 million
Euros. Furthermore, it has secured an or-
der for the construction of a 30 cells plume
abated cooling tower in the UK, and a con-
tract for Super Large Cooling Towers for
the State Nuclear Electric Power Planning
Design and Research Institute of China.
New orders for the whole year 2009 made
110 million Euros.
The year 2009 has been very successful
as the revenue of the group increased by
80 February-March 2010
19.3.2010 13:38:43
 4% compared to 2008. Hamon Cooling
Systems Business Unit’s earnings before
interest and taxes have improved by 29%
compared to 2008, thanks to the higher
revenue, the professional execution of
the jobs and a strict costs management
at all levels. Hamon Cooling Systems also
employed a total staff of 482 in 2009, and
sold to a number of world markets includ-
ing Europe, the Middle East and Asia.
Cooling towers
The Cooling Towers Business Unit supplies
and installs equipment for a variety of
industries worldwide, and is one of the
world leaders in its field. Customers include,
amongst others: power plants, chemical
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 81
plants, the paper industry, steel mills and
sugar mills. With such a diverse clientele,
the company has built up a vast knowledge
and experience to cater for individual
client specifications. To meet customer
requirements Hamon Cooling Towers of-
fers a broad range of options relating to
layout, arrangement, structure, internal
materials and mechanical requirements.
Additionally, their wet cooling systems
can be standard or made to measure. They
can provide cooling towers for any type
of industrial water, sea water or low pH
solutions, and all their designs take ac-
count of efficiency, longevity, power sav-
ing and Environmental awareness. In fact,
they include advice relating to Environ-
mental impact as standard with all their
Cooling Tower installations. They also take
care of repair and maintenance, and have
a centre in France dedicated to the supply
of spare parts.
Types of towers
There are a number of different kinds of
Cooling Tower dependant on require-
ments, and different fills to suit the type
of water. The Natural Draft Cooling Towers
(NDCT) were built for large power plants
in the 70’s and 80’s, but there was a reduc-
tion in the demand for this type from the
80’s onwards due to the reduction in
power plants and the fact that NDCT’s
were incorrectly linked to pollution due
to their size and visible impact. However,
opinion has changed regarding these
81 February-March 2010
19.3.2010 13:38:45

towers and they are now considered en-
vironmentally friendly, because they gen-
erate large amounts of power saving.
Other advantages of this type of tower are
that they have no mechanical noise, require
limited maintenance and have a long life
expectancy. Hamon has designed and built
over 300 NDCT’s in total, and continues to
improve their performance. A variation of
this type of tower is the fan assisted type
(FANDC), which is suitable for certain cir-
cumstances, for instance, when there are
height restrictions, or when fans are need-
ed to boost the air flow due to climatic
conditions.
Mechanical Draft Cooling Towers (IDCT)
can be built in any size and in different
materials such as steel, wood and concrete.
A number of issues are considered when
designing this type of tower; the available
plot area, water quality, air pollution, local
labour costs, and noise and plume limita-
tion are all contributory factors. To deal
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 82
HAMON COOLING TOWERS
Staying Cool
with the problem of plume visibility in
areas where this could be a problem, such
as residential areas, Hamon offer another
solution in the form of Plume Abated Cool-
ing Towers (PABCT). These are a type of
IDCT, so they have all the features of Me-
chanical Draft Cooling Towers but with the
added advantages of no plume visibility,
cost effectiveness and outstanding per-
formance in terms of evaporative cooling
towers.
Continuous research
and development
Prospects are good for Hamon Cooling
Systems and the 2008 annual report indi-
cated an intention to sustain growth levels
related to supply and installation of new
units and refurbishment of older towers.
Given the present economic climate this
upward trend is impressive. The company
also intends to continue investment in
Research and Development, and make
more use of renewable energy. The MD,
Francis Lambilliotte, remarked in his 2008
Annual Report Statement:
‘Of course, we’ve invested in the techno-
logical performances of our products,
which explains the wealth of talent re-
cruited with an R&D bias. Amongst other
things, we’re working on a natural draft
hybrid tower that produces less plume and
we’ve also got a new fan-assisted natural
draft tower that is considerably less high
than a traditional concrete tower: 80 meters
instead of 160/180 m. They offer the ad-
vantage of being able to blend in with the
environment more easily...’
‘... Tomorrow, I hope that we’ll be at the
heart of both traditional energy projects
with environmental protection systems
and also in renewable energy projects,
clearly a source of development for the
future.’
82 February-March 2010
19.3.2010 13:38:47
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TI_2010_02_final.indd 83 19.3.2010 13:38:49


If you want to know how to survive, profi-
tably and successfully, in today’s uncertain
economic climate, ask those who’ve
weathered – successfully – yesterday’s
uncertain economic climate. NLI has a long
and successful history and, despite several
times of economic downturn, when
competitors fell by the wayside; vision,
courage and action has seen the company
succeed where others have not.
History
This large company is still a private com-
pany, headed by Mr Nordheim-Larsen.
NLI started in a small mechanical work-
shop in Mjøndalen, Norway, in 1946, and
has grown significantly in the last 63 years,
in terms of turnover, areas of competence
and number of employees. The last five
years, in particular, have been marked by
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 84
NLI GROUP
Vision, Courage and Success
significant expansion and diversification,
not least geographically, but also into new
market areas. Despite the current eco-
nomic climate, which has affected the
industry detrimentally, NLI has high ambi-
tions and looks to the future with a solid
financial base and eyes open to potential
in this difficult time.
Why the success?
Back in the 1970’s, the group was mainly
supplying engineering equipment to
Norway’s traditional industries, such as
the forestry and aluminium, as it had done
for the previous 30 years. These industries
experienced a massive downturn and
many of NLI’s competitors struggled or
failed. But not NLI. Why? One of the an-
swers is that Mr Nordheim-Larsen was not
only a visionary but acted, courageously,
on his perception of the future. He realised
that the industries that had supported his
company for so long were doomed to
a long downturn and that NLI needed
to diversify in other industries.
Oil and gas exploration came to Norway
at this time and so that was a natural
target for expansion. NLI started reorient-
ing their systems and expertise to this
growing market. Then later, by the early
2000’s, many of Norway’s traditional en-
gineering workshops were feeling the
bite of another economic downturn.
Though the market was low, Mr Nordhe-
im-Larsen not only saw the potential but
also dared to act and acquired companies
with their own technologies – technolo-
gies that complemented NLI’s. Mr Nord-
heim-Larsen knew the hard economic
times would not last. His company start-
ed acquiring struggling businesses that
were in line with both the NLI expertise
84 February-March 2010
19.3.2010 13:38:51
 and the oil and gas industry market.
In the last 10 years NLI has continued to
grow both organically and by acquisi-
tion.
Two other success
factors
Mr Tor-Martin Røed, Chief Operational
Officer Marketing for NLI, sees that, be-
sides vision and courage to act, there
are two other factors to their success.
Firstly they concentrate on what their
particular skills are and they develop
those with total focus. It is always
tempting to leap into other markets
or acquisitions that show promise but,
unless they have synergies with NLI’s core
competencies, they are rejected. They
look closely at where their skills are
and continue to develop those further.
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 85
Secondly, they have a high focus on
developing their people. Because the
company has a large percentage of high-
ly skilled and educated people, the con-
tinuing training and development of
everyone, from management on down,
is a top priority.
Globalisation and
emerging markets
Because of its involvement in the oil and
gas industry, NLI has had to embrace the
whole world and, also, compete with the
whole world. In general they have ap-
proached this challenge by establishing
a wide network of suppliers in low cost
countries. Today that is one of their main
focus areas. Their business in Poland came
as a part of their growth in mechanical
engineering, being a daughter of a Norwe-
gian company they acquired. Nevertheless,
it has been an important element for them
both with respect to capacity and price.
Along with embracing a wider business
community, they have recently been em-
bracing the new technologies in renew-
able energy. These technologies include
floating offshore windmills, CO2 capture
and wave power.
Quality products
The oil and gas industry is necessarily
conscious of quality control – even the
smallest problems can lead to catastroph-
ic environmental, humanitarian and fi-
nancial consequences. NLI are certified
for ISO 14001 (Environmental Management
Standard) OHSAS 18001 (Health and Safe-
ty Management Standard), ISO 9001-2000
(Quality System Standard) and ISO 3834-2
85 February-March 2010
19.3.2010 13:39:09

(Welding Management Standard) and,
despite the cost and effort to maintain
these standards, they know it is essential
to continue to produce products of the
highest standard – customers demand it
and the long-term viability of NLI depends
on it.
Quality people
All new employees must undergo the NLI
training program at the in-house Compe-
tence Centre. The main objectives of the
Competence Centre are to continuously
improve their processes and routines for
recruitment, introduction and develop-
ment of new employees. The Competence
Centre programs focus equally on both
professional and social development. NLI
strives to create the best choice for their
employees, customers and partners and
in order to ensure and follow up on the
development of employees, they estab-
lished their own Competence Centre.
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 86
NLI GROUP
Vision, Courage and Success
Because the training is for everyone and
because the flat management structure
ensures effective communication through
the group, it is relatively easy for employ-
ees to move from one company or func-
tion to another. This ensures everyone
has wider opportunities for advancement
and skill enhancement.
All management personnel must attend
the Human Resources training program
and there are specific NLI training pro-
grams for every specific group of employ-
ees in the group – accounting, sales,
procurement, engineering and so on. They
also run their own Project Management
courses and there is a continual updating
and expanding of courses provided to
keep staff up to date with skills, technology,
legal and environmental changes.
NLI undertake massive engineering
projects. Therefore, their rigorous health
and safety training programs are essential,
as Mr Røed said, to maintain production
quality standards and, more importantly,
“so everybody gets back safely to their
families every day”. The caring nature of
the company shows itself in other ways
too; from the short communication lines
(allowing everyone to be heard easily) to
the ease of movement between divisions
and functions.
Management structure
For a company with over 1,000 staff, it
is surprisingly lacking in bureaucracy.
Mr Tor-Martin Røed explained that there
are very short communication lines and
communication between everyone, con-
stantly, is a large focus of management.
Within such a large group, there could be
conflicts of functions between different
companies. In order to avoid conflict of
interest between their own companies
and to manage the interfaces between
their clients in a proper way, NLI has
established a management structure
with a Management Group being res-
ponsible for all activities across NLI. In
addition to the owner, who is also CEO,
this consists of the CFO, COO Marketing,
COO Fabrication and COO Technology.
The two latter ones are also acting as
Working Chairmen for their respective
companies. This structure underlines
the short lines of communication and
ability to act and respond quickly if re-
quired. In addition there are several
other means of securing and improving
the co-operation across the group such
as regular meetings comprising the
group managing directors or meetings
for marketing personnel etc.
Current business
Under the NLI umbrella is a complete
supplier of engineering and manufactur-
ing services, technological products and
process solutions within the oil and gas,
land-based industry, maritime industry
and civil construction works (bridges and
buildings). They take full responsibility for
the entire process, from concept develop-
ment to the delivery of the final product,
including project management, engineer-
ing, structural steel, pipe-work, electrical
and instrumentation, surface treatment,
installation, assembly, testing and com-
missioning.
Their current locations are: Tønsberg
(head office), Odda, Arendal, Grenland,
86 February-March 2010
19.3.2010 13:39:16
 Larvik, Sandefjord, Krokstadelva, Lier-
byen, Kjeller and Gdansk (Poland). The
challenge of absorbing many different
languages and cultures necessitates an
effective and efficient communication
management system. Such is the nature
of a large international company. For
example, one of the NLI companies had
people from 15 different nations work-
ing for it, at one time. While ensuring
respect for differences, it is vital that
NLI’s strong management and training
systems – developed with great rigour
over the past 10 years – are maintained
so that there is consistency of operations
between divisions, companies and func-
tions.
Current economic
climate
NLI has suffered through this current
economic slump and they have had to
review permanent and temporary staff
numbers. Their order backlog has reduced
and many projects are on hold. The civil
engineering work in Norway dropped
immediately after the financial crisis
occurred, but while they now see that
part of the business is recovering, the oil
and gas work has taken longer to taper
off. Mr Røed does not anticipate that
2010 will be a good year but he says that
the company has made the necessary
adjustments to cope with the current
crisis. With the typical NLI attitude of vision
and courage, he says that the company
is very aware that: firstly, the economy
will return to better times, and secondly,
that with the economic downturn and
potentially many struggling companies
in mind, there could be many profitable
acquisition opportunities available for
NLI. Dealing with today’s very real prob-
lems while keeping an active eye on the
future has kept NLI at the forefront of
every market they’ve been involved in. In
Mr Tor-Martin Røed’s words, “We continue
to look behind to learn and forward for
opportunities.”
By Philip Bradbury

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UAB GKF “Sparnai” performs mechanical metal processing
works according to individual orders following ISO 9001:2008
requirements. Our main partners are companies from laser,
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dustries. Quality, flexibility and on time delivery – that’s what
we are valued for.
Tel.: +370 (0) 5 261 99 09
Fax: +370 (0) 5 262 78 91
gkf.sparnai@takas.lt
www.sparnai.eu

Trade & Investment | www.trade-investment.eu 87 February-March 2010

TI_2010_02_final.indd 87 19.3.2010 13:39:20


The telecommunications industry is
notoriously fast moving, with innova-
tive technologies constantly entering
the marketplace offering new solutions
for business and consumer clients alike.
GN Netcom’s Chief Technology Officer
Leo Larsen talks to Gabrielle Brown
about their award-winning Jabra hands-
free headsets and the imminent boom in
the unified communications market.
GN Netcom is one of the world’s leading
and fastest growing suppliers of hands-
free communications solutions, producing
wireless headsets for mobile users and
both wireless and corded headsets for
contact centres and general office users.
The company’s Jabra products, the world’s
best selling Bluetooth headsets, have re-
ceived numerous awards for their pioneer-
ing technology and design. “Our products
deliver outstanding sound quality but
their interoperability is also exceptional.
Our headsets work, and work well, with
many different systems and applications,”
says Mr Larsen, explaining what it is about
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 88
GN NETCOM
Getting Set for Hands-Free
his technology that sets it apart from the
competition.
Working smart
Working with a headset rather than a tra-
ditional telephone handset has two sig-
nificant advantages. Firstly, because you
are able to sit upright and move your body
freely you are less likely to suffer from
repetitive strain injuries – you will not find
yourself hunched uncomfortably over the
phone. Secondly, with no need to hold
on to a handset, and with wireless head-
sets you won’t be chained to a fixed point,
you can be more productive; using your
hands to type or being able to walk to
another area in your office to use the
printer, for example.
“To take the issue of wellbeing further,”
says Mr Larsen “Jabra headsets meet the
requirements of protective regulations,
meaning that individuals using our prod-
ucts will not be exposed to loud or un-
pleasant noises. This means that you are
best protected and staff working for hours
at a time in contact centres will work bet-
ter and not suffer stress.”
Looks versus
capability
Today, technology, design and to a certain
extent fashion are becoming increas-
ingly interdependent. Some mobile
phones, for example, are designed as
much as a fashion accessory as a means
of communication. Mr Larsen explained
that for Jabra the market has very different
requirements. “The mobile business is
driven by trends in looks and design par-
ticularly, to the extent that you will give
up something, such as sound quality, to
have a smaller and s marter product – and
that goes for all products in the consumer
area, not just in telecommunications. We
have different expectations in technology
too; for example we all accept that a mo-
88 February-March 2010
19.3.2010 13:39:32
 bile phone won’t work going through
a tunnel, but we expect a landline to be
robust and work all the time.”
Jabra headsets aimed at professional cli-
ents, particularly contact centres, are far
more technology driven. They combine
wired and wireless, DECT and Bluetooth
technologies (whereas the mobile market
is largely Bluetooth only) and package
these in a far more conservative fashion.
The importance of comfort, durability and
reliability take precedent over up-to-the-
minute design.

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

Trade & Investment | www.trade-investment.eu 89 February-March 2010

TI_2010_02_final.indd 89 19.3.2010 13:39:34


continuing success. Importantly, tech-
nologies are developed and evolved in-
house.
GN Netcom has dedicated resources for
tracking emerging and disruptive tech-
nologies, keeping a firm eye on trends and
also predicting – road mapping – the
likely future developments in wireless and
Bluetooth technologies. Product portfo-
lios are constantly evaluated to ensure
they’re at the forefront of their market.
It’s an ongoing, fundamental task, but be-
ing future-savvy means the company is
poised to take advantage of new tech-
nologies and move quickly when markets
pick them up and run with them – often
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 90
GN NETCOM
Getting Set for Hands-Free
at great speed. When Bluetooth exploded
on to the scene earlier this decade, Mr
Larsen explains that although there was
perhaps an element of surprise, it was
welcome and Jabra products were able to
keep pace and evolve to meet, and surpass,
clients’ expectations.
Unified
communications
So, what does the future hold? Without
hesitation, Mr Larsen asserts that the next
big thing will be unified communications,
where you have only one network which
accommodates email, instant messaging,
video and voice conferencing. “We are
taking the lead in this area. For instance,
we are the first to introduce Microsoft-
approved products for their unified com-
munications solutions.”
With unified communications, the PC be-
comes the core of all communications
activity. The traditional office phone could
therefore be rendered useless. Mr Larsen
proposes that as the PC becomes the focus,
and as communications technologies con-
tinue to be developed around that concept,
the phone as we know it will be left behind.
This development is the biggest opportu-
nity for Jabra: as the PC keyboard replaces
the traditional dialling pad, headsets be-
come the obvious interface through which
to speak and listen.
Surprisingly, it isn’t technology, or even
cost, posing the most complex challenge
to Jabra. Instead, it’s more people’s pre-
conceptions about being without their
handsets, and feeling uncomfortable at
the idea of seeing colleagues “walking and
talking with their hands waving about”. Mr
Larsen explains that the first challenge is
to get the products in front of the clients,
and for them to be open-minded. You could
liken it to the initial rejection of mobile
phone technologies, which at first were
thought to be ostentatious and unneces-
sary.
90 February-March 2010
19.3.2010 13:39:39
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TI_2010_02_final.indd 91 19.3.2010 13:39:48


From telephone to tool
As you would expect, the Jabra product
range is broad, with varying cost options.
But being state of the art, Jabra headsets
are not a low-cost option for businesses.
Mr Larsen has no reservations about the
brand’s status however; he stresses that
low-cost headsets will serve a certain pur-
TI_2010_02_final.indd 92
pose, but they will not be of a quality good
enough to last, and potentially not suitable
for long-term use. Jabra products have
been designed to improve efficiency in the
workplace; they are a professional business
tool, not just a ‘telephone headset’.
With unified communications fixed firmly
on the horizon Mr Larsen is positive about
the future for Jabra, but he’s also aware
that the market needs d a gentle nudge in
order to equip itself for this change. “I hope
that businesses come to see that hands-free
solutions can have a positive impact on
their workplaces. We know and understand
the benefits that our headsets provide, but
in order for this to be recognised, more
businesses have to be open to trying them.”
A challenge you’d be foolish to refuse.
19.3.2010 13:39:53
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Tel: +49 6196 9988-0
Mitsumi Electronics Europe GmbH
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providing customers with total energy solutions. Lishen has fixed its corporation vision as “world-class
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TI_2010_02_final.indd 93 19.3.2010 13:40:02


E.ON Sverige is at the forefront of Swe-
den’s commitment to reducing carbon
emissions and providing customers with
power from renewable energy sources.
Environmental Director Mattias Örtenvik
talks to Gabrielle Brown about the
importance of providing customers with
clear advice, viable green alternatives
and E.ON’s commitment to reducing cit-
ies’ carbon footprints.
E.ON Sverige first introduced an environ-
mental policy in 1969, decades before the
words ‘green’ or ‘renewable’ were as closely
associated with business as they are today.
E.ON continues to set the environmental
standards as a leading energy provider,
but as Mattias Örtenvik explains, this does
not mark a huge shift in its existing strat-
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 94
E.ON SVERIGE
Seriously Green
egy, “E.ON already had a strong portfolio
of renewable energy sources, including
hydro and nuclear, and in the last twenty
years made extensive change from fossil
fuels to bio fuels.” So, rather than increas-
ing political and market pressure forcing
it to review its products E.ON simply car-
ried on in the direction it was already
heading.
Power politics
In Sweden politics has been the main
driving force behind businesses applying
environmental policy across their opera-
tions, with the introduction of ‘green taxes’,
applied to electricity and especially to
carbon dioxide. Therefore, the demand
for green energy products already exists
in Sweden and E.ON’s target client base
doesn’t need to be sold the concept. “The
political agenda is very important and the
market has asked for this in a fairly clear
way,” says Mr Örtenvik, who goes on to
explain that the incentive then is for E.ON
to inform its market precisely what it has
to offer in terms of greener energy prod-
ucts.
In answer to my question about how the
recession had affected businesses’ attitude
to reducing their energy consumption
and turning to more environmental energy
options Mr Örtenvik said, “In order to
achieve greater energy efficiency compa-
nies have to make an investment. It
requires an initial, upfront cost, so the
recession has not helped in this respect.
94 February-March 2010
19.3.2010 13:40:06
 But it has perhaps triggered some busi-
nesses to look at rationalizing their energy
costs.”
Knowledge is power
A brief look at E.ON Sverige’s website will
tell you the company is committed to
educating clients as to how to reduce
energy consumption, providing various
tools and quizzes that aid with monitoring
usage. However, Mr Örtenvik explains that
this is largely directed at the mass market,
which is several steps behind business
when it comes to engaging in energy
issues. The business-to-business market
is notably more mature and companies
will for some time have considered the
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 95
impact of energy consumption not only
on their overheads but also as part of the
requirement to create greener brands.
“Over the last five years, due to the climate
issues, environmental policy has moved
into the strategic area. There is a more
obvious link between the environment
and its impact on business. In Sweden, as
soon as you have a product it has to have
a green element to it; it gives it an
appeal.”
I asked Mr Örtenvik to tell me what the
first step a business should take is in order
to reduce its carbon footprint: “First and
foremost before any energy-saving meas-
ures are made you must have an in-depth
understanding of where and how you are
using energy. This knowledge can be used
as a platform for you to not only pick the
low-hanging fruit, i.e. take immediate
measures, but also prepare your long-term
agenda, taking into account all the appro-
priate cost-benefit considerations.”
Creating sustainable
cities
As well as in the boardroom, general envi-
ronmental awareness throughout most
of Sweden’s city centres is fairly high.
Mr Örtenvik proposes that this is perhaps
because Sweden already had climate-
efficient electricity systems as well as low-
carbon heat options before climate change
became such a hot topic. E.ON Sverige’s
sustainable city projects are a result of
the company’s recognition that all levels
95 February-March 2010
19.3.2010 13:40:09

of society must be engaged in order to
make further headway with climate, renew-
able energy and energy efficiency objec-
tives. The project divides its focus into three
areas for attention: firstly, reviewing and
investing in large-scale energy systems;
secondly, looking at local energy systems,
namely heat, transport and waste; and
thirdly understanding how alternatives
can be made attractive to customers to
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 96
E.ON SVERIGE
Seriously Green
give them the incentive to reduce their
carbon footprints. Mr Örtenvik adds that
the heat business is the backbone of the
sustainable city concept because by nature
it is a local business – district heating sys-
tems are not connected in the way that
the electricity grid is. Whichever city you
live in, you will receive your heating from
a local source.
The integration of greener energy, trans-
port and waste systems is central to the
concept. Mr Örtenvik stresses that the sus-
tainable city concept is a platform for
a public-private partnership, with collabo-
ration between energy providers, munici-
palities and other local players. “We really
use our approach around sustainable city
as a base for local schemes, with a strong
cooperation from local business and
96 February-March 2010
19.3.2010 13:40:14
 authorities.” Mr Örtenvik himself
drives a biogas car and has
made considerable investments
in his home in order to reduce
energy consumption. There are
other things he would like to
do in order to reduce his own
carbon footprint but explains
that it comes back to what kind
of options are available, and the
TI_2010_02_final.indd 97
sustainable city is all about offering viable,
practical alternatives.
A greener future
The future for E.ON Sverige is that of an
extreme dedication to reducing CO2 emis-
sions across E.ON’s Nordic operations,
manifest in a commitment of 58 billion
Swedish Krona (SEK) over the next six years
which will be invested in projects including
new wind farms, making the existing elec-
tricity grid far more weatherproof and
updating the hydro electric power infra-
structure. The objective is to reduce CO2
emissions by four-million tonnes. This is
not only a momentous business objective;
it’s a serious commitment to the benefit
of our planet.
19.3.2010 13:40:17

International Diesel Service (IDS) is the
European business to business arm of the
Kuwait Petroleum Corporation, one of
the world’s leading oil producers. Ronan
O’Connor examines how they operate their
network of stations and lead the way in
security and pricing in the industry.
Even though fuel prices are about as con-
sistent as stock market values, for inter-
national haulage firms, the hunt for the
lowest fuel prices is constant. With around
600 fuelling stations spread across Europe
from Moscow to Ireland, IDS delivers the
lowest fuel prices to its customers via an
ingenious and innovative business model.
It is a strategy that has been developed
for the company’s unique customer base,
as Khaled Al-Bader, marketing coordina-
tor at IDS explains. ‘The business model
revolves around the long haul require-
ments of international haulage firms. We
have quick pumps, a good network of
stations, spanning the continent from
Ireland to Moscow. All of our stations are
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 98
INTERNATIONAL DIESEL SERVICE
Maximising Fuel Transport Efficiency
strategically placed and are normally lo-
cated about 1 kilometre from the main
highways. This allows us to avoid more
expensive land costs of having a station
right beside the highway. This lower cost
is then passed on to our customers in
lower prices. We also keep our costs down
by offering very little services at our sta-
tions,’ he said.
IDS supplies its stations through agree-
ments with local fuel suppliers all across
Europe. Kuwait Petroleum Corporation,
its parent company, has two refineries in
Europe: one in Europoort, Holland and
another in Sicily. However, the agreements
with fuel companies are based on location,
as it makes no logistical sense for IDS to
move fuel from Italy to stations in Poland
or elsewhere.
Beyond offering the provision of the
cheapest diesel, biodiesel and AdBlue,
IDS maintains its position at the top of
the market by making its business finan-
cially rewarding. ‘We also offer our custom-
ers a number of other financial and secu-
rity services that improve our business
model. We offer a NOVI service, which
offers the customers the net of VAT on
their invoices. This allows us to claim back
the VAT on behalf of our customers, and
gives our customers the benefit of having
less money tied up while they are waiting
for their rebates. It improves the cash flow
of our customers,’ Mr Al-Bader explained.
Online security
One of the trump cards in IDS’s business
model is the level of online access and
security on offer. All of the company’s
services are available online. This begins
with an electronic customer service sys-
tem, called Iaccount. It allows customers
to see all transactions and pump prices
and all card actions. This service is pro-
vided free to all customers and is con-
stantly being enhanced and upgraded,
according to Mr Al-Bader. Customers can
also order extra cards or cancel cards on-
line. In the beginning of 2010 an e-invoic-
98 February-March 2010
19.3.2010 13:40:22
 ing service will be launched, adding an-
other layer to the online offering.
As can be imagined, the outlay of big haul-
age companies on diesel can be huge. In
an attempt to eliminate any element of
misuse of company resources, IDS offers
clients a number of security features that
keeps it ahead of its peers in the market.
According to Mr Al-Bader, ‘One unique
aspect of our company is that we are com-
pletely online and operate in real time.
With our competitors, when a truck goes
to a station and uses their card to get fuel,
the card can be accepted or declined. But
if a card has already been cancelled, there
is a delay of a number of hours before this
is recognised at all stations. Some com-
petitors boast that their card systems are
updated twice a day. All IDS stations are
connected to a server and every card is
checked centrally every time a card re-
quests fuel. ‘
IDS also offers its customers a number of
other security features. For instance, they
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 99
can restrict the access of cards to a certain
route or even to one station, allowing them
to keep track of their drivers and minimise
the potential abuse of their account. And
they have recently added another layer of
security to their card system, allowing cli-
ents to block the cards’ use at weekends,
when their statistical analysis showed that
most misuse of cards was taking place.
There are a number of competitors in the
market for the international haulage busi-
ness, coming from fuel companies and fuel
traders. ‘The problem with the fuel traders
is that they don’t have their own stations.
They have agreements with fuel companies,
so their customers come and fuel with
them at different stations. It is an interest-
ing concept, but they cannot control the
fuel prices at the stations. We are the mar-
ket leader in offering a secure service to
our clients; we are like a bank. The others
do their best to keep up with us, but they
cannot offer a service like the immediate
blocking of cards,’ said Mr Al-Bader.
Challenges and growth
Despite the effect that the recession has
had on many businesses, IDS remains
strong in the marketplace, as they can
offer lower fuel prices than that of their
competitors, as Mr Al-Bader explains: ‘The
whole road transport sector was affected
by the economical crisis. Because of our
strong low cost business model, we were
able to weather the storm. We did get
a slight dip in volume at the beginning of
2008, however, the gap differential be-
tween budget and actual is thinning.’
In this environment, IDS has looked at
rationalising its current network to offer
customers a better standard of service. This
is not to say that the company is downsizing,
but that it needs to track the popularity of
sites as the European road network develops.
While looking at the western operation to
maximise efficiency, IDS is also looking to
emerging economies for growth. ‘We are
looking at expanding eastwards – that is
where the money is,’ said Mr Al-Bader.
99 February-March 2010
19.3.2010 13:40:24

The Central European Gas Hub (CEGH)
was set up over four years ago, but with
the growth in gas trading, its future
role is expanding. Diane Mannion
interviews the Chief Executive Officer,
Mr Harald Wüstrich, about the latest
developments.
On 11th December 2009 the natural gas
spot market was launched by the Central
European Gas Hub (CEGH) with further
plans to launch a futures market in the
spring of 2010. The launch has been seen
as a success so far, as Mr Harald Wüstrich,
Chief Executive Officer of CEGH, com-
ments:‘Launching the“CEGH gas exchange
of Wiener Börse” was successful since
13 customers had been registered at the
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 100
CENTRAL EUROPEAN GAS HUB
Euro-trade in Natural Gas
very beginning... Trading activities started
intensively...’
Central European
Gas Hub
CEGH is already one of the biggest gas
hubs in Continental Europe, and prior to
launching the spot market there were
already 90 registered traders using CEGH
for over the counter (OTC) trading amount-
ing to 2 billion m3 of natural gas per month.
According to Mr Wüstrich, CEGH has the
potential to become the biggest Central
European gas hub in the future: ‘The Vi-
enna-based CEGH has a considerable
competitive edge over other gas hubs in
Europe thanks to its geographical position
at the heart of Central Europe… Further-
more, one of its major trading points along
with large gas storage facilities are in close
proximity, offering additional advantages
for trading at the CEGH,’ he says.
The Central European Gas Hub was es-
tablished in 2005 by the Austrian com-
pany, OMV, in response to the growing
demand for gas trading in Europe. Nota-
bly, in the period from October 2005 un-
til October 2009 monthly trading volumes
for gas have increased tenfold. CEGH’s
functions are, firstly, to carry out all the
processes associated with gas trading
such as title transfer, and transportation
between different Transmission System
100 February-March 2010
19.3.2010 13:40:26
 Trade & Investment | www.trade-investment.eu 101 February-March 2010

TI_2010_02_final.indd 101 19.3.2010 13:40:30


Operators (TSO’). Secondly, is operation
of the gas exchange spot market, which
was launched in conjunction with Wien-
er Börse AG (the Vienna Stock Ex-
change).
Baumgarten
gas station
In practice CEGH acts in co-operation with
several different TSO’s, particularly in
Baumgarten, OMV’s main gas compressor
station, which handles a third of all Russian
gas exports to Western Europe. Here four
TSO’s are connected, namely OMV, TAG,
BOG and Eustream. Mr Wüstrich describes
the activities that take place here: ‘CEGH
obtained an important role as central
matching agent, while it integrates trad-
ing activities in between these networks
and connects them via wheeling services.
From this platform, the traders can easily
exit their gas quantities to the relevant
transportation systems or even to storage,
which is also connected by CEGH via
wheeling service to Baumgarten. The
transportation contracts and capacity
management are carried out by the re-
spective TSO.’
Trade currently takes place between Aus-
tria and its neighbouring countries, which
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 102
CENTRAL EUROPEAN GAS HUB
Euro-trade in Natural Gas
include Hungary, Italy, Slovenia, Slovakia
and Germany.
Participants
Although OMV Gas & Power is currently
the 100% shareholder in CEGH, there are
plans for this to change in the future. Ini-
tially, Wiener Börse AG will have a 20%
stake in CEGH with further steps taken to
allocate a 30% share for Gazprom, and
20% for Centrex, subject to approval by
the EU Commission. OMV will retain a 30%
shareholding. Gazprom’s involvement is
bound to have an impact as it is the world’s
largest gas company.
The existing sole shareholder, OMV Gas
& Power GmbH, already plays a pivotal
role in the European gas logistic system.
It was the first western European country
to begin importing gas from Russia back
in 1968, and currently transports more
than 66 billion cubic metres (bcm) per
annum of natural gas through their pipe-
line grid in Austria. OMV’s main gas com-
pressor station in Baumgarten is one of
the most important gas turntables in
Western Europe, and has storage facilities
with a capacity of 2.3 bcm’s, which repre-
sents half of the gas storage capacities
throughout Austria as a whole. As well as
Baumgarten, OMV also has other storage
facilities.
CEGH developed the gas exchange in
co-operation with Wiener Börse AG, and
European Commodity Clearing AG (ECC).
The role of Wiener Börse is vital for the
trading of commodities, and trade is car-
ried out using the internationally recog-
nised Xetra system of electronic trading,
which is market-proven. ECC, which is
based in Leipzig, has an agreement with
CEGH for clearing and settlement serv-
ices for the European energy market. It
makes trading easier and less risky for
members by managing the financial set-
tlement of transactions and clearing of
gas volumes with other markets that it
introduces. CEGH also co-operates close-
ly with the European Federation of En-
ergy Traders (EFET), which plays a sig-
nificant part in terms of contractual
requirements. All terms and conditions
must fall in line with the Austrian Exchange
Act, and be approved by the appropriate
authorities. This means that traders can
benefit from the security of this legal
framework.
The future
In May 2007 OMV and Gazprom formu-
lated a Memorandum of Understanding,
102 February-March 2010
19.3.2010 13:40:36
 and this agreement is at the heart of plans
to develop the CEGH as the most impor-
tant gas hub in Continental Europe. Re-
garding Gazprom’s involvement in the
CEGH, Mr Wüstrich advises:
‘...Gazprom’s participation would enhance
security of supply at CEGH and at the same
time secure liquidity of short-term trading
activities. With GAZPROM, the largest gas
supplier to Europe will be directly involved
in CEGH. This ensures that the trading of
gas from Russia will be actively pursued.
Gazprom’s involvement is a clear commit-
ment to opening the Eastern European
market for modern market mechanisms
and contributes significantly to supply
security in Western Europe. The trading
of gas from Russia will thus complement
the long term contracts.’
With these plans in place CEGH can de-
velop trade even further afield, although
new companies wanting to trade on the
gas exchange have to conclude several
agreements. However, CEGH is confident
of being able to expand its trading ac-
tivities in the future, as Mr Wüstrich states:
‘The CEGH has a special position as an
Eastern gas hub in Continental Europe and
together with its partners CEGH seeks to
become the biggest hub in the region, with
the opening of the markets towards South-
ern and South-Eastern Europe providing
new economic opportunities for traders.’

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TI_2010_02_final.indd 103 19.3.2010 13:40:37


How to make buildings
with glue
Scientists in Germany have discovered
a way of making adhesives used in
construction more heat-resistant. More
buildings held together with glue may
be the result.
Heat-resistant adhesives are permitting
new forms of construction. Scientists
at the Fraunhofer Institute for Wood
Research in Braunschweig, northern
Germany, have developed a way to
harden adhesives that will permit con-
struction work to continue on the
Metropol Parasol in Seville, Spain,
a planned group of mushroom-shaped
buildings by Berlin architect J Mayer
H to be erected as an attraction in the
city‘s Plaza de la Encarnacion square.
Load-bearing elements are to be at-
tached to each other with adhesives
rather than with screws, but the adhe-
sive intended for the task only worked
up to temperatures of 60 degrees Cel-
sius, which caused concern that the
structures might come apart in the
searing heat of the Spanish sun. The
Braunschweig-based researchers have
suggested making the adhesive more
heat-resistant through a process known
as „tempering“.
„Once the construction components
have been glued together they are
reheated – and that leads to a harden-
ing reaction,“ says construction tech-
nology expert Dirk Kruse. The research-
ers believe that will enable the glue to
retain its adhesive power up to 70 de-
grees. „It will help to increase the use
of adhesive technology in construc-
tion,“ says Kruse.
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 104
Technology news
Cellphones secured by
design
If you‘re forever leaving your cellphone
on the kitchen table or bus, you may
have use for a Bluetooth device that
immediately sounds an alarm and locks „We have tried to do quite a bit in terms
the phone if the two gadgets move of making phones useless after theft
beyond a set distance apart. The device and therefore not worth stealing, but
also regularly backs-up data from the there‘s still a very large market for
phone, and would alert you if a thief stolen phones,“ says Steve Babbage,
were to make off with your handset. security technologies manager at Vo-
dafone Group in Newbury, UK, who
Dubbed the „i-migo“, it‘s one of three
designs to win the UK‘s Mobile Phone was one of the judges.
Security Challenge to design crime- As well as making phones less desir-
proof cellphones. The other winners able to thieves, the Mobile Phone Se-
include an authentication card which curity Challenge also set competitors
approves small payments made via the the task of improving the security of
cellphone when it is swiped across the data stored on phones and improving
handset, and a method to marr y financial security ahead of the antici-
a handset to a specific SIM card, there- pated adoption of so-called „m-com-
by reducing the appeal of stolen hand- merce“, the use of mobile devices as
sets. credit cards or to make small cash pay-
ments.
The competition is part of an initiative
by the UK‘s Home Office and Design
Council to find solutions to problems
that the cellphone industry has failed
to tackle. It was judged by a panel of
design and telecoms experts including
representatives from Vodafone and
Nokia.
104 February-
FFebruary-March
-March 2010
19.3.2010 13:40:38

„The rapidly developing nature of mo-
bile technology means safeguards must
be incorporated at the drawing-board
stage if we are to stop criminals prof-
iting from this type of crime,“ says Alan
Campbell, a UK Home Office minis-
ter.
Current m-commerce phones being
used in countries like Japan require
users to enter a password in order to
access a virtual wallet and make secure
transactions. But this can be time-
consuming and has also prompted
concerns about „shoulder-surfing“, or
thieves watching customers type in
a pin before robbing them.
TI_2010_02_final.indd 105
The winning „touch-safe“ design aims
to combat this by encouraging people
to carry with them a radio-frequency
identification (RFID) card or patch,
which would need to be swiped across
the phone in order to authorise small
payments, while an additional PIN
would also be required for larger trans-
actions.
„The majority of phone thieves are not
into confrontation,“ explains Robert
Bult of the Design Council‘s Design
Out Crime initiative. „You can also see
the benefits for the merchant in terms
of people not fiddling around getting
their PIN wrong.“
Prototypes of all three winning designs
has been presented at the Mobile World
Congress in Barcelona, Spain.
www.newscientist.com
Computer power
provides heat for
Helsinki
Outside, the temperature is a bone-
chilling minus 14C and Helsinki is strug-
gling with its iciest winter since 1982,
but deep inside a former bomb shelter
carved from the bedrock beneath an
Orthodox cathedral, the city’s power
company is building what will soon be
the world’s most high-tech municipal
heating system.
Here, surplus heat from hundreds of
computer servers in a new data centre
located beneath Uspenski Cathedral,
one of the city’s main tourist attrac-
tions, will be captured and pumped to
heat hundreds of homes and busi-
nesses across the Finnish capital. “This
will be the greenest and most energy-
efficient data centre in the world,” Juha
Sipilä, the project manager for Hels-
ingin Energia, the company behind the
scheme, said.
In Helsinki, where winter temperatures
often plunge to minus 30C, hardly
anyone owns a domestic heating boil-
er. Instead, water is heated centrally
at combined heat and power (CHP)
plants to 115C and piped directly to
tens of thousands of homes and pub-
lic buildings.
Helsingin Energia is the operator of
Helsinki‘s district heating network,
a 1,350km (850-mile) network of un-
derground pipes, tunnels and pumping
stations that supplies hot water to
450,000 people across one of the
world’s coldest capital cities.
The data centre will be cooled using
seawater from the Baltic, which falls
below 8C from November to May, with
the excess heat pumped back into the
city’s heating system – a solution that
Mr Sipilä hopes will help to crack
a pressing problem for the world’s IT
industry.
Data centres consume vast amounts
of energy – about 3 per cent of all the
electricity generated in Britain, for ex-
ample. About two-thirds of the total
is used simply for cooling.
105 February-March 2010
19.3.2010 13:40:41
 Technology news

That figure is growing steadily with

the brisk expansion of so-called cloud
computing, whereby the internet is
evolving into a central store for data
and processing for millions of busi-
nesses around the world. Global emis- He believes that Nordic countries may
sions of carbon dioxide from data have stumbled across a lucrative new
centres are now equivalent to about business opportunity to tap into the
a third of the total from aviation and growing £7 billion global server mar-
are rising by 10 per cent per year. ket. A similar project is under way in
Iceland, which will use geothermal
“For technology companies like Goog-
energy to power servers and cold sea- There are fears that this growth is
le and IBM, this is a very big issue,”
water for cooling. Google has also an- threatened as engineers run out of
Matti Roto, of Academica, a Finnish IT
nounced plans recently to site a giant ways to shrink silicon transistors and
firm involved in the project, said. “The
server centre in Finland. cram more power into chips. Finding
cost of paying for all that energy is
new ways to make smaller transistors
huge – quite apart from the emissions –
has become a priority. But while carbon
so it is very important to find solutions
nanotubes had been considered a po-
to improve efficiency.” Only about Nanotube transistors tential saviour, making transistors with
40 per cent of the energy consumed
by a typical data centre is used for shrink smaller than them has proved to be difficult.
computing, Mr Roto said, with the rest Performance in such transistors is lim-
needed simply to cool down the com- silicon size ited by an effect that creates an electri-
puters. This centre’s power usage ef- cal barrier at each point a nanotube
Is there anything carbon nanotubes
fectiveness – the central measurement joins any metal, impeding current flow.
can‘t do? Using them to make transis-
of data centre efficiency – will be an This seemed a deal-breaker because
tors about half the size of the silicon
unprecedented figure of less than one.
ones available today suggests they
The lowest figure for other centres has
might help maintain the continual
been 1.5.
growth of computing power that we
The Academica server centre due to have come to rely on.
enter service in April is a pilot and will
supply enough hot water to heat 1,000
flats. Mr Roto has plans for a much
bigger scheme including 2,000 square
metres of server racks.

Trade & Investment | www.trade-investment.eu 106 February-March 2010

TI_2010_02_final.indd 106 19.3.2010 13:40:43

 er together also makes it possible to
shrink the device‘s length down to
found a way to use thinner tubes to 15 nanometres. „That‘s about half the
build a competitive nanotube transis- length of the best silicon technology
tor. on the market today,“ says Franklin.
a nanotube in a transistor must connect
to two metal electrodes, with a third „That success is largely due to its „This is great work that helps shed light
„gate“ electrode placed nearby. Using geometry,“ says Franklin. His team on the scaling of carbon nanotube
fatter nanotubes reduced the size of placed the gate electrode, which con- transistors,“ says Yu Cao at Arizona State
the electrical barriers, but goes against trols the transistor, below the nanotube University in Tempe, who was not in-
the computer scientists‘ goal of con- instead of in its usual position above volved with the study. But Cao adds
stantly making things smaller. it. This makes it possible to position that nanotubes are still not ready for
the two closer together, and increases commercialisation. For example, physi-
Now Aaron Franklin and colleagues at cally manipulating them to build de-
IBM‘s Watson Research Center in York- the gate‘s influence on electrons inside
the nanotube, enabling them to punch vices is tricky. Franklin agrees. It‘s dif-
town Heights, New York state, have ficult to predict whether nanotubes
through the electronic barriers. Moving
the nanotube and gate electrode clos- can yet compete with silicon, he
says.
www.newscientist.com

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Trade & Investment | www.trade-investment.eu 107 February-March 2010

TI_2010_02_final.indd 107 19.3.2010 13:40:45


says Managing Director and President of
Pražská energetika, a.s.
PRE Group is an important electricity
trader on the Czech market and the
regional operator of the distribution
system for Prague, the capital city and
the town of Roztoky.
Drahomir Ruta was born 63 years ago
in Zatec. He is married with two adult
sons and four grandchildren. He lives in
a common house in Prague with his wife.
He usually spends his weekends near
Plzen. He likes his job but he also likes
other activities.
From my own point of view there is noth-
ing extraordinary about my day at work.
I get up at 6 am every morning and I take
care of my dog – I have a cocker spaniel,
my second one already. After that I drink
a cup of tea and set out for work. Most of
the time I drive to work but if circum-
stances require it, I take the subway. Even
if the distance remains the same, travelling
to work takes more and more time as the
traffic is getting heavier all the time. And
I do not even stop, say in a gym, I really
go straight to work.
Trade & Investment | www.trade-investment.eu
TI_2010_02_final.indd 108
I am able to “switch on” when it comes
to electricity in Prague but also to
“switch off” after a busy day
I spend my working hours partly in my
office and partly on meetings. Even though
I think I don’t have a problem with com-
munication in any form, still I like best
talking to people face to face. My desk is
unfortunately just rarely empty, but I try
to focus my attention to the main and
most important tasks of the day and re-
solve the most things I can. My work con-
sists of some routine things including
signing of documents and decisions, but
also of finding solutions to problems con-
cerning the operations and development
of the company. A proper communication
with my colleagues is very important,
including some regular meetings.
I consider lunch a significant part of the
day; I think it is an important ritual. But
with me it is not the same scenario every
day; it changes according to the circum-
stances, i. e. it can be a business lunch
with some partners or I have my lunch in
the company canteen. Also, I’m not fas-
tidious when it comes to food. I prefer
lighter meals but I can eat classical Czech
meals, too. I definitely would not skip
lunch, though.
Many times it is already evening when
I get home and that is when I have time
for my family, dog and hobbies with which
I try to spend as much time as possible.
I like travelling and I travel a lot, espe-
cially with my family. My four grandchil-
dren are now an essential part of the
family and I really love them. I try to spend
as much time as possible with them as
this is something that has a great meaning
for me and enriches my life. Any small
thing about them makes me happy, for
example the fact that three of the grand-
children have learnt to swim during
a holiday with me and my wife.
Logically I have only very little time for
other hobbies. I like reading but I only
have time for it during relaxing holidays.
If I arrange my own holiday then it is
mostly the kind where you get to travel
around and learn new things so I do not
take a book on these trips. Instead I take
my camera. I’ve been taking photographs
since I was fifteen but not so long ago
I got myself a new camera with various
accessories. Photography technology
went through a huge development in the
last decade and it enables specialities and
shots in high quality. I take pictures not
only of my family and holidays but I also
try to capture interesting details that others
don’t even notice. Consequently I also like
working with the computer where I store
and process the photo-
graphs. Because I don’t like
the computer presentation
of the photos I usually print
them out as a “photo book
“ or I print them out and tack
them into a photo album
which I always have handy.
Another of my hobbies is
music. When I was young
I learnt to play piano which
I sometimes also play today.
But as with everything that
requires time I am limited in
this activity. I can say that
nowadays I only play piano
at Christmas and my reper-
toire has shrunken to car-
ols…
At the weekends I also do
some gardening. Although it
is a never-ending work, it
brings me a much needed
relaxation and joy of getting
some fresh air. And unlike with
jogging or sports the result
after this work is visible.
108 February-March 2010
19.3.2010 13:40:47
 How can we get by with less when the
whole world keeps asking for more?

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Answers for energy.

TI_2010_02_obalka.indd 2 19.3.2010 14:34:45

 Longwall Mining Technology

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Managing Director
and President
www.bucyrus.com of Pražská energetika, a.s.
Reliability at work

TI_2010_02_obalka.indd 1 19.3.2010 14:33:28